<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                   FORM 10-KSB

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934
        For  the  fiscal  year  ended  December  31,  2001
                                       -------------------

[   ]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
        SECURITIES  EXCHANGE  ACT  OF  1934
        For  the  transition  period  from  _________  to  ____________

Commission  File  No.  0-28659
                       -------

                            Q-NET TECHNOLOGIES, INC.
                            ------------------------
             (Exact name of Registrant as specified in its charter)

DELAWARE                                   75-2610514
--------                                   ----------
(State  or  other  jurisdiction  of        (I.R.S.  Employer
incorporation  or  organization)            Identification  Number)

Suite  3500,  1600  Market  Street
Philadelphia,  Pennsylvania                19103
---------------------------                -----
(Address of principal executive offices)   (Zip  Code)

Registrant's  telephone  number,
 including  area  code:                    (215) 751-2198
                                           --------------

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:     NONE

Securities  registered  pursuant to Section 12 (g) of the Act:     Common Stock,
$0.00001  par  value

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

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

Revenues  for  2001  were  $725,152.

The  aggregate  market value of the voting stock held by non-affiliates computed
by  reference  to the last reported sale price of such stock as of April 8, 2002
is  $49,464,016.

The  number  of  shares  of the issuer's Common Stock outstanding as of April 8,
2002  is  14,568,004  shares.

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

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                                TABLE OF CONTENTS



                                                                      PAGE
                                                                      ----

PART  I

Item  1.     Description  of  Business                                   3
Item  2.     Description  of  Property                                   21
Item  3.     Legal  Proceedings                                          21
Item  4.     Submission of Matters to a Vote of Security Holders         21

PART  II

Item  5.     Market  for  Common  Equity  and
Related      Stockholder  Matters                                        22
Item  6.     Management's  Discussion  and  Analysis
             Or  Plan  of  Operation                                     23
Item  7.     Financial  Statements                                       28
Item  8.     Changes  in  and  Disagreements  with  Accountants
             on  Accounting  and  Financial  Disclosure                  29

PART  III

Item  9.      Directors  and  Executive  Officers,  Promoters
              and  Control  Persons;  Compliance  with
              Section  16(a)  of  the  Exchange  Act                     30
Item  10.     Executive  Compensation                                    33
Item  11.     Security  Ownership  of  Certain  Beneficial  Owners
              And  Management                                            36
Item  12.     Certain  Relationships  and  Related  Transactions         38
Item  13.     Exhibits  and  Reports  on  Form  8-K                      41

SIGNATURES                                                               43

INDEX  TO  CONSOLIDATED  FINANCIAL  STATEMENTS                           F-1

                                       2
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                                     PART I

Certain  statements  contained  in  this Form 10-KSB constitute "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended  (the  "Securities  Act"),  and  Section  21E of the Exchange Act. These
statements,  identified  by  words  such  as  "plan",  "anticipate,"  "believe,"
"estimate," "should," "expect" and similar expressions, include our expectations
and  objectives  regarding  our future financial position, operating results and
business strategy. These statements reflect the current views of management with
respect  to  future  events  and  are  subject to risks, uncertainties and other
factors  that  may  cause  our  actual  results, performance or achievements, or
industry  results,  to  be  materially  different  from  those  described in the
forward-looking statements. Such risks and uncertainties include those set forth
under  the  caption  "Management's Discussion and Analysis or Plan of Operation"
and  elsewhere  in  this  Form  10-KSB.  We  do  not  intend  to  update  the
forward-looking  information to reflect actual results or changes in the factors
affecting  such  forward-looking  information.

ITEM  1.     Description  of  Business

We  are  engaged  in  the  business  of  establishing  operations  in China as a
value-added  technology  provider  to  companies  and  businesses  engaged  in
electronic  commerce.  Our  business  activities  in  China  include:

1.     a  joint  venture  to  develop  an electronic book publishing business in
China;

2.     the  development  of  a  thin-client  server  computer system business in
China;

3.     providing  data  and  voice  transmission  services  using  state-of-art
Internet  protocol  technology  to  customers  in  North  America;  and

4.     developing  and  marketing  Internet  solution software to be marketed to
Chinese  customers.

Our  business  operations  are  carried  out  in  China through our wholly owned
subsidiary, Qinnet Holdings Corp., a Washington corporation ("Qinnet Holdings").
Qinnet  Holdings  is  the  owner  of all of the issued and outstanding shares of
Beijing  Qinnet  Electronic  Technologies Co., Ltd. ("Beijing Qinnet").  Beijing
Qinnet  carries  out  our business activities in China.  Qinnet Holdings is also
the  owner of all of the issued and outstanding shares of Qincom Networks, Inc.,
a British Columbia company that carries out our long distance telephony business
in  North  America.

Our  ability to carry our plan of operations is currently limited by our lack of
financial  resources.

CORPORATE  BACKGROUND

Q-Net  Technologies, Inc. is a Delaware corporation that was incorporated on May
31,  1989.  We  changed  our  corporate  name  from  Qinnet.com,  Inc.  to Q-Net
Technologies,  Inc.  in  August  2001.

We  completed  the  acquisition  of  our wholly owned subsidiary Qinnet Holdings
Corp.,  a Washington corporation in 2001.  Qinnet Holdings Corp. is a Washington
state  corporation  that  was  incorporated  in  June,  1999.

Our  Canadian  operations are conducted through Qincom Networks, Inc., a British
Columbia  company,  incorporated  on  August  22,  2000.

ACQUISITION  OF  QINNET  HOLDINGS

We completed the acquisition of a 93.8% interest in Qinnet Holdings on April 23,
2001.  Qinnet  Holdings is the owner of all of the issued and outstanding shares
of Beijing Qinnet.  This acquisition was completed pursuant to offers made by us
to  the U.S. accredited and non-Canadian foreign shareholders of Qinnet Holdings
on  March  14, 2001.  We issued a total of 12,275,100 shares of our common stock
to  the  accepting  shareholders  of  Qinnet  Holdings  upon  completion  of the
acquisition  on  the  basis  of  one share of our common stock for each share of
Qinnet  Holdings  acquired.

                                        3

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We  acquired  the  remaining 6.2% interest in Qinnet Holdings pursuant to offers
made  by us to the remaining non-U.S. shareholders of Qinnet Holdings on May 23,
2001.  The offers were to these shareholders of Qinnet Holdings to acquire their
shares  on the basis of 1.05 shares of our common stock for each share of Qinnet
Holdings  stock.  The  offers  were  accepted  by  all remaining shareholders of
Qinnet Holdings.  We issued a total of 853,650 shares of our common stock to the
remaining shareholders of Qinnet Holdings on June 8, 2001.  We are now the owner
of  all  of  the  outstanding  shares  of  Qinnet  Holdings.

2001  STOCK  OPTION  PLAN

We adopted our 2001 stock option plan (the "2001 Stock Option Plan") on June 15,
2001.  The  2001 Stock Option Plan provides for the grant of options to purchase
up to 2,100,000 shares of our common stock to our officers, directors, employees
and  eligible  consultants.  Upon  completion  of  the  acquisition  of  Qinnet
Holdings, we granted options to purchase an aggregate of 2,000,000 shares of our
common  stock  at a price of $5.00 per share under our 2001 Stock Option Plan to
the  former  holders  of  options  to  purchase shares of Qinnet Holdings common
stock.  Each grant of options was conditional upon the agreement of the optionee
to cancel their Qinnet Holdings options.  These new options have been granted on
the  same  general  terms  and  conditions  as  the holder's original options to
purchase  shares  of  Qinnet  Holdings  common  stock.  Of  the options granted,
options  to purchase an aggregate of 390,000 shares were subsequently terminated
in  2001.

OUR  BUSINESS

Our  business  is  summarized  as  follows:

1.     Electronic  Book  Publishing
       ----------------------------

We  entered  into a joint venture agreement in July 2000 with Liaoning Education
Press  ("LEP"), a wholly owned subsidiary operation of Liaoning Publishing Group
of  Companies  ("LPG").  LPG  is  the  first independently operated publisher in
China  and  is currently one of the largest publishers in China.  We have agreed
with  LPG to carry out a joint venture electronic book publishing, manufacturing
and  distribution  business in China.  Mr. Fredric Mann, our president and chief
executive  officer,  is  the  chairman of this joint venture.  The joint venture
business  is  to  be  carried  out  in Shenyang, China by Liaoning Qinnet E-book
Technologies  Ltd. ("Liaoning Qinnet"), a joint venture corporation incorporated
in  accordance  with  the  Enterprise  Laws  of  the  People's Republic of China
("PRC").  We  initially  contributed  $280,000  for a 70% interest in this joint
venture  while  LEP  contributed  $120,000  in consideration for a 30% interest.

We  subsequently  entered into an amended joint venture agreement in August 2000
with  LPG  to  expand the joint venture operation and to replace LEP with LPG as
our  joint venture partner.  Under this joint venture agreement, LPG and we have
agreed  to  invest  an  aggregate  of  $5,000,000.  We have agreed to contribute
$3,000,000 in exchange for a 60% ownership interest in Liaoning Qinnet.  LPG has
agreed  to  contribute  $2,000,000  in  exchange for a 40% ownership interest in
Liaoning  Qinnet.  The joint venture will be for an initial term of 20 years and
will  become  effective  upon  the  approval  by the PRC government authorities.

The  objective  of  the joint venture was originally to have been to establish a
database of Chinese and English language books and periodicals, to engage in the
electronic  publishing  and  sale  of electronic books and to develop and market
electronic  reading  devices,  to  be  known  as the Q-Reader. The amended joint
venture  agreement  was  modified to allow LPG to proceed in an expedited manner
with the aggregation and digitization of published materials.  It is anticipated
but  it  has  not  been  agreed  that  this function would be returned to LPG in
exchange  for  the  return  of  those funds expended by Liaoning Qinnet for this
purpose.  Accordingly,  LPG  has  agreed  to  return approximately RMB 1,130,000
(equal  to approximately US $137,000) to Liaoning Qinnet. It is anticipated that
Liaonong  Qinnet  will negotiate to reacquire an interest in the database during
the  next two years at a price reflecting a pro rata share of the funds invested
by  LPG.

                                         4
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The  electronic  reading  devices will enable users to read the electronic books
and periodicals that may be downloaded from the LPG database at cnbook.com.cn or
from  the  Internet in a digitized format, as well as providing e-mail, Internet
and  personal  digital  assistant  capabilities.  The Q-Reader was introduced in
January  2002  at  the  International Publishing and Book Show in Beijing. While
formal  sales  were not being solicited, orders for 24,700 Q-Readers were placed
by  publishers  and  book retailers nationally. It is expected that a portion of
these  "pre-orders"  will  be  converted  into  hard  orders upon the commercial
availability  of  the  Readers,  expected  in  August  2002.

To  date,  prototype  models of the Q-Reader have been rigorously tested in both
the  U.S.  and  in  China.  Modifications  have  been  engineered  to refine the
software,  components  and  molds  for the plastic case for the first production
run. Contracts have been concluded for the assembly of the Q-Reader in China. It
is  anticipated  that  the  first  500  units  will be available for sale at the
introduction  of  the Q-Reader in May 2002.  All funding required for this stage
of  production  has been completed and is available for this purpose. The second
stage  of  production  is  to  produce 5000 units for commercial distribution in
August  2002.  Advance  payments have been made as necessary to order components
that  require  lead-time  for  delivery. The production plan for the delivery of
these 5000 units has been initiated. In the event that sufficient funding is not
provided  from  Q-Net  for this purpose, LPG has agreed to advance the necessary
funds to assure the timely production of the units. Subsequent production of the
Q-Reader  and  the  planned  introduction of the wireless model six months later
will  be  predicated  on  us  providing  additional  financing.

The  joint  venture  is  also  negotiating  for the license of a print-on-demand
system  enabling  the  production of fully bound books from digitized input.  If
the  joint  venture  enters  into  the license agreement, the joint venture will
participate  in  the  refinement  of  the  print-on-demand system for commercial
introduction.  It  is  anticipated that the Print on Demand System will be ready
for  commercial  sales  within six months, subject to financing and provided the
license  agreement  is  entered  into.

Our  plan  of  operation  includes  pursuing our Liaoning Qinnet electronic book
publishing  joint venture over the next twelve months.  As of December 31, 2001,
we  had  advanced  approximately  $400,000 to fund initial start-up expenses for
this  joint venture and LEP had advanced approximately $240,000.  These start-up
expenses  included  substantial disbursements to engineering and technical firms
and  operating  expenses  for  the  project.  We  plan to advance the balance of
$2,600,000  to Liaoning Qinnet to fund our portion of the joint venture expenses
during  the  next  twelve  months.  We  will need to raise additional capital in
order  to  complete  our investment in the joint venture.  We anticipate that we
will not realize revenues from electronic book publishing until: (i) we complete
development  of  our  proprietary  electronic  reading  device;  and  (ii)  we
successfully  commercialize  and initiate sales of our electronic reading device
in  China.

2.     Thin-Client  Server  Technology  Business
       -----------------------------------------

Our  "Thin  Client  Server"  (TCS)  technology  is designed to provide small and
medium  sized  businesses  and  individual  customers  with  access  to computer
capabilities  previously available only to large corporations with sophisticated
and  expensive  computer  resources.  With  the  installation  of  a  relatively
inexpensive  screen,  keyboard and mouse, a client will be connected through its
own  local area network (LAN) or via broadband to a wide area network (WAN) to a
geographically  based  control  center. This control center contains the central
server  and  is  administered  and  maintained  by  Q-Net. For a monthly charge,
significantly  below the cost of maintaining a conventional system, the customer
is  provided  with  Internet  access,  software  applications,  upgrades and new
technology  without  the  cost  of  expensive  periodic  expenditures to upgrade
obsolete  equipment  or  the  need  to  maintain internal information technology
services. The system obviates the need to periodically upgrade or replace old or
obsolete  terminals,  the need to periodically upgrade or replace costly servers
and  the  need  to  download  new  software  and  pay  attendant licensing fees.

The  Q-Net  TCS  system  development  is  based on both the Citrix and Microsoft
server  platforms.  By  developing our own terminal, the margins for us are much
more  competitive  than  through  the  resale of terminals manufactured by other
venders.  The  terminal  family  will  consist of several different

                                    5
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models, from
basic  low cost models to more sophisticated end terminals with such features as
smart  card  readers and integrated VoIP capabilities.  At the same time, we are
designing  server configurations for many different user bases and applications.
We  plan  to offer both hardwired capabilities as well as wireless systems which
are  expected  to  be  available  later  in  the  year.

We  plan to use our relationships within the Chinese telecommunications industry
to  distribute  and  install  TCS Systems in geographic areas that are currently
wired  with broadband access. Based on the competitive structure and substantial
range of services offered by TCS, we anticipate acceptance of the TCS product in
the  commercial,  academic  and  residential  markets.  Currently planned and in
discussion  are  installations  directed  to  universities,  on-line  securities
trading,  residential  and  hotel  installations.  We  have  completed  the
installation  of  a pilot system in Tianjin, which will serve as a demonstration
facility  for customers, and we plan to create an identical system in Beijing to
serve  that  market.  Future  demonstration  sites  are planned to be located in
other  cities  as  required.

