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, 2004

[]   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
      incorporation or organization)                  Identification No.)


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


     Registrant'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

Indicate whether the Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for 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>

Indicate if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained in this Form, and will not 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 voting stock held by non-affiliates on March
31, 2005, calculated by taking the last sales price of the Company's common
stock ($.15 as quoted on March 31, 2005) was $851,528.55. The number of shares
outstanding of the issuer's common equity as of March 31, 2005 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.

                   (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, 2005

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 .....................................    6
  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 ....    7
  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 .........................   12
  ITEM 8A.  Controls and Procedures ....................................   12
  ITEM 8B.  Other Information ..........................................   12


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 ......................................   14
  ITEM 11. Security Ownership of Certain Beneficial Owners and
           Management and Related Stockholder Matters ..................   14
  ITEM 12. Certain Relationships and Related Transactions ..............   15
  ITEM 13. Exhibits and Reports on Form 8-K ............................   15
  ITEM 14. Principal Accountant Fees and Services ......................   16

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

                                        3
<PAGE>

Additional information

Descriptions in this Report are qualified by reference to the contents of any
contract, agreement or other documents and are not necessarily complete.
Reference is made to each such contract, agreement or document filed as an
exhibit to this Report, or previously filed by the Company pursuant to
regulations of the Securities and Exchange Commission (the "Commission"). (See
"Item 13. Exhibits.")

Reference in this document to "us", "we", "our", "the Company", or "the
Registrant" refer to 1st Net Technologies, Inc.

Special Note Regarding Forward Looking Statements

Certain statements contained herein constitute "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward looking statements include, without limitation, statements regarding the
Company's plan of business operations and related expenditures, potential
contractual arrangements, anticipated revenues and related expenditures.
Investors are cautioned not to put undue reliance on forward-looking statements.
Except as otherwise required by applicable securities statutes or regulations,
the Company disclaims any intent or obligation to update publicly these forward
looking statements, whether as a result of new information, future events or
otherwise.


PART I

ITEM 1.  Description of Business

1st Net Technologies, Inc. ("we", "us", "our", 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. Since August 2001, the Company has been a shell company in search
of a merger candidate. Recent operations have consisted of debt restructuring.

As of December 31, 2004, 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 11 or Chapter 7 filing, at some
point in the future. To date, no definitive decision has been made with regard
to this course of action.

On August 30, 2004, we entered into an Agreement and Plan of Reorganization with
VOS Systems, Inc., ("VOS") a San Diego, California based company that
specializes in voice activated electronic controls. The Agreement provides for
the reorganization of VOS with 1st Net, with 1st Net adopting the name VOS
Systems, Inc. In connection with the Agreement, we would acquire all of the
issued and outstanding common shares of VOS in exchange for approximately
36,050,000 shares of our common stock. At the closing of the Agreement, the
current shareholder of VOS would own approximately 85% of the outstanding common
stock of 1st Net, resulting in a change in control. The Agreement had not closed
as of the date of this report.

                                        4
<PAGE>

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.

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, 2004, SSP and 1st Net Technologies continue to hold common stock
in the following former clients:

                                                                # of shares
     Name of Company                  Status    Owner      owned at 12/31/04
     -----------------------------    -------   --------   -----------------
     a) SureCare, Inc.                Account   SSP         60,000 common
     b) Zootech, Inc.                 Account   SSP          5,000 common
     c) Lyon Capital Venture Corp.    Account   1st Net         33 common
     d) Phelps Engineer               Account   1st Net     21,000 common
     e) Uniprime Capital              Account   1st Net         20 common
     f) Zootech, Inc.                 Account   1st Net     17,000 common
     g) NOWAUTO, Inc.                 Account   1st Net          2 common


All the above securities trade on either the NASD's Bulletin Board system or the
"Pink Sheets."

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 did not equal or exceed $750,000, Marketbyte would 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. 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

                                        5
<PAGE>

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, 2004, MarketByte owed the Company $289,109 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. MFP has not chosen not to honor the stipulations of this
settlement as of December 31, 2004.

EMPLOYEES

As of December 31, 2004, 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 $1,500 and $1,000 in rent for its
office space during the years ended December 31, 2004 and 2003.

ITEM 3.  Legal Proceedings

As described toward the end of Item 1 above, we decided to settle our pending
litigation against Millennium Financial Publishing, LLC ("MFP") in February 2002
for total consideration of $7,500 and the return of the non-exclusive rights to
the databases and the exclusive rights to the other properties originally sold.
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.

                                        6
<PAGE>

The Company was a party to the following lawsuit during the years ended December
31, 2004 and 2003:

     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 stemmed from the dismissal of the
Company pursuant to a 2002 lawsuit, whereby the Company was seeking to recoup
the fees and expenses it had to expend to defend itself in that suit. During
January 2004, the parties settled the action and the Company received net
proceeds of $1,093, after deducting costs incurred to obtain the settlement.

