SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q


(Mark One)

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

                For the quarterly period ended SEPTEMBER 30, 1999

                                       OR

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

   For the transition period from ___________________ to ___________________


                        Commission File No. 33-55254-19

                            VIANET TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)


Nevada                                       87-0434285
(State or other jurisdiction of              (IRS Employer
incorporation or organization)               Identification No.)

                           83 Mercer Street, New York
                               New York 10012-4437
               (Address of principal executive offices, zip code)

                                 (212) 219-7680
              (Registrant's telephone number, including area code)

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

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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 __

     There were 12,039,428  shares of the  registrant's  Common Stock, par value
$.001 per share, outstanding on November 14, 1999.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY

                                      INDEX

<TABLE>
<CAPTION>


                                                                                                              Page
      Part 1         Financial Information

      Item 1         Financial Statements
<S>                                                                                                               <C>
                     Consolidated  Balance  Sheets at September 30, 1999  (unaudited)  and December 31, 1998
                     (audited)                                                                                    3

                     Consolidated  Statements  of Operations  for the three months ended  September 30, 1999
                     and 1998 (unaudited)                                                                         4

                     Consolidated  Statements of Operations for the nine months ended September 30, 1999 and
                     1998 (unaudited)                                                                             5

                     Consolidated  Statements of Cash Flows for the nine months ended September 30, 1999 and
                     1998 (unaudited)                                                                            6-7

                     Notes to Consolidated Financial Statements (unaudited)
                                                                                                                  8

      Item 2         Management's Discussion and Analysis of Financial                                           12
                     Condition and Results of Operations


      Item 3         Quantitative and Qualitative Disclosures About Market Risk                                  22


      Item 6         Exhibits and Reports

                     Exhibit 1 - Financial Data Schedule                                                         25

      Part 2         Legal and Capital Transactions                                                              23

                     Signatures                                                                                  24

</TABLE>
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                           --------------------------------------
                                                                                              (Unaudited)          (Audited)
                                                                                             September 30,        December 31,
                                                                                                  1999                1998
                                                                                           ------------------   -----------------
                                               ASSETS
Current Assets:
<S>                                                                                            <C>             <C>
     Cash and cash equivalents .............................................................   $     38,981    $     13,856
     Marketable securities .................................................................           --           669,268
     Accounts receivable, net of $306,000 allowance ........................................      1,072,308            --
     Inventories ...........................................................................      2,588,997            --
     Receivable from related party .........................................................        201,084            --
     Prepaids and other current assets .....................................................        177,310            --
                                                                                               ------------    ------------
           Total Current Assets ............................................................      4,078,680         683,124
                                                                                               ------------    ------------
Property and Equipment, net of accumulated depreciation of $140,927 ........................      2,174,925            --
                                                                                               ------------    ------------
Other Assets:
      Loans due from Develcon Electronics, Ltd. ............................................           --         1,506,800
      Loans due from Infinop Holdings, Inc. ................................................        724,000            --
      Loans due from PSI Communications, Inc. ..............................................        300,000            --
      Deferred costs arising from the acquisition of Infinop Holdings, Inc. ................        159,132            --
      Intangibles arising from acquisition of business, net of accumulated amortization of
      $ 364,432                                                                                   5,654,075            --
      Technology license, at cost less accumulated amortization of 1999: $90,000 and 1998:
      $ 22,500                                                                                      360,000         427,500
      Other ................................................................................         58,212          65,375
                                                                                               ------------    ------------
           Total Other Assets ..............................................................      7,255,419       1,999,675
                                                                                               ============    ============

                                                                                               $ 13,509,024    $  2,682,799
                                                                                               ============    ============

           LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
    Bank line of credit ....................................................................   $    340,135            --
    Current portion of long-term debt ......................................................      1,999,701            --
    Accounts payable and accruals ..........................................................      4,430,034         251,384
    Convertible demand notes ...............................................................           --         2,909,272
    Demand loans payable - related parties .................................................      2,510,215            --
    Deferred compensation ..................................................................        226,360            --
    Payable to Director of the Company .....................................................          1,000           1,000
                                                                                               ------------    ------------
           Total Current Liabilities .......................................................      9,507,445       3,161,656
                                                                                               ------------    ------------
Long-Term Debt .............................................................................         56,828            --
                                                                                               ------------    ------------
Shareholders' Equity (Deficiency):
    Series A convertible preferred shares (1998: authorized, issued and outstanding 250,000)
                                                                                                       --         1,000,000
    Common shares, $0.001 par value, 100,000,000 shares authorized.  9,140,886 issued and
       outstanding at September 30, 1999 (1998-1,400,000) ..................................          9,141           1,400
    Subscription receivable ................................................................           (500)       (990,500)
    Additional paid in capital .............................................................      8,561,956           2,100
    Accumulated deficit ....................................................................     (4,624,773)       (491,857)
    Accumulated other comprehensive income (loss) ..........................................         (1,073)           --
                                                                                               ------------    ------------
           Shareholders' Equity (Deficiency) ...............................................      3,944,751        (478,857)
                                                                                               ------------    ------------
                                                                                               $ 13,509,024    $  2,682,799
                                                                                               ============    ============

</TABLE>
   (The accompanying notes are an integral part of these financial statements)


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                        (Unaudited)
                                                                                     Three Months Ended
                                                                                       September 30,
                                                                     ---------------------------------------------------
                                                                              1999                       1998
                                                                     -----------------------    ------------------------


Revenue:
<S>                                                                              <C>            <C>
     Net sales                                                                   $1,019,766     $                     -
     Interest and other income                                                        6,666                      43,583
                                                                     -----------------------    ------------------------
                                                                                  1,026,432                      43,583
                                                                     -----------------------    ------------------------
Costs and Expenses:
     Cost of goods sold                                                             645,398                           -
     General and administrative                                                   1,595,841                     334,366
     Selling and marketing                                                          445,537                           -
     Research and development                                                       521,037                           -
     Product support                                                                112,971                           -
     Depreciation and amortization                                                  355,061                           -
     Interest                                                                       142,960                           -
                                                                     -----------------------    ------------------------

                                                                                  3,818,805                     334,366
                                                                     -----------------------    ------------------------

Loss Before Extraordinary Item                                                  (2,792,373)                   (290,783)

Extraordinary Loss on Extinguishment of Debt                                      (352,875)                           -
                                                                     -----------------------    ------------------------
Net Loss                                                                       $(3,145,248)                  $(290,783)
                                                                     =======================    ========================

Loss per share- basic and diluted:


    Loss Before Extraordinary Item                                                  $(0.31)                     $(0.21)

                                                                     ----------------------     -----------------------
    Net Loss

                                                                                    $(0.35)                     $(0.21)

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


Weighted average number of shares outstanding                                     8,985,875                   1,400,000
                                                                     -----------------------    ------------------------




</TABLE>



  (The accompanying notes are an integral part of these financial statements)
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                        (Unaudited)
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                     ---------------------------------------------------
                                                                              1999                       1998
                                                                     -----------------------    ------------------------


Revenue:
<S>                                                                              <C>                                  <C>
     Net sales                                                                   $1,912,243                           $
                                                                                                                      -
     Interest and other income                                                      112,688                      43,583
                                                                     -----------------------    ------------------------
                                                                                  2,024,931                      43,583
                                                                     -----------------------    ------------------------
Costs and Expenses:
     Cost of goods sold                                                           1,106,118                           -
     General and administrative                                                   2,233,700                     399,732
     Selling and marketing                                                          695,106                           -
     Research and development                                                       786,556                           -
     Product support                                                                189,199                           -
     Depreciation and amortization                                                  566,061                           -
     Interest                                                                       228,232                           -
                                                                     -----------------------    ------------------------

                                                                                  5,804,972                     399,732
                                                                     -----------------------    ------------------------

Loss Before Extraordinary Item                                                  (3,780,041)                   (356,149)


