UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A

                                   (Mark One)

     [x]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999

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

       For the Transition Period from _______________ TO _______________.

                                  033-55254-19

                            (Commission File Number)

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

<TABLE>
<CAPTION>
<S>                                                    <C>
NEVADA                                                 87-0434285
(State or other jurisdiction of                        (IRS Employer
incorporation or organization)                         Identification No.)
</TABLE>

                                83 MERCER STREET
                            NEW YORK, NEW YORK 10012

                    (Address of principal executive offices)

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

              (Former name, former address and former fiscal year,
                         if changed since last report)

     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 8,801,386  shares of the  registrant's  Common Stock,  par value
$.001 per share, outstanding on August 20, 1999.


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                   PAGE

Part I - Financial Information

     Item I - Financial Statements

<S>                                                                                                  <C>
              Independent Auditors' Report                                                           3

              Consolidated Balance Sheet at June 30, 1999                                            4

              Consolidated Statements of Operation
                  for the six months ended June 30, 1999                                             5

              Consolidated Statement of Shareholders' Equity
                  for the six months ended June 30, 1999                                             6

              Consolidated Statement of Cash Flows
                  for the six months ended June 30, 1999                                             7-8

              Notes to Consolidated Financial Statements                                             9-27

Item 2        Management's Discussion and Analysis of

                  Financial Condition and Results of Operations                                      28-33

Item 3        Quantitative and Qualitative Disclosures About Market Risk                             34

Item 6        Exhibits and Reports

                  Exhibit 1 - Financial Data Schedule                                                37

Part 2        Legal and Capital Transactions                                                         35

              Signatures                                                                             36

</TABLE>

<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Vianet Technologies, Inc.

We  have  audited   the  accompanying  consolidated   balance  sheet  of  Vianet
Technologies,  Inc.  and  subsidiary  as of  June  30,  1999,  and  the  related
consolidated statements of operations,  shareholders' equity, and cash flows for
the six months then ended. These financial  statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In  our  opinion,  the  financial  statements  referred to above present fairly,
in all material respects,  the financial position of Vianet  Technologies,  Inc.
and  subsidiary as of June 30, 1999,  and the results of its operations and cash
flows for the six months then  ended,  in  conformity  with  generally  accepted
accounting principles.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements, the Company has sustained significant operating losses, is
unable to pay its  suppliers  within  normal  trade terms and has a  significant
working  capital  deficiency.   The  Company  is  in  default  of  certain  debt
obligations  and  related  covenants,  including  nonpayment  of  principal  and
interest on its debt,  which allows the lenders to demand  repayment of existing
debt.  No such demands have been made.  These factors  raise  substantial  doubt
about the Company's ability to continue as a going concern.  Management's  plans
in  regard  to  these  matters  are  also  described  in Note 2.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


                                                 /s/ Edward Isaacs & Company LLP

New York, New York
September 29, 1999

                                        3


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET

                                  JUNE 30, 1999

<TABLE>
<CAPTION>
                                     ASSETS

Current Assets:

<S>                                                                                                <C>
   Cash and cash equivalents ...................................................................   $    134,694
   Accounts receivable, net of allowance of $306,000 ...........................................      1,444,687
   Inventories .................................................................................      2,461,890
   Prepaids and other current assets ...........................................................        188,388
                                                                                                    -----------
                 TOTAL CURRENT ASSETS ..........................................................      4,229,659
                                                                                                    -----------
PROPERTY AND EQUIPMENT .........................................................................      2,263,658
                                                                                                    -----------

OTHER ASSETS:
   Loans due from Infinop Holdings, Inc. .......................................................        350,000
   Intangibles arising from acquisition of business, net of accumulated amortization of $117,500      5,898,161
   Technology license, net of accumulated amortization of $67,500 ..............................        382,500
   Security deposits ...........................................................................         70,265
                                                                                                    -----------
                 TOTAL OTHER ASSETS ............................................................      6,700,926
                                                                                                    -----------
                                                                                                   $ 13,194,243
                                                                                                   ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Bank line of credit .........................................................................   $    339,675
   Current portion of long-term debt ...........................................................      1,996,983
   Accounts payable and accruals ...............................................................      3,942,828
   Demand loans payable - related parties ......................................................      1,029,887
                                                                                                    -----------
                 TOTAL CURRENT LIABILITIES .....................................................      7,309,373
                                                                                                    -----------
LONG-TERM DEBT .................................................................................         64,555
                                                                                                    -----------

SHAREHOLDERS' EQUITY:
   Common shares, $0.001 par value, 100,000,000 shares authorized;
          8,801,386 shares, issued and outstanding .............................................          8,801
   Subscription receivable .....................................................................           (500)
See Independent Auditors' Report and notes to financial statements .............................
   Additional paid-in capital ..................................................................      7,270,946
   Accumulated deficit .........................................................................     (1,479,525)
   Accumulated other comprehensive income ......................................................         20,593
                                                                                                    -----------
                 TOTAL SHAREHOLDERS' EQUITY ....................................................      5,820,315
                                                                                                    -----------
                                                                                                   $ 13,194,243
                                                                                                   ============
</TABLE>

      See Independent Auditors' Report and notes to financial statements.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF OPERATIONS

                         SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
REVENUE:

<S>                                                               <C>
     Net sales                                                    $    892,477
     Interest and other income                                         106,022
                                                                     ---------
                                                                       998,499
                                                                     ---------
COSTS AND EXPENSES:
     Cost of goods sold                                                460,720
     General and administrative                                        637,859
     Selling and marketing                                             249,569
     Research and development                                          265,519
     Product support                                                    76,228
     Depreciation and amortization                                     211,000
     Interest                                                           85,272
                                                                     ---------
                                                                     1,986,167
                                                                     ---------
               NET LOSS                                           $  (987,668)
                                                      ==========================


LOSS PER SHARE - BASIC AND DILUTED                                $    (0.18)
                                                      ==========================


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                       5,464,285
                                                      ==========================

</TABLE>



      See Independent Auditors' Report and notes to financial statements.

