FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                         For Quarter Ended June 30, 2001

                                       OR

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

                For the transition period from _______ to _______

                      Commission file number: 33-131110-NY

                               4net Software, Inc.
              -----------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

           DELAWARE                                   22-1895668
 ------------------------------                   ------------------
 State or other jurisdiction of                    (I.R.S. Employer
 incorporation or organization                    Identification No.)

            10 South Street, Suite 202, Ridgefield, Connecticut 06877
           ----------------------------------------------------------
               (Address of Principal Executive Office) (Zip Code)

                                 (203) 894-9755
               --------------------------------------------------
               (Registrant's telephone number including area code)


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

As of August 10, 2001, there were issued and outstanding 8,481,018 shares of the
registrant's common stock, par value $.00001 per share.

Transitional Small Business Disclosure Format (check one):
Yes      No  X
   ---      ---

<PAGE>

                               4net Software, Inc

                                TABLE OF CONTENTS



                                                                        Page No.
                                                                        --------
PART I - FINANCIAL INFORMATION............................................  3

Item 1.  Financial Statements.............................................  3

Condensed Balance Sheet...................................................  3

Condensed Statements of Operations........................................  4

Condensed Statements of Cash Flows .......................................  5

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

Item 2.  Management's Discussion And
           Plan Of Operations............................................. 10

PART II - OTHER INFORMATION............................................... 14

Item 1.  Legal Proceedings................................................ 14

Item 2.  Changes in Securities............................................ 14

Item 5.  Other Information................................................ 15

Item 6.  Exhibits & Reports on Form 8-K................................... 16

SIGNATURES................................................................ 17






                                        2
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.        Financial Statements


4net Software, Inc.
CONDENSED BALANCE SHEET
JUNE 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                         <C>
ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                                $  251,245
   Accounts receivable, net                                                     18,080
   Prepaid expenses                                                              7,500
---------------------------------------------------------------------------------------
     Total current assets                                                      276,825

PROPERTY AND EQUIPMENT, NET                                                     41,893

GOODWILL, NET                                                                  723,678

OTHER ASSETS                                                                     3,834
---------------------------------------------------------------------------------------

     TOTAL ASSETS                                                           $1,046,230
---------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------------------------------------------------------

CURRENT LIABILITIES
   Accounts payable and accrued expenses                                    $   18,760
   Deposits on preferred stock offering                                        120,000
   Current portion of long-term debt                                            24,062
---------------------------------------------------------------------------------------
     Total current liabilities                                                 162,822

LONG-TERM DEBT                                                                  66,438
---------------------------------------------------------------------------------------

     TOTAL LIABILITIES                                                         229,260
---------------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY
   Common  stock,  $.00001  par value;  100,000,000  shares  authorized;
     8,046,018 shares issued and outstanding                                        80
   Capital in excess of par value                                            2,746,053
   Accumulated deficit                                                      (1,929,163)
---------------------------------------------------------------------------------------
     Total stockholders' equity                                                816,970
---------------------------------------------------------------------------------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $1,046,230
---------------------------------------------------------------------------------------
</TABLE>

                             See accompanying notes.
                                       3
<PAGE>

4net Software, Inc.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                       Three Months Ended June 30, Nine Months Ended June 30,
                                       --------------------------- --------------------------------------
                                           2001          2000          2001          2000
---------------------------------------------------------------------------------------------------------
<S>                                    <C>           <C>           <C>           <C>
REVENUE                                $   74,483    $   28,813    $  222,621    $   28,813
---------------------------------------------------------------------------------------------------------

EXPENSES
    Advertising                             2,298        31,135        30,800        31,135
    Payroll                                39,484        32,975       165,473        32,975
    Professional fees                      42,236        59,815       110,506        88,286
    General and administrative             95,150        53,863       234,188        56,313
---------------------------------------------------------------------------------------------------------
       Total expenses                     179,168       177,788       540,967       208,709
---------------------------------------------------------------------------------------------------------

LOSS FROM OPERATIONS                     (104,685)     (148,975)     (318,346)     (179,896)
---------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE)
    Bad debt recovery                          --        40,500        97,450        40,500
    Other income (expense), net              (765)         (483)        2,223           105
---------------------------------------------------------------------------------------------------------
       Total other income (expense)          (765)       40,017        99,673        40,605
---------------------------------------------------------------------------------------------------------

