<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[Mark One]

[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 for the quarterly period ended: ______.

[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 for the transition period from December 31, 1999 to March 31,
    2000

Commission file number :000-24447

                                 QUEST NET CORP.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                    3001 W. HALLANDALE BEACH BLVD. 2ND FLOOR
                          PEMBROKE PARK, FLORIDA 33009
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (954) 457-0900
                         -------------------------------
                         (Registrant's telephone number)

                            PARPUTT ENTERPRISES, INC.
                             12835 E. ARAPAHOE ROAD
                               TOWER I, PENTHOUSE
                            ENGLEWOOD, COLORADO 80112
                        --------------------------------
                        (Former name and former address)


      Indicate by check mark whether the Registrant:(1) has 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 [X]  No [ ]

      The number of shares outstanding of each of the issuer's classes of equity
as of June 15, 2000, 2000: 23,474,309 shares of Common Stock, no par value; and,
30,000 shares of Preferred Convertible Stock, no par value.


<PAGE>   2
                                 QUEST NET CORP.
                         (A Developmental Stage Company)


PART I - FINANCIAL INFORMATION


<TABLE>
<CAPTION>

                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
Condensed Balance Sheet -
      March 31, 2000 and June 30, 1999..........................................   3

Condensed Statement of Operations Three months ended March 31, 2000, and 1999,
      and November 28, 1995 (date of inception) to March 31, 2000...............   4

Condensed Statement of Cash Flows Three months ended March 31, 2000, and 1999,
      and November 28, 1995 (date of inception) to March 31, 2000...............   5


Notes to Condensed Financial Statements ........................................   6

Management's Discussion and Analysis of
Financial Condition and Results.................................................   9

Part II - Other Information

Item 1.    Legal Proceedings....................................................  20

Item 2.    Changes in Securities................................................  21

Item 3.    Defaults Upon Senior Securities......................................  21

Item 4.    Submission of Matters To a Vote of
           Security Holders ....................................................  21

Item 5.    Other Information....................................................  21

Item 6.    Exhibits and Reports on Form 8-K.....................................  24

Signature ......................................................................  25

</TABLE>





                                       2
<PAGE>   3

                                 QUEST NET CORP.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>

<S>                                                                        <C>
                                         ASSETS
CURRENT ASSETS
      Cash ......................................................          $    227,398
      Accounts receivable, net of $867,842 allowance ............                76,906
      Due from acquisition candidate ............................               100,000
      Accounts receivable, other ................................                22,049
      Marketable securities .....................................                86,500
      Other current assets ......................................                30,668
              TOTAL CURRENT ASSETS ..............................               543,521

PROPERTY AND EQUIPMENT, net of
      accumulated depreciation of $702,453 ......................             1,579,698

INTANGIBLE ASSETS, net of
      accumulated amortization of $194,163 ......................             1,373,845

DEPOSITS ........................................................               200,126
                                                                           ------------
                                                                           $  3,697,190
                                                                           ============

                          LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
      Accounts payable ..........................................          $    187,002
      Due to officer ............................................               300,000
      Current portion of capital lease payable ..................                11,646
      Accrued expenses ..........................................                71,663
      Accrued payroll taxes .....................................                13,488
              TOTAL CURRENT LIABILITIES .........................               583,799
                                                                           ------------
CAPITAL LEASE PAYABLE ...........................................                43,685
                                                                           ------------

SHAREHOLDERS' EQUITY
      Preferred stock, no par value; 5,000,000 shares authorized;
        300,000 shares issued and outstanding, respectively .....                    --
      Common stock, no par value; 50,000,000 shares authorized;
        23,366,372 shares issued and outstanding ................            16,259,615
        47,000 outstanding common stock warrants ................                 7,191
        10,000 outstanding common stock options .................                25,800
      Additional paid in capital ................................               341,700
      Deficit accumulated during development stage ..............           (13,564,600)
                                                                           ------------
              TOTAL SHAREHOLDERS' EQUITY ........................             3,069,706
                                                                           ------------
                                                                           $  3,697,190
                                                                           ============

</TABLE>


       See notes to condensed consolidated unaudited financial statements






                                       3
<PAGE>   4
                                 QUEST NET CORP.
                          (A Development Stage Company)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>


                                                                                                                 November 28,
                                                                                                                    1995
                                                     For the Three Months Ended     For the Nine Months Ended    (inception)
                                                               March 31,                   March 31,               Through
                                                     ---------------------------   ---------------------------    March 31,
                                                         2000          1999            2000           1999           2000
                                                     ------------   ------------   ------------   ------------   ------------
                                                      (Unaudited)   (Unaudited)    (Unaudited)    (Unaudited)     (Unaudited)
<S>                                                  <C>            <C>            <C>            <C>            <C>
REVENUES ..........................................  $    167,953   $     36,773   $    276,769   $  1,033,426   $  1,346,967

COSTS AND EXPENSES
    Cost of revenue ...............................        85,568         16,523        102,045        678,565        797,133
    Stock based compensation ......................       666,228        956,661      1,334,431      6,388,720      8,363,916
    Bad debt expense ..............................         4,282         12,714          4,282        880,381        897,377
    Salaries and bonuses ..........................       252,675        115,445        651,314        267,715      1,034,474
    Consulting fees, related party ................            --             --             --        135,000        135,000
    General and administrative ....................       711,313        295,876      1,424,821        307,227      2,032,146
    Depreciation and amortization .................       161,134        150,871        576,600        162,496        889,967
    Unauthorized loss on property and equipment ...       655,000             --        655,000             --        655,000
    Loss on disposal of assets ....................            --         28,280             --         28,280         56,559
                                                     ------------   ------------   ------------   ------------   ------------
            TOTAL OPERATING EXPENSES ..............     2,536,200      1,576,369      4,748,493      8,848,383     14,861,572
                                                     ------------   ------------   ------------   ------------   ------------
            OPERATING LOSS ........................    (2,368,248)    (1,539,597)    (4,471,724)    (7,814,958)   (13,514,605)

NON-OPERATING INCOME (EXPENSE)
    Interest expense ..............................        (1,570)        (1,351)       (35,442)        (1,351)       (41,385)
    Interest income ...............................        12,062          4,283         75,989          4,283         84,555
    Penalty for unconsummated acquisition .........      (100,000)            --       (100,000)            --       (100,000)
    Unrealized gain (loss) on marketable securities         4,248             --        (13,503)            --        (13,503)
    Proceeds from settlement ......................            --             --         19,454             --         19,454
    Other, net ....................................       (28,387)            --            884             --            884
                                                     ------------   ------------   ------------   ------------   ------------
            NET LOSS BEFORE INCOME TAXES ..........    (2,481,895)    (1,536,665)    (4,524,342)    (7,812,026)   (13,564,600)
                                                     ------------   ------------   ------------   ------------   ------------
INCOME TAXES ......................................            --             --             --             --             --
                                                     ------------   ------------   ------------   ------------   ------------
            NET LOSS ..............................  $ (2,481,895)  $ (1,536,665)  $ (4,524,342)  $ (7,812,026)  $(13,564,600)
                                                     ============   ============   ============   ============   ============