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                         SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>

                                                                                                        Accumu
                                                                                                        lated
                                                                                                        Other    Total      Compre
                              Convertible                           Additional  Subscrip-    Accumu-    Compre   Share      hensive
                            Preferred Stock       Common Stock      Paid-In     tion         lated      hensive  holders'   Income
                           Shares  Amount       Shares     Amount   Capital     Receivable   Deficit    Income   Equity     (Loss)
                           -------- ---------   ---------   -----    ---------    --------  -----------  ------  --------- ---------
BALANCES at
<S>                        <C>     <C>          <C>        <C>      <C>         <C>          <C>        <C>      <C>         <C>
 beginning                 250,000 $1,000,000   2,400,000  $2,400   $    2,100  $(990,500)   $(491,857) $  -     $(477,857)    -

Issuance of common
 stock for services             -       -          75,000      75       74,925         -         -         -        75,000     -

Issuance of common
 stock in connection
 with Develcon merger           -       -       2,585,488   2,585    3,453,187         -         -         -     3,455,772     -

Conversion of preferred
 stock                    (250,000)(1,000,000)  1,000,000   1,000      990,000    990,000        -         -       990,000     -

Conversion of notes
 payable                        -       -       2,739,272   2,739    2,736,533         -         -         -     2,739,272     -

Exercise of stock
 options                        -       -           1,626       2        5,201         -         -         -         5,203     -

COMPREHENSIVE INCOME (LOSS):

Net Loss                        -       -              -        -          -           -      (987,668)    -      (987,668)(987,668)

Other comprehensive income:

Foreign currency
 translation adjustments        -       -              -        -          -           -         -       20,593     20,593   20,593
                           -------- ---------   ---------   -----    ---------    --------  -----------  ------  --------- --------
BALANCES at 6/30/99             -       -       8,801,386   8,801    7,270,946       (500)  (1,479,525)  20,593  5,820,315
                           ======== =========   =========   =====    =========    ========  ===========  ======  =========
COMPREHENSIVE LOSS                                                                                                         (967,075)
                                                                                                                           =========
</TABLE>

      See Independent Auditors' Report and notes to financial statements.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                         SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>

   OPERATING ACTIVITIES:

<S>                                                                                        <C>
       Net loss                                                                            $   (987,668)
       Adjustments to reconcile net loss to net cash used
            in operating activities:
                 Depreciation and amortization                                                  211,000
                 Gain on sale of marketable securities                                          (70,687)
                 Increase (decrease) in cash attributable to changes in
                       operating assets and liabilities:
                             Prepaids and other receivables                                      57,123
                             Accounts receivable                                                (34,383)
                             Inventory                                                           96,391
                             Accounts payable, accruals and other                                16,552
                                                                                               ---------
                             NET CASH USED IN OPERATING ACTIVITIES                             (711,672)
                                                                                               ---------
   INVESTING ACTIVITIES:
       Loans to Infinop Holdings, Inc.                                                         (350,000)
       Proceeds from sale of marketable securities                                              739,955
       Capital expenditures                                                                     (23,723)
       Security deposits                                                                        (70,265)
       Other acquisition costs                                                                 (291,870)
                                                                                               ---------
                             NET CASH PROVIDED BY INVESTING ACTIVITIES                            4,097
                                                                                               ---------
   FINANCING ACTIVITIES:
       Proceeds from subscriptions receivable                                                   990,000
       Repayment of convertible notes payable                                                 (200,000)
       Principal payments of long-term debt                                                    (17,383)
       Proceeds from convertible notes payable                                                   30,000
       Issuance of common stock                                                                   5,203
                                                                                               ---------
                             NET CASH PROVIDED BY FINANCING ACTIVITIES                          807,820
                                                                                               ---------
   EFFECT OF EXCHANGE RATE CHANGES                                                               20,593
                                                                                               ---------
                             NET INCREASE IN CASH AND CASH EQUIVALENTS                          120,838
   CASH AND CASH EQUIVALENTS AT DECEMBER 31, 1998                                                13,856
                                                                                               ---------
                             CASH AND CASH EQUIVALENTS AT JUNE 30, 1999                     $   134,694
                                                                                      ==================

</TABLE>


       See Independent Auditors' Report and notes to financial statements.


