U.S. Securities and Exchange Commission

                             Washington, D.C. 20594

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934
     For the fiscal year ended: DECEMBER 31, 2002

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934
     For the transition period from: _____________ to  ______________


                         Commission file number 0-27145
                                                -------

                           1st Net Technologies, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Colorado                                      33-0756798
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
  incorporation or organization)


    1869 W. Littleton Boulevard                                          80120
------------------------------------------                            ----------
(Address of principal executive offices)                              (Zip Code)


                    Issuer's telephone number: (303) 738-8994
                                               --------------

Securities registered under Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act:

                6,395,357 shares of Common Stock, $.001 par value
                -------------------------------------------------
                               Title of each class

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 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
                                                         ---     ---
<PAGE>


Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]

The issuer had no revenue for its most recent fiscal year.

The  aggregate  market  value of the  5,695,357  shares of voting  stock held by
non-affiliates  of the Company  outstanding  at March 31,  2003,  calculated  by
taking the last sales price of the  Company's  common  stock ($.008 as quoted on
March 31, 2003) was $45,562.86. The number of shares outstanding of the issuer's
common equity as of March 31, 2003 was 6,395,357.

Note:  If  determining  whether  a  person  is  an  affiliate  will  involve  an
unreasonable  effort and expense,  the issuer may calculate the aggregate market
value of the common  equity held by  non-affiliates  on the basis of  reasonable
assumptions, if the assumptions are stated.

                         (ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDING DURING THE PAST FIVE YEARS)

Check  whether the issuer has filed all  documents  and  reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.
                               Yes _____ No _____

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable  date.  6,395,357 common shares issued and
                                              outstanding as of March 31, 2003

Transitional Small Business Disclosure Format (check one):   Yes          No  X
                                                                ---          ---
                                        2
<PAGE>


TABLE OF CONTENTS


PART I

  ITEM 1.  Description of Business                                          4
  ITEM 2.  Description of Property                                          7
  ITEM 3.  Legal Proceedings                                                7
  ITEM 4.  Submission of Matters to a Vote of Security Holders              7

PART II

  ITEM 5.  Market for Common Equity and Related Stockholder Matters         8
  ITEM 6.  Management's Discussion and Analysis or Plan of Operation        8
  ITEM 7.  Financial Statements                                            11
  ITEM 8.  Changes In and Disagreements With Accountants on
               Accounting and Financial Disclosure                         11

PART III

  ITEM 9.  Directors, Executive Officers, Promoters and Control Persons;
               Compliance With Section 16(a) of the Exchange Act           12
  ITEM 10. Executive Compensation                                          13
  ITEM 11. Security Ownership of Certain Beneficial Owners and
               Management and Related Stockholder Matters                  14
  ITEM 12. Certain Relationships and Related Transactions                  14
  ITEM 13. Exhibits and Reports on Form 8-K                                15

SIGNATURES                                                                 16

CERTIFICATION                                                              17

                                        3
<PAGE>


PART I

ITEM 1.  Description of Business

THIS  ANNUAL  REPORT ON FORM 10-KSB  CONTAINS  FORWARD-LOOKING  STATEMENTS  THAT
INVOLVE RISKS AND UNCERTAINTIES. THESE STATEMENTS RELATE TO THE COMPANY'S FUTURE
PLANS,  OBJECTIVES,  EXPECTATIONS  AND INTENTIONS AND MAY BE IDENTIFIED BY WORDS
LIKE "BELIEVE,"  "EXPECT," "MAY," "WILL," "SHOULD," "SEEK," OR "ANTICIPATE," AND
SIMILAR  EXPRESSIONS.  OUR ACTUAL  RESULTS  COULD DIFFER  MATERIALLY  FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING  STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING  THOSE  SET FORTH IN THIS  BUSINESS  SECTION  AND UNDER  "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" BELOW.

1st Net  Technologies,  Inc. (the  "Company" or "1st Net") had,  prior to August
2001,  primarily been in the Internet  commerce and services  business since its
inception in 1997. In August 2001, the Company's  Board of Directors  decided to
suspend  its  California  operations  and,  subsequently,  moved  the  Company's
headquarters to Colorado, its original state of incorporation.  With the closing
of its  California  operations,  the  Company  currently  maintains  no business
operations, other than to manage its remaining assets and liabilities.

In October 2001, the Company retained the services of a Corporate Reorganization
/ Bankruptcy Specialist in order to determine a course of action that might best
provide  the  Company  with the  opportunity  to remain a going  concern.  As of
December 31, 2002, the Company  continues to have discussions with its unsecured
creditors to determine  their  willingness to negotiate their claims against the
Company.  The  Company  has a limited  amount of  capital  from which to pay its
remaining obligations. If the Company is unable to negotiate favorable and final
terms with its remaining creditors, the Company may have to seek protection from
its creditors  through a Chapter XI or Chapter VII filing,  at some point in the
future. To date, no definitive decision has been made with regard to this course
of action.

Our  historical  financial  information  contained in this Annual Report on Form
10-KSB is that of 1st Net Technologies, Inc. and its subsidiary corporation, SSP
Management Corp., and is presented on a consolidated basis, where necessary.

The Company currently maintains one subsidiary corporation, SSP Management Corp.
In January 1999, we acquired a 100 percent  interest in SSP Management  Corp., a
Colorado  corporation  ("SSP"),  from a private  company  that is  considered  a
related  party.  SSP was wholly owned by  Entrepreneur  Investments,  LLC ("EI")
whose    sole    shareholder,    James   H.    Watson,    Jr.,    our    current
Chairman/President/CEO, was a member of 1st Net's Board of Directors at the time
of  acquisition.  Through our  acquisition  of that  company,  we built  several
investment-oriented  Internet Web sites and on-line newsletter publications.  In
December 1999, we made a strategic decision to divest ourselves of the SSP types
of clients and services and,  where  applicable,  to sell our  information-based
assets  to  companies  whose  long-term  objective  was to  participate  in that
business.  Accordingly,  we completed the sale of some of our online newsletters
to other unrelated  companies in February and August 2000 and this subsidiary is
no longer active in its former business.

At December 31, 2002, SSP and 1st Net Technologies continue to hold common stock
in the following former clients:

                                        4
<PAGE>


Name of Company        Status          Owner       # of shares owned at 12/31/02
---------------        ------          -----       -----------------------------

a) SureCare, Inc.      Account         SSP         60,000 common

b) Zootech, Inc.       Account         SSP         5,000 common

c) Allwest System      Account         1st Net     33 common

d) Phelps Engineer     Account         1st Net     21,000 common

e) Uniprime Capital    Account         1st Net     2,035 common

f) Zootech, Inc.       Account         1st Net     17,000 common

g) CTG                 Certificate     1st Net     2,120,114 common

All the above,  except  Children's  Technology Group (CTG),  currently trades on
either the NASD's Bulletin Board system or the "Pink Sheets."

CHILDREN'S TECHNOLOGY GROUP

In May 1999, we acquired a  controlling  interest in The  Children's  Technology
Group, Inc. ("CTG") (formerly  Tummybusters,  Inc.), a Nevada  corporation.  The
business  model of CTG is to build a safe and enjoyable  Internet  community for
children on-line. Prior to its acquisition by 1st Net, James H. Watson, Jr., our
Chairman/President/CEO served as a member of the boards of directors of both CTG
and 1st  Net.  Prior  to  December  31,  2000,  the  Company  accounted  for its
investment in  Children's  Technology  Group,  Inc.  ("CTG") in accordance  with
Accounting  Principle  Board  ("APB")  Opinion No. 16.  Under this  method,  the
Company  consolidated  CTG's financial  statements with its own. During the year
ended  December 31, 2000, CTG issued  additional  shares of its common stock and
preferred stock to the public resulting in a change in the Company's  ownership.
Because  of the change in  ownership,  the  Company no longer has a  controlling
interest in CTG.

At January 1, 2001,  the cost basis in the 4,172,614  shares of CTG common stock
was $146,232.  On June 28, 2001, the Company,  CTG and a third party investor in
CTG  entered  into a shares  exchange  and  option  agreement.  Pursuant  to the
agreement,  the Company  returned  250,000  shares of CTG stock in exchange  for
$25,000 in July 2001.  Upon receiving the $25,000 from CTG, the Company  granted
the third party  investor an option to purchase  1,250,000  shares of CTG common
stock owned by 1st Net at $.125 per share.  At December  31,  2001,  the Company
held 3,922,614 shares of CTG common stock valued at $120,731.  Additionally, the
Company agreed to exchange 550,500 shares of its CTG's common stock with 550,500
shares of 1st Net's common stock owned by CTG. The share  exchange was closed in
January 2002.

During February 2002, the third party investor  exercised the option to purchase
1,250,000 of the CTG stock owned by the Company,  and paid the Company  $156,250
($.125/share).  The sale  reduced the number of shares of CTG common stock owned
by the Company to  2,120,114.  The Company  recognized a gain on the sale of the
CTG stock of  $110,497  and  reduced  its cost  basis in the CTG  investment  by
$44,753.