NET LOSS PER SHARE:
    Basic ........................................   $      (0.11)  $      (0.07)  $      (0.20)  $      (0.70)
                                                     ============   ============   ============   ============
    Diluted ......................................   $      (0.11)  $      (0.07)  $      (0.20)  $      (0.70)
                                                     ============   ============   ============   ============

SHARES USED FOR COMPUTING NET LOSS PER SHARE:
    Basic ........................................     23,091,372     22,046,780     22,483,859     11,098,288
                                                     ============   ============   ============   ============
    Diluted ......................................     23,091,372     22,046,780     22,483,859     11,098,288
                                                     ============   ============   ============   ============
</TABLE>




       See notes to condensed consolidated unaudited financial statements





                                       4
<PAGE>   5
                                 QUEST NET CORP.
                          (A Development Stage Company)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>


                                                                                                        November 28,
                                                                     For the Nine Months Ended             1995
                                                                             March 31,                  (inception)
                                                                     -----------------------------    Through, March 31,
                                                                        2000             1999              2000
                                                                     (Unaudited)       (Unaudited)       (Unaudited)
                                                                     -----------       -----------       -----------
<S>                                                                   <C>                 <C>             <C>
            NET CASH USED IN OPERATING ACTIVITIES ..............      (1,603,633)         (545,938)       (2,560,758)
                                                                     -----------       -----------       -----------
INVESTING ACTIVITIES
    Equipment and leasehold purchases ..........................        (889,806)         (119,239)       (1,008,562)
    Proceeds from sale of equipment ............................              --                --             2,100
    Cash refunded/(paid) for deposits ..........................        (177,452)          (32,047)         (246,702)
    Advances made to acquisition candidate .....................        (200,000)               --          (200,000)
    Purchase of CWTel ..........................................        (200,000)               --          (200,000)
    Purchase of Wings Online, Inc, net of $-0- cash received ...              --          (135,000)         (135,000)
                                                                     -----------       -----------       -----------
            NET CASH (USED IN) INVESTING ACTIVITIES ............      (1,467,258)         (286,286)       (1,788,164)
                                                                     -----------       -----------       -----------

FINANCING ACTIVITIES
    Capital contribution .......................................              --                --                70
    Sale of preferred stock ....................................              --                --             3,000
    Sale of common stock and warrants ..........................              --           925,000         5,926,200
    Redemption of preferred stock ..............................      (1,000,000)               --        (1,000,000)
    Cash paid for offering costs ...............................              --            (2,950)         (352,950)
    Proceeds from issuance of notes to related party ...........              --           213,140           214,900
    Principal payments of related party notes ..................              --          (213,140)         (214,900)
                                                                     -----------       -----------       -----------
            NET CASH PROVIDED BY FINANCING ACTIVITIES ..........      (1,000,000)          922,050         4,576,320
                                                                     -----------       -----------       -----------

NET CHANGE IN CASH AND CASH EQUIVALENTS ........................      (4,070,891)           89,826           227,398
Cash and cash equivalents, beginning ...........................       4,298,289                43                --
                                                                     -----------       -----------       -----------
Cash and cash equivalents, ending ..............................     $   227,398       $    89,869       $   227,398
                                                                     ===========       ===========       ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest .........................................     $    33,872       $        --       $    39,815
                                                                     ===========       ===========       ===========
Cash paid for income taxes .....................................     $        --       $        --       $        --
                                                                     ===========       ===========       ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
2,000,000 common shares issued for property ....................     $        --       $        --       $   125,274
2,649,054 common shares issued for property ....................     $        --       $ 1,031,520       $ 1,031,520
160,000 preferred shares issued for property and software ......     $        --       $ 1,600,000       $ 1,600,000
24,000 common shares issued for payment of offering costs ......     $        --       $    15,000       $    15,000
29,326 common shares issued in acquisition of Wings Online, Inc.     $        --       $   200,000       $   200,000
360,000 common shares issued in acquisitoin of CWTel, Inc. .....     $   700,000       $        --       $   700,000

</TABLE>



       See notes to condensed consolidated unaudited financial statements


                                       5
<PAGE>   6
                                 QUEST NET CORP.
                          (A Development Stage Company)
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE A:  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB and Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements
and should be read in conjunction with the Company's June 30, 1999 audited
financial statements as filed on Form 8-K in March 2000. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included. The results of
operations for the three and nine months ended March 31, 2000 are not
necessarily indicative of the results that will be realized for the full year.

PRINCIPLES OF CONSOLIDATION

The consolidated statements include the accounts of the Company and its
wholly-owned subsidiaries Wings Online, Inc., IP Quest Corp., Quest Wireless
Corp., Globalbot Corp., QuesTel Corp., Quest Fiber Corp and CWTel, Inc. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

During the interim period the Company purchased marketable securities and has
adopted the following accounting policy:

         Marketable securities consist of equity securities and are stated at
         current market value. All equity securities are considered "trading"
         securities under the provisions of Statement of Financial Accounting
         Standards No. 115, "Accounting for Certain Investments in Debt and
         Equity Securities". Accordingly, unrealized gains and losses on equity
         securities are reflected in the accompanying statements of operations.




                                       6
<PAGE>   7
                                 QUEST NET CORP.
                          (A Development Stage Company)
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE B: CWTEL, INC. ("CWTEL")

The following pro forma condensed consolidated statement of operations gives
effect to the acquisition of CWTel as if it had occurred at the beginning of the
period presented. The pro forma condensed consolidated statement of operations
are not necessarily indicative of results of operations had the acquisition
occurred at the beginning of the periods presented nor of results to be expected
in the future.

            PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    For the nine months ended March 31, 1999

<TABLE>
<CAPTION>
                                                                                                    Pro forma
                                                       Quest Net        CWTel       Adjustments   Consolidated
                                                      -----------     ---------     -----------   ------------
<S>                                                   <C>             <C>           <C>           <C>
Revenues..........................................    $ 1,033,426     $ 154,650                   $ 1,188,076
Operating expenses................................     (8,848,383)     (331,007)     (153,828)     (9,333,218)
(Loss) income from operations.....................     (7,814,957)     (176,357)     (153,828)     (8,145,142)
Interest expense..................................         (1,351)           --            --          (1,351)
Interest income...................................          4,283            --            --           4,283
Net (loss) income.................................     (7,812,025)     (176,357)     (153,828)     (8,142,210)
Net (loss) income per share - basic and diluted...    $     (0.70)     $(176.36)                  $     (0.71)
Basic and diluted shares outstanding..............     11,098,288         1,000       360,000      11,458,288
</TABLE>

The adjustments include amortization expense resulting from amortization of
goodwill of $17,092 for nine months. Goodwill resulting from the acquisition
totaling $1,025,524 will be amortized on a straight-line basis over five years.
Adjustments also include the effect on earnings per share of the 360,000 common
shares issued in the transaction.

            PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                    For the nine months ended March 31, 2000

<TABLE>
<CAPTION>
                                                                                                    Pro forma
                                                       Quest Net        CWTel       Adjustments   Consolidated
                                                      -----------     ---------     -----------   ------------
<S>                                                   <C>             <C>           <C>           <C>
Revenues..........................................    $   276,769     $ 392,071                   $   668,840
Operating expenses................................     (4,841,658)     (440,125)     (136,736)     (5,418,519)
(Loss) income from operations.....................     (4,564,889)      (48,054)     (136,736)     (4,749,679)
Interest expense..................................        (35,442)      (10,262)           --         (45,704)
Interest income...................................         75,989            --            --          75,989
Net (loss) income.................................     (4,524,342)      (58,316)     (136,736)     (4,719,394)
Net (loss) income per share - basic and diluted...    $     (0.20)     $ (58.32)                  $     (0.21)
Basic and diluted shares outstanding..............     22,483,859         1,000       360,000      22,843,859
</TABLE>


The information for CWTel is for the eight months ended March 31, 2000 as the
results of operations for March 2000 for CWTEL are in the consolidated Quest Net
results of operations. The adjustments include amortization expense resulting
from amortization of goodwill of $17,092 for eight months. Goodwill resulting
from the acquisition totaling $1,025,524 will be amortized on a straight-line
basis over five years. Adjustments also include the effect on earnings per share
of the 360,000 common shares issued in the transaction.





                                       7
<PAGE>   8

                                 QUEST NET CORP.
                          (A Development Stage Company)
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The pro forma condensed consolidated financial information do not show any
adjustments for a change in the income tax benefit as the total pro forma
consolidated benefit for income taxes would be offset by any valuation allowance
due to any deferred tax asset derived from net operating losses. The valuation
allowance offsets the net deferred tax asset for which there is no assurance of
recovery.

NOTE C:  UNAUTHORIZED LOSS ON PROPERTY AND EQUIPMENT

During the three months ended March 31, 2000 the Company scaled down its staff
and management team. The company also moved to its new facility. During the
move, it was discovered that two Maux's were lost or stolen from each warehouse.
This equipment is valued at approximately $ $655,000. After several meetings and
an investigation by the Board, it was decided that the Company should proceed
with a claim under its insurance policy. The Company has written off those
assets on their balance sheets.


NOTE D:  FLORIDA DEPARTMENT OF REVENUE

During the month of January, the Company was notified of an impending
investigation by the Florida Department of Revenue concerning the payment of
Florida Use Taxes in regard to the purchase of the Company's Fixed Assets. The
Company has contracted a Certified Public Accountant in its efforts to respond
to the Florida Department of Revenue. As a result of this limited investigation,
it came to light that the Company has failed to pay Use Taxes on certain of its
purchases. The current and previous officers of the Company are working closely
with the Florida Department of Revenue auditor to resolve this situation and it
expects to complete the investigation by the end of the fourth quarter. The
Company is not in a position to determine the amount of its liability at the
present time, but it is confident the amount due will not substantially affect
the financial position and result of operations for the entity on a going
concern basis.




                                       8
<PAGE>   9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

GENERAL

      Quest Net Corp. is a developmental stage company, which, since inception,
has been primarily engaged in providing Internet connectivity and the
development of Internet tools for individuals and companies.

      We have incurred net losses applicable to common shareholders since
inception through March 31, 2000, of approximately $13,564,600 after discounts
and dividends on preferred stock. We anticipate that losses from operations will
continue for at least the next year, primarily due to an anticipated increase in
marketing and deployment expenses associated with the building of our Internet
and Telephony backbone, and the costs associated with the other development
activities. There can be no assurances that our company will achieve market
acceptance or that sufficient revenues will be generated after the deployment of
our Wireless backbone to allow us to operate profitably. The Company primary
generates its revenue by being a CLEC and a wireless Internet provider.

      Our costs and expenses primarily fall into the following categories:

            o     Telecommunications and operations;
            o     Employee stock compensation plans;
            o     Sales and marketing;
            o     General and administrative;
            o     Amortization and depreciation.

         Our telecommunications and operating expenses consist of our cost of
telecommunications, including the cost of local telephone lines and costs of
leased lines connecting the Internet and our operations centers. We expect these
expenses to increase over time to support our growing subscriber base.

         Our operating expenses also include employee salaries and benefits,
equipment costs, office rent and utilities and customer service and technical
support costs. We expect customer service and support expenses to increase over
time to support new and existing subscribers.

         Our employee stock compensation plans consist of restricted common
stock awards and options. We have utilized our restricted stock as an incentive
to attract and keep qualified experienced key personnel.

         Our general and administrative expenses consist primarily of
administrative staff and related benefits. We expect our general and
administrative costs to increase to support our growth.

         Our amortization expense primarily relates to the amortization of
goodwill and a non-compete agreement acquired in our purchase of an e-commerce
provider and certain equipment and licenses related to our proposed plans to
offer Internet kiosks. Amortization expense is based on our best estimate of the
useful lives of the intangible assets.



                                       9
<PAGE>   10

         Our depreciation expense primarily relates to our equipment and is
based on the estimated useful lives of the assets ranging from three to five
years using the straight-line method for the equipment. Depreciation expense is
expected to increase as we place in service equipment already purchased and as
we acquire additional equipment to support our intended growth.

         We made an acquisition of an e-commerce provider, which has been
accounted for using the purchase method of accounting. As a result, the amount
by which the fair value of the consideration we paid in the acquisition exceeded
the fair value of the net tangible assets we bought of $3,372. We allocated the
excess of $331,628 to the non-compete agreement, which was acquired as part of
the purchase. The non-compete agreement will be amortized over the life of the
agreement, which is three years.

RESULTS OF OPERATIONS

THREE AND NINE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999

REVENUE

      Our revenue for the three months ended March 31, 2000 was $167,953 as
compared to $36,773 for the same period in 1999. The increase was primarily a
result of new business generated and diversification into new business.

      Our revenue for the nine months ended March 31, 2000 was $276,769 as
compared to $1,033,426 for the same period in 1999. The decrease was primarily a
result of the loss of a major customer, severe competition from large companies
and saturation of the Internet market.

COSTS AND EXPENSES

      Our cost of revenue, substantially comprised of Telecommunications lines
and acquisition of equipment, for the three months ended March 31, 2000 was
$85,568 as compared to $16,523 for the same period in 1999. The increase was a
result of the installation of new Internet lines and acquisition of new
equipment.

      Our cost of revenue, substantially comprised of purchase of software and
source code, for the nine months ended March 31, 2000 was $102,045 as compared
to $678,565 for the same period in 1999. The decrease was a result of Quest
making no new major acquisition of soft wares or equipment.

      Stock based compensation decreased by $290,433 during the three months
ended March 31, 2000 as compared to the three months ended March 31, 1999
because certain employment contract were cancelled or acquired back by the Quest
and compensation was tied to performance.



                                       10
<PAGE>   11
      Stock based compensation decreased by $5,054,289 during the nine months
ended March 31, 2000 as compared to the nine months ended March 31, 1999 due to
a decline in our stock price. During the nine months ended March 31, 1999 our
stock was trading at an abnormally high price and, as result, we incurred a
major loss in order to fulfill our commitment to issue shares to employees and
consultants. In order to avoid this situation in the future, we changed our
stock compensation policies.

      Bad debt expense decreased by $8,432 during the three months ended March
31, 2000 as compared to the three months ended March 31, 1999 as result of tough
collection policies, less vulnerability to our major client, and the decrease in
our client base.

      Salaries and bonuses increased by $137,230 during the three months ended
March 31, 2000 as compared to the three months ended March 31, 1999 due to the
hiring of more staff and the increase in our sales force.

