U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

                     For the fiscal year ended June 30, 2001

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

           For the transition period from ___________ to ____________


                        Commission File Number 000-31485

                              METHOD PRODUCTS CORP.
                             ----------------------
             (Exact name of registrant as specified in its charter)


          Florida                                               11-3456837
----------------------------                                 -------------------
(State or other jurisdiction                                 (I.R.S. Employer
of incorporation or organization)                            Identification No.)


 2101 N.W. 33rd Street, Suite 600A, Pompano Beach, FL                   33069
--------------------------------------------------------------------------------
(Address of principal  executive offices)                             (Zip Code)

        Registrant's telephone number, including area code (954) 968-1913

           Securities registered pursuant to Section 12(g) of the Act:

                         COMMON STOCK, $.0001 PAR VALUE
                   --------- -------------------------------
                                (Title of Class)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
        Yes        No X
           ------   ------


<PAGE>


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-K [____].

         The Issuer's revenues for its most recent fiscal year is $3,719,470.

         The aggregate market value of the voting stock held by non-affiliates
of the Registrant as of November 30, 2001 is approximately $14,966,023, based on
the closing bid price.

         As of November 30, 2001, the Registrant had 39,983,285 shares of common
stock, par value $.0001 per share outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         The following documents are incorporated by reference:

Definitive Information Statement filed with the Commission on February 8, 2001 -
PART III, ITEM 13

<PAGE>

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

         We (sometimes referred to as the "Registrant"or, together with our
wholly-owned subsidiaries, MPC Integrated Technologies, Inc. ("MPCIT") and
Ameritrend Corporation ("Ameritrend"), the "Company") are a multi-service
business communications systems company specializing in the custom design,
installation and service of total communications network systems, including
computer telephone integration, fiber optic cabling and video conferencing,
among other network systems, for various businesses, with a focus on businesses
located in South Florida.

         Our executive offices are located at 2101 NW 33rd Street, Suite 600A,
Pompano Beach, FL 33069. Our telephone number is (954) 968-1913.

Recent Events

         As previously reported in a Form 8-K filed with the Securities and
Exchange Commission ("Commission" or "SEC") on September 4, 2001 and a Form 8-K
filed with the Commission on September 14, 2001, we entered into a stock
purchase agreement with Ameritrend, a then wholly-owned subsidiary of Danka
Holding Company ("Danka"), and Danka on August 31, 2001 whereby we purchased all
of Ameritrend's issued and outstanding capital stock.

         Pursuant to the terms of the stock purchase agreement, we executed a
promissory note to Danka in the amount of $1,000,000, payable over the course of
180 days from the closing date, from sales of purchased inventory. Concurrent
with the execution of the stock purchase agreement and issuance of the
promissory note, we entered into a stock pledge agreement with Danka pursuant to
which we granted Danka a security interest in the Ameritrend shares purchased by
us, and Ameritrend entered into a security agreement with Danka whereby
Ameritrend granted Danka a security interest in, among other things, all of the
inventory purchased pursuant to such stock purchase agreement in order to
guaranty full and complete payment of the promissory note. In connection
therewith, prior to closing, Danka assumed certain accounts receivable and other
assets from Ameritrend and agreed to settle certain payables and liabilities.

         As a result of the stock purchase agreement, we acquired the entire
business of Ameritrend, which involves the sale and servicing of business
communications systems comprised of various networked computer equipment,
software and telephone communications systems. We plan to operate Ameritrend as
a wholly-owned subsidiary and continue to expand upon its business operations,
which currently include sales offices in Pompano Beach, Miami, and Orlando,
Florida as well as technical support staff located in Tampa and Tallahassee,
Florida and Raleigh and Charlotte, North Carolina. The consideration we provided
in connection with the transaction was negotiated at arms-length between and
determined by the respective management of Ameritrend, Danka and the Registrant.

         We entered into a Stock Purchase Agreement (the "Agreement") with
Lancer Offshore, Inc., a Curacao, Netherlands Antilles corporation ("Lancer")
dated as of June 21, 2001, pursuant to which Lancer purchased an aggregate of
10,000,000 shares of restricted common stock, par value $.0001 per share, for
$500,000 ($.05 per share ("Share Price")), representing, immediately
post-issuance, approximately 45% of our issued and outstanding common stock,
together with an immediately exercisable common stock purchase warrant to
purchase 10,000,000 shares of restricted common stock at $.08 per share and an
immediately exercisable common stock purchase warrant to purchase 10,000,000
shares of restricted common stock at $.12 per share, each warrant exercisable
until June 21, 2004.


                                       3
<PAGE>

         Such Agreement further provides, among other things, that: (i) at the
request of Lancer, we will recommend to our stockholders and use our best
efforts to have two individuals designated by Lancer to be elected as directors
for a total of three to be elected as directors of the Registrant; (ii) Mr.
Bruce Cowen, Investment Manager of Lancer, will have visitation rights to all
Board of Director and committee meetings; (iii) we shall seek the prior approval
of a to-be-appointed Lancer representative for all cash disbursements over
$5,000, except for vendor purchases; (iv) Lancer be provided with a 30 day right
of first refusal to participate on the same terms and conditions as any other
purchaser in connection with any private financing we may undertake through June
20, 2004; (v) the employment agreement with our Chief Executive Officer, Mark
Antonucci, be extended for an additional two (2) years; (vi) certain Share Price
protection and shares subject to Share Price protection be provided in the event
we sell any shares of our common stock and/or securities convertible into common
stock at a lower price than the Share Price; and (vii) certain of our officers
execute lock-up agreements effective through June 12, 2003 pursuant to which
such officers agree not to sell any shares of our common stock owned by such
persons without Lancer's prior approval.

         We entered into an agreement with Mark Weitsman ("Weitsman") and other
parties dated as of June 15, 2001, pursuant to which, among other things: (i)
Weitsman resigned from his position as a member of the Board of Directors,
Chairman of the Board and from all officer and employee positions of the
Registrant and of MPCIT; (ii) Weitsman's employment agreement was terminated
without any liability to the Company thereunder; (iii) we agreed to pay Weitsman
$3,000 upon his resignation from such positions, and the sum of $2,500 monthly,
subject to certain conditions, commencing July 15, 2001 and continuing on the
fifteenth day of each month thereafter until all Company liabilities personally
guaranteed by Weitsman are paid in full or otherwise removed or released by the
party or parties named in each such personal guarantee; and (iv) all stock
options previously granted to Mr. Weitsman were canceled effective immediately.

         On September 27, 2001, we entered into another stock purchase agreement
(the "September 27 Agreement") with Lancer, pursuant to which Lancer purchased
an additional 13,750,000 shares of restricted common stock, par value $.0001 per
share, for $275,000 ($.02 per share ("Share Price")) (representing, immediately
post-issuance, together with their previously acquired shares, approximately
61.6% of our issued and outstanding common stock exclusive of shares of common
stock underlying warrants), together with an immediately exercisable common
stock purchase warrant to purchase 20,000,000 shares of restricted common stock
at $.001 per share, exercisable until June 21, 2004.

         Such September 27 Agreement provides, among other things, that: (i) at
the request of Lancer, we will recommend to our stockholders and use our best
efforts to have two individuals designated by Lancer to be elected as directors;
(ii) Mr. Bruce Cowen, Investment Manager of Lancer, will have visitation rights
to all Board of Director and committee meetings; (iii) we shall seek the prior
approval of an appointed Lancer representative for all cash disbursements over
$5,000, except for vendor purchases; (iv) Lancer shall be provided with a 30 day
right of first refusal to participate on the same terms and conditions as any
other purchaser in connection with any private financing we may undertake
through September 27, 2004; (v) we shall distribute internally prepared monthly
financial statements within 30 days of the previous month's end to Lancer; and
(vii) the lock-up agreements executed by certain of our officers effective
through June 12, 2003, pursuant to which such officers agree not to sell any
shares of our common stock owned by such persons without Lancer's prior
approval, shall remain in effect.


                                       4
<PAGE>

               See also PART III. ITEM 10. EXECUTIVE COMPENSATION.

Other Events

         On January 24, 2001, the Registrant's Board of Directors and majority
shareholders executed and delivered a written consent to corporate action where
they approved: (i) our reincorporation from Delaware to Florida (the
"Reincorporation") by merging with and into a wholly-owned Florida subsidiary,
Method Products Corp.; (ii) the adoption of a 2001 Stock Option Plan to provide
for the grant of options to purchase up to 500,000 shares of common stock to our
employees, directors and consultants; and (iii) increased share authorization in
the Registrant's articles of incorporation to provide for 80,000,000 authorized
shares of common stock, $.0001 par value, and authorization for 2,000,000 shares
of "blank check" preferred stock, $.0001 par value.

         The Reincorporation from Delaware to Florida was effected on March 16,
2001.

Business Combination

         On October 6, 2000, pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") dated as of January 12, 2000 between The Arielle Corp., a
Delaware corporation ("Arielle") and Method Products Corp., a Florida
corporation ("Method"), all of the issued and outstanding shares of common stock
of Method as of January 12, 2000, together with additional Method shares of
common stock issued subsequent thereto, were exchanged on a tax-free basis for
7,412,021 shares of common stock of Arielle (representing approximately 91.87%
of the surviving entity), in a transaction in which Arielle, whose name was
changed to Method Products Corp. in the Certificate of Merger filed with the
Delaware Secretary of State, was the surviving legal corporation. Pursuant to
the Merger Agreement, the Registrant's shareholders agreed to place 779,152 of
their shares in escrow, to be released if the Registrant achieves sales of a
minimum of $5,000,000 in the first complete fiscal year (ending June 30, 2002)
following the merger. In the event such sales are not achieved, the 779,152
escrowed shares shall be returned to the Registrant's treasury. Certain persons
constituting both officers and directors of the Registrant informally agreed
among themselves to utilize certain shares owned by such persons for purposes of
such escrow provision.

         For accounting purposes, the merger was treated as a purchase business
combination of Arielle by Method (a reverse acquisition) and a recapitalization
of Method. Method was the acquirer for accounting purposes because the former
Method stockholders received the larger portion of the common stockholder
interests and voting rights in the Registrant than those retained by Arielle
stockholders prior to the merger. Because Method was the acquirer for accounting
purposes, the surviving entity adopted Method's fiscal year end, June 30th.


                                       5
<PAGE>

         The Merger Agreement was adopted by unanimous consent of the Board of
Directors of Arielle and approved by more than 80% of the shareholders of
Arielle pursuant to a reconfirmation offer conducted by Arielle in accordance
with Rule 419 under the Securities Act of 1933, as amended.

         The Merger Agreement was adopted by the unanimous written consent of
the Board of Directors of Method on January 12, 2000 and approved by the written
consent of a majority of Method's shareholders on October 5, 2000.

         Prior to the merger, Arielle had 500,000 (representing approximately
6.20% of the surviving entity) shares of common stock issued and outstanding
Subsequent to the merger, former Arielle shareholders continued to own the same
aggregate number of shares; 156,000 shares of common stock (representing
approximately 1.93% of the surviving entity) were issued to Arielle's counsel. A
total of 8,068,021 shares of common stock of Registrant were issued and
outstanding immediately subsequent to the merger.

         In connection with the merger, the officers and directors of Method
became the officers, in their same prior capacities, and directors of the
Registrant, and the officers and directors of Arielle resigned.

         The source of the consideration used in the merger were shares of the
Registrant's common stock that were acquired by the shareholders of Method in
exchange for shares of the common stock of Method owned by Method shareholders.

         In view of the Commission's position set forth in its January 21, 2000
correspondence to NASD Regulation, Inc. to the effect that Rule 144 is not
applicable to securities privately issued by a blank check entity, five Arielle
shareholders were granted certain registration rights with respect to their
shares wherein the Registrant has agreed to file a registration statement with
the Commission, and utilize its best efforts to register such shares.

Products and Services

         We offer a broad range of products and services designed to support the
needs of businesses and other organizations, primarily in the South Florida
area, requiring voice and data communications systems. Our principal products
are digital telephone systems which support network installations up to 25,000
ports, IP telephony products and services, computer telephony integration
("CTI") applications, unified messaging software and voice processing software
and CRM Solutions ("Customer Relationship Management"). The Company principally
sells systems supporting 8 to 500 telephones with suggested retail prices of
larger systems in excess of $100,000 per system, depending upon configuration.
We also offer network design and implementation services, maintenance, leasing
and support services, and resell other telecommunications products.


                                       6
<PAGE>

         We are a "single source" provider of communications technology
solutions to various types of businesses and promote ourselves as such. We
provide architectural design and consulting as well as software and hardware
selections, and full installation, training and service. We provide phone
systems, voice mail, unified messaging, video conferencing and cabling, amongst
other products and services to local and wide area networks, as further
described below.
         We are an authorized Avaya, Inc. ("Avaya") (formerly the enterprise
group of Lucent Technologies) "business partner" and primarily offer and sell
various business communication products manufactured by such company due to its
reputation for quality and service. Pursuant to our agreement with Avaya and
ScanSource, Inc. d/b/a Catalyst Telecom (the "Distributor") which was entered
into on or about November 28, 2000, we deal directly with the Distributor from
whom we purchase various Avaya equipment subject to financing terms. Such
agreement provides for a two year term, which term shall be automatically
renewed for an additional year unless a party thereto gives written notice of
its intent not to renew to the other parties. Such agreement further provides
for earlier termination upon the occurrence of certain events.

         Pursuant to a written agreement with NEC America, Inc. (formerly
Nitsuko) ("NEC") dated June 8, 2001 which has a one year term (subject to
automatic renewal for a one year period absent written notice by NEC thirty days
prior to the anniversary date of its intent not to renew), we also purchase
directly from and offer various business communications products manufactured by
NEC and unified messaging and voice communications products offered by AVT and
several smaller companies. For a short period of time, we also purchased
directly from and offered various business communications products manufactured
by Fujitsu; however, such company recently ceased offering such products in the
U.S.

         Computer Telephony Integration ("CTI") - CTI combines the communication
power of telephones with the information resources of computers, providing for
the management of all communication tasks from a PC. CTI services include
providing the PC user with caller information which "pops" on the PC screen
before a call is answered and, among other things, allows the user to set up
conference calls, and manage faxes and voice mail with drag-and-drop ease. CTI
services improve productivity and customer service by enabling PC users to
manage incoming and outgoing calls, organize personal information and store
client information in a single data base. The CTI systems we offer provide for
versatile mounting options, scalability and compatibility with future
innovations through software driven technology.


                                       7
<PAGE>

         The Company offers, sells and assists prospective customers in
arranging lease financing for various CTI and business communications systems
and various hardware and software communication integration enhancement products
offered by Avaya (formerly the enterprise group of Lucent Technologies),
including the DEFINITY(R) Business Communications System ("BCS"), DEFINITY(R)
ProLogix (TM) Solutions which provide the professional communications
capabilities of the DEFINITY communications servers in a package sized and
priced for mid-sized companies and smaller locations of large businesses, and
also supports Avaya's line of feature-rich telephones, the 6400 voice terminals,
the DEFINITY Enterprise Communications Server ("ECS") which may be scaled as
needed to support large locations of 200 or more employees, CentreVu(R) Computer
Telephony which is a LAN-based CTI solution consisting of server software that
integrates DEFINITY telephony and data resources without requiring special
phones, connectors, PC circuit packs or new wiring at every work station and the
DEFINITY(R) Call Center and, to a lesser extent, products offered by NEC and
Quintum. We have chosen such product lines because of the manufacturer's
reputation within the industry for providing quality products.

Unified Messaging

         We offer feature rich unified messaging products and services which
provide our clients access to voice, fax and e-mail messages from a single
"in-box." Unified messaging allows the user to play, send and forward voice
messages from any telephone in the world using conventional touch tone commands
or over the Internet. In addition, we offer a variety of unified messaging
products with built-in speech recognition. These capabilities include touch-tone
and speech recognition access to e-mail. Our unified messaging products and
services render seamless call transfer, forwarding and retrieval, fax-on-demand,
never-busy fax line, fax broadcast, follow-me fax and voice annotation.

         We offer various unified messaging products, including:


         -        Avaya's IP ExchangeComm (TM) system, which runs on a Windows
                  NT server, and supports open applications programming
                  interfacing ("APIs"), which allows for businesses to combine
                  scalable voice, fax, data and Internet communications over an
                  existing LAN and WAN supporting enhanced features, functions
                  and applications;

         -        DEFINITY(R) AUDIX(R) System, a cost-effective voice messaging
                  solution housed inside DEFINITY Systems including the DEFINITY
                  ECS, DEFINITY ProLogix(TM) Solutions, and the DEFINITY BCS


                                       8
<PAGE>

         -        DEFINITY(R) Extender, an enhancement product to the DEFINITY
                  Communications System which offers a telecommuting solution
                  for remote workers that provides them access to features of
                  the DEFINITY Communications System and offers them the ability
                  to place and receive calls, leave and retrieve voice messages,
                  send and receive e-mail, access features such as hold, drop,
                  transfer and conference, cover multiple calls, including voice
                  mail, continuous online access to a host/PC, and connects
                  customers who are calling remote workers to be connected
                  transparently to the off-site locations.

         -        NEC28I,12YI and 704I, Voice-IP Gateway, building on a
                  business's existing TCP/IP network infrastructure, allows a
                  business to set up worldwide voice and fax communications
                  without relying on high-cost public networks.