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

We have not held any meetings where a vote on any matters by the shareholders
occurred during the reporting period. The Company is preparing for a
shareholders meeting upon clearing comment on the associated materials required
for distribution to the shareholders.

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.OB". 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 shareholders of record of the Company's $.001 par value Common
Stock at December 31, 2004, was approximately 203.

We did not issue or sell any shares of stock during the year ended December 31,
2004.

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

                                        7
<PAGE>

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, 2004 AND DECEMBER 31, 2003

During the year ended December 31, 2004, the Company recognized net income
totaling $38,284 as compared to net income of $342,671 during the year ended
December 31, 2003. The net income recognized in 2004 was related to the
following changes in revenues and expenses:

Operating expenses
------------------

Operating expenses totaling $25,332 in 2004 increased $9,493 or 60 percent from
$15,839 in 2003. The increase in operating expenses is due to the professional
and administrative costs related to the VOS Agreement and Plan of
Reorganization.

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

December 31, 2004
-----------------
During the year ended December 31, 2004, other income included gains from sale
of marketable securities totaling $12,431 and proceeds from a lawsuit settled
for $1,093 in January 2004 (see Item 3, Legal Proceedings). The $28,546
installment sale was related to collections of "other consideration" on the
MarketByte receivable, which is recorded as a gain when the consideration is
received. The gain on debt restructure resulted from the settlement of two
account payables.

The Company incurred a $1,701 loss on impairment of its idle assets during 2004.
The assets were subsequently sold for $299.

December 31, 2003
-----------------
During the year ended December 31, 2003, other income includes an installment
sale of $45,380, a $55,681 gain on the settlement of payables, the write-down of
$98,791 in accruals, and a gain resulting form the change in an accounting
estimate totaling $158,668. There were no amounts recognized for these types of
gains during the year ended December 31, 2002. The $45,380 installment sale is
related to collections of "other consideration" on the MarketByte receivable,
which is recorded as a gain when consideration is received.

The Company's management recorded a corporate restructuring liability at
December 31, 2000 in the amount of $350,000. Management estimated the liability
based on costs associated with employee reductions, relocation of the corporate
headquarters and other expenses related to its plan to restructure and cease
operations. The Company recognized liabilities totaling $191,332 during the
years ended December 31, 2003, 2002 and 2001, which reduced the restructuring
liability to $158,668. At December 31, 2003, management determined that it had
over-estimated the original restructuring liability and revised its estimate,
which reduced the liability to zero.

                                        8
<PAGE>

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, 2004, the Company had cash and a
net working capital deficit of $12,800 and $145,180, respectively. Our future
source of capital will come from the remaining receivable from prior sales of
SSP's operations and disposal of equity securities held by the Company.

As of December 31, 2004, we had total assets of $13,178, all of which were
current assets (cash and marketable securities). We had total liabilities (all
current) of $158,358 as of December 31, 2004. We had an accumulated deficit of
$6,265,628 and a shareholders' deficit of $145,180 at December 31, 2004.

As of December 31, 2003, we had total assets of $21,782, including current
assets of $19,282, investments of $500 and $2,000 in idle equipment. We had
total liabilities (all current) of $205,419 as of December 31, 2003. We had an
accumulated deficit of $6,303,912 and a shareholders' deficit of $183,637 at
December 31, 2003.

Net cash used in operations was $31,229 in 2004 consisting largely of the
$38,284 of net income offset by the gain on sale of assets of $28,546, the gain
on debt restructure of $23,247, realized gain on sale of marketable securities,
and the increase in payables and accruals of $7,490. Cash provided by investing
activities was $51,276 in 2004 related to $38,546 in proceeds from SSP's
MarketByte receivable, $12,431 from the sale of marketable securities, and $299
from the sale of idle assets. Cash used in financing activities was $16,324 in
2004 all related to the repayment of a related party promissory note.

Net cash used in operations was $50,674 in 2003 consisting the $342,671 of net
income offset by the gain on sale of assets of $45,380, the gain on write-down
of liabilities of $98,791, the gain on change in accounting estimate of 4158,668
and the increase in payables and accruals of $34,825. Cash provided by investing
activities was $80,380 in 2003 all related to proceeds from SSP's MarketByte
receivable. Cash used in financing activities was $20,754 in 2003 all related to
the repayment of promissory notes.

On a forward-looking 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 restructure our debt burden with past vendors.

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 $289,109 remaining to be paid to SSP from

                                        9
<PAGE>

that contract. There can be no assurance that MarketByte can and will continue
to honor its financial commitment under this Agreement.

Result of the Transaction with VOS Systems, Inc. if approved
Upon completion of the reorganization agreement by and between 1st Net
Technologies, Inc. and VOS Systems, Inc., the strategic direction and business
plans of VOS Systems, Inc. will be adopted. Such strategies and plans are
expected to include new product development, the enhancement of existing
technologies, and the definition of specific applications for such products and
technologies, and the expansion of business-to-business (wholesale)
applications.

Management is not aware of any required state or federal regulatory requirements
that must be complied with or approvals obtained to complete this reorganization
with VOS Systems, Inc.