      Salaries and bonuses increased by $383,599 during the nine months ended
March 31, 2000, as compared to the nine months ended March 31, 1999, due to the
hiring of additional staff, the increase in our sales force, the issuance of
shares to directors and officers, the hiring of a Chief Financial Officer and a
new President, and the eventual termination of those contracts.

      General and administrative costs are primarily made up of office expenses,
rent, legal and accounting fees, insurance, consulting fees and travel and
entertainment costs. Those costs, in the aggregate, increased to $711,313 for
the three months ended March 31, 2000 as compared to $295,876 for the same
period in 1999. The $415,437 increase was due to new office leasehold
improvement, rent for larger office space, additional consulting contracts in
order to generate new business or to retain existing business, legal fees
incurred due to the SEC investigation and other lawsuits.

      General and administrative costs increased to $1,424,821 for the nine
months ended March 31, 2000 as compared to $307,227 for the same period in 1999.
The $1,117,594 increase was a largely due to the $9.99 dial up advertising
campaign, new office leasehold improvement, rent for larger office space,
additional consulting contracts in order to generate new business or to retain
existing business, legal fees incurred due to the SEC investigation and other
lawsuits as described in Item 1-Legal Proceedings.

      Depreciation and amortization increased by $10,263 during the three months
ended March 31, 2000, as compared to the three months ended March 31, 1999 due
to purchase of new equipment and the acquisition of. CWTel, Inc.

      Depreciation and amortization increased by $414,104 during the nine months
ended March 31, 2000 as compared to the nine months ended March 31, 1999 The
increase was due to our placing in service equipment acquired during the period
and intangible assets acquired in our purchase of Wings Online, Inc.

      We experienced an unauthorized loss on property and equipment of $655,000
during the three months ended March 31, 2000. At the time of the move to our new
office, we noticed that





                                       11
<PAGE>   12

certain equipment that was in storage was missing. The Company begun to
investigate this lost and has reported the matter to the proper authorities.
Several individuals had access to the storage facility and equipment, which
makes it very difficult for us to recover the equipment or to identify the
person or persons involved.

      Interest expense increased by $34,091 during the nine months ended March
31, 2000 as compared to the nine months ended March 31, 1999 due to our failure
to redeem our preferred stock on a timely basis as no funds were available at
that stage.

      Interest income increased by $71,706 during the nine months ended March
31, 2000 as compared to the nine months ended March 31, 1999 due to the
investment interest earned on the proceeds of a $5,000,00 private placement.

      We also recorded a charge of $100,000 as a penalty for an unconsummated
acquisition. The penalty was incurred because Quest decided to unilaterally
cancel its acquisition of 49% of AfricaInternet, Corp. a related party company.

LIQUIDITY AND CAPITAL RESOURCES

      We are currently a developmental stage company and since our revenue is
inadequate to support our operation, our continued existence is dependent upon
our ability to resolve our liquidity problems, principally by obtaining
additional debt and/or equity financing. We have not yet generated sufficient
cash flow, and until we can construct and deploy our Wireless Backbone, we do
not expect our revenues to increase sufficiently to fund our entire operations.
In order to continue our current operations and effectuate our operational plan
we will need to obtain additional debt or equity financing.

      In the event that we are unable to obtain debt or equity financing or we
are unable to obtain such financing on terms and conditions acceptable to us, we
may have to cease or severely curtail our operations. This would materially
impact our ability to continue as a going concern. However, our management is
continually negotiating with various outside entities for additional funding
necessary to complete the deployment of our Wireless backbone. Management has
been able to raise the capital necessary to reach this stage of development and
has been able to obtain funding for capital requirements to date. Quest believes
that once that backbone is deployed the revenue will increase significantly,
however any delay on the deployment of the backbone will be detrimental to Quest
as other companies with larger capital and operations will be able to enter the
market. The Company has certain frequency licenses, but that alone cannot secure
our success.

      We have, to a substantial extent, financed our operations through several
Regulation D private placement transactions. We have funded our operating
expenses during the third quarter ended March 31, 2000 with equity capital from
those transactions. At March 31, 2000, we had working capital of $543,521
compared to working capital of $4,340,804 on June 30, 1999.




                                       12
<PAGE>   13

      Since the acquisition of CWTel, Inc. our revenue has increased and we hope
that as the companies become more integrated the revenue will increase and
expenses will stay stable, except for the cost of more telecommunications lines
and sales force.


      The Company anticipates that the balance of its capital needs for the
fiscal year ending June 30, 2000 will be approximately $ 200,000.

      In June 1999, we finalized a Private Placement ( REG D 506) with James LLC
in the amount of $5,000,000, of which the company received a net amount of
$4,650.000. On May 5, 2000, a lawsuit was filed against Quest by James LLC. See
Item1-Legal Proceeding. If the lawsuit is tried and a judgment is entered
against the Quest, we estimates that the damages could be in excess of $5
million, which is the minimum amount invested by James LLC. In the event that
the lawsuit cannot be settled and the Company is adjudged libel, the Company
does not have the funds available to redeem any or all of common shares. Any
judgment to this effect would force the Company to cease operations.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

      Statements in this Quarterly Report on Form 10-QSB under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," as well as in the Company's press releases or oral statements that
may be made by the Company or by officers, directors or employees of the Company
acting on the Company's behalf, that are not historical fact constitute
"forward-looking statements". Such forward-looking statements involve known and
unknown risks, uncertainties, and other factors that could cause the actual
results of the Company to be materially different from the historical results or
from any results expressed or implied by such forward-looking statements.
Factors that might cause such a difference include, without limitation, the
information set forth below. In addition to statements which explicitly describe
such risks and uncertainties, statements labeled with the terms "believes",
"belief" "expects", "plans" or "anticipates" should be considered uncertain and
forward-looking. All cautionary statements made in this Report should be read as
being applicable to all related forward-looking statements wherever they appear.


OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT FOR AN INVESTOR TO EVALUATE OUR
BUSINESS AND PROSPECTS

      We have minimal business history that investors can analyze to help them
decide whether or not to invest in us. Any investment in us should be considered
a high-risk investment because investors will be placing their funds at risk in
an unseasoned development stage company with unforeseen costs, expenses and
problems often experienced by development stage companies.





                                       13
<PAGE>   14

WE HAVE HAD HISTORY OF LIMITED REVENUES BASE AND THIS MAY CONTINUE TO BE THE
CASE.
      From inception to March 31, 2000, we generated revenues of approximately $
1,346,967 and incurred operating expenses of $ 13,564,600. At March 31, 2000, we
had an accumulated deficit of approximately $ (13,564,600) after discounts and
dividends.

THE COMPANY IS UNCERTAIN ABOUT ITS ABILITY TO MEET CAPITAL NEEDS.

      The Company needs additional capital to fund its operations, and is
seeking to obtain additional capital through debt or equity financing or
conventional loans. If additional funds are raised by issuing equity securities,
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, however, that additional financing will be available when needed, or
if available, will be available on acceptable terms. Insufficient funds may
prevent the Company from implementing its business strategy and will require the
Company to limit, delay, scale back, or eliminate certain of its operations.

      This limitation could harm our business and decrease the value of the
shares or cause us to go out of business. If we are unable to continue our
operations, your entire investment in us will be lost. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" for a discussion of our working
capital and capital expenditures.

WE HAVE HAD HISTORY OF A LIMITED CUSTOMER BASE AND THIS MAY CONTINUE TO BE THE
CASE.