We  entered  into  a  memorandum  of  understanding  dated  January 8, 2001 with
PowerNet  USA, Inc. ("PowerNet") to establish a joint venture corporation called
QinPowerNet,  Inc.  in  Montreal,  Canada.  This  joint  venture  agreement  was
terminated  by  agreement  in  2001.  No  significant  investment  was  made  in
connection with this Joint Venture and all expenses incurred as a result of this
relationship  accrued  to  the  benefit  of  the  company  in  it's  independent
development  of  the  system

Although  the commercialisation of our TCS system was delayed by the termination
of  the  Powernet  Agreement, we believe we have developed proprietary terminals
that  are  superior to, and less expensive than, others currently on the market.
Utilizing  our  relationship  with  the  engineering  firm  that assisted in the
development  of the Q-Reader, we plan to complete the initial terminal design at
the  end  of  the  second  quarter  or  early in the third quarter of 2002. This
terminal  will  be designed to be cost effective and will provide the most basic
functions  necessary  to  the  operation of the TCS system.  Our objective is to
reduce  the  time  to finish development and time to coming to market as well as
reduce  the  cost  to  the consumer.  It is our plan to market the TCS terminals
directly  to consumers through local telecommunications providers in a number of
geographic markets within China. To date, we have introduced the TCS concept and
proprietary  terminal to several broadband telecommunications providers and have
received  initial  indications  that  they are interested in working together to
advance  this business opportunity. There have been no formal agreements signed,
however, with these potential partners, and there can be no assurance that these
relations  will  come  to  fruition.  We  anticipate  that  when the terminal is
completed,  these  relationships  will go forward to enable us to distribute the
TCS  system  in  China.

To date, the cost of developing our TCS system has been nominal, because much of
the required technical assistance and equipment was already available to us from
the  resources  of  Tianjin Qinnet, noted below.  Further development of the TCS
terminal  will  require between $50,000 to $100,000. With the development of the
terminal,  we will be in a position to market the LAN application of the system.
The  further  development  of  a  WAN system will require approximately $800,000
which  will  provide  a  fully  operational system that will serve from 5,000 to
100,000  customers.

Our  ability  to  continue  development  of  our  thin-client  server technology
business  is subject to our ability to raise the additional funding requirements
noted  above.  The  amount  of funds that we propose to spend on developing this
business  will  depend  upon  the  amount  of  funds, if any, available from any
financing  that  we  are  able  to  achieve  and  our  corporate  priorities and
opportunities  at  the  time  additional  funds  are  raised.

3.     QinTop  Communication  Network
       ------------------------------

Beijing  Qinnet  has entered into a strategic relationship with a communications
company  to  provide  Voice  over  Internet Protocol ("VoIP") telecommunications
services  under the "QinTop" operating name.  This service is provided through a
Chinese  IP  Internet  technology corporation that manages data traffic or voice
and  data  transmission between North America and Asia to China.  Beijing Qinnet
has  invested  approximately $262,000 through December 31, 2001 for equipment to
facilitate  this project. These services provide call termination within the PRC
from North America through

                                     6

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established Chinese networks.  On October 1, 2000, we
entered  into  a  renewable 12 month leasing arrangement for communication lines
within  North America and have established relationships for data traffic within
China.  Qincom  Networks Inc., our wholly owned subsidiary, initiated service in
Vancouver,  Canada  in  December 2000 and has equipment located in North America
and  China with initial capacity of 10 million minutes of call volume per month.
This  capacity  can  be  increased  incrementally as demand requires, subject to
available  financing.

We  have  generated  revenues  by selling wholesale long distance service to our
customers  who,  in turn, market these services in the retail market. We provide
call  termination  from  North America to China, primarily the Canadian markets,
where  the  wholesale  customers  are billed and funds remitted to our Vancouver
office.

During  2001,  our  VoIP  activities were significantly  affected  by  the
failure  of a major customer to remit an accounts receivable.  We have an
allowance for doubtful accounts of $83,300 related to
this account receivable as of December 31, 2001.   This has had a negative
impact  on  the  division's  ability  to  maintain  the  VOIP  operations.

While  we  have  realized  cash flow from the VoIP service, the financial issues
presented  by  the  failure  of  the  customer  noted  above and the alternative
opportunities presented by the Q- Reader and the TCS operations have compelled a
reexamination  of  our  continued  presence  in  the  VoIP  markets. These other
activities  have  been determined to present greater long-term benefits to Q-Net
and  our shareholders, where we enjoy a position of having developed proprietary
products  and  have  established  a  significant  market  lead  over  potential
competitors.  Accordingly,  it is our intention to exit the VoIP business within
the  coming  year,  to redeploy the assets of the VoIP operation and concentrate
these  resources  in  areas  of  involvement that present greater opportunities.

4.     Tianjin  Qinnet
       ---------------

Beijing  Qinnet  entered  into  a joint venture arrangement with Tianjin Xiandao
Information  Network Co., Ltd. ("Tjvan") of Tianjin, China in March 2000 for the
establishment  of  an  Internet  service  provider  ("ISP") business in Tianjin,
China.  Beijing  Qinnet  and  Tjvan have established a joint venture corporation
known  as  Tianjin  QinNet  Xiandao  Information  Technology  Co., Ltd. (Tianjin
QinNet)  to  own  and  operate an Internet service provider business in Tianjin,
China.  Mr. Weiguo Lang, our chairman and a director, is the registered owner of
a  70%  interest  of Tianjin QinNet and Tjvan owns the balance of 30% of Tianjin
QinNet.  Ownership  is  in  the  name  of  Mr.  Lang to comply with the laws and
regulations  of  the  PRC.  Mr.  Lang has granted to Beijing Qinnet an option to
purchase  Mr.  Lang's  70% interest in Tianjin Qinnet at a price equal to 70,000
RMB  (equal to approximately US $8,700 as of December 31, 2001).  This option is
exercisable  by  Beijing Qinnet for a five-year term expiring on March 24, 2005.
The  option  arrangement  has been structured to enable Beijing Qinnet to comply
with PRC foreign ownership laws and restrictions.  The option is transferable by
Beijing Qinnet to give flexibility in structuring its ownership arrangement.  We
anticipate  that  the  foreign ownership laws of the PRC may change prior to the
expiry  of  the option period or the option will be extended.  Funds used by Mr.
Lang  to acquire his interest in Tianjin Qinnet were provided by Beijing Qinnet.

Beijing  Qinnet  entered  into  an  equipment  lease  agreement and an exclusive
consulting  and  services  agreement  with  Tianjin Qinnet.  Under the equipment
lease  agreement,  Beijing  Qinnet  has  acquired  and leased equipment totaling
$90,000  to  Tianjin  Qinnet.  Tianjin Qinnet pays to Beijing Qinnet a lease fee
equal  to  50%  of the revenues generated by Tianjin Qinnet in consideration for
the  lease  of  this  equipment.  Under  the  exclusive  consulting and services
agreement,  Beijing Qinnet is the exclusive provider of technical consulting and
services  to Tianjin Qinnet.   Tianjin Qinnet pays to Beijing Qinnet a fee equal
to  20%  of  all revenues generated by Tianjin Qinnet in consideration for these
services.    Each  of the equipment lease agreement and the exclusive consulting
and  services  agreement with Tianjin Qinnet are for a ten-year term expiring on
March  24,  2010.

Tianjin  Qinnet has not generated any revenues to date and we anticipate we will
not  earn  revenues  from the Tianjin Qinnet joint venture during 2002.   During
2001,  it  was  decided by management that the business opportunity presented by
the Tianjin operation, when compared to the opportunities in the electronic book
publishing  and  TCS  operations,  does  not possess the sustainable competitive

                                     7

<Page>

advantages  that  are exhibited by the Q-Reader and TCS systems. The markets for
the  Tianjin  Internet  service provider business have become crowded because of
the  low  barriers  to  entry  enabling many competitors to enter the market and
creating a price sensitive, low margin competitive environment requiring ongoing
capital  expenditures  to  meet  competition.  It  was  determined  that further
investment  in  this  area would not return the magnitude of profits that may be
expected if the same funding were directed to our electronic book publishing and
TCS  opportunities.  Accordingly,  management  has  decided  to  wind  down  the
business  operations of Tianjin Qinnet in an orderly manner, exit the respective
businesses  and  maximize  the recovery of the assets that have been directed to
these  functions.  In  making this determination, management considered the fact
that  we  currently  have  limited  capital resources and it is essential to our
business  plan  that  our  capital reserves be expended on our priority business
opportunities.

5.     Shenyang  Qinnet
       ----------------

Beijing Qinnet has entered into a joint venture arrangement with Shenyang Brainn
Information  Co.,  Ltd.  ("Braininfo.com")  of  Shenyang,  China  in March 2000.
Beijing  Qinnet  and  Braininfo.com have established a joint venture corporation
called  Shenyang  Qinnet-Brainn  Information  Technologies  Corporation Co. Ltd.
("Shenyang  Qinnet")  to  develop  and  market  an  Internet service business in
Shenyang,  China.  Shenyang  Qinnet is in the business of providing Internet web
site  design  and electronic commerce and related customer and technical support
services.  Shenyang  Qinnet  planned  to  earn revenues from fees charged to its
customers  for  providing  these  services.   Shenyang  Qinnet  earned  minimal
revenues  to  date.

Mr.  Weiguo  Lang, our chairman and a director, is the registered owner of a 51%
interest  in  Shenyang  Qinnet.  Ownership  is in the name of Mr. Lang to comply
with  the  laws  and  regulations  of  the PRC.  Mr. Lang has granted to Beijing
Qinnet  an  option  to  purchase Mr. Lang's 51% interest in Shenyang Qinnet at a
price  equal  to 50,000 RMB (equal to approximately US $6,200 as of December 31,
2001).  This  option  is  exercisable  by  Beijing  Qinnet  for a five year term
expiring  on  March  24,  2005.  The  option  arrangement has been structured to
enable  Beijing  Qinnet  to  comply  with  PRC  foreign  ownership  laws  and
restrictions.  The  option is transferable by Beijing Qinnet to give flexibility
in  structuring  its  ownership  arrangement.  We  anticipate  that  the foreign
ownership laws of the PRC may change prior to the expiry of the option period or
the  option will be extended.  Funds used by Mr. Lang to acquire his interest in
Shenyang  Qinnet  were  provided  by  Beijing  Qinnet.

Beijing  Qinnet  has  also  entered  into  an  equipment  lease agreement and an
exclusive  consulting  and  services  agreement with Shenyang Qinnet.  Under the
equipment  lease  agreement, Beijing Qinnet has acquired and leased equipment to
Shenyang  Qinnet.  Shenyang  Qinnet  pays to Beijing Qinnet a lease fee equal to
50%  of the revenues generated by Shenyang Qinnet in consideration for the lease
of  this  equipment.  Under  the  exclusive  consulting  and services agreement,
Beijing Qinnet is the exclusive provider of technical consulting and services to
Shenyang  Qinnet.   Shenyang Qinnet pays to Beijing Qinnet a fee equal to 20% of
all  revenues  generated by Shenyang Qinnet in consideration for these services.
Each  of the equipment lease agreement and the exclusive consulting and services
agreement  with  Shenyang  Qinnet  are for a ten year term expiring on March 24,
2010.

Shenyang  Qinnet  has  not  generated  any revenues to date and we will not earn
revenues  from  Shenyang  Qinnet  during 2002.  We have decided to terminate the
business  of  Shenyang  Qinnet  in  order  to  focus  in  the other areas of our
business,  based  on  their higher anticipated growth rates. Staff from Shenyang
Qinnet  has  been assigned to other areas of our business.

6.     QWS  Internet  Solution  Software
       ---------------------------------

Beijing  Qinnet  is  currently  completing  the development of a "One-Stop Total
Solutions" Internet software package (referred to as the "QWS Software Package")
to  offer  Internet  solutions  to  medium

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and  small-sized companies.  In this
manner,  Beijing  Qinnet  plans to provide the software necessary to establish a
presence  in  the  rapidly  growing  e-commerce  market.  Development of the QWS
Software  Package  is  approaching  the final stage.  The final software package
will  consist  of  a  suite  of modules that provide comprehensive solutions for
companies  wishing  to  establish an online presence.  The pre-packaged software
modules  allow  the client to establish an e-commerce and Internet presence in a
short  period  of  time  at  competitive  cost without the need for a full time,
in-house  technical  staff.  This package is intended to replace the traditional
procedure  in  which  a  client  must  identify and contract a website designer,
engage a website host provider, negotiate with a software developer, negotiate a
contract  and  initiate  the  design process.  This process is generally costly,
time  consuming  and  requires  internal  management  resources  to  implement.

We  have  begun  to market the QWS Software Package.  We anticipate that we will
not  realize  significant  revenues  until such time as we undertake broad based
marketing  efforts.  We  currently  do  not  have the ability to undertake these
marketing  efforts  due  to our current lack of funding and our determination to
focus our limited capital resources on other areas of our business. Accordingly,
our  ability  to  complete  sales  of  this software is subject to our obtaining
further  financing.

EMPLOYEES

We  have approximately 82 employees.  Our employees include Mr. Fredric R. Mann,
our president, chief executive officer and chief financial officer, and Mr. Paul
Schwartz,  our  chief operating officer, executive vice-president, secretary and
treasurer.  Each  of our officers devotes his full business time to our business
and  to the business of Qinnet Holdings.   The remaining 80 employees, including
Mr.  Weiguo  Lang,  our  chairman,  are employed in our operations in China.  We
anticipate  hiring  additional  employees  over the next twelve months if we are
successful  in  implementing  our  plan  of  operations.  Of  these  additional
employees,  a majority is anticipated to be located in China.  We plan on adding
to  our  management  teams  in  North  America  and  China.

COMPETITIVE  CONDITIONS

Electronic  Book  Publishing

The market for electronic book publishing is a new market and it is difficult to
predict  the  competition  that  we  will  encounter through our electronic book
publishing  joint  venture  with LPG.  Electronic book reading devices have been
and  are  continuing  to  be  developed  by  competitors  with greater financial
resources  than  we  have.   There  is a substantial risk that these competitors
will  achieve  commercial acceptance in the Chinese market before we are able to
complete  development  of  our  electronic  book  reading  device  and  commence
marketing of our product to consumers.  To successfully compete with anticipated
competition,  we  entered  into  our  joint  venture with LPG in order to secure
access to a large volume of Chinese book publications on an exclusive basis. Our
withdrawal  from  the  content  aggregation  and  digitization  component of the
business  no  longer  guarantees  this  exclusive  access.

As the electronic book publishing market is new, there is no assurance as to the
price  that Chinese consumers will be prepared to pay for our planned electronic
book  reading  device  and  services.  Although  we  have  planned to market our
products  and  services  at  prices  that  will  exceed  our  costs, there is no
assurance  that  we  will  be able to realize the anticipated price from Chinese
consumers.  In  addition,  new  competitors with greater financial resources and
brand  name  recognition  may  enter the market and offer competing products and
services at prices that are below the prices that we plan to offer our services,
with  the  result that we may be forced to sell our electronic book products and
services  at  lower  than  anticipated  prices.

Thin-Client  Server  Technology

The  thin-client  server  technology  market is new and evolving and there is no
assurance that this technology will achieve acceptance by consumers.  We plan to
market  this  technology to Chinese consumers on the basis that it offers a more
affordable  alternative  to traditional personal computers and PC based systems.
We  believe that a thin-client server will be able to offer many of the features
and  functions  of  a  traditional  personal  computer  based  system  at a more
affordable  price  to consumers.   Thin-client servers will be less

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expensive as
they  do  not  contain  many  of the hardware components of traditional personal
computers.  However,  there  is  no  assurance  that  consumers  will  prefer
thin-client  servers  to  personal  computers.  Furthermore,  prices of personal
computers  continue  to  decline  with  the  result  that the price differential
between thin-client servers and personal computers may decline, thereby lowering
the  price  competitive  advantage  of  thin-client  servers.