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

                         SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
NONCASH TRANSACTIONS:

   ACQUISTION OF DEVELCON:

<S>                                                                                <C>
   Fair value of assets acquired                                                   12,226,306

   Liabilities assumed                                                              (9,692,412)
   Common stock issued                                                              (2,533,894)
   Net cash paid for acquistion                                                              -
   Cash acquired in acquistion                                                               -
   Cash paid for acquistion                                                                  -
                                                                         ======================

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

   Issuance of Common Stock for consulting services                       $             75,000
                                                                         ======================

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

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

</TABLE>

      See Independent Auditors' Report and notes to financial statements.


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

1.       ORGANIZATION AND BUSINESS

     Vianet  Technologies,  Inc. ("Old Vianet") was incorporated in the State of
Delaware,  U.S.  on March 20, 1998  initially  to acquire  Develcon  Electronics
Limited.  ("Develcon") and a license to utilize SPS Technology ("SPS") developed
by NewCom Technologies, Inc.

     Develcon designs high quality products and implements  innovative  services
based on a wide range of flexible and modular communications platforms. Develcon
products integrate diverse LAN, legacy and voice applications using technologies
such as frame relay, ISDN, PPP and packet switching.

     SPS  is  a   technology   developed   to   exploit   the   convergence   of
telecommunications and data transmission methods. The Company plans to integrate
the  SPS  technology  into  Develcon's   product  lines  and  to  develop  other
adaptations to further expand the product capabilities of Develcon.

MERGER WITH VIANET TECHNOLOGIES, INC. (FORMERLY, RADAR RESOURCES, INC.)

     On March 16, 1999, the Company, a Nevada Corporation, entered into a Merger
Agreement with Vianet Technologies, Inc. ("Old Vianet") under the terms of which
the Company and Old Vianet merged through an exchange of shares (the  "Merger").
Subject to the terms and conditions of this Merger Agreement, on March 23, 1999,
the Company issued to the shareholders of Old Vianet,  four shares of fully paid
and nonassessable shares of the Company's common stock, $.001 par value ("Common
Stock") per share in exchange for each share of Old Vianet's  outstanding common
stock. The existing common  shareholders of Old Vianet received 1,400,000 shares
of common stock of the Merged  Company in exchange  for the 350,000  shares then
outstanding.  All shares of Old Vianet's  Series A Convertible  Preferred  Stock
issued and outstanding  immediately prior to the Merger were deemed to have been
converted into an aggregate of 250,000  shares of Old Vianet's  common stock and
the Series A Convertible  Preferred  shareholders  received 1 million  shares of
Common  Stock of the  Company.  Further,  Old Vianet  convertible  demand  notes
payable  holders  received  2,739,272  shares of common  stock.  For  accounting
purposes,  Old Vianet was considered to be the acquirer in a reverse acquisition
accounted for as a purchase.  All share amounts have been retroactively restated
to reflect the reverse acquisition.

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

2.       GOING CONCERN

     The Company has sustained  significant  operating  losses, is unable to pay
its suppliers  within normal trade terms and has a significant  working  capital
deficiency.  The  Company is in default on certain  debt  agreements,  including
nonpayment of principal and interest, and violation of financial covenants which
allows  the  lenders  to demand  repayment.  No such  demands  have  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.

3.       SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF CONSOLIDATION:

     The  consolidated  financial  statements  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.

         FOREIGN CURRENCY:

     All balance sheet accounts of foreign  operations are translated  into U.S.
dollars at the year-end rate of exchange and  statements  of earnings  items are
translated at the weighted  average  exchange  rates for the year. The resulting
translation  adjustments  are reported as a component of  comprehensive  income.
Gains and losses from foreign  currency  transactions,  such as those  resulting
from the  settlement  of foreign  receivables  or payables,  are included in the
consolidated statements of earnings.

         CASH AND CASH EQUIVALENTS:

     Cash and cash  equivalents  include  cash held in banks  and time  deposits
having original maturities of three months or less.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

3.       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         INVESTMENT IN MARKETABLE EQUITY SECURITIES:

     The Company  accounts for its  investments in equity  securities  that have
readily  determinable  fair  values  under  the  provisions  of  SFAS  No.  115,
"Accounting for Certain Investments in Debt and Equity  Securities."  Marketable
equity  securities  consist  of shares of common  stock and are stated at market
value.  Management has identified the Company's  marketable equity securities as
trading  securities  and,  accordingly,  unrealized  gains  and  losses  on such
securities are recorded in the statement of operations.

         INVENTORIES:

     Inventories  are  stated  at the  lower of cost  (first-in,  first-out)  or
market.

         PROPERTY AND EQUIPMENT:

     Property  and  equipment  are  stated at cost and  depreciated  over  their
estimated  useful  lives,  which  range from five to fifteen  years.  Long-lived
assets are reviewed for impairment whenever the facts and circumstances indicate
that the carrying amount may not be recoverable.

         TECHNOLOGY LICENSE:

     The technology license consists of purchased  technology,  amortized by the
straight-line  method  over a period  of five  years,  the  initial  term of the
license agreement.

         GOODWILL:

     The excess of the cost over the fair  value of net assets of its  purchased
business is recorded as goodwill and is amortized on a straight-line  basis over
its estimated useful life of six years.

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

3.       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         USE OF ESTIMATES:

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

         STOCK OPTION PLAN:

     The Company  accounted for stock options  issued to employees in accordance
with SFAS No.  123,  Accounting  for  Stock-Based  Compensation,  which  permits
entities to continue to apply the  provisions  of  Accounting  Principles  Board
("APB") Opinion No. 25 and provide pro forma net income disclosures for employee
stock option  grants as if the fair value based  method,  as defined in SFAS No.
123, had been  applied.  The Company has elected to apply the  provisions of APB
Opinion No. 25 and provide the pro forma disclosure required by SFAS No. 123.