Voice Communications

         We offer numerous voice communications products, including:


         -        Avaya's 6400 Series Digital Voice Terminals, which offer such
                  features as whisper page, group paging and group listening as
                  well as built-in speaker phones and LCD displays in most
                  models, and can be personalized by programming soft keys to
                  access the DEFINITY features that meet an individual user's
                  needs

         -        Avaya's 8400 Series Digital Voice Terminals, a feature-rich
                  advanced CTI-compatible, multi-media terminal that also
                  incorporates analog connectivity without requiring separate
                  lines.

         -        Avaya's 8100 Series Analog Voice Terminals, designed for
                  business locations where full-featured telephones are not
                  necessary or cost effective but which offer more built-in
                  features than ordinary telephones, such as hold, redial and
                  flash which allows a user to access a second dial tone and to
                  take advantage of custom-calling features such as call-waiting
                  and three-way calling.

         -        Avaya's 6210 and 6220 Analog Telephones, single-line analog
                  telephones offering frequently used business calling features
                  designed to cost-effectively support all Avaya's Business
                  Communications Systems, including the DEFINITY(R) ECS,
                  DEFINITY ProLogix(TM) Solutions and DEFINITY BCS.


                                       9
<PAGE>

Other Services and Products

         -        Structured Cabling (a physical link between active equipment
                  which utilizes unshielded twisted pair (UTP) cable or optical
                  fiber cable or combinations of both) - we provide businesses
                  with universal structured cabling systems that are able to
                  carry a wide variety of applications - from voice and low
                  speed data to high-speed LAN applications.

         -        Installation - we provide installation services and in doing
                  so, review programming information, TELCO (local telephone
                  company) information, special system considerations and
                  engineering performed by system coordinators. Our installation
                  procedure generally involves a pre-installation site review by
                  an installation supervisor, the assignment of the installation
                  to an installation crew to cable, wire and mount the equipment
                  and the testing of equipment and verifying of programming
                  before and after actual cut over of the lines/trunks with a
                  goal of minimizing possible service interruption. During the
                  installation process, TELCO orders are verified by a TELCO
                  coordinator to ensure coordination between line cut-overs and
                  the needs of the customer. The installation supervisor will
                  also coordinate the cut over with the company's customer
                  service department for customer training. Installation is
                  considered finished when the customer accepts the system by
                  signing a delivery and acceptance notice. Contact by telephone
                  or job site visit will be made at a later date to verify that
                  the system is satisfactory.

         -        Training - we offer and provide customer training for the
                  communications systems that we sell and provide highly
                  qualified project managers to meet our customers' needs. A
                  project manager is assigned to a customer's account to
                  coordinate and schedule training requirements which generally
                  include orientation on available features, feature
                  interaction, station user training techniques and problem
                  solving skills. Our project managers are able to answer many
                  questions "on the spot" and thereby reduce user-related
                  problems. Customers have the option of pre-training at their
                  offices via an online demonstration unit before the system
                  goes on-line so as to allow the user to "see and touch" the
                  equipment and familiarize themselves with basic operations
                  before the system goes "on-line." The project manager will
                  then schedule a return to the customer's facilities for
                  training on the new system and will conduct a follow-up visit
                  generally one to two weeks later to address post-training
                  questions or problems. Retraining is done on a call-in basis
                  during normal business hours on a fee basis.

         -        Customer Service/Warranty - We believe that the quality of the
                  systems offered by the Company, customer service and support
                  and other aspects of our organization are a critical element
                  of meeting customer needs. We provide customer service to our
                  customers 24 hours a day, seven days a week, 365 days a year.



                                       10
<PAGE>

                 Our technicians, who are Company employees and carry
                  replacement parts inventory, are dispatched via a computerized
                  system throughout the South Florida region on a daily basis.
                  Our technicians are certified by the manufacturers whose
                  products we offer to maintain optimum quality of workmanship.
                  Our computerized customer help desk, staffed by customer
                  service representatives ("CSRs") ensures that service orders
                  are processed quickly and efficiently and provides us with
                  up-to-the minute accurate information on the status of all
                  customer service orders. Our CSRs function both in the
                  capacity of setting service appointments as well as providing
                  answers to customer service inquiries and referring certain of
                  such inquiries to our technicians when required.

                  We offer to our customers the manufacturer's warranty on all
                  newly purchased business communications equipment, which,
                  generally is for a period of one to five years depending upon
                  the manufacturer and the product offered. We also offer
                  maintenance contracts generally for between 1 to 3 years which
                  provide for guaranteed pricing of products, labor and other
                  services during such maintenance contract time periods.

Sales and Marketing

         Since our inception, the Company's sales and marketing emphasis has
entailed direct marketing through its own sales staff and has been primarily
focused upon businesses located in South Florida. For a short period of time,
the Company established a sales office in Tampa, Florida as a result of the
acquisition of certain assets of a competitor in that geographical location;
however, due to the slowing U.S. economy which negatively impacted Company sales
in the third quarter of the Company's last fiscal year, at the end of such
quarter, the Company closed its Tampa sales and support facility and also
reduced staff from other non-income generating areas of the Company's
operations.

         We plan to continue our sales and marketing efforts in the South
Florida area through our own sales force and to the extent we may acquire
additional related businesses, expand our sales and marketing efforts through
our own sales force to the geographical areas where such businesses and their
customer bases may be located.

         Our Sales Team. We sell our systems, services and solutions through our
staff which as of June 30, 2001 and currently numbers approximately 16 sales
representatives and support staff and approximately 14 technicians. Our sales
force is supervised by area general managers, each of whom has responsibility
for all sales functions in a defined territory. A significant portion of the
compensation of the sales force is tied to annual goal and quota programs with
incentive bonuses paid based on gross margin (rather than revenue) targets set
by the Company


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<PAGE>

Customers and Markets

         Our Customers. We have provided our systems and services to more than
3,500 customers since July 1, 1999. Our customers include such types of
businesses as law offices, financial offices and auto dealers.

         Our Markets. We currently provide our systems and services in five
counties located in South Florida and in five counties located in the Tampa,
Orlando and Tallahassee, Florida areas. Depending upon working capital and cash
flow, and whether we acquire any additional businesses in either our current
and/or new market areas, we may expand our market presence over approximately
the next twelve months in our current market areas and /or in the markets where
such businesses may be located.

Customer Care and Operation Support

         Our Customer Care Staff. Our sales and customer support functions are
highly integrated. Our customer care specialists, which currently number
approximately 8, are trained in all aspects of the systems, services and
solutions offered in their respective markets. Our integrated approach allows us
to pursue our goal of providing best-in-care service starting with the initial
customer contact and continuing throughout the life of the account.

         Commitment to Superior Service. In order to provide superior service,
we:

         -        Respond Immediately. Our employees are specialists who begin
                  troubleshooting immediately to resolve customer problems
                  during the initial customer contact. We provide
                  around-the-clock support 365 days a year.

         -        Provide a Single Point of Contact. Our customers can call a
                  single toll-free number for assistance in solving most
                  problems. As our customer care teams are trained in the entire
                  suite of communications systems and services we offer, they
                  are able to assist customers in solving problems that may
                  involve more than one system or service issue.

         Our Operational Support System. Our operational support system is
designed to integrate all of our internal support services. Such integration
permits customer care, sales, engineering, service management, service delivery,
accounting and inventory sales management personnel to access a single customer
record. Accordingly, a customer can get support for any of our systems and
services with one phone call. By providing comprehensive, real-time customer
information, the system is designed to enable our customer support
representatives to respond faster to inquiries, provide greater quality customer
care, and identify more opportunities to sell additional systems and services.


                                       12
<PAGE>

         During approximately the next twelve months, we plan to add additional
functionality to our operational support system, including improved order entry
systems, dispatch and other logistic functions, improve trouble ticket systems
and CRM. Such enhancements are anticipated to increase our efficiency in
supporting our existing voice product and service customers and to increase our
sales of data systems and services to them.

Acquisitions

         From time to time, we have acquired certain assets and in some
instances, select liabilities from competitors within the State of Florida.
Prior to the Ameritrend transaction discussed in PART I. ITEM 1. and elsewhere
herein, such acquisitions have not constituted "significant acquisitions," in
view of such acquisitions not constituting the sale of a "business," as such
term is described in Item 310 (c) of Regulation S-B, and related Rule 11-01(d)
of Regulation S-X.

         We plan to continue to make selective acquisitions from time-to-time
to, among other things, broaden our geographical coverage, expand our expertise
and acquire assets with a perceived resale value greater than their acquisition
cost. The key factors we have and will continue to use in evaluating potential
acquisitions are:

         -        Additions to our sales force and technical personnel

         -        Expansion of existing markets and acceleration of new market
                  entry

         -        Cross-selling and up-selling opportunities

         -        Size and quality of an acquired customer base, if any

         -        Costs of acquisition

         -        Historical and projected financial performance

Competition

         Marketing Environment. Commencing in approximately the beginning of the
second half of our fiscal year ended June 30, 2001, we experienced a slowing of
sales due to the slowing economy which negatively impacted our business sector.
Particularly following the September 11, 2001 terrorist incident in the U.S.,
the U.S. economy in general has continued to evidence a marked slowing trend
and, accordingly, the business sector in which we operate was also adversely
affected. We are unable to predict when the U.S. economy in general may show
evidence of improvement and until such time, our business sector may also be
adversely effected.


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<PAGE>

         Industry Competition. The market for our products is highly competitive
and in recent periods has been characterized by pricing pressures and business
consolidations. Certain of our business communications solutions competitors
include Exp@nets, Global Partners and MIS. Many of the key systems products
offered by such competitors offer comparable service and pricing as that offered
by the manufacturers of the products that we offer.

         Key competitive factors in the sale of business communications systems
include price, performance, features, reliability, service and support, name
recognition and distribution capability. We believe that we compete favorably in
the markets we service with respect to the price, performance and features of
the systems we offer, as well as the level of service and support that we
provide to our customers. Certain of our competitors have significantly greater
name recognition and sales and marketing capabilities than the Company.

Regulation

         Our equipment manufacturers are subject to various federal laws, rules
and regulations, including the rules and regulations of the Federal
Communications Commission with respect to the telecommunications equipment that
they manufacture. The Company and its operations are subject to all otherwise
applicable federal, state, and local laws, rules and regulations.

Environmental

         We do not know of any statutory requirements with respect to
environmental quality which can be expected to have a material effect upon our
capital expenditures, earnings or competitive position.

Employees

        As of June 30, 2001, we had approximately 37 full-time employees, of
which 16 are engaged in sales, marketing and customer support; 14 in related
technical service and support functions and 7 in finance and administration. As
of the date hereof, we have approximately 70 full-time employees, including
personnel retained in connection with the Ameritrend acquisition. Our future
success will depend upon our ability to attract, retain and motivate highly
qualified employees who, depending upon market conditions, may be in great
demand. We have no collective bargaining agreements and believe relations with
our employees are good.


                                       14
<PAGE>

Factors that May Affect Future Operating Results

        In addition to the other information in this Report on Form 10-KSB, the
following are important factors that should be considered in evaluating our
business. This Report on Form 10-KSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Actual results could differ materially from those
set forth in the forward-looking statements as a result of many risk factors
including, without limitation, those set forth under "Factors That May Affect
Future Operating Results" below. In evaluating the Company's business,
shareholders and prospective investors should consider carefully the following
factors in addition to the other information set forth in this document.

GOING CONCERN CONSIDERATIONS

        Our independent auditors have added an explanatory paragraph to their
report on the Company's June 30, 2001 financial statements. In this paragraph,
they state that there are factors present that raise substantial doubts about
the Company's ability to continue as a going concern.

        Our audited financial statements have been prepared on a going concern
basis that contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. We have a net
stockholders' deficit of $703,776 at June 30, 2001. In addition, we have a
deficit in working capital of $918,511 at June 30, 2001. Management recognizes
that the Company must generate additional resources to enable it to pay its
obligations as they come due. Management is planning to obtain additional
working capital from operations, and/or from other sources, including creditors.
The realization of assets and satisfaction of liabilities in the normal course
of business is dependent upon the Company obtaining additional working capital
and sustaining profitable operations. However, no assurances can be given that
we will be successful in these activities. Should any of these events not occur,
the accompanying financial statements will be materially affected.

UNCERTAIN ABILITY TO MEET CAPITAL NEEDS

        We need additional capital to fund our operations and we are seeking to
obtain additional capital through equity and/or debt financing. If additional
funds are raised by issuing equity securities and/or debt convertible into
equity, further dilution to existing stockholders will result, and future
investors may be granted rights superior to those of existing stockholders.
There can be no assurance that additional financing will be available when
needed, or if available, on acceptable terms. While Lancer has previously
provided the Registrant with needed financing on two occasions and has a right
of first refusal to participate on the same terms and conditions as any other
purchaser in connection with any private financing that we may undertake through
June 20, 2004, no assurances are given that Lancer will provide additional
financing when required or as otherwise desired.


                                       15
<PAGE>

IF WE LOSE KEY PERSONNEL OR ARE UNABLE TO HIRE ADDITIONAL QUALIFIED PERSONNEL AS
NECESSARY, WE MAY NOT BE ABLE TO EFFECTIVELY MANAGE GROWTH IN OUR BUSINESS OR
ACHIEVE OUR OBJECTIVES.

         We depend on the continued service of, and our ability to attract and
retain, qualified technical, marketing, sales and managerial personnel, many of
whom may be difficult to replace. Competition for qualified personnel, depending
upon market conditions, may be intense. To date, we have not had difficulty
hiring employees having the skills and in the timeframe that we desire. This may
change, when current market conditions may improve. Our loss of any key
personnel or our failure to effectively recruit additional key personnel could
make it difficult for us to manage our business and meet other key objectives
and therefore harm our business. While we have to date retained substantially
all of the Ameritrend employees that we desired to retain, our operating results
may be impaired if we lose a substantial number of Ameritrend employees in the
months to come following the Ameritrend acquisition. We cannot assure that we
will be able to continue attracting and retaining the qualified personnel
necessary for the development of our business. Moreover, the contraction of our
business due to the slowing U.S. economy has at times caused us to reduce our
staff, which has, at such times, placed and is expected to continue to place, a
strain on our remaining personnel, management and other resources. Our ability
to manage any future growth effectively will require us to successfully attract,
train, motivate and manage new employees, to integrate new employees into our
overall operations and to continue to improve our operational, financial and
management information systems.

WE CURRENTLY DEPEND UPON TWO MANUFACTURERS FOR A SUBSTANTIAL PERCENTAGE OF OUR
BUSINESS WHICH COULD IMPAIR OUR ABILITY TO DELIVER OUR PRODUCTS AND SERVICES IN
A TIMELY MANNER.

         We currently obtain the majority of our product offerings from two
manufacturers, Avaya and to a lesser extent, NEC. Our reliance on these
manufacturers involve certain risks and uncertainties, including, in the case of
Avaya, from whom we purchase products through a distributor, their ability to
terminate such agreement prior to the expiration of the two year term (and one
year automatic renewal) upon the occurrence of certain events, and in the case
of NEC, its's ability to terminate such agreement prior to the one year term
(which term will be automatically renewed for a one year period absent written
notice by NEC thirty days prior to the anniversary date of its intent not to
renew or in accordance with applicable state law) upon the occurrence of certain
events. Although we believe that alternate supplier sources are available for
most of the products we currently offer or similar products, no assurances can
be given. We have occasionally experienced delays in the supply of products and
components due to working capital constraints which have caused us at times to
be untimely in our payment obligations to certain distributors and manufacturers
who in turn temporarily ceased shipping product until paid. We cannot assure



                                       16
<PAGE>

that we will not experience similar delays in the future for this or other
reasons. Our reliance on third party manufacturers involves a number of
additional risks, including reduced control over delivery schedules and costs.
Our business may be harmed by any delay in delivery or any shortage of supply of
products or components from a supplier. Our business may also be harmed if we
cannot efficiently develop alternative or additional sources if necessary. To
date, we have been able to obtain supplies of products and components in a
timely manner, except when due to our working capital constraints, even though
we do not have long-term supply contracts with any of our suppliers. However, we
cannot assure that we will be able to continue to obtain products or components
in sufficient quantities or quality or on favorable pricing and delivery terms
in the future.

         We cannot assure you that we will be able to continue purchasing such
equipment and software from these vendors on acceptable terms, if at all, or
that these vendors will continue to support all of the products we may purchase
from them. Some vendors we deal with are smaller companies with limited
resources and capitalization, and may not be able to sustain their business in
the future. If any of our suppliers raise rates, change pricing structures or
fail for whatever reason to continue to timely supply the Company with desired
products and services, our operations and business may be harmed. We cannot
assure that there will not be a significant disruption of service provided by
these suppliers, now or in the future.

BUSINESS ACQUISITIONS MAY DISRUPT OUR BUSINESS, DILUTE SHAREHOLDER VALUE OR
DISTRACT MANAGEMENT ATTENTION.

         As part of our business strategy, we from time to time consider
acquisitions of, or investments in, businesses that offer products, services and
technologies complementary to ours. Such acquisitions could materially adversely
affect our operating results and/or the price of our common stock. Acquisitions
also entail numerous risks, including: (i) difficulty of assimilating the
operations, products and personnel of the acquired business; (ii) potential
disruption of our ongoing business; (iii) unanticipated costs and problems
associated with the acquisition; (iv) inability of management to manage the
financial and strategic position of acquired or developed products, services and
technologies; (v) the division of management's attention from our core business;
(vi) inability to maintain uniform standards, controls, policies and procedures;
and (vi) impairment of relationships with employees and customers which may
occur as a result of integration of the acquired business.