Given  the  potential  of the thin-client server market, we anticipate that many
large technology and personal computer companies may enter this market.  If they
determine  to  enter  this  market, we will face competition from companies with
greater financial resources and brand-name recognition than we have.  We may not
be  able  to  achieve  the financing or consumer acceptance necessary to compete
with  this  competition.

QinTop  Communication  Network

As  originally  planned,  we  would  compete  directly  against  established
telecommunications  companies in providing long distance telephone services over
the  Internet.   Established  telecommunications  companies  have  substantially
greater  financial  resources  and  brand  name  recognition than we do.  We had
intended  to compete against these companies on the basis of price.  We believed
that  we  would  be  able  to  offer  long  distance telephone services over the
Internet  at cheaper rates than currently available using conventional telephone
lines.

As originally planned, we would compete directly against new companies that have
been  established  to  provide  voice-over-Internet  long  distance  telephone
services.  Many  of  these  companies  have  substantially  greater  financial
resources and brand name recognition than we do.  There was no assurance that we
would  be  able  to  develop  a  cost  advantage  over services offered by these
competitors  or that we would be able to capture a significant market share from
these  competitors.

In  view of these competitive conditions, our lack of funding, our priorities in
other  businesses  areas  and  the  failure of a key customer to make payment as
billed,  we  have  determined  to  discontinue  our QinTop communication network
business  over  the  current  fiscal  year.

GOVERNMENT  REGULATION

We  intend  to  ensure  that  all  activities  that we undertake in the People's
Republic  of China (the "PRC") comply with the strict regulatory climate imposed
by  the  PRC  where  all  corporate  activities must be approved by the relevant
government  regulatory  authorities.  Such  regulation is generally based on the
size,  location  and  nature  of  each  individual  undertaking.  Each  of these
elements generally determines whether business activity requires local, regional
or  central  government  approval.  Further,  foreign  investments  in China are
classified  into  one of three categories: encouraged, restricted or prohibited.
In  general, foreign investments in projects that attract advanced technology to
China  are  encouraged.  As  such,  we  believe  that our proposed activities to
develop  and market the electronic book reader device and the thin-client server
technology  fall  into  this  encouraged  category.

Direct  foreign  ownership  of  a controlling position in telecommunications and
Internet  projects  are  restricted by the PRC.  As such, our equity investments
will  be  limited  in  these  areas.  We have structured and plan to continue to
structure  our  business arrangements such that we will comply with PRC laws and
regulations  by entering into business arrangements with qualified joint venture
partners.  We  anticipate  that  many of our business activities in the PRC will
involve  acting  in  an  advisory or service capacity to Chinese owned companies
that  are  directly  involved  in  these  industries.

Electronic  Book  Publishing

We  must  ensure  that our electronic publishing joint venture business with LPG
complies  with  all  applicable laws and regulations of the PRC.  The publishing
industry  is  heavily  regulated in the PRC.  Companies may not publish books in
the  PRC  unless they are licensed by the PRC.  Accordingly, we will not be able
to  obtain  a  license  to  publish  books  in  the PRC.  LPG, our joint venture
partner,  has  been  licensed  by the PRC to publish books in China.  We will be
required to structure our arrangement with LPG in order to ensure that we

                                     10

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comply
with all applicable laws and regulations.  Our joint venture with LPG is subject
to  approval  by  the  required  local  government  authority.

Thin-Client  Server  Technology

We  must  ensure that our thin-client server projects comply with all applicable
laws  and  regulations  of  the  PRC.  These  laws  and regulations include laws
regarding  provision  of  Internet  services,  provision of Internet content and
ownership  and  provision  of telecommunications services.  These laws currently
encourage  the  introduction  of  computer  technology,  but  restrict  foreign
ownership of Internet and telecommunications services.  We plan to structure our
projects  in  the form of cooperations with Chinese telecommunications companies
that  already  have  existing  licenses  in  order to ensure compliance with the
applicable  laws  and  regulations  of the PRC.  We contemplate that under these
cooperation arrangements, we would supply advisory services and equipment to the
Chinese  partners  that  would  provide  the  Internet  and  telecommunications
components  of  the  undertaking.

Foreign  Ownership  Laws

Qinnet  Holdings  is  subject  to  the strict foreign ownership laws of the PRC.
These  laws  and  regulations  currently  prohibit  direct  ownership  by Qinnet
Holdings of its joint venture businesses that are involved in Internet services,
content  and  other  telecommunications  activities.  Accordingly,  we  have
structured  our  joint  venture  arrangements  through  option agreements, lease
agreements  and  consulting  agreements  in  order  to  comply  with the foreign
ownership  laws  of  the  PRC.  As  a result of this compliance and our indirect
ownership  interest,  we  are  currently  not  able to consolidate the financial
results  of  Shenyang  Qinnet  and  Tianjin  Qinnet in our financial statements.

RESEARCH  AND  DEVELOPMENT

We  estimate that we incurred expenses on research and development activities in
the  amount  of approximately $500,000 during the fiscal year ended December 31,
2001 and $12,000 during the fiscal year ended December 31, 2000.  These expenses
were  incurred  in connection with our electronic book publishing joint venture,
thin-client  server  project  and  the  QWS  software  operation.

RISK  FACTORS

We  face  risks  in  executing  our  business  plan and achieving revenues.  The
following  risks  are  material  risks  that  we  face.  We  also face the risks
identified  elsewhere  in  this  Annual Report, including those risks identified
under  Item  1  -  Description of Business, including Competition and Government
Regulation,  and  Item  6  -  Management  Discussion  and  Analysis  or  Plan of
Operations.  If any of these risks occur, our business and our operating results
and  financial  condition  could  be  seriously  harmed.

Risks  Related  To  Our  Financial  Condition  And  Business  Model
-------------------------------------------------------------------

Because  we  have  only  recently  commenced  business  operations,  there is no
assurance that our business will be profitable or that our business will succeed

While  we  were  incorporated  in  1989, we only recently commenced our business
operations  in  October 1999 in our current configuration of offering electronic
publishing,  TCS and other services.  Our operating subsidiary, Qinnet Holdings,
was  incorporated in June 1999.  We are presently in the process of establishing
our business operations as an information and computer technology and electronic
publishing  provider  in  China.  Accordingly,  we have only a limited operating
history  with  which  to  evaluate  our business. You should consider the risks,
expenses  and  uncertainties  that  an  early stage corporation like ours faces.
These  risks  include  our  ability  or  inability  to:

(i)     complete  our  joint venture investment obligations for Liaoning Qinnet;
(ii)     provide  value-added  technology  products  and  services  in  China;
(iii)     achieve  commercial acceptance of the technology products and services
that  we  plan  to  offer  in  China;

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<Page>

(iv)     expand  our  existing  businesses;
(v)     achieve  financing  to  fund  our  plan  of  operations;
(vi)     respond  effectively  to  competitive  pressures
(vii)     complete  the  establishment  of  the  pilot  projects  in  China.

If  we  are  unsuccessful  in  addressing  these  risks, our business, financial
condition  and results of operations will be adversely affected and our business
may  fail.

Because  We  Are Still Developing Our Business, We Expect Our Losses To Continue

To  date,  we  have not been profitable and we have earned limited revenues.  As
our  business  plan  is  implemented,  we  expect  to  incur increased operating
expenses  and thus significant losses until sufficient operating revenues can be
earned.  If  we  are  not able to generate significant revenues from our planned
value-added  technology  products  and  services,  then  we  will not be able to
achieve  profitability.

If  We  Do  Not  Obtain  Additional  Financing,  Our  Business  May  Fail

Our business plan calls for increased expenditures associated with the expansion
of  our  thin-client  server business, our Liaoning Qinnet joint venture and our
other  planned  businesses.  We  anticipate  that  revenues from operations will
initially  be  insufficient  to cover these expenses.  Accordingly, we will have
substantial additional capital requirements and we can provide no assurance that
such  funding  will  be  available  if  and  when  needed.  Obtaining additional
financing  will  be  subject  to  a  number  of  factors,  including:

(i)     market  conditions;
(ii)     our  operating  performance;  and
(iii)     investor  acceptance  of  our  business  plan.

These  factors  may  make the timing, amount, terms and conditions of additional
financing  unattractive for us. If we are unable to raise additional capital, we
may  not  be  able  to  implement  our  business plan and our business may fail.

Risks  Related  To  Our  Markets  And  Strategy
-----------------------------------------------

If  We  Are  Not  Successful  In Completing the Development of the Q-Reader, Our
Business  Will  Suffer

We  expect  to derive a portion of our revenue from the development and sales of
our  Q-Reader  electronic  book  reading  device.  There  is  no  assurance that
consumers  in China will prefer electronic book reading devices to augment or as
an  alternative  to  traditional  paper  books.  Our  electronic book publishing
business  model  remains  in  the  development  stage and we have not earned any
revenues  to date.   Our success is dependent upon our ability to implement this
business  model  and  the  acceptance of our electronic book reader products and
services  by  consumers  in  China.   Our  success  is  also contingent upon our
raising  the necessary financing to meet our obligations under our joint venture
agreement  with  LPG.  As  a  result,  we  cannot  determine  at  this  time the
probability  of  our  success  in  earning  income  from  sales  of  our planned
electronic  book  publishing  products  and  services.

If  Our  Thin-Client  Server Business Model Is Not Widely Accepted in China, Our
Business  Will  Suffer

We  expect  to derive a portion of our revenue from the development and sales of
thin-client  server  computer  systems  in  China.  There  is  no assurance that
consumers in China will prefer thin-client servers as an alternative to personal
computers.  Our  thin-client  server  business  model remains in the development
stage  and  we  have not earned any revenues to date.   Our success is dependent
upon  our  ability  to  implement  this business model and the acceptance of our
products  and  services by consumers in China.  As a result, we cannot determine
at  this time the probability of our success in earning income from sales of our
planned  thin-client  server  products  and  services.

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If  Social  Or Political Conditions In China Change, Our Business Operations May
Be  Adversely  Affected

We  have  established  our  business  operations  in  China and plan to derive a
substantial portion of our revenues from the domestic Chinese market. Social and
political  conditions  in  China  are  more  volatile  than  in  more  developed
countries.  This  volatility  may  cause our operations to fluctuate and make it
difficult  for  our  business  to grow.  Results such as this could then have an
adverse  effect on our stock price. Historically, volatility has been caused by:

(i)     significant governmental influence over many aspects of local economies;
(ii)     political  uncertainty;
(iii)     unexpected  changes  in  regulatory  requirements;
(iv)     slow  or  negative  growth;
(v)     imposition  of  trade  barriers.

We  have  no control over these matters. Volatility resulting from these matters
may  decrease  our ability to expand our business operations in China, adversely
affect  Internet availability to Chinese consumers, create uncertainty regarding
our  operating climate and adversely affect our customers budgets.  All of these
factors  may  adversely  impact  our  business.

If  The  Chinese  Currency  Depreciates  Relative  To  The U.S. Dollar, Then Our
Revenues  Will  Decline

Our reporting currency is the U.S. dollar.  We anticipate that our revenues from
operations  within  China will be earned in Chinese currency.  Our revenues from
domestic  Chinese  operations  will  decline  in  value  if the Chinese currency
depreciates  relative  to  the  U.S.  dollar.  Accordingly,  our  revenues  will
decrease  if  the Chinese currency depreciates relative to the U.S. dollar, with
the  result  that our business operations and financial condition may be harmed.

If  The Telecommunications Infrastructure In China Is Not Improved, Our Business
Will  Be  Limited  In  Its  Growth

Access  to  the  Internet  requires  a  relatively  advanced  telecommunications
infrastructure.  The telecommunications infrastructure in many parts of China is
not  as well-developed as in the United States or other developed countries. The
quality  and  continued  development of the telecommunications infrastructure in
China  will have a substantial impact on our ability to deliver our services and
on  the  market  acceptance  of  the  Internet  in  China in general. If further
improvements  in the Chinese telecommunications infrastructure are not made, the
usage  of  the  Internet  in China may not grow as anticipated. If access to the
Internet  in  China  does  not  continue  to  grow  or grows more slowly than we
anticipate,  then  our  planned technology products and services may not achieve
the  required  consumer  acceptance  and  our  business, financial condition and
results  of  operations  may  be  adversely  affected.

If We Are Not Able To Effectively Manage Expanding Operations, Then Our Business
May  Be  Harmed

Our  business  plan  anticipates  that  our  operations will undergo significant
expansion  if  we  are  able to implement our plan of operations. This expansion
will  require us to hire additional personnel and establish offices in locations
within China.  We anticipate that this growth will place a significant strain on
our managerial, operational and financial resources. To accommodate this growth,
we  must successfully find and train additional employees, acquire and implement
new computer hardware and software systems and establish new offices. We may not
succeed  with  these efforts. Our failure to expand in an efficient manner could
cause  our  expenses  to  be greater than anticipated, our revenues to grow more
slowly than expected and could otherwise have an adverse effect on our business,
financial  condition  and  results  of  operations.

If  We  Are  Unable To Hire And Retain Key Personnel, Then We May Not Be Able To
Implement  Our  Business  Plan

We  depend on the services of our senior management and key technical personnel.
In  particular,  our  success  depends  on  the  continued  efforts  of  our key
management,  sales  or  technical  personnel could have an

                                     13

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adverse effect on our
business,  financial  condition  and  results  of  operations.  In addition, our
success is largely dependent on our ability to hire highly qualified managerial,
sales  and  technical personnel. These individuals are in high demand and we may
thus  not  be  able  to  attract  the  staff  we  need  within  our  budget.

ITEM  2.     Description  of  Property

Our  principal  offices  are  in  the  business offices of Mr. Fredric Mann, our
president  and  chief  executive  officer,  located  at  Suite 3500, 1600 Market
Street,  Philadelphia,  Pennsylvania  19103.  We  are not party to any lease for
these  premises  and  we  do  not pay any amount to Mr. Mann in respect of these
premises.  We  do not own any real estate. We believe that all of our facilities
are  adequately  maintained  and  suitable  for  their  present  use.

Our  subsidiary,  Beijing Qinnet, sub-leases premises comprised of approximately
2500  square  feet  in  Beijing,  China  for  a  two  year  term  expiring 2003.

Our  joint  venture  subsidiary,  Liaoning  Qinnet,  maintains  offices in space
provided  by  our joint venture partner, Liaoning Publishing Group of Companies,
as  part of their capital contribution to the joint venture.  These premises are
approximately  4500  square  feet.

We  consider  our  premises  to  be  adequate for our current business purposes.

ITEM  3.     Legal  Proceedings

We  are  not  a party to any material legal proceedings and to our knowledge, no
such  proceedings  are  threatened  or  contemplated.

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

No  matters  were  submitted  to our security holders for a vote during the last
quarter  of  our  fiscal  year  ending  December  31,  2001.

                                       14
<PAGE>
                                     PART II

ITEM  5.     Market  for  Registrant's  Common  Equity  and Related Stockholders
Matters

Market  Information

Our  shares  are  currently  trading  on  the OTC Bulletin Board under the stock
symbol QNTI.  The first day on which the Company's shares were traded on the OTC
Bulletin  Board  was  January 10, 2000.  Our shares were traded under the symbol
QNNT  from  January  2000  to  August 2001.  The high and the low trades for our
shares  for  each  quarter  of  actual  trading  were:

Quarter                         High               Low
-------                         ----               ---

1st  Quarter  2000               $17.125          $8.25
2nd  Quarter  2000               $14.25               $8.50
3rd  Quarter  2000               $12.00               $10.00
4th  Quarter  2000               $12.00               $9.50
1st  Quarter  2001               $10.00               $5.50
2nd  Quarter  2001               $7.00               $4.75
3rd  Quarter  2001               $5.50               $4.25
4th  Quarter  2001               $5.00               $3.00
1st  Quarter  2002               $4.75               $3.50

The  trades  reflect  inter-dealer  prices,  without retail mark-up, markdown or
commission  and  may  not  represent  actual  transactions.