NET LOSS                                ($105,450)    ($108,958)    ($218,673)    ($139,291)
---------------------------------------------------------------------------------------------------------

WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING                    8,046,018     5,865,253     8,032,350     5,706,796
---------------------------------------------------------------------------------------------------------

NET LOSS PER COMMON SHARE
    Basic and diluted                      ($0.01)       ($0.02)       ($0.03)       ($0.02)
---------------------------------------------------------------------------------------------------------
</TABLE>

                             See accompanying notes.
                                       4
<PAGE>

4net Software, Inc.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                      2001          2000
-----------------------------------------------------------------------------------------------------------
<S>                                                                                <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                                       ($218,673)    ($139,291)
    Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                  70,184        16,195
       Common stock issued for professional services                                   6,563        13,688
       Options issued for professional services                                        6,000         6,050
       Changes in operating assets and liabilities:
          Accounts receivable                                                         (2,867)       (1,114)
          Prepaid expenses                                                            (7,500)           --
          Other assets                                                                (3,834)           --
          Accounts payable and accrued expenses                                      (92,367)       22,436
-----------------------------------------------------------------------------------------------------------
              Total adjustments                                                      (23,821)       57,255
-----------------------------------------------------------------------------------------------------------
                Net cash used in operating activities                               (242,494)      (82,036)
-----------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                                               (3,300)           --
    Cash consideration paid for business acquired                                         --       (20,000)
    Cash balance of business acquired                                                     --        11,877
    Proceeds from loan receivable                                                         --         1,000
-----------------------------------------------------------------------------------------------------------
                Net cash used in operating activities                                 (3,300)       (7,123)
-----------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments of long-term debt                                             (16,867)      (14,549)
    Proceeds from issuance of common stock                                                --       500,000
    Deposits on preferred stock offering                                             120,000            --
-----------------------------------------------------------------------------------------------------------
                Net cash provided by financing activities                            103,133       485,451
-----------------------------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                (142,661)      396,292

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                      393,906        47,677
-----------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS - END OF PERIOD                                          $ 251,245     $ 443,969
-----------------------------------------------------------------------------------------------------------
</TABLE>

                             See accompanying notes.
                                       5
<PAGE>

4net Software, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1.        ORGANIZATION AND BASIS OF PRESENTATION
--------------------------------------------------------------------------------
               Consolidation

               In February 2001, 4net Software, Inc. was merged into
               4networld.com, Inc. and the corporation changed its name from
               4networld.com, Inc. to 4net Software, Inc.

               The condensed financial statements for all periods presented
               include the accounts of 4networld.com, Inc. and 4net Software,
               Inc. All significant intercompany balances and transactions have
               been eliminated in consolidation.

               Basis of Presentation

               The accompanying unaudited condensed financial statements have
               been prepared in accordance with accounting principles generally
               accepted in the United States for interim financial information
               and with the instructions to Form 10-QSB. Accordingly, they do
               not include all of the information and footnotes required by
               accounting principles generally accepted in the United States for
               complete financial statements. In the opinion of management, all
               adjustments considered necessary for a fair presentation have
               been included and such adjustments are of a normal recurring
               nature. Operating results for the nine month period ended June
               30, 2001 are not necessarily indicative of the results that may
               be expected for the year ending September 30, 2001.

               The audited financial statements for the year ended September 30,
               2000, which are included in the Company's Annual Report on Form
               10-KSB, should be read in conjunction with these condensed
               financial statements.

--------------------------------------------------------------------------------
NOTE 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------

               Use of Estimates

               The preparation of financial statements in conformity with
               accounting principles generally accepted in the United States
               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.


                                       6
<PAGE>

--------------------------------------------------------------------------------
NOTE 2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
--------------------------------------------------------------------------------

               Net Income (Loss) Per Share

               The Company applies Statement of Financial Accounting Standards
               No. 128, "Earnings Per Share" (FAS 128) which requires dual
               presentation of net income per share: basic and diluted. Basic
               earnings (loss) per share is computed using the weighted average
               number of common shares outstanding during the period. Diluted
               earnings (loss) per share is computed using the weighted average
               number of common shares outstanding during the period adjusted
               for incremental shares attributed to outstanding options to
               purchase shares of common stock. Outstanding stock equivalents
               were not considered in the calculation for periods in which the
               Company sustained a loss as their effect would have been
               anti-dilutive.