Management has not obtained any appraisals or expert opinions related to this
reorganization with VOS systems, Inc. Factors management has considered when
evaluating the terms of the reorganization with VOS Systems, Inc. include but
are not limited to: The lack of business activities, market activity, business
prospects and the potential liabilities of 1st Net Technologies, Inc.
Additionally, VOS Systems, Inc. has a qualified and active management team,
intellectual property and potential for growth.

1st Net Technologies, Inc., VOS Systems, Inc. and their affiliates have had no
prior contractual arrangements, relationships or engaged in other negotiations
for the periods represented by the accompanying financial statements.

Terms of the Share Exchange
---------------------------
The Share Exchange in connection with the Agreement and Plan of Reorganization
consists exclusively of newly issued shares of Common Stock, $.001 par value per
share, of 1st Net Technologies, Inc. and shall be a maximum of 36,050,000 shares
issued and exchanged on the basis of three (3) shares of 1st Net Technologies,
Inc. common shares for each common share of VOS Systems, Inc. with fractional
shares being rounded up to the next whole share.

These newly issued shares of 1st Net Technologies, Inc. will be allocated among
the Stockholders of VOS Systems, Inc. in the proportion of their share ownership
of the outstanding shares of VOS Systems, Inc. Common Stock. Upon completion of
the share exchange with the current shareholders of VOS Systems, Inc. they would
own approximately 85% of the outstanding common stock of 1st Net Technologies,
Inc., resulting in a change in control. 1st Net Technologies, Inc. would own
100% of the outstanding common stock of VOS Systems, Inc. and hold VOS Systems,
Inc., a California Corporation as a wholly owned subsidiary.

Change in Control of 1st Net Technologies
-----------------------------------------
As of December 31, 2004, 1st net technologies had 6,395,357 shares of common
stock outstanding. These shares are held by approximately 203 shareholders of
record with the Company's transfer agent.

Currently, our CEO James H. Watson is the only beneficial holder of our
outstanding stock through his control of 11.23% of 1st Net's outstanding common
stock. The remaining 88% of the outstanding common stock is held in small
concentrations by many stockholders.

If the reorganization with VOS Systems, Inc. is approved, up to 36,050,000
additional common shares will be issued to the 74 individual shareholders of
VOS. Upon this issuance the current shareholders of VOS Systems, Inc. would own
approximately 85% of the outstanding common stock of 1st Net Technologies, Inc.

                                       10
<PAGE>

The officers and directors of VOS Systems as a group would control over 33% of
that outstanding and a single beneficial owner would control an additional 15%
of the outstanding stock. This changes the current ownership by concentrating
control of nearly half of the outstanding common stock of the company with six
individuals.

Current 1st Net Shareholders would hold a minority position and due to the wide
distribution of shares among those shareholders would likely not have
substantial ability to choose future management of 1st Net Technologies, Inc.
with their current holdings.

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 the MarketByte
agreement, the settlement of liabilities and the write-off of the liabilities
reserve; we would have suffered a net losses in 2004 and 2003. Also, because we
expect our operating losses to continue into the future, we may never be
profitable. We had an accumulated deficit of $6,265,628 at December 31, 2004. We
incurred net income of $38,284 and $342,671 for the years ended December 31,
2004 and 2003, respectively, due to the previously described non-operating
gains. While we are unable to predict accurately our future operating expenses,
we currently expect our operating expenses to remain low, as we attempt to close
the Agreement and Plan of Reorganization with VOS. If we fail to close the VOS
transaction or are unable to find a suitable business to acquire or combine
with, we will not succeed. In addition, there is the potential that after a
reorganization, profitable business operations could fail to develop with new
management and any new business strategies.

We are also dependent upon the willingness of our sole officer to continue
providing services without compensation as well as the liquidity and advances
from the officer to maintain the Company in stasis with no firm commitments to
continue.

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.

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.

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

                                       11
<PAGE>

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-13.

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.

ITEM 8A.  Controls and Procedures

We maintain a system of controls and procedures designed to provide reasonable
assurance as to the reliability of the financial statements and other
disclosures included in this report. As of December 31, 2004, under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, management has evaluated the effectiveness of the design and
operation of our disclosure controls and procedures. Based on that evaluation,
the Chief Executive Officer and the Chief Financial Officer concluded that our
disclosure controls and procedures were effective in timely alerting them to
required information to be included in our periodic filings with the Securities
and Exchange Commission.

Changes in Internal Controls

There have been no changes in internal controls or in other factors that could
significantly affect those controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

ITEM 8B.  Other Information

         No required disclosures.


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.    42    President, Chairman, Chief Executive
                                   Officer, Chief Financial Officer and
                                   Director

     Daniel Nye              44    Director

                                       12
<PAGE>


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

The Company presently has no committees, which is why we do not have an Audit
Committee Financial Expert.

