UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[ X ]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934
          For the quarterly period ended : September 30, 2001


[ ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
          For the transition period from _________________ to _________________


                        Commission file number: 000-29915

                                   Frefax Inc.
        (Exact name of small business issuer as specified in its charter)


             FLORIDA                                       65-0786722
(State or other jurisdiction of
incorporation or organization)                 (IRS Employer Identification No.)


                  1255 Peel Street, Suite 550, Montreal, Quebec
                      CANADA H3B 1T4 (Address of principal
                               executive offices)


                                 (514) 398-0515
                           (Issuer's telephone number)




                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 50,331,657

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]

<PAGE>

PART I-- FINANCIAL INFORMATION....................................2
------------------------------

   ITEM 1. FINANCIAL STATEMENTS...................................2
   -----------------------------
   ITEM 2. PLAN OF OPERATION......................................3
   --------------------------
   1.    NEWS ARTICLES............................................5
   --    -------------

PART II-- OTHER INFORMATION.......................................6
---------------------------

   ITEM 1. LEGAL PROCEEDINGS......................................6
   --------------------------
   ITEM 2. CHANGES IN SECURITIES..................................6
   ------------------------------
   ITEM 3. DEFAULTS UPON SENIOR SECURITIES........................7
   ---------------------------------------
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....7
   ------------------------------------------------------------
   ITEM 5. OTHER INFORMATION......................................7
   --------------------------
   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.......................7
   -----------------------------------------

SIGNATURES........................................................8




                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

At the end of this filing are attached audited financial statements for Frefax,
Inc. (FC) and subsidiary, for the period ending September 30th, 2000 which are
submitted in compliance with item 310 (b) of Regulation SB.

                           FREFAX, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                             Page number
<S>                                                                                                <C>
Independent auditors' report                                                                     F-1
Consolidated Interim Balance sheet at September 30, 2001                                         F-2
Consolidated Interim Statements of operations and comprehensive income (loss) for the            F-3
period ended September 30, 2001 and cumulative period from September 26, 1997 (date of
inception) to September 30, 2001
Consolidated Interim Statement of stockholders' deficiency for the period from                F-4 - F-5
September 26, 1997 (date of inception) to September 30, 2001
Consolidated Interim Statement of cash flows for the periods ended September 30, 2001            F-6
and cumulative period from September 26, 1997 (date of inception) to September 30,
2001.
Consolidated Interim Notes to financial statements                                           F-7 - F-12

</TABLE>


<PAGE>


Item 2. Plan of Operation.

Subsequent to the close of the first quarter of September 30, 2001, Frefax Inc.
acquired 100% of the outstanding shares of CXN in exchange for a total of
28,836,566 newly issued shares of Frefax common stock to CXN shareholders. The
issuance of the Frefax shares to CXN effectively created a merger and change of
control, such that CXN is now a wholly owned subsidiary of Frefax. The
transaction was closed on November 13, 2001.

While events occurred subsequent to the period of this filling, new management
has incorporated all results of its operations in this filling.

The Company
CXN was incorporated on October 19th, 2000, to acquire the exclusive
commercialization rights to the most reliable and timely financial, economic and
business financial information on China, published by the China Economic
Information Network (CEINet).

CEINet is a subsidiary of the Chinese State Information Center (SIC) which
reports to the State Development Planning Commission.

CEINet was created by the SIC as a professional information service network,
responsible for producing and publishing economic information on China. CEINet
has a local information network in over 150 cities and regions all across China,
forming a financial information network that covers the entire country.

The SIC is a government sponsored institution under the direct management of the
State Development Planning Commission (SDPC). The SDPC reports directly to the
State Council, which is China's cabinet, the highest body, of state
administration.

CEINet currently publishes over 2000 financial news articles and features a week
in Mandarin. This allows CXN to provide its subscribers with over 200 new
articles daily. The articles and reports that are published by CXN are sourced
primarily from CEINet. CEINet is the Chinese Government's primary source of
financial, economic and business news, used in the planning and economic
development of China.

CXN will edit, normalize and properly classify all this data using industry
standard NewsML tags. This process allows CXN to display, hide or arrange
certain areas of the same content in different ways. This allows the content to
be automatically prepared for multi-channel publishing. The main products to be
offered by CXN include, Real-time Financial News, Corporate Profiles, Financial
Television, Market Research and Monthly Industry Reviews.