In January 2002, the Company granted the third party investor  another option to
purchase an  additional  1,370,114  shares of its CTG common  stock at $.225 per
share.  This option was not exercised  during its applicable term and expired in
January 2003.

The Company's  investment in CTG dropped to 13 percent at December 31, 2002. Due
to the  reduction  in the  percentage  of ownership  and the options  granted to
purchase the  Company's CTG common  stock,  the Company's  investment in CTG has
been  reclassified  as  marketable  securities  that are  available-for-sale  at
December 31, 2002.

                                        5
<PAGE>


SALE OF INTERNET PORTALS

In December 1999, we made a strategic  decision to divest ourselves of the types
of clients serviced by our subsidiary SSP Management and, where applicable, sell
our  information-based  assets to  companies  whose  long-term  objective  is to
participate in the investor information business.

On February  23, 2000,  SSP sold  certain  related  assets to  MarketByte,  LLC.
("MarketByte")  in  exchange  for a note  receivable  totaling  $200,000  and 10
percent  of  any  future  non-cash   consideration  received  by  Marketbyte  in
connection  with the assets,  through  June 2, 2002.  Under this Asset  Purchase
Agreement,  in the event that the consideration received from Marketbyte through
June 2, 2002 does not equal or exceed  $750,000,  Marketbyte will be required to
pay the Company the difference between $750,000 and the consideration previously
paid to the Company in connection  with the original Asset  Purchase  Agreement.
Subsequently,  there have been two  amendments to this  Agreement to date.  They
are:

In October 2000, the Company  agreed to amend its Agreement  with  MarketByte to
read,  "Upon  expiration of the contract  period of this  Agreement,  and should
Seller (Company) not have received the total sum of Six Hundred Thousand Dollars
($600,000) in cash and market value securities received or excess thereof, Buyer
(MarketByte)  shall  agree to  renegotiate  in  order to make up the  difference
between those amounts  received by Seller and Six Hundred  Thousand  Dollars and
such shall become due and owing immediately upon such date and the conclusion of
the  aforementioned  negotiation." In  consideration  for agreeing to reduce the
total value of the agreement by $150,000, the Company received from Buyer 50,000
shares of marketable securities, which were valued at $3.00 per share.

In December 2001,  the Company again agreed to amend the  MarketByte  Agreement.
This amendment states that "By mutual agreement Buyer and Seller do hereby agree
to extend the payment  period of such  non-cash  consideration  as  follows:  a)
MarketByte  shall continue to pay 10 percent of any/all  non-cash  consideration
(i.e.  securities)  it receives  during its normal course of business until such
time as the full amount owed has been received by Seller, with no specified time
limit,"  and,  "the  parties  also  agree that as of the  executed  date of this
Supplement  the total  amount of  non-cash  consideration  due to the  Seller is
$370,886.25,  which is figured by subtracting  the amounts already paid by Buyer
to date...minus the original amount owed of $400,000."

At December 31, 2002,  MarketByte  owed the Company $45,000 in cash and $362,556
in  other  non-cash  consideration.  Due  to  the  uncertainty  related  to  the
collection of the "other consideration", no receivable has been recorded and any
collections are recorded as income when received.

In August 2000, our two remaining  newsletter  publications and their respective
databases  were sold to a different  unaffiliated  party,  Millennium  Financial
Publishing, LLC. (MFP) for an aggregate of $115,000 in cash and promissory notes
for the remainder of the $1.5 million  aggregate  purchase price.  Subsequent to
the close of those agreements, MFP made payments to the Company totaling $50,000
before  becoming in default on those  Agreements.  During the second  quarter of
2001,  the Company filed suit against MFP in District  Court,  Arapahoe  County,
Colorado  for breach of contract and failure to pay under the  promissory  notes
executed by the companies. On or about February 28, 2002, the Company decided to
settle its suit with MFP in  consideration  of them paying us $2,500 in cash and
$5,000  in  marketable  securities,  as well as  returning  to the  Company  the
non-exclusive  rights to the  databases  and the  exclusive  rights to the other
properties sold.

                                        6
<PAGE>


EMPLOYEES

As  of  December  31,  2002,  the  Company  had  no  employees  other  than  our
President/CEO Mr. Watson.  Mr. Watson currently receives no compensation for his
services,  other than  reimbursements  for  expenses  incurred  on behalf of the
Company.

ITEM 2.  Description of Property

The  Company  maintains  its  executive  offices  at  1869 W.  Littleton  Blvd.,
Littleton,  Colorado 80120. The Company paid $4,800 in rent for its office space
during the year ended December 31, 2002.

Our  property and  equipment  as of December  31, 2002  consists of certain idle
equipment at an estimated value of $2,000.

We were under certain  capital lease  obligations.  During 2001, we defaulted on
all capital leases  obligations due to suspension of our operations and returned
all leased equipment.  At December 31, 2002, we estimated  $197,215 in defaulted
capital and office lease obligations.

ITEM 3.  Legal Proceedings

As  described  in Item 1 above,  we  decided to settle  our  pending  litigation
against Millennium Financial  Publishing,  LLC ("MFP") in February 2002. MFP has
so far  chosen  not to honor the  stipulations  of this  settlement  and thus no
compensation  has been  received by the Company as a result of this action.  The
Company has  chosen,  at this time,  not to expend the  resources  necessary  to
pursue this action, although we may pursue this suit in the future.

The Company was a party to the following lawsuits during 2002:

     1) During  2001,  a suit was filed by L.A.  Commercial  Group,  Inc. in the
amount of $2,665.71.  A default  judgment was awarded  against the Company in LA
County, CA district court in 2002.

     2) During 2001,  the Company was named as a defendant in a wrongful  action
lawsuit filed in Superior  Court of the State of  California,  for the County of
San Diego by Bradley L. Jacobs,  et al. The claims against the Company had to do
with a Crossclaim  against these  defendants that was filed in Superior Court of
California,  unbeknownst  to 1st Net. In  February  2002,  the case  against the
Company  was  dismissed  as a result of a Court  Order  based  upon a Motion for
Summary Judgment filed by 1st Net. As a result,  of this dismissal,  the Company
should have no further liability in this case.

     3) In October,  2002, the Company entered into a  representation  agreement
with the Law Office of Roy R. Withers,  of San Diego,  California,  to represent
the Company in a civil  action  against  Mitchell & Shea,  attorneys at law, for
misuse of name and related damages.  This action stems from the dismissal of the
Company pursuant to item #2 above,  whereby the Company is seeking to recoup the
fees and expenses it had to expend to defend itself in that suit. The Company is
also asking the Court for  punitive  damages  related to this case.  The case is
still pending as of March 31, 2003.

                                       7
<PAGE>


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

We did not submit any  matters to a vote of security  holders  during the fourth
quarter of the year ended December 31, 2002.

PART II

ITEM 5. Market for Common Equity and Related Shareholder Matters

Our common  stock  trades on the NASD's  Bulletin  Board system under the symbol
"FNTT."  Although  an active  trading  market for our Common  Stock has at times
existed  in the  past,  currently  our  shares  are  only  sporadically  traded.
Consequently, no meaningful market information is currently available.

To date, we have paid no dividends and do not anticipate  paying dividends until
we receive revenues in an amount which management determines to be sufficient.

The number of record  holders of the  Company's  $.001 par value Common Stock at
December 31, 2002, was approximately 1,500.

We did not issue or sell any shares of stock during the year ended  December 31,
2002.

ITEM 6.  Management's Discussion and Analysis or Plan of Operation

This  discussion may contain  forward-looking  statements that involve risks and
uncertainties.  Our  actual  results  may  differ  materially  from the  results
discussed in such  forward-looking  statements.  Factors that might cause such a
difference  include,  but are not  limited  to,  those  discussed  in "Risks and
Uncertainties" below. We undertake no obligation to release publicly the results
of any  revisions  to these  forward-looking  statements  to  reflect  events or
circumstances arising after the date hereof.

OVERVIEW

Prior to August 2001,  the Company had primarily  been in the Internet  commerce
and services  business  since its inception in 1997.  During 2001, the Company's
Board  of  Directors   decided  to  suspend  its  California   operations   and,
subsequently,  moved  the  Company's  headquarters  to  Colorado,  its  state of
incorporation.  With the  closing  of its  California  operations,  the  Company
maintains no current  business  operations,  other than to manage its  remaining
assets and liabilities.  The Company maintains one subsidiary  corporation;  SSP
Management  Corp. Our historical  financial  information  contained in this Form
10-KSB is that of 1st Net Technologies, Inc. and SSP on a consolidated basis.

RESULTS OF  OPERATIONS  FOR THE YEARS ENDED  DECEMBER  31, 2002 AND DECEMBER 31,
2001.