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., 41, 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 devotes
between 30%-50% of his time to our business. Currently Mr. Watson is a founding
member of The 4 Horsemen, LLC a private equity capital firm that consults with
and invests in development stage companies. From 1996 - 2004, Mr. Watson was the
Founder and General Managing Member of Entrepreneur Investments, LLC (EI), a
private financial consulting and investment firm that specialized in the unique
needs of development stage companies. From 1995 to 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 does not sit on any other Boards. Mr. Watson graduated from the
University of Tennessee / Chattanooga in 1985 with a Bachelors degree in
Political Science/Public Administration.

Daniel Nye, 43, 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

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than 10% shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely on its review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the year ended December 31, 2004, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.

                                       13
<PAGE>


Code of Ethics

The Company has always encouraged its employees, including officers and
directors to conduct business in an honest and ethical manner. Additionally, it
has always been the Company's policy to comply with all applicable laws and
provide accurate and timely disclosure. Despite the foregoing, we currently do
not have a formal written code of ethics for either our directors or employees.
We do not have a formal written code of ethics because we currently only have
one employee, our president/CEO, who is employed on a part-time basis. Our
president/CEO is held to the highest degree of ethical standards. Once we locate
a suitable merger candidate, we will adopt a written code of ethics for all of
our directors, executive officers and employees.

ITEM 10.  Executive Compensation

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. None of our
other executives or directors has received compensation. We reimburse our
officers and directors for any reasonable out-of-pocket expenses incurred on our
behalf.

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

     James H. Watson, Jr.    2004       $ -          $ -         $ -
     President, CEO          2003       $ -          $ -         $ -


Notes:

As of December 31, 2004, 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.

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

                                       14
<PAGE>


BENEFICIAL OWNERS

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, 2004 (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

    JW Holdings Corp. (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 JW Holdings Corp.

CHANGES IN CONTROL

On August 30, 2004, we entered into an Agreement and Plan of Reorganization with
VOS Systems, Inc., ("VOS"). The Agreement provides for the reorganization of VOS
with 1st Net, with 1st Net adopting the name VOS Systems, Inc. In connection
with the Agreement, we would acquire all of the issued and outstanding common
shares of VOS in exchange for approximately 36,050,000 shares of our common
stock. At the closing of the Agreement, the current shareholder of VOS would own
approximately 85% of the outstanding common stock of 1st Net, resulting in a
change in control. The Agreement had not closed as of the date of this report.

ITEM 12.  Certain Relationships and Related Transactions

In prior years, the Company has borrowed funds from JW Holdings Corporation ("JW
Holdings"), an affiliate under common control, for working capital. At December
31, 2002, the Company was indebted to JW Holdings in the amount of $45,078. The
Company borrowed $-0- and $27,882 from JW Holdings and made payments of $16,342
and $48,636 during the years ended December 31, 2004 and 2003, respectively.
Borrowings from JW Holdings are non-interest bearing unless so stated at the
time funds are advanced. The Company owed JW Holdings $8,000 at December 31,
2004.

ITEM 13.  Exhibits and Reports on Form 8-K

     Exhibits:

                                       15
<PAGE>

Exhibit 2      Agreement and Plan of Reorganization, 1st Net Technologies,
               Inc. (a Colorado corporation) and VOS Systems, Inc. (a
               California corporation), entered into August 30, 2004 and
               filed with the SEC on September 2, 2004.

               02-24-2005 - Annual meeting postponed and 8-K press release
               text

     1st Net Technologies, Inc. includes herewith:


     31.1         Certification of Chief Executive Officer and Principal
                  Accounting Officer pursuant to Rule 13a-14(a), as adopted
                  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     32.1         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.

     Item 8.01 - Other Events

         1st Net Announces Postponement of Upcoming Shareholder's Meeting
         February 22, 2005

         DENVER, Feb 22 /PRNewswire-FirstCall/ - 1st Net Technologies, Inc. (OTC
         Bulletin Board: FNTT) announced today that it has postponed the
         shareholder meeting that was scheduled to take place on February 24,
         2005.


     Reports on Form 8-K:

         September 2, 2004
         Item 8.01 - Other Events

          Acquisition of VOS Systems, Inc. (a California corporation)

          On August 30, 2004, 1st Net Technologies, Inc. (the "Company") entered
          into an Agreement and Plan of Reorganization (the "Agreement") with
          VOS Systems, Inc., a California corporation ("VOSS"), and the
          shareholders of VOSS Systems, Inc.

Item 9.01 - Financial Statements and Exhibits

ITEM 14.  Principal Accountant Fees and Services

1.   Audit and Audit-Related Fees

During the year ended December 31, 2004, the Company's principal accountant
billed $5,800 in fees that were directly associated with the preparation of
annual audit reports and quarterly review reports.

During the year ended December 31, 2003, the Company's principal accountant
billed $6,700 in fees that were directly associated with the preparation of
annual audit reports and quarterly review reports.

2.   Tax Fees

During the year ended December 31, 2004, the Company's principal accountant
billed $1,500 in fees that were directly associated with the preparation of tax
filings.