Extraordinary Loss on Extinguishment of Debt                                      (352,875)                           -

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

Net Loss                                                                       $(4,132,916)                  $(356,149)
                                                                     =======================    ========================
Loss per share- basic and diluted:


    Loss Before Extraordinary Item                                                  $(0.57)                     $(0.25)

                                                                     ----------------------     -----------------------
    Net Loss

                                                                                    $(0.62)                     $(0.25)

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


Weighted average number of shares outstanding                                     6,646,293                   1,400,000
                                                                     -----------------------    ------------------------

</TABLE>
  (The accompanying notes are an integral part of these financial statements)
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                                   (Unaudited)
                                                                                                Nine Months Ended
                                                                                                  September 30,
                                                                                   ---------------------------------------------
                                                                                           1999                    1998
                                                                                   ----------------------   --------------------
Operating Activities:
<S>                                                                                         <C>                      <C>
Net loss                                                                                    $(4,132,916)             $(356,149)
Adjustments to reconcile net loss to net cash (used in) provided by operating
activities:
     Depreciation and Amortization                                                               566,061                      -
     Gain on sale of Marketable securities                                                      (70,687)                      -
     Issuance of common stock for services                                                       388,475                      -
     Extraordinary loss on extinguishment of debt                                                352,875                      -
Increase  (decrease)  in cash  attributable  to changes in operating  assets and
liabilities:
    Prepaids and other receivables                                                                80,323                      -
    Accounts receivable                                                                          337,926                      -
    Inventory                                                                                   (30,716)                      -
    Deferred compensation                                                                         25,272                      -
    Accounts payable, accruals and other                                                         709,514                373,381
                                                                                   ----------------------   --------------------
Net cash (used in) provided by operating activities                                          (1,773,873)                 17,232
                                                                                   ----------------------   --------------------

Investing Activities:
    Loans to PSI Communications, Inc.                                                          (300,000)                      -
    Loans to Infinop Holdings, Inc.                                                            (724,000)                      -
    Proceeds from sale of marketable securities                                                  739,955                      -
    Deferred costs of Infinop Holdings, Inc. acquisition                                       (159,132)                      -
    Receivable from related party                                                              (201,084)                      -
    Security Deposits                                                                           (70,265)                      -
    Capital expenditures                                                                        (24,414)                      -
    Other acquisition costs                                                                    (291,870)                      -
                                                                                   ----------------------   --------------------
Net cash used in investing activities                                                        (1,030,810)                      -
                                                                                   ----------------------   --------------------

Financing Activities:
    Repayment of Convertible notes payable                                                     (200,000)                      -
    Loan payable to related parties                                                            1,480,328                      -
    Bank indebtedness                                                                                460                      -
    Principal payments of long-term debt                                                        (25,110)                      -
    Proceeds from convertible notes payable                                                       30,000                      -
    Issuance of common stock                                                                     555,203                      -
    Proceeds from subscription receivable                                                        990,000                      -
                                                                                   ----------------------   --------------------
Net cash provided by financing activities                                                      2,830,881                      -
                                                                                   ----------------------   --------------------

Effect of exchange rate changes                                                                  (1,073)                      -

Net increase in cash and cash equivalents                                                         25,125                 17,232

Cash and cash equivalents, beginning                                                              13,856                      -

                                                                                   ======================   ====================
Cash and cash equivalents, end                                                                   $38,981                $17,232
                                                                                   ======================   ====================
</TABLE>

  (The accompanying notes are an integral part of these financial statements)

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>


                                                                                                   (Unaudited)
                                                                                                Nine Months Ended
                                                                                                  September 30,
                                                                                   ---------------------------------------------
                                                                                           1999                    1998
                                                                                   ----------------------   --------------------
Noncash Transactions:
Acquisition of Develcon:
<S>                                                                                          <C>            <C>
   Fair value of assets acquired                                                             $12,226,306                      -
   Liabilities assumed                                                                       (9,692,412)                      -
   Common stock issued                                                                       (2,533,894)                      -
                                                                                   ----------------------   --------------------
   Net cash paid for acquisition                                                                       -                      -
   Cash acquired in acquisition                                                                        -                      -
                                                                                   ----------------------   --------------------
Cash paid for acquisition                                                                              -                      -
                                                                                   ======================   ====================


Issuance of common stock for debt (Develcon creditors)                                          $921,878                      -
                                                                                   ======================   ====================

Conversion of notes payable into common stock                                                 $2,739,272                      -
                                                                                   ======================   ====================


Conversion of Series A Convertible Preferred Stock into common stock                          $1,000,000                      -
                                                                                   ======================   ====================

</TABLE>



  (The accompanying notes are an integral part of these financial statements)

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1.       Basis of Presentation

The  accompanying  consolidated  financial  statements have been prepared by the
Company  without  audit  in  accordance  with  generally   accepted   accounting
principles for interim  financial  statements and with instructions to Form 10-Q
and Article 10 of Regulation S-X. In the opinion of management,  all adjustments
(consisting only of normal recurring accruals)  considered  necessary for a fair
presentation have been included.

The  accompanying  consolidated  financial  statements  do not  include  certain
footnotes and financial presentations normally required under generally accepted
accounting  principles and,  therefore,  should be read in conjunction  with the
audited financial  statements included in the Company's Form 10-K as at December
31,  1998,  as well as in  conjunction  with the  audited  financial  statements
included in the Company's Form 10-Q as at June 30, 1999.

The consolidated  financial statements for the year 1999 include the accounts of
Vianet Technologies, Inc. (Vianet) and its wholly-owned subsidiary, Develcon and
its subsidiaries  (collectively,  the "Company").  All significant  intercompany
accounts and transactions have been eliminated.

2.       Inventories

Inventories consist of:
<TABLE>
<CAPTION>

<S>                                                                    <C>
                 Raw materials                                         $     727,646
                 Work-in-process                                             536,930
                 Finished goods                                            1,324,421
                                                                           ---------

                                                                        $  2,588,997
                                                                           =========
</TABLE>

3.       Acquisitions

Merger with Radar Resources

Vianet  Technologies,  Inc., a Delaware  corporation  ("Vianet  Delaware"),  was
formed in March 1998. In March 1999,  Vianet Delaware  consummated a merger (the
"Vianet Merger") with Radar Resources, a Nevada corporation ("Radar"),  pursuant
to which Vianet Delaware merged with and into Radar, with Radar as the surviving
corporation.  Upon  completion of the Vianet  Merger,  Radar changed its name to
Vianet Technologies, Inc.

Acquisition of Develcon Electronics, Ltd.

On February 12, 1999,  the Company  entered into an  Arrangement  Agreement (the
"Arrangement")  to  acquire  all  the  outstanding   shares  of  Develcon.   The
Arrangement  was  approved  by  the  Supreme  Court  of  British  Columbia,  the
Securityholders and Debentureholders of Develcon.

The  Arrangement  provided  for  Develcon  shareholders  to receive one share of
common stock of the Company for every 30.75 shares of Develcon.  The Arrangement
also provided  that the Develcon  convertible  notes  payable be converted  into
5.9963 Develcon shares for each $1.00 principal amount of notes payable and that
interest  accrued  on the  convertible  notes  payable  but not  paid  shall  be
forgiven.  These shares were  converted  into Vianet  shares in the ratio of one
share of the Company for every 30.75 shares of Develcon.  Additionally,  certain
other  creditors of Develcon  agreed to either  accept common stock of Vianet as
payment for amounts or  portions of amounts  owed to them and have  restructured
the repayment schedule.

In exchange for  restructuring  the repayment  schedule of its debt, a lender of
Develcon  was granted  warrants to purchase  150,000  shares of Vianet  stock at
$6.00 per share.  Since such debt had not been  repaid by June 30,  1999,  these

<PAGE>
warrants were issued August 1, 1999, and are exercisable  through June 2002. The
Arrangement  became  effective  on May 17,  1999.  Accordingly,  the  assets and
liabilities have been consolidated as of the date of acquisition and the results
of operations have been included from May 17, 1999, to September 30, 1999.

