UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[ x ]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF1934

                  For the quarterly period ended March 31, 2002


[   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

       For the transition period from _________________ to _________________


                         Commission file number 0-21151

                           PROFILE TECHNOLOGIES, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


          DELAWARE                                               91-1418002
-------------------------------                              -------------------
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                               Identification No.)

Two Park Avenue, Suite 201, Manhasset, NY                          11030
-----------------------------------------                    -------------------
(Address of principal executive offices)                         (Zip Code)

                                  516-365-1909
                                ----------------
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the part 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   X     No
                                                              -----      -----

Applicable only to corporate issuers

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: On March 31, 2002, there were
4,959,842 shares of common stock outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]



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PART I-- FINANCIAL INFORMATION

Item 1. Financial Statements.


                                     PROFILE TECHNOLOGIES, INC.
                                      Condensed Balance Sheets
                                           (unaudited)


                                                                March 31,               June 30,
                                Assets                             2002                   2001
                                                               -----------             -----------

<S>                                                            <C>                     <C>
Current assets:
     Cash and cash equivalents                                 $    25,362             $   306,058
     Accounts receivable                                              --                    32,129
     Contract work-in-progress                                        --                    17,850
     Prepaid expenses and other current assets                      58,037                  31,969

                                                               -----------             -----------
                    Total current assets                            83,399                 388,006

Equipment, net                                                     178,416                 212,544
Patents, net                                                       167,048                 230,492
Other assets                                                        10,158                  11,008

                                                               -----------             -----------
                    Total assets                               $   439,021             $   842,050
                                                               ===========             ===========

                 Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable - stockholder                            $      --               $     3,262
     Other accounts payable                                        170,237                  52,524
     Accrued liabilities                                           128,569                  21,511
     Payable to stockholder                                         20,000                    --

                                                               -----------             -----------
                    Total current liabilities                      318,806                  77,297
                                                               -----------             -----------

Stockholders' equity:
     Common stock, $0.001 par value.  Authorized 10,000,000
       Shares; issued and outstanding 4,959,842 shares at
       March 31, 2002 and 4,285,092 at June 30, 2001                 4,960                   4,285
     Additional paid-in capital                                  7,956,530               7,585,830
     Accumulated deficit                                        (7,841,275)             (6,825,362)
                                                               -----------             -----------
                    Total stockholders' equity                     120,215                 764,753
                                                               -----------             -----------



Total liabilities and stockholders' equity                     $   439,021             $   842,050
                                                               ===========             ===========



                    See accompanying notes to condensed financial statements.



<PAGE>


                                                 PROFILE TECHNOLOGIES, INC.
                                            Condensed Statements of Operations
                                                       (unaudited)


                                                        For the three months ended       For the nine months ended
                                                                 March 31,                         March 31,
                                                            2002           2001             2002            2001
                                                        ---------------------------     ---------------------------

Revenue                                                 $      --       $    27,500     $   404,573     $   305,250
Cost of revenue                                              49,737          73,577         303,809         327,116

                                                        -----------     -----------     -----------     -----------

        Gross profit (loss)                                 (49,737)        (46,077)        100,764         (21,866)


     Research and development                               140,754          97,389         312,317         223,610
     Selling, general and administrative                    264,977         249,725         805,355         783,439
                                                        -----------     -----------     -----------     -----------
         Total operating expenses                           405,731         347,114       1,117,672       1,007,049
                                                        -----------     -----------     -----------     -----------

        Loss from operations                               (455,468)       (393,191)    (1,016,908)     (1,028,915)
                                                        -----------     -----------     -----------     -----------

Interest income                                                  12          13,637             995          53,466
                                                        -----------     -----------     -----------     -----------
                     Net loss                           $  (455,456)    $  (379,554)    $(1,015,913)    $  (975,449)
                                                        ===========     ===========     ===========     ===========

Basic and diluted net loss per share                    $     (0.09)    $     (0.09)    $     (0.21)    $     (0.23)

Shares used to calculate basic and diluted
     net loss per share                                   4,954,875       4,285,092       4,753,633       4,285,092



                    See accompanying notes to condensed financial statements.