Holders  of  Common  Stock

As  of  the  date  of  April  8,  2002,  there were eight hundred fourteen (814)
registered  shareholders  of  our  common  stock.

Dividends

We have neither declared nor paid any cash dividends on our capital stock and do
not  anticipate  paying  cash  dividends  in the foreseeable future. Our current
policy  is  to  retain  any  earnings  in  order to finance the expansion of our
operations. Our board of directors will determine future declaration and payment
of dividends, if any, in light of the then-current conditions they deem relevant
and  in  accordance  with  Delaware  General  Corporation  Law.

Recent  Sales  of  Unregistered  Securities

We  approved  our  2000/A  incentive stock option plan in June 2001.  This stock
option  plan  was approved by our stockholders in August 2001.  Our 2000/A stock
option  plan  provides  for the grant of incentive stock options to purchase our
common  stock  to  our  directors, officers, employees and eligible consultants.
Options  to  purchase  a  total  of up to 260,000 shares of our common stock may
presently  be  granted  under  the  stock  option  plan.

We  granted  options to purchase a total of 2,000,000 shares of our common stock
under  our 2001 stock option plan during the year ended December 31, 2001.  Each
option  granted  is  exercisable  at  price  of  $5.00  per  share.

We  completed  the  issuance  of  12,275,000  shares  of our common stock to the
non-Canadian  shareholders  of  Qinnet Holdings on April 23, 2001.  These shares
were  issued  pursuant  to  Rule  506  of  Regulation  D in consideration of the
transfer  to  us  of  an  aggregate  of 93.8% of the outstanding stock of Qinnet
Holdings.  Each  shareholder  represented  to  us  that  the  shareholder was an
"accredited  investor".


                                     15

<Page>

We  issued  an  additional  853,650  shares of our common stock to the remaining
shareholders  of  Qinnet  Holdings  on  June  8, 2001.  These shares were issued
pursuant  to  Regulation  S  in  consideration  for  the  transfer  to us of the
remaining  6.2%  interest  in  Qinnet Holdings.  Each investor represented to us
that  the investor was not a "U.S. Person", as defined under Regulation S of the
1933  Act.  The  shares  were issued as restricted shares under the 1933 Act and
were  endorsed with a restrictive legend.  Shares were issued to an aggregate of
forty  (40)  investors.

We  completed  the sale of 138,757 units on January 24, 2002 at a price of $2.80
per unit for gross proceeds of $388,519. Each unit was comprised of one share of
our  common  stock  and  one share purchase warrant. Each share purchase warrant
entitles  the  holder to purchase one share our common stock at a price of $2.80
per  share  until  January 30, 2004. A total of 138,757 shares and 138,757 share
purchase  warrants  were  issued.  The  purchasers consisted of a total of seven
purchasers.  We paid commissions in the amount of $37,000 in connection with the
offering.  Of  this amount, $25,000 was converted into units at a price of $2.80
and the balance was paid in cash.  All sales were completed pursuant to Rule 506
of Regulation D of the Act to persons who are "accredited investors", as defined
in Rule 501 of Regulation D.   The shares were issued as restricted shares under
the  Securities  Act  of  1933  (the "1933 Act") and all share certificates were
endorsed  with  a  restrictive  legend.
                                     16

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

PLAN  OF  OPERATIONS

Our  plan  of  operations  over  the  next  twelve months includes the following
elements,  subject  to  us  achieving  the  required  financing  (See  Item 1. -
Description  of  Business):

1.     Electronic  Book  Publishing
       ----------------------------

The  primary  focus  of our plan of operations over the next twelve months is to
pursue  our  activities  in  Liaoning Qinnet.  We plan to advance the balance of
$2,600,000  to Liaoning Qinnet to fund our portion of the joint venture expenses
during  the  next  twelve months. This will allow us to commence the roll out of
the  Q-Reader  in China and to supply the funds necessary to complete the design
and initiate the production of the second generation product, the e-Bag. This is
a wireless device that will enable a student to inexpensively interface with the
main  server of a school or university, as well as providing all of the features
of  the  Q-Reader.  See  Description  of  Business - Electronic Book Publishing.

2.     Thin-Client  Server  Technology
       -------------------------------

We  plan  to  continue  development  of  our thin-client server technology.  Our
ability  to  implement  our  plan  of  operations  for  the  development  of our
thin-client  server  technology  business  is  subject  to  our ability to raise
additional  financing.  We  plan to spend $800,000 on the TCS project within the
next  twelve  months.  These  funds  will  be  directed to terminal development,
marketing  and  sales  activities. With continued terminal development, the line
will  be expanded to include more features.  We also plan to incorporate the TCS
platform  into  a  wireless  model  of  the  Q-Reader.  In  addition, we plan to
establish  a  centrally located server system that will accommodate up to 10,000
subscribers  in  a  Wide  Area  Network environment. The amount of funds that we
propose  to  spend  on  developing  this business will depend upon the amount of
funds,  if any, available from any financing that we are able to achieve and our
subsequent  determination  based  on  priorities and business opportunities. See
Description  of  Business  -  Thin-Client  Server  Technology.

3.     QinTop  Communication  Network
       ------------------------------

As  noted  earlier,  we  do  not  plan  to continue the operations of the QinTop
Communication  Network,  as we have determined to direct our corporate resources
to  other  areas  of  our  operations.

4.     Tianjin  Qinnet
       ---------------

We  have  discontinued  our  previously disclosed plan of operations for Tianjin
Qinnet  due  to market conditions affecting Internet related services and are in
the  process  of  winding  down  operations.  Any funds recoverable from the net
assets  will  be  invested  in  the  activities  described  above.

5.     Shenyang  Qinnet
       ----------------

We  do  not  plan  to  continue  the  operations  of  Shenyang  Qinnet. With the
discontinuation  of  extremely  competitive  Internet  related  businesses,  key
technical personnel have been moved to the development of our electronic reading
device  within  Liaoning  Qinnet.

6.     QWS  Internet  Solution  Software
       ---------------------------------

We are ready to market the Internet solution software (QWS) developed by Beijing
Qinnet.  We  anticipate that we will not realize significant revenues until such
time  as  we  undertake broad based marketing efforts.  We currently do not have
the  ability  to  undertake  these  marketing efforts due to our current limited
funding.  Accordingly, our ability to complete sales of this software is subject
to  our  obtaining further financing and our determination that the continuation
of  this  operation  is  viable  as  compared  to  alternative  uses of capital.

                                     17

<Page>


We  plan  to spend approximately $3,380,000 over the next twelve months in order
to  pursue  our  plan of operations, provided we achieve the required financing.
We  anticipate  spending  approximately  half  of  this amount over the next six
months  if  the  required  financing  is achieved.  We had cash in the amount of
$367,807  as  of  December  31,  2001.  Accordingly, we will require significant
amounts of additional financing in order to complete our plan of operations.  We
will plan our expenditures around our capital resources in order to maintain our
operations.  The  amount of expenditures may vary if: (i) we determine to reduce
or expand our plan of operations; (ii) the actual costs incurred in pursuing our
stated  plan  of  operations  are  greater than anticipated; or (iii) we are not
successful  in  achieving  revenues  upon  completion  of  our  stated  plan  of
operations.  We  do  not  have  any  arrangement in place for any debt or equity
financing  which  would  enable  us to achieve additional financing if required.
There  is  no  assurance  that we will be able to secure the required additional
financing.  There  is  no  assurance  that  completion  of  our  stated  plan of
operations  will successfully generate the planned revenues or that any revenues
generated  will  be  sufficient  to  fund  future  operations.

We  hired  a full-time chief executive officer in the third quarter of 2001.  We
plan  on  hiring  a full-time chief financial officer in second quarter of 2002.
We  currently  employ  approximately  82 people in our operations, mostly in the
People's  Republic  of  China.  We  anticipate  that  we  will  hire  additional
employees  over  the next twelve months if we achieve the financing necessary to
implement  our plan of operations.  Of these additional employees, a majority is
anticipated  to be located in China.  We also plan to expand our management team
in  North  America  and  China.

Our  business plan may differ from our stated plan of operations.  We may decide
not to pursue all or part of our stated plan of operations.  In addition, we may
modify  our  stated  plan  of  operations  if  actual  costs  are  greater  than
anticipated,  if  we are not able to achieve financing or if we secure financing
in  order  to  expand  or  accelerate  our  plan  of  operations.

RESULTS  OF  OPERATIONS

We  completed  the  acquisition of a 100% interest in Qinnet Holdings during the
second  quarter  of 2001.  We completed this acquisition in consideration of the
issuance  by  us of 13,128,750 shares of our common stock to the shareholders of
Qinnet  Holdings.  Due  to  the  common  management  and  shareholders  of Q-Net
Technologies,  Inc. and Qinnet Holdings, the acquisition was accounted for using
historical  cost  in  a  manner  similar  to  pooling-of-interests  method  of
accounting.  Under this method, the assets, liabilities and stockholders' equity
of the acquired entities are combined with the Company's respective accounts and
recorded  at  book  value.  The financial statements and footnotes included with
this  Form  10-KSB Annual Report have been restated to include the operations of
Qinnet  Holdings  and  its  subsidiaries  for  all  periods  presented.

The  audited  consolidated  financial  statements included with this Form 10-KSB
Annual  Report  include  Q-Net  Technologies, Inc. and each of our subsidiaries.
These  subsidiaries  include our 100% owned subsidiaries, Qinnet Holdings Corp.,
Beijing  Qinnet  Electronic  Technologies  Co.  Ltd.  (a  subsidiary  of  Qinnet
Holdings), Qincom Networks Inc. and Internet Corporation of America, and our 70%
owned subsidiary, Liaoning Qinnet E-book Technology Co. Ltd.  These consolidated
financial  statements  do  not  include  the  accounts  of our Tianjin Qinnet or
Shenyang  Qinnet  joint ventures, which are accounted for using the cost method.

2001  compared  with  2000

Revenues

We  earned revenues in the amount of $725,152 during the year ended December 31,
2001,  compared to revenues in the amount of $11,222 for the year ended December
31,  2000.  Of  the  revenue  earned,  a  total  of $712,703 was attributable to
Internet  phone  services provided by Qincom Networks Inc and a total of $12,449
was  attributable  to  our Chinese operations. We did not earn any revenues from
our  Liaoning  Qinnet  joint venture or any thin-client server operations during
the year ended December 31, 2001.  We earned minimal revenues for the year ended
December  31, 2000.   We have determined to terminate our Internet phone service
operations  during  2002.  Accordingly,  there  is  no  assurance  that  we will
continue  to  achieve  revenues from Internet phone services during 2002.  For a
discussion  of  our  reasons not to continue this component of

                                     18

<Page>

our business, see
Item  1 - Description of Busines - QinTop Communication Network.  Further, there
is  no  assurance  that  we  will  be  able  to generate revenues from our other
business  operations  during  2002 other than the sale of the 500 Q-Readers that
have  been  funded  earlier,  although  we  are  optimistic that a number of our
Q-Reader's that have been pre-ordered will result in further sales. There can be
no  assurance that further revenues will be generated due to our current lack of
financing,  the  development  costs associated with our Liaoning Qinnet Q-Reader
joint  venture and our thin-client server and solutions software businesses, and
our  determinations  not to proceed with the QinTop, Tianjin Qinnet and Shenyang
Qinnet  businesses.

Our  cost  of  revenues  for  the  year  ended  December  31, 2001 was $682,797,
representing  94%  of  total  revenues.  Our  cost  of  revenues  for year ended
December 31, 2000 was $11,186, representing 99.7% of total revenues. The cost of
revenues  is  primarily  attributable  to telecommunication expenses incurred in
connection  with  the  provision  of Internet phone services by Qincom Networks.

Our gross profit for the year ended December 31, 2001 was $42,355, compared to a
gross  profit of $36 for the year ended December 31, 2000.  Our gross profit was
attributable  entirely  to  our  Qincom  Networks  Internet  phone  services.

Operating  Expenses

Our  operating  expenses decreased to $3,543,155 for the year ended December 31,
2001,  compared  to  $4,850,361  for  the  year  ended  December 31, 2000.   The
decrease  in  our  operating  expenses in the amount of $1,307,206 was primarily
attributable  to  a  reduction  to  general  and administrative expenses.   This
reduction  was  off-set  by  the  impairment  of investments in two of our joint
ventures.

Our  consulting  expenses,  which  included  management  contracts, increased to
$1,011,474 for the year ended December 31, 2001 from $765,806 for the year ended
December  31,  2000  due to the expansion of our management team in 2001.   This
expansion  included  the addition of Fredric Mann to our management as president
and  chief  executive  officer  and  acting  chief  financial  officer.

Our general and administrative expenses decreased to $853,818 for the year ended
December  31,  2001  from $3,413,385 for the year ended December 31, 2000.  This
decrease  was  primarily  attributable to the inclusion of a $2,872,100 non-cash
compensation  expense  associated  with  stock  option grants in our general and
administrative expenses for 2000.  There was no non-cash compensation expense in
2001.   Our  professional fees increased to $307,941 for the year ended December
31,  2001  from  $255,402 for the year ended December 31, 2000.  The increase in
professional  fees  was  primarily  attributable  to  our  acquisition of Qinnet
Holdings during the second quarter of 2001.  We expect to continue to incur high
professional  expenses in order to comply with our ongoing obligations under the
Securities Exchange Act of 1934.  We anticipate that our operating expenses will
continue  to increase if we are able to achieve the financing required to enable
us  to  carry  out our stated plan of operations.    If we are not successful in
achieving  additional  financing,  we  anticipate our general and administrative
expenses  will  decrease  as  we  will  be  forced to scale back our operations.

We  incurred  costs  in  the  amount of $323,314 related to the operation of our
Liaoning  Qinnet  joint  venture  during  the  year ended December 31, 2001.  We
anticipate  the  amount  expended  on this joint venture will increase if we are
able  to  achieve  the  financing  required  to  enable  us  to meet our funding
obligations  under  this  joint  venture.

We  incurred  an expense in the amount of $1,168,955 for the year ended December
31,  2001  in  respect to the impairment of investments in joint ventures in the
PRC.  This  expense  with respect to impairment of investments in joint ventures
reflects our determination to not to pursue our Tianjin Qinnet,
Shenyang  Qinnet,  Shanghai, Tianjin QinTop and Hulunbier businesses and  our
determination that we will not be able to recover our
investments in these business.  Accordingly, we have written-off our investments
in these businesses.  This write-off is reflected on our financial statements as
an  expense  in  an  amount  equal  to  the  amount  of our investments in these
businesses.  We are unable to estimate any amounts that will be recovered from
these investments.

                                     19
<Page>

Net  Loss

We  incurred  a net loss in the amount of $3,477,201 for the year ended December
31,  2001,  compared to a net loss of $4,758,682 for the year ended December 31,
2000.  The  decrease  to  our  loss  in  the  amount of $1,281,481 was primarily
attributable  to  our  decreased  general  and  administrative  expenses.