The former shareholders and creditors of Develcon hold 2,707,114 shares of
the 9,140,886 shares of common stock the Company has outstanding.

The  acquisition  was  accounted by the purchase  method of  accounting.  Assets
acquired and  liabilities  assumed have been  recorded at their  estimated  fair
values.  The  excess of cost over the  estimated  fair  value of the net  assets
acquired was  allocated  to goodwill  and will be  amortized on a  straight-line
basis over six years.

The purchase  price of Develcon was determined by the number of shares issued by
the  Company  to effect the  acquisition  and the  amount of loans  provided  to
Develcon.  The total acquisition amounted to $7,034,000 including $6,015,000 for
goodwill.

The  following  unaudited  pro forma  consolidated  results  of  operations  are
presented as if the acquisition had been made at the beginning of the nine month
period ending September 30, 1999:

         Net sales                                            $ 5,021,300
         Loss before extraordinary item                       $(7,575,353)
         Net loss                                             $(7,928,228)
         Loss per share before extraordinary item             $(0.98)
         Loss per share after extraordinary item              $(1.02)

The  following  unaudited  pro forma  consolidated  results  of  operations  are
presented as if the acquisition had been made at the beginning of the nine month
period ending September 30, 1998:

                                    Net sales                 $ 9,121,535
                                    Net loss                  $(3,883,996)
                                    Loss per share            $(0.68)

The pro  forma  consolidated  results  of  operations  give  effect  to  certain
adjustments, including amortization of goodwill and depreciation based upon fair
market value of the property  acquired.  The unaudited pro forma  information is
not necessarily indicative of the results of operations that would have occurred
had the  purchase  been made at the  beginning  of the period  presented  or the
future results of the combined operations.

Acquisition of Infinop Holdings, Inc.

On May 19, 1999, the Company  entered into a letter of intent to acquire 100% of
Infinop  Holdings,   Inc.  ("Infinop")  of  Denton,   Texas,  a  privately  held
corporation,  in exchange for common shares of Vianet.  The Company has advanced
Infinop $724,000 in loans as at September 30, 1999. The acquisition,  which will
be  accounted  for as a  purchase,  was  completed  on  October  12,  1999,  the
outstanding loans were forgiven, and 2,878,542 common shares of the Company were
issued to Infinop's shareholders and option holders.

Option to Purchase PSI Communications, Inc.

On July 26, 1999, the Company entered into an agreement whereby it would provide
PSI  Communications,  Inc. (PSI) with $500,000 of interim  financing in exchange
for an option,  expiring  December  31, 1999,  to acquire PSI for  consideration
consisting of 1,200,000 shares of the Company's common stock, discharge of PSI's
liability for the interim  financing,  repayment of certain  liabilities  to PSI
shareholders and employees,  and additional payments and issuance of stock based
upon PSI's performance. If the Company does not exercise the option it may elect
(1) to receive a non-exclusive  indefinite  license to utilize PSI's current and
future  technology,  subject to a royalty of five percent of revenues;  (2) have
the interim  financing remain as debt due from PSI in which case it shall be due
on June 30, 2000 with  interest  payable at 6% per annum  commencing  January 1,
2000.  If unpaid at June 30, 2000,  the Company may elect to convert the debt to
up to 10% of the common equity of PSI depending on the amount unpaid.


<PAGE>
4.   Related Party Transactions

Demand  loans  payable  consists  of  approximately  $1,960,000  payable  to two
affiliated  entities and one of the Company's  shareholders  bearing interest at
10% per annum.  In addition,  non-interest  bearing loans payable to four of the
Company's  shareholders  and entities  controlled by  Shareholders  approximated
$550,000.

Non-interest  bearing  receivables  from a related party totaled  $201,084 as of
September 30, 1999.

5.       Changes in Capital Stock

On August 5, 1999, pursuant to a private placement offering,  the Company issued
100,000  shares of common  stock for  $550,000  and 55,000  three-year  warrants
exercisable at $6.60 per share.  The placement agent received $50,000 and 10,000
shares of common stock,  with a fair value of $38,750,  in  connection  with the
transaction.

In conjunction with a modification of the banking  facilities with Royal Bank of
Canada (RBC),  the Company issued  120,000  shares of common stock,  with a fair
value of $352,875,  to RBC and warrants to purchase  additional  150,000  common
shares, exercisable at $6.00 per share (see note 8).


Additionally, throughout the third quarter, the Company issued 109,500
shares of common stock, with a fair value of $349,725,  in exchange for services
rendered.


6.       Accumulated Other Comprehensive Income

The Company reports and presents comprehensive income (loss) and its
components in accordance with SFAS No. 130, Reporting Comprehensive Income. SFAS
No. 130 requires only additional disclosures in the financial statements; it
does not affect the Company's financial position or results of operations.

Foreign currency translation adjustments for the nine months ended September 30,
1999 were ($1,073).

The following table reconciles net loss to total comprehensive loss:
<TABLE>
<CAPTION>

                                                                       Three Months          Nine Months
                                                                           Ended                Ended
                                                                       September 30,        September 30,
                                                                           1999                 1999
                                                                     ------------------   ------------------
<S>                                                                        <C>                  <C>
Net loss                                                                   (3,145,248)          (4,132,916)
Other Comprehensive Loss -Foreign currency translation adjustments
                                                                              (21,666)              (1,073)
                                                                     ------------------   ------------------

Total Comprehensive Loss                                                   (3,166,914)          (4,133,989)
                                                                     ==================   ==================
</TABLE>
7.        Net Loss Per Share

Basic loss per share is computed  using the  weighted  average  number of common
shares outstanding during the period.  Diluted loss per share is computed giving
effect to all dilutive  potential common shares that were outstanding during the
period.  Dilutive  potential common shares consist of incremental  common shares
issuable upon exercise of stock  options and  warrants.  Computation  of diluted
loss per share is not reflected,  because including potential common shares will
result in an anti-dilutive per share amount due to the loss in the period.

The following table reconciles the number of common shares  outstanding with the
number of common shares used in computing net loss per share:
<PAGE>
<TABLE>
<CAPTION>

                                                       Three Months          Three Months        Nine Months         Nine Months
                                                           Ended                 Ended               Ended               Ended
                                                       September 30,         September 30,       September 30,       September 30,
                                                            1999                  1998                1999                1998
                                                    ---------------------  -------------------  -----------------   ----------------
Basic and Diluted Loss Per Share

<S>                                                            <C>                  <C>                <C>                 <C>
Common shares outstanding                                      9,140,886            1,400,000          9,140,886           1,400,000
Effect of using weighted average                               (155,011)                    -        (2,494,593)                   -
                                                    =====================  ===================  =================   ================
Weighted average number of shares outstanding
                                                               8,985,875            1,400,000          6,646,293           1,400,000
                                                    =====================  ===================  =================   ================
</TABLE>


In March 1999, in connection with a merger agreement, which resulted in a
reverse acquisition,  there was a 4 for 1 exchange of shares. All shares and per
share data have been restated to reflect the reverse acquisition.