CXN presently operates from its head office in Montreal and has a staff of 28
editors, translators and support staff in its Beijing editorial office.
<PAGE>

Capital Needs
-------------
The company currently has enough capital to cover operations till the end of
February 2002. The company will require an additional $1 million to $1.5 in
equity to cover costs associated with;

o        Hiring of additional key staff and sales staff;
o        Cover  development  and  operating  costs of the  company's  enterprise
         portal;
o        Launch marketing and advertising campaign;
o        Hire additional translators and editors in China;

Based on the difficult funding environment faced by most companies, the company
will run a very streamlined sales office and support infrastructure which will
require much lower operating expense and need of ramp up capital. The company
will rely more on using content aggregators and strategic partnership to
distribute its content. This will translate to lower operating margins in the
range of 30-35%.

The company will generate revenue starting February 2002, and is expected to be
cash-flow positive by April 2003 or earlier.

Capital will be raised through, debt financing, private placements or secondary
offerings and will be completed before March 2002.

Product Development & Catalogue
-------------------------------
During the next 12 months, the company will be rolling out all its content and
made available through its portal or through various e-content aggregators.

The company has presently available in English, a complete listing of all 1114
companies listed on the Shanghai and Shenzhen stock exchanges.

By the end of February 2002, the company will have a complete translated
database of all 84,000 companies, including all of China's non-listed state
owned enterprises and major privately owned companies.

All of this data is produced and updated on a regular basis by CEINet, the
company will be transferring the data to its own servers, where the data will be
translated, noralized and available for delivery in various formats.


The company is in the process of producing a detailed catalogue to be provided
to the market in the near future. An outline of all products in development is
listed bellow.

(i)      China's  Public Company  Profiles
                  Hoover's  type  profile  for all listed  companies  in China's
                  Shanghai and Shenzhen stock exchanges. Reports include company
                  overview,  leading financial ratios,  two-year  financial data
                  and  five-year  historical  stock  prices.  The source of this
                  product  comes from CXN research  and the  research  center of
                  China's State Planning & Development  Commission (SPDC).  Over
                  1100 profiles will be available by January 15, 2002 in XML and
                  PDF format.
<PAGE>

(ii)     China's Private and State Owned Company Profiles
                  Fact sheet  information on 84,000  companies  including all of
                  China's non-listed state owned enterprises and major privately
                  owned companies. This product will launch on February 25, 2002
                  in XML format.

(iii)    China Macroeconomic Reports
                  Macroeconomic reports from the research center of China's
                  powerful State Planning and Development Commission and two of
                  China's prominent brokerage houses Hongyuan Securities and
                  Beijing Securities. These reports are available in XML format.

(iv)     China's 50 Economic Expert Forum
                  Papers produced by China's top economists on various financial
                  & economical topics. On average, 7 papers are available each
                  month. The source of this information is the research center
                  of SPDC. These reports are available in XML format.

(v)      Sector Research Reports on major industries in China
                  Sector Research Reports on major industries produced by
                  Hongyuan Securities Co., Beijing Securities and other
                  prominent Chinese brokerage houses.

(vi)     China Public Company Analysis
                  In-depth coverage and investment analysis on China's
                  domestically listed companies. The data sources of this
                  product are prominent Chinese brokerage houses including
                  Hongyuan Securities Co., Beijing Securities and China
                  Securities.

(vii)    Other China Financial, Market & Economic Development Information
                  CXN's primary data source is the research center of the SPDC.
                  All the titles included in this section are already available
                  in the Chinese Language. The English versions of the following
                  titles are currently under preparation.
1.       News articles

                  a.  Macroeconomy  -  information  and  commentary  on  China's
                  domestic economy and major international economies;
                  b.  Industry - daily news  articles  covering  top  stories in
                  China by industry sector and region;
                  c.  Markets - daily  news  articles  and  commentary  covering
                  China's securities markets.
<PAGE>

2.       Macroeconomic and Industry Statistics

         a.       Macroeconomy  -  regular  updates,  historical  coverage,  and
                  analysis of China's fixed assets  investment,  value-added  of
                  industry,  retail sales,  and industrial  GDP,  foreign trade,
                  domestic  and  foreign  investment,  government  fiscal  data,
                  pricing, consumption and livelihood;
         b.       Industry - regular updates,  historical coverage, and analysis
                  of  China's  industrial  production  covering  over 230 sector
                  headings, 32 regions, and 35 cities.

Major Expenditure - Portal
--------------------------
The only major purchase anticipated by the company is the development and
launching is its enterprise portal.

It was originally planed to develop and maintain this portal in-house, but to
minimize capital expenditures associated to purchasing servers and maintaining
full time staff to support the infrastructure, the company has decided to
outsource all its enterprise portal needs to ECNext.

With minimal upfront development costs and monthly maintenance fees and revenue
sharing arrangement, the company will have a world-class portal online starting
January and fully implemented by March 2002.