During the year ended  December  31,  2002,  the Company  recognized  net income
totaling  $32,123 as compared to a net loss of ($576,319)  during the year ended
December  31,  2001.  The net  income  recognized  in 2002  was  related  to the
following changes in revenues and expenses:

                                        8
<PAGE>


Revenue and operating expenses
------------------------------

The  Company's  revenues  from  technology  consulting,  user fees and marketing
services  decreased  from  $37,652  in 2001 to $-0- in  2002.  The  decrease  is
attributable to the closing of our operations in 2001.

Operating  expenses totaling $85,039 in 2002 decreased  $375,144 or 81.5 percent
from  $460,183  in 2001.  In  2001,  operating  expenses  consisted  of  product
development,   marketing  and  general  and  administrative  expenses;  however,
operating expenses were made up of only general and  administrative  expenses in
2002 as a result of our closing of operations in 2001.

Other Income and Expense
------------------------

Included in other  income  were gains from sales of  marketable  securities  and
investments  totaling $117,562 in 2002 compared to $51,273 in 2001. The increase
in gains from sales of  marketable  securities  was  largely  due to the sale of
1,250,000  shares  of CTG stock for  $156,250  in  February  2002.  The  Company
recognized  gains  totaling  $34,375  and  $144,975  on the sale of  assets  and
settlement  of  liabilities,  respectively,  in 2001  compared  to $-0- in 2002.
Additionally,  the Company  recorded a ($76,524) in loss on disposal of property
and equipment due to suspension of operations and ($290,800) in asset impairment
due to notes  receivable  restructure  and disposal of property and equipment in
2001. The Company incurred only a ($4,000) loss on asset impairment during 2002.

Interest  expense  totaled $7,771 in 2001 compared to $-0- in 2002. The decrease
in interest  expense was due to the repayment of all  promissory  notes early in
2002.  Interest and other income  totaled  $3,600 in 2002  compared to $7,982 in
2001. The Company did not earn any interest income during 2002.

LIQUIDITY AND CAPITAL RESOURCES

To date,  we have been funded  through sale of equity  securities  received from
services, advances and loans from related parties, sale of SSP's operations, and
proceeds from equity offerings. At December 31, 2002, the Company had cash and a
net working  capital deficit of $125 and  ($673,594),  respectively.  Our future
source of capital will come from the remaining note  receivable from prior sales
of SSP's operations and disposal of equity securities held by the Company.

As of December  31,  2002,  we had total  assets of $70,216,  including  current
assets of $67,716,  investments of $500 and $2,000 in property and equipment. We
had total  liabilities (all current) of $673,594 as of December 31, 2002. We had
a retained loss of  ($6,646,583)  and a  shareholders'  deficit of ($603,378) at
December 31, 2002.

Net cash used in operations  was  ($112,772)  in 2002  primarily due to the gain
realized  on the sale of  investments  totaling  ($117,562).  Cash  provided  by
investing  activities was $163,315 in 2002 all related to proceeds from the sale
of  investments.  Cash used in financing  activities  was  ($55,000) in 2002 all
related to the repayment of promissory notes.

On a going  forward  basis,  1st Net and its 100 percent  owned  subsidiary  SSP
maintain  only  minimal  holdings of  marketable  securities.  It is  impossible
however to ascertain the actual amounts that will be eventually  realized by the
Company when these  securities  are sold.  Management  is not sure that proceeds
from the sale of  investments  held in addition to cash  payments to be received
from the transactions  described above,  will be sufficient to make up projected
shortfalls from the results of its operations through the next twelve months.

Prior to August 2001, the majority of our capital resources was expended:  1) on
salaries  and  benefits  to our  employees,  2) to  service  our debt  burden to
vendors, and 3) to our professional  consultants.  Since September 2001, we have
eliminated our employee burden completely. Today, our greatest needs for capital
are to pay fees to our outside consultants,  primarily legal and accounting, and
to continue trying to service and eliminate our debt burden with past vendors.

                                        9
<PAGE>


Our main  source  of  capital  is our Asset  Purchase  and Loan  Agreement  with
MarketByte,  LLC. Entered into during the first quarter of 2000, SSP concluded a
sale of its  newsletter  OTCjournal.com  for a $200,000 note  receivable  and 10
percent of the gross non-cash compensation the buyer realizes from the operation
of  OTCjournal.com.  To date, there is approximately,  $407,556  remaining to be
paid to SSP from that contract,  including  $45,000 due on a note receivable and
$362,556 in future other considerations. Whereas, there can be no assurance that
MarketByte  can and will continue to honor its financial  commitment  under this
Agreement.

On July 11, 2001, the Company issued an option (Option #1) to purchase 1,250,000
common  shares of its holdings in Children's  Technology  Group to DOC Partners,
LLC (DOC) of Golden,  Colorado.  The option carried a strike price of $0.125 per
share. On February 11, 2002, DOC exercised that option by issuing a check in the
amount of $156,250 to the Company.  On January 11, 2002,  the Company  agreed to
issue a second and final option  (Option #2) to DOC for 1,370,114  common shares
at an exercise  price of $0.225 per share.  This  option  expired on January 11,
2003.  At December  31,  2002,  the Company  holds  2,120,114  common  shares in
Children's Technology Group.

RISKS AND UNCERTAINTIES

The risks and uncertainties  described below are those that we currently deem to
be material and that we believe are specific to our Company.  If any of these or
other  risks  actually  occurs,  the  trading  price of our Common  Stock  could
decline. We have a history of losses and absent the gains on securities sold, we
would have  suffered a net loss in 2002.  Also,  because we expect our operating
losses  to  continue  into the  future,  we may never be  profitable.  We had an
accumulated  deficit of  ($6,646,583)  at December  31,  2002.  We incurred  net
income/(loss)  of $32,123 and  ($576,319)  for the years ended December 31, 2002
and 2001,  respectively.  While we are unable to predict  accurately  our future
operating   expenses,   we   currently   expect   these   expenses  to  decrease
substantially,  year over year, as we seek to find a business  combination  that
would be a suitable  fit for the Company on a  go-forward  basis.  If we fail to
find a suitable business to acquire or combine with we will not succeed.

We are much less likely to succeed than a business with an established operating
history.  You should  consider an investment in our stock in light of the risks,
uncertainties and difficulties  frequently  encountered by early-stage companies
in new markets such as ours. We may not be able to  successfully  address any or
all of these  risks.  Failure  to  adequately  do so could  cause our  business,
results of operations and financial  condition to suffer.  Our future  financial
performance also will depend, in part, on our ability to diversify our offerings
by successfully  developing,  introducing and gaining customer acceptance of new
products. We cannot assure you, however, that we will be successful in achieving
market acceptance of any new products that we develop or acquire. Any failure or
delay in diversifying our existing offerings could harm our business, results of
operations and financial condition.

We face  increasing  competition  from  better-established  companies  that have
significantly  greater resources.  Many of our current and potential competitors
could enjoy substantial competitive advantages, such as:

     *  Greater corporate name recognition and larger marketing budgets and
        resources;
     *  Established marketing relationships and access to larger customer
        bases; and
     *  Substantially greater financial, technical and other resources.

                                       10
<PAGE>


In order to be  successful  we will need to seek out,  identify,  and  negotiate
certain  favorable  terms with an  existing  business  entity or  concept  whose
operations  may be a good  fit  for  the  Company.  However,  problems  commonly
associated with such a transaction  may eventually  cause us to fail. Our future
success will depend in part upon the ability of our  management  to  effectively
negotiate  such a  transaction.  Such a  transaction  may require us to hire and
train additional  personnel to manage the expanded operations.  In addition,  we
will  be  required  to  continue  to  improve  our  operational,  financial  and
management  controls and our  reporting  systems and  procedures.  If we fail to
successfully  manage these  processes,  we may be unable to proceed forward as a
going concern.  If we acquire any companies or technologies in the future,  they
could prove  difficult to integrate,  disrupt our business,  dilute  shareholder
value and adversely affect operating results. We may acquire or make investments
in  complementary  companies,  services  and  technologies  in the future.  As a
result, if we fail to properly evaluate and execute acquisitions or investments,
our business and prospects will be seriously harmed.

If we have to go to court and litigate for any reason, it will be time consuming
and expensive. Therefore, the threat of creditor lawsuits could adversely affect
the Company's ability as a going concern.

In the future, we may seek to license additional  technology or content in order
to enhance our current  features or to introduce new  services.  There can be no
assurance  that any such licenses will be available on  commercially  reasonable
terms,  if at all.  The loss of or  inability to obtain or maintain any of these
technology licenses could result in delays in introduction of new services until
equivalent  technology,  if available,  is identified,  licensed and integrated,
which  could  have a  material  adverse  effect  on  our  business,  results  of
operations and financial condition.

We are not sure of the scope or the  impact on us of all of the laws,  rules and
regulations that are likely to affect our business in the future.