8.       Debt Agreements

The Company is in default on certain debt  agreements,  including  nonpayment of
principal and interest, and in violation of financial covenants, which allow the
lenders to demand  repayment.  As such,  the balances with respect to these debt
agreements are included in current  maturities of long-term debt.  During August
1999, the Company  modified its banking  arrangement with RBC which provided for
the  issuance of common  shares and  warrants  (see Note 5) in exchange  for RBC
agreeing  not to  exercise  its option to demand  immediate  payment of the debt
because of violation of certain  financial  covenants,  until June 30, 2000. The
modified banking arrangement has substantially different terms from the original
debt  instrument  and as a  result  is  recorded  at its  fair  value,  with  an
extraordinary loss of US$352,875  recorded on the extinguishment of the original
debt  instrument.  The current banking  facilities  provided by RBC consist of a
CDN$1,500,000  term  loan.  The  term  loan  is  payable  in  three  CDN$500,000
installments   due  on  or  before   December  31st  of  2000,  2001  and  2002,
respectively.  Interest charged on the Company's RBC facilities is calculated at
8.5% per  year.  Furthermore,  all  indebtedness  of the  Company  under the RBC
facilities is secured by Develcon's assets and a corporate guarantee executed by
the Company. The company is also in violation of its agreement with respect to a
note payable with a Canadian government entity (CDN$344,087). The lender has the
option to demand that the entire outstanding  balance become immediately due and
payable.  No such demand has been made.  Management  believes that its operating
losses are primarily due to inadequate financing and is dependent on its ability
to  obtain  additional   sources  of  financing  to  fund  its  working  capital
requirements.  The Company is  considering  several  alternatives  to fund these
requirements.  There  is no  assurance  the  Company  will  be  able  to  obtain
continuing  adequate  funding on  acceptable  terms and no  assurance  that once
obtained  such  additional  funding  will  result  in the  Company's  profitable
operation.

9.       Consulting Agreements

In August 1999, the Company entered into consulting agreements with two investor
relations  firms,  which provide for monthly fees of $12,000 and the issuance of
100,000 shares of common stock and 450,000  warrants to purchase common stock at
$6 to $8 per share.




<PAGE>
ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1999

This quarterly report on Form 10-Q contains forward-looking  statements that are
subject to risks and  uncertainties,  which could cause actual results to differ
materially from those  expressed or implied in the  statements.  Forward-looking
statements   (including  oral   representations)  are  statements  about  future
performance or results,  and include any statements  using the words  "believe",
"expect", "anticipate" or similar words. All forward-looking statements are only
predictions or statements of current plans,  which we are constantly  reviewing.
All forward-looking statements may differ from actual future results due to, but
not limited to, changes in the local and overall economy, the nature and pace of
technological  changes,  the  number and  effectiveness  of  competitors  in the
Company's markets, success in overall strategy,  changes in legal and regulatory
policy,  relations with ILECs and their ability to provide  delivery of services
including interoffice  trunking,  implementation of back office service delivery
systems,  the  Company's  ability to identify  future  markets and  successfully
expand  existing  ones  and the mix of  products  and  services  offered  in the
Company's  target  markets.  You  should  consider  these  important  factors in
evaluating  any  statement  contained in this report and/or made by us or on our
behalf. We have no obligation to update or revise forward-looking statements.

The following information has not been audited. You should read this
information in conjunction with the condensed  financial  statements and related
notes to financial  statements included in this report. In addition,  please see
our  Management  Discussion  and Analysis of Financial  Condition and Results of
Operations  and audited  financial  statements and related notes included in our
Annual Report on Form 10-K for the year ended  December 31, 1998, as well as our
Management  Discussion  and  Analysis  of  Financial  Condition  and  Results of
Operations and audited financial  statements included in the Company's Form 10-Q
as at June 30,  1999.Vianet  Technologies,  Inc. is referred to as "we", "us" or
"our" in this report.

Significant Transactions

The Company is transitioning  through a period of completing  transactions.  The
costs and other effects of these programs and activities are adversely impacting
current  results  for  intended  benefits  of  improving   revenues,   operating
performance  and  financial  results  in  future  reporting  periods.  Prior  to
September  30,  1999,  the Company  completed  one  acquisition,  Develcon,  and
subsequent  to September 30, 1999,  the Company  completed  the  acquisition  of
Vianet Labs (formerly Infinop Holdings, Inc.). The Company intends on completing
the acquisition of PSI Communications,  Inc. prior to December 31, 1999. Details
behind the aforementioned acquisitions and intended acquisition are as follows:

Our predecessor,  Vianet  Technologies,  Inc., a Delaware  corporation  ("Vianet
Delaware"), was formed in March 1998. In March 1999, Vianet Delaware consummated
a merger  (the  "Vianet  Merger")  with Radar  Resources,  a Nevada  corporation
("Radar"),  pursuant to which Vianet Delaware  merged with and into Radar,  with
Radar as the surviving corporation.  Upon completion of the Vianet Merger, Radar
changed its name to Vianet Technologies, Inc.

From its  inception  to March 1999,  Radar had engaged in no business and had no
operational  history.  Radar was originally  incorporated  under the name Radar,
Inc.,  in the state of Utah on April  11,  1986.  In  December  1993,  Radar was
reorganized  under the laws of Nevada.  Pursuant to this  reorganization,  Radar
changed the state of its domicile, and Radar formed a new corporation in Nevada,
Radar  Resources,  Inc.,  which  acquired  all of the  contractual  obligations,
shareholder  rights and identity of the original Utah corporation,  and then the
Utah corporation was dissolved.

Prior to the Vianet Merger,  Vianet  Delaware's  business  activities  consisted
primarily of entering into a plan of arrangement to acquire Develcon Electronics
Limited, an Ontario, Canada corporation  specializing in networking products and
systems ("Develcon"), and obtaining a licensing agreement for Synchronous Packet
Switching  Technology  ("SPS")  from  NewCom  Technologies,   Inc.,  a  Delaware
corporation ("NewCom").

Develcon Electronics Ltd.

The  Develcon  Product  Portfolio  consists  of two main  platforms,  the Athena
Enterprise Communications System and the Orbitor family of access routers.


<PAGE>
The Athena platform is a powerful enterprise  communications  system that offers
high-speed edge switching for backbone networks and large-scale  aggregation for
Central  Site  locations.  A flexible,  scaleable  platform,  Athena  seamlessly
integrates  switching,   routing  and  network  access  services.  By  combining
switching  and  routing  in  the  same  platform  and  adding  advanced  traffic
management capabilities such as prioritization,  alternate routing and bandwidth
on demand, Athena delivers superior networking functionality.

Athena Access,  a new flexible  voice/data  solution  designed for remote branch
offices,  incorporates the most innovative voice  compression  algorithms in the
industry to offer top-rated voice quality and optimized  bandwidth  utilization.
Built to satisfy the total  communication  requirements  of today's  multi-media
branch office environment,  Athena Access provides a cost effective  alternative
to dedicated phone lines.

The Orbitor  product family  includes a complete line of Ethernet Access routers
designed for SOHO (small  office,  home office),  branch office and central site
applications.  The Orbitor portfolio  delivers  cost-effective  access to a wide
variety of network  services  including leased lines,  ISDN,  public frame relay
networks and the Internet.

The  Company  believes  the new  Orbitor  530 Branch  Office  Router is the only
product  available in today's market that combines the features and  performance
of a large branch office  router,  while still keeping the product small in both
size  and  price.  In the  Orbitor  530,  Develcon  has  developed  a  versatile
full-featured  router  that is  targeted  specifically  to the  needs  of  small
offices.

With the rapid  advancement of the information age and the explosion of business
services  based on networking  technologies,  the speed and  reliability of data
transmission  has reached  paramount  importance.  Develcon's  new Orbitor  5100
modular access router  delivers  maximum  performance and reliability for branch
offices  through a rich  feature set that offers  automatic  ISDN backup of main
network connections and bandwidth on demand for guaranteed transmission times.

On February 12, 1999,  the Company  entered into an  Arrangement  Agreement (the
"Arrangement")  to  acquire  all  the  outstanding   shares  of  Develcon.   The
Arrangement  was  approved  by  the  Supreme  Court  of  British  Columbia,  the
Securityholders  and  Debentureholders  of  Develcon.   The  Arrangement  became
effective on May 17, 1999.  Accordingly,  the assets and  liabilities  have been
consolidated  as of the date of acquisition  and the results of operations  have
been included from May 17, 1999, to September 30, 1999.