      At present, our customer base is limited. Our ability to operate
profitably depends on increasing our customer base and achieving sufficient
gross profit margins. We cannot assure you that we will be able to increase our
customer base or to operate profitably.

WE ARE SUBJECT TO ALL OF THE SUBSTANTIAL RISKS INHERENT IN AN INTERNET BUSINESS,
WHICH MAY HARM OUR ABILITY TO OPERATE SUCCESSFULLY.

      We are subject to all of the substantial risks inherent in an Internet
related business, any one of which may harm our ability to operate successfully.
These include, but are not limited to:

            0     Our inability to develop, maintain and/or increase levels of
                  traffic on our Internet sites.

            0     Our inability to attract or retain customers.

            0     Our inability to generate significant Web-based revenue from
                  our customers.

            0     Our failure to anticipate and adapt to a developing market and
                  the level of use of the Internet and online services for the
                  purchase of consumer products and in general.

            0     Our inability to upgrade and develop competitive systems and
                  infrastructures.

            0     The failure of our servers and networking systems to
                  efficiently handle our Web traffic.

            0     Technical difficulties and system downtime or Internet
                  brownouts.





                                       14
<PAGE>   15

IF WE RAISE ADDITION CAPITAL THROUGH THE ISSUANCE OF EQUITY OR CONVERTIBLE DEBT,
YOUR PROPORTIONATE INTEREST WILL BE DILUTED.

      We will need more working capital to expand our operations. If we raise
additional capital by issuing equity or convertible debt securities, the
percentage ownership of our then-current stockholders will be reduced, and such
securities may have senior rights, preferences, or privileges.


OUR DATA CENTERS AND THE NETWORKS ON WHICH WE RELY ARE SENSITIVE TO HARM FROM
HUMAN FACTIONS AND NATURAL DISASTERS. ANY RESULTING DISRUPTION COULD
SIGNIFICANTLY DAMAGE OUR BUSINESS AND REPUTATION.

      Our reputation for providing reliable service largely depends on the
performance and security of our data centers equipment and the network
infrastructure on which we rely. Our customers often maintain confidential
information on our servers.

      Our data centers, equipment and networks, and our customers' information
are subject to damage and unauthorized access from:

            0     Human error and tampering.
            0     Breaches of security.
            0     Natural disasters.
            0     Power loss.
            0     Capacity limitations.
            0     Software defects.
            0     Telecommunications failures.
            0     Intentional acts of vandalism, including computer viruses.

All of which, will cause interruptions in service or reduced capacity for our
customers. These events could potentially jeopardize the security of our
customers' confidential information such as credit card and bank account
numbers.

      Despite precautions we have taken and plan to take, the occurrence of any
one of the events listed above or other unanticipated problems could seriously
damage our business and reputation and cause us to lose customers.

      The time and expense required to eliminate computer viruses and alleviate
other security problems could be significant and could impair our service
quality.

      In the event of any resulting harm to customers, we could be held liable
for damages. Awards for such damages might exceed our $1,000,000 liability
insurance policy by an unknown but significant amount and could seriously harm
our business.





                                       15
<PAGE>   16

WE COULD NOT PROVIDE ADEQUATE SERVICE TO OUR CUSTOMERS IF WE WERE UNABLE TO
SECURE SUFFICIENT NETWORK CAPACITY TO MEET OUR FUTURE NEEDS ON REASONABLE TERMS
OR AT ALL.

      Our failure to achieve or maintain high capacity data transmission could
negatively impact service levels to our existing customers and limit our ability
to attract new customers, which would harm our business.


WE ARE DEPENDENT ON INTERNET NETWORK ACCESS SERVICES WE RECEIVE FROM OTHERS, ANY
DISRUPTION OF THESE SERVICES COULD HARM OUR BUSINESS

      We rely on third-party networks, local telephone companies, and other
companies to provide data communications capacity. Any disruption of these
services could cause our customers to find other providers and prohibit us from
obtaining new customers.


OUR BUSINESS DEPENDS IN PART ON OUR NETWORK SERVICE PROVIDER'S NUMEROUS PEERING
RELATIONSHIPS. THEIR INABILITY TO MAINTAIN THEIR PEERING RELATIONSHIPS COULD BE
COSTLY AND HARMFUL TO OUR BUSINESS.

      The Internet is composed of many Internet service providers that operate
their own networks and interconnect with other Internet Service Providers at
various peering points.

      If our network service provider's network or infrastructure fails to
continue to meet industry requirements for peering or it loses its peering
relationships for any reason, our transmission rates could be reduced, resulting
in a decrease in the quality of service we provide to our customers.

POTENTIAL LACK OF LIQUIDITY OF OUR COMMON STOCK

      Our common stock trades on the OTC Electronic Bulletin Board. Stocks
trading on the OTC Electronic Bulletin Board generally attract a smaller number
of market makers and a less active public market.

      Moreover, since our common stock is traded on the OTC Electronic Bulletin
Board, investors may find it difficult to dispose of or obtain accurate
quotations as to the value of our common stock.


WE ARE SUBJECT TO PENNY STOCK REGULATIONS AND RESTRICTIONS

      Our stock is designated as a Penny Stock. Such a designation requires any
broker or dealer selling such securities to disclose certain information
concerning the transaction, obtain a written agreement from the purchaser, and
determine that the purchaser is reasonably suitable to purchase such securities.
These rules will restrict the ability of Broker / Dealers to sell our common
stock and may affect the ability of Investors to sell their shares.


YOU MAY NOT BE ABLE TO RESELL SHARES OF OUR STOCK AT OR FOR MORE THAN THE PRICE
YOU PAID.

      The price of our common stock and Internet and telecommunication stock in
general, have recently experienced extreme volatility that often has been
unrelated to the operating performance of any specific public companies. During
the period from July 10, 1998 to June 15, 2000 the bid and ask price of our
common stock has ranged from a high of $30.71 to a low of $.125. If continued,
these broad market and industry fluctuations may adversely affect the trading
price of our common stock, regardless of our actual operating performance. This
volatility may negatively impact the liquidity and value of your shares.




                                       16
<PAGE>   17

OUR ARTICLES OF INCORPORATION ALLOW AUTHORIZATION AND DISCRETIONARY ISSUANCE OF
PREFERRED STOCK

      Our Articles of Incorporation authorize the issuance of "blank check",
preferred stock. The board of directors is empowered, without stockholder
approval, to designate and issue additional series of preferred stock with
dividend, liquidation, conversion, voting, or other rights, including the right
to issue convertible securities with no limitations on conversion. Any such
designations and issuances, could:

            0     Adversely affect the voting power or other rights of the
                  holders of our common stock.

            0     Substantially dilute the common shareholder's interest.

            0     Depress the price of our common stock.


THE ISSUANCE OF "BLANK CHECK" PREFERRED STOCK COULD DELAY, DETER, OR PREVENT A
TAKE OVER, MERGER OR CHANGE OF CONTROL AND MAY PREVENT YOU FROM REALIZING A
PREMIUM RETURN

      Our Certificate of Incorporation gives the Board of Directors the sole
authority to issue "blank check" preferred stock. The issuance of "blank check"
preferred stock could have the effect of delaying, deterring, or preventing a
merger, take over or change in control without any action by the shareholders.
The Board of Directors, by the issuance of preferred stock, could make it more
difficult for a third party to acquire us, even if the acquisition would be
beneficial to you. You may not realize the premium return that stockholders may
realize in conjunction with corporate takeovers.

WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS OR TO CONTINUE
USING INTELLECTUAL PROPERTY THAT WE LICENSE FROM OTHERS.

      We rely and will rely on a combination of copyright, trademark, service
mark, and trade secret laws and contractual restrictions to establish and
protect certain of our proprietary rights. We have no patented technology that
would bar competitors from our market. Despite our efforts to protect our
proprietary rights, unauthorized parties may attempt to copy or otherwise obtain
and use our data or technology.

THE UNCERTAINTY ASSOCIATED WITH UNPROVEN BUSINESS MODELS

      Since Quest Net's business model is relatively new and unproven, we may
not be able to anticipate and adapt to a developing market, or may be unable to
manage its network infrastructure (including server, hardware, and software, to
handle our Internet traffic, or to effectively manage our rapidly expanding
operations.




                                       17
<PAGE>   18

WE LACK UNIQUE SERVICES OR MARKET NICHE IN AN INDUSTRY CHARACTERIZED BY
SIGNIFICANT OVERCAPACITY FOR CURRENT DEMAND

      The market for Internet access is highly competitive and fragmented with
over 4,800 Internet service providers, primarily in local markets and averaging
less than 5,000 customers each. Multiple Internet access providers serve every
local market we have entered, or intend to enter. We offer the same type of
services as other Internet service providers. Due to our lack of working capital
in the past, we have not obtained any significant market share.


WE CANNOT BE CERTAIN THAT WE WILL BE ABLE TO COMPETE WITH SIGNIFICANT PRICING
PRESSURE BY OUR COMPETITORS.

      As a result of increased competition in our industry, we expect to
encounter significant pricing pressure. We cannot be certain that we will be
able to offset the effects of any required price reductions through an increase
in the number of our subscribers, higher revenues from our business services,
cost reductions or otherwise, or that we will have the resources to continue to
compete successfully.


WE MAY NOT BE ABLE TO COMPETE IN THE INTERNET SERVICE MARKET

      We operate in the Internet services market, which is extremely
competitive. Our current and prospective competitors include many large
companies that have substantially greater market presence, financial, technical,
marketing, and other resources than we have. We compete directly or indirectly
with the following categories of companies:

            0     Established online services, such as America Online, the
                  Microsoft Network, CompuServe, and Prodigy.

            0     Local, regional, and national Internet service providers, such
                  as MindSpring, Earthlink, Network, Inc., Internet America, and
                  PSINet.

            0     National telecommunications companies, such as AT&T Corp., MCI
                  WorldCom, Inc., Sprint, and GTE.

            0     Regional Bell operating companies, such as BellSouth and SBC
                  Communications.

      Our competition is likely to increase. We believe this will probably
happen as large diversified telecommunications and media companies acquire
Internet service providers and as Internet service providers consolidate into
larger, more competitive companies.

      Diversified competitors may bundle other services and products with
Internet connectivity services, potentially placing us at a significant
competitive disadvantage. As a result, our business may suffer.


WE MAY NOT BE ABLE TO COMPETE IN THE LONG-DISTANCE TELEPHONE MARKET

      Quest, through its wholly owned subsidiary CWTel, is a reseller of long
distance telephone service. We compete with long distance carriers and other
long distance resellers and providers, including large carriers such as AT&T,
MCI WorldCom and Sprint and new entrants to the long distance market. Many of
our competitors are significantly larger and have substantially greater





                                       18
<PAGE>   19

market presence and financial, technical, operational, marketing and other
resources. We will face stiff price competition and may not be able to compete.


QUEST HAS LIMITED MARKETING AND SALES CAPABILITY.

      Because of our limited working capital in the past, we have not had the
resources to develop a marketing and sales force.

      In order to increase our revenues, we are in the process of developing
marketing and sales force with technical expertise and marketing capability.
There can be no assurance that we will be able to:

            0     Establish such sales force.

            0     Gain market acceptance for our services.

            0     Retain a qualified Director of Sales.

            0     Develop our sales force.

            0     Obtain and retain qualified sales personnel on acceptable
                  terms, if at all.

            0     Meet our proposed marketing schedules or plans.

     To the extent that we arrange with third parties to market our services,
the success of such products may depend on the efforts of such third parties.

DEPENDENCE ON QUALIFIED PERSONNEL.

      Due to the specialized nature of our business, we are highly dependent
upon our ability to attract and retain qualified technical and managerial
personnel. Our failure to recruit key technical and managerial personnel in a
timely manner has been detrimental to our plan of operations and has had an
adverse impact upon our business affairs or finances.

      Our anticipated growth and expansion into areas and activities requiring
additional expertise, such as marketing, will require the addition of new
management personnel. Competition for qualified personnel is intense and there
can be no assurance that we will be able to attract and retain qualified
personnel necessary for the development of our business.


THE "GOING CONCERN" EMPHASIS ON THE REPORT OF OUR INDEPENDENT ACCOUNTANTS MAY
REDUCE OUR ABILITY TO RAISE ADDITIONAL FINANCING.

      The report of our independent accountants on our June 30, 1999
Consolidated Financial Statements contains an explanatory paragraph regarding
our ability to continue as a going concern. Our independent accountants cited
our history of operating losses, limited operating history, and negative cash
flow from operations, which raised substantial doubt as to our ability to
continue as a going concern. This "going concern", emphasis may reduce our
ability to raise additional financing.

NO PAYMENT OF DIVIDENDS

      Although we declared a three-for-one stock dividend in December 1998, it
is not anticipated that we will pay any cash dividends on our common stock in
the future. The Board of Directors intends to follow a policy of retaining
earnings, if any, for use in our business operations. As a result, the return on
your investment in us will depend upon any appreciation in the market price of
the common stock.




                                       19
<PAGE>   20

PART II - OTHER INFORMATION


ITEM 1.    LEGAL PROCEEDINGS.

SECURE TRANSACTION INTERNATIONAL CORP. ET AL.

      In April 1999, Quest filed a lawsuit in the Circuit Court of the 17th
Judicial Circuit in and for Broward County, Florida against Secure Transaction
International Corp., its subsidiaries and principals, the accounting firm of
Margolis, Fink & Wichrowski, Barry A Fink, C.P.A., P.A., Mark V. Wichrowski,
C.P.A. and Barry A. Fink and Mark Wichrowski, individually, alleging violation
of the Florida securities laws, negligent misrepresentations, breach of contract
payment of accounts, and conversion.

      The lawsuit stems from several contracts entered into with Secure
Transaction and its subsidiaries for bandwidth, consulting services and
software. As payment for the services, Secure Transaction and its subsidiaries
issued redeemable preferred stock that was convertible into Secure Transaction
common stock.

      Quest provided the services as required and the appropriate amount of
convertible stock was not redeemed or converted. The amount due us under these
various agreements is approximately $867,842.

      Quest has also alleged that the Financial Statements provided, negligently
misrepresented the financial condition of Secure Transaction and its
subsidiaries. Quest has asked the court for rescission, compensatory damages,
attorneys' fees, costs, and expenses.