<PAGE>


                                         PROFILE TECHNOLOGIES, INC.
                                     Condensed Statements of Cash Flows
                                                (unaudited)

                                                                           For the nine months ended
                                                                                   March 31,
                                                                           2002                 2001
                                                                      ----------------------------------

Cash flows from operating activities:
     Net loss                                                          $(1,015,913)          $  (595,895)
     Adjustments to reconcile net loss to net cash used in
        operating activities:
           Depreciation and amortization                                   124,352                71,631
           Stock compensation expense                                        2,917                 6,416
           Stock issued for rent                                             5,500                  --
           Changes in certain assets and liabilities:
              Accounts receivable                                           32,129              (130,000)
              Contract work-in-progress                                     17,850                69,779
              Prepaid expenses and other current assets                    (26,068)               37,186
              Other assets                                                     850                  --
              Accounts payable - stockholder                                (3,262)               (1,178)
              Other accounts payable                                       117,713               (47,735)
              Accrued liabilities                                          107,058               (19,548)
                                                                       -----------           -----------
                    Net cash used in operating activities                 (636,874)             (609,344)
                                                                       -----------           -----------

Cash flows from investing activities - purchases of equipment              (26,780)              (16,530)

Cash flows from financing activities:
        Issuance of common stock and warrants, net of offering costs       362,958                  --
        Payable to stockholder                                              20,000                  --
                                                                       -----------           -----------
                    Net cash provided by financing activities              382,958                  --
                                                                       -----------           -----------
                    Net decrease in cash and cash equivalents             (280,696)             (625,874)

Cash and cash equivalents at beginning of the period                       306,058             1,744,032
                                                                       -----------           -----------

Cash and cash equivalents at end of the period                         $    25,362           $ 1,118,158
                                                                       ===========           ===========


                    See accompanying notes to condensed financial statements.

</TABLE>


<PAGE>

                            PROFILE TECHNOLOGIES, INC
                                 March 31, 2002
                Notes to Unaudited Condensed Financial Statements


1.    Description of Business

Profile Technologies, Inc. (the "Company") is in the business of developing and
commercializing potential processes for the nondestructive, noninvasive testing
of both above ground and buried pipelines for the effectiveness of pipeline
cathodic protecting systems and coating integrity. The Company's future revenues
are currently dependent upon the market's acceptance of its sole developed
process.

2.    Basis of Presentation

The unaudited interim condensed financial statements and related notes of the
Company have been prepared pursuant to the instructions to Form 10-QSB.
Accordingly, certain information and note disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted pursuant to such
instructions. The condensed financial statements and related notes should be
read in conjunction with the audited financial statements and notes thereto
included in the Company's annual report on form 10-KSB for the year ended June
30, 2001 (filed September 28, 2001). The information furnished reflects, in the
opinion of management, all adjustments, consisting of only normal recurring
items necessary for fair presentation of the results of the interim periods
presented. Interim results are not necessarily indicative of results for a full
year.

3.    Net Loss Per Share

Basic loss per share is computed by dividing the net loss by the weighted
average number of common shares outstanding during the period. Diluted loss per
share is computed by dividing the net loss by the weighted average number of
common and dilutive common equivalent shares outstanding during the period. As
the Company had a net loss attributable to common shareholders in each of the
periods presented, basic and diluted net loss per share is the same.

Excluded from the computation of diluted loss per share for the three and nine
months ended March 31, 2002 are options and warrants to acquire approximately
2,287,000 shares of common stock with a weighted-average exercise price of $3.01
because their effect would be antidilutive. Excluded from the computation of
diluted loss per share for the three and nine months ended March 31, 2001 are
options and warrants to acquire approximately 1,381,000 shares of common stock
with a weighted-average exercise price of $4.19 because their effect would be
antidilutive. Also excluded are up to 248,000 options at an exercise price of
$1.00 per share and a five year term that may be issued if certain employees,
officers and directors elect to convert portions of their deferred salaries and
consulting fees, because their effect would be antidilutive.

4.    Sale of Common Stock

During the nine months ended March 31, 2002, the Company raised gross proceeds
of $403,200 from the sale of 672,000 shares of common stock and issued one
warrant in connection with each share of common stock sold. The warrants are
exercisable at $1.00 per share until September, 2006. Each share of common stock
and warrant was sold for a total of $0.60. Directors and related parties to the
directors purchased a total of approximately 307,500 shares of common stock.
Additionally, the Company issued 2,750 shares of common stock for the payment of
rent.