The former shareholders and creditors of Develcon hold 2,707,114 shares of
the 9,140,886 shares of common stock the Company has outstanding.

The  acquisition  was  accounted by the purchase  method of  accounting.  Assets
acquired and  liabilities  assumed have been  recorded at their  estimated  fair
values.  The  excess of cost over the  estimated  fair  value of the net  assets
acquired was  allocated  to goodwill  and will be  amortized on a  straight-line
basis over six years.

The purchase  price of Develcon was determined by the number of shares issued by
the  Company  to effect the  acquisition  and the  amount of loans  provided  to
Develcon.  The total acquisition amounted to $7,034,000 including $6,015,000 for
goodwill.

Infinop Holdings, Inc.

Infinop  is an  industry  leader  in the  development  of  advanced  compression
technologies for a wide range of software and hardware  applications.  Infinop's
patented  compression  technology   dramatically  improves  compression  ratios,
increases  transmission  speeds and improves  image  quality.  Infinop  offers a
unique  approach,  which has the  capability  to generate an entire  spectrum of
compression products for every type of data.

On May 19, 1999 the Company  entered  into a letter of intent to acquire 100% of
Infinop  Holdings,  Inc.  ("Infinop"),  a privately held corporation  located in
Denton,  Texas,  in exchange for common shares of Vianet.  As part the agreement
the Company agreed to advance  Infinop  $640,000 in loans.  Additional  loans of
$84,000 were provided  during the month of September.  On October 12, 1999,  the
acquisition  was completed  and the Company  issued  2,878,542  common shares to
Infinop's shareholders and option holders and the loans were forgiven.


<PAGE>
On October 12, 1999, Infinop Holdings, Inc. changed its name to Vianet Labs.

PSI Communications, Inc.

PSI  is a  designer  and  manufacturer  of  fiber  optic  access  equipment  and
specializes  in the  application of advanced  technologies  that help Access and
Exchange  networks  operate and interact  efficiently and reliably.  Serving the
emerging commercial multimedia  communications markets, PSI focuses on providing
equipment to interface for carrier  access and  enterprise  fiber optic networks
with their DLC Mux product. PSI has built a product for the weakest chain in the
Internet/Intranet link - the last mile, also known as the local loop.

The DLC system has the  capability to transport  Bellcore and ITU-T standard and
data  interfaces  over fiber optic T-1, E-1 and V.35 with plans to add broadband
Internet  interfaces  including ISDN,  BRI/PRI,  xDSL, IP video and Frame Relay.
This  combination will result in the first true integrated V5.2 DLC fiber optics
multiplexer.  This technology solves a long time telco concern: how to reach the
consumer market with high bandwidth capabilities.

On July 15, 1999, the Company signed an option  agreement  (which was amended in
November 1999) to acquire 100% of PSI Communications,  Inc. ("PSI"), a privately
held Delaware corporation,  in exchange for common shares of Vianet. As part the
agreement the Company agreed to fund PSI $500,000 in loans.  If the agreement is
consummated the Company will issue a minimum of 2,500,000 common shares to PSI's
shareholders  and option  holders and the loans will be  forgiven.  In the event
that the Company  decides not to exercise  its option to acquire PSI, it will be
entitled to  non-exclusive  license for PSI's  products.  The Company  currently
intends to exercise its option to acquire PSI.

The Company  expects this  acquisition  to be completed in the fourth quarter of
1999.

The Company believes that the combined product portfolio of PSI,  Develcon,  and
Infinop provides a broad range of solutions aimed at the high growth of domestic
network buildout fueled by the e-commerce boom and leaves Vianet well positioned
to address the Internet Service Provider and CLEC market.

Results of Operations

Nine Month Period Ended September 30, 1999

During the nine months  ended  September  30,  1999,  Vianet  completed  several
significant transactions.

In March 1999, the Company's predecessor,  Vianet Delaware, consummated a merger
with Radar  Resources,  Inc.  pursuant to which Vianet  Delaware merged with and
into  Radar,  with  Radar  as the  surviving  corporation.  Vianet  Delaware  is
considered  to be the  accounting  acquirer  in a reverse  acquisition,  and the
merger was accounted for as a purchase. Accordingly, Vianet Delaware's financial
statements  have become the  historical  financial  statements  of the  combined
company.

In May 1999,  Vianet  acquired  Develcon  Electronics  Ltd. The  acquisition was
accounted for as a purchase,  and the purchase  price of Develcon was determined
by the  number of shares  issued by  Vianet to effect  the  acquisition  and the
amount of loans provided to Develcon.

As a result  of the  foregoing  transactions,  Vianet's  consolidated  financial
statements as of and for the nine month period ended September 30, 1999, include
the following:

     o The results for the Company and Vianet  Delaware  prior to  completion of
       the Vianet Merger;

     o A consolidation of the assets and liabilities of the Company and Develcon
       as of the date of the Develcon acquisition; and

     o The results  operations of Develcon from the date of the  acquisition  to
       September 30, 1999.

The following is a discussion of the operations  for Vianet and Develcon  during
this period.


<PAGE>
Vianet

Prior to completion of the merger,  Vianet (then known as Radar) was an inactive
company, and, accordingly,  it did not have any revenues from operations. At the
time of the consummation of the merger, Radar had no assets and no liabilities.

Vianet Delaware

Vianet Delaware was incorporated in March 1998. From its  incorporation  through
the date of consummation of the Vianet Merger, Vianet had been primarily focused
on development and  implementation of its business plan,  including  acquiring a
license for SPS  technology  and entering into an Agreement to acquire  Develcon
Electronics.

During the period of March 1998 to December 1998,  Vianet  Delaware  incurred an
operating loss of  ($491,857),  all of which  consisted of selling,  general and
administrative   expenses  associated  with  development  activities  of  Vianet
Delaware.

Develcon

Develcon was incorporated  under The Companies Act of Saskatchewan on August 15,
1974,  continued under The Business  Corporations Act of Saskatchewan on May 14,
1980 and continued under the CBCA on March 6, 1985.  Prior to its acquisition by
Vianet,  Develcon had been  primarily  focused on designing,  manufacturing  and
marketing a range of networking products and systems,  each of which is designed
to  provide  a  specific   communications   solution  for  the  integration  and
consolidation of corporate data processing and data communications equipment.

Sales

Vianet had net sales of $1,912,243 for the nine months ended September 30, 1999.
Vianet acquired  Develcon on May 17, 1999 and,  accordingly,  the sales recorded
are only for the period May 17, 1999, to September 30, 1999. Sales and operating
performance have been negatively impacted by working capital constraints. Vianet
does not expect a significant increase in sales until the first quarter of 2000.
Other revenues  consisted of interest on cash deposits and a gain on the sale of
marketable securities of $112,688.

Cost of Goods Sold and Gross Profit

Vianet's cost of sales was  $1,106,118,  representing  margins of 42%, which are
below historical margins for Develcon's products due to difficulties in shipping
economical quantities of products given limited working capital.  Vianet expects
margins to improve to  historic  levels of  approximately  52% by the end of the
first quarter of the year 2000, based upon a more a stable  financial  operating
environment, although no assurances can be given that the margin improvement can
be achieved.

General and administrative

General and  administrative  expenses  amounted to  $2,233,700.  This amount was
comprised primarily of legal,  professional fees and investor relations expenses
of Vianet,  which  totaled  $1,779,711.  These  expenses  are expected to lessen
significantly  in the first  quarter  of the year 2000,  after the  Vianet  Labs
acquisition is completed.

Selling and Marketing/Product Support

Selling and marketing amounted to $695,106 and product support totaled $189,199.
Vianet has  continued  a high level of  spending  relative  to sales  during the
period of adjustment under new ownership. Vianet expects more traditional ratios
of sales to  expenditures  to be achieved by the end of the first quarter of the
year 2000, although no assurances can be given that this will be achieved.