The securities industry in the United States is subject to extensive  regulation
under both federal and state laws.  In  addition,  the  Securities  and Exchange
Commission (the  "Commission"),  the NASD,  various stock  exchanges,  and other
regulatory  bodies,  such  as  state  securities  commissions,   require  strict
compliance  with  their  rules and  regulations.  As a matter of public  policy,
regulatory  bodies are charged with safeguarding the integrity of the securities
and other  financial  markets and with  protecting  the  interests  of customers
participating  in those  markets.  Our failure to comply with any of these laws,
rules  or  regulations  could  result  in  censure,  fine,  or the  issuance  of
cease-and-desist  orders,  any of which could have a material  adverse effect on
our business, financial condition and operating results.

ITEM 7. Financial Statements

The Financial Statements are included on Pages F-1 through F-15.

ITEM 8.  Changes  In  and  Disagreements  With  Accountants  on  Accounting  and
         Financial Disclosure

There  have  been no  disagreements  between  the  Company  and its  independent
accountants  on any matter of  accounting  principles  or practices or financial
statement disclosure.

                                       11
<PAGE>

<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Index to Consolidated Financial Statements

                                                                            Page
                                                                            ----

Independent Auditors' Report .............................................   F-2

Consolidated Balance Sheet at December 31, 2002 ..........................   F-3

Consolidated Statements of Operations for the years ended
     December 31, 2002 and 2001 ..........................................   F-4

Consolidated Statement of Changes in Shareholders' Deficit
     for the years ended December 31, 2002 and 2001 ......................   F-5

Consolidated Statements of Cash Flows for the years ended
     December 31, 2002 and 2001 ..........................................   F-6

Notes to Consolidated Financial Statements ...............................   F-7

<PAGE>


To the Board of Directors and Shareholders:
1st Net Technologies, Inc.

                          INDEPENDENT AUDITORS' REPORT

We  have  audited  the  accompanying  consolidated  balance  sheet  of  1st  Net
Technologies,  Inc. (a Colorado corporation) and Subsidiary,  as of December 31,
2002  and  the  related  consolidated  statements  of  operations,   changes  in
shareholders'  deficit and cash flows for the years ended  December 31, 2002 and
2001. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  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
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material   respects,   the  financial   position  of  1st  Net
Technologies,  Inc., as of December 31, 2002 and the results of their operations
and  their  cash  flows  for the  years  ended  December  31,  2002  and 2001 in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
the  Company  will  continue  as a  going  concern.  As  shown  in Note 2 to the
consolidated  financial  statements,  the Company has  incurred net losses since
inception and has working capital deficit at December 31, 2002.  These and other
factors  discussed in Note 2 to the  consolidated  financial  statements raise a
substantial  doubt  about the  ability  of the  Company to  continue  as a going
concern.  Management's  plans in regard to those  matters are also  described in
Note 2. The Company's ability to achieve its plans with regard to those matters,
which may be necessary to permit the  realization of assets and  satisfaction of
liabilities in the ordinary course of business,  is uncertain.  The consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.



/s/ Cordovano and Harvey, P.C.
------------------------------
Cordovano and Harvey, P.C.
Denver, Colorado
March 26, 2003

                                       F-2
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                           Consolidated Balance Sheet


                                December 31, 2002

                                     Assets
Current assets:
    Cash .......................................................... $       125
    Marketable securities (Note 5) ................................      22,591
    Note receivable (Note 4) ......................................      45,000
                                                                    -----------
                  Total current assets ............................      67,716

Investment, at cost (Note 6) ......................................         500
Idle equipment, at cost, net of accumulated
    depreciation of $9,599 (Note 7) ...............................       2,000
                                                                    -----------

                                                                    $    70,216
                                                                    ===========

                      Liabilities and Shareholders' Deficit
Current liabilities:
    Accounts payable and accrued liabilities ...................... $   173,842
    Indebtedness to related party (Note 3) ........................      45,078
    Lease obligations (Note 8) ....................................     197,215
    Accrued payroll and payroll taxes .............................      93,791
    Restructuring reserve (Note 11) ...............................     163,668
                                                                    -----------
                  Total current liabilities .......................     673,594
                                                                    -----------

Shareholders' deficit (Note 9):
    Preferred stock, $.001 par value; 10,000,000 shares authorized,
       -0- shares issued and outstanding ..........................        --
    Common stock, $.001 par value; 40,000,000 shares authorized,
       6,395,357 shares issued and outstanding ....................       6,395
    Additional paid-in capital ....................................   6,093,485
    Accumulated deficit ...........................................  (6,646,583)
    Accumulated other comprehensive income:
       Unrealized holding loss on marketable securities ...........     (56,675)
                                                                    -----------

                  Total shareholders' deficit .....................    (603,378)
                                                                    -----------

                                                                    $    70,216
                                                                    ===========

           See accompanying notes to consolidated financial statements

                                       F-3
<PAGE>

<TABLE>
                           1ST NET TECHNOLOGIES, INC.
                     Consolidated Statements of Operations
<CAPTION>
                                                             For The Years Ended
                                                                 December 31,
                                                          --------------------------
                                                             2002           2001
                                                          -----------    -----------
<S>                                                       <C>            <C>
Revenues:
    Technology consulting, user fees
       and marketing services .........................   $      --      $    37,652

Operating expenses ....................................        85,039        460,183
                                                          -----------    -----------

                   Loss from operations ...............       (85,039)      (422,531)

Other income (expense):
    Realized gain/(loss) on sale of investments .......       117,562         51,273
    Unrealized gain/(loss) on investments .............          --          (17,298)
    Interest expense ..................................          --           (7,771)
    Gain on sale of assets ............................          --           34,375
    Loss on disposal of property and equipment (Note 7)          --          (76,524)
    Asset impairment (Notes 4 and 7) ..................        (4,000)      (290,800)
    Gain on settlement of liabilities (Note 11) .......          --          144,975
    Interest and dividend income ......................          --                3
    Other income ......................................         3,600          7,979
                                                          -----------    -----------

                   Income (loss) before income taxes ..        32,123       (576,319)

Provision for income taxes (Note 10) ..................          --             --
                                                          -----------    -----------

                   Net income (loss) ..................   $    32,123    $  (576,319)
                                                          ===========    ===========

Basic and diluted income (loss) per share .............   $      0.00    $     (0.08)
                                                          ===========    ===========

Weighted average common shares outstanding ............     6,479,511      6,808,648
                                                          ===========    ===========
</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-4
<PAGE>

<TABLE>
                           1ST NET TECHNOLOGIES, INC.
           Consolidated Statement of Changes in Shareholders' Deficit
                            (See Below - Table Split)
<CAPTION>






                                              Preferred Stock             Common Stock              Common       Additional
                                         ------------------------   --------------------------      Stock          Paid-in
                                           Shares       Par Value     Shares        Par Value       Warrants       Capital
                                         -----------    ---------   -----------    -----------    -----------    -----------
<S>                                      <C>            <C>         <C>            <C>            <C>            <C>
Balance at January 1, 2001 ...........          --      $    --       6,555,857    $     6,556    $   275,272    $ 8,422,179

Common stock warrants expired (Note 9)          --           --             --             --         (98,250)          --
Shares sold through private placement
    at $.25 per share (Note 9) .......          --           --         340,000            340          --            84,660
Shares issued in exchange for services
    pursuant to employment agreement
    (Note 10) ........................          --           --          25,000             25          --             6,225
Shares issued in exchange for
    rescission of options (Note 9) ...          --           --          25,000             25          --             6,225
Adjustment to reflect the change in
    reporting entity (Note 2) ........          --           --            --             --            --        (2,603,377)
Comprehensive loss:
    Unrealized loss on investments
      held for sale ..................          --           --            --             --            --             --
    Net loss .........................          --           --            --             --            --             --

     Total comprehensive loss ........
                                         -----------    ---------   -----------    -----------    -----------    -----------

Balance at December 31, 2001 .........          --           --       6,945,857          6,946        177,022      5,915,912

Shares reacquired in exchange for
    552,500 shares of CTG (Note 6) ...          --           --        (550,500)          (551)          --              551
Common stock warrants expired (Note 9)          --           --            --             --         (177,022)       177,022
Comprehensive loss:
    Unrealized loss on investments
      held for sale ..................          --           --            --             --             --             --
    Net income .......................          --           --            --             --             --             --

     Total comprehensive loss
                                         ===========    =========   ===========    ===========    ===========    ===========
Balance at December 31, 2002 .........          --           --       6,395,357          6,395            --       6,093,485
</TABLE>


                           1ST NET TECHNOLOGIES, INC.
           Consolidated Statement of Changes in Shareholders' Deficit
                            (Continued - Split Table)

                                                             Other
                                                         Comprehensive
                                                            Income
                                                          -----------
                                                          Unrealized
                                           Accumulated     Holding
                                             Deficit          Loss       Total
                                           -----------    -----------  ---------
Balance at January 1, 2001 ...........     $(8,705,764)   $ 11,285     $ 9,528