               New Accounting Pronouncements

               In June 2001, the Financial Accounting Standards Board issued
               Statement of Financial Accounting Standards No. 141, "Business
               Combinations," and No. 142, "Goodwill and Other Intangible
               Assets," effective for fiscal years beginning after December 15,
               2001. Under the new rules, goodwill and intangible assets deemed
               to have indefinite lives will no longer be amortized but will be
               subject to annual impairment tests in accordance with the
               Statements. Other intangible assets will continue to be amortized
               over their useful lives.

               The Company will apply the new rules on accounting for goodwill
               and other intangible assets beginning in the first quarter of
               2002. Also during 2002, it will perform the required impairment
               tests of goodwill and indefinite life intangible assets as of
               January 1, 2002. The Company has not yet determined what the
               effects of these Statements will be on its financial position and
               results of operations.

               Reclassification

               Certain amounts in the financial statements for the three and
               nine month periods ended June 30, 2000 have been reclassified to
               conform with the June 30, 2001 financial statement presentation.

--------------------------------------------------------------------------------
NOTE 3.        BAD DEBT RECOVERY
--------------------------------------------------------------------------------

               During the year ended September 30, 1999, the Company made two
               advances, evidenced by a loan receivable, totaling $170,000 to
               Abtech Industries, Inc. ("Abtech"), an intended merger target.
               The merger agreement was cancelled and Abtech defaulted under the
               loan agreement. Due to the Company's inability to estimate the
               amount ultimately recoverable from Abtech, the Company reduced
               the carrying value of the receivable to $1,000 as of September
               30, 1999.

               Pursuant to a final agreement in September 2000, the Company and
               Abtech agreed to a full settlement aggregating $170,000. As of
               June 30, 2001, the Company had received $170,000 in principal
               payments, $19,450 in interest payments and $15,000 in fees to
               extend payment dates.

                                       7
<PAGE>

--------------------------------------------------------------------------------
NOTE 4.        MAJOR CUSTOMERS
--------------------------------------------------------------------------------

               Revenue from individual unaffiliated customers in excess of 10%
               of revenue during the nine month period ended June 30, 2001, was
               as follows:

                                                     Amount      % of Revenue
                  -------------------------------------------------------------

                           Customer A             $     78,345         35%
                           Customer B             $     28,300         13%

                  Individual accounts receivable balances at June 30, 2001, in
                  excess of 10% of total accounts receivable were as follows:

                                                                  % of Accounts
                                                     Amount         Receivable
                  -------------------------------------------------------------

                           Customer C             $      10,000           46%
                           Customer D             $       4,955           23%

--------------------------------------------------------------------------------
NOTE 5.        RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

               Office Rent

               In February 2001, the Company entered into a three-year sub-lease
               for office space with an entity controlled by the President of
               the Company. The lease provides for monthly rent of $2,000.

               Management Consulting Agreement

               Effective February 1, 2001, the Company entered into a one-year
               management consulting agreement with an entity controlled by the
               President of the Company (Catalyst) which provides for, among
               other things, the Company to pay the consultant $10,000 per month
               for management consulting services. Effective June 30, 2001, the
               Company and Catalyst agreed to terminate the agreement.

               Mergers and Acquisitions Advisory Agreement

               In March 2001, the Company entered into a three-year mergers and
               acquisitions advisory agreement with Catalyst. The agreement
               provides for, among other things, the Company to pay Catalyst a
               fee in the event that the Company completes a merger, business
               combination or similar transaction as a result of an introduction
               made by Catalyst. The agreement is cancellable by either party
               with 30 days written notice.

                                       8
<PAGE>

--------------------------------------------------------------------------------
NOTE 6.        OTHER MATTERS
--------------------------------------------------------------------------------

               Preferred Stock

               In April 2001, the Company designated 550,000 shares of preferred
               stock as Series A Convertible Preferred Stock (Preferred Stock).
               The Preferred Stock provides for, among other things, cumulative
               dividends at 8% per annum, certain liquidation rights and no
               voting rights, and is convertible to 5 shares of common stock at
               the option of the holder or mandatorily converted upon the
               occurrence of certain events, as defined.