Staff
-----
The company believes it will require a staff of 75 translators and editors in
its Beijing office by the end of 2002, to support its operations. The company
currently has 28 employees in its Beijing office.

With respect to the company's sales, marketing and advertising and
administrative operations in Montreal, it is expected the current head count of
6 persons will jump to 19.

All staff will be ramped up as needed and pending budget allocation from head
office.


                          PART II -- OTHER INFORMATION
                          ----------------------------
Item 1. Legal Proceedings.

Not applicable


Item 2. Changes in Securities.

Not applicable
<PAGE>


Item 3. Defaults Upon Senior Securities

Not applicable


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

Not applicable


Item 5. Other Information.

Not applicable


Item 6. Exhibits and Reports on Form 8-K.

Exhibits
2      Acquisition of China Xin Network (Canada) inc. (1)
3.a    Articles of Incorporation of the Company (2)
3.b    Amendments to the Articles of Incorporation (2)
3.c    By-Laws of the Company (2)

(1)Previously filed as an Exhibit to Form 8-K dated November 28, 2001
(2)Previously   filed  as  an  Exhibit  to  Form  10-SB12G,   General  form  for
registration of Securities filed on March 10, 2000

Forms 8-K
---------
There were no 8-K filed during the first quarter ending September 30, 2001.
Following subsequent events dated November 8 merger between Frefax and China Xin
Network, Form 8-K was filled on November 28, 2001 reflecting change of control
following merger with China Xin Network. On December 17, 2001 the new management
engaged new accountants for China Xin Network and Frefax. On December 21, 2001,
two separate Form 8-Ks were filled reflecting changes to auditors.


<PAGE>


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                          Frefax Inc.
                                          (Registrant)


                                          /S/ Jean-Francois Amyot
                                          ----------------------------------
Date December 27, 2001                    Jean-Francois Amyot
                                          CEO & Chairman

<PAGE>

                          FREFAX, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                    CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                     FOR THE PERIOD ENDED SEPTEMBER 30, 2001
                                       AND
                    CUMULATIVE PERIOD FROM SEPTEMBER 26, 1997
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001

























<PAGE>



                           FREFAX, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>


                                                                                             Page number
<S>                                                                                                <C>
Independent auditors' report                                                                     F-1

Consolidated Interim Balance sheet at September 30, 2001                                         F-2

Consolidated Interim Statements of operations and comprehensive income (loss)
for the period ended September 30, 2001 and cumulative period
from September 26, 1997 (date of inception) to September 30, 2001                                F-3

Consolidated Interim Statement of stockholders' deficiency for the period from
September 26, 1997 (date of inception) to September 30, 2001                                     F-4 - F-5

Consolidated Interim Statement of cash flows for the periods ended September 30,
2001 and cumulative period from September 26, 1997 (date of
inception) to September 30, 2001.                                                                F-6

Consolidated Interim Notes to financial statements                                               F-7 - F-12

</TABLE>



                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Frefax, Inc. and Subsidiary

We have  audited the  accompanying  interim  balance  sheet of Frefax,  Inc. and
Subsidiary (a  development  stage  company) (the  "Company") as of September 30,
2001 and the related interim  statements of operations and comprehensive  income
(loss),  stockholders'  deficiency and cash flows for the period ended September
30, 2001 and  cumulative  period from  September 26, 1997 (date of inception) to
September 30, 2001.  These  consolidated  interim  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated interim 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 audits to obtain reasonable assurance about whether the consolidated
interim  financial  statements  are  free of  material  misstatement.  An  audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable bases for our opinion.

In our opinion,  the consolidated interim financial statements referred to above
present fairly, in all material respects,  the financial position of the Company
as of September  30, 2001 and the results of its  operations  and cash flows for
the  period  ended  September  30,  2001  and 2000 and  cumulative  period  from
September 26, 1997 (date of inception) to September 30, 2001 in conformity  with
accounting principles generally accepted in the United States of America.

The accompanying  consolidated  interim financial  statements have been prepared
assuming the Company will continue as a going concern, As discussed in Note 3 to
the  financial  statements,  the  Company  has  suffered  recurring  losses from
operations  and has no  established  source of revenue which raises  substantial
doubt about its ability to continue  as a going  concern.  Management's  plan in
regard to these matters are also  described in Note 3. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.