                                       16
<PAGE>

During the year ended December 31, 2003, the Company's principal accountant
billed $-0- in fees that were directly associated with the preparation of tax
filings.

3.   All Other Fees

The Company's principal accountant did not bill any other fees during the years
ended December 31, 2004 and 2003.

Audit Committee's Pre-Approval Policies and Procedures

Due to the fact that 1st Net Technologies has only one active officer and two
directors, the Company does not have an audit committee at this time.

Percentage of Hours Expended

All hours expended on the principal accountant's engagement to audit the
registrant's financial statements for the most recent fiscal year were
attributable to work performed by persons that are the principal accountant's
full-time, permanent employees.


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 12, 2005        By:  /s/ James H. Watson, Jr.
                                   ---------------------------------------------
                                   James H. Watson, Jr., Chief Executive Officer
                                   Officer and Chief Financial 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 12, 2005        By:  /s/ James H. Watson, Jr.
                                   ---------------------------------------------
                                   James H. Watson, Jr., Chief Executive Officer
                                   Officer and Chief Financial Officer of
                                   the Registrant

                                       17
<PAGE>


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

                                                                         Page
                                                                         ----

Report of Independent Registered Public Accounting Firm ..............   F-2

Consolidated Balance Sheet at December 31, 2004 ......................   F-3

Consolidated Statements of Operations for the years ended
     December 31, 2004 and 2003 ......................................   F-4

Consolidated Statement of Changes in Shareholders' Deficit
     for the years ended December 31, 2004 and 2003 ..................   F-5

Consolidated Statements of Cash Flows for the years ended
     December 31, 2004 and 2003 ......................................   F-6

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


<PAGE>

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

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheet of 1st Net
Technologies, Inc. (a Colorado corporation) and subsidiary, as of December 31,
2004 and the related consolidated statements of operations, changes in
shareholders' deficit and cash flows for the years ended December 31, 2004 and
2003. 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 the standards of the Public Company
Accounting Oversight Board (United States). 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, 2004 and the results of their operations
and their cash flows for the years ended December 31, 2004 and 2003 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 a net capital deficit at December 31, 2004. 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 Honeck, LLP
-----------------------------
Cordovano and Honeck, LLP
Denver, Colorado
March 30, 2005

                                       F-2
<PAGE>

                           1ST NET TECHNOLOGIES, INC.
                           Consolidated Balance Sheet


                               December 31, 2004

 Assets
Current assets:
    Cash ........................................................   $    12,800
    Marketable securities (Note 5) ..............................           378
                                                                    -----------

                                                                    $    13,178
                                                                    ===========

                     Liabilities and Shareholders' Deficit
Current liabilities:
    Accounts payable and accrued liabilities ....................   $    61,319
    Indebtedness to related parties (Note 3) ....................         8,000
    Capital lease obligations (Note 1) ..........................        49,039
    Accrued payroll taxes .......................................        40,000
                                                                    -----------
                   Total current liabilities ....................       158,358
                                                                    -----------

Shareholders' deficit (Note 8):
    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 ..................................     6,192,941
    Retained deficit ............................................    (6,265,628)
    Accumulated other comprehensive income:
       Unrealized holding loss on marketable securities .........       (78,888)
                                                                    -----------

                  Total shareholders' deficit ...................      (145,180)
                                                                    -----------

                                                                    $    13,178
                                                                    ===========

           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,
                                                           --------------------------
                                                              2004            2003
                                                           -----------    -----------
<S>                                                        <C>            <C>
Costs and expenses:
    General and administrative expenses ................   $    25,332    $    15,839
                                                           -----------    -----------

                    Loss from operations ...............       (25,332)       (15,839)

Other income (expense):
    Realized gain/(loss) on sale of investments (Note 5)        12,431           --
    Interest expense ...................................          --              (10)
    Installment sale (Note 4) ..........................        28,546         45,380
    Gain on debt restructure (Note 1) ..................        23,247         55,681
    Impairment of idle assets (Note 6) .................        (1,701)          --
    Other income (Notes 1 and 7) .......................         1,093        257,459
                                                           -----------    -----------

                    Income before income taxes .........        38,284        342,671

Provision for income taxes (Note 9) ....................          --             --
                                                           -----------    -----------

                    Net income .........................   $    38,284    $   342,671
                                                           ===========    ===========

Basic and diluted income per share .....................   $      0.01    $      0.05
                                                           ===========    ===========

Weighted average common shares outstanding .............     6,395,357      6,395,357
                                                           ===========    ===========
</TABLE>


           See accompanying notes to consolidated financial statements

                                       F-4

<PAGE>

<TABLE>
                           1ST NET TECHNOLOGIES, INC.
           Consolidated Statement of Changes in Shareholders' Deficit
<CAPTION>

                         *** SPLIT TABLE - SEE BELOW ***



                                         Preferred Stock        Common Stock
                                        ------------------  ----------------------
                                         Shares  Par Value    Shares     Par Value
                                        -------   -------   -----------   --------
<S>                                     <C>       <C>       <C>           <C>
Balance at January 1, 2003 ..........      --     $  --     $ 6,395,357   $  6,395