Liquidity  and  Capital  Resources

We  had cash in the amount of $367,807 as of December 31, 2001, compared to cash
of  $2,463,940 as of December 31, 2000.  We had working capital in the amount of
$209,805  as  of December 31, 2001, compared to working capital in the amount of
$2,484,825  as  of  December  31,  2000.

Cash  used  by  us  in operating activities decreased to $2,198,276 for the year
ended  December 31, 2001, compared to $1,561,439 for the year ended December 31,
2000.

Cash  provided  by financing activities decreased to $101,881 for the year ended
December  31,  2001 compared to $6,333,639 for the year ended December 31, 2000.
The decrease in cash provided by financing activities was primarily attributable
to  the  fact  that we did not complete any sales of our common stock during the
year  ended  December  31,  2001,  whereas we received cash from sales of common
stock  in  the  amount  of  $5,350,500  during the year ended December 31, 2000.

Our  cash  position  decreased in the amount of $2,096,133 during the year ended
December  31,  2001,  whereas  our  cash  position  increased  in  the amount of
$2,411,082 during the year ended December 31, 2000.  We anticipate that our cash
position  will continue to decline until such time as our revenues increase to a
level where they exceed our operating expenses or until we realize an additional
financing.

We  did  not complete any sales of our common stock for cash proceeds during the
year  ended December 31, 2001.  None of our granted stock options were exercised
during  this  period.  Option holders currently have options to purchase a total
of 235,000 shares of our common stock outstanding at a price of $10.00 per share
and options to purchase 1,610,000 shares of our common stock at a price of $5.00
per  share.  None  of  these  options  have  been exercised as of April 8, 2002.

We  will  require  additional  capital  if we are to complete our stated plan of
operations.  Our  plan  of  operations  calls  for  us  to  spend  in  excess of
$3,000,000  over  the  next twelve months, if we achieve the required financing.
Our current monthly operating expenses are approximately $150,000 per month. Our
current  cash  reserves are sufficient to enable us to operate for an additional
three  months, assuming that management continues to agree to defer salaries and
we  do  not fully implement our plan of operations. Accordingly, we will require
additional financing if we are to continue as a going concern and to finance our
business  operations.  We  anticipate  that  any  additional  financing would be
through  the  sales of our common stock or placement of convertible debt. We are
presently  in the process of negotiating the private placement of our securities
to  raise working capital to finance our operations. However, we do not have any
definitive  agreements  in place for the sale of any of our securities and there
is  no  assurance  that  we will be able to raise the additional capital that we
require  to  continue  operations.  In  the  event  that  we are unable to raise
additional  financing on acceptable terms, we intend to reduce our marketing and
sales  efforts  and  may  implement  additional  actions to reduce expenditures,
including  withdrawing  from  our  joint  ventures, reducing staff, reducing the
level  of  services,  selling  assets, disposing of business units or suspending
some  or  all  of  our  operations.

We  anticipate that we will continue to incur losses for the foreseeable future.
We  base  this  expectation  in  part  on  the  expectation  that  we will incur
substantial  marketing  and  operating expenses in completing our stated plan of
operations  and there is no assurance that we will generate revenues that exceed
these  expenses.

                                     20

<PAGE>

ITEM  7.     Financial  Statements


Index  to  Consolidated Financial Statements                                Page
                                                                            ----

Report  of  Independent Certified Public Accountants                         F-1

Consolidated  Financial  Statements:

     Consolidated  Balance  Sheets as at December 31, 2001 and 2000          F-2

     Consolidated  Statements  of  Operations                                F-3
     for  the  years  ended  December  31,  2001  and  2000
     and  cumulative  from  Inception  to  December  31,  2001

     Consolidated  Statement  of  Stockholders'  Equity                      F-4
     for  the  years  ended  December  31,  2001  and  2000
     and  cumulative  from  Inception  to  December  31,  2001

     Consolidated  Statements  of  Cash  Flows                               F-6
     for  the  years  ended  December  31,  2001  and  2000
     and  cumulative  from  Inception  to  December  31,  2001

     Notes  to  Consolidated  Financial  Statements                          F-7

                                       21

<PAGE>



April  16,  2002
Qinnet  Holdings  Corp.  -2001FS.doc

Financial  Statements  and  Report  of
Independent  Certified  Public  Accountants

Q-NET  TECHNOLOGIES,  INC.
(formerly  Qinnet.com,  Inc.)
(a  development  stage  enterprise)

December  31,  2001  and  2000

                                  F-1
<PAGE>


                          C  O  N  T  E  N  T  S



                                                         Page
                                                         ----

REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS     F-3

CONSOLIDATED  FINANCIAL  STATEMENTS

     CONSOLIDATED  BALANCE  SHEETS                          F-4

     CONSOLIDATED  STATEMENTS  OF  OPERATIONS               F-5

     CONSOLIDATED  STATEMENT  OF  STOCKHOLDERS'  EQUITY     F-6

     CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS              F-7

     NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS          9


                                  F-2
<PAGE>


     REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS
     -------------------------------------------------------


Board  of  Directors
Q-Net  Technologies,  Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Q-Net
Technologies,  Inc.  (the  "Company") (formerly Qinnet.com, Inc.) (a development
stage  company)  as  of December 31, 2001 and 2000, and the related consolidated
statements of operations, stockholders' equity and cash flows for the years then
ended.  These  financial  statements  are  the  responsibility  of the Company's
management.  Our  responsibility  is  to  express  an opinion on these financial
statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the 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  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the consolidated financial position of Q-Net
Technologies,  Inc.  as  of  December  31,  2001  and 2000, and the consolidated
results  of  its  operations and its consolidated cash flows for the years  then
ended, in conformity with accounting principles generally accepted in the United
States  of  America.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will continue as a going concern.  As discussed in Note C to
the  consolidated financial statements, the Company has no established source of
revenue and is dependent on its ability to raise substantial amounts of capital.
Management's  plans  in  regard  to  these matters are also described in Note C.
These  matters  raise substantial doubt about its ability to continue as a going
concern.  The  consolidated  financial statements do not include any adjustments
that  might  result  from  the  outcome  of  this  uncertainty.





Irvine,  California
April  12,  2002

                                         F-3
<PAGE>

<TABLE>
<CAPTION>


                                          Q-NET TECHNOLOGIES, INC.
                                         (formerly Qinnet.com, Inc.)
                                        (a development stage company)
                                         CONSOLIDATED BALANCE SHEETS


                                              December 31,    December 31,
                                              2001            2000
------------------------------------------------------------------------------
<S>                                           <C>             <C>

  ASSETS
  Current assets
    Cash and cash equivalents                 $     367,807   $   2,463,940
    Short term investments                        1,999,995       1,999,653
    Trade accounts receivable, net of
    allowance for doubtful
     accounts of $3,300                            218,220               -
    Prepaid expenses and other current assets       149,499          83,684
                                                --------------  --------------
  Total current assets                            2,735,521       4,547,277
                                                --------------  --------------

  Property and equipment, net                       202,640         197,814
  Loan and interest receivable                      111,258         104,258
  Note receivable from shareholder                        -          50,313
  Deposits on investments                                 -       1,130,939
                                                --------------  --------------
                                                    313,898       1,483,324
                                                --------------  --------------

                                              $   3,049,419   $   6,030,601
                                                ==============  ==============

 LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
    Accounts payable and other accrued
    Liabilities                               $     592,756   $     129,972
    Note payable to bank                          1,932,960       1,932,480
                                                --------------  --------------
       Total current liabilities                  2,525,716       2,062,452
                                                --------------  --------------

  Minority interest                                  98,488          76,321
  Commitments and contingencies                           -               -

  Stockholders' Equity
    Preferred Stock : $0.00001 par value
      Authorized : 100,000,000
      Issued and outstanding : nil                        -               -
    Common Stock : $0.00001 par value
      Authorized : 100,000,000
      Issued and outstanding : 14,429,247
      at December 31, 2001 and 2000                     144             144
    Additional paid in capital                    8,681,154       8,681,154
    Accumulated deficit                          (8,267,439)     (4,790,238)
    Accumulated other comprehensive income           11,356             768
                                                --------------  --------------
  Total Stockholders' Equity                        425,215       3,891,828
                                                --------------  --------------
                                              $   3,049,419   $   6,030,601
                                                ==============  ==============

  See accompanying notes

</TABLE>

                                          F-4

<Page>

                                    Q-NET TECHNOLOGIES, INC.
                                  (formerly Qinnet.com, Inc.)
                                 (a development stage company)
                             CONSOLIDATED STATEMENTS OF OPERATIONS

                           Cumulative from
                              inception                    Year Ended
                       (May 31, 1989) through    December 31,      December 31,
                         December 31, 2001              2001          2000
-------------------------------------------------------------------------------
Revenues                      $   736,374         $   725,152   $    11,222
  Cost of revenue                 693,983             682,797        11,186
     Gross profit                  42,391              42,355            36
                              ------------        ------------  ------------

Operating Expenses
    General and administrative  4,296,056             853,818     3,413,385
    Management consulting       1,778,465           1,011,474       765,806
    Impairment of investments
      in joint ventures         1,168,955           1,168,955             -
    Marketing expenses            487,293             185,594       301,699
    Start-up cost
      of joint venture            359,870             323,314        36,471
    Reorganization cost            33,000                   -       333,000

                              ------------        ------------  ------------
                                 8,423,639           3,543,155     4,850,361
                              ------------        ------------  ------------

Operating loss                  (8,381,248)         (3,500,800)   (4,850,325)

  Other income (expense)
    Interest income                232,131              42,663       189,468
    Interest expense             (188,456)           (114,057)      (74,399)
    Foreign exchange loss         (60,894)            (21,768)      (37,693)
                              ------------        ------------  ------------

 Loss before minority
     interest                  (8,398,467)          (3,593,962)   (4,772,949)

  Minority interest in
    net loss of subsidiary        131,028              116,761        14,267
                              ------------        ------------  ------------
  Net loss                    $(8,267,439)         $(3,477,201)  $(4,758,682)
                              ============        ============  ============
  Basic and diluted net
    loss per share                                 $     (0.24)  $     (0.33)
                                                  ============  ============
  Weighted average shares outstanding               14,429,247    14,257,211
                                                  ============  ============
                               See accompanying notes

                                        F-5

<PAGE>

<TABLE>
<CAPTION>

                                                   Q-NET  TECHNOLOGIES,  INC.
                                                  (formerly Qinnet.com, Inc.)
                                                 (a development stage company)
                                         CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                     FOR THE PERIOD FROM MAY 31, 1989 TO DECEMBER 31, 2001


                                                                                                  Deficit
                                                                                                Accumulated
                                                                                        Stock    during the
                                                                 Stock      Additional Subscrip-   Develop
                                                  Common       Amount At    Paid In       tion      ment
                                                  Shares       Par Value    Capital    Receivable   Stage
<S>                                              <C>          <C>        <C>         <C>        <C>

Issuance of stock at formation on May 31, 1989    16,000,000  $     160  $        -  $       -  $        -

Capital contributed to support development
  during the period May 31, 1989 through
  December 31, 1992                                       -           -       5,358          -           -

Effect of one-for-seven reverse split on June
 27, 1996                                        (13,714,000)      (137)        137          -           -

Issuance of common stock to new majority
  shareholder on November 27, 1996                 7,714,00           7      49,923    (50,000)          -

Effect of one-for-eight reverse split on
  July 31, 1999                                  (8,749,503)        (87)         87          -           -

Issuance of common stock for cash                          -
  in December 1999                                12,058,650        120     120,060          -           -

Foreign currency translation adjustment                    -          -           -          -           -

Net loss for the period May 31, 1989 through
  December 31, 1999                                        -          -           -          -     (31,556)
                                                -----------------------------------------------------------
Balance, December 31, 1999                        13,309,147        133     175,565     50,000)    (31,556)
                                                -----------------------------------------------------------

Issuance of common stock for cash                  1,070,100         11   5,350,489          -           -

Issuance of common stock for acquisition of ICA       50,000          -     283,000          -           -

Stock options granted to non-employees                     -          -   2,872,100          -           -

Receipt of stock subscription                              -          -           -     50,000           -

Foreign currency translation adjustment                    -          -           -          -           -

Net loss                                                   -          -           -          -  (4,758,682)

Total comprehensive loss
                                                -----------------------------------------------------------
Balance, December 31, 2000                        14,429,247        144   8,681,154          -  (4,790,238)
                                                -----------------------------------------------------------

Foreign currency translation adjustment

Net loss                                                   -          -           -          -  (3,477,201)

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

Balance, December 31, 2001                        14,429,247  $     144  $8,681,154   $      - $(8,267,439)
                                                ===========================================================



  See accompanying notes



                                                      Accumulated
                                                         Other
                                                     Comprehensive
                                                         Loss             Total
                                                -----------------------------------

Issuance of stock at formation on May 31, 1989    $            -   $       160

Capital contributed to support development
  during the period May 31, 1989 through
  December 31, 1992                                            -         5,358

Effect of one-for-seven reverse split on June
                                                               -             -

Issuance of common stock to new majority
  shareholder on November 27, 1996                             -             -

Effect of one-for-eight reverse split on
  July 31, 1999                                                -             -

Issuance of common stock for cash
  in December 1999                                             -       120,180

Foreign currency translation adjustment                     (274)         (274)

Net loss for the period May 31, 1989 through
  December 31, 1999                                            -       (31,556)
                                                  ---------------  ------------

Balance, December 31, 1999                                  (274)       93,868
                                                  ---------------  ------------

Issuance of common stock for cash                              -     5,350,500

Issuance of common stock for acquisition  of ICA               -       283,000

Stock options granted to non-employees                         -     2,872,100

Receipt of stock subscription                                  -        50,000

Foreign currency translation adjustment                    1,042         1,042

Net loss                                                       -    (4,758,682)
                                                                   ------------
Total comprehensive loss                                            (4,757,640)
                                                  ---------------  ------------

Balance, December 31, 2000                                   768     3,891,828
                                                  ---------------  ------------

Foreign currency translation adjustment                   10,588        10,588

Net loss                                                       -    (3,477,201)
                                                                   ------------
Total comprehensive loss                                            (3,466,613)
                                                  ---------------  ------------

Balance, December 31, 2001                        $       11,356   $   425,215



                                   See accompanying notes

</TABLE>
                                            F-6

<PAGE>

<TABLE>
<CAPTION>
                                        Q-NET TECHNOLOGIES, INC.
                                      (formerly Qinnet.com, Inc.)
                                     (a development stage company)
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                            Cumulative from           Year Ended
                                                           inception (May 31, --------------------------
                                                              1989) through    December 31, December 31,
                                                            December 31, 2001     2001         2000
--------------------------------------------------------------------------------------------------------
<S>                                                            <C>           <C>           <C>

Cash flows from operating activities
  Net loss                                                     $(8,267,439)  $(3,477,201)  $(4,758,682)
  Adjustments to reconcile net loss to net cash
    Used in operating activities :
      Depreciation                                                  72,200        48,813        14,380
      Minority interest in net loss of subsidiary                 (131,028)     (116,761)      (14,267)
      Non-cash compensation expense                              2,872,100             -     2,872,100
      Reorganization costs                                         283,000             -       283,000
      Impairment of investments in joint ventures                1,168,955     1,168,955             -
      Changes in assets and liabilities :
        Increase in trade accounts receivable                     (218,469)     (218,220)         (249)
        Increase in prepaid expenses and other current assets     (153,370)      (65,677)      (87,693)
        Increase in accounts payable and accrued liabilities       554,740       462,784       129,972
                                                                ---------------------------------------
          Net cash used in operating activities                 (3,819,311)   (2,197,309)   (1,561,439)
                                                                ---------------------------------------