Fine and Associates
Montreal, Quebec Canada
December 20, 2001
<PAGE>




                           FREFAX, INC. AND SUBSIDARY
                          (A DEVELOPMENT STAGE COMPANY)
                       CONSOLIDATED INTERIM BALANCE SHEET
                               SEPTEMBER 30, 2001


                                     ASSETS
                                     ------
<TABLE>
<CAPTION>

Current assets:
<S>                                                                                 <C>
     Cash                                                                           $       8,049
     Prepaid and deposits                                                                  19,962
     Receivable use Tax                                                                    19,149
                                                                                    -------------
                                                                                           47,160

Capital assets. (Note 1d)                                                                  60,273
                                                                                    -------------

                                                                                          107,433

                                   LIABILITIES
                                   -----------
Current liabilities:
     Accrued expenses                                                               $      16,650
                                                                                    -------------
     Accrued expenses - Related party                                               $      74,971
                                                                                    -------------
     Loans from related parties                                                            37,223
                                                                                    -------------
              Total current liabilities                                                   128,844
                                                                                    -------------

Loans payable (Note 7)

Commitments and contingencies (Note 6)                                                     -
                                                                                          ----

                                                                                          538,148
                            SHAREHOLDERS' DEFICIENCY
                            ------------------------
Stockholders' deficiency:
     Common stock - $.001 per value, 50,000,000 shares
     Authorized, 50,331,657 shares issued and outstanding                                  50,332
     Additional paid-in capital                                                           108,932
Accumulated deficit during the development stage                                        (197,285)
Stock subscriptions receivable                                                          (196,349)
                                                                                    -------------
     Total stockholders' deficiency                                                       430,715
                                                                                    -------------

Total liabilities and stockholders' deficiency                                      $     107,433
                                                                                    =============
</TABLE>



           See accompanying notes to consolidated financial statements

                                       F-2
<PAGE>

                                  FREFAX, INC.
                          (A DEVELOPMENT STAGE COMPANY)
            STATEMENTS OF OPERATIONS AND COMPRHEHENSIVE INCOME (LOSS)

<TABLE>
<CAPTION>
                                                                                 Cumulative period
                                                                                 from September
                                                                                 26, 1997 (date of
                                                          For the period         inception) to
                                                          ended September        September 30,
                                                          30, 2001               2001
                                                         -------------------------------------------

<S>                                                       <C>                    <C>
                                                          $               -      $               -
                                                         --------------------   --------------------
Income

Expenses:
    Selling, general and administrative expenses                     276,201                393,630

Total expense                                                        276,201                393,630
                                                         --------------------   --------------------

Loss before other income (expense)
 and provision for income taxes                                     (276,201)              (393,630)

Other income (expense)
   Interest income                                                       936                    936
   Total other income                                                    936                    936
                                                         --------------------   --------------------

Loss before provision for income taxes                              (275,265)              (392,694)
                                                         --------------------   --------------------

Provision for income taxes                                         -                      -
                                                         --------------------   --------------------

Comprehensive net (loss)                                            (275,265)              (392,694)
                                                         ====================   ====================

Basic:
    Net (loss)                                                            (0)                    (0)
                                                         ====================   ====================
</TABLE>


           See accompanying notes to consolidated financial statements

                                       F-3



<PAGE>



            FREFAX, INC. AND SUBSIDIARY (A DEVELOPMENT STAGE COMPANY)
           CONSOLIDATED INTERIM STATEMENTS OF STOCKHOLDERS' DEFICIENCY
           FOR THE PERIOD FROM SEPTEMBER 26, 1997 (DATE OF INCEPTION)
                             TO SEPTEMBER 30, 2001
<TABLE>
<CAPTION>

                                                                        Accumulated        Accumulated
                                                            Additional  Deficit            Other         Stock         Total
                                           Common Stock     Paid-in     During the         comprehensive Subscriptions Stockholders'
                                       Shares     Amount    Capital     Development Stage  Income (Loss) Receivable    Deficiency
                                     -----------  --------- ----------- ----------------- -------------  ------------   -----------
Issuance of common stock upon
<S>                                     <C>            <C>       <C>                                                         <C>
capitalization of company               500,000        500       2,000       -                -              -               2,500

Issuance of common stock in
  connection with limited offerings     403,000        403         297       -                -              -                 700

Net loss from date of inception
  (September 26, 1997) to
June 30, 1998                              -             -          -             (2,954)     -              -              (2,954)
                                     -----------  --------- ----------- ----------------- -------------  ------------   -----------

Balances at June 30, 1998               903,000        903       2,297            (2,954)     -              -                 246

Issuance of common
   stock in connection with
acquisition of subsidiary            10,000,000     10,000      -            -                -              -              10,000

Issuance of common
   stock in connection with
   limited offering (November 1998)   6,001,000      6,001      54,009       -                 (60,010)      -             -

Issuance of common
   stock in connection with
   limited offering (february 1999)   2,542,000      2,542     124,558       -                -             (127,100)      -