               Preferred Stock Private Placement Offering

               In April 2001, the Company entered into a Placement Agent
               Agreement with Catalyst whereby, among other things, Catalyst was
               to act as placement agent in an attempt to raise up to $1,600,000
               through an offer to sell up to 400,000 shares of Preferred Stock.
               Through June 2001, the Company had received deposits from
               investors for $120,000. In July 2001, the Company determined to
               withdraw and terminate the private placement. Accordingly, no
               preferred stock was issued by the Company and all subscriptions
               were returned to the investors or applied to the common stock
               private placement offering (Note 7).

--------------------------------------------------------------------------------
NOTE 7.        SUBSEQUENT EVENTS
--------------------------------------------------------------------------------

               Common Stock Private Placement Offering

               In July 2001, the Company entered into a Placement Agent
               Agreement with Catalyst whereby, among other things, Catalyst
               will act as a placement agent for the Company in connection with
               a private placement offering of its common stock at a price of
               $0.50 per share. The placement agent will receive a selling
               commission of 10% of the gross offering proceeds, a
               non-accountable expense allowance of 3% of the gross offering
               proceeds and warrants to purchase the number of shares of common
               stock equal to 10% of the number of shares of common stock sold
               in the offering at a price of $0.50 per share. Through August 13,
               2001, the Company has accepted $205,000 pursuant to the offering.

               Letter of Intent

               In July 2001, the Company entered into a letter of intent to
               acquire a software company in Texas.


                                       9
<PAGE>

Item 2. Management's Discussion and Analysis and Plan Of Operations

     The following discussion and analysis provides information which management
of 4net Software, Inc. (the "Company" or "4net Software") believes to be
relevant to an assessment and understanding of the Company's results of
operations and financial condition. This discussion should be read together with
the Company's financial statements and the notes to financial statements, which
are included in this report as well as the Company's Annual Report on Form
10-KSB for the year ended September 30, 2000, which is incorporated herein by
reference.


Forward Looking Statements Disclosure
-------------------------------------

     This report on Form 10-QSB contains, in addition to historical information,
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can
identify these forward-looking statements when you see words such as "expect,"
"anticipate," "estimate," "may," "plans," "believe," and other similar
expressions. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Actual results could differ materially from those projected in the
forward-looking statements. Factors that could cause such a difference include,
but are not limited to, those discussed in the section entitled "Factors
Affecting Operating Results and Market Price of Stock," contained in the
Company's Annual Report on Form 10-KSB for the year ended September 30, 2000.
Readers are cautioned not to place undo reliance on these forward-looking
statements, which speak only as of the date hereof. We undertake no obligation
to update any forward-looking statements.


Background
----------

     4net Software was incorporated in 1986 and ceased all operations in 1991.
Between 1991 and March 2000, the Company had no operations, except for necessary
administrative matters, and was not engaged in operating a business. During that
period, the Company utilized its resources to remain in compliance with the
periodic reporting requirements of the federal securities laws while management
attempted to arrange for a merger, acquisition or other transaction by and
between the Company and a viable operating entity.

     In March 2000, the Company adopted a new plan of operation. The Company's
plan of operation is to make acquisitions and strategic investments in companies
that have developed unique niche software and/or Internet related products and
services. 4net Software's objective is to acquire profitable software and/or
Internet solution companies that enable businesses to streamline key business
processes and increase operating efficiency. Following an acquisition the
Company plans to develop, manage and operate the acquired business through,
among other things, providing management and financial support, as well as
assisting the acquired businesses in marketing, sales, and accounting functions.

     Pursuant to its business plan, on April 28, 2000, the Company acquired all
of the issued and outstanding capital stock of DelOtto Systems, Inc.,
Pennsylvania corporation ("DelOtto Systems"). DelOtto Systems was engaged in the
business of developing Web-based software applications focusing on content
management and information exchange and designing business-critical Web sites.


                                       10
<PAGE>

     Following the acquisition of DelOtto Systems, the Company changed the name
of DelOtto Systems to 4net Software, Inc. and operated it as a wholly owned
subsidiary. On February 20, 2001, the Board of Directors of the Company
authorized and approved the upstream merger of 4net Software, Inc., the
Company's wholly owned subsidiary, with and into the Company pursuant to Section
253 of the General Corporation Law of the State of Delaware (the "Upstream
Merger"). In connection with the Upstream Merger the Company also changed its
name to 4net Software, Inc. The Upstream Merger and name change became effective
on March 2, 2001, when the Company filed a Certificate of Ownership and Merger
with the Delaware Secretary of State.