         COMPREHENSIVE INCOME:

     The Company reports and presents comprehensive income 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.

         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  consists 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.


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

3.       SIGNIFICANT ACCOUNTING POLICIES (Continued)

         FAIR VALUE OF FINANCIAL INSTRUMENTS:

     Statement of Financial  Accounting  Standards ("SFAS") No.107,  Disclosures
About Fair Value of Financial Instruments, requires disclosure of the fair value
of certain  financial  instruments  for which it is practicable to estimate fair
value.  For  purposes  of the  disclosure  requirements,  the  fair  value  of a
financial instrument is the amount at which the instrument could be exchanged in
a current  transaction  between willing parties,  other than in a forced sale or
liquidation. Fair value of financial instruments classified as current assets or
liabilities (except Demand Loans Payable) approximates carrying value due to the
short-term maturity of underlying financial instruments. It was not practical to
estimate the fair value of the  Company's  Demand Loans Payable  because  quoted
market prices do no exist and comparable securities were not available.

         INCOME TAXES:

     The Company  accounts for income taxes under the asset and liability method
as required by SFAS No. 109,  Accounting  for Income  Taxes.  Under this method,
deferred tax assets and  liabilities  are  determined  based on the  differences
between the financial  reporting and income tax bases of assets and  liabilities
and are  measured  using the  enacted  tax rates and laws  expected  to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.

         RESEARCH AND DEVELOPMENT:

     Research and development costs are expensed as incurred.

         SEGMENT REPORTING:

     Effective  July 1, 1998,  the  Company  adopted  the  Financial  Accounting
Standards  Board's  Statement  of  Financial   Accounting   Standards  No.  131,
"Disclosures about Segments of an Enterprise and Related  Information" (SFAS No.
131). SFAS No. 131

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

3.       SIGNIFICANT ACCOUNTING POLICIES (Continued)

superceded FASB Statement No. 14, "Financial Reporting for Segments of a
Business Enterprise." SFAS No. 131 establishes standards for the way that public
business  enterprises  report  information  about  operating  segments in annual
financial  statements  and  requires  that  those  enterprises  report  selected
information about operating segments in interim financial reports.  SFAS No. 131
also establishes  standards for related disclosures about products and services,
geographic  areas,  and major  customers.  The  adoption of SFAS No. 131 did not
effect the results of  operations,  financial  position,  or the  disclosure  of
segment information because the Company operates only in one segment.

4.       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
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 June 30, 1999.


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

4.       ACQUISITION OF DEVELCON ELECTRONICS, LTD. (Continued)

     As a result of the closing of the Arrangement,  the former shareholders and
creditors of Develcon hold  2,585,488  shares of the 8,801,386  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 six month
period ending June 30, 1999:

                  Net sales         $   4,001,534
                  Net loss          $  (4,782,980)
                  Loss per share    $        (.80)

     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.

5.       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. As part the agreement the
Company  agreed to advance  Infinop  $640,000  ($350,000 was advanced as at June
30,1999,  and the balance of $290,000  was  advanced in July and August 1999) in
loans. If completed the Company will issue 2,164,167  common shares to Infinop's
shareholders and option holders and the loans will

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

5.       ACQUISITION OF INFINOP HOLDINGS, INC. (Continued)

be forgiven. In August 1999, the Company signed a definitive agreement with
Infinop  and  certain  major   shareholders  of  Infinop  to  proceed  with  the
transaction.

     Infinop  develops  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.

6.       SPS TECHNOLOGY LICENSE

     The  Company  purchased  a  license  for the  SPS  technology  from  NewCom
Technologies,  Inc.  (the  "Licensor")  for $450,000.  The license  entitles the
Company  to use  certain  intellectual  property  rights.  This  "right  to use"
includes any patents  associated with the SPS technology  along with the current
preferred  embodiment  of the  patent.  Royalty  payments  of 2.5%  of Net  Cash
Received,  as defined in the license  agreement,  on products  manufactured  and
sold, licensed or services rendered by Vianet during the term of the license are
due to the licensor.  The Company may, at its option, pay a one-time royalty fee
of $2.1  million at any time during the term.  If such one time payment is made,
the license shall become  perpetual and no further  royalties  will be due under
the license.

     The license provides the Company with all the source code and documentation
required to allow the Company to integrate the technology into its products. The
license provides for quarterly updates from NewCom of the  hardware/firmware for
the initial five year term of the agreement.

7.       INVENTORIES

         Inventories consist of:

Raw materials                                   $    553,421
Work-in-process                                      421,220
FINISHED GOODS                                     1,487,249
                                                ------------

                                                $ 2,461,890


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

8.       PROPERTY AND EQUIPMENT

         Property and equipment consist of:

Land                                            $    135,870
Building                                             305,708
Machinery and equipment                            1,846,667
LEASEHOLD IMPROVEMENTS                                23,777
                                                --------------

                                                   2,312,022

LESS: ACCUMULATED DEPRECIATION                        48,364

                                                $  2,263,658

9.       BANK LINE OF CREDIT

     The  Company  has a line of credit  facility  with a bank in the  amount of
$339,675,  which was fully utilized at June 30, 1999. The line bears interest at
1-1/4%  above the bank's prime rate and is secured by the assets of a subsidiary
of Develcon and is personally  guaranteed by a shareholder  of the Company.  The
line expires on November 30, 1999 and cannot be extended.