Accrued interest on
  subscriptions receivable             -             -          -            -                -               (1,755)       (1,755)

Foreign Currency
   translation adjustment              -             -          -            -                  (6,436)      -              (6,436)

Net loss for the year ended
   June 30, 1999                       -             -          -                (49,719)     -              -             (49,719)
                                     -----------  --------- ----------- ----------------- -------------  ------------   -----------
                                     -----------  --------- ----------- ----------------- -------------  ------------   -----------

Balances at June 30, 1999 (Forwarded)19,446,000     19,446     180,864           (52,673)       (6,436)     (188,865)      (47,664)
</TABLE>




           See accompanying notes to consolidated financial statements

                                       F-4
<PAGE>

            FREFAX, INC. AND SUBSIDIARY (A DEVELOPMENT STAGE COMPANY)
           CONSOLIDATED INTERIM STATEMENTS OF STOCKHOLDERS' DEFICIENCY
           FOR THE PERIOD FROM SEPTEMBER 26, 1997 (DATE OF INCEPTION)
                             TO SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                 Accumulated          Accumulated
                                                   Additional    Deficit              Other                   Stock         Total
                                 Common Stock      Paid-in       During the           comprehensive   Subscriptions  Stockholders'
                             Shares     Amount     Capital       Development Stage    Income (Loss)      Receivable    Deficiency
                           ------------ ---------  ------------  -------------------  --------------- -------------  ------------
                           ------------ ---------  ------------  -------------------  --------------- -------------  ------------
<S>                            <C>            <C>          <C>                  <C>               <C>         <C>              <C>
Balances at June 30, 1999  (19,446,000)   19,446       180,864              (52,673)          (6,436)     (188,865)        (47,664)

Accrued interest on
   subscriptins receivable    -           -            -                -                   -               (3,742)       (3,742)

Foreign currency
   translation adjustment     -           -            -                -                     (4,936)     -               (4,936)

Net loss for the year ended
   June 30, 2000              -           -            -                    (35,300)        -             -              (35,300)
                           ------------ ---------  ------------  -------------------  --------------- -------------  ------------
                           ------------ ---------  ------------  -------------------  --------------- -------------  ------------

Balances at June 30, 2000   19,446,000    19,446       180,864              (87,973)         (11,372)     (192,607)      (91,642)

Issuance of common stock
for services rendered        2,049,091     2,049        98,451          -                   -             -              100,500

Accrued interest on
   subscriptions receivable   -           -            -                -                   -               (3,742)       (3,742)

Foreign currency
   translation adjustment     -           -            -                -                        565      -                  565

Net loss for the year ended
   June 30, 2001              -           -            -                    (51,904)        -             -              (51,904)
                           ------------ ---------  ------------  -------------------  --------------- -------------  ------------
                           ------------ ---------  ------------  -------------------  --------------- -------------  ------------

Balances at June 30, 2001   21,495,091    21,495       279,315             (139,877)         (10,807)     (196,349)      (46,223)
                           ============ =========  ============  ===================  =============== =============  ============
                           ============ =========  ============  ===================  =============== =============  ============

Issuance of common stock
on reverse takeover of CXN
(Canada) Inc.               28,836,566    28,837      (170,383)              22,448           10,807                    (108,291)

Accrued interest on
subscription receivable                                                                                    (936)           (936)

Net loss for the period
ended                                                                      (275,265)                                    (275,265)
                           ------------ ---------  ------------  -------------------  --------------- -------------  ------------
September 30, 2001          50,331,657    50,332       108,932             (392,694)                      (197,285)     (430,715)
                           ============ =========  ============  ===================  =============== =============  ============

</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-5

<PAGE>

                          FREFAX, INC. AND SUBSIDIARY
                         (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

Cash flows from operating activities:
<S>                                                                      <C>
   Net (loss)                                                            (275,265)
   Adjustments to reconcile net (loss) to net
      cash used for operating activities:
         Depreciation                                                       3,321
         Interest income on subscriptions receivable                         (936)
(Increase) decrease in:
         Recoverable use tax                                              (19,149)
         Prepaids and deposits                                            (19,962)
Increase (decrease) in:
         Accrued expenses - related party                                  65,971
         Accrued expenses                                                  16,650
                                                                  ----------------
Net cash used for operating activities                                   (229,370)
                                                                  ----------------

Cash flows from investing activities:
        Acquisition of wholly owned subsidiary                           (108,291)
        Purchase of furniture, fixtures and equipment                     (63,594)
                                                                  ----------------
Net cash used for investing activities                                   (171,885)
                                                                  ----------------