<PAGE>


On March 18, 2002, the Board of Directors approved an offering of one million
(1,000,000) shares of the Company's Common Stock at a price of $.70 per share,
with attached warrants (the "Offering"). Each warrant will entitle the holder to
purchase one share of Common Stock at an exercise price of $1.05 per share until
April 4, 2007. During the period from April 1, 2002 through May 9, 2002, the
Company raised gross proceeds totaling $201,250 from the sale of 287,500 shares
of common stock and issued one warrant in connection with each share of common
stock sold.

During the three months ended March 31, 2002, the Company issued options and
warrants to purchase 55,000 common shares to consultants with exercise prices of
$1.00 per share and expiration dates ranging from December 2004 through January
2007. Of the 55,000 options and warrants, 40,000 are subject to vesting in the
upcoming year. The fair value of the unvested options and warrants will be
remeasured each reporting date until the vesting and service conditions have
been met by the consultants. Compensation expense related to these grants
recognized during the three months ended March 31, 2002 was $2,917.

In May, 2002, the Board of Directors approved the grant of an additional warrant
to purchase 5,000 common shares to a consultant at an exercise price of $1.00
per share with an expiration date in February, 2005.

5.    Liquidity

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company incurred cumulative losses of
$7,841,275 through March 31, 2002 and has a working capital deficit of $235,407
as of March 31, 2002. The Company has expended a significant amount of cash in
developing its technology and patented processes. Management recognizes that in
order to meet the Company's ongoing operating and capital requirements,
additional financing will be necessary over the next two to three months to
continue as a going concern. The Company is evaluating alternative sources of
financing to improve its cash position and is undertaking efforts to raise
capital. As discussed in Note 4, the Company raised gross proceeds totaling
$201,250 subsequent to March 31, 2002 through May 9, 2002. The Company will need
additional capital above the amount raised during this period. If the Company is
unable to raise additional capital or secure additional revenue contracts and
generate positive cash flow, there can be no assurance that the Company will be
able to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

To reduce cash outflows, certain of the Company's employees, officers and
directors have agreed to defer a portion of their salaries and consulting fees
from August 2001 until the Company has sufficient resources to pay the amounts
owed. At March 31, 2002, the Company accrued approximately $124,000 related to
the deferred payment of the salaries and consulting fees which is included under
accrued liabilities. On March 18, 2002, the Board of Directors approved a
conversion right whereby for each dollar of deferred salary and fees, the
employee, officer or director could receive in exchange an option to purchase
two shares of common stock at an exercise price of $1.00 per share with a five
year term. No conversions have been exercised.

On May 9, 2002, the Company entered into a bridge loan of up to $150,000 with
Murphy Evans, President and a director of the Company. As of March 31, 2002, Mr.
Evans had loaned the Company $20,000. An additional $106,000 was loaned between
April 1, 2002 and May 9, 2002. Pursuant to the terms of the loan, once Mr. Evans
has loaned the Company $125,000, the Company will cancel 150,000 warrants held
by Mr. Evans, with exercise prices ranging from $3.00 per share to $7.50 per
share and issue to Mr. Evans 150,000 five-year warrants with exercise prices of
$1.05 per share. If the Company raises $400,000 pursuant to the Offering within
90 days of May 9, 2002, the entire loan amount will be converted into the
Company's common stock in accordance with the terms of the Offering. If the
Company is unsuccessful in raising $400,000 pursuant to the Offering within 90
days of May 9, 2002, the Company will be obligated to begin monthly loan
payments of $25,000 per month with interest accruing at 6% per annum on the
unpaid balance.

<PAGE>

6.    NASDAQ Delisting

On June 27, 2001, the Company announced that it received a Nasdaq Staff
Determination on June 20, 2001, indicating that the Company failed to comply
with the minimum bid price and net tangible asset/shareholder equity
requirements of the Nasdaq Marketplace Rules for continued listing set forth in
Marketplace Rule 4310(c)(4), and that its securities were, therefore, subject to
delisting from the Nasdaq SmallCap Market. On August 10, 2001, the Nasdaq Stock
Market suspended trading in the Company's common stock. Effective Monday, August
13, 2001, the Company began trading on the Over the Counter Bulletin Board under
the symbol PRTK.