Capital contribution (Note 1) .......      --        --            --         --
Comprehensive loss:
    Unrealized loss on investments
       held for sale ................      --        --            --         --
    Net income ......................      --        --            --         --

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

Balance at December 31, 2003 ........      --        --       6,395,357      6,395

Comprehensive loss:
    Unrealized loss on investments
       held for sale ................      --        --            --         --
    Net income ......................      --        --            --         --

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

Balance at December 31, 2004 ........      --     $  --       6,395,357   $  6,395
                                        =======   =======   ===========   ========
</TABLE>

<TABLE>
                           1ST NET TECHNOLOGIES, INC.
           Consolidated Statement of Changes in Shareholders' Deficit
                                   (CONTINUED)
<CAPTION>

                         *** SPLIT TABLE - SEE ABOVE ***

                                                                        Other
                                                                    Comprehensive
                                                                        Income
                                                                      -----------
                                         Additional                   Unrealized
                                          Paid-in       Retained       Holding
                                           Capital       Deficit         Loss           Total
                                         -----------   -----------    -----------    -----------
<S>                                      <C>           <C>            <C>            <C>
Balance at January 1, 2003 ..........    $ 6,093,485   $(6,646,583)   $   (56,675)   $  (603,378)

Capital contribution (Note 1) .......         99,456          --             --           99,456
Comprehensive loss:
    Unrealized loss on investments
       held for sale ................           --            --          (22,386)       (22,386)
    Net income ......................           --         342,671           --          342,671

            Total comprehensive loss                                                     320,285
                                         -----------   -----------    -----------    -----------

Balance at December 31, 2003 ........      6,192,941    (6,303,912)       (79,061)      (183,637)

Comprehensive loss:
    Unrealized loss on investments
       held for sale ................           --            --              173            173
    Net income ......................           --          38,284           --           38,284
                                                                                     -----------
            Total comprehensive loss                                                      38,457
                                         -----------   -----------    -----------    -----------

Balance at December 31, 2004 ........    $ 6,192,941   $(6,265,628)   $   (78,888)   $  (145,180)
                                         ===========   ===========    ===========    ===========
</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-5

<PAGE>

<TABLE>
                           1ST NET TECHNOLOGIES, INC.
                      Consolidated Statements of Cash Flows
<CAPTION>

                                                                          For the Years Ended
                                                                              December 31,
                                                                         ----------------------
                                                                            2004        2003
                                                                         ---------    ---------
<S>                                                                      <C>          <C>
Cash flows from operating activities:
    Net income (loss) ................................................   $  38,284    $ 342,671
    Adjustments to reconcile net income (loss) to
       net cash used by operating activities:
          Gain on sale of assets .....................................     (28,546)     (45,380)
          Asset impairment ...........................................       1,701         --
          Realized gain on sale of investments .......................     (12,431)        --
          Gain on debt restructure (Note 1) ..........................     (23,247)     (55,681)
          Gain on write-off of liabilities (Note 1)  .................        --        (98,791)
          Gain on change in accounting estimate (Note 1)  ............        --       (158,668)
          Changes in current assets and liabilities:
             Other assets ............................................         500         --
             Accounts payable and accrued liabilities ................      (7,490)     (34,825)
                                                                         ---------    ---------
                      Net cash used in
                         operating activities ........................     (31,229)     (50,674)
                                                                         ---------    ---------

Cash flows from investing activities:
    Proceeds from receipt of note receivable\ ........................      38,546       80,380
    Proceeds from sale of equipment ..................................         299         --
    Proceeds from sale of marketable securities, net .................      12,431         --
                                                                         ---------    ---------
                      Net cash provided by
                         investing activities ........................      51,276       80,380
                                                                         ---------    ---------

Cash flows from financing activities:
    Repayment of notes payable .......................................        --           --
    Proceeds from related party loans (Note 3) .......................        --         27,882
    Repayment of related party loans (Note 3) ........................     (16,324)     (48,636)
                                                                         ---------    ---------
                      Net cash used in
                         financing activities ........................     (16,324)     (20,754)
                                                                         ---------    ---------

                         Net change in cash ..........................       3,723        8,952

Cash, beginning of period ............................................       9,077          125
                                                                         ---------    ---------

Cash, end of period ..................................................   $  12,800    $   9,077
                                                                         =========    =========

Supplemental disclosure of cash flow information:
    Cash paid for:
       Interest ......................................................   $    --      $    --
                                                                         =========    =========
       Income taxes ..................................................   $    --      $    --
                                                                         =========    =========
</TABLE>
           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 from its inception in 1997 through
August 2001. The Company conducted its business operations 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, 2003, SSP remains wholly-owned by 1st Net.
The Company ceased operations and moved its headquarters from San Diego,
California to Denver, Colorado in August 2001. Since August 2001, the Company
has been a shell company in search of a merger candidate. Recent operations have
consisted of debt restructuring.