Cash flows from financing  activities:
        Proceeds from initial capitalization of company
          and from sale of common stock in connection
          with private placements,                                             -
        Loans payable                                                     409,304
                                                                  ----------------
Net cash provided by financing activities                                 409,304
                                                                  ----------------

Net increase (decrease) in cash                                             8,049

Cash, beginning of period                                                 -
                                                                  ----------------

Cash, end of period                                                       8,049
                                                                  ----------------

Supplemental disclosure of non-cash flow information:
       Cash paid during the year for:
       Interest                                                           -
                                                                  ----------------
                                                                  ----------------
       Income taxes                                                       -
                                                                  ----------------

</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-6
<PAGE>


                            FEFAX, INC AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                     FOR THE PERIOD ENDED SEPTEMBER 30, 2001
                                       AND
                    CUMULATIVE PERIOD FROM SEPTEMBER 26, 1997
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001

NOTE 1   -        ORGANIZATION

         Frefax,  Inc. (the "Company") was  incorporated in the State of Florida
         on September  26, 1997 as Central  Group,  Inc. The name of the Company
         was changed on September 15, 1998 to its current name.

         Pursuant to the stock  purchase  agreement  dated July 30, 1998 between
         the Company and the  shareholders of Frefax,  Inc.  (Canada),  ("Frefax
         Canada"),  a company  incorporated in the province of Ontario,  Canada,
         the Company  issued an aggregate of 10,000,000  shares of its $.001 par
         value common stock to the shareholders of Frefax Canada in exchange for
         100%  of  Frefax  Canada's   issued  and   outstanding   common  stock.
         Accordingly,  Frefax  Canada  became a wholly owned  subsidiary  of the
         Company.  Such transaction is considered a capital  transaction whereby
         Frefax  Canada  contributed  its  stock  for the net book  value of the
         Company.

         Frefax Canada was incorporated on September 5, 1996 for the purpose of
         developing software to be utilized in reducing long distance telephone
         fax charges. The Company ceased pursuing this prior to June 30, 2000.

         In May 2001 the Company disposed of 100% of Frefax Inc.  (Canada) for a
         total net proceeds of $68,389

         As of June 30,  2001,  the company is  considered  to be a  development
         stage  company.  However,  on  November 8, 2001,  the Company  signed a
         letter of intent to enter into an acquisition  agreement with China Xin
         Network (Canada) Inc. ("CXN"). See Note 9.

NOTE 2   -        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a)       Basis of  presentation
         ----------------------

         The  Company is  considered  to be a  development  stage  company as of
         September  30, 2001 since  planned  principal  operations  have not yet
         commenced.

b)       Principles of  consolidation
         -----------------------------

         The accompanying consolidated financial statements include the accounts
         of the Company  from  September  26, 1997 (date of  inception)  and its
         wholly  owned  subsidiary,  CXN Canada from  October  2001 herein after
         referred to as the  ("Companies")  after elimination of all significant
         intercompany transaction and accounts.

c)       Cash and cash equivalent
         ------------------------

         The Company  considers  highly liquid  investments  with  maturities of
         three months or less at the time of purchase to be cash equivalents.


                                       F-7


                           FREFAX, INC AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE PERIOD ENDED SEPTEMBER 30, 2001
                                       AND
                    CUMULATIVE PERIOD FROM SEPTEMBER 26, 1997
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001

NOTE 2   -        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

d)       Furniture, fixtures, and equipment
         ----------------------------------

         Furniture,   fixtures,   and   equipment  are  recorded  at  cost  less
         accumulated  depreciation  which is provided on the straight line basis
         over the estimated useful lives of the assets which range between three
         and seven years.  Expenditures for maintenance and repairs are expensed
         as incurred.

e)       Income taxes.
         ------------

         The Company accounts for income taxes in accordance with the "liability
         method" of  accounting  for income  taxes.  Accordingly,  deferred  tax
         assets and liabilities are determined  based on the difference  between
         the financial statement and tax bases of assets and liabilities,  using
         enacted tax rates in effect for the year in which the  differences  are
         expected to reverse.  Current  income taxes are based on the respective
         periods'  taxable  income for  federal,  state and  foreign  income tax
         reporting purposes.

f)       Earnings per share
         -----------------

         Earnings  per  common  share  is  computed  pursuant  to SFAS  No.  128
         "Earnings  Per  Share."  Basic  earnings  per share is  computed as net
         income (loss) available to common shareholders  divided by the weighted
         average  number of common shares  outstanding  for the period.  Diluted
         earnings per share  reflects the  potential  dilution  that could occur
         from  common  shares  issuable  through  stock  options,  warrants  and
         convertible     preferred     stock.