                                       17
<PAGE>

         In particular, on August 31, 2001, we acquired all of the issued and
outstanding common stock of Ameritrend. We may be adversely affected by one or
more of the risks described above relating to the Ameritrend acquisition. In
connection with the Ameritrend acquisition, we hired approximately 40 Ameritrend
employees, and assumed the operations of three Ameritrend offices in their
previous Ameritrend locations. In addition to the foregoing risks and
uncertainties we face generally in our acquisitions, we may experience the
following difficulties or risks associated with the Ameritrend acquisition: a
large number of Ameritrend's customers may decline the assignment of their
maintenance contracts to us; and any number of the approximately 40 employees
hired by the Company may not integrate successfully or timely into our business
model and plans. Any future acquisitions may not generate additional revenue or
provide any benefit to our business, and we may not achieve a satisfactory
return on our investment in any acquired businesses.

ECONOMIC AND MARKET FACTORS AFFECTING THE COMPANY AND OUR CUSTOMERS.

         Prior to and on a more accelerated basis following the September 11,
2001 terrorist incident in the United States, the U.S. economy in general has
experienced a dramatic slowdown. Such slowdown has caused many businesses to
delay capital expenditures that had been previously considered, including the
purchase of business telecommunications products. Accordingly, the business
sector in which we operate was also adversely affected. We are unable to predict
when the U.S. economy in general may show evidence of improvement and until such
time, our business sector may also be adversely effected.

OUR MARKET IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND TO COMPETE SUCCESSFULLY,
WE MUST CONTINUALLY OFFER NEW AND ENHANCED PRODUCTS AND SERVICES THAT ACHIEVE
BROAD MARKET ACCEPTANCE.

         The market for our products and services is characterized by rapid
technological change, evolving industry standards and vigorous customer demand
for new products, applications and services. To compete successfully, we must
continually update our telecommunications products, related software and
customer services offerings. If we fail to offer new products and services that
achieve broad market acceptance, or do not adapt our offering products and
services to customer demands or evolving industry standards, our business could
be significantly harmed. In addition, current competitors or new market entrants
may offer products, applications or services that are better adapted to changing
technology or customer demands and could render our products and services less
desirable or obsolete. In addition, if the markets for IP network products, CTI
applications or related products continue to experience their current slow down
or later develop more slowly than we anticipate, or if we are unable for any
reason to capitalize on any of these emerging market opportunities as they
develop, our business, financial condition and operating results could be
significantly harmed.


                                       18
<PAGE>

CERTAIN PRODUCTS OFFERED BY THE COMPANY ARE COMPLEX AND MAY CONTAIN ERRORS OR
DEFECTS THAT ARE DETECTED ONLY AFTER THEIR RELEASE, WHICH MAY CAUSE US TO INCUR
LOST SALES AND LOSS OF CUSTOMER GOODWILL.

         Certain of the telecommunications products we offer are highly complex.
Although new products and upgrades are examined and tested by their
manufacturers prior to release, they can only be fully tested when used by a
large customer base. Consequently, our customers may discover program errors or
other defects after new products and upgrades have been released. Some of these
errors or "bugs" may result from defects contained in component parts or
software from our suppliers or other third parties that are intended to be
compatible with products offered by the Company also manufactured by
third-parties over which we have little or no control. Although manufacturers of
the products offered by the Company have test procedures and quality control
standards designed to minimize the number of errors or other defects in their
products, we cannot assure that their new products and upgrades will be free of
bugs when released. If manufacturers whose products we offer are unable to
quickly or successfully correct bugs identified after release, we could
experience: (i) loss of or delay in revenues; (ii) loss of customers and
customer goodwill; and (iii) legal actions by our customers.

IP NETWORK PRODUCTS OFFERED BY THE COMPANY MAY BE VULNERABLE TO VIRUSES, OTHER
SYSTEM FAILURE RISKS AND SECURITY CONCERNS.

         IP Network products offered by the Company may be vulnerable to
computer viruses or similar disruptive problems. Computer viruses or problems
caused by third parties could lead to interruptions, delays or cessation of
service that could harm our operations and revenues. In addition, we may lose
customers if inappropriate use of the Internet or other IP networks by third
parties jeopardized the security of confidential information, such as credit
card or bank account information or the content of conversations over the IP
network. User concerns about privacy and security may cause IP networks in
general to grow more slowly, and impair market acceptance of our IP network
products in particular, until more comprehensive security technologies are
developed.

WE HAVE MANY COMPETITORS AND EXPECT NEW COMPETITORS TO ENTER OUR MARKET, WHICH
COULD PUT PRESSURES ON US.


                                       19
<PAGE>

         The markets for our products and services are extremely competitive and
we expect competition to increase in the future. Our current and potential
competitors primarily include those companies in or proximate to our current
geographical locations having the same or similar product and service offerings
as the Company. There are also numerous competitors among the various
manufacturers of the types of products we offer. Many of our competitors and
potential competitors have substantially greater financial, customer support,
technical and marketing resources, larger customer bases, longer operating
histories, greater name recognition and more established relationships in the
industry than we do. We cannot be sure that we will have the resources or
expertise to compete successfully in the future. Our competitors may be able to:
(i) develop and expand their product and service offerings more quickly; (ii)
adapt to new or emerging technologies and changing customer needs faster; (iii)
take advantage of acquisitions and other opportunities more readily; (iv)
negotiate more favorable agreements with distributors and more favorable
licensing agreements with vendors; (v) devote greater resources to the marketing
and sale of their products; and (vi) address customers' service-related issues
better. Some of our competitors may also be able to provide customers with
additional benefits at lower overall costs or to reduce their application
service charges aggressively in an effort to increase market share. We cannot be
sure that we will be able to match cost reductions by our competitors. In
addition, we believe that there is likely to be consolidation in our markets,
which could lead to increased price competition and other forms of competition
that could cause our business to suffer.

OUR CUSTOMERS MAY BECOME SUBJECT TO GOVERNMENT REGULATION AND LEGAL
UNCERTAINTIES THAT COULD HARM OUR BUSINESS.

         The regulatory environment for IP network telephony is subject to
substantial uncertainty. In the United States, we believe that there are
currently few laws or regulations directly applicable to packet switched
technology networks or to access to, or commerce on, IP networks generally.
Future changes in the regulatory environment, particularly in regulations
relating to the telecommunications industry, could significantly harm our
business. The increasing commercial acceptance of packet switched technology
networks, as well as other factors, may result in the future application or
adoption of a number of laws and regulations relating to the conduct of our
customers' business as it relates to telecommunications, such as: fees or
charges on users and providers of products and services; pricing;
characteristics and quality of services; taxes; copyrights; and additional
regulations and obligations upon on-line service providers. Substantial
government regulation or government imposition of fees, charges, taxes or
regulation may significantly harm the acceptance and attractiveness of IP
network voice communications. Also, we cannot predict the likelihood that any
future legislation or regulation will be enacted, nor the financial impact, if
any, of such resulting legislation or regulation. In addition, we may offer
other products with new telecommunications capabilities or services which could
be subject to existing federal government regulations or which could trigger the
enactment of additional domestic or foreign government regulations. The
regulatory treatment of IP-based telephony outside of the United States varies
widely from country to country. A number of countries currently prohibit or
limit competition in the provision of traditional voice telephony services. Some
countries prohibit, limit or regulate how companies provide IP-based telephony.
Increased regulation of the Internet and/or IP-based telephony providers, or the
prohibition of IP-based telephony in one or more countries could limit our
ability to offer IP-based telephony products or make them more expensive.


                                       20
<PAGE>

THE INTRODUCTION OF NEW PRODUCTS AND SERVICES MAY RESULT IN CHANGES TO OUR SALES
CYCLES AND BACKLOG WHICH MAY CAUSE FLUCTUATIONS IN OUR QUARTERLY RESULTS.

         The purchase of the products we offer sometimes involves on the part of
our prospective customers significant internal procedures associated with the
evaluation, testing, implementation and acceptance of new technologies. This
evaluation process can result in a lengthy sales process, depending upon the
product(s) offered, typically ranging from approximately two months to more than
six months, and subjects the sales cycle associated with the purchase of the
products we offer to a number of significant risks, including budgetary
constraints and internal acceptance reviews. The length of our sales cycle also
may vary substantially from customer to customer. While our customers are
evaluating the products we offer and before placing an order with us, we may
incur substantial sales and marketing expenses and expend significant management
effort. Consequently, if sales forecasted from a specific customer for a
particular quarter are not realized in that quarter, our operating results could
be materially adversely affected. Our quarterly operating results have
historically depended on, and may fluctuate in the future as a result of, many
factors including: volume and timing of orders received during the quarter; the
mix of products sold; competitive pricing pressures; general economic
conditions; patterns of capital spending by customers; the timing of new product
announcements and releases by the manufacturers and distributors of such
products; the availability of current and new product offerings by us and our
competitors; the availability and cost of products and components from our
suppliers; and the cost and effect of acquisitions. In addition, we have
historically operated with a relatively large backlog (tracked generally in the
industry by equipment specifically ordered for a customer but not yet
installed), with sales and operating results in any quarter principally
dependent on delivery, installation and acceptance by a customer of the
equipment ordered and the balance of payment due made. Market demand for
investment in capital equipment such as business communication systems is
largely dependent on general economic conditions, and can vary significantly as
a result of changing conditions in the economy as a whole. We cannot assure that
historical backlog trends will continue in the future. Our expense levels are
based in part on expectations of future sales and, if sales levels do not meet
expectations, operating results could be harmed. As a result of these and other
factors, we have historically experienced, and could continue to experience in
the future, fluctuations in sales and operating results on a quarterly basis.

PENNY STOCK REGULATIONS AND RESTRICTIONS

         The Commission has adopted regulations, which generally define penny
stocks to be an equity security that has a market price less than $5.00 per
share, subject to certain exemptions. As of the date hereof, the closing price



                                       21
<PAGE>

of our common stock is less than $5.00 per share and therefore, is a "penny
stock" under the Exchange Act. Such designation requires any broker or dealer
selling such securities to disclose certain information concerning the
transactions, obtain a written agreement from the purchaser, and determine that
the purchaser is reasonably suitable to purchase the securities. These rules may
restrict the ability of brokers and dealers to sell our common stock and may
adversely affect the ability of investors to sell their shares.

OUR STOCK PRICE MAY BE VOLATILE, IMPAIRING YOUR ABILITY TO SELL YOUR SHARES AT
OR ABOVE PURCHASE PRICE.

         The market price for our common stock may be highly volatile. We cannot
assure that you will be able to sell your shares at or above your purchase
price. The volatility of our stock could be subject to continued wide
fluctuations in response to many risk factors listed in this section, and others
beyond our control, including: announcements of developments relating to our
business; fluctuations in our operating results; shortfalls in revenue or
earnings relative to (if any) securities analysts' expectations; announcements
of technological innovations or new products or enhancements by the
manufacturers of the products we offer or by the manufacturers of the products
offered by our competitors; announcements of acquisitions or planned
acquisitions of other companies or businesses; investors' reactions to
acquisition announcements; general conditions in the telecommunications
industry; the market for Internet-related products and services; changes in the
national or worldwide economy; changes in legislation or regulation affecting
the telecommunications industry; an outbreak of hostilities; and changes in our
relationships with our customers and suppliers. In addition, stock prices of
technology related companies in general, and for Internet-based voice and data
communications companies of technology stocks in particular, have experienced
extreme price fluctuations in recent years which have often been unrelated to
the operating performance of affected companies. We cannot assure that the
market price of our common stock will not experience significant fluctuations in
the future, including fluctuations that are unrelated to our performance.

ITEM 2.  PROPERTIES

         Our executive offices are currently located at 2101 N.W. 33rd Street,
Suite 600A, Pompano Beach, FL 33069. Such facility, which aggregates
approximately 7,620 square feet is subject to a five year lease which commenced
on July 11, 2000. The total rent is approximately $473,964 over 60 months,
subject to cost of living adjustments.


                                       22
<PAGE>

         We are currently exploring the possibility of subletting such facility
or otherwise obtaining a release from such lease as we have relocated most of
our operations to the Ameritrend office facility located at 3710 Park Central
Boulevard North, Pompano Beach, Florida 33064, a short distance from our current
executive office facility. Such Ameritrend facility, which aggregates
approximately 8,968 square feet, is currently subject to a monthly rent of
approximately $6,400 plus fees for common area and maintenance.

         We believe such Ameritrend facility to be adequate for our current
operations, and for our planned operations for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not presently a party to any litigation, nor to the
knowledge of management, is any litigation threatened against the Company which
may materially affect its business or operations. The Company is, and may from
time-to-time, be subject to claims, actions and/or proceedings arising primarily
in the ordinary course of its business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         See PART I. ITEM 1. and "Other Events" thereunder.

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is listed for trading on the over-the-counter market
("OTC") (Symbol: MTDP). From approximately February 23, 2001 through November
20, 2001, our common stock was listed for trading on Over-The-Counter Bulletin
Board ("OTCBB"). Our common stock was delisted from the OTCBB on or about
November 20, 2001 due to the Registrant not being current in its filings with
the Commission under the Exchange Act. We intend to eventually reapply for
listing on the OTCBB. No assurances are given that such application will be
approved.

         The following table sets forth the high and low bid for our common
stock for each quarter since February 23, 2001, as reported by NASDAQ's online
charting service. Such quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions:

Quarter Ended                               High Bid                   Low Bid

February 23 - March 31, 2001                $1.25                      $1.00
June 30, 2001                               $1.00                      $.30
September 30, 2001                          $1.05                      $.30


                                       23
<PAGE>

         As of November 30, 2001, there were approximately 180 common
stockholders of record and 39,983,285 shares of common stock issued and
outstanding. Certain of the shares of common stock are held in "street" name and
may, therefore, be held by several beneficial owners.

         Of the 39,983,285 shares of outstanding common stock, 38,949,428 shares
are restricted securities of the Registrant within the meaning of Rule 144(a)(3)
promulgated under the Securities Act of 1933, as amended. In general, under Rule
144, as currently in effect, subject to the satisfaction of certain other
conditions, a person, including an affiliate of the company (a person who has a
control relationship with the company) who has owned restricted securities of
common stock beneficially for at least one year is entitled to sell, within any
three month period, that number of shares of a class of securities that does not
exceed the greater of (i) one percent of the shares of that class then
outstanding or, (ii) the average weekly trading volume of that class during the
four calendar weeks preceding such sale. A person who has not been an affiliate
of the Registrant for the three months immediately preceding the sale and has
beneficially owned shares of common stock for at least two years is entitled to
sell such shares under Rule 144 without regard to any of the limitations
described above. The holders of the Registrant's restricted securities are and
will become eligible to sell under Rule 144 at various times from the present
through November 2002.

         No prediction can be made as to the effect, if any, that future sales
of shares of common stock or the availability of common stock for future sale
will have on the market price of the common stock prevailing from time to time.
Sales of substantial amounts of common stock on the public market could
adversely affect the prevailing market price of the common stock.

         No shares of the Registrant's preferred stock are issued and
outstanding.

Dividends

         The Registrant has not declared or paid any dividends to its
shareholders of common stock since its inception and does not anticipate paying
any such dividends in the foreseeable future. Management anticipates that all
cash flow generated from operations in the foreseeable future will be retained
and used to develop and expand the Company's business. Any future payment of
dividends will depend on the Company's results of operations, financial
condition, cash requirements and other factors deemed relevant by the board of
directors.

         The securities issuances described below were effected during the
Registrant's fourth quarter ended June 30, 2001 pursuant to Section 4(2) under
the Securities Act, based upon the limited number of offerees, their
relationship to the Registrant, the number of shares or other securities offered
in each offering, the size of the respective offerings, and the manner of each
offering:


                                       24
<PAGE>

         We issued an aggregate of 15,100 shares of our common stock to
employees of the Company for employee services rendered valued at $1.00 per
share; 80,000 shares of our common stock pursuant to exercises of employee stock
options at $.01 per share; 1,096,000 shares of our common stock to the
Registrant's Chief Executive Officer pursuant to his exercise of a previously
issued common stock option at an exercise price of $.0001 per share; 277,002
shares of our common stock to investors at prices ranging from $.44 to $.60 per
share; 200,000 shares of our common stock to a consultant to the Registrant for
business consulting services rendered valued at $.05 per share; 150,000 shares
of our common stock to a consultant to the Registrant for business consulting
services rendered valued at $.05 per share; 180,000 shares of our common stock
to a consultant for business consulting services rendered in connection with a
previously executed financial advisory investment banking agreement valued at
$.05 per share (such consultant was also paid $65,000 in connection with the
June 21, 2001 stock transaction with Lancer), and 58,000 shares of our common
stock in settlement of a debt dispute valued at $.05 per share.
See also PART I. ITEM 1.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS AND OTHER PARTS OF THIS REPORT ON FORM 10-KSB CONTAIN FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE WORDS "EXPECTS,"
"ANTICIPATES," "BELIEVES," "INTENDS" AND SIMILAR EXPRESSIONS IDENTIFY
FORWARD-LOOKING STATEMENTS WHICH ARE BASED ON INFORMATION AVAILABLE TO THE
COMPANY ON THE DATE HEREOF, AND THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY
SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A
RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH IN "FACTORS THAT MAY AFFECT
FUTURE OPERATING RESULTS" AND ELSEWHERE IN THIS FORM 10-KSB, AND OTHERWISE SET
FORTH FROM TIME TO TIME IN THE REGISTRANT'S FILINGS WITH THE COMMISSION UNDER
THE EXCHANGE ACT AND IN ITS PRESS RELEASES.