      The defendants filed a motion to dismiss, which was denied. The defendants
have filed an answer to our complaint. The lawsuit is in the discovery stage. At
present, we are unable to predict the outcome this lawsuit.

HERMAN HENIN

      In January 1999, Herman Henin, a shareholder of Pact Communications Group,
Inc., filed a lawsuit against Quest in the Circuit Court of the 17th Judicial
Circuit in and for Broward County, Florida. Mr. Henin alleged that he did not
receive a proper distribution of Quest shares from Pact after Quest's
acquisition of certain of the assets of Pact, and that, somehow, Quest was
responsible.

      Due to the cost of litigation, Quest settled the case for the issuance of
mutual releases and the issuance of 12,500 shares of common stock to Mr. Henin's
attorney.

AUTONOMY, INC.

     In September 1999, Autonomy, Inc, filed suite against Pact Communication
Group, Inc. and Quest Net Corp. in the Circuit Court of the 17th Judicial
Circuit in and for Broward County, Florida. The lawsuit stemmed from an alleged
contract with Pact for a non-transferable, non-sublicenseable, and non-exclusive
license for the use of Autonomy's software and other related services. In June
2000, the case was dismissed by mutual agreement of the parties without any
payment.

JAMES LLC

      On May 5, 2000, a lawsuit was filed against the Quest in the United States
District Court, Southern District of New York, by James LLC (Case No. 00 Civ.
3467). The lawsuit stems from the sale of common stock to James LLC for
$5,000,000 The lawsuit alleges that the Company breached its contract of sale to
James LLC by, among other things, failing to register the common stock, and
failing to pay liquidated damages for the non-effectivness of the registration
statement. James LLC have demanded damages in excess of $5,000,000 to be
determined at trial, liquated damages and a mandatory injunction requiring Quest
register the shares, together with interest costs and legal fees. The Company
intends to defend this suit and has obtained litigation counsel, who is in the
processes of reviewing the case and filing an answer. If the lawsuit is tried
and a judgment is entered against the Company, the Company estimates that the
damages could be in excess of $5 million, which is the minimum amount invested
by James LLC. In the event that the lawsuit cannot be settled and the Company is
adjudged libel, the Company does not have the funds available to redeem any or
all of common shares. Any judgment to this effect would force the Company to
cease operations.

SECURITIES AND EXCHANGE COMMISSION

      Quest has been advised by the Securities and Commission (the "Commission")
that they have issued an order directing a private investigation of possible
violations of Sections 17(a) of the Securities Act and Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated there under by
certain unnamed persons. The Commission has also advised Quest that the
investigation should not be construed as an indication by the Commission or its
staff that any violation of law has occurred, nor as a reflection upon any
person, entity, or security.





                                       20
<PAGE>   21

FLORIDA DEPARTMENT OF REVENUE

      During the month of January, the Company was notified of an impending
investigation by the Florida Department of Revenue concerning the payment of
Florida Use Taxes in regard to the purchase of the Company's Fixed Assets. The
Company has contracted a Certified Public Accountant in its efforts to respond
to the Florida Department of Revenue. As a result of this limited investigation,
it came to light that the Company has failed to pay Use Taxes on certain of its
purchases. The current and previous officers of the Company are working closely
with the Florida Department of Revenue auditor to resolve this situation and it
expects to complete the investigation by the end of the fourth quarter. The
Company is not in a position to determine the amount of its liability at the
present time, but it is confident the amount due will not substantially affect
the financial position and result of operations for the entity on a going
concern basis.


ITEM 2. CHANGES IN SECURITIES.

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

The Company has not submitted any matters to a vote of Security Holders.

ITEM 5.    OTHER INFORMATION.

THREE-MONTH OVERVIEW

      In December 1999, Quest began to enter a new phase of reorganizing its
operations and focusing specifically on projects such as Wireless Operations,
Dial-up and Hosting. It also started to pursue an acquisition of a telephone
company in order to benefit from its recently granted CLEC License and 214
International Telecommunication License.

      Quest also decided to move their offices to a new location in order to
house all of its operations in one place, have room for expansion, and to
generate facilities that would provide a better back up to its network. A new
facility was chosen at 3001 West Hallandale Beach Blvd. 2nd Floor, Pembroke
Park, Florida 33009.

      In February 2000, due to management conflict as to the direction of the
Company, it was mutually decided between the Company and its President at the
time, Rebecca Del Medico, that the Company would be in a better situation if
someone with more of an Operational/Technological background filled that
position. As part of the termination agreement, Ms. Del Medico received $50,000
and the right to 50,000 shares of the Company's common stock, which the Company
had accrued over the three month, ended December 31, 1999. Mr. Pereira, the
Chief Executive Officer at the time replaced Ms. Del Medico as President. Mr.
Pereira, initially felt that Quest should have started a professional search for
a mature seasoned Telecommunications Executive. Due to the cost of such a search
and the compensation package required for such an executive, the Board of
Directors did not approve the request. Instead, it was decided to continue with
negotiation for an acquisition candidate that would bring in a management team
with qualities that management felt would be the right fit for the company.





                                       21
<PAGE>   22

      On February 25, 2000, Quest entered into a Stock Purchase Agreement,
effective March 1, 2000 to purchase CWTel, Inc. from Charles Wainer for the sum
of $1,200,000. Of the purchase price $200,000 was paid at closing, $700,000 was
paid by the issuance of 360,000 share of the Company's restricted common stock
and $300,000 was to be paid in three equal payments at 90 days, 180 days, and
270 days from closing. These payments were represented by promissory note and
guaranteed by the issuance, at closing, of 300,000 shares of preferred stock,
with a face value of $10.00 per share. The Company is presently in default for
the second payment under the purchase agreement. CWTel, Inc. provides
communication services to commercial and residential customers. The company is a
switch-based carrier for local and long distance voice calls utilizing
conventional transmission methods and Voice over IP protocols. CWTel, Inc. also
provides high-speed Internet service, dial-up Internet access, and web hosting.
CWTel, Inc. offers local dial tone, long distance calling, and high speed
Internet access to tenants located in commercial buildings. Agreements are
previously signed with the landlord or the management of such buildings, and
then tenants are offered discounted services. CWTel, Inc. equipment includes a
class 4 and 5 Harris tandem switch with capacity for 10,000 ports, Cisco routers
and Compaq servers. A state of the art billing and accounting package guarantees
accurate and timely invoicing of the services provided. CWTel, Inc.
has activated approximately 1,300 accounts.

      As part of the transaction, Mr. Wainer was given a five-year employment
agreement as President of Quest, at an annual base salary of $100,000 during the
Term, with a 20% cost of living increase per annum and 50,000 shares of the
Company's common stock. Mr. Wainer also received options to purchase 1,000,000
shares of the Company's common stock. These options vest at the rate if 50,000
shares every six months and Options for an additional 50,000 shares can be
exercised every time the Company has increased its revenue by one million
dollars and has retained that revenue for a period of not less than two months.
These options are exercisable at $2.68 per share (110% of the fair market value
of the Company's common stock on the date of the Employment Agreement). Once
vested, the options will remain exercisable for one year from the date of
vesting. After one year from the vesting date, the options will become null and
void. Mr. Wainer was also appointed as interim CEO and a Director. At the same
time, Victor Coppola resigned from the Board of Directors.