g)       Use of estimates
         ----------------

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





                                       F-8



<PAGE>


                           FREFAX, INC AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE PERIOD ENDED SEPTEMBER 30, 2001
                                       AND
                    CUMULATIVE PERIOD FROM SEPTEMBER 26, 1997
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001

NOTE 2   -        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)


h)       Faire value disclosure at September 30, 2001
         --------------------------------------------

         The carrying value of recoverable use fax, loan receivable - unsecured,
         accrued  expenses - related  party,  and loans from related  party is a
         reasonable estimate of their fair value.

i)       Foreign currency translation
         ----------------------------

         The  functional  currency for the  Company's  foreign  operation is the
         applicable  local currency,  Canadian  dollars.  The  translation  from
         Canadian  dollars  to U.S.  dollars  is  performed  for  balance  sheet
         accounts  using current  exchange  rates in effect at the balance sheet
         date and for  revenue  and expense  accounts  using a weighted  average
         exchange rate during the period. The resulting translation  adjustments
         are recorded as a component of  comprehensive  income.  Gains or losses
         resulting  from  foreign  currency  transactions  are  included  in the
         statements of operations.

j)       Effect of new accounting standards
         ----------------------------------

         The  Company  does not  believe  that any  recently  issued  accounting
         standards,  not yet adopted by the Company, will have a material impact
         on its financial position and results of operations when adopted.

         During June 2001 SFAS No. 141, "Business Combinations" was issued. This
         standard  addresses  financial  accounting  and  reporting for business
         combinations.  All business  combinations  within the scope of SFAS 141
         are to be accounted for using one method - the purchase method.  Use of
         the pooling-of-interests  method is prohibited.  The provisions of SFAS
         141 apply to all business  combinations  initiated after June 30, 2001.
         It also applies to all business  combinations  accounted  for using the
         purchase  method for which the date of  acquisition  is July 1, 2001 or
         later.

         During June 2001 SFAS No. 142,  "Goodwill" and Other Intangible Assets"
         was issued.  This  standard  addresses how  intangible  assets that are
         acquired  individually  or with a group of other  assets (but not those
         acquired  in  a  business  combination)  should  be  accounted  for  in
         financial  statements upon their  acquisition.  SFAS 142 also addresses
         how goodwill and other intangibles assets should be accounted for after
         they have been initially  recognized in the financial  statements.  The
         provision of SFAS 142 is effective  for fiscal  years  beginning  after
         December 15, 2001.

                                      F- 9
<PAGE>

                           FREFAX, INC AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE PERIOD ENDED SEPTEMBER 30, 2001
                                       AND
                    CUMULATIVE PERIOD FROM SEPTEMBER 26, 1997
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001

NOTE 3   -        GOING CONCERN

         The  Company's  financial   statements  are  prepared  using  generally
         accepted  accounting  principles  applicable to a going concern,  which
         contemplates  the  realization of assets and liquidation of liabilities
         in the normal  course of  business.  The  Company  has not  established
         revenues  sufficient  to cover  its  operating  costs  and  allow it to
         continue  as a going  concern.  It is the intent of the Company to seek
         financing trough the acquisition of an active company. See Note 10.

NOTE 4   -        ACCRUED EXPENSES RELATED PARTY

         Accrued  expenses at September 30, 2001 consist of $9,000  professional
         fees  which  have been  subsequently  paid  directly  by the  Company's
         President  and  $65,971  represent   management  fees  charged  by  the
         Company's President.

NOTE 5   -        PROVISION FOR INCOME TAX

         Income taxes are provided for the tax effects of transactions  reported
         in the  financial  statements  and consist of taxes  currently due plus
         deferred taxes related to differences  between the financial  statement
         and income tax bases of assets and liabilities for financial  statement
         and income tax reporting purposes.  Deferred tax assets and liabilities
         represent  the  future  tax  return  consequences  of  these  temporary
         differences,  which will  either be taxable or  deductible  in the year
         when the assets or liabilities  are recovered or settled.  Accordingly,
         measurement of the deferred tax assets and liabilities  attributable to
         the book-tax basis  differentials are computed by the Company at a rate
         of approximately 34% for federal and 6% for state.

NOTE 6   -        COMMITMENTS AND CONTINGENCIES

         a) Lack of  Insurance
         The  Company  does not  maintain  any  property,
         product  liability,  general  liability or any other form of insurance,
         Although the Company is not aware of any claims  resulting from product
         malfunctions, there is no assurance that none exists.


         b) Rent
         CXN Canada  Inc.  leases  office  space under  temporary  lease
         expiring in June 2002,  minimum monthly payments are $2,465. CXN Canada
         Inc. also leases office space in China under a lease expiring in August
         2003, minimum monthly payments are $6,261.