                                       25
<PAGE>

RESULTS OF OPERATIONS

         As further described in the notes to the consolidated financial
statements herein, and in PART I. ITEM 1. above, we are the result of an October
6, 2000 merger between Arielle and Method. The merger has been accounted for as
an acquisition of Arielle by Method, and in accordance with applicable
accounting rules, the effective date of the merger for accounting purposes is
September 30, 2000. The merged entity adopted the June fiscal year end of
Method. Since Arielle was a non-operating "shell" entity with no appreciable
revenues or expenses, the analysis of the results of operations and financial
condition relates primarily to the activities of Method, the surviving entity
for accounting purposes.

         We are a multi-service business communications systems company
specializing in the custom design, installation, and service of total
communications network systems, including computer telephone integration, fiber
optic cabling and video conferencing, among other network systems, for various
businesses with a focus on businesses located in South Florida. We intend to
pursue a growth strategy which will entail, among other things, the possible
acquisition of existing technology companies involved in segments of the
business communications industry complimentary to that of the Company and to
acquire additional experienced industry personnel.

         Twelve months ended June 30, 2001 compared to twelve months ended June
30, 2000, respectively.

         Net sales for the twelve months ended June 30, 2001 were $3,719,470, as
compared to net sales for the twelve months ended June 30, 2000 of $2,974,946.
This increase is primarily attributable to increased successful sales and
marketing efforts. Approximately $744,000 of such sales are attributable to
sales of Avaya equipment, and the balance to sales of NEC and other
manufacturers' equipment.

         Cost of sales was $2,551,910 or approximately 69% of sales for the
twelve months ended June 30, 2001 as compared to cost of sales for the twelve
months ended June 30, 2000 of $1,562,986 or approximately 53% of sales. This
increase is attributable to increased labor and related costs as a percentage of
net sales.

         Operating expenses for the twelve months ended June 30, 2001, which
substantially consist of sales and administrative labor, amounted to $4,566,193
as compared to $3,406,898 for the twelve months ended June 30, 2000. This
increase is attributable to the hiring of additional sales personnel and related
administrative support staff from time to time during the fiscal year in
anticipation of increased sales and marketing efforts.

         Consulting fees were $257,891 for the twelve months ended June 30, 2001
as compared to $37,547 for the twelve months ended June 30, 2000. The increase
is attributable to increased investor relations and various business consulting
services rendered.


                                       26
<PAGE>

         Salaries were $2,391,217 for the twelve months ended June 30, 2001 as
compared to $1,794,105 for the twelve months ended June 30, 2000. The increase
is attributable to the hiring of additional sales and administrative staff and
the granting of 2,000,000 shares of common stock to two employees below fair
value.

         Professional fees were $168,409 for the twelve months ended June 30,
2001 as compared to $76,361 for the twelve months ended June 30, 2000. This
increase is attributable to increased legal costs associated with the merger,
and related increased quarterly legal, accounting and auditing fees associated
with SEC quarterly review.

         Rent expense was $128,847 for the twelve months ended June 30, 2001 as
compared to $61,764 for the twelve months ended June 30, 2000. The increase is
attributable to the relocation to larger and more expensive facilities.

          Other selling, general and administrative expenses, which include
travel and entertainment, insurance, auto, telephone and other expenses, were
$614,835 for the twelve months ended June 30, 2001 as compared to $942,098 for
the twelve months ended June 30, 2000. The decrease is attributable to
management's concerted efforts to overall reduce such corporate expenditures.
 .
         Interest expense was $98,657 for the twelve months ended June 30, 2001
as compared to $26,632 for the twelve months ended June 30, 2000. The increase
is attributable to interest and related expenses relating to our $600,000
General Electric Capital Corporation ("GE Capital") revolving credit line which
was fully repaid and retired on October 9, 2001.

         During the twelve months ended June 30, 2001, we issued stock options
to consultants and to certain employees at exercise prices below fair value.
These issuances have resulted in the Company incurring an accounting charge of
$1,150,912 for such period, compared to $983,815 in the comparable period in the
prior year.

         As a result of the foregoing factors, we incurred a net loss of
$(3,485,007) or $(.379) per share of the twelve months ended June 30, 2001 as
compared to a net loss of $(2,016,775) or $(.350) per share for the twelve month
period ended June 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

         As further discussed in Note 1 to our accompanying financial
statements, our accompanying financial statements have been prepared on a going
concern basis that contemplates the realization of assets and the settlement of
liabilities and commitments on the normal course of business. To the extent that
we are unable to obtain additional working capital from operations and/or other
sources as required or otherwise desired, our accompanying financial statements
will be materially affected.


                                       27
<PAGE>

         At June 30, 2001, we had stockholders' deficit of $(703,776) and a
deficit in working capital of $(918,511). Since our inception, we have incurred
losses of approximately $6,070,479. Our operations and growth have been funded
by the sale of common stock during fiscal 2001 with net proceeds of
approximately $582,784 and working capital borrowings, further discussed below,
of approximately $701,663. These funds have been used for working capital and
capital expenditures.

         We do not currently have any commitments for any material capital
expenditures except for lease obligations for our office facilities and leased
and purchased fleet service vehicles. See notes 3 and 9 to the accompanying
financial statements for a description of our obligations at June 30, 2001.

         Other material expenditures include the payment, from sales of
purchased inventory, to Danka of approximately $975,000, representing the
approximate balance due under the $1,000,000 promissory note issued in
connection with our acquisition of Ameritrend.

         As of June 30, 2001, we had three lines of credit with commercial
lenders. The agreements provide for maximum revolving lines of credit of
$633,000. Interest at June 30, 2001 ranged from 11.5% to 19.4%. The aggregate
amount outstanding at June 30, 2001 was $309,342. Currently, except for
customary credit terms extended by certain of our vendors (30-60 days net), we
have no credit lines or other credit facilities with any third parties.

         A $600,000 revolving credit line with GE Capital was repaid by the
Company in full and retired on October 8, 2001.

         During the twelve months ended June 30, 2001, we obtained loans from
several individual investors aggregating $260,000 which were used for working
capital purposes. On February 12, 2001, such notes were exchanged for 355,957
shares of our common stock, valued at $.75 per share.

         We presently believe our current sources of credit, which only include
standard terms provided by vendors, and liquidity, both from cash flow from
current operations, resulting in part from our previously announced acquisition
of Ameritrend, and from informal commitments for additional equity capital from
certain current shareholders, will provide sufficient liquidity to meet our cash
requirements to sustain existing operations for approximately the next six to
nine months. We have recently seen some improvement in sales industry wide,
which we have also experienced, and believe, based upon such current trend, if
continued, that sales following such six to nine month period may provide
sufficient internal cash flow to sustain our current operations.

         A key element of our growth strategy is the acquisition of additional
telecommunications related companies. We believe we may be able to acquire such
companies or select assets through the issuance of shares of our common stock.
It is possible, however, that certain acquisition candidates may also require
cash to be acquired. In such event, we may require additional funding to finance
such acquisitions. Additional cash may also be required to integrate any such



                                       28
<PAGE>

acquisitions into our operations. Such financing, if available, may be in the
form of equity and/or debt. We have no firm commitments presently in place with
any underwriters or otherwise in connection therewith and no assurances are
given that such funding will be available if desired, or that the terms thereof,
if available, will be satisfactory.

         For the twelve months ended June 30, 2001, approximately 20.3% of our
total sales were attributable to the sale of medium sized voice communication
equipment manufactured by NEC, and approximately 10.1% of our total sales were
attributable to the sale of cabling supplies and various maintenance related
equipment for installed telephone systems purchased from one particular supplier
of such cabling supplies and maintenance equipment. For the twelve months ended
June 30, 2000, approximately 60% of our total sales were attributable to the
sale of medium sized communications equipment manufactured by Nitsuko.
Commencing in approximately the latter portion of the third quarter of the
fiscal year ended June 30, 2001, as a result of a determination by management to
focus more upon the sale of Avaya products, in view of such manufacturer's name
recognition and reputation for quality products, we started experiencing
increased sales of Avaya products, which trend we anticipate will continue for
the forseeable future.

         On April 26, 2000 the Company entered into an agreement with Thornhill
Group, Inc., a financial advisory and investment banking firm, which provides us
with financial advisory and investment banking services in exchange for a
combination of fees and/or shares of our common stock. Through June 30, 2001,
all fees have been paid in cash and stock. Pursuant to such agreement, such firm
has also been granted an option to purchase a total of 9.9% of our outstanding
shares of common stock as of April 30, 2002 exercisable through April 30, 2005
at an exercise price of $.75 per share, subject to customary adjustments.

Inflation

         We do not believe that inflation has had a material effect on our
results of operations. However, there can be no assurances that our business
will not be affected by inflation in the future.

Seasonality

         We do not generally believe our business is seasonal.


                                       29
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

         The financial statements required by this item are incorporated by
reference. The index to the financial statements is located beginning on page
F-1 of this report.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         Not Applicable.

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         The Registrant's officers and directors through the fiscal year end
(except as otherwise noted) and further information concerning them are as
follows. Directors are elected at our annual meeting of shareholders and serve
for one year or until their successors are elected and qualify. Officers are
elected by the Board and their terms of office are, except to the extent
governed by employment contract, at the discretion of the Board:

Name                       Age      Position

Mark Antonucci*            32       Chief Executive Officer, Chief Financial
                                    Officer, Secretary and Director

Mark Weitsman**            33       President, Chief Operating Officer, Chairman
                                    of the Board of Directors, and Director

Michael Beaubien           41       Executive Vice President & Director

Georges Karam***           51       Director

* Mr. Antonucci voluntarily resigned as Chief Financial Officer on November 28,
2001.

** Mr. Weitsman voluntarily resigned as an officer, director and employee of the
Registrant on June 15, 2001.

*** Mr. Karam voluntarily resigned as a director of the Registrant on June 30,
2001.

         There are no family relationships between the directors, executive
officers, significant employees or any other person who may be selected as a
director or executive officer of the Registrant. None of the Registrant's
directors or executive officers is a director of any registrant that files
reports with the Commission except as described below.


                                       30
<PAGE>

         All directors of the Registrant hold office until the next annual
meeting of stockholders or until their successors are elected and qualified. Our
employee directors have not received any additional compensation since inception
for acting in such capacity and the Registrant has no plans to establish such a
compensation plan.

         Mark Antonucci has been the Registrant's Chief Executive Officer,
Secretary and a Director since the merger with Arielle and served in the same
capacities with Method from January 1, 1999 to the consummation of such merger.
Mr. Antonucci served as the Registrant's Chief Financial Officer from the
consummation of such merger through November 28, 2001 and served in the same
capacities with Method from January 1, 1999 through the consummation of such
merger. As of July 1, 2001, Mr. Antonucci was elected as Chairman of the Board
of Directors. He has been an employee of Method and, following the merger, the
Registrant, since September1998. From April 1996 to August 1998, Mr. Antonucci
was Chief Executive Officer and President of Millennium Capital Consulting
Corp., a financial consulting company located in Boca Raton, Florida which
previously acted as a consultant to Method. In October 1996, Mr. Antonucci filed
for protection pursuant to Chapter 7 of the U.S. Bankruptcy Code.

         Mark Weitsman was the Registrant's President, Chief Operating Officer
and a Director from the consummation of the merger with Arielle through June 15,
2001, at which time he voluntarily resigned from all officer, director and
employee positions. From 1990 through the consummation of the merger with
Arielle, he served in the same capacities with Method.

         Michael Beaubien has been the Registrant's Executive Vice President and
a Director since the consummation of the merger with Arielle and served in the
same capacities with Method prior thereto and since July 1990. As Executive Vice
President he is in charge of the Company's technical services. From 1990 to
1992, he was a service technician with TIE Systems, Inc. of Miami Lakes,
Florida. From 1987 to 1990, he was a service technician with Intellicom Business
Communications in Fort Lauderdale, Florida. From 1984 to 1987, Mr. Beaubien
served as an installation and service technician with National Business
Communications of Pompano Beach, Florida.

         Georges Karam served as a Director of the Registrant from the
consummation of the merger with Arielle through June 30, 2001 when he
voluntarily resigned from such position. Prior thereto and from July 1999, he
was a director of Method. Since July 1996, he has served as President and Chief
Executive Officer of Karam Co., a financial advising firm located in Lebanon.
Mr. Karam has and continues to serve as a financial consultant and business
adviser for various businesses worldwide.


                                       31
<PAGE>

         Milton Barbarosh was appointed as the Registrant's Chief Financial
Officer on December 5, 2001. Mr. Barbarosh is President of Stenton Leigh Capital
Corp., which was formed in 1989 by Mr. Barbarosh to provide specialized services
to various businesses, and which firm has also provided services to the
Registrant. Mr. Barbarosh has served as an officer and director of many public
companies. From 1987 to 1989, Mr. Barbarosh served as Chief Executive Officer of
J.W. Charles Group, Inc., a financial services company. From 1986 to 1989, he
served as President of J.W. Charles Capital Corp., an investment banking firm.
From 1984 to 1986, he served as Manager, Mergers and Acquisitions for The Royal
Bank of Canada where he was responsible for mergers and acquisitions,
divestitures, valuations, financing, leveraged buyouts and strategic planning.
From 1980 to 1984, he served as Manager, Mergers and Acquisitions for Arthur
Young (now Ernst & Young). Prior thereto, he was employed in the audit
department of Thorne Riddell (now KPMG Peat Marwick) from 1976 to 1979. Mr.
Barbarosh is a Senior Member of the American Society of Appraisers in Business
Valuations and holds numerous professional associations.

         The following persons were elected by the Registrant's remaining
Directors to fill vacancies on the Board of Directors subsequent to June 30,
2001. Each of such persons shall serve in such capacity for a term expiring at
the next annual meeting of shareholders, or until his/her earlier death,
resignation or removal.

         Richard Fieni was elected to the Registrant's Board of Directors on
July 1, 2001 and appointed as President of the Registrant on the same date.
Prior thereto and since September 27, 2000, Mr. Fieni served as Method's
Director of Sales and Sales Manager of the South Florida Branch. From September
2000 to June 2001, Mr. Fieni was the Director of Sales of MPCIT. Previously Mr.
Fieni was Vice President of Interconnect Data Services, Inc., located in Miami
from November 1996 through September 2000.

         Kathryn Braithwaite, age 39, has been a Director of the Registrant
since August 2001. From March 1999 through January 2001, Ms. Braithwaite was
Vice-President of ContractorHub.com, a technology firm with headquarters located
in Kent, Washington, which provides construction company clients with electronic
procurement of goods and services over the Internet. From 1997 to March 1999,
Ms. Braithwaite was Director of Business Development for The IT Group, Inc., a
provider of diversified services in the areas of consulting, engineering,
construction, remediation and facilities management with headquarters located in
Monroeville, Pennsylvania, which acquired the division of Fluor Daniel GTI,
Inc., where Ms. Braithwaite had been employed. From September 1992 to August
1997, Ms. Braithwaite was Director of Business Development for TRC Environmental
Solutions, Inc., an environmental construction and engineering firm. Ms.
Braithwaite also previously served as Project Manager, Business Development &
Engineering for Hughes Environmental Systems, Inc. and Senior Manufacturing
Engineer for Hughes Aircraft Company. Ms. Braithwaite currently serves on the
Board of Directors of the following public companies: SMX Corp., Nu-D-Zine,
Inc., AUG Corp., and Centrack International, Inc. Ms. Braithwaite was requested
by Lancer Offshore, Inc. to be elected to the Registrant's Board of Directors
and the Registrant plans to recommend to its shareholders that she be re-elected
to the Board of Directors at Lancer's request.


                                       32
<PAGE>

         The following persons were the Registrant's Executive Officers and
Directors prior to the consummation of the Merger Agreement:

         David Kass was President and a Director of the Registrant from October
1997 through the date of the consummation of the Merger Agreement. Mr. Kass was
Vice President and owner of Mobile Phone Radio Systems from 1974 to 1982. Since
1982, Mr. Kass has been active in several organizations such as Fellow Radio
Club of North America, MENSA and Explorers Club.

         David S. Jacobs was Vice President, and Secretary and a Director of the
Registrant from October 1997 through the date immediately prior to the Merger
Agreement. Mr. Kass has been a partner in the law firm of Jacobs & Cohen, in
Brooklyn, New York, since 1994. Prior to that, he was a partner in the law firm
of Jacobs, Katz & Lurie, Brooklyn, New York.

         John E. Vidaver, was a Director of the Registrant from July 7, 1998
through the date immediately prior to the Merger Agreement. Mr. Vidaver has been
a free-lance radio announcer and voice-over artist for commercials and films
since 1990. He has worked for such radio stations as WQXR Radio, New York, NY,
and WQCD Radio, New York, NY.