Common stock warrants expired (Note 9)            --          --       (98,250)
Shares sold through private placement
    at $.25 per share (Note 9) .......            --          --        85,000
Shares issued in exchange for services
    pursuant to employment agreement
    (Note 10) ........................            --          --         6,250
Shares issued in exchange for
    rescission of options (Note 9) ...            --          --         6,250
Adjustment to reflect the change in
    reporting entity (Note 2) ........       2,603,377        --          --
Comprehensive loss:
    Unrealized loss on investments
      held for sale ..................           --        (11,285)    (11,285)
    Net loss .........................       (576,319)        --      (576,319)
                                                                      --------
     Total comprehensive loss ........                                (587,604)
                                           -----------    --------    --------

Balance at December 31, 2001 .........      (6,678,706)       --      (578,826)

Shares reacquired in exchange for
    552,500 shares of CTG (Note 6) ...            --          --          --
Common stock warrants expired (Note 9)            --          --          --
Comprehensive loss:
    Unrealized loss on investments
      held for sale ..................            --       (56,675)    (56,675)
    Net income .......................          32,123        --        32,123
                                                                      --------
     Total comprehensive loss                                          (24,552)
                                           ===========    ========    ========
Balance at December 31, 2002 .........      (6,646,583)    (56,675)   (603,378)


           See accompanying notes to consolidated financial statements

                                       F-5
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                      Consolidated Statements of Cash Flows

                                                           For The Years Ended
                                                               December 31,
                                                          ---------------------
                                                            2002        2001
                                                          ---------  ----------

Cash flows from operating activities:
    Net income (loss) ..................................  $  32,123   $(576,319)
    Adjustments to reconcile net income (loss) to
       net cash used by operating activities:
          Depreciation and amortization ................       --        58,326
          Loss on disposal of property and equipment ...       --        76,524
          Gain on sale of assets .......................       --       (34,375)
          Asset impairment .............................      4,000     290,800
          Realized gain on sale of investments .........   (117,562)    (51,273)
          Gain on settlement of liabilities ............       --      (144,975)
          Stock-based compensation .....................       --        12,500
          Unrealized loss on restricted stock investment       --        17,298
          Changes in current assets and liabilities:
             Accounts receivable .......................      2,060       2,316
             Other current assets ......................       --      (113,132)
             Accounts payable and accrued liabilities ..    (33,393)     42,262
                                                          ---------   ---------
                     Net cash used in
                         operating activities ..........   (112,772)   (420,048)
                                                          ---------   ---------

Cash flows from investing activities:
    Proceeds from sale of equipment ....................       --           700
    Proceeds from sale of marketable securities, net ...    163,315     119,790
    Proceeds from collection of notes receivable .......       --       179,114
                                                          ---------   ---------
                     Net cash provided by
                         investing activities ..........    163,315     299,604
                                                          ---------   ---------

Cash flows from financing activities:
    Proceeds from issuance of notes payable ............       --        80,278
    Repayment of notes payable .........................    (55,000)    (40,000)
    Proceeds from sale of common stock .................       --        85,000
                                                          ---------   ---------
                     Net cash provided by (used in)
                         financing activities ..........    (55,000)    125,278
                                                          ---------   ---------

                         Net change in cash ............     (4,457)      4,834

Cash, beginning of period ..............................      4,582        (252)
                                                          ---------   ---------

Cash, end of period ....................................  $     125   $   4,582
                                                          =========   =========

Supplemental disclosure of cash flow information:
    Interest ...........................................  $    --     $   7,471
                                                          =========   =========

    Income taxes .......................................  $    --     $    --
                                                          =========   =========

           See accompanying notes to consolidated financial statements

                                       F-6
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements


1.   Organization

1st Net  Technologies,  Inc.  (the  "Company" or "1st Net") was primarily in the
Internet commerce and services business during the first six months of 2001. The
Company  terminated its operations  and moved its  headquarters  from San Diego,
California to Denver, Colorado in August 2001.

The Company conducted business through SSP Management Corp. ("SSP"),  its wholly
owned   subsidiary.   SSP  provided   Internet  public  relations  and  Internet
newsletters  and sold  substantially  all of its operations in 2000. At December
31, 2002, SSP remains wholly-owned by 1st Net.

2.   Significant accounting policies

Going concern

The Company's  financial  statements  have been prepared under the assumption it
will continue as a going concern.  However,  the Company has incurred net losses
since inception and has a working  capital  deficit at December 31, 2002.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going  concern.  Realization  of a  portion  of  the  Company's  assets  in  the
accompanying  financial  statements is dependent upon the continued operation of
the Company. In order to continue operations,  the Company must raise additional
funds by  incurring  new debt,  raising  new  equity or  liquidating  investment
securities.

Principles of consolidation

The consolidated  financial  statements  include the accounts of the Company and
SSP. All significant intercompany accounts and transactions have been eliminated
in  consolidation.  SSP had  shareholders  and management in common with 1st Net
prior to their  acquisition.  The  accompanying  financial  statements have been
prepared on a consolidated  basis as if common control was established as of the
inception of SSP.

Change of accounting treatment in reporting entity

Prior to January 1, 2001, the Company accounted for its investment in Children's
Technology  Group,  Inc.  ("CTG") in accordance with Accounting  Principle Board
("APB")  Opinion  No. 16.  Under this  method,  the Company  consolidated  CTG's
financial  statements  with its own during  2000.  As of  January  1, 2001,  the
Company  began  accounting  for its  investment  in CTG at  cost  due to loss of
control  over CTG. At December  31,  2001,  the Company  owns  approximately  23
percent of the  outstanding  common stock in CTG. In accordance with APB No. 20,
the financial  statements  have been restated to show financial  information for
the new reporting  entity.  As a result of the restatement,  the Company reduced
its associated additional paid in capital and retained losses by $2,603,377.

During 2002,  the Company sold  1,250,000  shares of the CTG stock and granted a
third party investor an option to purchase an additional 1,370,114 shares of its
CTG stock. As a result, the Company's investment in CTG dropped to 13 percent at
December 31, 2002.  The Company's  investment in CTG is classified as marketable
securities that are available-for-sale at December 31, 2002 (see Note 6).

                                       F-7
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements

Estimates and assumptions

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principals  requires  management  to  make  estimates  and
assumptions  that affect  certain  reported  amounts of assets and  liabilities;
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. Accordingly, actual results could differ from those estimates.

Cash and cash equivalents

The Company  considers  all highly  liquid debt  instruments  purchased  with an
original  maturity of three months or less to be cash  equivalents.  The Company
had no cash equivalents at December 31, 2002.

Investments

Marketable  securities  are  stated at market  value as  determined  by the most
recently  traded price of the security at the balance sheet date.  The Company's
marketable securities have been classified as  available-for-sale  securities in
accordance with Statement of Financial  Accounting  Standards  ("SFAS") No. 115,
Accounting for Certain Investments in Debt and Equity Securities. The unrealized
gains and losses on  available-for-sale  securities  are  reported as a separate
component of shareholders' equity, using the specific identification method.

Equity  investments  in private  companies with no readily  determinable  market
value  are  carried  at cost  and are  adjusted  only  for  other-than-temporary
declines in fair value, distributions of earnings and additional investments.

Idle equipment

At December  31,  2002,  the  Company's  idle  equipment  consisted  of computer
equipment. The net book value of this equipment totals $2,000. In the opinion of
management, the net book value of the idle equipment is not in excess of the net
realizable value.

Impairment and disposal of long-lived assets

The Company  evaluates  the carrying  value of its  long-lived  assets under the
provisions  of SFAS No.  144,  Accounting  for the  Impairment  or  Disposal  of
Long-Lived Assets.  Statement No. 144 requires  impairment losses to be recorded
on long-lived  assets used in  operations  when  indicators  of  impairment  are
present and the  undiscounted  future cash flows  estimated  to be  generated by
those  assets are less than the  assets'  carrying  amount.  If such  assets are
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying value or fair value,  less
costs to sell.

Fair value of financial instruments

The Company  estimates  the fair value of its  monetary  assets and  liabilities
based  upon  existing  interest  rates  related to such  assets and  liabilities
compared to current rates of interest for instruments  with a similar nature and
degree of risk. The Company  estimates that the carrying  values of its monetary
assets and liabilities approximate their fair values as of December 31, 2002.

Revenue recognition

Revenue is recognized when earned.  The Company's revenue  recognition  policies
are  in  compliance  with  all  applicable  accounting  regulations,   including
Securities and Exchange  Commission Staff  Accounting  Bulletin No. 101, Revenue
Recognition,   American  Institute  of  Certified  Public  Accountants   (AICPA)
Statement of Position (SOP) 97-2,  Software Revenue  Recognition,  and SOP 98-9,
Modification  of SOP 97-2, With Respect to Certain  Transactions.  Revenues from
technology  consulting,  user fees and marketing services are recognized ratably
over the contract period in accordance with the period in which the services are
performed.  Revenues attributable to undelivered  elements,  including technical
support  are  recognized  ratably on a  straight-line  basis  over the  contract
period.