Cash flows from investing activities
  Purchases of property and equipment                             (274,840)      (53,639)     (212,194)
  Purchases of short term investments                           (1,999,653)            -    (1,999,653)
  (Advances) payments under notes receivable                      (107,000)       43,313      (150,313)
                                                                ---------------------------------------
         Net cash used in investing activities                  (2,381,493)      (10,326)   (2,362,160)
                                                                ---------------------------------------

Cash flows from financing activities
  Investment from minority interest shareholders, net              229,516       138,928        90,588
  Deposits on investments                                       (1,130,939)      (38,016)   (1,089,929)
  Proceeds from notes payable to bank                            1,932,480             -     1,932,480
  Receipt of stock subscription                                     50,000             -        50,000
  Issuance of common stock                                       5,476,198             -     5,350,500
                                                                ---------------------------------------
         Net cash provided by financing activities               6,557,255       100,912     6,333,639
                                                                ---------------------------------------

Effect of exchange rate changes on cash                             11,356        10,588         1,042
                                                                ---------------------------------------

Increase (decrease) in cash and cash equivalents                   367,807    (2,096,133)    2,411,082

Cash and cash equivalents - beginning of year                            -     2,463,940        52,858
                                                                ---------------------------------------

Cash and cash equivalents - end of year                        $   367,807   $   367,807   $ 2,463,940
                                                                =======================================

Supplemental information :
Cash paid for :
    Interest                                                   $   188,456   $   114,057   $    74,399
    Income taxes                                               $         -   $         -   $         -

            See accompanying notes

</TABLE>
                                             F-7

<PAGE>

                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000




NOTE  A  -  DESCRIPTION  OF  BUSINESS

Q-Net  Technologies,  Inc.,  ("the  Company"),  a  Deleware  corporation,  was
incorporated  on  May  31, 1989 as Specialists, Inc.  In 1996, Specialists, Inc.
amended  its  Certificate  of  Incorporation to change its name to Eastern Group
International  Co., Ltd. Also during 1996, Eastern Group International Co., Ltd.
issued  7,714,000 shares of common stock in exchange for $50,000 and changed its
name to Telespace Limited.  In December 1999, Telespace Ltd. changed its name to
Qinnet.com,  Inc.  On  August  13,  2001,  the Company changed its name to Q-Net
Technologies,  Inc.

On  April  13,  2000,  the  Company purchased 100% of the issued and outstanding
shares of Internet Corporation of America, Inc. ("ICA"), a Delaware corporation,
for  $50,000 cash and 50,000 shares of restricted, unregistered common stock. At
the  date  of  acquisition,  ICA  was  a  reporting company under the Securities
Exchange  Act of 1934 and had no operations, assets or employees. This change in
control  of  ICA occurred in conjunction with the closing under an Agreement and
Plan  of  Reorganization  (the  "Reorganization  Agreement") between ICA and the
Company.  As  a result of this transaction, ICA became a wholly-owned subsidiary
of  the Company. Upon effectiveness of the Reorganization Agreement, the Company
became  the  successor issuer to ICA for reporting purposes under the Securities
Exchange  Act  of  1934.

The  common  stock  of  the  Company  issued  in  this transaction was valued at
$283,000,  the estimated value of the Company's restricted, unregistered shares.
The  total  cost of the acquisition of $333,000 was recorded as a reorganization
cost,  since  ICA  was a dormant entity with no operations, assets or employees.

The  Company  entered  into  an  agreement  dated January 12, 2000 to merge with
Qinnet  Holdings Corp. ("Qinnet Holdings"), a Washington State corporation. Both
the  Company  and  Qinnet  Holdings  share  common  directors,  officers  and
shareholders.      On  March  14,  2001,  the  Company  extended  an  offer  to
accredited  United  States shareholders and non-Canadian foreign shareholders to
exchange  their shares in Qinnet Holdings for shares in the Company on the basis
of  one  share  of  the Company's common stock for each share of Qinnet Holdings
common  stock.  As  of  April  23,  2001,  12,275,100 shares had been exchanged,
representing  approximately  93.8% of the outstanding shares of Qinnet Holdings.
Further  offers  were made to remaining Canadian shareholders of Qinnet Holdings
to  acquire  their  remaining  813,000  shares  of Qinnet Holdings, representing
approximately  6.2%  interest.  For  the  remaining  6.2%  acquisition of Qinnet
Holdings,  the Company issued 1.05 shares of the Company's common stock for each
share of Qinnet Holdings common stock. As at June 8, 2001, the Company completed
its  acquisition  of  all  the  remaining  shares  of  Qinnet  Holdings.


                                     F-8
<PAGE>

                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  A  -  DESCRIPTION  OF  BUSINESS  -  Continued

Qinnet  Holdings  was incorporated on April 26, 1999 in the state of Washington.
Qinnet  Holdings  has  two  wholly-owned subsidiaries: Beijing Qinnet Electronic
Technologies Co. Ltd. ("Beijing Qinnet"), established in the Peoples Republic of
China  on  December  6,  1999,  and  Qincom  Networks Inc. ("Qincom"), a British
Columbia,  Canada  company  established on August 22, 2000. Qincom provides long
distance  calling  services  from  Canada to the PRC through voice over internet
protocol  technology.

The  Company  is  considered to be a development stage enterprise as its primary
business  objectives  have not been fully developed, despite generating revenues
through  its  telecomunnications activities, which management does not expect to
continue.  The Company is focusing its resources on developing Qinnet E-book and
its  "Thin  Client  Server"  technology,  which have not generated any revenues.

The  Company  entered  into  a joint venture agreement dated July 11, 2000. with
Liaoning  Education  Press  ("LEP"),  a  wholly  owned  subsidiary  operation of
Liaoning  Publishing  Group of Companies ("LPG") in PRC. The Company agreed with
LPG  to  carry out a joint venture electronic book publishing, manufacturing and
distribution  business in China. The joint venture business is to be carried out
in  Shenyang,  China  by  Liaoning  Qinnet  E-book  Technologies  Ltd.  ("Qinnet
E-book"),  a  joint  venture  corporation  incorporated  in  accordance with the
Enterprise Laws of the PRC. The Company initially contributed $280,000 for a 70%
interest  in  this joint venture while LEP contributed $120,000 in consideration
for  a  30%  interest.  On  August 18, 2000, the Company entered into an amended
joint  venture  agreement  with LPG to expand the joint venture operation and to
replace  LEP  with  LPG  as  the  joint venture partner. Under the amended joint
venture  agreement,  LPG  and  the Company have agreed to invest an aggregate of
$5,000,000.  The  Company  agreed to contribute $3,000,000 in exchange for a 60%
ownership  interest in Qinnet E-book. LPG has agreed to contribute $2,000,000 in
exchange  for  a 40% ownership interest in Qinnet E-book. The joint venture will
be  for  an initial term of 20 years and will become effective upon the approval
of  the  PRC  government  authorities.  The objective of the joint venture is to
establish  a  database of Chinese and English language books and periodicals, to
engage in the electronic publishing and sale of electronic books, and to develop
and  market  electronic  reading  devices,  to  be  known  as  the  Q-Reader.

Beijing  Qinnet  also  participates in two joint venture agreements with Chinese
internet  companies  and has options to purchase equity interests in these joint
ventures.  These  two  joint  ventures  are  carried  out  by  two  operating
corporations,  Tianjin  Xiaodao  Information Network Co. Ltd. ("Tianjin Qinnet")
and  Shenyang  Qinnet  Brainn  Informerce Co. Ltd. ("Shenyang Qinnet"). Shenyang
Qinnet  is in the business of providing internet web site design, e-commerce and
related
                                      F-9
<PAGE>

                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  A  -  DESCRIPTION  OF  BUSINESS  -  Continued

customer  and  technical  support services. Tianjin Qinnet is in the business of
providing internet access services. Currently, Mr. Weiguo Lang, the Chairman and
a  director of the Company, is the registered owner of 51% ownership interest in
Shenyang  Qinnet  and  70%  ownership  interest in Tianjin Qinnet as the current
investment  regulations  in  PRC do not permit foreign ownership of PRC entities
operating  in the telecom and related industries. The funds used to purchase Mr.
Lang's  equity  interests  in  these  joint  ventures  were
provided  by  Beijing  Qinnet and are included in Deposits on Investments in the
accompanying  balance  sheets.  Exercise  of the first option would transfer 51%
ownership  of Shenyang Qinnet to Beijing Qinnet and would require the payment of
50,000  Chinese  RMB  or  approximately  $6,040. Further, Beijing Qinnet has the
option  to  increase  its ownership interest in this joint venture to 70% for an
additional  $200,000.  Exercise of the other option would transfer 70% ownership
of  Tianjin  Qinnet  to  Beijing  Qinnet and would require the payment of 70,000
Chinese RMB or approximately $8,460. The option agreements have a five-year term
expiring  on  March  24,  2005.  The option arrangements have been structured to
enable  Beijing  Qinnet  to  comply  with  PRC  foreign  ownership  laws  and
restrictions.  The  option is transferable by Beijing Qinnet to give flexibility
in  structuring  its  ownership  arrangement.  The  Company anticipates that the
foreign  ownership  laws  of  the  PRC may change prior to the expiration of the
option  period  or  the  options  might  be  extended.


NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

          Basis  of  Presentation
          -----------------------

In  June  2001,  the Company completed its merger with Qinnet Holdings, in which
Qinnet  Holdings  became  a  wholly-owned subsidiary of the Company. The Company
exchanged  approximately  13  million  shares  of  common  stock  for  all  the
outstanding  common  shares  of  Qinnet  Holdings.  Due to common management and
shareholders  of  the  Company and Qinnet Holdings, the merger was accounted for
using  historical  costs  in  a manner similar to pooling-of-interests method of
accounting.  Under this method, the assets, liabilities and shareholders' equity
of the acquired entities are combined with the Company's respective accounts and
are recorded book value. The accompanying consolidated financial statements have
been  restated  to  include  the  operations  of Qinnet Holdings for all periods
presented.

Principles  of  Consolidation
-----------------------------

The  consolidated  financial statements include the accounts of the Company, its
wholly-owned subsidiary companies, Qinnet Holdings, Qincom, Beijing Qinnet, ICA,
and  its  70%  owned
                                      F-10
<PAGE>

                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  Continued

subsidiary,  Qinnet  E-book. The Company accounts for the remaining 30% interest
in Qinnet E-book as minority interest in the accompanying consolidated financial
statements.  The  Company
holds the majority of the Board of Directors positions of Qinnet E-book, and has
the  majority  control  over  the  operating  decisions  of  Qinnet  E-book. All
significant  intercompany  transactions  and  accounts  have  been  eliminated.

The Company's investments in joint ventures located in the PRC are accounted for
using  the  cost  method,  as the Company's ownership is indirect and management
does  not  have  the  ability  to  control  the  ventures'  operating decisions.

     Accounting  Method
     ------------------

     The Company's financial statements are prepared using the accrual method of
accounting.

     Use  of  Estimates
     ------------------

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

     Cash  and  Cash  Equivalents
     ----------------------------

     Cash  and  cash  equivalents  include  all  cash  on  hand,  cash in banks,
certificates  of  deposit  and  other  highly-liquid  investments  with original
maturities  of  three  months  or  less.

     Short-term  Investments
     -----------------------


     Short-term  investments  represent  certificate  of  deposits with original
maturities  of  more  than  three  months  but  less  than  a  year.

     Concentration  of  Credit  Risk
     -------------------------------

     The  Company  maintains  Renminbi  cash  balances  in banks of the People's
Republic  of China and U.S. Dollar cash balances in U.S. and Canadian banks, all
of  which  are not insured. Revenues were derived from the long distance calling
services  in  Canada  and the United States. Two

                                   F-11
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000




NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING  POLICIES  -  Continued

     customers  accounted  for  more  than  75  percent  and  18  percent of the
Company's  revenue  for  the  year  ended  December  31,  2001  and one customer
accounted for 51 percent of accounts receivable at December 31, 2001. There were
no  significant  customers  in  2000.

     Property  and  Equipment
     ------------------------

     Property  and  equipment  is stated at cost. Depreciation is computed using
the  straight-line  method  over  the  estimated  useful  lives  of  five years.

     Long-Lived  Assets
     ------------------

     The  Company  records  impairment  losses  on  long-lived  assets  used  in
operation  when  indicators  of impairment are present and the undiscounted cash
flows  estimated  to  be  generated by those assets are less than their carrying
amount.

     Revenue  Recognition
     --------------------

     The  Company's  revenue  is  primarily  derived from the sale of voice over
internet protocol long distance telephone services on a wholesale basis. Revenue
is  recognized  upon  delivery  of  the  services.

     In  December  1999,  the  Securities and Exchange Commission ("SEC") issued
Staff  Accounting Bulletin No. 101 ("SAB101"), "Revenue Recognition in Financial
Statements,"  which  provides  guidance  on  the  recognition,  presentation and
disclosure  of  revenue  in  financials filed with the SEC.  SAB101 outlines the
basic  criteria  that must be met to recognize revenue and provides guidance for
disclosures related to revenue recognition policies.  It also requires companies
to  report  any  changes  in  revenue  recognition  as  a  cumulative  change in
accounting principle at the time of implementation in accordance with Accounting
Principles  Board  Opinion  No. 20, "Accounting Changes."  As amended by SAB101A
and  SAB101B,  the Company is required to follow this guidance no later than the
fourth  fiscal  quarter of the fiscal year ended December 31, 2001.  The Company
implemented  SAB101  during  the  first  quarter  of  2000, which did not have a
material  effect  on  the Company's results of operations or financial position.

                                     F-12
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  Continued

     Start-up  Costs
     ---------------

     Start-up  and  organization  costs  are expensed as incurred. Start-up cost
expensed  for  2001  and  2000  were  $323,314  and  $36,471.

     Income  Taxes
     -------------

     Deferred  income  tax  assets  and liabilities are computed for differences
between  the  financial  statements and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future, based on enacted tax
laws  and  rates applicable to the periods in which the differences are expected
to  affect  taxable income. Valuation allowances are established when necessary,
to  reduce  deferred  income  tax  assets to the amount expected to be realized.

Foreign  Currency  Translations
-------------------------------

The  assets  and  liabilities of the Company's foreign operations are translated
into U.S. dollars at exchange rates in effect at the end of period, and revenues
and  expenses  are  translated  at  average  exchange  rates  during the period.
Resulting  translation  adjustments  are  reflected  as  a separate component of
stockholders' equity. Transaction gains and losses that arise from exchange rate
fluctuations on transactions denominated in a currency other than the functional
currency  are  included  in  the  results  of  operations  as  incurred.

Fair  Value  of  Financial  Instruments
---------------------------------------

For  certain  of  the  Company's  financial instruments, including cash and cash
equivalents,  short-term  investments, accounts receivable and accounts payable,
the  carrying amounts approximate fair value due to their short maturities.  The
note payable to bank is secured by the short-term investments, and therefore its
carrying  amount  approximates  fair  value.

     Business  Segment  Information
     ------------------------------

     The  Company  discloses  information  about  its  reportable  segments  in
accordance  with  SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related  Information."  The  Company's  reportable segments are geographic areas
that  provide  long  distance  calling  services.