COMPLIANCE UNDER SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section 16 of the Exchange Act requires the Registrant's directors and
certain of the Registrant's officers, and persons who own more than 10% of the
Registrant's common stock, to file initial reports of ownership and reports of
changes in ownership with the Commission. Such persons are required by
Commission regulation to furnish us with copies of all Section 16(a) forms they
file. Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Registrant believes
that during its fiscal year ended June 30, 2001, Mr. David Liu, a shareholder of
the Registrant, filed a Form 3 after the due date; Lancer Offshore, Inc. filed
its Form 3 one day after the due date.

ITEM 10. EXECUTIVE COMPENSATION

         The following table discloses compensation received for the fiscal
years ended June 30, 2001, 2000* and 1999* by the named Executive Officers and
Directors:


                                       33
<PAGE>
<TABLE>
<CAPTION>
                                                                          Long-Term
                                  Annual Compensation                 Compensation (**)
                           ----------------------------------         -----------------

                                                                          Securities       All
                                                          Other           Under-          Other
 Name and                                                 Compen-         lying           Compen-
 Principal Position        Year     Salary     Bonus      sation          Options (#)     sation
 ------------------        ----     ------     -----      ------          -----------     ------

<S>                        <C>      <C>          <C>      <C>     <C>     <C>     <C>       <C>
Mark Antonucci, CEO        2001     $62,404      $0       $23,305 (1)     156,952 (2)       (2)

Michael Beaubien, Exec.    2001     $62,404      $0       $23,503 (3)   1,000,000            N/A
  VP

Mark Weitsman, former      2001     $62,404      $0       $19,568 (4)        (5)             N/A
  President

Richard Fieni, President   2001     $64,009      $0       $11,603 (6)   1,150,000            N/A
</TABLE>

** The Company has not entered into any Long-Term Incentive Plan Awards since
inception.

(1)   Includes automobile allowance of $10,455, automobile insurance of $3,128,
      and life, health and dental insurance premiums of $9,722.

(2)   Does not include an aggregate of 1,941,459 shares exercised during the
      fiscal year ended June 30, 2001; such option was previously granted by
      Method and exchanged in connection with the merger with Arielle for an
      option with the Registrant having the same number of underlying
      securities. See further discussion below; All Other Compensation,
      aggregating $688,700, is based upon third party purchases of the
      Registrant's restricted common stock at or near time of two stock option
      exercises.

(3)   Includes automobile allowance of $9,083, automobile insurance of $1,657
      and life, health and dental insurance premiums of $12,763.

(4)   Includes automobile allowance of $17,693 and automobile insurance of
      $1,875.

(5)   An option for 1,000,000 shares of the Registrant's common stock was
      canceled pursuant to the terms of a June 15, 2001 agreement between the
      Registrant and Mr. Weitsman.

(6)   Includes automobile allowance of $5,400 and life, health and dental
      insurance premiums of $6,203.

         *Messrs. Kass, Jacobs and Vidaver, the former officers/directors and
director, respectively, of the Registrant prior to the consummation of the
Merger Agreement on October 6, 2000 by and between Arielle and Method, did not
receive any compensation in their capacity as officers/directors and director,
respectively, of the Registrant. Shortly following the Registrant's
incorporation on or about October 7, 1997 as a Delaware corporation, Messrs.
Kass, Jacobs and Vidaver each acquired 100,000 shares of the Registrant's common
stock at a purchase price of $.05 per share; see discussion below concerning a
summary of compensation terms and provisions for Method's officers and directors
pre-merger and a summary of such person's compensation terms and provisions
post-merger.

         No remuneration of any nature has been paid for or on account of
services rendered by a director in such capacity through the June 30, 2001
fiscal year end except as follows: Mr. Karam, a director from July 1999 through
June 30, 2001, was issued 300,000 shares of common stock in July 1999 by Method
in connection with his election as a director of Method; he was subsequently
issued an option in April 2000 to acquire 300,000 shares at an exercise price of
$.75 per share, vesting over a 2 year period and exercisable over a 4 year
period, and was issued 154,606 shares of common stock in July 2001, valued at
$.175 per share as reimbursement for expenses incurred in his prior capacity as
a director.


                                       34
<PAGE>

         On January 1, 1999, Method entered into a three year employment
agreement with Mr. Antonucci, Method's Chief Executive Officer. Such agreement
provided, among other things, that Mr. Antonucci receive a salary of $125,000
per annum, subject to an annual cost of living increase, a company vehicle and
would be eligible for an annual bonus in an amount determined by the Board of
Directors in its discretion. On or about September 15, 1998, in connection with
his prior association with Method, Mr. Antonucci was granted a stock option
dated as of September 15, 1998 pursuant to which Mr. Antonucci could acquire,
pursuant to the terms and conditions thereof, 10% of the outstanding shares of
Method's common stock at an exercise price of $.0001 per share (based on the
number of shares of Method's common stock issued and outstanding through June
30, 2001) exercisable through April 15, 2003. Such option agreement further
provides that the option shall expire on the last day of any initial employment
agreement with Mr. Antonucci, but no sooner than June 30, 2001 and no later than
April 15, 2003. Such stock option agreement by its terms is binding upon
Method's successors. On December 28, 2001, the Registrant entered into an
amendment to the employment agreement with Mr. Antonucci which, among other
things, extended the term of Mr. Antonucci's employment agreement for two years
(through December 31, 2003, subject to a three year extension)and provided that
Mr. Antonucci receive an automobile to be provided by the Registrant with a cost
not to exceed $750 per month To settle certain obligations due to Mr. Antonucci
under his employment agreement, on July 1, 2001, the Registrant issued Mr.
Antonucci an option to purchase 1,500,000 shares of the Registrant's common
stock exercisable at $.05 per share through June 30, 2006.

         On January 1, 1999, Method entered into a three year employment
agreement with Mr. Beaubien, Method's Executive Vice President. Such agreement
provided, among other things, that Mr. Beaubien receive a salary of $175,000 per
annum, subject to an annual cost of living increase, a company vehicle and be
eligible to receive an annual bonus in an amount determined by the Board of
Directors in its discretion. On October 6, 2001, Mr. Beaubien was granted an
option to purchase 1,000,000 shares of Method's common stock at an exercise
price of $.35 per share exercisable through March 14, 2004 subject to certain
additional terms and conditions set forth therein. Such stock option agreement
by its terms is binding upon Method's successors. On July 1, 2001, the
Registrant entered into a new three year employment agreement with Mr. Beaubien
(subject to an additional two year extension if notice to the contrary is not
otherwise provided by either party as set forth therein), which agreement
provides that Mr. Beaubien serve as Executive Vice President and a Director of
the Registrant, receive a salary of $85,000 per annum, subject to an annual cost
of living increase and five percent of the net profit of the Registrant's
technical services division paid on a quarterly basis. Such agreement further
provides that the Registrant shall provide Mr. Beaubien with an automobile for
which he shall be entitled to receive reimbursement for related expenses
incurred in connection with the use of such automobile in the performance of his
duties on behalf of the Registrant, and is entitled to receive, in the
discretion of the Registrant's Board of Director's, an annual bonus. To settle
certain obligations due to Mr. Beaubien under the January 1, 1999 employment
agreement, the Registrant issued Mr. Beaubien an option to purchase 1,000,000
shares of the Registrant's common stock exercisable at $.05 per share through
June 30, 2006. Such agreement also provides for certain additional fringe
benefits customarily provided to senior executive officers and certain
non-competition, change of control (as defined therein), death, and disability,
for cause and for good reason (as such terms are defined therein) termination
provisions.

         On September 27, 2000, Method entered into a three year employment
agreement with Mr. Fieni, to serve as a director of sales and sales manager.
Such agreement provided, among other things, that Mr. Fieni receive a salary of
$70,000 per annum in addition to override increases based upon specified
criteria and commission based on sales performance. Additionally, Mr. Fieni was
provided with a $500 per month car allowance and was granted a stock option to



                                       35
<PAGE>

purchase 650,000 shares of Method's common stock at a price of $.75 per share
exercisable over a period of three years (250,000 shares vesting after an
introductory period and 200,000 shares vesting on September 27, 2001 and 200,000
shares vesting on September 27, 2002). Such stock option agreement by its terms
is binding upon Method's successors. On July 1, 2001, the Registrant entered
into a new three year employment agreement with Mr. Fieni (subject to an
additional two year extension if notice to the contrary is not otherwise
provided by either party as set forth therein), which agreement provides that
Mr. Fieni serve as President and a Director of the Registrant, receive a salary
of $125,000 per annum, subject to an annual cost of living increase, an
automobile to be provided by the Registrant with a cost not to exceed $750 per
month and, in the discretion of the Registrant's Board of Director's, an annual
bonus. To settle certain obligations due to Mr. Fieni under the January 1, 1999
employment agreement, the Registrant issued Mr. Fieni an option to purchase
500,000 shares of the Registrant's common stock exercisable at $.05 per share
through June 30, 2006. Such agreement further provides that Mr. Fieni receive an
option to purchase 1,000,000 shares of the Registrant's common stock at a price
of $.05 per share exercisable through June 30, 2006 and for certain additional
fringe benefits customarily provided to senior executive officers and certain
non-competition, change of control (as defined therein), death, and disability,
for cause and for good reason (as such terms are defined therein) termination
provisions.

         On January 1, 1999, Method entered into a three year employment
agreement with Mr. Weitsman, Method's then President, Chief Operating Officer
and Chairman of the Board of Directors. Such agreement provided, among other
things, that Mr. Weitsman receive a salary of $175,000 per annum, subject to an
annual cost of living increase, a company vehicle and be eligible to receive an
annual bonus in an amount determined by the Board of Directors in its
discretion. On October 6, 2001, Mr. Weitsman was granted an option to purchase
1,000,000 shares of Method's common stock at an exercise price of $.35 per share
exercisable through March 14, 2004 subject to certain additional terms and
conditions set forth therein. On June 15, 2001, Mr. Weitsman voluntarily
resigned from all officer, director and employee positions with Method and all
subsidiaries and such stock option agreement was canceled pursuant to the terms
of a June 15, 2001 agreement between the Registrant and Mr. Weitsman. See PART
1, ITEM 1.

         Directors, officers, employees and consultants are eligible to
participate in the Registrant's 2001 Stock Option Plan which authorizes the
grant by the plan administrator of up to 500,000 shares of the Registrant's
common stock. Options to purchase 221,800 shares of the Registrant's common
stock have been granted to date at exercise prices of $.75 per share and with
the following additional terms: two year vesting period, and expiring ten years
from the date of grant. Subsequent to issuance, 29,500 shares were forfeited
upon the grantees no longer being employees.

         Stock Option Grants
         -------------------

         The following table contains information concerning stock option grants
to each of the named executive officers for the fiscal year ended June 30, 2001:

                                       36
<PAGE>

<TABLE>
<CAPTION>

                                           % of Total
                    No. of Securities      Options Granted                            Market Price
                    Underlying             to Employees          Exercise Price       Per Share on      Expiration
Name                Options Granted        in Fiscal Year (1)    Per Share            Grant Date        Date
-----------         --------------         -------------------   --------------       -----------      ------------
<S>                   <C>                   <C>                   <C>                     <C>           <C>  <C>
Mark Antonucci        2,098,411(2)(3)       38.59%                $.0001                  (2)           4/15/03

Michael Beaubien      1,000,000(3)          18.40%                $.35                  $.75            3/14/04

Mark Weitsman         1,000,000(4)          18.40%(4)             $.35                  $.75            3/14/04

Richard Fieni           650,000(5)           12.0%                $.75                  $.75           12/31/05
</TABLE>


(1)  Percentages are based upon the total number of options of the Registrant's
     common stock granted to employees during the fiscal year ended June 30,
     2001; does not exclude options forfeited, expired or exercised during the
     fiscal year ended June 30, 2001.

(2)  Mr. Antonucci was previously granted an option by Method to acquire
     (measured through June 30, 2001) 10% of such entity's issued and
     outstanding common stock exercisable at $.0001 per share through April 15,
     2003. Such option was exchanged in connection with the merger with Arielle
     for an option in the Registrant having the same number of underlying
     securities, same exercise price per share, and expiration period. As of
     June 30, 2001, Mr. Antonucci has exercised such option for an aggregate of
     1,941,459 shares. The number of shares remaining underlying such option as
     of June 30, 2001 is 156,952; Market price per share on grant date is as
     follows: 1,000,401 at $.75 per share, and 1,098,010 at $.05 per share.

(3)  Such options are immediately exercisable.

(4)   Such options were canceled pursuant to the terms of a June 15, 2001
      agreement between the Registrant and Mr. Weitsman.

(5)   Mr. Fieni was previously granted an option by Method to acquire 650,000
      shares of such entity's common stock exercisable at $.75 per share
      exercisable over a period of three years. Such option was exchanged in
      connection with the merger with Arielle for an option in the Registrant
      having the same terms and conditions; 450,000 shares are immediately
      exercisable and the remaining 200,000 shares will become exercisable on
      September 27, 2002.

         The following table contains information concerning stock option
exercises by each of the named executive officers for the fiscal year ended June
30, 2001:

                                       37
<PAGE>

<TABLE>
<CAPTION>

                                                                                            Value of
                                                       Number of Securities                 Unexercised
                    Shares                             Underlying Unexercised               in the Money
                    Acquired       Value               Options at Fiscal Year End           Options at 6/30/01
Name                on Exercise    Realized           (Exercisable / Unexercisable)     Exercisable / Unexercisable
----                -----------    --------           -----------------------------     ---------------------------

<S>                 <C>              <C>                <C>           <C>                  <C>
Mark Antonucci      1,941,459        (1)                156,952       (156,952/N/A)        $7,832/N/A


Michael Beaubien     N/A             N/A              1,000,000     (1,000,000/N/A)          $0/N/A

Mark Weitsman        N/A             N/A                  N/A                                 N/A

Richard Fieni        N/A             N/A                650,000   (450,000/200,000)           $0/$0
</TABLE>

(1)  Value Realized, $688,700, is based upon third party purchases of the
     Registrant's restricted common stock at or near time of two stock option
     exercises.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth the beneficial ownership of common stock
as of November 30, 2001 by: (i) each of the Registrant's officers and directors,
(ii) each person who is known by the Registrant to own beneficially more than 5%
of the outstanding shares of common stock, and (iii) all of the Registrant's
officers and directors as a group:

                                                              Percentage
Name and Address of                 Number of Shares          Ownership
Beneficial Owner(1)                 Beneficially Owned(2)     of Class(2)
----------------------              ---------------------     -----------

Mark Antonucci (3)                 4,024,911 (3)               9.7%(3)
Michael Beaubien (4)               4,351,500 (4)              10.4%(4)
Richard Fieni (5)                  1,951,500 (5)               4.7%(5)
Kathryn Braithwaite (6)                 -                           --
Lancer Offshore, Inc. (7)         63,750,000 (7)              79.7%(7)
Mark Weitsman (8)                  2,351,500 (8)               5.9%(8)
Anthony Ivankovitch                5,604,000 (9)              14.0%(9)
Officers and Directors            10,326,911 (10)             22.7%(10)
  as a Group (4 persons)(10)

(1)   Unless otherwise indicated, the Registrant believes that all persons named
      in the table have sole voting and investment power with respect to the
      shares of common stock beneficially owned by each such person.

(2)   A person is deemed to be the beneficial owner of common stock that can be
      acquired by such person within 60 days of November 30, 2001 pursuant to
      warrants, stock options, conversion privileges or other rights. Except as
      otherwise specified, each beneficial owner's percentage ownership is
      determined by assuming that any such securities that are held by such
      person (but not those held by any other person) and that are exercisable
      or convertible within 60 days from November 30, 2001 have been exercised
      or converted.


                                       38
<PAGE>

(3)   Mr. Antonucci is the Chief Executive Officer, Secretary, Chairman of the
      Board of Directors and a Director of the Registrant. Also includes 156,952
      shares of common stock underlying an immediately exercisable option
      exercisable at $.0001 per share through April 15, 2003 and 1,500,000
      shares of common stock underlying an immediately exercisable option
      exercisable at $.05 per share through June 30, 2006.

(4)   Mr. Beaubien is the Executive Vice President and a Director of the
      Registrant. Also includes: 1,000,000 shares of common stock underlying an
      immediately exercisable option exercisable at $.35 per share through March
      14, 2004 and 1,000,000 shares of common stock underlying an immediately
      exercisable option exercisable at $.05 per share through June 30, 2006.

(5)   Mr. Fieni is the President and a Director of the Registrant. Includes:
      450,000 shares of common stock underlying an option for 650,000 shares of
      common stock, of which 450,000 shares are currently exercisable (remaining
      200,000 vest on September 27, 2002) at a price of $.75 per share through
      December 31, 2005; 1,000,000 shares of common stock underlying an
      immediately exercisable option exercisable at $.05 per share through June
      30, 2006; and 500,000 shares of common stock underlying an immediately
      exercisable option exercisable at $.05 per share through June 30, 2006.

(6)   Ms. Braithwaite is a Director of the Registrant.

(7)   Includes 10,000,000 shares of common stock underlying an immediately
      exercisable warrant exercisable at $.08 per share through June 21, 2004;
      10,000,000 shares of common stock underlying an immediately exercisable
      warrant exercisable at $.12 per share through June 21, 2004; and
      20,000,000 shares of common stock underlying an immediately exercisable
      warrant exercisable at $.001 per share through September 26, 2006.

(8)   Mr. Weitzman is a former officer and director of the Registrant.

(9)   Includes 3,000,000 shares of common stock underlying an immediately
      exercisable warrant exercisable at $.15 per share through May 31, 2003.