     Currently, the Company is engaged in managing and developing the content
management and Web site design business, and searching for and evaluating
acquisition candidates that have developed proven software solutions or unique
proprietary technology intended to help businesses increase operating
efficiency. The Company expects to expand its offerings of products and services
and increase its client base through its acquisition strategy. Management
believes that the successful implementation of the Company's acquisition
strategy will allow 4net Software to increase revenues and earnings and achieve
profitability. However, there can be no assurances that 4net Software will
successfully complete any additional acquisitions or that 4net Software will
achieve profitability.


The Content Management and Web-Design Business
----------------------------------------------

     4net Software is a full service provider of content management and content
syndication software and is a developer of business-critical Web sites. 4net
Software develops Web-based software applications, focusing on content
management and information exchange. 4net Software's flagship product,
4netManager(TM) bridges the gap between content creation and content delivery by
giving non-technical users the ability to update and maintain their own Web
site. This functionality reduces the cost of Web site maintenance, and improves
the process of sustaining a dynamic online presence.

     To date, 4net Software has operated primarily as a Web site development
company with a proprietary content management application. 4net Software markets
its services along with its proprietary technology through relationships and
customer referrals. 4net Software is in the process of pursuing pricing and
marketing strategies to increase the sales of 4netManager(TM) to companies that
have a Web site, but do not have a content management system. 4net Software is
also in the process of enhancing its proprietary content management solution
into a robust enterprise application to be marketed to large businesses in
various industries. Additionally, 4net Software is aggressively pursuing
strategic business relationships with entities that will permit 4net Software to
utilize their existing distribution channels. The Company is interested in
seeking additional capital to fund a comprehensive sales and marketing effort to
promote the products and services of 4net Software. However, there can be no
assurances that 4net Software will be able secure additional capital to fund a
comprehensive sales and marketing effort to promote the products and services of
4net Software.

     4net Software plans to enhance the effectiveness of its client's Web sites
by establishing key relationships with traditional media companies to develop
and promote local Web-based business directories. Management believes that
traditional media such as television and radio are effective ways to gain
exposure for our clients and to direct customers to their Web sites.




                                       11
<PAGE>

     Recently, 4net Software entered into a co-marketing relationship with
KYW-TV3 (a CBS owned and operated television station and a Viacom, Inc.
subsidiary) to develop, produce, and promote a Web-based business directory for
the Philadelphia, Pennsylvania market place. KYW-TV3 has committed twenty
segments of on-air promotion per week for the business directory and will
conduct the direct sales effort to sign up local businesses. The business
directory promotions will allow local businesses to tap into traditional on-air
advertising and direct traffic to their Web sites. Pursuant to the agreement
with KYW-TV3, 4net Software will be paid a percentage of all revenues generated
from sales of business directory listings and advertising space. To date, the
Company has not derived any revenues from its relationship with KYW-TV3.


4net Software's Acquisition Strategy
------------------------------------

     As part of the Company's ongoing business strategy, 4net Software is
engaged in identifying, investigating and, if investigation warrants, acquiring
software companies within targeted industries, which have proven technology and
report revenues and earnings. 4net Software's acquisition strategy is focused on
helping businesses manage the Internet and increase operating efficiency by
streamlining key business processes with proprietary software. 4net Software is
pursuing a strategy of growth by acquiring businesses and assets that complement
our existing operations. The Company utilizes several criteria to evaluate
prospective acquisitions including whether the business to be acquired (1)
broadens the scope of the services or products we offer or the geographic areas
we serve, (2) expands our client base or distribution network, (3) increases
blended margins, (4) is accretive to earnings, (5) offers the opportunity to
achieve and/or enhance profitability, and (6) improves the efficiency of our
operations.

     In the second quarter of the current fiscal year, the Company identified
for acquisition two software companies; Target Company 1 and Target Company 2
(collectively referred to as the "Acquisitions"), that management believed would
provide synergies to the Company and further its growth strategy. The Company
entered in to a Letter of Intent in connection with the Acquisitions. Due to
significant decreases in the revenues and earnings of Target Company 1 and
Target Company 2 during the months of March, April and May of 2001, management
terminated the letter of intent and attempted to renegotiate the terms of the
Acquisitions. The Company has not been able to negotiate an acceptable
transaction with Target Company 1 and Target Company 2 and the Company is no
longer in active negotiations concerning the Acquisitions.