                                       F-8
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements


Comprehensive income

SFAS No. 130, Reporting  Comprehensive  Income,  requires that all components of
comprehensive  income,  including  net  income,  be  reported  in the  financial
statements in the period in which they are recognized.  Comprehensive  income is
defined  as the change in equity  during a period  from  transactions  and other
events and  circumstances  from non-owner  sources.  Net income (loss) and other
comprehensive income,  including unrealized gains and losses on investments held
for sale,  shall be  reported  net of their  related  tax  effect,  to arrive at
comprehensive income (loss).

Earnings per share

Earnings  per share is computed in  accordance  with SFAS No. 128,  Earnings Per
Share and SEC Staff Accounting Bulletin (or SAB) No. 98. Under the provisions of
SFAS No. 128,  basic earnings per share is computed by dividing the net loss for
the period by the weighted  average number of common shares  outstanding  during
the period.  Diluted earnings per share is computed by dividing the net loss for
the period by the weighted average number of common and common equivalent shares
outstanding during the period. Under the provisions of SAB No. 98, common shares
issued for nominal  consideration are included in the per share  calculations as
if they were outstanding for all periods presented.

Potentially  dilutive securities include options and warrants that were excluded
from basic and diluted earnings per share because of their anti-dilutive effect.
Anti-dilutive securities outstanding totaled 625,000 and 861,200 at December 31,
2002 and 2001, respectively.

Stock-based compensation

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB 25"), and related interpretations
in accounting for its employee stock options because the alternative  fair value
accounting   provided  for  under  SFAS  No.  123,  Accounting  for  Stock-Based
Compensation,  requires  the  use of  option  valuation  models  that  were  not
developed  for use in valuing  employee  stock  options.  Under APB 25, when the
exercise  price of the  Company's  employee  stock  options is not less than the
deemed fair value for the underlying stock on the date of grant, no compensation
expense is  recognized.  At the time stock  options  were  granted,  the Company
believed that the exercise  price was at a price not less than the fair value of
the underlying common stock.

3.   Related party transactions

Advances and loans

The Company borrowed funds for working capital from an affiliate during 2001. At
December  31, 2001,  the Company was indebted to the  affiliate in the amount of
$75,078.  The Company  borrowed  $-0- and $45,278  from the  affiliate  and made
payments of $30,000 and $-0- in 2002 and 2001, respectively. Borrowings from the
affiliate  are  non-interest  bearing  unless so  stated  at the time  funds are
advanced. The Company owed the affiliate $45,078 at December 31, 2002.

At December 31,  2001,  the Company owed two related  parties  promissory  notes
totaling $50,000 and $5,000, respectively.  The Company repaid both notes during
2002.

                                       F-9
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements

On February 16, 2001,  APJW,  Inc.  ("APJW"),  an affiliate,  loaned the Company
$25,000  pursuant to a promissory  note. The promissory note carries an interest
rate of one  percent per month and matures on demand.  On April 20,  2001,  APJW
loaned the  Company  additional  $10,000  pursuant  to a  promissory  note.  The
promissory note carries an interest rate of one percent per month and matures on
demand.  The Company  repaid $15,000 on June 6, 2001 and $20,000 on December 17,
2001.  The Company paid $2,700 of interest  expense on the two notes in 2001. At
December 31, 2001, the Company owes $-0- to APJW.

Warrants

On January 10, 2001, the Company granted  warrants to purchase 525,000 shares of
common stock at $3.00 per share to four related parties as follows:

   Related Party                                                  Warrants
   -----------------------------------------------------------------------
   Entrepreneur Investments, LLC ..............................    300,000
   Jeffery M. Chatfield .......................................     25,000
   Gregory D. Writer, Jr ......................................    100,000
   Clifford J. Smith ..........................................    100,000
                                                                   -------
                                                                   525,000
                                                                   =======

These warrants were issued in satisfaction of a stock option agreement with each
of the  respective  parties,  which was  agreed  to in  January  1999;  however,
executed copies of the stock option agreement were not subsequently delivered to
the parties.  The stock option  agreement with each of the parties was rescinded
in  exchange  for the  warrants.  The  warrants  vested as of the grant date and
expire on January 10, 2004.

The  Company  recorded no  stock-based  compensation  for the  525,000  warrants
granted on January 10, 2001.  The Company has accounted  for the warrants  under
the fair value method in accordance  with the Statement of Financial  Accounting
Standard  No. 123.  Market  price of the stock was $.27 per share on the date of
grant.

Asset sales

In January 2001, the Company sold certain  operational  assets,  consisting of a
trade name,  marketing process,  and multimedia  properties to a former employee
for a note receivable and a 25 percent equity interest in the former  employee's
new business.  On December 15, 2001, the Company and the former  employee agreed
to terminate  the  agreement.  Pursuant to the  termination  letter,  the former
employee  returned the assets  purchased  and the Company  released its claim to
note receivable and equity interest in its former employee's new business.

4.   Notes Receivable

On February 23, 2000, SSP sold an Internet  newsletter  published by the Company
along with certain  related assets to Marketbyte,  L.L.C.  ("Marketbyte")  for a
$200,000  promissory  note and  $550,000 in other  future  consideration.  Other
future  consideration  consists of 10% of any future  consideration  received by
Marketbyte  in  connection  with the  newsletter  through June 2, 2002.  SSP and
Marketbyte  amended  the sale  agreement  in October  2000 and again in December
2001.  The amended  terms reduced  other future  consideration  from $550,000 to
$400,000   and   cancelled   the  June  2,  2002  due  date  for  other   future
considerations.  Marketbyte  has paid  $155,000  towards the note and $37,444 in
other consideration through December 31, 2002. At December 31, 2002, the balance
on the promissory note of $45,000 is included in the  accompanying  consolidated
financial  statements as Note Receivable.  Due to the uncertainty related to the
collection of the "other consideration", no receivable has been recorded and any
collections are recorded as income when received.

                                      F-10
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements


5.   Marketable securities

Marketable  securities  are  stated at their  fair  value and  consisted  of the
following at December 31, 2002:

                                             Unrealized  Unrealized      Fair
              2002                 Cost        Gain        Loss          Value
--------------------------------------------------------------------------------
Equity Securities ..........     $ 79,446     $ 688.00    $(57,543)     $ 22,591


The Company  received net proceeds  from sale of equity  securities  held in the
amount of $163,315  and  $119,790  and realized a gain in the amount of $117,562
and $51,273,  in 2002 and 2001  respectively.  The Company recorded  accumulated
comprehensive  losses on  available-for-sale  securities  totaling  $56,855  and
$11,285  during the years ended  December 31, 2002 and 2001,  respectively.  The
Company  included  $-0- and $17,298 in net  unrealized  holding loss in earnings
during  2002 and  2001  due to  permanent  decline  in  value of the  investment
securities held.

6.   Investments

CTG common stock

At January 1, 2001,  the cost basis in the 4,172,614  shares of CTG common stock
was $146,232.  On June 28, 2001, the Company,  CTG and a third party investor in
CTG  entered  into a shares  exchange  and  option  agreement.  Pursuant  to the
agreement,  the Company  returned  250,000  shares of CTG stock in exchange  for
$25,000 in July 2001.  Upon receiving the $25,000 from CTG, the Company  granted
the third party  investor an option to purchase  1,250,000  shares of CTG common
stock owned by 1st Net at $.125 per share.  At December  31,  2001,  the Company
held 3,922,614 shares of CTG common stock valued at $120,731.  Additionally, the
Company agreed to exchange 550,500 shares of its CTG's common stock with 550,500
shares of 1st Net's common stock owned by CTG. The share  exchange was closed in
January 2002.

During February 2002, the third party investor  exercised the option to purchase
1,250,000 of the CTG stock owned by the Company,  and paid the Company  $156,250
($.125/share).  The sale  reduced the number of shares of CTG common stock owned
by the Company to  2,120,114.  The Company  recognized a gain on the sale of the
CTG stock of  $110,497  and  reduced  its cost  basis in the CTG  investment  by
$44,753.

In January 2002, the Company granted the third party investor  another option to
purchase an  additional  1,370,114  shares of its CTG common  stock at $.225 per
share.  The option has not been exercised as of December 31, 2002. If the option
is exercised in its entirety,  the number of shares of CTG common stock owned by
the Company would be reduced to 750,000.

The Company's  investment in CTG dropped to 13 percent at December 31, 2002. Due
to the  reduction  in the  percentage  of ownership  and the options  granted to
purchase the  Company's CTG common  stock,  the Company's  investment in CTG has
been  reclassified  as  marketable  securities  that are  available-for-sale  at
December 31, 2002.

                                      F-11
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements


Other investments

During the year ended December 31, 2002, the Company sold another  investment to
a third party investor for $7,065. The Company recognized a gain on the sale for
$7,065 as the investment had previously been written off by the Company.

The Company holds various other equity  investments  in other private  companies
valued at cost, after an allowance for permanent decline in value, in the amount
of $500 at December 31, 2002.