<PAGE>
Research and Development

Research  and  development  amounted  to  $786,556,   which  consists  primarily
expenditures  on Orbitor and Athena Access  product  lines.  Vianet expects more
traditional  ratios of sales to  research  and  development  expenditures  to be
achieved by the end of the first quarter of the year 2000 although no assurances
can be given that this will be achieved.

Depreciation and Amortization

Depreciation   and   amortization   amounted  to  $566,061  and  represents  the
amortization  of Vianet's  SPS  Technology  License  ($67,500)  over five years,
depreciation on Develcon's property and equipment ($134,129) and amortization of
intangibles  on  the  acquisition  of  Develcon  over  a  period  of  six  years
($364,432).

Three Month Period Ended September 30, 1999

Sales

Vianet had net sales of  $1,019,766  for the three  months ended  September  30,
1999. Sales and operating  performance have been negatively  impacted by working
capital  constraints.  Vianet  does not expect a  significant  increase in sales
until the first  quarter of 2000.  Interest on cash  deposits  and other  income
amounted to $6,666.

Cost of Goods Sold and Gross Profit

Vianet's  cost of sales was  $645,398,  representing  margins of 37%,  which are
below historical margins for Develcon's products due to difficulties in shipping
economical quantities of products given limited working capital.  Vianet expects
margins to improve to  historic  levels of  approximately  52% by the end of the
first quarter of the year 2000, based upon a more a stable  financial  operating
environment, although no assurances can be given that the margin improvement can
be achieved.

General and administrative

General and  administrative  expenses  amounted to  $1,595,841.  This amount was
comprised primarily of legal,  professional fees and investor relations expenses
of Vianet,  which totaled  $1,279,103.  The Vianet portion of these expenses are
expected to reduce  significantly  in the first quarter of the year 2000,  after
the Vianet Labs acquisition is completed.

Selling and Marketing/Product Support

Selling and marketing amounted to $445,537 and product support totaled $112,971.
Vianet has  continued  a high level of  spending  relative  to sales  during the
period of adjustment under new ownership. Vianet expects more traditional ratios
of sales to  expenditures  to be achieved by the end of the first quarter of the
year 2000, although no assurances can be given that this will be achieved.

Research and Development

Research  and  development  amounted  to  $521,037,   which  consists  primarily
expenditures  on Orbitor and Athena Access  product  lines.  Vianet expects more
traditional  ratios of sales to  research  and  development  expenditures  to be
achieved  by  the  end of the  first  quarter  of the  year  2000,  although  no
assurances can be given that this will be achieved.

Depreciation and Amortization

Depreciation   and   amortization   amounted  to  $355,061  and  represents  the
amortization  of Vianet's  SPS  Technology  License  ($22,500)  over five years,
depreciation on Develcon's  property and equipment ($85,629) and amortization of
intangibles  on  the  acquisition  of  Develcon  over  a  period  of  six  years
($246,932).


<PAGE>
Year 2000

The Year 2000 (Y2K) issue is the result computer programs,  microprocessors  and
date  reliant  systems  that may  recognize  a date  using "00" as the year 1900
rather  than  the  year  2000.   This  could  result  in  a  system  failure  or
miscalculation causing disruption in business operations.

In an effort to  assess  our Y2K state of  readiness  we  performed  a  complete
inventory  assessment  and  test of all of our  internal  systems  and  external
interfaces. All of our financial,  message processing and office support systems
are currently Year 2000 compliant.

The  Company  has  communicated  with  all  of its major customers and suppliers
to determine the extent to which the Company's  interface systems are vulnerable
to any  failure by third  parties to upgrade  their own  software.  The  Company
believes that its customers  and  suppliers are  addressing  the issues and will
timely adjust their systems.  If such modifications are not made by customers or
suppliers,  or are not completed in a timely  manner,  the Company's  operations
will not be affected.

LIQUIDITY AND CAPITAL RESOURCES

Prior to the  completion of the merger between Radar and Vianet  Delaware,  both
Radar and Vianet  Delaware had limited  working  capital and their prospects for
obtaining capital were severely  limited.  Upon completion of the Vianet merger,
Vianet   Delaware  ceased  to  exist  and  Radar  changed  its  name  to  Vianet
Technologies, Inc. Up until the completion of the Vianet Merger, Vianet Delaware
had sustained its operations from its inception  (March 1998) primarily from the
sale of equity. Specifically,  in December 1998, Vianet sold 1,000,000 shares of
common stock for an aggregate of $1,000,000 in cash.

Subsequent  to  September  30,1999  the  Company  has  completed  the  following
financings:

         On  October  12,  1999,  Vianet  Technologies,  Inc.   (the  "Company")
         consummated its acquisition of all of the issued and outstanding  stock
         of Infinop Holdings, Inc. ("Infinop"),  in exchange for the issuance of
         up to 2,878,542  shares of Common  Stock of the  Company,  as described
         below.  The  transaction  was completed in accordance with the terms of
         the Agreement  and Plan of Merger,  dated August 31, 1999, by and among
         the Company, Vianet Labs, Inc., a Delaware corporation ("Vianet Labs"),
         which is a wholly owned  subsidiary  of the  Company,  Infinop and Paul
         Fisher,  Howard Fisher and Craig Fisher  (collectively,  the "Principal
         Stockholders").

         Infinop is engaged, through its subsidiaries,  Computer and Information
         Science, Inc., and INFInet Op., Inc., in the business of developing and
         marketing data compression and pattern  recognition  software.  Its key
         products,  all of which incorporate its proprietary wavelet technology,
         are Lightning  Strike,  a product  designed to effectuate still imagery
         compression,  LSVideoN and  LSVideoR,  products  designed to effectuate
         video or moving image processing, LSBio, a product that facilitates the
         compression  of scanned  documents  for  long-term  data  storage,  and
         LSStorm,  a product that reduces the bulk of information moving through
         a network.

         As a result of the completion of this transaction, Infinop has become a
         wholly-owned  subsidiary of Vianet and all of the outstanding shares of
         Infinop  Common Stock have been  cancelled and converted into shares of
         Vianet's Class A Common Stock,  par value $0.001 per share (the "Vianet
         Common Stock"). In addition, the Infinop shareholders have the right to
         receive additional  consideration in the form of shares of common stock
         of the Company (or, upon the election of the Principal Stockholders, in
         the form of cash,  subject to a maximum cash limit of $3,200,000)  (the
         "Additional Consideration"). The Additional Consideration will be based
         on royalties  actually  received by Vianet  during the four year period
         (the "Additional  Payment Period")  following the closing of the Merger
         (the "Closing")  under the terms of the following two Software  License
         Agreements:  (i) the  Software  License  Agreement  dated June 25, 1998
         between  Infinop Op, Inc.  and Video  Stream  International  (now doing
         business as  "Teraglobal")  (the "Teraglobal  Contract");  and (ii) the
         Software  License  Agreement dated October 15, 1998 between Infinop Op,
         Inc. and  Transwire,  Inc. (now doing  business as "Prism") (the "Prism
         Contract").

         The  Additional  Consideration  payable in respect of each  outstanding
         share of Infinop  Common  Stock will  represent  each  share's pro rata
         portion of a fixed percentage of the cumulative  royalties in excess of
         $4 million received by Vianet during the Additional Payment Period. The
         percentage  upon which those  payments will be based will represent the
         aggregate of 50% of the royalty  received from the Teraglobal  Contract
         and  40% of the  royalties  received  under  the  Prism  Contract.  All

<PAGE>
         Additional  Consideration  will be payable  in shares of Vianet  Common
         Stock, unless the Principal Stockholders elect to receive cash (subject
         to an  aggregate  limit  of  $3.2  million  in  cash).  The  Additional
         Consideration  payable in respect of each share of Infinop Common Stock
         will be  distributed  within 30 days of the end of each  annual  period
         during the Additional  Payment Period.  For purposes of determining the
         number  of  shares  of  Vianet   Common  Stock  payable  as  Additional
         Consideration,  the Vianet  Common  Stock will be valued at the average
         closing  price  of  Vianet  Common  Stock  for the  five  trading  days
         immediately preceding the end of the related annual period.