(10)  See footnotes 3-6 above; does not include Mr. Milton Barbarosh who became
      the Registrant's Interim Chief Financial Officer on December 5, 2001.
      Stenton Leigh Business Resources, Inc., a business consultant to the
      Registrant, with which firm Mr. Barbarosh is affiliated, owns immediately
      exercisable warrants to purchase 1,500,000 shares of the Registrant's
      common stock exercisable at $.05 per share through June 21, 2003 and
      1,500,000 shares of the Registrant's common stock exercisable at $.01 per
      share through June 21, 2003.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         See PART I. ITEM 1. and PART III. ITEMS 9, 10 and 11.


                                       39
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following documents are filed as part of this report:

1.       Financial Statements:

The index to the Registrant's Consolidated Financial Statements is set forth on
page F-1 of this report.

2.       Exhibits

     Exhibit Number    Description

         2.0      Agreement and Plan of Merger dated January 12, 2000 between
                  Method, and Arielle, incorporated by reference to Exhibit 2.0
                  to the Registrant's Post-Effective Amendment No. 1 to Form
                  SB-2 Registration Statement filed with the Commission on June
                  12, 2000

         2.1      Plan and Agreement of Merger by and between the Registrant and
                  Method Products Corp., a Florida corporation dated March 1,
                  2001*

         3.1(a)   Certificate of Incorporation of Arielle incorporated by
                  reference to Exhibit 3.1(a) to the Registrant's Form SB-2
                  Registration Statement filed with the Commission on August 17,
                  1998

         3.1(b)   Certificate of Incorporation of Method incorporated by
                  reference to Exhibit 3.1(b) to the Registrant's Post Effective
                  Amendment No. 1 to Form SB-2 Registration Statement filed with
                  the Commission on June 12, 2000

         3.1(c)   Articles of Incorporation of Method Products Corp., a Florida
                  corporation*

         3.2(a)   By-Laws of Arielle incorporated by reference to Exhibit 3.2(a)
                  to the Registrant's Form SB-2 Registration Statement filed
                  with the Commission on August 17, 1998.

         3.2(b)   By-Laws of Method incorporated by reference to Exhibit 3.2(b)
                  to the Registrant's Post-Effective Amendment No. 1 to Form
                  SB-2 Registration Statement filed with the Commission on June
                  12, 2000.

         3.2(c)   By-Laws of Method Products Corp. (Florida
                  corporation)/Registrant*

         4.1      Form of Common Stock Share Certificate*

         4.2      Warrant for Lancer dated June 21, 2001 incorporated by
                  reference to Exhibit 4.8 to the Registrant's Form 8-K filed
                  with the Commission on July 9, 2001.

         4.3      Warrant for Lancer dated June 21, 2001 incorporated by
                  reference to Exhibit 4.9 to the Registrant's Form 8-K filed
                  with the Commission on July 9, 2001.

         4.4      Warrant for Lancer dated September 27, 2001*

         4.5      Warrant for Stenton Leigh Business Resources, Inc. dated June
                  21, 2001 incorporated by reference to Exhibit 4.10 to the
                  Registrant's Form 8-K filed with the Commission on July 9,
                  2001

         4.6      Warrant for Stenton Leigh Business Resources, Inc. dated
                  September 26, 2001*

         4.7      Escrow Agreement by and between Registrant, Michael Beaubien,
                  Mark Antonucci and Kipnis Tescher Lippman & Valinsky, P.A.
                  dated December 19, 2001*

         10.2     Dealer Agreement by and between Avaya Inc., ScanSource, Inc.
                  d/b/a Catalyst Telecom and the Registrant dated November 2000*

         10.3     Agreement with NEC America, Inc. dated June 8, 2001*


                                       40
<PAGE>

         10.4     Stock Purchase Agreement by and between Lancer and the
                  Registrant dated as of June 21, 2001 incorporated by reference
                  to Exhibit 4.7 to the Registrant's Form 8-K filed with the
                  Commission on July 9, 2001

         10.5     Stock Purchase Agreement by and between Lancer and the
                  Registrant dated as of September 27, 2001*

         10.6     Stock Purchase Agreement by and between Danka, Ameritrend and
                  the Registrant dated as of August 31, 2001*

         10.7     Stock Pledge Agreement by and between Danka, Shumaker, Loop &
                  Kendrick, LLP and the Registrant dated as of August 31, 2001*

         10.8     Assignment and Assumption Agreement by and between Danka and
                  Ameritrend dated as of August 31, 2001*

         10.9     Secured Promissory Note by and between Danka and the
                  Registrant dated August 31, 2001*

         10.10    Security Agreement by and between Danka and Ameritrend dated
                  August 31, 2001*

         10.11    2001 Stock Option Plan incorporated by Reference to Exhibit C
                  to the Registrant's Definitive Information Statement filed
                  with the Commission on February 8, 2001

         10.12    Employment Agreement by and between Method and Mark Antonucci
                  dated January 1, 1999 incorporated by reference to Exhibit
                  99.1 to the Registrant's Post-Effective Amendment No. 3 to
                  Form SB-2 Registration Statement filed with the Commission on
                  August 18, 2000

         10.13    Employment Agreement by and between Method and Michael
                  Beaubien dated January 1, 1999 incorporated by reference to
                  Exhibit 99.2 to the Registrant's Post-Effective Amendment No.
                  3 to Form SB-2 Registration Statement filed with the
                  Commission on August 18, 2000

         10.14    Employment Agreement by and between Method and Mark Weitsman
                  dated January 1, 1999 incorporated by reference to Exhibit
                  99.3 to the Registrant's Post-Effective Amendment No. 3 to
                  Form SB-2 Registration Statement filed with the Commission on
                  August 18, 2000

         10.15    Financial Advisory/Investment Banking Agreement with Thornhill
                  Group, Inc. incorporated by reference incorporated by
                  reference to Exhibit 99.7 to the Registrant's Form SB-2
                  Registration Statement filed with the Commission on August 18,
                  2000

         10.16    Amended Employment Agreement by and between the Registrant and
                  Mark Antonucci dated as of December 28,2001*

         10.17    Employment Agreement by and between the Registrant and Michael
                  Beaubien dated July 1, 2001 *

         10.18    Employment Agreement by and between the Registrant and Richard
                  Fieni dated July 1, 2001 *

         21(a)    MPC Integrated Technologies, Inc., a Florida corporation

         21(b)    Ameritrend Corp., a Florida corporation

* filed herewith

(b) Reports on Form 8-K

         During the last quarter of its fiscal year, the Registrant filed a Form
8-K on April 5, 2001 reporting the voluntary resignation of Mark Weitsman as an
officer, director and employee (see PART I.. ITEM 1 herein) and the execution of
a stock purchase agreement by and between the Registrant and Lancer (see PART
I.. ITEM 1 herein).


                                     41
<PAGE>



                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d)of the Securities
Exchange Act, of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                             METHOD PRODUCTS CORP.


                             By:/s/  Mark Antonucci
                                --------------------------
                                     Mark Antonucci, Chief Executive Officer

Dated: December 28, 2001

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>

SIGNATURE                                   TITLE                               DATE

<S>                        <C>                                                  <C>
/s/ Mark Antonucci         Chief Executive Officer, Secretary,
------------------         Chairman of the Board of Directors                   December 28, 2001
                           and Director



/s/ Milton Barbarosh       Interim Chief Financial Officer (Principal
--------------------       Financial and Accounting Officer                     December 28, 2001


/s/ Michael Beaubien       Executive Vice President,
--------------------        Director                                            December 28, 2001




/s/Richard Fieni           President, Director                                  December 28, 2001
----------------



/s/ Kathryn Braithwaite    Director                                             December 28, 2001
-----------------------
</TABLE>


                                       42



<PAGE>

                      METHOD PRODUCTS CORP. AND SUBSIDIARY









                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>

                                                                                             Page
                                                                                             ----
<S>                                                                                   <C>
INDEPENDENT AUDITORS' REPORT                                                                  F-2
----------------------------

CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------

      Consolidated Balance Sheets                                                             F-3

      Consolidated Statements of Operations                                                  F-4

      Consolidated Statement of Changes in Stockholders' Equity (Deficit)                     F-5

      Consolidated Statements of Cash Flows                                                   F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                            F-7 to F-18
------------------------------------------
</TABLE>


                                      F-1


<PAGE>


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


To the Board of Directors of
Method Products Corp.

We have audited the accompanying consolidated balance sheets of Method Products
Corp. and subsidiary (collectively, the "Company") as of June 30, 2001 and 2000,
and the related consolidated statements of operations, changes in stockholders'
equity (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Method Products
Corp. and subsidiary as of June 30, 2001 and 2000, and the results of its
operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred losses from operations, and it
has a net stockholders' deficit and a working capital deficit at June 30, 2001.
These factors raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


/s/ Ahearn, Jasco + Company, P.A.
---------------------------------
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants

Pompano Beach, Florida
December 7, 2001


                                      F-2


<PAGE>


                      METHOD PRODUCTS CORP. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>




                                                                              2001                    2000
                                                                           -----------            -----------
                                ASSETS
                                ------
<S>                                                                        <C>                    <C>
CURRENT ASSETS:
   Cash and cash equivalents                                               $   271,171            $   326,927
   Accounts receivable, net                                                    206,839                248,464
   Inventories, net                                                            180,974                192,109
   Due from employees                                                            9,999                  2,892
   Prepaid expenses and other                                                   18,449                 29,369
                                                                           -----------            -----------

       TOTAL CURRENT ASSETS                                                    687,432                799,761

PROPERTY AND EQUIPMENT, net                                                    305,856                259,029

OTHER ASSETS                                                                    42,590                 74,228
                                                                           -----------            -----------

       TOTAL                                                               $ 1,035,878            $ 1,133,018
                                                                           ===========            ===========


            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
            ----------------------------------------------

CURRENT LIABILITIES:
   Lines of credit                                                         $   309,342            $    75,397
   Current portion of long-term debt                                            61,986                 61,078
   Accounts payable and accrued expenses                                     1,125,778                495,956
   Customer deposits                                                           108,837                 21,622
                                                                           -----------            -----------

       TOTAL CURRENT LIABILITIES                                             1,605,943                654,053
                                                                           -----------            -----------

LONG-TERM DEBT, less current portion                                           133,711                141,949
                                                                           -----------            -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
   Preferred stock, 2,000,000 shares authorized, $0.0001 par
          value;  no shares issued or outstanding                                   --                     --
   Common stock, 80,000,000 shares authorized, $0.0001 par
          value; 22,080,107 and 7,330,521 shares issued and
          outstanding at June 30, 2001 and 2000, respectively                    2,208                    733
   Additional paid-in capital                                                5,364,495              2,835,808
   Deficit                                                                  (6,070,479)            (2,499,525)
                                                                           -----------            -----------

       STOCKHOLDERS' EQUITY (DEFICIT), NET                                    (703,776)               337,016
                                                                           -----------            -----------

       TOTAL                                                               $ 1,035,878            $ 1,133,018
                                                                           ===========            ===========
</TABLE>





          See accompanying notes to consolidated financial statements.


                                       F-3
<PAGE>

                 METHOD PRODUCTS CORP. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------


                                                         2001           2000
                                                     -----------    -----------

SALES                                                $ 3,719,470    $ 2,974,946

COST OF SALES                                          2,551,910      1,562,986
                                                     -----------    -----------

       GROSS PROFIT                                    1,167,560      1,411,960

ADMINISTRATIVE EXPENSES                                4,566,193      3,406,898
                                                     -----------    -----------

       LOSS FROM OPERATIONS                           (3,398,633)    (1,994,938)
                                                     -----------    -----------

OTHER (INCOME) EXPENSE:
   Interest expense                                       98,657         26,632
   Other income                                          (12,283)        (4,795)
                                                     -----------    -----------

       OTHER EXPENSE, NET                                 86,374         21,837
                                                     -----------    -----------

       LOSS BEFORE INCOME TAXES                       (3,485,007)    (2,016,775)

PROVISION FOR INCOME TAXES                                    --             --
                                                     -----------    -----------

       NET LOSS                                      $(3,485,007)   $(2,016,775)
                                                     ===========    ===========



LOSS PER COMMON SHARE:
   Basic and diluted                                 $    (0.379)   $    (0.350)
                                                     ===========    ===========
   Weighted average common shares outstanding          9,206,190      5,766,899
                                                     ===========    ===========






       See accompanying notes to consolidated financial statements.


                                       F-4

<PAGE>

                      METHOD PRODUCTS CORP. AND SUBSIDIARY
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                   FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                     Preferred Stock         Common Stock
                                                   ------------------   -----------------------
                                                     Number    At par     Number        At par
                                                   of Shares   value     of Shares       value
                                                    -------   -------   -----------   -----------

<S>                                                 <C>       <C>         <C>         <C>
TOTALS, July 1, 1999                                $    --   $    --     5,380,000   $       538

Issuance of stock for cash, net of expenses              --        --     1,442,271           144
Issuance of stock for services                           --        --       453,250            45
Exercise of stock options                                --        --        30,000             3
Issuance of stock for equipment and inventory            --        --        25,000             3
Issuance of stock options below fair market value        --        --            --            --
Issuance of stock options to consultants                 --        --            --            --
Net loss for the year ended June 30, 2000                --        --            --            --
                                                    -------   -------   -----------   -----------

TOTALS, June 30, 2000                                    --        --     7,330,521           733

Issuance of stock for cash, net of expenses              --        --    10,940,959         1,094
Issuance of stock for services                           --        --       834,600            84
Common stock issued at merger                            --        --       654,857            65
Issuance of stock for assets                             --        --       297,711            30
Issuance of stock options for services                   --        --            --            --
Issuance of stock options below fair market value        --        --            --            --
Exercise of stock options                                --        --     2,021,459           202
Net loss for the year ended June 30, 2001                --        --            --            --
                                                    -------   -------   -----------   -----------

TOTALS,  June 30, 2001                                   --   $    --    22,080,107   $     2,208
                                                    =======   =======   ===========   ===========
[RESTUBBED]
<CAPTION>

                                                      Additional                  Stockholders'
                                                       Paid-in                      Equity
                                                       Capital      Deficit     (Deficit), net
                                                     -----------   -----------   -------------

<S>                                                  <C>           <C>            <C>
TOTALS, July 1, 1999                                 $   414,935   $  (482,750)   $   (67,277)

Issuance of stock for cash, net of expenses              977,608            --        977,752
Issuance of stock for services                           418,205            --        418,250
Exercise of stock options                                 22,497            --         22,500
Issuance of stock for equipment and inventory             18,748            --         18,751
Issuance of stock options below fair market value        827,215            --        827,215
Issuance of stock options to consultants                 156,600            --        156,600
Net loss for the year ended June 30, 2000                     --    (2,016,775)    (2,016,775)
                                                     -----------   -----------    -----------

TOTALS, June 30, 2000                                  2,835,808    (2,499,525)       337,016

Issuance of stock for cash, net of expenses              841,690            --        842,784
Issuance of stock for services                           218,041            --        218,125
Common stock issued at merger                             94,000       (85,947)         8,118
Issuance of stock for assets                             223,251            --        223,281
Issuance of stock options for services                    90,166            --         90,166
Issuance of stock options below fair market value      1,060,746            --      1,060,746
Exercise of stock options                                    793            --            995
Net loss for the year ended June 30, 2001                     --    (3,485,007)    (3,485,007)
                                                     -----------   -----------    -----------

TOTALS,  June 30, 2001                               $ 5,364,495   $(6,070,479)   $  (703,776)
                                                     ===========   ===========    ===========
</TABLE>

        See accompanying notes to consolidated financial statements.


                                       F-5

<PAGE>

                 METHOD PRODUCTS CORP. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                          2001                 2000
                                                                                       -----------         -----------
<S>                                                                                    <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                            $(3,485,007)        $(2,016,775)
   Adjustments to reconcile net loss to net cash used in operating activities:
      Depreciation and amortization                                                         94,455              73,560
      (Gain) loss on asset dispositions                                                     41,212              (5,183)
      Options issued below fair market value, and to consultants                         1,150,912             983,815
      Common stock issued for services                                                     218,125             418,250
      Changes in certain assets and liabilities:
         Accounts receivable, net                                                           41,625             (93,447)
         Inventories                                                                       234,416             (54,540)
         Due from employees                                                                 (7,107)              3,942
         Prepaid expenses and other                                                         10,920             (21,674)
         Accounts payable and accrued expenses                                             629,820             118,572
         Customer deposits                                                                  87,215            (168,965)
         Income tax payable                                                                     --             (20,485)
                                                                                       -----------         -----------
       NET CASH USED IN OPERATING ACTIVITIES                                              (983,414)           (782,930)
                                                                                       -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                                     (182,494)            (89,984)
   Notes receivable, shareholders                                                               --              41,893
   Change in other assets, and other                                                        39,758             (28,630)
                                                                                       -----------         -----------
       NET CASH USED IN INVESTING ACTIVITIES                                              (142,736)            (76,721)
                                                                                      -----------         -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net change in lines of credit                                                           233,945             (10,804)
   Proceeds from long term debt                                                             65,210              53,124
   Payments on long term debt                                                              (72,540)            (62,075)
   Common stock issued for exercise of options                                                 995              22,500
   Common stock issued for cash , net                                                      842,784             977,752
   Other                                                                                        --             (13,815)
                                                                                       -----------         -----------
       NET CASH PROVIDED BY FINANCING ACTIVITIES                                         1,070,394             966,682
                                                                                       -----------         -----------

       NET INCREASE IN CASH AND CASH EQUIVALENTS                                           (55,756)            107,031

CASH AND CASH EQUIVALENTS, Beginning of year                                               326,927             219,896
                                                                                       -----------         -----------

CASH AND CASH EQUIVALENTS, End of year                                                 $   271,171         $   326,927
                                                                                       ===========         ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Interest paid in cash                                                               $    91,689         $    26,632
                                                                                       ===========         ===========
   Income taxes paid in cash                                                           $        --         $    38,817
                                                                                       ===========         ===========

</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

       During fiscal 2001, the Company: recorded net tangible assets of $8,120
in connection with the merger with Arielle Corp.; issued 297,711 shares of
common stock in exchange for inventory with a fair value of $223,281; and the
Company entered into long-term debt and capital leases for approximately $65,720
for vehicles and office equipment.