7.   Property and equipment

In August 2001,  the Company  returned all property  under capital leases to the
financial  institutions and gave most of its remaining property and equipment to
a third party vendor for an unpaid office lease obligation. The Company retained
certain equipment and its associated  software,  which was idle during 2002. The
Company expects to dispose the remaining  equipment in its  foreseeable  future.
The Company  recorded  losses on asset  disposal and  impairment  cost  totaling
$4,000 and $13,160 during the years ended December 31, 2002 and 2001.

Property and equipment consists of the following at December 31, 2002:

Computer equipment ........................................            $ 11,599
Less accumulated depreciation .............................              (9,599)
                                                                       --------
                                                                       $  2,000
                                                                       ========

Depreciation expense was $-0- and $58,326 in 2002 and 2001, respectively.

8.   Lease obligations

The Company  defaulted on its capital lease obligations in 2001 and returned all
of the equipment under capital leases in August 2001. The Company remains liable
for the amount  remaining on the leases which,  totaled $197,215 at December 31,
2002.

Rent expense  totaled  $4,800 and $53,200 for the years ended  December 31, 2002
and 2001,  respectively.  The Company  moved out of its leased  office  space in
August 2001 and left certain  equipment  and  furniture as  compensation  to the
lessor.  The remaining  lease  commitment  under the defaulted  operating  lease
totaled  $106,400 as of August  2001.  The Company  estimated a remaining  lease
liability of approximately $45,000 at December 31, 2002.

9.   Shareholders' deficit

Preferred stock

The Board of Directors  is  authorized  to issue  shares of  preferred  stock in
series  and  to fix  the  number  of  shares  in  such  series  as  well  as the
designation, relative rights, powers, preferences, restrictions, and limitations
of all such series.  The Company had no preferred  shares issued and outstanding
at December 31, 2002.

                                      F-12
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements


Stock-based compensation

The Company issued -0- and 50,000 restricted shares of common stock to employees
during the years ended  December  31, 2002 and 2001,  respectively.  The Company
recognized  compensation  expense  totaling $-0- and $12,500 for the years ended
December 31, 2002 and 2001,  respectively.  The compensation  expense recognized
was  calculated  based on the most recent  trading prices of the common stock or
contemporaneous  stock sales at the time management  approved the grant of stock
to employees.

Private Placement

In January 2001, the Company commenced a common stock offering of 500,000 shares
of its common stock at $.25 per share.  The Company  relied on an exemption from
registration  under Regulation D of the Securities Act of 1933, as amended.  The
Company received proceeds of $85,000 from the sale of 340,000 shares.

Options and warrants

The Company  accounts  for all stock  options  under SFAS No. 123.  However,  as
permitted by SFAS No. 123, the Company  accounts  for stock  options  granted to
employees  and stock options  granted to  nonemployees,  in a different  manner.
Directors, acting in their capacity as directors, are in the employee category.

The Company has elected to account for stock options  granted to employees under
the "intrinsic value method" whereby no compensation  expense is recorded if the
option's price equals or exceeds the fair value of the underlying stock.

The  Company  accounts  for  stock  options  granted  to  consultants  and other
providers under the "fair value method" whereby compensation expense is recorded
for the  excess of the fair value of the  option  over the  market  price of the
underlying stock.

On October 31, 2002, 236,200 warrants expired.  The Company recorded a reduction
to  previously  recorded  common stock  warrants in the amount of $177,022  upon
expiration of the warrants.

On June 30, 2001,  the Company  issued an employee  25,000  shares of its common
stock in exchange  for the  cancellation  of 100,000  options  issued on June 2,
2000. The Company did not record a reduction in compensation  expense associated
with the cancellation of the options.

On March 31, 2001, 75,000 warrants expired.  The Company recorded a reduction to
previously  recorded  common  stock  warrants  in the  amount  of  $98,250  upon
expiration of the warrants.

Under SFAS No. 123,  when the  intrinsic  value method is elected,  compensation
expense is also  measured  under the fair value  method,  but reported on a "pro
forma" basis.  However,  there was no pro forma effect  related to the Company's
options and warrants during the years ended December 31, 2002 and 2001.

Following  is a schedule of changes in the  Company's  outstanding  warrants and
options for years ended December 31, 2002 and 2001:

                                      F-13
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>
                                                                        Weighted        Weighted Avg
                                                          Number          Avg             Remaining
        Options/Warrants                   Number      Exercisable    Exercise Price        Life
----------------------------------------------------------------------------------------------------
<S>                                       <C>          <C>            <C>                <C>
Outstanding at January 1, 2001 ........    511,200        411,200      $   3.12             3 years
Granted ...............................    525,000
Exercised .............................       --
Expired ...............................    (75,000)
Cancelled .............................   (100,000)
                                          ---------
Outstanding at December 31, 2001 ......    861,200        861,200      $   3.39             2 years
Granted ...............................       --
Exercised .............................       --
Expired ...............................   (236,200)
Cancelled .............................       --
                                          ---------
Outstanding at December 31, 2002 ......    625,000        625,000      $   2.60             1 year
                                          =========
</TABLE>

The fair value of the  options  issued  was  estimated  using the  Black-Scholes
option pricing model with the following  weighted  average  assumptions used for
grants:  dividend yield - 0%; expected  volatility - 80%;  risk-free  investment
rate - 6%;  and an  expected  life  of  four  years.  The  compensation  cost as
generated  by the  Black-Scholes  model  may  not be  indicative  of the  future
benefit, if any, which may be realized by the option holders.  The fair value of
the option grant was $.34 per share.

10.  Income taxes

A reconciliation of the U.S.  statutory federal income tax rate to the effective
rate is as follows:

                                                            2002         2001
                                                          ---------    --------
Federal income tax rate ................................    15.00%      34.00%
State income tax rate, net of Federal benefit ..........     3.94%       5.90%
Net operating loss for which no tax benefit
   is currently available ..............................   -18.94%     -39.90%
                                                          ---------    --------
                                                             0.00%       0.00%
                                                          =========    =======

At December 31, 2002, deferred taxes consisted of a net tax asset of $2,264,677,
due to operating loss carryforwards of $6,646,583,  which was fully allowed for,
in the valuation  allowance of $2,264,677.  The valuation  allowance offsets the
net deferred  tax asset for which there is no assurance of recovery.  The change
in the  valuation  allowance  for the years  ended  December  31,  2002 and 2001
totaled  $(6,083) and $753,469.  Net operating  loss  carryforwards  will expire
through 2021.

The  valuation   allowance  will  be  evaluated  at  each  balance  sheet  date,
considering  positive  and  negative  evidence  about  whether the asset will be
realized.  At that time,  the  allowance  will either be  increased  or reduced;
reduction could result in the complete  elimination of the allowance if positive
evidence  indicates  that  the  value of the  deferred  tax  asset is no  longer
impaired and the allowance is no longer required.

Should the Company undergo an ownership  change as defined in Section 382 of the
Internal  Revenue  Code,  the Company's  tax net  operating  loss  carryforwards
generated prior to the ownership change will be subject to an annual limitation,
which could reduce or defer the utilization of these losses.

                                      F-14
<PAGE>


11.  Commitments and contingencies

During 2002, the Company received a demand for payment of approximately $135,000
from  Diagnostic  Recovery  Services,  Inc. on behalf of CIT Group.  The Company
denies any knowledge of liability related to this claim. There was no litigation
related to this claim as of the date of this report. The Company has not accrued
any liability specifically related to this claim.

The Company established a liabilities reserve at December 31, 2000 in the amount
of $350,000  due to its plan to  terminate  operations.  The Company  recognized
liabilities  totaling  $25,247 and $161,085  during the years ended December 31,
2002 and 2001. At December 31, 2002,  the remaining  liabilities  reserve in the
amount of $163,668 was included in the financial statements. Liabilities reserve
will be reclassified into accrued liabilities at the time when previous incurred
expenses are billed. The Company will reduce its liabilities reserve at the time
when it determines that the Company is no longer subject to such liabilities.

                                      F-15
<PAGE>


PART III

ITEM 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act

     The Directors and Officers of the Company are as follows:

   Name                            Age             Positions and Offices Held
---------------------              ---             --------------------------
  James H. Watson, Jr.             40              President, Chairman,
                                                   Chief Executive
                                                   Officer, Chief Financial
                                                   Officer and Director

  Daniel Nye                       42              Director

There is no family relationship between any Director or Executive Officer of the
Company.

The Company presently has no committees.