         Additional  details  regarding this  transaction  are included within a
         report on Form 8-K reporting the acquisition of Infinop Holdings,  Inc.
         This report was filed on October 28, 1999.

     o On October 29, 1999, the Company borrowed $5,000 from Mr. B.M.  Arnstein,
       an Officer of the Company.

     o On November 1, 1999,  the Company issued 20,000 shares of common stock in
       exchange for legal services.

The Company  intends to consolidate  and build our sales and marketing  team, to
purchase inventory and capital  equipment,  and to fund the purchase of PSI. Our
ability  to  become  a  serious  competitor  in the  network  access,  Internet,
E-commerce,  and  value-added  services  markets  is  dependent  upon  obtaining
additional financing.

We have entered  into a credit  facility  (the  "Facility")  with an  affiliated
company  controlled  by the  President  of the  Company.  The  Facility is for a
maximum of  $3,000,000,  bears  interest  at 10% per annum and  monthly  fees of
$15,000 and is secured on the Company's investments in Develcon, Vianet Labs and
it's loans to PSI.  The  Facility  is  repayable  in the event that the  company
raises more than  $8,000,000 in equity  financing and in any event no later than
March 31,  2000.  In the event that the company  defaults on the Facility we may
lose the  ownership of our  principal  assets.  As at September  30, 1999 we had
drawn  $1,959,000  against the Facility and have drawn a further $432,000 in the
period from September 30, 1999 to the date of this filing.

         POTENTIAL FINANCING

We are  currently  seeking  new equity  financing  arrangements  to provide  the
necessary capital to fully fund our operations and pursue our business strategy.
Specifically,  we have engaged Aegis Capital Corp. (the "Placement Agent") of 70
East Sunrise highway,  Suite 45, Valley Stream, New York, New York 11581-1264 to
raise between  $1,000,000  and $3,000,000 in equity  financing (the  "Offering")
with private qualified investors.

The following is a brief  description of the Units offered by the Company in the
Offering.

         Units

Each Unit offered  hereby is comprised of 33,333 Common  Shares,  33,333 Class A
Warrants,  33,333 Class B Warrants  and 33,333  Class C Warrants.  The number of
Common  Shares  included  with a Unit was  determined  by dividing  the per Unit
purchase  price of $100,000 by $3.00.  For each Common Share  included  within a
Unit, one Class A Warrant, one Class B Warrant and one Class C Warrant were also
included.

     At the time that 50% of the Common Stock becomes publicly  saleable (either
     pursuant  to Rule 144  promulgated  under the  Securities  Act of 1933,  as
     amended (the "Securities  Act"), or because a registration  statement filed
     under the Securities Act covering such shares is declared  effective by the
     Securities  and Exchange  Commission  (the "SEC")),  (the "First  Measuring
     Date") and at the expiration of any Lock-up  Period (the "Second  Measuring
     Date") if closing  prices of the Common  Stock (as reported by the Bulletin
     Board,  The NASDAQ Stock Market or a securities  exchange,  depending  upon
     where the  Company's  Common  Stock is then  traded or listed)  (the "Later
     Market Value") is less than $4.29 per share (the "Base Market Value"),  the
     Investor  shall  be  entitled  to  receive  additional  Warrants  as if the
     Offering had been based upon the Later Market Value (rounded up to the next
     whole cent) (but in no event more than an  additional  100% of the original
     shares of Common Stock and  Warrants  issued).  For  example,  if on either
     Measuring  Date the price of the Common Stock is $4.00,  then the investors
     will  receive  such  number of  shares  of  Common  Stock so as to make the
     assumed Offering Price per share $2.80 (a 30% discount from $4.00).

In addition,  in the event that the closing price of the Company's  Common Stock
is less than $5.00 on the  effective  date of the  Company's  next  registration
statement,  then the  Exercise  Price of the  Warrants  shall be  adjusted as to
reflect the closing price of the Common Stock on that day, which shall be deemed
the new Exercise Price.


<PAGE>
Any such readjustment in the Exercise Price or number of the Warrants shall only
apply  to the  unexercised  portion  of  the  Warrants.  The  right  to  receive
additional  Warrants shall not be deemed attached to the purchased  Common Stock
and Warrants, and shall not be considered transferred to any person who acquires
such originally purchased Common Stock and Warrants.

         Common Shares

The holders of the Common Shares have no preemptive  or  subscription  rights in
later  offerings of Common  Shares and are entitled to share ratably (i) in such
dividends  as may be declared  by the Board of  Directors  out of funds  legally
available  for such  purpose  and (ii) upon  liquidation,  in all  assets of the
Company  remaining  after  payment in full of all debts and  obligations  of the
Company.  The Company has not paid any  dividends on the Common  Shares,  and no
dividends are contemplated in the foreseeable future. See "Dividend Policy."

         Warrants

Each Class A Warrant,  Class B Warrant and Class C Warrant is exercisable  until
the fifth  anniversary of the Initial  Closing,  subject to earlier  redemption,
under certain circumstances, as discussed below.

The Class A Warrants are exercisable at a price of $5.00 per share;  the Class B
Warrants are exercisable at a price of $6.25 per share; and the Class C Warrants
are  exercisable at a price of $7.50 per share.  The respective  exercise prices
were determined  based upon the Assumed Market Price. The exercise prices of the
Class B Warrants and Class C Warrants  are equal to 125% and 150%  respectively,
of the Class A Exercise  Price  ($5.00).  In the event that the closing price of
the  Company's  common  Stock is less than  $5.00 on the  effective  date of the
Company's next registration  statement,  then the Exercise Price of the Warrants
shall be adjusted as to reflect  the closing  price of the Common  Stock on that
day, which shall be deemed the new Exercise Price. Any such  readjustment in the
exercise prices of the Warrants shall only apply to the  unexercised  portion of
the Warrants.

         Other Warrants

The Placement Agent is entitled to receive five-year  warrants to purchase up to
10% of the number of Units sold in the  Offering,  which could range from 33,333
to 99,999 of each of the Common Stock and Class A, B, and C Warrants.

         Registration Rights

Vianet has granted the holders of the Units  certain  registration  rights under
the  Registration  Rights  Agreement.  Vianet has  agreed to prepare  and file a
registration  statement  under the  Securities  Act of 1933  (the  "Registration
Statement"),  as amended,  for all Common Shares underlying each Unit (including
the Common Stock  underlying the Warrants  which are part of each Unit),  within
one-hundred  twenty (120) days of the Final Closing (the "120 Day  Period").  In
the event  that the  Registration  Statement  is not  effective  at the close of
business on the last day of the 120 Day Period,  Vianet has agreed to pay to the
holders  of the  securities  purchased  in  this  Offering  (the  "Holders")  an
aggregate  of, one percent (1%) of all  securities  sold in the  Offering,  upon
expiration  of the first  thirty  (30) days  after the 120 Day  Period,  and two
percent  (2%) of such  securities  for every 30 day period  thereafter  that the
Registration  Statement has not been declared  effective (the "Penalty Shares").
In addition,  Vianet has agreed to place nine months worth of Penalty  Shares in
escrow with Sichenzia,  Ross & Friedman LLP, a New York law firm, upon the final
closing of this offering.

Purchasers of the Units offered  herein agree not to sell fifty percent (50%) of
the  Common  Stock  underlying  the Units for a period  of six  months  from the
effective date of the Registration  Statement or upon NASDAQ listing,  whichever
occurs  first (the  "Lock-Up  Period").  In any event,  the Lock-Up  Period will
expire  twelve  (12)  months from the date the  securities  offered  herein were
issued.  The Holder may sell the  balance of the  Common  Stock  (fifty  percent
(50%)) upon  effectiveness of the Registration  Statement or at such time as the
securities are available for resale under Rule 144, whichever occurs first.