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

10.      LONG-TERM DEBT
<TABLE>
<CAPTION>

         Long-term debt consists of:
<S>                                                                                                 <C>
         Note payable to bank, in three annual installments of $339,675
             commencing December 2000.  Interest at 8.5% payable
             semi-annually beginning December 1999 (a)                                              $  1,019,025

         Note payable to a Canadian government entity in monthly principal
             installments of $7,913, plus interest at 3% maturing November 1999 (b)                      317,899

         10.5% note  payable  in equal  monthly  installments  of  $4,925,
             inclusive of interest, maturing February 2000, secured by land and
             building in Saskatoon, Saskatchewan.                                                        266,346

         8% note payable, due November 1999, plus accrued interest.                                      351,903

         Capital lease obligations for equipment payable in monthly installments with
             INTEREST RANGING FROM 10% TO 14%, MATURING THROUGH 2005.                                    106,365
                                                                                                   -------------

                                                                                                      2,061,538
LESS: CURRENT MATURITIES                                                                              1,996,983

                                                                                                    $    64,555
</TABLE>
     (a) On July 30, 1999,  the Company  entered into an amended loan  agreement
with the bank which,  among other matters,  extended the maturities of the debt.
The note is secured by a general security interest on all assets of the Company,
subject to a $339,675  preference relating to the bank operating line of credit.
The  noteholder is a shareholder  of the Company.  The loan  agreement  contains
certain  financial  covenants and at June 30, 1999, the Company was in violation
of  several of these  covenants.  Consequently,  the debt is in default  and the
lender has the option to demand that the entire balance become  immediately  due
and payable.  As such, the entire  balance is included in current  maturities of
long-term debt.

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

10.      LONG-TERM DEBT (Continued)

     (b) At June 30, 1999,  the Company was in  violation  of certain  covenants
under the loan agreement and the lender has the option to demand that the entire
balance  become  immediately  due and payable.  As such,  the entire  balance is
included in current maturities of long-term debt.

         Annual maturities of long-term debt at June 30, 1999 are as follows:

2000                                            $ 1,996,983
2001                                                 30,910
2002                                                 20,122
2003                                                  9,293
2004                                                  3,384
THEREAFTER                                              846
                                           ----------------

                                                $ 2,061,538

11.      SERIES A CONVERTIBLE PREFERRED STOCK

     The authorized Series A convertible preferred stock of the Company consists
of 1,000,000  shares,  of which 250,000  shares were issued and  outstanding  at
December 31, 1998. On March 23, 1999 the Series A preferred  stock was converted
into common stock at a rate of four for one. As a result, the Series A preferred
shareholders received 1,000,000 shares of common stock of the Company.

12.      RELATED PARTY TRANSACTIONS

         CONVERTIBLE DEMAND NOTES PAYABLE:


         ON MARCH 23, 1999,  CONVERTIBLE  DEMAND NOTES  PAYABLE OF $2,909,272 TO
ENTITIES  CONTROLLED BY TWO OFFICERS AND DIRECTORS OF THE COMPANY WERE CONVERTED
INTO  2,739,272  SHARES OF COMMON  STOCK AT A RATIO OF ONE SHARE FOR EVERY $1 OF
PRINCIPAL AMOUNT.  DURING THE SIX MONTHS ENDED JUNE 30, 1999, the Company repaid
$200,000 and additional convertible demand notes of $30,000 were issued.

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

12.      RELATED PARTY TRANSACTIONS (Continued)

         DEMAND LOANS PAYABLE:

     Demand loans payable consist of  non-interest  bearing loans payable to two
affiliated entities and one of the Company's shareholders.

         DEFERRED COMPENSATION:

     Deferred  compensation  payable to an officer of  Develcon in the amount of
$200,000 is included in accounts payable and accruals.

         FEES AND EXPENSES:

     The Company accrued consulting fees aggregating  approximately $12,000 to a
company  owned by two  shareholders  who are also  officers  of the  Company for
engineering and other services.

13.      PENSION PLAN

     A  subsidiary  of Develcon  maintains a defined  contribution  plan for its
employees under which eligible employees can contribute up to 5% of earnings, as
defined,   and  the  Company   matches  the  employee   contribution   in  full.
Contributions under the plan were $8,589 for the six months ended June 30, 1999.

14.      INCOME TAXES

     The  difference  between  the  statutory  Federal  income  tax rate and the
Company's  effective tax rate for the period ended June 30, 1999 is  principally
due to the Company  incurring net operating  losses for which no tax benefit was
recorded.