Debt restructurings and write-offs

During the years ended December 31, 2004 and 2003, the Company settled certain
accounts payable balances for less than the carrying value. The resulting gains
of $23,247 and $55,681, respectively, are included in the accompanying
consolidated financial statements as "Gain on debt restructure".

The Company defaulted on certain equipment lease obligations during 2001. One
lease was assumed from an affiliate that was the lessee. The affiliate
subsequently dissolved its corporate existence. As a result, the Company
wrote-off the $99,456 lease obligation and recorded a capital contribution
during the year ended December 31, 2003. The Company remains liable for the
remaining lease obligations which totaled $49,039 at December 31, 2004.

The Company relocated in August 2001 and defaulted on its office lease. Due to a
change in ownership of the building where the office lease was located and the
lack of contact with the landlord since 2001, management believes the
probability of collection actions on the office lease is remote. Therefore, the
Company wrote-off the $45,000 lease obligation during the year ended December
31, 2003.

During the year ended December 31, 2004, the Company adjusted its payroll tax
accruals based on negotiations with the Internal Revenue Service. The Company
reversed $53,791 of payroll tax accruals as a result of the adjustment.

Change in accounting estimate

The Company's management recorded a corporate restructuring liability at
December 31, 2000 in the amount of $350,000. Management estimated the liability
based on costs associated with employee reductions, relocation of the corporate
headquarters and other expenses related to its plan to restructure and cease
operations. The Company recognized liabilities totaling $191,332 during the
years ended December 31, 2003, 2002 and 2001, which reduced the restructuring
liability to $158,668. At December 31, 2003, management determined that it had
over-estimated the original restructuring liability and revised its estimate,
and reversed the remaining liability of $158,668.

Agreement and Plan of Reorganization

On August 30, 2004, the Company entered into an Agreement and Plan of
Reorganization with VOS Systems, Inc., ("VOS") a San Diego, California based
company that specializes in voice activated electronic controls. The Agreement
provides for the reorganization of VOS with the Company, with the Company
adopting the name VOS Systems, Inc. In connection with the Agreement, the
Company would acquire all of the issued and outstanding common shares of VOS in
exchange for approximately 36,050,000 shares of the Company's common stock. At
the closing of the Agreement, the current shareholder of VOS would own
approximately 85% of the outstanding common stock of the Company, resulting in a
change in control. The Agreement had not closed as of the date of this report.

                                       F-7
<PAGE>


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


2.   Significant accounting policies

Going concern

The Company's financial statements have been prepared under the assumption it
will continue as a going concern. Realization of the Company's assets in the
accompanying financial statements is dependent upon the continued operation of
the Company. The Company plans to remain a going concern through its Agreement
and Plan of Reorganization with VOS. If the Company fails to close the
agreement, it must raise additional funds by incurring new debt, raising new
equity or liquidating investment securities in order to continue its limited
operations. There is no assurance the Company will be successful in closing the
VOS agreement or in acquiring the working capital necessary to continue as a
going concern. The Company is operating through the forbearance of its
creditors.

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. The accompanying financial statements have been prepared on a
consolidated basis as if common control was established as of the inception of
SSP.

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, 2004.

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.

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

                                       F-8
<PAGE>


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


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. An impairment was recorded on the Company's idle equipment during
the year ended December 31, 2004 (see Note 6).

Fair value of financial instruments

The Company estimates that the carrying values of its monetary assets and
liabilities approximate their fair values as of December 31, 2004 due to the
short-term maturity of those instruments.

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 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.

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.

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 -0- and 625,000 at December 31,
2004 and 2003, respectively.

Stock-based compensation

The Company accounts for compensation expense for its stock-based employee
compensation plans using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"), and complies with the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), and SFAS No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure". Under APB
25, compensation expense of fixed stock options is based on the difference, if
any, on the date of the grant between the deemed fair value of the Company's
stock and the exercise price of the option. Compensation expense is recognized
on the date of grant or on the straight-line basis over the option-vesting
period. The Company accounts for stock issued to nonemployees in accordance with
the provisions of SFAS 123 and EITF Issue No. 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services".

Pro forma information regarding the results of operations is determined as if
the Company had accounted for its employee stock options using the fair-value
method. The fair value of each option grant is estimated on the date of grant
using the Black-Scholes method. The Company did not grant any stock-based awards
during the years ended December 31, 2004 and 2003.

                                       F-9
<PAGE>

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

Reclassifications

Certain 2003 balances have been reclassified to conform with the 2004
presentation. These reclassifications have no effect on net income.

Recent accounting pronouncements

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- an amendment of APB Opinion No. 29." This Statement eliminates the exception
for nonmonetary exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. This Statement is effective for nonmonetary asset exchanges
occurring in fiscal periods beginning after June 15, 2005. The Company does not
expect application of SFAS No. 153 to have a material affect on its financial
statements.