                                     F-13
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000




NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  Continued

     Earnings  Per  Share
     --------------------

     Basic  loss  per  share  is  computed  using the weighted average number of
common  shares  outstanding.  Diluted  loss  per  share  is  computed  using the
weighted  average  number of common shares outstanding and dilutive common stock
equivalents.  Potentially  dilutive  securities include stock options, which are
antidilutive and have been excluded from the computation of loss per share.  All
per  share  information  has  been  restated  to  reflect  the  merger of Qinnet
Holdings.

     Stock-Based  Compensation
     -------------------------

     The Company accounts for stock-based compensation using the intrinsic value
method  prescribed  in  Accounting  Principles  Board  ("APB")  Opinion  No. 25,
"Accounting  for  Stock  Issued  to  Employees."  Compensation  cost  for  stock
options,  if  any,  is  measured as the excess of the quoted market price of the
Company's  stock  at  the  date of grant over the amount an employee must pay to
acquire  the  stock.  SFAS  No.123,  "Accounting  for Stock-Based Compensation,"
established  accounting  and  disclosure  requirements  using a fair-value-based
method  of  accounting for stock-based employee compensation plans.  The Company
has  elected  to  remain on its current method of accounting as described above,
and  has  adopted  the  disclosure  requirements  of  SFAS  No.  123.

     Recent  Accounting  Pronouncements
     ----------------------------------

     On  July  20,  2001, the Financial Accounting Standards Board (FASB) issued
Statement  of  Financial Accounting Standards (SFAS) 141, Business Combinations,
and  SFAS  142,  Goodwill and Intangible Assets.   SFAS 141 is effective for all
business  combinations completed after June 30, 2001.  SFAS 142 is effective for
fiscal  years  beginning after December 15, 2001; however, certain provisions of
this  Statement  apply  to goodwill and other intangible assets acquired between
July  1,  2001  and  the  effective date of SFAS 142.  Major provisions of these
Statements  and  their  effective  dates  for  the  Company  are  as  follows:

                                      F-14
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000




NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  Continued

-     all  business  combinations  initiated  after  June  30, 2001 must use the
purchase  method  of accounting. The pooling of interest method of accounting is
prohibited  except  for  transactions  initiated  before  July  1,  2001.
-     intangible  assets  acquired  in  a  business combination must be recorded
separately from goodwill if they arise from contractual or other legal rights or
are  separable  from the acquired entity and can be sold, transferred, licensed,
rented or exchanged, either individually or as part of a related contract, asset
or  liability
-     goodwill,  as  well  as  intangible assets with indefinite lives, acquired
after  June  30,  2001,  will  not be amortized.  Effective January 1, 2002, all
previously  recognized goodwill and intangible assets with indefinite lives will
no  longer  be  subject  to  amortization.
-     effective  January 1, 2002, goodwill and intangible assets with indefinite
lives will be tested for impairment annually and whenever there is an impairment
indicator
-     all  acquired goodwill must be assigned to reporting units for purposes of
impairment  testing  and  segment  reporting.

     In  August  2001,  the  FASB  issued  SFAS  No.  143, "Accounting for Asset
Retirement  Obligations" ("SFAS 143"). SFAS 143 establishes accounting standards
for recognition and measurement of a liability for the costs of asset retirement
obligations.  Under  SFAS 143, the costs of retiring an asset are to be recorded
as  a  liability  when the retirement obligation arises and amortized to expense
over  the  life  of  the  asset.

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting for the
Impairment  or  Disposal  of Long-Lived Assets" ("SFAS 144"). SFAS 144 addresses
financial  accounting and reporting for the impairment or disposal of long-lived
assets  and  discontinued  operations,  and  it  provides guidance on estimating
future  cash  flows  to  test  recoverability.  SFAS  144  requires  that  those
long-lived assets be measured at the lower of carrying amount or fair value less
costs  to  sell.

     Although  it  is  still  reviewing  the  provisions  of  these  statements,
management's  preliminary assessment is these new pronouncements will not have a
material  impact  on  the Company's financial position or results of operations.

                                     F-15
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000





NOTE  C  -  REALIZATION  OF  ASSETS

The  accompanying  consolidated financial statements have been prepared assuming
that  the Company will continue as a going concern. As shown in the consolidated
financial statements, the Company incurred a net loss of $3,477,201 for the year
ended  December  31,  2001  and has had cumulative net losses of $8,267,439 from
inception (May 31, 1989) through December 31, 2001. As of December 31, 2001, the

Company  had  minimal working capital of $209,805. In addition, the Company is a
development  stage  entity  and  is  dependent  on outside financing to fund its
operations.  These  factors,  among  others,  raise  substantial doubt about the
Company's  ability  to  continue  as  a  going  concern.

Management's  plans  in  regard  to  these  matters  are  to  continue  to raise
additional  capital from selling the Company's stock. Subsequent to December 31,
2001,  the  Company  completed the sale of 138,757 units at a price of $2.80 per
unit  for proceeds of $388,519 (Note L). The financial statements do not include
any  adjustments  that  might  result  from  the  outcome  of  this uncertainty.


NOTE  D  -  PROPERTY  AND  EQUIPMENT

     Property  and  equipment  consists  of  the  following  at  December  31:

                                         2001             2000
                                      -------------------------
     Vehicle                           $  25,012     $  25,012
     Electronic  equipment               127,506        79,720
     Computer  equipment                 105,880        93,427
     Other                                16,442        14,035
                                      -------------------------
                          Total          274,840       212,194
     Less:  accumulated  depreciation    (72,200)      (14,380)
                                      -------------------------

                                       $ 202,640      $197,814
                                      =========================

     Depreciation charged to expense during the year ended December 31, 2001 and
2000  was  $48,813  and  $14,380  respectively.

                                     F-16
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  E  -  DEPOSITS  ON  INVESTMENTS

     During  year  the  three  months  ended  December  31,  2001,  the  Company
determined  that  the  business  opportunity  presented  by Tianjin and Shenyang
operations,  when  compared  to  the opportunities in the digital publishing and
thin  client  server  technology,  did  not  possess the sustainable competitive
advantages  that are exhibited by the newer technologies. In view of the limited
capital  resources,  the Company decided to preserve its capital for investments
in the Qinnet E-book and development of the "Thin Client Server" technology. The
Company  will  wind  down the business operations of Tianjin Qinnet and Shenyang
Qinnet  in  an  orderly  manner. In accordance with FAS #121, the Company has an
estimated  impairment loss of $1,168,955 to the investments in these projects in
the  last  quarter  of  year  2001.

NOTE  F  -  NOTES  PAYABLE  TO  BANK  AND  SHORT-TERM  INVESTMENTS

     The fixed term deposit amounting to US$ 1,999,995 (RMB 16,556,159) has been
pledged  to  a bank to secure bank loans of RMB 16,000,000 (Note F). The deposit
accrues  interest  at  5.3125%.  These short-term investments are denominated in
U.S. dollars and are used as collateral for the Company's notes payable with the
bank,  which  provides  RMB  for  local  purposes.  One of the bank loans of RMB
8,000,000 with an interest rate of 5.85% per annum is payable on April 16, 2002.
The other bank loan of RMB 8,000,000 with an interest rate of 5.85% per annum is
payable  on  December  14,  2002.  The  notes  are  rolled  over  upon maturity.


NOTE  G  -  RELATED  PARTY  TRANSACTIONS

The  Company  paid  management  and  consulting fees of $395,000 and $480,000 to
various  directors  during  the  years  ended  December  31,  2001  and  2000,
respectively.


NOTE  H  -  STOCK  OPTION  PLAN

     In  March  2000, the Company adopted the 2000 Stock Option Plan (the Plan),
under which it was authorized to issue non-qualified stock options and incentive
stock  options  to key employees, directors and consultants to purchase up to an
aggregate  of 187,500 shares of the Company's common stock. Upon board approval,
the  number  of shares available for grant could be increased quarterly by up to
an  amount  equal  to  15%  of the Company's outstanding shares of common stock.
Options  granted  under  this plan during 2000 were cancelled and reissued under
the  amended  stock  option  plan  described  below.

                                      F-17
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000




NOTE  H  -  STOCK  OPTION  PLAN  -  Continued

     In September 2000, the 2000 Stock Option Plan was terminated and the 2000/A
Stock  Option Plan was adopted. Under the new plan, the Company is authorized to
issue  non-qualified stock options and incentive stock options to key employees,
directors  and  consultants  to purchase up to an aggregate of 260,000 shares of
the  Company's common stock. Upon board approval, the number of shares available
for  grant  may  increase  quarterly  by  up  to  an  amount equal to 20% of the
Company's  outstanding shares of common stock. The options may have a term of up
to ten years and generally vest immediately. The Company granted 260,000 options
under  this  plan  at an exercise price of $10.00 per share in 2000. The Company
recorded  compensation  expense  of $883,100 in connection with the grant of the
260,000  options  in  2000.

     In  June 2001, the Company adopted the 2001 Stock Option Plan ("the Plan"),
under which it was authorized to issue non-qualified stock options and incentive
stock  options  to  key  employees,  directors and consultants to purchase up to
2,100,000  shares of the Company's common stock. Upon board approval, the number
of shares available for grant could be increased quarterly to an amount equal to
15%  of  the  Company's  outstanding  shares  of common stock. In June 2001, the
Company  granted  options  to  the  Qinnet  Holdings  optionees  to  purchase an
aggregate  of 2,000,000 shares of the Company's common stock under generally the
same  terms  and  conditions  of  the  options  granted  by  Qinnet Holdings, in
consideration  for  the cancellation of the options previously granted by Qinnet
Holdings.  These options all have an exercise price of $5.00 per share, and with
various  vesting and expiration dates. The Company recorded compensation expense
of  $1,989,000  in  connection  with the grant of the 2,000,000 options in 2000.

     The  following table summarizes information about stock option transactions
for  the  years  ended  December  31,  2001  and  2000  :

                                      F-18
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  H  -  STOCK  OPTION  PLAN  -  Continued

                                                   Weighted average
                                   Shares          exercise  price
                                  -----------      ----------------
Outstanding at December 31, 1999
Granted                            2,260,000       $5.58
Exercised                                  -           -
Canceled                                   -           -
                                  ===========

Outstanding at December 31, 2000   2,260,000
Granted                               30,000       $5.00
Exercised                                  -           -
Canceled                            (445,000)      $5.28
                                  ===========
Outstanding at December 31, 2001   1,845,000       $5.64
                                  ===========

The  following is a summary of the outstanding options as at December 31, 2001:
                                      Total
Range                   Weighted      Weighted                 Weighted
of        Total         average       average                  average
exercise  options       remaining     exercise    Options      exercise
prices    outstanding   life (years)  price       exercisable  price
-------- ------------  -------------- --------  -------------- ----------
$ 5.00    1,610,000     3.2           $  5.00     1,217,500    $  5.00
$10.00    235,000       3.0           $ 10.00       235,000    $ 10.00

Statement  of Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation, encourages, but does not require, companies to record compensation
cost for stock-based employee compensation plans at fair value.  The Company has
chosen  to  continue to account for stock-based compensation using the intrinsic
value  method  prescribed  in  previously  issued  standards.  Accordingly,
compensation  cost  for  stock  options  issued  to employees is measured as the
excess, if any, of the quoted market price of the Company's stock at the date of
grant  over  the  amount  an  employee  must  pay  to  acquire  the  stock.

Under  the  2000  and  2001  Stock  Option  Plans, the Company issued options to
certain  consultants.  Stock options issued to non-employees are recorded at the
fair  value  of  the  services received or the fair value of the options issued,
whichever  is  more  reliably  measurable.  Total  compensation  cost

                                     F-19
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  H  -  STOCK  OPTION  PLAN  -  Continued

recognized  in  the  accompanying statement of operations for options granted to
non-employees  was  $2,872,100  for  the  year  ended  December  31,  2000.

Weighted  average  fair  value of options granted during the year ended December
31,  2001  and  2000  are  as  follows:

                                                            2001         2000

Exercise price is below market price at date of grant       $  -         $4.10
Exercise  price equals market price at date of grant        $ 0.79       $3.11


     The fair value of employee stock options at the date of grant was estimated
using  the  Black-Scholes model with the following weighted average assumptions:

                          Expected life (years)     4 years
                          Risk-free interest rate     6.00%
                          Expected volatility           27%
                          Expected dividend yield        -

NOTE  I  -  INCOME  TAXES



     There  is  no  current or deferred tax expense for the years ended December
31,  2001  and  2000,  due to the Company's loss position. The Company has fully
reserved  for  any  benefits  of these losses.  The deferred tax consequences of
temporary  differences in reporting items for financial statement and income tax
purposes are recognized, as appropriate.  Realization of the future tax benefits
related  to  the deferred tax assets is dependent on many factors, including the
Company's  ability  to  generate  taxable  income  within the net operating loss
carryforward  period.  Management  has  considered these factors in reaching its
conclusion  as  to the valuation allowance for financial reporting purposes. The
income  tax  effect  of temporary differences comprising the deferred tax assets
and  deferred tax liabilities on the accompanying consolidated balance sheets is
a  result  of  the  following:

                                     F-20
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  I  -  INCOME  TAXES  -  Continued

                                             2001                  2000
Deferred  taxes
 Net  operating  loss  carryforwards     $  1,457,000          $    850,000
 Valuation  allowance                      (1,457,000)             (850,000)

Net  deferred  tax  assets               $          -           $         -

     The net change in the valuation allowance for 2001 and 2000 was an increase
of  $607,000 and $850,000, respectively, and is the result of net operating loss
carryforwards.

     Pursuant to the Tax Reform Act of 1986, annual utilization of the Company's
net  operating  loss  carryforwards  may  be  limited  if a cumulative change in
ownership  of  more than 50% is deemed to occur within any three-year period. As
of  December  31,  2001, the Company had approximately $3,400,000 of federal and
state  operating loss carryforwards available to reduce future federal and state
tax  liability  through  the  year  2021 for federal purposes and 2006 for state
purposes.

NOTE  J  -  SEGMENT  AND  GEOGRAPHIC  DATA

     The  Company's  reportable  segments are geographic areas that provide long
distance  telephone calls related services to the Canadian and PRC China markets
markets.  Summarized  financial  information concerning the Company's reportable
segments  is  shown  in  the  following  table:

                                     F-21
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  J  -  SEGMENT  AND  GEOGRAPHIC  DATA  -  Continued

For the year ended
December 31, 2001          China          Canada       Corporate     Total
------------------
     -----------       ----------   -----------  ----------
     Revenue           $   12,449        $ 712,703    $        -   $  725,152
     Operating  loss   (1,543,802)        (139,233)   (1,860,120)  (3,543,155)
     Total  assets      2,815,887          116,041       117,491    3,049,419
     Depreciation/
      amortization         22,958           31,753         3,754       58,465
     Interest  income      19,551               44        23,068       42,663
     Interest  expense    112,715              104         1,238      114,057

For the year ended
December 31, 2000
------------------
     Revenue           $   11,222        $       -    $        -   $   11,222
     Operating loss      (225,249)         (37,096)   (4,587,980)  (4,850,325)
     Total  assets      4,142,965          101,728     1,785,908    6,030,601
     Depreciation/
     amortization           4,484            8,185         1,711       14,380
     Interest  income      70,551                -       118,917      189,468
     Interest  expense     71,450                -         2,949       74,399



NOTE  K  -  COMMITMENTS

     The  Company  leases  office  space under various operating leases expiring
through  2005. Total rent expense charged to operations during 2001 and 2000 was
$117,771  and  $50,192  respectively.  Future  minimum rental commitments are as


follows:

                                       F-22
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000



NOTE  K  -  COMMITMENTS  -  Continued

                      Year ending December 31,          Amount
                      ------------------------         ----------

                      2002                              $  73,874
                      2003                                 79,783
                      2004                                 83,772
                      2005                                 85,448
                                                       ----------
                                                         $322,877
                                                       ==========

MANAGEMENT  AGREEMENTS

The Company's president and chief executive officer, provides his services to us
pursuant  to  an  employment  agreement  dated October 23, 2001.  The employment
agreement  provides  that  the Company will pay Mr. Mann a base annual salary of
$300,000  per  year  in  consideration of Mr. Mann acting as president and chief
executive  officer  on  a  permanent  basis.  Mr. Mann has also agreed to act as
chief  financial  officer and general counsel until such positions are filled by
the board of directors. The employment agreement also provides for a performance
and  merit based bonus to be not less than $60,000 for any year. In addition, we
have  agreed  to  grant  to  Mr.  Mann options to purchase 100,000 shares of our
common stock in each year of the term of the agreement. The employment agreement
is  for  an initial three year term. We are entitled to terminate this agreement
upon  one  month's prior written notice and the payment of one year's salary and
minimum  bonus.