Set forth below are the names of all  Directors  and  Executive  Officers of the
Company,  all  positions  and offices with the Company held by each such person,
the period  during which he has served as such,  and the business  experience of
such persons during at least the last five years:

James H. Watson, Jr., 40, has served as our President since December 2000 and as
our Chief  Executive  Officer and Chairman of our Board of Directors  since June
30, 1999.  He has been a member of our Board since 1997.  Mr.  Watson  currently
devotes  40-50% of his time to our  business.  Mr. Watson is the Founder and the
General  Managing  Member  of  Entrepreneur  Investments,  LLC  (EI),  a private
financial consulting and investment firm that specializes in the unique needs of
development  stage  companies.  Started in 1996, EI has worked hand in hand with
both public and private  companies,  assisting them with such critical issues as
corporate  capitalization,   mergers/acquisitions,   management  placement,  and
business strategy. From 1995 - 1996, he was a Founder and Chief Operating Member
of N8  Concepts,  LLC, a private  company  that  specialized  in  sports-related
trademark  licensing  and event  management.  Mr.  Watson  has served on various
Boards in recent years including Probook, Inc., Nicklebys.com,  Inc., Children's
Technology Group, Inc., and Mariah  Communications.  At present, Mr. Watson sits
on only one other  Board that being  Technology  Consulting  Partners,  Inc.,  a
Denver based technology  placement and consulting company.  Mr. Watson graduated
from the University of Tennessee / Chattanooga  in 1985 with a Bachelors  degree
in Political Science/Public Administration.

Daniel  Nye,  42,  has been the  President  of NYCON  Resources  Inc.  since its
inception in 1992. NYCON is a private  corporation  involved in natural resource
exploration and investment,  real estate investment, and securities speculation.
Mr. Nye is responsible for identifying and structuring investment  opportunities
and  strategic  planning  for NYCON.  Mr. Nye  received a BS degree in Aerospace
Technology from Indiana State University.

SECTION 16(A) BENEFICIAL REPORTING COMPLIANCE

To the best of the knowledge of the Company,  based on reports received pursuant
to rule 16a-3(e) of the 1934 Act, all reports  required to be filed  pursuant to
rule 16a-3(e) were filed as of the date of this report.

                                       12
<PAGE>


ITEM 10. Executive Compensation

BOARD OF DIRECTOR MEETINGS AND COMMITTEES

The Board of Directors held no meetings during the year ended December 31, 2002,
but entered into various consent resolutions in lieu of meetings.

COMPENSATION SUMMARY

The following  table sets forth the  annualized  base salary that we paid to our
Chief Executive Officer. Mr. James H. Watson became our CEO on June 29, 1999 and
has not received any cash compensation  since accepting the position.  All other
compensation  for our  executives or directors  has not exceeded  $100,000 on an
annualized basis. Prior to 1997, we had not paid compensation to executives.  We
reimburse our officers and directors for any reasonable  out-of-pocket  expenses
incurred on our behalf.

     Name and               Fiscal        Salary                       Other
Principal Position           Year      Compensation      Bonus      Compensation
------------------           ----      ------------      -----      ------------

James H. Watson, Jr.         2002          $ --          $ --           $ --
President, CEO               2001          $ --          $ --           $ --

Notes:

As of December 31, 2002, we had no group life, health, hospitalization,  medical
reimbursement or relocation plans in effect. Further, we had no pension plans or
plans or agreements,  which provide  compensation on the event of termination of
employment or change in control of the Company.

We do not pay  members  of our Board of  Directors  any fees for  attendance  or
similar  remuneration or reimburse them for any out-of-pocket  expenses incurred
by them in connection with our business.

COMPENSATION OF DIRECTORS

There was no compensation paid to any directors of 1st Net as director's fees.

EMPLOYMENT AGREEMENTS

Currently, no employment agreements exist with any officer or employee.

LONG-TERM INCENTIVE PLAN

None.


ITEM 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters

BENEFICIAL OWNERS

                                       13
<PAGE>


The following table sets forth information regarding the beneficial ownership of
the shares of the Common Stock (the only class of shares outstanding) of 1st Net
on  December  31,  2002 (at which date there were  6,395,357  shares  issued and
outstanding), by each person known by us to be the beneficial owner of more than
five  percent of the  outstanding  shares of our Common Stock and by each person
known by us to be a director or nominee or executive officer owning a beneficial
interest in our equity securities.

Name and Address of              Amount of       Percent of
Beneficial Owner(a)            Class (Shares)       Class         Title of Class
-------------------------      --------------    ----------       --------------

Entrepreneur Investments,
LLC (a)(b)                       118,500             1.85%         Common Stock

APJW, Inc. (a)(b)                600,000             9.38%         Common Stock

All Officers and Directors
as a Group (One Person)          718,500            11.23%         Common Stock

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

(a) All entities or persons  listed have sole voting and  investment  power with
respect  to their  shares of Common  Stock,  except to the extent  authority  is
shared by spouses under applicable law.

(b) James H. Watson is the managing  member of Entrepreneur  Investments,  LLC.,
and also the President and sole shareholder of APJW, Inc.

CHANGES IN CONTROL

The  Company  knows of no  arrangement,  including  the  pledge by anyone of any
securities of the Company, that may result in a change in control.

ITEM 12. Certain Relationships and Related Transactions

The Company borrowed funds from Entrepreneur Investments, LLC ("EI") for working
capital  during  2001.  At December  31,  2001,  the Company was indebted to the
affiliate  in the amount of $75,078.  The Company  paid EI $30,000  during 2002,
reducing  the  balance  owed to  $45,078.  Borrowings  from  the  affiliate  are
non-interest bearing unless so stated at the time funds are advanced.

In September 2000, Daniel Nye, a Director, personally loaned the Company $50,000
in exchange for a  promissory  note.  The note  carried an interest  rate of ten
percent  (10%)  annually with a one (1) year term.  In September  2001,  Mr. Nye
agreed to extend the note for six (6)  additional  months.  On June 7, 2001,  we
paid interest accrued on this loan totaling $2,500.00.  On February 12, 2002, we
paid the  entire  principal  due of  $50,000  and Mr.  Nye  agreed  to waive all
remaining,  accrued interest. Mr. Nye was not an affiliate of the Company at the
time the loan was granted.

                                       14
<PAGE>


On February  16, 2001,  and April 20, 2001 APJW,  Inc.,  an  affiliate  company,
loaned the Company  $25,000.00 and $10,000.00,  respectively,  in exchange for a
promissory  note. The  promissory  notes carried an interest rate of one percent
per month and matured on demand.  On June 7, 2001, the Company repaid $15,000.00
of the principal plus accrued interest. On December 17, 2001, the Company repaid
the remaining  principal due of $20,000.00  plus accrued  interest of $1,200.00.
APJW, Inc.  currently owns 600,000 shares of our common stock and is our largest
single shareholder.  The sole owner/shareholder of APJW, Inc. is Mr. Watson, the
Company's Chairman and President.

During  2000 we issued  options to Scott  Baker,  an Officer  and  Director,  to
purchase  up to  100,000  shares of our Common  Stock,  as an  incentive  to his
employment.  Such  options are not earned or vested  until after his first (50%)
and second  (remaining 50%) years of employment with the Company.  During fiscal
year 2001,  we  cancelled  the option  agreement  with Mr. Baker in exchange for
agreeing to issue him 25,000 restricted common shares.

Item 13. Exhibits and Reports on Form 8-K

     Reports on Form 8-K:

          None.

     Exhibits:

          1st Net Technologies, Inc. includes herewith the following exhibits:

          99.1 Certification of Chief Executive Officer and Principal Accounting
               Officer  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant
               to Section 906 of the Sarbanes-Oxley Act of 2002.

                                       15
<PAGE>


SIGNATURES

In  accordance  with Section 13 or 15(d) of the  Exchange,  the  Registrant  has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                               1st Net Technologies, Inc.




Dated:  April 4, 2003          By: /s/ James H. Watson, Jr.
        -------------              ---------------------------------------------
                                   James H. Watson, Jr., Chief Executive Officer
                                   Officer and Principal Accounting Officer of
                                   the Registrant



Pursuant to the  requirements of the Security  Exchange Act of 1934, as amended,
this Report has been signed by the following  persons in the  capacities  and on
the dates indicated.


Dated:  April 4, 2003          By: /s/ James H. Watson, Jr.
        -------------              ---------------------------------------------
                                   James H. Watson, Jr., Chief Executive Officer
                                   Officer and Principal Accounting Officer of
                                   the Registrant

                                       16


<PAGE>

    CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND PRINCIPAL ACCOUNTING OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the  accompanying  Annual  Report on Form 10-KSB of 1ST Net
Technologies,  Inc. for the fiscal year ending  December 31, 2002, as filed with
the Securities and Exchange  Commission on the date hereof, the undersigned,  in
the capacity and date indicated below, hereby certifies that:

1.   I have reviewed this annual report on Form 10-KSB of 1st Net  Technologies,
     Inc.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated  subsidiary,  is made known to us by others  within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     (b)  evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     (c)  presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

     (a)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual report whether there were significant  changes in internal  controls
     or in other  factors  that could  significantly  affect  internal  controls
     subsequent  to the  date  of our  most  recent  evaluation,  including  any
     corrective  actions with regard to  significant  deficiencies  and material
     weaknesses.


Dated:  April 4, 2003          By: /s/ James H. Watson, Jr.
        -------------              ---------------------------------------------
                                   James H. Watson, Jr., Chief Executive Officer
                                   Officer and Principal Accounting Officer of
                                   the Registrant

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