                                      F-10


                           FREFAX, INC AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE PERIOD ENDED SEPTEMBER 30, 2001 AND
                    CUMULATIVE PERIOD FROM SEPTEMBER 26, 1997
                      (DATE OF INCEPTION) TO JUNE 30, 2001

NOTE 7   -        Loans Payable
         The loans payable bear interest at prime +2% and are convertible at the
         option of the holder at a rate of $ 0.25 per common share for a total
         conversion of 1,597,215 common shares and 3,187,831 warrants.

NOTE 8   -        STOCKHOLDERS' DEFICIENCY

a)       Capitalization
         --------------
         The Company was organized during September 1997 by issuing an aggregate
         of 500,000  shares of its $.001 par value  common  stock to its founder
         for $2,500.

b)       Acquisition of Subsidiary
         -------------------------
         Pursuant to a stock purchase  agreement dated July 30, 1998 between the
         Company and the  shareholders  of Frefax Canada,  the Company issued an
         aggregate of  10,000,000  shares of its $.001 par value common stock to
         the shareholders of Frefax Canada in exchange for 100% of Frefax Canada
         issued  and   outstanding   common  stock.   Accordingly,   after  such
         transaction,  Frefax  Canada  became a wholly owned  subsidiary  of the
         Company.  Such transaction is considered a capital  transaction whereby
         Frefax  Canada  contributed  its  stock  for the net book  value of the
         Company, and accordingly, no goodwill is recorded.

c)       Limited Offering Memorandums
         ----------------------------
         During October 1997, the Company commenced two Limited Offerings
         pursuant to Rule 504 of Regulation D promulgated under the Securities
         Act of 1933. The Company offered 400,000 shares of its common stock at
         $.001 per share and 4,000 shares of its common stock at $ .10 per
         share, respectively. The Company sold an aggregate of 403,000 shares of
         common stock yielding net proceeds of $700.

d)       Private Offerings
         -----------------
i)                During November 1998, the Company offered 7,500,000
                  shares of its common stock at $.01 per share pursuant to rule
                  504 of regulation D promulgated under the Securities Act of
                  1933. The Company sold a total of 6,001,000 shares of common
                  stock in exchange for a promissory note of $60,010 which has
                  been classified as a stock subscription receivable thereby
                  reducing stockholder's equity.

ii)               During February 1999, the Company offered 10,000,000
                  shares of its common stock at $.05 per share pursuant to Rule
                  504 of Regulation D promulgated under the Securities Act of
                  1933. The Company sold a total of 2,542,000 shares of common
                  stock in exchange for a promissory note of $127,100, which has
                  been classified as a stock subscription receivable thereby
                  reducing stockholder's equity.

The above promissory notes are callable on demand and accrue interest at a rate
of 2% per annum. As of September 30, 2001, the Company accrued $10,175 of
interest receivable in connection with such notes.

                                      F-11

<PAGE>



                                   FREFAX, INC
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE PERIOD ENDED SEPTEMBER 30, 2001
                                       AND
                    CUMULATIVE PERIOD FROM SEPTEMBER 26, 1997
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001


NOTE 8   -        STOCKHOLDERS' DEFICIENCY (cont'd)

e)       Shares issued for services rendered

         In June 2001, 2,049,091 shares of common stock were issued in exchange
         for services rendered at a value of $100,500, or $.05 per share,
         including a total of 1,622,728 shares issued to the Chairman as
         compensation.

NOTE 9   -        RELATED PARTY TRANSACTIONS


a)       In June  2001,  1,622,728  shares of common  stock  were  issued to the
         Chairman for compensation at a value of $80,000, or $.05 per share.



NOTE 10  -        SUBSEQUENT EVENT

         On November 8, 2001,  the Company  acquired  China Xin Network  Inc., a
         Canadian  corporation  Under the  acquisition  agreement,  the  Company
         acquired  all of the  outstanding  common  stock of CXN in exchange for
         28,836,566  newly issued common shares of the Company's common stock to
         be  issued on a 2 for 1 basis to the  existing  CXN  shareholders.  The
         acquisition  will be treated as a reverse  acquisition.  Therefore  the
         historical financial statements prior to November 8, 2001 will be those
         of CXN. The transaction is considered a capital transaction whereby CXN
         contributes its stock for the net assets of the Company.

         In addition, the Company was declared to have no assets and liabilities
         at that date.  In  connection  with that,  the former  Chairman  of the
         Company agreed to take full  responsibility for any and all outstanding
         liabilities of the company.

         As a result of the issuance of  28,836,566  new shares of common stock,
         the Company is in excess of its 50,000,00  authorized shares by 331,657
         shares.



                                      F-12