Subsequent Event
----------------

     On or about July 5, 2001, the Company entered into a letter of intent to
acquire a software company based in Texas (the "Texas Acquisition"). Management
believes that the successful completion of the Texas Acquisition will broaden
the Company's services and products and the geographic areas we serve, expand
our client base and distribution network and enable the Company to achieve
profitability in the fiscal year ending September 30, 2002. The Company is
currently engaged in conducting a due diligence review of the Texas Acquisition
and the Company anticipates on closing the Texas Acquisition in the first
quarter of fiscal year ending September 30, 2002.


                                       12

<PAGE>

Results of Operations
---------------------

     For the three-month period ended June 30, 2001, the Company had revenues of
$74,483 compared to revenues of $28,813 for the same period a year earlier,
representing an increase of $45,670. The increase in revenue for the three-month
period ended June 30, 2001 is attributable to the income earned by 4net Software
through the content management and Web design business.

     For the nine-month period ended June 30, 2001, the Company had revenue of
$222,621 compared to revenues of $28,813 for the same period a year earlier,
representing an increase of $193,808. The increase in revenue for the nine-month
period ended June 30, 2001 is attributable to the income earned by 4net Software
through the content management and Web design business.

     Expenses for the three-month period ended June 30, 2001 were $179,168
compared to expenses of $177,788 for the same period a year earlier,
representing an increase of $1,380. The increase in expenses for the
three-months ended June 30, 2001 was due primarily to payroll, increased general
and administrative expenses associated with the operation of 4net Software's
content management and Web design business, as well as Company's efforts to
locate suitable merger targets and negotiate acquisitions, and was offset by a
decrease in professional expenses and advertising.

     Expenses for the nine-month period ended June 30, 2001 were $540,967
compared to expenses of $208,709 for the same period a year earlier,
representing an increase of $332,258. The increase in expenses for the
nine-months ended June 30, 2001 was due primarily to payroll, increased
professional fees and administrative expenses associated with the operation of
4net Software's content management and Web design business, as well as Company's
efforts to locate suitable merger targets and negotiate acquisitions.

     For the three-month period ended June 30, 2001, the Company had operating
losses of $104,685 compared to operating losses of $148,975 for the same period
a year earlier, representing an decrease of $44,290. The decrease in losses
incurred by the Company in the three-month period ended June 30, 2001 were due
primarily to additional revenues generated from the operation of 4net Software's
content management and Web design business.

     For the nine-month period ended June 30, 2001, the Company had operating
losses of $318,346 compared to operating losses of $179,896 for the same period
a year earlier, representing an increase of $138,450. The increase in losses
incurred by the Company in the nine-month period ended June 30, 2001 were due
primarily to increased expenses associated with the operation of 4net Software's
content management and Web design business as well as the Company's efforts to
locate suitable merger targets and negotiate acquisitions, in accordance with
the Company's business plan.




                                       13
<PAGE>

Liquidity and Capital Resources
-------------------------------

     During the three-month period ended June 30, 2001, the Company satisfied
its working capital needs from cash on hand at the beginning of the period,
revenues generated through the operation of 4net Software's content management
and Web design business, and cash generated from interest income during the
year. As of June 30, 2001, the Company had cash on hand in the amount of
$251,245. Management anticipates that the Company will need additional funds in
order to further develop and grow 4net Software's content management and Web
design business and to effectuate 4net Software' acquisition strategy, including
but not limited the completion of the Texas Acquisition. There can be no
assurance that the Company will be able to obtain such additional funds, when
needed. Even if the Company is able to obtain additional funds there is no
assurance that the Company will be able to successfully develop and grow 4net
Software's content management and Web design business or to complete any
additional acquisitions.



                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     On or about May 31, 2001, the Company commenced a lawsuit to enforce a
covenant not to compete against a former employee that was terminated in
November 2000. The action is entitled 4net Software, Inc. f/k/a 4networld.com,
Inc. v. Andrew Patros and is pending in the New York State Supreme Court, New
York County and has been assigned Index No. 01/602729. The Company does not
believe that this action will have a material adverse affect on the Company.

     The Company is not a party to any other material legal proceedings.