7.    New Accounting Pronouncements

In July 2001, the FASB issued Statement No. 141, "Business Combinations", and
Statement No. 142, "Goodwill and Other Intangible Assets". Statement No. 141
requires business combinations initiated after June 30, 2001 to be accounted for
using the purchase method of accounting, and specifies criteria for recognizing
intangible assets acquired in a business combination. Statement No. 142 requires
that goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead be tested for impairment at least annually. Intangible
assets with definite useful lives, such as the Company's patents, which have a
net book value of $167,048 as of March 31, 2002, will continue to be amortized
over their respective estimated useful lives. The Company is required to adopt
the provisions of Statement No. 141 immediately and Statement No. 142 effective
July 1, 2002. The impact of adopting Statement No. 141 was not material. The
adoption of Statement No. 142 is not expected to have a material impact on the
Company's financial statements.

In October, 2001 the FASB issued FASB Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets", which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
While Statement No. 144 supersedes FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", it
retains many of the fundamental provisions of that Statement. Statement No. 144
also supersedes the accounting and reporting provisions of APB Opinion No. 30,
"Reporting the Results of Operations--Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions", for the disposal of a segment of a business. However,
it retains the requirement in Opinion No. 30 to report separately discontinued
operations and extends that reporting to a component of an entity that either
has been disposed of (by sale, abandonment, or in a distribution to owners) or
is classified as held for sale. The Company is required and plans to adopt the
provisions of Statement No. 144 for the fiscal year beginning July 1, 2002. The
adoption of this statement is not expected to have a material impact on the
Company's financial statements.


<PAGE>



Item 2. Management's Discussion and Analysis or Plan of Operation.

GENERAL

     Since its inception in 1988, Profile Technologies, Inc. (the "Company"), a
Delaware corporation, has been engaged in the business of researching and
developing a high speed scanning process, which is nondestructive and
noninvasive, to test remotely buried and insulated pipelines for corrosion. The
Company's electromagnetic wave inspection process, referred to as EMW, is a
patented process of analyzing the waveforms of electrical impulses in a way that
extracts point-to-point information along a segment of pipeline to illustrate
the integrity of the entire pipeline. This process involves sending an
electrical pulse along the pipe being tested from each of two locations toward
varying intersecting points between the two locations. At least one of the
modified pulses is analyzed to determine whether an anomaly exists at the
intersecting location.

     This process is designed to detect external corrosion of pipelines without
the need for taking the line out of service, physically removing the insulation,
or uncovering the pipe, and then visually inspecting the outside of the pipe for
corrosion. Often the Company can inspect the pipelines by using various access
points to the pipeline that already exist for other reasons. Where such access
is not already available, the Company's technology permits inspection of
pipelines with only a very minimal amount of disturbance of the covering or
insulation that is present on the pipeline. Finally, the Company's technology
permits an inspection of the entire pipeline, as opposed to other technologies
which only conduct inspections at the points selected for the testing.

Sales

     We derive revenue from the sale of the EMW inspection service and from
research and development activities that have been sponsored by large
multinational oil companies and large utilities. The Company relies upon several
employees, including the Chief Executive Officer, the Chief Operating Officer
and the Vice President - Field Operations, for the Company's sales functions.
The Company relies solely upon the employees of the Company to conduct its sales
activities.

     During the nine months ended March 31, 2002 and 2001, all of the Company's
sales were attributable to four and three customers, respectively. Two of the
Company's customers individually accounted for 36% and 52% of net sales for the
nine months ended March 31, 2002, and one customer accounted for 81% of net
sales for the nine months ended March 31, 2001.

Marketing

     The Company's sales and marketing strategy includes positioning the
Company's EMW as the method of choice to detect pipeline corrosion where the
pipelines are either inaccessible to other inspection tools or much more costly
to inspect with tools other than the Company's EMW inspection. The Company does
not have a designated sales force, but currently relies upon several employees,
including the Chief Executive Officer, the Chief Operating Officer and the Vice
President - Field Operations, for the Company's sales functions.