       During fiscal 2000, the Company: acquired certain assets by assuming
approximately $42,898 of liabilities; the Company acquired approximately $65,000
of phone equipment pursuant to a capital lease; and the Company issued 25,000
shares of common stock valued at $18,751 for the purchase of certain inventory
and property and equipment.

          See accompanying notes to consolidated financial statements.

                                       F-6

<PAGE>

                      METHOD PRODUCTS CORP. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED JUNE 30, 2001 AND 2000
--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

      Organization and Basis of Presentation
      --------------------------------------
      Method Products Corp. was initially incorporated on June 4, 1986 in the
      State of Florida. On June 22, 1999, MPC Integrated Technologies, Inc. was
      incorporated in the State of Florida and on June 30, 1999 was re-organized
      to be a wholly owned subsidiary of Method Products Corp. Effective
      September 30, 2000, Methods Products Corp. merged with The Arielle
      Corporation ("Arielle"). The merger was treated as a purchase business
      acquisition of Arielle by Method Products Corp. (a reverse merger) and a
      re-capitalization of Method Products Corp. Arielle was a public,
      non-operating entity prior to the merger (see note 7). Method Products
      Corp. and its wholly owned subsidiary are collectively referred to as the
      "Company." All significant inter-company balances and transactions are
      eliminated in consolidation.

      The Company is a multi-service business communications systems provider,
      specializing in the custom design, installation, and service of telephone
      and communications network systems for businesses.

      Going Concern Considerations
      ----------------------------
      The Company's consolidated financial statements have been prepared on a
      going concern basis, which contemplates the realization of assets and the
      settlement of liabilities and commitments in the normal course of
      business. The Company has incurred losses from operations during the past
      two fiscal years, and it has net stockholders' deficit of $703,776 at June
      30, 2001. In addition, the Company has a deficit in working capital of
      $918,511 at June 30, 2001. Management recognizes that the Company must
      generate additional resources to enable it to pay its obligations as they
      come due, and that the Company must ultimately achieve profitable
      operations. Management is working to generate additional revenue from
      operations, to cut expenses, and as necessary, to raise additional
      capital. The realization of assets and satisfaction of liabilities in the
      normal course of business is dependent upon the Company ultimately
      achieving profitable operations. However, no assurances can be given that
      the Company will be successful in these activities. Should any of these
      events not occur, the accompanying financial statements will be materially
      affected.

      Use of Estimates
      ----------------
      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.

      Revenue Recognition and Credit Risks
      ------------------------------------
      Revenue is recognized at the time the goods are shipped and/or installed.
      Revenue from maintenance agreements is recognized over the term of the
      contract. Accounts receivable is primarily with businesses located in
      Florida. The Company sells its products to various customers in different
      industries; therefore, the Company believes that it does not have an
      abnormal concentration of credit risk within any one market or any one
      geographic area.

      For the year ended June 30, 2001, no single customer accounted for 10% or
      more of the Company's total sales. During the year ended June 30, 2001,
      two vendors supplied 20% and 10%, respectively, of the Company's total
      product purchases. For the year ended June 30, 2000, one customer
      accounted for 14% of the Company's total sales, and two vendors supplied
      21% and 60%, respectively, of the Company's total product purchases.


                                       F-7


<PAGE>


      Inventories, net
      ----------------
      Inventories, consisting primarily of goods purchased for resale, are
      recorded at the lower of cost (first in, first out method) or market. The
      reported amounts are net of allowances for obsolescence, which were
      $30,000 and $20,000 at June 30, 2001 and 2000, respectively.

      Accounts Receivable, net
      ------------------------
      Accounts receivable amounts are reported net of an allowance for doubtful
      accounts. The allowances were $64,924 and $5,000 at June 30, 2001 and
      2000, respectively.

      Property and Equipment
      ----------------------
      Property and equipment is recorded at acquisition cost and depreciated
      using the straight-line method over the estimated useful lives of the
      assets. Useful lives range from five to seven years. Expenditures for
      routine maintenance and repairs are charged to expense as incurred.

      Advertising
      -----------
      The costs of advertising, promotion, and marketing programs are charged to
      operations in the period incurred. Advertising expense was $98,521 and
      $70,698 for the years ended June 30, 2001 and 2000.

      Income Taxes
      ------------
      The Company accounts for income taxes in accordance with Statement of
      Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
      Taxes." Deferred taxes are provided on a liability method whereby deferred
      tax assets are recognized for deductible temporary differences and
      operating loss and tax credit carryforwards and deferred tax liabilities
      are recognized for taxable temporary differences. Temporary differences
      are the differences between the reported amounts of assets and liabilities
      and their tax bases. Deferred tax assets are reduced by a valuation
      allowance when, in the opinion of management, it is more likely than not
      that some portion or all of the deferred tax assets will not be realized.
      Deferred tax assets and liabilities are adjusted for the effects of
      changes in tax laws and rates on the date of enactment.

      Net Income (Loss) Per Common Share
      ----------------------------------
      SFAS No. 128, "Earnings Per Share," requires companies with complex
      capital structures or common stock equivalents to present both basic and
      diluted earnings per share ("EPS") on the face of the income statement.
      Basic EPS is calculated as the income or loss available to common
      stockholders divided by the weighted average number of common shares
      outstanding during the period. Diluted EPS is calculated using the "if
      converted" method for common share equivalents such as convertible
      securities and options and warrants.

      Stock Based Compensation
      ------------------------
      SFAS No. 123, "Accounting for Stock-Based Compensation," encourages, but
      does not require, companies to record compensation plans at fair value.
      The Company has chosen, in accordance with the provision of SFAS No. 123,
      to apply Accounting Principles Board Opinion ("APB") No. 25, "Accounting
      for Stock Issued to Employees" for its stock plans. Under APB No. 25, if
      the exercise price of the Company's stock options is less than the market
      price of the underlying stock on the date of grant, the Company must
      recognize compensation expense. SFAS No. 123 will be adopted for
      disclosure purposes only and will not impact the Company's financial
      position, annual operating results, or cash flows. For transactions with
      other than employees, in which services were performed in exchange for
      stock, the transactions are recorded on the basis of the fair value of the
      services received or the fair value of the issued equity instrument,
      whichever was more readily measurable.

      Cash and Cash Equivalents
      -------------------------
      Cash and cash equivalents include all highly liquid investments purchased
      with an original maturity of three months or less. The Company
      occasionally maintains cash balances in financial institutions in excess
      of the federally insured limits.



                                       F-8


<PAGE>


      Fair Value of Financial Instruments
      -----------------------------------
      Cash, receivables, and accounts payable and accrued expenses are reflected
      in the financial statements at fair value due to the short-term maturity
      of those instruments. The fair values of the Company's debt obligations
      are the same as the recorded amounts because rates and terms approximate
      current market conditions. Related party amounts are not subject to fair
      value estimation because of their unique nature.

      Statement of Comprehensive Income (Loss)
      ----------------------------------------
      In accordance with SFAS No. 130, "Reporting Comprehensive Income," the
      Company is required to report its comprehensive income (loss). Other
      comprehensive income refers to revenue, expenses, and gains and losses
      that under generally accepted accounting principles are included in
      comprehensive income but are excluded from net income, as these amounts
      are recorded directly as an adjustment to stockholders' equity. A
      statement of comprehensive income (loss) is not presented since the
      Company has no items of other comprehensive income. Comprehensive income
      (loss) is the same as net loss for the periods presented herein.

      Reclassifications
      -----------------
      Certain 2000 financial statement amounts were reclassified to conform to
      the 2001 presentation.

      Recent Accounting Pronouncements
      --------------------------------
      SFAS No. 133, "Accounting for Derivative Instruments and Hedging
      Activities" and SFAS No. 138, "Accounting for Certain Derivative
      Instruments and Certain Hedging Activities, an Amendment of FASB 133"
      establishes accounting and reporting standards for derivative instruments,
      including certain derivative instruments embedded in other contracts, and
      for hedging activities. It requires an entity to recognize all derivatives
      as either assets or liabilities in the statement of financial position,
      and measure those instruments at fair value. Changes in fair value of
      those derivatives will be reported in earnings or other comprehensive
      income depending on the use of the derivative and whether the derivative
      qualifies for hedge accounting. SFAS No. 133 and SFAS No. 138 are
      effective for all fiscal years beginning after June 30, 2000, and
      therefore, the Company adopted these standards on July 1, 2000. The affect
      of the recording of these new accounting pronouncements is
      inconsequential, as the Company has not identified any derivatives subject
      to the new standards, and the Company does not engage in hedging
      activities contemplated by the pronouncements. The Company believes that
      its derivative or hedging activities in the future, if any, are not likely
      to be material.

      In July 2001, SFAS No. 141, "Business Combinations," SFAS No. 142,
      "Goodwill and Other Intangible Assets," and SFAS No. 143, "Accounting for
      Asset Retirement Obligations" were issued. SFAS No. 141 changes certain
      accounting methods used for business combinations. Specifically, it
      requires use of the purchase method of accounting for all business
      combinations initiated after June 30, 2001, thereby eliminating use of the
      pooling-of-interests method. SFAS No. 142 establishes new guidance on how
      to account for goodwill and intangible assets after a business combination
      is completed. Among other things, goodwill and certain other intangible
      assets will no longer be amortized, but will now be tested for impairment
      at least annually, and expensed only when impaired. This statement will
      apply to existing goodwill and intangible assets, beginning with fiscal
      years starting after December 15, 2001. Early adoption of the statement is
      permitted for certain companies with a fiscal year beginning after March
      15, 2001. SFAS No. 143 addresses financial accounting and reporting for
      legal obligations associated with the retirement of tangible long-lived
      assets. The Company is currently evaluating these statements, but no
      significant impact on financial position or results of operations is
      expected from the adoption of these statements.



                                       F-9


<PAGE>


NOTE 2 - PROPERTY AND EQUIPMENT
-------------------------------

      Property and equipment consists of the following at June 30, 2001 and
      2000:

                                                           2001           2000
                                                         --------       --------
          Equipment                                      $177,171       $193,749
          Leasehold improvements                           34,361             --
          Furniture and fixtures                           19,815         15,655
          Leased equipment                                137,175        124,455
          Vehicles                                        184,668        132,178
                                                         --------       --------
                    Total cost                            553,190        466,037
          Less:  Accumulated depreciation                 247,334        207,008
                                                         --------       --------

                    Property and equipment, net          $305,856       $259,029
                                                         ========       ========

      Property and equipment includes assets acquired through capital leases
      with original costs of $137,175 and $124,455 and accumulated depreciation
      of $59,877 and $32,442 at June 30, 2001 and 2000, respectively. For the
      years ended June 30, 2001 and 2000, depreciation expense (including
      amortization of capital leases) was $94,455 and $69,562, respectively.

NOTE 3 - DEBT AND FINANCING AGREEMENTS
--------------------------------------

      During fiscal year 2001, the Company entered into a $600,000 revolving
      credit facility with a commercial finance company. The outstanding balance
      at June 30, 2001 was $283,075, however, the credit facility was repaid and
      cancelled subsequent to June 30, 2001. The interest rate was at
      approximately prime plus 2%. The debt was secured by accounts receivable,
      and was guaranteed by three of the Company's officers/directors. The terms
      of the line included customary financial covenants, several of which the
      Company was not in compliance with during the period the loan was
      outstanding; no action is expected to be taken against the Company for
      such non-compliance, as the debt has been repaid and the credit facility
      terminated.

      In addition to the above, the Company has two revolving lines of credit at
      June 30, 2001, and it had three at June 30, 2000. The total amount
      outstanding under these lines of credit at June 30, 2001 and 2000 was
      $26,266 and $75,397 respectively. The line of credit that was terminated
      during fiscal 2001 was secured by a blanket lien on all business assets,
      and had a maximum availability of $50,000. Maximum borrowings under the
      two unsecured lines remaining available at June 30, 2001 total $25,000 and
      $8,000, with a corresponding interest rate of 11.5% and 19.4%,
      respectively.

      Other debt consists of the following at June 30th of each year:
<TABLE>
<CAPTION>

                                                                                            2001                2000
                                                                                          ---------           ---------
<S>                                                                                     <C>                 <C>
      Notes payable (six at June 30, 2001) to financial institutions, each
      secured by a vehicle, payable in monthly installments including interest
      ranging from 3.9% to 10.8%, expiring January 2002 through October 2005            $  99,361           $  72,352

      Capital leases (five at June 30, 2001), each secured by the leased
      equipment, payable in monthly installments including imputed interest
      ranging from 15% to 22%, expiring May 2002 through January 2005                      96,063             114,952

      Other                                                                                15,723                 273
                                                                                        ---------           ---------
                                                                                          195,697             203,027
      Total debt
      Less:  current portion                                                              (61,986)            (61,078)
                                                                                        ---------           ---------

                Long-term debt, less current portion                                    $ 133,711           $ 141,949
                                                                                        =========           =========
</TABLE>


                                      F-10


<PAGE>


      The long-term portion of $133,711 is scheduled for repayment as follows:
      $53,322 during the fiscal year ending June 30, 2003, $44,785 in fiscal
      2004, $31,906 in fiscal 2005, and $3,698 in fiscal 2006.

      During fiscal 2001, the Company obtained loans from several individuals
      totaling $260,000, bearing interest at 8%. In February 2001, the loans and
      accrued interest were exchanged for 355,957 shares of the Company's common
      stock.


NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
-------------------------------------------------

      Accounts payable and accrued liabilities consist of the following at June
30th of each year:

                                                       2001              2000
                                                    ----------        ----------

Accounts payable                                    $  940,884        $  336,361
Accrued liabilities:
   Sales taxes                                          23,717            10,230
   Payroll and related items                           140,651            84,398
   Warranty accrual                                     10,000            10,000
   Deferred revenue                                     10,526            54,967
                                                    ----------        ----------

          Total                                     $1,125,778        $  495,956
                                                    ==========        ==========


NOTE 5 - INCOME TAXES
---------------------

      A summary of income taxes for the years ended June 30, 2001 and 2000 is as
follows:
<TABLE>
<CAPTION>

                                                        2001            2000
                                                   -----------      -----------
<S>                                                <C>              <C>
Currently payable:
   Federal                                         $        --      $        --
   State                                                    --               --
Deferred tax (benefit) provision                    (1,354,100)        (688,845)
                                                   -----------      -----------
          Income tax (benefit) provision            (1,354,100)        (688,845)
Change in valuation allowance                        1,354,100          688,845
                                                   -----------      -----------

          Total income tax provision               $        --      $        --
                                                   ===========      ===========
</TABLE>

      Temporary differences between the financial statement carrying amounts and
      tax bases of assets and liabilities that give rise to net deferred income
      tax assets relate to the following:
<TABLE>
<CAPTION>

                                                       2001             2000
                                                   -----------      -----------
<S>                                                <C>              <C>
Net operating loss carryforward                    $ 1,227,565      $   355,000
Stock option compensation charges                      793,191          344,335
Accrued liabilities and other                           48,308           15,410
Valuation allowance                                 (2,069,064)        (714,745)
                                                   -----------      -----------

           Net deferred income tax asset           $        --      $        --
                                                   ===========      ===========
</TABLE>


                                      F-11


<PAGE>


      There are no significant deferred tax liabilities. The Company has used a
      combined estimated federal and state tax rate of approximately 39% in
      2001, and 35% in 2000, for all deferred tax computations. The tax benefit
      prior to the allowance differs from the Federal statutory rate of 34%
      because of permanent differences and the effect of state income taxes.

      The Company has recorded a valuation allowance in accordance with the
      provisions of SFAS No. 109 to reflect the estimated amount of deferred tax
      assets that may not be realized. In assessing the realizability of
      deferred tax assets, management considers whether it is more likely than
      not that some portion or all of the deferred tax assets will not be
      realized. The ultimate realization of deferred tax assets is dependent
      upon the generation of future taxable income during the periods in which
      temporary differences and/or carryforward losses become deductible.

      The Company has available tax net operating loss carryovers ("NOLs") as of
      June 30, 2001 of approximately $3,037,000. The NOLs will expire beginning
      in the year 2020. Certain provisions of the tax law may limit the net
      operating loss carryforwards available for use in any given year in the
      event of a significant change in ownership interest. There have already
      been significant changes in stock ownership. Management believes that such
      an ownership change occurred during June 2001 which will cause the future
      use of the net operating loss carryover to be significantly limited.


NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------

      Common and Preferred Stock
      --------------------------
      On January 24, 2001, a majority of the shareholders approved a change in
      the articles of incorporation of the Company to reflect the following
      capital structure: 80,000,000 authorized shares of common stock, $0.0001
      par value, and 2,000,000 shares of "blank check" preferred stock with a
      par value of $0.0001. The preferred stock may be issued from time to time
      in one or more series and with such designations, rights, preferences,
      privileges, qualifications, limitations, and restrictions as shall be
      stated and expressed in a resolution of the Board of Directors providing
      for the creation and issuance of such preferred stock.

      Issuance of Common Stock in Fiscal 2001
      ---------------------------------------
      During the year ended June 30, 2001, the Company issued a total of
      14,749,586 shares of common stock. These stock issuances included the
      following:

         (a) In October 2000, the Company issued 654,857 shares of stock in
      connection with a reverse merger into a publicly held entity. (See note
      7.)

         (b) Effective November 1, 2000, the Company entered into an asset
      purchase agreement with an unrelated third party to purchase inventory in
      exchange for shares of the Company's common stock. The purchase price of
      the inventory was $223,281, which approximates the wholesale value of the
      inventory. The Company paid for the inventory by issuing 297,711 shares of
      common stock valued at $0.75 per share.

         (c) In February 2001, loans from several individuals totaling $260,000,
      plus accrued interest on the loans, were exchanged for 355,957 shares of
      the Company's common stock valued at $0.75 per share.

         (d) Various sales of common stock to individuals, totaling 585,002
      shares, between February and June 2001. These shares were sold at per
      share prices ranging from $0.75 to $0.44.



                                      F-12


<PAGE>


         (e) On June 21, 2001, the Company entered into a Stock Purchase
      Agreement with Lancer Offshore, Inc., a Curacao, Netherlands Antilles
      corporation ("Lancer"), whereby Lancer purchased for $0.05 per share, or
      an aggregate of $500,000, 10,000,000 shares of the Company's restricted
      common stock, representing, post-issuance, approximately 45% of the
      Company's issued and outstanding common stock. In addition, the Company
      issued two immediately exercisable common stock purchase warrants to
      Lancer: one to purchase 10,000,000 shares of the Company's restricted
      common stock at $.08 per share, and the other to purchase 10,000,000
      shares of the Company's restricted common stock at $.12 per share. Each
      warrant is exercisable until June 21, 2004. Such Agreement further
      provides, among other things, that: (i) the Company will use its best
      efforts to have two individuals designated by Lancer to be elected as
      directors of the Company; (ii) granted visitation rights to all Company
      Board of Director and committee meetings; (iii) the Company shall seek the
      prior approval of all cash disbursements over $5,000, except for vendor
      purchases; (iv) Lancer be provided with a 30 day right of first refusal to
      participate on the same terms and conditions as any other purchaser in
      connection with any private financing undertaken by the Company through
      June 20, 2004; (v) the employment agreement with the Company's CEO be
      extended for an additional two years; (vi) provided certain share price
      protections in the event the Company sells any shares of its common stock
      and/or securities convertible into common stock at a lower price; and
      (vii) that certain Company officers execute common share sale lock-up
      agreements, effective through June 12, 2003.

         (f) Other issuances during fiscal year 2001 included: employees
      exercising options for 2,021,459 shares of stock; 15,100 shares of stock
      issued to employees as compensation; and shares of stock totaling 819,500
      issued to consultants as compensation.

      Issuance of Common Stock in Fiscal 2000
      ---------------------------------------
      During the year ended June 30, 2000, the Company sold 1,442,271 shares of
      common stock that resulted in net proceeds of $977,752, and it also issued
      453,250 shares of common stock for services. Management of the Company
      placed a value of $418,250 on the services performed. Also during fiscal
      2000, the Company issued 25,000 shares of common stock to acquire certain
      inventory and equipment from an unrelated third party and placed a value
      of $18,751 on the assets acquired.

      Stock Options - Non-employees
      -----------------------------
      On June 21, 2001, the Company issued 1,500,000 stock options for services
      provided by other than employees of the Company. The exercise price of
      these options is $0.05, which was the fair value of the Company's common
      stock at the date of grant. On October 6, 2000, the Company issued 325,000
      stock options for services of a consultant. The exercise price for these
      options is $0.75, the fair value of the common stock at that date. The
      Company placed a value of $72,748 and $17,418, respectively, on these
      options, and recorded compensation expense in accordance with SFAS No.
      123.

      During the year ended June 30, 2000, the Company issued 2,005,000 stock
      options for services provided by other than employees of the Company. The
      exercise price of these options range from $0.75 to $1.00. The Company
      placed a value of $156,600 on these options, and recorded compensation
      expense in accordance with SFAS No. 123.

      Stock Options - 2001 Plan
      -------------------------
      In February 2001, the Company, as approved by its shareholders, adopted
      the Method Products Corp. 2001 Stock Option Plan (the "2001 Plan").
      Options issued under the plan will have terms, exercise prices, and
      vesting periods as determined by the Administrator of the 2001 Plan. Up to
      500,000 shares are authorized under the 2001 Plan, and the 2001 Plan has a
      term of ten years. In March 2001, options for 221,800 shares of common
      stock were issued to employees with the following terms: fair value
      exercise price of $0.75, vesting over a two year period, and expiring ten
      years from the grant date. Subsequent to issuance, 29,500 shares were
      forfeited upon the grantees leaving the Company as employees.


                                      F-13


<PAGE>


      Other Stock Options - Employees
      -------------------------------
      During the year ended June 30, 2001, the Company issued options to
      employees for 3,365,359 shares of common stock with a below fair value
      exercise price that resulted in the recording of compensation expense of
      $1,060,746. Also during the year ended June 30, 2001, the Company issued
      options to employees for 2,071,800 shares of common stock with fair value
      exercise prices of $0.75, which vest over either two or three years.

      During the year ended June 30, 2000, the Company issued options for
      1,108,052 shares of common stock with a below fair value exercise price
      that resulted in compensation expense of $827,215. An additional 30,000
      options were granted with a below fair value exercise price, and such
      options were exercised into 30,000 shares of stock that resulted in
      compensation expense of $22,500. Also during the year ended June 30, 2000,
      the Company issued 1,680,000 options for shares of common stock at fair
      value exercise prices ranging from $0.75 to $1.00, which generally vest
      over three years.

      Pro-forma Stock Option Disclosures
      ----------------------------------
      SFAS No. 123 required entities that account for awards of stock-based
      compensation to employees in accordance with APB No. 25 to present pro
      forma disclosures of results of operations and earnings per share as if
      compensation cost was measured at the date of grant based on the fair
      value of the award. For the year ended June 30, 2001, the fair value for
      granted options was estimated at the date of grant using a Black-Scholes
      options pricing model with the following weighted average assumptions: a
      risk free interest rate of 4.5%, zero dividend yield, volatility of
      approximately 250%, based on the fair value of the Company's common stock
      since the merger with Arielle, and an average expected life of the options
      of from three to ten years. The fair value of the options granted in
      fiscal 2001 was approximately $0.75 each. For the year ended June 30,
      2000, the fair value for granted options was estimated at the date of
      grant using a Black-Scholes options pricing model with the following
      weighted average assumptions: a risk free interest rate of 5.8%, zero
      dividend yield, no volatility since the Company's common stock was not
      traded on a public exchange, and a weighted average expected life of the
      options of three years. The fair value of the options granted in fiscal
      2000 was approximately $0.12 each.

      The Black-Scholes option valuation model was developed for use in
      estimating the fair value of traded options that have no vesting
      restrictions and are fully transferable. In addition, option valuation
      models require the input of highly subjective assumptions including the
      expected stock price volatility. Because the Company's employee stock
      options have characteristics different from those of traded options, and
      because changes in the subjective input assumptions can materially affect
      the fair value estimate, in management's opinion, the existing models do
      not necessarily provide a reliable single measure of the fair value of its
      employee stock options.

      For purposes of pro forma disclosures, the estimated fair value of the
      options is amortized to expense over the options' vesting period. With
      this expense included, the Company's net loss of $2,016,775 would have
      been increased to the pro forma amount of $2,086,975 for the year ended
      June 30, 2000, and the net loss of $3,485,007 for the year ended June 30,
      2001 would have been increased to the pro forma amount of $4,066,135. The
      Company's basic and diluted loss per share of $0.35 would have been
      increased to the pro forma loss per share of $0.36 for the year ended June
      30, 2000, and the basic and diluted loss per share of $0.38 would have
      been increased to the pro forma loss per share of $0.44 for the year ended
      June 30, 2001. The pro forma amounts may not be representative of the
      future effects on reported net income and earnings per share that will
      result from the future granting of stock options since future pro forma
      compensation expense may be allocated over the periods in which options
      become exercisable and new option awards may be granted each year.



                                      F-14


<PAGE>


      Options to Purchase Common Stock - Summary
      ------------------------------------------
      The following tables represent the Company's stock option activity for the
      years ended June 30, 2001 and 2000:
                                                     Optioned   Weighted-Average
                                                      Shares      Exercise Price
                                                    ----------   ---------------

      Options outstanding at July 1, 1999                   --           --
      Issued to non-employees                        2,005,000        $   0.81
      Issued to employees                            2,818,052        $   0.76
      Exercised                                        (30,000)       $   0.01
                                                    ----------        --------

      Options outstanding at June 30, 2000           4,793,052        $   0.61
                                                    ==========        ========

                                                     Optioned   Weighted-Average
                                                      Shares      Exercise Price
                                                    ----------   ---------------

      Options outstanding at July 1, 2000            4,793,052        $   0.61
      Issued to non-employees                        1,825,000        $   0.17
      Issued to employees under the 2001 Plan          221,800        $   0.75
      Issued to employees, other                     5,215,359        $   0.40
      Forfeited                                     (1,574,500)       $   0.50
      Expired                                         (500,000)       $   1.00
      Exercised                                     (2,316,459)       $   0.01
                                                    ----------        --------

      Options outstanding at June 30, 2001           7,664,252        $   0.55
                                                    ==========        ========

      The majority of the options outstanding at June 30, 2001 expire at various
      times through 2005. Employee options totaling 192,300, which were issued
      under the 2001 Plan, expire in March 2011. Of the options outstanding at
      June 30, 2001, 5,245,585 are available for exercise by the option holder,
      as follows:

                                                    Optioned    Weighted-Average
                                                     Shares      Exercise Price
                                                   ---------    ---------------

      Issued under the 2001 Plan                       7,800       $   0.75
      Issued to employees, at fair value             950,833       $   0.75
      Issued to employees, below fair value        1,156,952       $   0.30
      Issued to non-employees in 2001              1,825,000       $   0.17
      Issued to non-employees in 2000              1,305,000       $   0.75


      Warrants to Purchase Common Stock - Summary
      -------------------------------------------
      In June 2001, as described above, the Company issued two immediately
      exercisable common stock purchase warrants to Lancer: one to purchase
      10,000,000 shares of the Company's restricted common stock at $.08 per
      share, and the other to purchase 10,000,000 shares of the Company's
      restricted common stock at $.12 per share. Each warrant is exercisable
      until June 21, 2004.



                                      F-15


<PAGE>


NOTE 7 - MERGERS
----------------

      Effective September 30, 2000, the Company merged with Arielle, a public
      shell entity. To complete the legal merger, all of the issued and
      outstanding shares of the Company's common stock were canceled and Arielle
      issued shares of its common stock to the Company's shareholders. Although
      Arielle is the legal surviving corporation, for accounting purposes, the
      merger was treated as a purchase business acquisition of Arielle by the
      Company (a reverse merger) and a re-capitalization of the Company. The
      Company is the acquirer for accounting purposes because the former
      stockholders of the Company received a larger portion of the common
      stockholder interests and voting rights than those retained by the former
      of stockholders of Arielle.

      For accounting purposes, the merger is recorded as if the Company issued
      654,857 shares of stock. Immediately subsequent to the merger, the
      shareholders of the Company controlled approximately 91.6% of Arielle.
      Since Arielle was a non-operating shell entity, the merger is recorded in
      a manner similar to a pooling of interests, and no goodwill is recorded.

      On March 16, 2001, the Company effected a change of domicile merger and
      reincorporated from Delaware to Florida. This merger has no affect on the
      Company's accounting or financial reporting.


NOTE 8 - RELATED PARTY TRANSACTIONS
-----------------------------------

      Due from Employees
      ------------------
      These advances are mainly comprised of travel, commissions, and other
      reimbursable expenses and totaled $9,999 and $2,892 at June 30, 2001 and
      2000, respectively.

      Notes Receivable, Shareholders
      ------------------------------
      During the year ended June 30, 2000, notes payable of $41,893 that were
      due from two shareholders were repaid.

      Other Transactions
      ------------------
      The Company's investment banking firm is a shareholder. See note 9 below.


NOTE 9 - COMMITMENTS AND CONTINGENCIES
--------------------------------------

      Operating Leases
      ----------------
      The Company leases vehicles and its principal office space. Rent expense
      for the years ended June 30, 2001 and 2000 was $234,932 and $46,644
      respectively. Future minimum lease payments subsequent to June 30, 2001
      under these operating leases are as follows: $180,424 in 2002, $169,696 in
      2003, $142,668 in 2004, $100,512 in 2005, and $33,299 in 2006.

      Investment Banking Agreement
      ----------------------------
      On April 26, 2000, the Company entered into an investment banking and
      financial advisory service agreement with a then unrelated third party
      (the "agent"). The agreement requires a monthly service fee of $10,000 or
      20,000 shares of common stock. Additional shares have also been issued for
      the initial retainer, as well as for financial advisory and investment
      banking services provided in June 2001. The term of the agreement is for
      three years from May 1, 2000 through April 30, 2003. As of June 30, 2001,
      a total of 460,000 shares of stock have been issued. When and if a private
      placement is effectuated, the Company is required to grant to the agent a
      five-year option to purchase an additional 10% of the stock sold in such
      private placement. Furthermore, contingent on the agent's successful
      completion of certain tasks, the Company has agreed to grant the agent an
      option to purchase 9.9% of the outstanding shares of common stock of the
      Company on April 30, 2002, exercisable until April 30, 2005, at an
      exercise price of $0.75 per share.


                                      F-16


<PAGE>


      Litigation
      ----------
      From time to time, the Company is exposed to claims and legal actions in
      the normal course of business, some of which are initiated by the Company.
      Management believes that any such outstanding issues will be resolved and
      will not significantly impair the financial condition of the Company.

NOTE 10 - NET INCOME (LOSS) PER COMMON SHARE
--------------------------------------------

      For the years ended June 30, 2001 and 2000 basic and diluted weighted
      average common shares includes only common shares outstanding as the
      inclusion of common stock equivalents would be anti-dilutive. However, the
      common stock equivalents, if converted, would have increased common shares
      outstanding at June 30, 2001 and 2000 by approximately 25,245,585 and
      2,943,000 shares, respectively.

      A reconciliation of the number of common shares shown as outstanding in
      the consolidated financial statements with the number of shares used in
      the computation of the weighted average common shares outstanding is shown
      below:

                                                        2001             2000
                                                     ----------       ---------

      Common shares outstanding at June 30th         22,080,107       7,330,521
      Effect of weighting                           (12,873,917)     (1,563,622)
                                                    ----------       ---------

      Weighted average common shares outstanding      9,206,190       5,766,899
                                                    ==========       =========

NOTE 11 - SUBSEQUENT EVENTS
---------------------------

      Acquisition of Ameritrend
      -------------------------
      On August 31, 2001, the Company entered into a stock purchase agreement
      with Ameritrend Corporation, a previously wholly-owned subsidiary of Danka
      Holding Company, whereby the Company purchased all of Ameritrend's issued
      and outstanding capital stock. Prior to closing, in connection therewith,
      Danka assumed certain accounts receivable and other assets from
      Ameritrend, and agreed to settle certain payables and liabilities.

      Pursuant to the terms of the stock purchase agreement, the Company
      executed a promissory note to Danka in the amount of $1,000,000, payable
      over the course of 180 days from the closing date, from sales of purchased
      inventory. The Company entered into a stock pledge agreement with Danka
      pursuant to which the Company granted Danka a security interest in the
      Ameritrend shares purchased by the Company. Ameritrend entered into a
      security agreement with Danka whereby Ameritrend granted Danka a security
      interest in, among other things, all of the inventory purchased pursuant
      to such stock purchase agreement in order to guaranty full and complete
      payment of the promissory note.

      As a result of the stock purchase agreement, the Company acquired the
      entire business of Ameritrend, which involves the sale and servicing of
      business communications systems comprised of various networked computer
      equipment, software and telephone communications systems. The Company
      plans to operate Ameritrend as a wholly owned subsidiary and continue and
      expand upon its business operations. The Company is presently evaluating
      the assets acquired to determine the proper purchase price allocation
      following applicable accounting principles.


                                      F-17


<PAGE>


      Subsequent Issuances of Common Stock
      ------------------------------------
      Subsequent to June 30, 2001 and through December 7, 2001, the Company has
      issued 16,537,607 shares of its common stock, as follows: 15,560,001
      shares for cash totaling $546,500, and 977,606 shares for services
      rendered to the Company. In addition, the Company issued options to
      employees and consultants for 8,000,000 shares of the Company's stock, and
      warrants to investors for 21,500,000 shares of the Company's stock.



                                * * * * * * * * *






                                      F-18