Item 2. Changes in Securities

     On April 9, 2001, the Board of Directors of the Company designated 550,000
shares of the 5,000,000 shares of preferred stock authorized for issuance as
Series A Convertible Preferred Stock (the "Preferred Shares"). The Company
attempted to complete a private offering of the Preferred Shares to raise up to
$2,000,000 to, among other things, finance the acquisition of Target Company 1
and Target Company 2. Due to, among other things, the termination of the letter
of intent with Target Company 1 and Target Company 2, the Company determined to
withdraw and terminate the private placement of the Preferred Shares.
Accordingly, no Preferred Shares have been issued by the Company.


Subsequent Event
----------------

     On August 3, 2001, the Company authorized the issuance of 14,000 shares of
common stock to James A. Prestiano, Esq. as consideration for legal services
rendered to the Company. The shares issued to Mr. Prestiano are restricted
securities and were issued pursuant to Section 4 (2) of the Securities Act of
1933.


                                       14
<PAGE>

Item 5. Other Information

     The Company entered into a management consulting agreement, effective
February 1, 2001 with Catalyst Financial LLC ("Catalyst Financial"), a limited
liability company, owned and controlled by Steven N. Bronson. Catalyst Financial
is a full service licensed securities broker-dealer, investment banking and
consulting firm. Pursuant to the management agreement, Catalyst Financial
provided management consulting services, strategic business planning and certain
other management advisory services to the Company in exchange for a monthly fee
of ten thousand dollars ($10,000). Effective June 30, 2001, the Company and
Catalyst Financial agreed to terminate the Management Consulting Agreement.

     Pursuant to the Mergers and Acquisitions Advisory Agreement, dated as of
March 27, 2001, between Catalyst Financial and 4net Software, Catalyst Financial
is entitled to receive a fee in the event the Company successfully completes
that Texas Acquisition based upon the total consideration of the Texas
Acquisition, calculated as follows: 5% of the consideration from $1 up to
$1,000,000; 4% of the consideration in excess of $1,000,000 and up to
$2,000,000; plus 3% of the consideration in excess of $2,000,000 and up to
$3,000,000, plus; 2% of the consideration in excess of $3,000,000 and up to
$4,000,000, plus; 1% of the consideration in excess of $5,000,000.


Subsequent Events
-----------------

     Effective July 1, 2001, the Company entered into a new employment agreement
with Steven N. Bronson, the President of the Company, replacing Mr. Bronson's
Employment Agreement, dated as of August 1, 2000. Pursuant to the July 1, 2001
Employment Agreement, Mr. Bronson is entitled to receive a salary of $60,000 per
annum, payable in equal monthly installments of $5,000. Additionally, the
employment agreement provides that Mr. Bronson is eligible to receive bonus
compensation and stock option grants under the Company's 2000 Stock Incentive
Plan, at the discretion of the Board of Directors. A copy of the Employment
Agreement, dated as of July 1, 2001 by and between the Company and Steven N.
Bronson is attached hereto as an exhibit and is incorporated herein by
reference.

     Pursuant to a Placement Agent Agreement, dated as of July 2, 2001, between
Catalyst Financial and 4net Software, Catalyst Financial has agreed to act as
the Placement Agent for some or all of the Common Stock, $.00001 par value (the
"Shares") offered by the Company in a private offering, pursuant to Section 4(2)
of the Securities Act of 1933 and Rule 506 of Regulation D, promulgated
thereunder. Pursuant to the terms of the Placement Agent Agreement, the Company
has agreed to pay Catalyst Financial a selling commission equal to 10% of the
gross proceeds of this Offering. The Company has also agreed to pay Catalyst
Financial a non-accountable expense allowance of 3% of the gross proceeds from
the sale of all Shares sold in the Offering. To the extent that the expenses of
Catalyst Financial are less than the non-accountable expense allowance, the
excess shall be paid to Catalyst Financial. Additionally, the Company shall
issue to Catalyst Financial warrants to purchase an amount of Shares equal to
ten percent (10%) of the total number of Shares sold in the Offering at a
purchase price of $.50 per share (the "Placement Agent Warrants"). The Placement
Agent Warrants shall be exercisable for a period of five years commencing on the
date of completion of the Offering. A copy of the Placement Agent Agreement,
dated as of July 2, 2001, between Catalyst Financial LLC and 4net Software, Inc.
is attached hereto as an exhibit and is incorporated herein by reference.



                                       15
<PAGE>

Item 6. Exhibits And Reports On Form 8-K

     a. Exhibits

     The following exhibits are hereby filed as part of this Quarterly Report on
Form 10-QSB or incorporated herein by reference.