RESULTS OF OPERATIONS

     Revenue decreased to $0 for the three months and increased to $404,573 for
the nine months ended March 31, 2002, compared to $27,500 for the three months
and $305,250 for the nine months ended March 31, 2001. As explained in more
detail under "Part II, Item 5. Other Information," the Company began a major
project in January to redesign and upgrade its hardware and software. That
project is nearing completion, and the Company has ordered new equipment in
anticipation of returning to the North Slope of Alaska in June. However, pending
completion of the work described under "Part II, Item 5. Other Information," the
Company has not attempted to service any commercial contracts and, accordingly
did not generate any revenues during the quarter ended March 31, 2002. The
increase for the nine-month period was primarily due to additional work
performed on the North Slope of Alaska during the first six months of the fiscal
year. The Company's revenues have historically been fairly seasonal with
revenues lowest during the winter months.

<PAGE>


     Gross loss was $49,737 for the three months and gross profit was $100,764
for the nine months ended March 31, 2002, compared to a gross loss of $46,077
for the three months and gross loss of $21,866 for the nine months ended March
31, 2001. The Company has certain fixed costs and therefore cost of revenue will
not fluctuate directly with changes in the amount of revenue recognized during a
period. The decrease in cost of revenue for the three months ended March 31,
2002 is due to the Company not performing work on any service contracts while
still incurring its fixed overhead costs. The increase in gross profit for the
nine months ended March 31, 2002 as compared to the same period in the prior
year is primarily due to efficiencies in the testing services performed and
certain fixed costs that do not fluctuate based on revenue.

     Research and development expenses increased to $140,754 for the three
months and $312,317 for the nine months ended March 31, 2002, compared to
$97,389 for the three months and $223,610 for the nine months ended March 31,
2001. The increase for the nine month period ended March 31, 2002, compared to
the nine month period ended March 31, 2001, was due to certain employees
spending more time on research and development and less time on revenue
generating contracts.

     General and administrative expenses increased to $264,977 for the three
months and $805,355 for the nine months ended March 31, 2002, compared to
$249,725 for the three months and $783,439 for the nine months ended March 31,
2001. The increase for the three and nine months ended March 31, 2002 is due to
the Company focusing more of its efforts on marketing related activities.

     Loss from operations increased to $455,468 for the three months and
decreased to $1,016,908 for the nine months ended March 31, 2002, compared to
$393,191 for the three months and $1,028,915 for the nine months ended March 31,
2001. The increase for the three months ended March 31, 2002 compared to the
same period in the prior year is due mainly to no revenues during the quarter.

     Interest income decreased to $12 for the three months and $995 for the nine
months ended March 31, 2002, down from $13,637 for the three months and $53,466
for the nine months ended March 31, 2001. This decrease was the result of
declining cash and cash equivalent balances as the Company used such resources
to sustain its commercial operations and research and development activities and
lower rates of return on invested funds.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash used in operating activities was $636,874 for the nine months
ended March 31, 2002, compared with $609,344 for the nine months ended March 31,
2001. At March 31, 2002, the Company has accrued approximately $124,000 related
to deferred payment of the salaries and consulting and board fees which is
included under accrued liabilities.

     Net cash used in investing activities was $26,780 for the nine months ended
March 31, 2002, compared with $16,530 for the nine months ended March 31, 2001.
The Company's investing activities consisted of the purchase of additional
office and field equipment.

         Net cash from financing activities was $382,958 for the nine months
ended March 31, 2002, compared to $0 for the nine months ended March 31, 2001.
The net cash provided by financing activities was primarily due to the sale of
common stock and warrants.

     The Company's cash and cash equivalents as of March 31, 2002 were $25,362,
compared to $306,058 as of June 30, 2001, and the Company had no material
long-term commitments or material commitments for capital expenditures.