     For  Federal  income tax  purposes,  Vianet has unused net  operating  loss
carryforwards  of  approximately  $1,054,000  expiring  through  year 2014.  The
availability  of the net operating  loss  carryforwards  to offset income in the
future years, if any, may be limited by the Internal Revenue Code Section 382 as
a result of certain ownership changes.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

14.      INCOME TAXES (Continued)

     Develcon has Federal and foreign net  operating  loss  carryforwards  as of
June  30,  1999  of  approximately  $7,000,000  and  $14,000,000,  respectively.
Develcon's Federal loss carryforwards  expire through 2012 and their utilization
is subject to certain limitations as defined in section 382 of the United States
Internal Revenue Code. The foreign loss  carryforwards  include $5,000,000 which
expires at various  times through 2006 and  $9,000,000  which have no expiration
date. Also, there are approximately $1,500,000 in foreign investment tax credits
which expire at various times through 2007.

     The tax effects of the temporary  differences that give rise to significant
portions of deferred tax assets at June 30, 1999 are as follows:
<TABLE>
<CAPTION>

                                                                        VIANET               DEVELCON

DEFERRED TAX ASSETS:

<S>                                                                <C>                 <C>
   Federal and state net operating loss carryforwards              $  421,000          $ 2,800,000
   Foreign net operating loss carryforward                                 -             5,320,000
   Foreign investment tax credit                                           -             1,500,000
   UNREALIZED FOREIGN EXCHANGE LOSS                                    (8,000)                  -
                                                                   ------------        -----------

                                                                      413,000            9,620,000
LESS: VALUATION ALLOWANCE                                            (413,000)          (9,620,000)
                                                                   ------------        ------------

DEFERRED TAX ASSET                                                 $       -           $        -
                                                                   ============        ============

</TABLE>

     In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some  portion or all of the deferred tax
assets will not be realized.  The ultimate realization of deferred tax assets is
dependent  upon the  generation of future  taxable  income during the periods in
which those temporary  differences become deductible.  Management  considers the
projected  future  taxable  income and tax  planning  strategies  in making this
assessment.  The valuation  allowance was recorded due to the uncertainty in the
utilization of the net operating loss carryforwards and credits.

<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

15.      STOCK INCENTIVE PLAN

     The Company  adopted a Stock  Incentive Plan for employees (the Plan).  The
Plan permits the issuance of stock options to selected  employees,  officers and
directors  of the  Company.  Options  granted  may  be  either  nonqualified  or
incentive stock options.

     The Company has assumed  options  granted  under  Develcon's  Option  Plans
(Acquired Options).  The Acquired Options were assumed by the Company outside of
its stock  option  plan,  and they are  administered  as if issued  under  their
original plans. All of the Acquired Options have been adjusted to effectuate the
conversion under the terms of the Arrangement  between the Company and Develcon.
The Acquired Options  generally become  exercisable over a three-year period and
generally expire ten years from the date of grant. No additional options will be
granted under Develcon's plans.

     The following  table  summarizes  stock option  activity for the six months
ended June 30, 1999:
<TABLE>
<CAPTION>

                                                         Number of                                Weighted
                                                         Shares Subject                     Average Exercise
STOCK OPTION ACTIVITY                                    to Options                           Price Per Share

<S>                   <C> <C>                                      <C>                              <C>
Outstanding, December 31, 1998                                     440,000                          $1.00
     Granted                                                       470,000                           6.40
     Assumed from Develcon plans                                    61,951                          10.21
     Cancelled                                                    (200,000)                          1.00
     Exercised                                                      (1,626)                          3.20
                                                              ------------

Outstanding June 30, 1999                                         770,325                           5.04
                                                              ============

</TABLE>


<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

15.      STOCK INCENTIVE PLAN (Continued)

     The following table summarizes  information about stock options outstanding
and exercisable at June 30, 1999:
<TABLE>
<CAPTION>

                                          Options Outstanding                                Options Exercisable
                                                Weighted              Weighted                                     Weighted
       Range of                                 Average               Average                                       Average
       Exercise                                Remaining              Exercise                                     Exercise
        Price              Number of          Contractual              Price                Number of                Price
      Per Share              Shares        Life (Years)              Per Share                Shares               Per Share

<S>        <C>             <C>                     <C>                 <C>                  <C>                      <C>
$ 1.00 to  4.80            384,715                 9.5                 $ 1.20               264,715                  $  1.29
$ 6.00 to 10.00            371,625                 3.3                   8.17                21,625                     6.87
$18.00 to 27.60             13,985                 6.8                  27.31                 13,985                   27.31
                           ---------             ------                ------               --------                 -------

                           770,325                 6.6                 $ 5.04               300,325                  $  2.91
                           =======               =====                 ======              ========                  =======
</TABLE>


     The  following  table  reflects  pro  forma net loss and loss per share had
compensation  cost been determined based on the fair value at the grant date for
awards  granted  in the six  months  ended  June 30,  1999  consistent  with the
requirements of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation":

<TABLE>
<CAPTION>
Net loss:

<S>                                              <C>
     As reported                                 $   (987,668)
     Pro forma                                   $ (1,044,678)

Basic loss per share:

     As reported                                 $     (.18)
     Pro forma                                   $     (.19)

</TABLE>

     These pro forma  amounts may not be  representative  of future  disclosures
since the estimated fair value of stock options is amortized to expense over the
vesting period, and additional options may be granted in future years.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

15.      STOCK INCENTIVE PLAN (Continued)

     The estimated fair value of each option  granted  included in the pro forma
results is calculated using the minimum value calculation for the options issued
prior  to  the  Company  becoming   publicly  traded,   and  the   Black-Scholes
option-pricing  model with the following  weighted-average  assumptions used for
grants  subsequent  to the Company  becoming  publicly  traded:  no common stock
dividends paid;  expected  volatility of 56%;  risk-free interest rates of 5.0%;
and expected lives of 6.6 years.  The weighted average fair values of options at
their grant date during 1999 was $3.09.