<PAGE>
By executing the Registration  Rights Agreement,  each investor will be granting
power-of-attorney  to a duly  authorized  officer  of  the  Placement  Agent  to
negotiate  the terms and  condition of the Lock-Up  agreements  of the holder of
Registrable Securities and any other restrictions on the right of such holder to
sell his or its shares of Common Stock which shall be imposed by any underwriter
in connection  with any proposed public offering or by NASDAQ in connection with
any  application  for listing of the  Registrable  Securities  made by Vianet to
NASDAQ (including, without limitation, the length of the Lock-Up Period, and the
other  rights  of the  holder  of  Registrable  Securities  to  sell  his or its
Registrable Securities).

The  Placement  Agent also has certain  registration  rights with respect to the
securities underlying the Agent's Options.

We currently expect an initial closing on the Offering on or before November 30,
1999.  However,  there can be no  assurances  that this or any other  additional
financing  will be available  on  acceptable  terms,  if at all. If the intended
offering is not successfully completed and additional financing arrangements are
not obtained, we may be unable to fully fund our operations, pursue our business
strategy, take advantage of new opportunities,  develop or enhance our products,
or respond to  competitive  pressures and financial or marketing  hurdles.  Such
inability could have a materially adverse effect on Vianet's business, operating
results and financial  condition.  Moreover,  the estimated cost of the proposed
expansion of our  production  and  marketing  activities  is subject to numerous
uncertainties, including the problems, expenses, difficulties, complications and
delays,  many of  which  are  beyond  our  control,  frequently  encountered  in
connection with the  establishment  and development of new business  activities,
and may be affected by the  competitive  environment  in which we are operating.
Accordingly,  there  can be no  assurance  that we will  complete  the  proposed
expansion of our production and marketing activities described herein.

ADDITIONAL LIQUIDITY DISCUSSION

Vianet's  working capital deficit at September 30, 1999 was  ($5,428,765).  As a
result,  the  Company  is in  default  on  certain  debt  agreements,  including
nonpayment of principal and interest,  and in violation of financial  covenants,
which  allows the lenders to demand  repayment.  No such demands have been made.
Management  believes  that its  operating  losses are in part due to  inadequate
financing  and is  dependent  on its  ability  to obtain  additional  sources of
financing to fund its working capital  requirements.  The Company is considering
several  alternatives  to fund these  requirements.  There is no  assurance  the
Company will be able to obtain  continuing  adequate funding on acceptable terms
and no assurance that once obtained such  additional  funding will result in the
Company's profitable operation.

Vianet's  management believes that upon full implementation of Vianet's business
plan,  sufficient  revenues  will be generated to meet  operating  requirements.
However,  no assurance  can be given that such goal will be obtained or that any
expected revenues will be realized.

The Company is considering several financing alternatives to fund its medium and
longer-term  financing  requirements,  including anticipated accounts receivable
and inventory  requirements and future R&D needs.  While the Company has, in the
past, been able to maintain  access to adequate  external  financing  sources on
acceptable terms, no assurances can be given that such access will continue.  If
the Company is unable to obtain  short-term and long-term  funding on acceptable
terms  from  existing  financing  sources or through  secure  new  sources,  the
Company's ongoing operations could be adversely impacted.

The Company is currently in negotiations with several other potential  investors
to fund its cash requirements.  No assurances can be given that the Company will
be successful in completing these financings.

CONCLUSION

The Company has operational,  financial and product introduction plans which, if
achieved,  will  result in  profitability  and cash  equilibrium  in early 2000.
Considering the available financial resources,  current business prospects,  the
outlook for cash available from customer collections, the outlook for cash to be
used in operations and investing,  and actions to control spending,  the Company
believes  it has or can  obtain the  financial  resources  to meet its  business
requirements  for the balance of the current  year.  There can be no  assurance,
however,  that the  assumptions  and  projections  underlying or supporting this
outlook will be realized.  The Company has incurred significant operating losses
and negative  cash flows from  operations  in since its inception in March 1998.
The cash flows were funded by proceeds from borrowings  under credit  facilities
and by sales common stock.  The Company  expects  operating  losses and negative
operating  cash  flow to  continue  at  least  through  the end of  1999.  It is
uncertain  when, if ever, the Company will report  operating  income or positive
cash flow from operations. If cash needs exceed available resources,  there also
can be no assurance that additional  capital will be available through public or
private equity or debt financings.  The financial  statements have been prepared
assuming  the Company  will  continue as a going  concern and do not include any
adjustments  that  might  result  from  the  unfavorable   outcome  of  such  an
uncertainty.
<PAGE>
ADDITIONAL FACTORS THAT MAY AFFECT RESULTS

Future  operating  results may be  impacted  by a number of  factors,  including
worldwide  economic and political  conditions,  industry specific  factors,  the
Company's  ability to  maintain  access to  external  financing  sources and its
financial  liquidity,  the  Company's  ability  to timely  develop  and  produce
commercially viable products at competitive prices, the availability and cost of
components,  the  Company's  ability to manage  expense  levels,  the  continued
financial strength of the Company's dealers and distributors,  and the Company's
ability to accurately anticipate customer demand.

The Company's  future  success is highly  dependent upon its ability to develop,
produce  and  market  products  that   incorporate  new  technology  are  priced
competitively  and  achieve  significant  market  acceptance.  There  can  be no
assurance  that  the  Company's  products  will be  commercially  successful  or
technically advanced due to the rapid improvements in information technology and
resulting product obsolescence. There is also no assurance that the Company will
be able to deliver commercial quantities of new products in a timely manner. The
success  of new  product  introductions  is  dependent  on a number of  factors,
including market  acceptance,  the Company's  ability to manage risks associated
with product  transitions,  the effective management of inventory levels in line
with  anticipated  product  demand and the timely  manufacturing  of products in
appropriate  quantities to meet  anticipated  demand.  The Company competes with
established  equipment  manufacturers with greater financial  resources and more
developed channels of distribution.  No assurances can be given that the Company
will be successful in competing in this environment.



<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to foreign currency  exchange rate risk relating to receipts from
customers,  payments to  suppliers.  We do not consider the market risk exposure
relating to foreign exchange to be material.

We do not have financial instruments which are subject to interest rate risk and
accordingly our exposure to interest rate risk is not material.

Item 6.  Exhibits and Reports

         (a)  Exhibit.

                 I - Financial Data Schedule

         (b) Reports on Form 8-K:

                    On March 23,  1999,  the Company  filed a report on Form 8-K
               reporting the merger with Vianet Technologies, Inc.

                    On August 18, 1999 the Company  filed a report on Form 8-K/A
               reflecting  the audited  financial  statements as at December 31,
               1998. The submission was amended on September 8, 1999.

                    On  September  10, 1999 the  Company  filed a report on Form
               8-K/A  reflecting  the  change  in  the  Registrant's  Certifying
               Accountant.

                    On  September  24, 1999 the  Company  filed a report on Form
               8-K/A  reflecting  a  letter  from  the   Registrant's   previous
               Certifying Accountant.

                    On October 28, 1999,  the Company filed a report on Form 8-K
               reporting the acquisition of Infinop Holdings, Inc.


<PAGE>
                                     PART II
                                OTHER INFORMATION


Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities and Use of Proceeds

         None.

Item 3.  Defaults Upon Senior Securities

         None.

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

         None.

Item 5.  Other Information

         None.



<PAGE>
                                   SIGNATURES







Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                          VIANET TECHNOLOGIES, INC. (Registrant)


Date: November 16, 1999                           /s/ VINCENT L. SANTIVASCI
                                                      Vincent L. Santivasci
                                                      Chief Financial Officer