In December 2004, the FASB issued a revision to SFAS No. 123, "Share-Based
Payment." This Statement supercedes APB Opinion No. 25, "Accounting for Stock
Issued to Employees" and its related implementation guidance. It establishes
standards for the accounting for transactions in which an entity exchanges its
equity instruments for goods or services. It also addresses transactions in
which an entity incurs liabilities in exchange for goods or services that are
based on the fair value of the entity's equity instruments or that may be
settled by the issuance of those equity instruments. This Statement does not
change the accounting guidance for share-based payment transactions with parties
other than employees provided in Statement No. 123 as originally issued and EITF
Issue No. 96-18. This Statement is effective for public entities that file as
small business issuers as of the beginning of the first fiscal period that
begins after December 15, 2005. The Company has not yet determined the impact of
SFAS No. 123 (revised) on its financial statements.

3.   Related party transactions

In prior years, the Company has borrowed funds from an affiliate for working
capital. At December 31, 2002, the Company was indebted to the affiliate in the
amount of $45,078. The Company borrowed $-0- and $27,882 from the affiliate and
made payments of $16,342 and $48,636 during the years ended December 31, 2004
and 2003, respectively. Borrowings from the affiliate are non-interest bearing
unless so stated at the time funds are advanced. The Company owed the affiliate
$8,000 at December 31, 2004.

4.   Installment sale of Internet newsletter

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 $400,000 in other future consideration. Other
future consideration consisted of 10% of any future consideration received by
Marketbyte in connection with the newsletter through June 2, 2002. Marketbyte
has repaid $200,000 the promissory note and has paid $110,891 in other
consideration through December 31, 2004. 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, 2004:

                                         Unrealized  Unrealized    Fair
               2004            Cost         Gain        Loss       Value
    --------------------------------------------------------------------
    Equity Securities        $ 205        $ 173      $  --         $ 378



                                         Unrealized  Unrealized    Fair
               2003            Cost         Gain        Loss       Value
    --------------------------------------------------------------------
    Equity Securities        $ 22,591     $  --      $ (22,386)    $ 205

The Company received net proceeds from sale of equity securities held in the
amount of $12,431 and $-0- and realized a gain in the amount of $12,431 and
$-0-, during the years ended December 31, 2004 and 2003 respectively. The
Company recorded net accumulated comprehensive gains/(losses) on
available-for-sale securities totaling $173 and $(22,386) during the years ended
December 31, 2004 and 2003, respectively.

6.   Sale of idle equipment

At December 31, 2003, the Company held idle computer equipment with a book value
of $2,000. During April 2004, the Company sold the idle equipment for net
proceeds of $299, after deducting costs to sell the equipment. The Company had
previously recorded an asset impairment charge of $1,701 to reduce the book
value of the idle equipment to its fair value as of March 31, 2004.

There was no depreciation expense recorded during the years ended December 31,
2004 and 2003.

7.   Lawsuit settlement

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 stemmed from the dismissal of the Company
pursuant to a 2002 lawsuit, whereby the Company was seeking to recoup the fees
and expenses it had to expend to defend itself in that suit. During January
2004, the parties settled the action and the Company received net proceeds of
$1,093, after deducting costs incurred to obtain the settlement. The net
proceeds are included in the accompanying condensed consolidated financial
statements as "Other Income".

8.   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, 2003.

Common stock awards

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

                                      F-11
<PAGE>

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


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

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. The Company granted no stock awards during the years ended
December 31, 2004 and 2003.

Following is a schedule of changes in the Company's outstanding stock awards for
the years ended December 31, 2004 and 2003:

<TABLE>

<CAPTION>

                                                                    Weighted       Weighted Avg
                                                       Number          Avg           Remaining
               Stock Awards                 Number   Exercisable   Exercise Price        Life
------------------------------------------------------------------------------------------------
<S>                                         <C>      <C>           <C>             <C>
Outstanding at January 1, 2003............. 625,000     625,000        $2.60            1 year
Granted....................................       -           -           -                -
Exercised..................................       -           -           -                -
Expired....................................       -           -           -                -
Cancelled..................................       -           -           -                -
                                           ---------------------------------------------------------
Outstanding at December 31, 2003........... 625,000     625,000        $2.60           2 months
Granted....................................       -           -           -                -
Exercised..................................       -           -           -                -
Expired....................................(625,000)   (625,000)          -                -
Cancelled..................................       -           -           -                -
                                           ---------------------------------------------------------
Outstanding at December 31, 2004...........       -           -           -                -
                                           =========
</TABLE>

9.   Income taxes

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

                                                          2004         2003
                                                        --------     --------
     Federal income tax rate..........................   15.00%       34.00%
     State income tax rate, net of Federal benefit....    3.94%        3.06%
     Net operating loss for which no tax benefit......
        is currently available........................  -18.94%      -37.06%
                                                        --------     --------
                                                          0.00%        0.00%
                                                        ========     ========


At December 31, 2004, deferred taxes consisted of a net tax asset of $2,093,504,
due to operating loss carryforwards of $6,165,697, which was fully allowed for,
in the valuation allowance of $2,093,504. 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, 2004 and 2003
totaled $(7,339) and $(163,834). 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-12