16.      GEOGRAPHIC AND CUSTOMER INFORMATION

     The Company's  activities  represent one industry  segment,  the design and
manufacture of sophisticated  electronics  data  communications  equipment.  The
Company operates in a worldwide market place.

     The   Company's   net  sales  for  the  six  months  ended  June  30,  1999
(representing  Develcon's  net sales from May 17, 1999 - June 30, 1999) are from
the following geographic areas:

United Arab Emirates                                               $    362,441
United States                                                           188,758
United Kingdom                                                          170,749
Canada                                                                   49,756
OTHER                                                                   120,773
                                                                   ------------

                                                                   $    892,477

                                                                   ============

     The  Company's  long-lived  assets as of June 30, 1999 are in the following
geographic areas:

Canada                                                             $ 1,951,450
OTHER                                                                  312,208
                                                                   -------------

                                                                   $ 2,263,658

     Sales from one  customer  represented  approximately  40% of the  Company's
sales. Receivables from two major customers constitute 41% of total receivables.
Purchases from one vendor approximated 57% of total raw material purchases.



<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

17.      COMMITMENTS AND CONTINGENCIES

         LEASES:

     The Company leases office and warehouse  space along with  equipment  under
capital and operating  leases  extending to 2005. The leases provide for payment
by the Company of taxes and other  expenses.  The lease for office and warehouse
facilities which expires March 31, 2002 has an option to renew for five-years at
market rent.

     Rent expense for the six months ended June 30, 1999 was $64,100.

     Minimum rental payments under noncancellable leases are as follows:

<TABLE>
<CAPTION>
YEAR ENDING JUNE 30,                                          OPERATING               CAPITAL

<S>        <C>                                          <C>                     <C>
           2000                                         $   77,000              $   49,000
           2001                                             72,000                  37,000
           2002                                             53,000                  24,000
           2003                                              1,000                  11,000
           2004                                                  -                   4,000
           THEREAFTER                                            -                   1,000
                                                        ---------                  -------

                                                        $ 203,000                  126,000
                                                        =========
          LESS: AMOUNT REPRESENTING INTEREST                                        20,000
                                                                                   -------
                                                                                 $ 106,000
                                                                                   =======
</TABLE>

     Net book value of equipment  under capital leases  included in property and
equipment was approximately $143,000 at June 30, 1999.

         MANUFACTURING AND SERVICE AGREEMENT:

     On April 12, 1999,  Develcon  entered into a  three-year  agreement  with a
vendor to provide  finished goods under an exclusive  manufacturing  outsourcing
arrangement.   Develcon   has  agreed  to  minimum   purchase   commitments   of
approximately $3.4 million,  $4.0 million and $4.7 million in years one, two and
three of the contract,  respectively.  Cost to Develcon  will be  manufacturer's
cost plus 25%.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

18.      SUBSEQUENT EVENTS

         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.

         PRIVATE PLACEMENT OFFERING:

     In July 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 in connection with the transaction.

         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 - $8 per share.
<PAGE>
                    VIANET TECHNOLOGIES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1999

19.      YEAR 2000 ISSUE

     The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year.  Data-sensitive  systems may  recognize the
Year 2000 as 1900 or some other date, resulting in errors when information using
Year 2000 dates is processed.  In addition,  similar  problems may arise in some
systems  which use certain  dates in 1999 to  represent  something  other than a
date. The effects of the Year 2000 issue may be experienced  before, on or after
January 1, 2000 and if not  addressed,  the impact on  operations  and financial
reporting may range from minor errors to significant  systems failure that could
affect an entity's ability to conduct normal business  operations.  Although the
Company has addressed its internal Year 2000 readiness, it is not possible to be
certain that all aspects of the Year 2000 issue affecting the Company, including
those related to the efforts of customers,  suppliers,  or other third  parties,
will be fully resolved.




<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATION

INTRODUCTION

     The  following  discussion  of  the  financial  condition  and  results  of
operations of Vianet should be read in conjunction with the Financial Statements
and Notes thereto  included  elsewhere in this report.  This  document  contains
certain forward-looking  statements including,  among others, anticipated trends
in Vianet's financial  condition and results of operations and Vianet's business
strategy. These forward-looking statements are based largely on Vianet's current
expectations  and are  subject  to a number of risks and  uncertainties.  Actual
results could differ materially from these forward-looking statements. Important
factors to consider in evaluating such  forward-looking  statements  include (i)
changes in external competitive market factors or in Vianet's internal budgeting
process  which might  impact  trends in  Vianet's  results of  operations;  (ii)
unanticipated  working  capital or other  cash  requirements;  (iii)  changes in
Vianet's  business  strategy  or an  inability  to execute its  strategy  due to
unanticipated  changes in the industries in which it operates;  and (iv) various
competitive  factors that may prevent Vianet from competing  successfully in the
marketplace.

GENERAL

     Our predecessor,  Vianet Technolgies, 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").

     Subsequent to the Vianet Merger, on May 17, 1999, Vianet acquired Develcon.