Exhibit
Number         Description of Document
-------------------------------------------------------------------------------
2.1#           Stock Purchase Agreement by and between Michael Park, Andrew
               Patros and Robert Park and MedTech Diagnostics, Inc. dated April
               24, 2000. (Incorporated by reference to Exhibit 2.1 to the
               Current Report on Form 8-K filed by the Company on May 3, 2000.)

3.1#           Certificate of Incorporation of the Company. (Incorporated by
               reference to Exhibit 3.1 to the Annual Report on Form 10-KSB
               filed by the Company on January 20, 2000.)

3.2#           By-Laws of the Company. (Incorporated by reference to Exhibit
               3.2 to the Annual Report on Form 10-KSB filed by the Company on
               January 20, 2000.)

3.3#           Certificate of Amendment to the Certificate of Incorporation of
               the Company. (Incorporated by reference to Exhibit 3.3 to the
               Quarterly Report on Form 10-QSB filed by the Company on August
               14, 2000.)

3.4#           Amended and Restated By-Laws of the Company. (Incorporated by
               reference to Exhibit 3.4 to the Quarterly Report on Form 10-QSB
               filed by the Company on August 14, 2000.)

3.5#           Certificate of Merger between the Company and its wholly owned
               subsidiary 4net Software, Inc. (Incorporated by reference to
               Exhibit 3.5 to the Quarterly Report on Form 10-QSB filed by the
               Company on March 31, 2001.)

3.6#           Amended Certificate of Designation of the Series A Convertible
               Preferred Stock of 4net Software, Inc. (Incorporated by reference
               to Exhibit 3.6 to the Quarterly Report on Form 10-QSB filed by
               the Company on March 31, 2001.)

10.3#@         Employment Agreement dated as of August 1, 2000 by and between
               the Company and Steven N. Bronson. (Incorporated by reference to
               Exhibit 10.3 to the Quarterly Report on Form 10-QSB filed by the
               Company on August 14, 2000.)

10.4#@         Employment Agreement dated as of August 1, 2000 by and between
               the Company and Robert Park. (Incorporated by reference to
               Exhibit 10.4 to the Quarterly Report on Form 10-QSB filed by the
               Company on August 14, 2000.)

10.5#          Sublease dated as of February 1, 2001 by and between the Company
               and Catalyst Operations, Inc. (Incorporated by reference to
               Exhibit 10.5 to the Quarterly Report on Form 10-QSB filed by the
               Company on May 21, 2001.)

10.6#          Management Consulting Agreement, dated as of February 1, 2001 by
               and between the Company and Catalyst Financial LLC. (Incorporated
               by reference to Exhibit 10.6 to the Quarterly Report on Form
               10-QSB filed by the Company on May 21, 2001.)



                                       16
<PAGE>

10.7#          Mergers and Acquisitions Advisory Agreement, dated as of March
               27, 2001 by and between the Company and Catalyst Financial LLC.
               (Incorporated by reference to Exhibit 10.7 to the Quarterly
               Report on Form 10-QSB filed by the Company on May 21, 2001.)

10.8#          Placement Agent Agreement, dated as of April 30, 2001, by and
               between the Company and Catalyst Financial LLC. (Incorporated by
               reference to Exhibit 10.8 to the Quarterly Report on Form 10-QSB
               filed by the Company on May 21, 2001.)

10.9*          Placement Agent Agreement, dated as of July 2, 2001, by and
               between the Company and Catalyst Financial LLC.

10.10*@        Employment Agreement, dated as of July 1, 2001 by and between
               the Company and Steven N. Bronson.
--------------------------------
*    Filed herewith
#    Incorporated herein by reference
@    Represents a management contract


     b. Reports on Form 8-K.

     None

                                   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.

August 13, 2001
                                   4net Software, Inc.

                                   By: /s/ Steven N. Bronson
                                       -----------------------------------
                                       Steven N. Bronson, President
                                       Principle Executive Officer
                                       as Registrant's duly authorized officer



                                       17
<PAGE>

                                  EXHIBIT INDEX


Exhibit
Number         Description of Document
--------------------------------------------------------------------------------
10.9           Placement Agent Agreement, dated as of July 2, 2001, by and
               between the Company and Catalyst Financial LLC.

10.10          Employment Agreement, dated as of July 1, 2001 by and between
               the Company and Steven N. Bronson.








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