     Management is currently directing the Company's activities towards
obtaining additional service contracts, which will necessitate the Company
attracting, hiring, training and outfitting qualified technicians. The Company's
intention is to purchase such equipment for its field crews for the foreseeable
future, until such time as the scope of operations may require alternate sources
of financing equipment. There can be no assurance that the Company's process
will gain widespread commercial acceptance within any particular time frame, or
at all. The Company will incur additional expenses as it hires and trains field
crews and support personnel related to the successful receipt of commercial
contracts. At the present time the Company anticipates that it may need one
additional crew to service future contracts, but it cannot be certain until
contract negotiations are complete.

<PAGE>


         Capital will be expended to support operations until the Company can
generate sufficient cash flows from operations. In order for the Company to
generate cash flows from operations, the Company must generate additional
revenue generating contracts. The Company expects that accounts receivable and
contract work-in-progress will increase to the extent revenues rise. Any such
increase that occurs at the same time or at a greater rate than an increase in
revenue can be expected to reduce cash. Additionally, the Company anticipates
that cash will be used to meet capital expenditure requirements necessary to
develop infrastructure to support future growth. There can be no assurance that
the Company will be able to secure additional revenue generating contracts to
provide sufficient cash.

         The Company has incurred cumulative losses of $7,841,275 through March
31, 2002 and had negative working capital of $235,407 as of March 31, 2002.
During the nine months ended March 31, 2002, the Company used $636,874 of cash
in operating activities. With negative working capital of $235,407 at March 31,
2002, the Company will need additional financing over the next two to three
months to be able to continue as a going concern. Management recognizes that in
order to meet the Company's on-going capital and operating expense requirements,
additional financing will be necessary.

     On March 18, 2002, the Board of Directors approved an offering of one
million (1,000,000) shares of the Company's Common Stock at a price of $.70 per
share, with attached warrants (the "Offering"). Each warrant will entitle the
holder to purchase one (1) share of Common Stock at an exercise price of $1.05
per share until April 4, 2007. Between April 4, 2002 and May 9, 2002, the
Company has raised $201,250 through this Offering.

     On May 9, 2002, the Company entered into a bridge loan of up to $150,000
with Murphy Evans, President and a director of the Company. Mr. Evans has
currently loaned the Company $126,000 pursuant to this bridge loan. Pursuant to
the terms of the loan, once Mr. Evans loaned the Company $125,000, the Company
will cancel 150,000 warrants, currently held by Mr. Evans, with exercise prices
ranging from $3.00 per share to $7.50 per share and issue to Mr. Evans 150,000
five-year warrants with an exercise price of $1.05. If the Company raises
$400,000 pursuant to the Offering within 90 days of May 9, 2002, the entire loan
amount will be converted into the Company's common stock in accordance with the
terms of the Offering. If the Company is unsuccessful in raising $400,000
pursuant to the Offering within 90 days of May 9, 2002, the Company will be
obligated to begin monthly loan payments of $25,000 per month with interest
accruing at 6% per annum on the unpaid balance. The Company's Board of Directors
approved the terms of this loan.

     In addition, the Company is evaluating alternative sources of financing,
including seeking industry-partner investment through joint venture or other
possible arrangements, to improve its cash position and is also undertaking
efforts to raise capital from more conventional sources. Further, the Company is
making on-going efforts to reduce its on-going expense requirements including
payroll. If the Company is unable to raise additional capital or secure
additional revenue contracts and generate positive cash flow, there can be no
assurance that the Company will be able to continue as a going concern.

FORWARD-LOOKING STATEMENTS

     Some of the statements under "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and elsewhere in this Report and
in the Company's periodic filings with the Securities and Exchange Commission
constitute forward-looking statements. These statements involve known and
unknown risks, significant uncertainties and other factors that may cause actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements.

     In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "could," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology.

<PAGE>


     The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on assumptions that the Company will obtain or have access
to adequate financing for each successive phase of its growth, that the Company
will market and provide products and services on a timely basis, that there will
be no material adverse competitive or technological change in condition of the
Company's business, that demand for the Company's products and services will
significantly increase, that the Company's executive officers will remain
employed as such by the Company, that the Company's forecasts accurately
anticipate market demand and that there will be no material adverse change in
the Company's operations, business or governmental regulation affecting the
Company or its customers. The foregoing assumptions are based on judgments with
respect to, among other things, future economic, competitive and market
conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the Company's
control.

     Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, it cannot guarantee future results,
levels of activity, performance or achievements. Moreover, neither the Company
nor any individual assumes responsibility for the accuracy and completeness of
such statements.



<PAGE>




PART II-- OTHER INFORMATION

Item 1. Legal Proceedings.

     The Company is not a party to any pending or threatened legal proceedings.

Item 2. Changes in Securities.

     In connection with the Company's 1999 Stock Plan, the Company issued,
between January 1, 2002 and March 31, 2002, options and warrants for 60,000
shares of common stock to one employee and two consultants of the Company. The
options/warrants have an exercise price of $1.00. 20,000 options/warrants are
presently exercisable with the remainder exercisable upon completion of
additional service in the upcoming year. The options and warrants were issued
directly by the Company and have an exercisability period ending between
December 31, 2004 and January 2, 2007.

Item 3. Defaults Upon Senior Securities.

     None.

Item 4. Submission of Matters to a Vote of Security Holders.

     None.

Item 5. Other Information.

     The Company has recently retained Dr. Marcus Zahn of the Massachusetts
Institute of Technology (M.I.T.) to model the Company's data interpretation
process mathematically in what was designed to be the first step in a successful
automation of that process. The Company has also recently retained Dr. Charles
A. Frost, President of Pulse Power Physics, Inc., Albuquerque, New Mexico, to
design and test certain improvements to the Company's EMW antennas, pulsers and
other equipment.

     The Company developed the EMWSM technology to its present stage through
practical investigation into the ways that corrosion affects electromagnetic
waves traveling along the surface of carbon steel pipe. Through experimentation,
field data gathering procedures were identified that enabled the Company to
acquire data sets of sufficient quality to permit the identification of certain
anomalies directly related to the presence of corrosion. In the years since the
first verified correlation results were produced, the Company has worked to
refine its testing methods, hardware, software and data interpretation
procedures associated with EMW testing. This work has primarily focused on
improving the procedures and equipment originally used by the Company's founder,
Gale Burnett.

     After reviewing the technology with Dr. John Kuo, a director and former
officer of the Company, Drs. Zahn and Frost committed to the data interpretation
automation project with the understanding that the tools developed would need to
be completed and fully tested prior to the Company's planned work on the North
Slope of Alaska in early summer of 2002. By producing a model based on the
actual physical laws that govern the system, rather than just the observed
phenomena, the electromagnetic input to the pipe and the data extraction from
the pipe can be optimized and, the Company believes, automated to a large
degree. The total cost of Dr. Zahn's project, including equipment and consulting
hours, is anticipated to be approximately $100,000.

     Dr. Frost, a leader in pulse technology, is analyzing the total hardware
package currently being used by the Company and has made specific
recommendations that have improved data quality. These improvements should
ultimately facilitate Dr. Zahn's efforts to model the data interpretation
process.

     Dr. Frost's recommendations have, in the last few weeks, dramatically
improved the signal to noise ratio, and his antenna design promises to greatly
reduce environmental interference. Upgraded pulsers and improved equipment
configurations will further improve the data. The Company has already begun

<PAGE>


verification testing using several of Dr. Frost's recommendations. The
improvement in the data is dramatic. Many anomalies can now be seen in the raw
data prior to smoothing and other data processing. Dr. Frost's project,
including the purchase of 2-3 new pulsers, will cost approximately $150,000. Dr.
Frost's current project should be completed by the end of May in time for the
Company's anticipated return to the North Slope of Alaska in June.

     In summary, Drs. Frost and Zahn are working together to re-engineer the
Company's system in ways that will optimize testing, rather than merely trying
to improve equipment currently in use.

Item 6. Exhibits and Reports on Form 8-K.

     (a) Exhibits.

          4.1 Loan Agreement, by and between the Registrant and Murphy Evans,
          dated May 9, 2002 is filed herewith.

     (b) Reports on Form 8-K

          None



<PAGE>




                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                          PROFILE TECHNOLOGIES, INC.
                                          --------------------------
                                         (Registrant)
                                         -

Date: May 15, 2002                       /s/ Henry E. Gemino
                                         -------------------
                                             Henry E. Gemino
                                             Chief Executive Officer;
                                             Chief Financial Officer