<PAGE>
RESULTS OF OPERATIONS

         SIX MONTH PERIOD ENDED JUNE 30, 1999

     During  the six  months  ended  June 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 six month  period  ended June 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
June 30, 1999.

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

         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 the
following:

o    Acquiring a license for SPS technology; and
o    Entering into an Agreement to acquire Develcon Electronics


<PAGE>

     However,  during such period, 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 $892,477  for the six months  ended June 30,  1999.
Vianet acquired  Develcon on May 17, 1999 and,  accordingly,  the sales recorded
are only for the six week  period to June 30,  1999.  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 $106,022.

COST OF GOODS SOLD AND GROSS PROFIT

     Vianet's  cost of sales was $460,720  representing  margins of 48% which is
below historical margins for Develcon's products due to difficulties in shipping
economic  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 $637,859.  This amount was
comprised primarily of legal,  professional fees and investor relations expenses
of Vianet,  which totaled  $500,608.  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 $249,569  and product  support  totaled
$76,288.  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 $265,519,  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 $211,000  and  represents  the
amortization  of Vianet's  SPS  Technology  License  ($45,000)  over five years,
depreciation on Develcon's  property and equipment ($48,500) and amortization of
intangibles  on  the  acquisition  of  Develcon  over  a  period  of  six  years
($117,500).

         THREE MONTH PERIOD ENDED JUNE 30, 1999

SALES

     Vianet had net sales of $892,477  for the six months  ended June 30,  1999.
Vianet acquired  Develcon on May 17, 1999 and,  accordingly,  the sales recorded
are only for the six week  period to June 30,  1999.  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 $71,122.

COST OF GOODS SOLD AND GROSS PROFIT

     Vianet's  cost of sales was $460,720  representing  margins of 48% which is
below historical margins for Develcon's products due to difficulties in shipping
economic  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 $408,109.  This amount was
comprised primarily of legal,  professional fees and investor relations expenses
of Vianet, which totaled $270,858.


<PAGE>
SELLING AND MARKETING/PRODUCT SUPPORT

     Selling and  marketing  amounted to $249,569  and product  support  totaled
$76,288.  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 $265,519,  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 $188,500  and  represents  the
amortization  of Vianet's  SPS  Technology  License  ($22,500)  over five years,
depreciation on Develcon's  property and equipment ($48,500) and amortization of
intangibles  on  the  acquisition  of  Develcon  over  a  period  of  six  years
($117,500).

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
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 June 30,1999  Vianet has  completed the following  financings
and/or debt restructurings:

     On July 17, 1999 Vianet borrowed $285,000 from certain private investors.

     On July 30, 1999 Vianet  issued  100,000  common  shares to certain  non-US
investors for cash of $550,000

     In September 1999,  certain of Develcon's  creditors  agreed to exchange an
aggregate  of  $613,365 of  accounts  payable  for a total of 215,051  shares of
Vianet's common stock.

     In addition to the  foregoing,  in august 1999,  Vianet amended its banking
arrangements   with  the  royal  bank  of  canada.   In   connection   with  the
implementation of such new facilities, Vianet issued 120,000 shares and warrants
to purchase an additional  150,000  shares,  exercisable at $6.00 per share,  to

<PAGE>
RBC. The current banking  facilities  provided by RBC consist of a CDN$1,500,000
term loan. As of September 1, 1999, Vianet has CDN$1,500,000  outstanding on the
term loan facility. 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 Vianet's RBC facilities is calculated at 8.5% per year.  Furthermore,
all  indebtedness  of Vianet under the RBC  facilities  is secured by Develcon's
assets and a corporate guarantee executed by Vianet.

     Vianet's working capital deficit at June 30, 1999 was ($3,079,714).

     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.

     Except for a private placement offering and the existing CDN$1,500,000 term
loan  facility  with  Royal  Bank  of  Canada,   Vianet  has  no  other  current
arrangements in place with respect to financing. Vianet is currently seeking new
financing  arrangements  to  provide  the  necessary  capital  to fully fund our
operations  and pursue our business  strategy.  There can be no assurances  that
additional financing will be available on acceptable terms, if at all. Moreover,
no assurance can be given that the intended  offering  will be achieved.  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.

     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.

YEAR 2000

     Many computer  systems used today may be unable to interpret data correctly
after December 31, 1999, because they allow only two digits to indicate the year
in a date.  Vianet  has been  engaged  in  assessing  this Year 2000 issue as it
relates to its business.  This review covers both Vianet's own operating systems
and the systems of Vianet's third party vendors and manufacturers. This project,
along  with  developing  and  implementing  solutions  to the Year 2000 issue is
continuing.   Management   currently   anticipates  that  the  project  will  be
substantially  completed  before the end of calendar year 1998.  While Vianet is
currently unable to quantify the costs associated with implementing solutions to
the Year  2000  issue,  it does not  believe  that  such  costs  will not have a
material impact on Vianet's financial results or position.


<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.


<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.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

         Exhibit 27:                 Financial Data Schedule

         (b)  Reports on Form 8-K

                  On October 28, 1999, the Company filed a report on Form 8-K.


<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.

DATE: NOVEMBER 15, 1999                                BY: /S/VINCENT SANTIVASCI
                                                       -------------------------
                                                              Vincent Santivasci
                                                         Chief Financial Officer