      Mr. Camilo Pereira had already expressed to the Board his desire, for
health and personal reasons to resign as CEO/Chairman of the Board. The Board of
Directors requested that Mr. Pereira remain in management of the company until
at least August 2000. Originally, Mr. Pereira had agreed in principal to remain
but in March 2000, he resigned from all managerial and directorship
responsibility.

         In March 2000, the Company entered into a two-year Consulting Agreement
with Internet Strategy Group Ltd. for a consulting fee of $20,000 per month
during the first and $24,000 the second year plus 60,000 shares of Quest Net
common stock annually, to be issued every quarter in advance. Mr. Pereira is the
Principal shareholder of Internet Strategy Group Ltd. Internet Strategy Group
Ltd. will perform consulting and advisory services on behalf of the Company on
an as-needed basis, not to exceed 60 hours per months. Its duties consist of
providing advice and consultation with respect to all matters relating to or
affecting the telecommunications business. In addition, Internet Strategy Group
Ltd. will provide assistance to the Company with regard to new business
ventures, evaluating and negotiating potential mergers, acquisitions, and other
similar transactions, providing advice to the Company and its lawyers concerning
corporate financing issues and corporate structure. The Agreement also provides
that the Consultant will be entitled to receive an amount equal to 2% of any
equity or debt financing consummated by the Company and introduced by or
procured through the efforts of Consultant and 2% of the value of any
acquisition or merger consummated by the Company and introduced by or procured
through the efforts of Consultant. The Company's payment of consulting fees
under the agreement is three months in arrears and the Company has not issued
any restricted common stock to the Consultant.





                                       22
<PAGE>   23

      In February 2000, Quest had also decided to cancel its purchase of shares
of Africa Internet Corp. Quest had paid $200,000 of the purchase price. Pursuant
to the cancellation agreement, the company received back the shares issued for
the acquisition and paid a cancellation penalty of 100 Thousand Dollars and the
balance was agreed would be paid back in one year with an interest bearing note
as a guarantee for that amount.

      The company also saw the departure of George Elia of the Investor
Relations Department when he refused to cooperate with the SEC inquiry.

      During the quarter, there was a substantial scale back in Quest's Sales
Department as the company found that there were severe technological problems
with the equipment of Wireless, Inc., which we are in the process of returning
to the manufacturer. Mr. Paul Zeller, the Company's former Executive Vice
President, was transferred to Sales/Marketing but eventually his service was
terminated. The Company felt that it was not receiving the performance expected
from his position. The Company also terminated the services of its Vice
President Thomas Magill. John Scafidi, the Company's Chief Financial Officer
resigned in May 2000. Mr. Wainer is now the sole officer of Quest.

      Since Mr. Wainer became President and interim CEO, a scaled down of staff
and management occurred. The company also moved to its new facility. During the
move, it was discovered that two Maux's were lost or stolen from each warehouse.
This equipment is valued at approximately $ $655,000. After several meetings and
an investigation by the Board, it was decided that the Company should proceed
with a claim under its insurance policy. The Company has written off those
assets on their balance sheets.

      The Company saw the need to start the deployment of more sites under its
GlobalBot subsidiary and the commission of the development on Carsonline,
Boatsonline, and Motorbikesonline was initiated. Due to technological problems,
the WINGS Online, Inc. revenue was not collected for several months. Some of
that revenue has been collected, some written off and the company is working
diligently to correct such flaws.

      Since the Company does not have the resources available to operate, fund,
and grow GlobalBot to its full potential, the Company's Board of Directors has
approved the "spin off" of GlobalBot, under certain conditions including but not
limited to a successful private sale of 20% of GlobalBot's common stock owned by
Quest, and additional funding for GlobalBot. In addition, the Board believes
that the "spin off" would allow management of Quest to concentrate on its core
business, and enhance GlobaBot's access to financing

      During quarter, the Company saw the installation of five new building for
its Wireless and Telecommunications business. In addition, the company has
pending contracts for six new buildings. Due to the severe technological
problems with the equipment of Wireless, Inc. and the change to a better
technology, Quest has experienced certain delays in fulfilling those
installations.

      The Company spent approximately $ 200,000 for advertising for its new
$9.95 unlimited Internet dial-up but did not manage to attract a substantial
number of clients. Although the Company experienced a growth on its customer
base, that growth was far less then originally projected by management.

      In April 2000, the Company entered into agreements with Sprint and
Broadwing to provide up to 90 Mbps of bandwidth for the Company' wireless and
other Internet related operations. In addition, Nextlink in the process of
installing one DS3 (PRI) which will enable Quest to supply connections to an
additional 9,660 customers.





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<PAGE>   24

MERGER

      Pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated
as of March 13, 2000 between Parputt Enterprises, Inc. ("PEI"), a Nevada
corporation, and Quest Net Corp., all the outstanding shares of common stock of
PEI were exchanged for 275,000 shares of common stock of Quest in a transaction
in which Quest was the surviving company.

      The Merger Agreement was adopted by the unanimous consent of the Board of
Directors of PEI and approved by the unanimous consent of the shareholders of
PEI on March 13, 2000 The Merger Agreement was adopted by the unanimous consent
of the Board of Directors of Quest on March 13, 2000. Pursuant to Florida, law
the consent of the shareholders of Quest was not required.

      Prior to the merger, PEI had 500,000 shares of common stock outstanding,
which shares were exchanged for 275,000 shares of common stock of Quest. By
virtue of the merger, Quest acquired 100% of the issued and outstanding common
stock of PEI.

      Prior to the effectiveness of the merger, Quest had an aggregate of
22,786,022 shares of common stock issued and outstanding, and 30,000 shares of
preferred stock outstanding. The preferred stock has a preference on dividends,
liquidation, and merger at $10.00 per share. The preferred stock has no voting
or conversion rights.

      Upon effectiveness of the merger, Quest had an aggregate of 23,061,022
shares of common stock outstanding.

      The officers, directors, and by-laws of Quest continued without change as
the officers, directors, and by-laws of the successor issuer.

      A copy of the Merger Agreement and the Articles of Merger and Plan of
Merger are filed as an exhibit to Quest's Form 8-K filed on March 23, 2000.

      The consideration exchanged pursuant to the Merger Agreement was
negotiated between PEI and Quest.

      In evaluating Quest as a candidate for the proposed merger, PEI used
criteria such as the value of the assets of Quest, its business operations, plan
of operation, the demand for wireless Internet service Quest's current business
operations and anticipated operations, and Quest's business name and reputation.
PEI determined that the consideration for the merger was reasonable.

      Quest intends to continue developing and marketing it Wireless Internet
and Internet related services in Florida.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(A) EXHIBITS

EXHIBITS                     DESCRIPTION
--------                     -----------
10.24                        Wainer Employment Agreement
10.25                        CWTel Purchase Agreement
10.26                        Internet Strategy Group Ltd. Consulting Agreement

(b) REPORTS ON FORM 8-K

Form 8-K filed on March 23, 2000.



                                       24
<PAGE>   25


                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, who is duly
authorized to sign as an officer and as the principal financial officer of the
registrant.

  Dated: June 16, 2000                    QUEST NET CORP.



                                          By: /s/ Charles Wainer
                                              ----------------------------------
                                              Charles Wainer, President
                                              Acting Chief Financial Officer




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