The  Company's secretary and treasurer has a three year contract providing for a
salary  of  $120,000  annually. The services provided by this individual include
ensuring  that  proper  corporate,  financial  and  administrative  records  are
maintained,  supervising  and  advising on the conduct of financial affairs, and
coordinating  all  auditing  functions.

                                      F-23
<PAGE>
                            Q-Net Technologies, Inc.
                           (formerly Qinnet.com, Inc.)
                          (a development stage company)
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           December 31, 2001 and 2000


NOTE  L  -  SUBSEQUENT  EVENT

     In January 2002, the Company completed the sale of 138,757 units at a price
of  $2.80  per unit for proceeds of $388,519. Each unit consists of one share of
the  Company's  common stock and one share purchase warrant. Each share purchase
warrant  entitles the holder to purchase one share of the Company's common stock
at  a price of $2.80 per share until January 30, 2004. A total of 138,757 shares
and  138,757  share  purchase  warrants were issued. A commission of $12,000 was
paid  in  connection  with  the  offering.

NOTE M  -  QUARTERLY FINANCIAL INFORMATION
<TABLE>
<CAPTION>



     The  following  summarizes  financial  data relating to the results of operations for
             each  quarter  of  the  years  ended  December 31,  2001  and  2000 :

                                         Three Months Ended
                                         ------------------

                                       Mar 31           Jun 30      Sep 30       Dec 31
<S>                             <C>                   <C>         <C>         <C>
                                ----------------------------------------------------------
  Fiscal year 2001 :
  Net sales                     $           143,618   $ 202,126   $ 198,053   $   181,355
  Gross profit                  $            28,995   $  (1,199)  $  81,152   $   (66,593)
  Net loss                      $          (516,950)  $(562,184)  $(576,968)  $(1,821,099)
  Net loss - basic and diluted  $             (0.04)  $   (0.04)  $   (0.04)  $     (0.13)

  Fiscal year 2000 :
  Net sales                     $                 -   $       -   $   3,400   $     7,822
  Gross profit                  $                 -   $       -   $      11   $        25
  Net loss                      $          (251,430)  $(667,478)  $(245,158)  $(3,594,616)
  Net loss - basic and diluted  $             (0.02)  $   (0.05)  $   (0.02)  $     (0.25)


</TABLE>

ITEM  8.     Changes  in  and  Disagreements  with Accountants on Accounting and
Financial  Disclosure


Not  applicable.

                                       29
<PAGE>

                                    PART III

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

The  following  information  sets forth the names of our officers and directors,
their  present  positions  with  Q-Net  Technologies,  and  their  biographical
information.


Name  of  Director     Age     Position
------------------     ---     --------

Weiguo  Lang           43       Director  and  Chairman

Paul  Schwartz         38       Director,  Executive  Vice-President,
                                Secretary, Treasurer and Chief Operating
                                Officer

Fredric R. Mann        53       Director,  President,  Chief  Executive
                                Officer and Chief Financial Officer

Mr.  Fredric  Mann was appointed to our board of directors on June 15, 2001. Mr.
Fredric  Mann II was appointed as our president, our chief executive officer and
our  chief  financial  officer  on August 10, 2001 subsequent to our 2001 annual
general  meeting.  Mr.  Mann  brings  over  20  years of experience in corporate
finance  and advisory work in both domestic and international markets.  Mr. Mann
was  a  managing  director and led the Global Corporate Finance practice for the
Consumer  Business  and Retail Industries at Deloitte & Touche from 1996 through
2000.  Prior  to  joining  Deloitte  &  Touche,  he  was  president  of  a
Philadelphia-based  investment-banking  firm  specializing  in  mergers  and
acquisitions,  divestitures  and  corporate  finance  advisory  services
internationally.  Previously,  he  served  as  senior vice president at Shearson
Lehman  Hutton,  Inc.  focusing  primarily  in  the  retain and medical sectors,
following  the practice of corporate law in Philadelphia with a similar focus in
serving  international  clients  in  the  financial,  business  and  economic
development  sectors.  Mr.  Mann  is  a  member  of  Pennsylvania  Securities
Association  and  a lecturer at the Wharton School of University of Pennsylvania
and  the American Management Association.  Mr. Mann received his BS in Economics
from the Wharton School of the University of Pennsylvania and a JD from Syracuse
University  College  of  Law.

Mr.  Paul  Schwartz  was appointed to our board of directors on May 8, 2000. Mr.
Schwartz  was  appointed  as  our  secretary,  our executive vice-president, our
treasurer  and  our chief operating officer on August 10, 2001 subsequent to our
2001  annual  general  meeting.  Mr.  Schwartz  has ten years of experience as a
stockbroker  and  in  investment  banking.  Mr. Schwartz was a vice-president of
investments  with Josephthal Lyon from 1995 to 1998.  Mr. Schwartz has also held
vice-president  positions  with Royce Investment Group, Spencer Trask and Thomas
James.  Mr.  Schwartz  was the senior vice-president of new business development
for Turbodyne Technologies Inc. from 1998 to early 2000.  Turbodyne Technologies
is  an  automotive  component-manufacturing  corporation  in  California.  Mr.
Schwartz  was responsible for creating strategic alliances with industry leading
companies  in the automotive components industry.  Mr. Schwartz was president of
GSG  Global  Synergy  Group  during  2000,  which  delivered  services to Qinnet
Holdings.  Mr. Schwartz was senior vice-president of manufacturing of Supremetal
Fabricators,  a food service equipment manufacturing company, from 1985 to 1990.
Mr.  Schwartz  received his bachelors degree in finance from Syracuse University
in  1985.  Mr. Schwartz is a director and is the secretary, treasurer and senior
vice-president  of  Qinnet  Holdings.

Dr.  Weiguo Lang was appointed as our president and to our board of directors on
October 26, 1999.  Mr. Lang stepped down as our president on August 10, 2001 but
remains  as  chairman  of our board of directors.  In 1997, Dr. Lang established
the first Internet service provider operation in Chengdu, the capital of Sichuan
Province,  which was one of the earliest Internet service provider operations in
China.  Since  then,  Dr.  Lang  has  pursued  and  researched  various Internet
opportunities  in  China.  From  1995  to  1998,  Dr. Lang was President of Agro
International,  a publicly-listed Canadian corporation.  From 1993 thru 1994, he
was  a  senior  consultant  for  International  Business  for  the  Canadian
international  trade  &  development  businesses.

                                     30

<Page>

Prior  to moving to Canada to
further his education, Dr. Lang was a division manager in Heilongjiang Province,
China  from  1984  to  1987.  Dr.  Lang  received  M.Sc.  and  Ph.D.  degrees in
Engineering  from  Canada  and  a B.Sc. degree from China.  Most of his work was
related  to  computer  programming  and  mathematical modeling.  Dr. Lang speaks
fluent  mandarin  and  English.  Dr.  Lang is a director and is the president of
Qinnet  Holdings.

Former  Director

Mr.  Lynn  Patterson,  one  of  former directors, resigned for health reasons in
2001.

Committees  of  The  Board  Of  Directors

We  presently do not have an audit committee, compensation committee, nominating
committee,  an  executive  committee  of  our  board  of  directors,  stock plan
committee or any other committees. However, our board of directors may establish
various  committees  during  the  current  fiscal  year.

Compensation  Of  Directors

Our  directors  do not receive cash compensation for their services as directors
or  members  of committees of the board, but are reimbursed for their reasonable
expenses  incurred  in  attending  board or committee meetings. Our 2000/A Stock
Option  Plan  permits  the  grant  of  options for the purchase of shares of our
common  stock  to  our  directors.  See below "Summary Compensation Table, Stock
Option  Grants"  for  information about options granted to our directors for the
fiscal  year  ended  December  31,  2001.

Terms  of  Office

Our  directors  are  appointed  for one-year terms to hold office until the next
annual  general meeting of the holders of our Common Stock or until removed from
office  in  accordance with our by-laws. Our officers are appointed by our board
of  directors  and  hold  office  until  removed  by  our  board  of  directors.

Section  16(a)  Beneficial  Ownership  Reporting  Compliance

Section 16(a) of the Exchange Act requires our executive officers and directors,
and persons who beneficially own more than ten percent of our equity securities,
to  file  reports  of ownership and changes in ownership with the Securities and
Exchange  Commission.  Officers,  directors  and  greater  than  ten  percent
shareholders  are  required  by  SEC regulation to furnish us with copies of all
Section  16(a)  forms they file. Based on our review of the copies of such forms
received  by us, we believes that during the fiscal year ended December 31, 2001
all  such  filing  requirements applicable to our officers and directors (We are
not aware of any ten percent holder) were complied with except that reports were
filed  late  by  the  following  persons:

                                Number     Transactions          Known  Failures
                                Of Late    Not Timely            To File a
Name  and  Principal            Reports     Reported             Required Form
Position

Fredric  R.  Mann, Director       None         None               None
President, Chief Executive
Officer and  Chief  Financial
Officer

Paul  Schwartz,  Director         None          None               None
Secretary,  Treasurer  and
Chief  Operating  Officer

Weiguo  Lang,  Director            One          None               None
and  Chairman

Lynn  Patterson, Former            One          None               None
Director
                                     31

<PAGE>

ITEM  10.     Executive  Compensation

The following table sets forth certain information as to the Company's executive
officers  for the Company's fiscal years ended December 31, 2001, 2000 and 1999.
These  individuals  are  referred  to  in  this  section  entitled  Executive
Compensation as our named executive officers.  No other compensation was paid to
any  of  our  named  executive  officers  other  than  the cash and stock option
compensation  set  forth  below.


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

                           ANNUAL  COMPENSATION  TABLE

--------------------------------------------------------------------------------
                         ANNUAL COMPENSATION       LONG TERM COMPENSATION
                    ----------------------------  ------------------------
                                          Other                             All
                                          Annual                           Other
                                            Com-  Restric-                  Com-
                                            pen-  ted     Options/          pen-
                                            sa-   Stock   SARs*   LTIP      sa-
Name      Title      Year  Salary  Bonus    tion  Awarded   (#)   payouts($)tion
----      -----      ----  ------  ------ ------- ------- ------- --------- ----
FREDRIC   Director   2001 $300,000 $60,000      0       0 100,000        0     0
MANN      and        2000 $120,000       0      0       0      0         0     0
(1)       President  1999       $0       0      0       0      0         0     0
          Chief
          Financial
          Officer
          Chief
          Executive
          Officer

PAUL      Director,  2001 $120,000  0           0       0  75,000        0     0
SCHWARTZ  Secretary  2000   $0      0           0       0      0         0     0
(2)       Executive  1999   $0      0           0       0      0         0     0
          Vice-
          President
          Treasurer
          and Chief
          Operating
          Officer

WEIGUO    Director   2001 $120,000  0           0       0 100,000        0     0
LANG                 2000 $120,000  0           0       0      0         0     0
(3)                  1999   $0      0           0       0      0         0     0



Notes:

(1)     Compensation  attributed  to  Mr.  Mann includes $120,000 paid by Qinnet
Holdings  to Mr. Mann as a consulting fee during the period from October 1, 2000
to  December  31,  2000  and $360,000 paid and accrued by Qinnet Holdings to Mr.
Mann  during  the  period  from  January  1, 2001 to December 31, 2001.   Of the
amount  attributable  to compensation in 2001, $240,000 was paid to Mr. Mann and
$120,000  was  accrued.  See  below  under Executive Compensation - Compensation
Arrangements.

(2)     Compensation  attributed  to  Mr.  Schwartz  includes  $120,000 paid and
accrued  by  Qinnet  Holdings  to Mr. Schwartz during the period from January 1,
2001  to  December 31, 2001. Of the amount attributable to compensation in 2001,
$80,000  was  paid  to  Mr.  Schwartz  and $40,000 was accrued.  See below under
Executive  Compensation  -  Compensation  Arrangements.

(3)     Compensation  attributed  to  Mr.  Lang includes $120,000 paid by Qinnet
Holdings  to  Can Tech & Trade International Corp., a private company controlled
by  Mr.  Lang,  as  a  consulting  fee during the period from January 1, 2000 to
December  31,  2000 and $120,000 paid and accrued by Qinnet Holdings to Mr. Lang
during  the  period  from January 1, 2001 to December 31, 2001.  See below under
Executive  Compensation  -  Compensation  Arrangements.

                                     32
<PAGE>
STOCK  OPTION  GRANTS

The following table sets forth information with respect to stock options granted
to each of our named executive officers during our most recent fiscal year ended
December  31,  2001:





                     OPTION/SAR  GRANTS  IN  LAST  FISCAL  YEAR

                               (INDIVIDUAL GRANTS)


                           Number of
                          Securities       %  of  Total    Exercise   Expira-
                          Underlying      Options Granted  Price per  tion
Name                     Options Granted   to Employees    Share      Date
-----------------------  ----------------  -------------   ---------  ---------

FREDRIC R. MANN
Director and President
Chief Executive Officer
Chief Financial Officer      100,000         5.0%           $5.00   April 28,
                                                                       2005

PAUL SCHWARTZ
Director and Secretary,
Executive Vice-President,
Treasurer and Chief
Operating Officer             75,000         3.75%          $5.00   April 28,
                                                                      2005

WIEGUO LANG
Director and Chairman        100,000          5.0%          $5.00   April 28,
                                                                      2005





                                     33

<PAGE>
EXERCISES  OF  STOCK  OPTIONS  AND  YEAR-END  OPTION  VALUES

None  of  the share purchase options held by our chief executive officer and our
named executive officers were exercised during the year ended December 31, 2001.



            AGGREGATED  OPTION/SAR  EXERCISES  DURING  THE  LAST
          FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR VALUES
                                                                   Value of
                                                                   unexercisable
                                                   Unexercised     In-The-Money
                                                   Options at      Options/SARs
                                                   Financial       at Financial
Name (#)                 Common Shares             Year-End (#)    Year-End ($)
                          Acquired on    Value     exercisable/    exercisable/
                         Exercise ($) Realized ($) unexercisable   unexercisable

FREDRIC R. MANN
Director and President
Chief Executive Officer
Chief Financial Officer      NIL           N/A         100,000        NIL/ N/A


PAUL SCHWARTZ
Director and Secretary,
Executive Vice-President,
Treasurer and Chief
Operating Officer            NIL           N/A          75,000         NIL/ N/A


WIEGUO LANG
Director and Chairman        NIL           N/A          100,000        NIL/ N/A





OUTSTANDING  STOCK  OPTIONS

The  following  table shows the issued and outstanding stock options held by our
officers  and directors, and by each person known by us to beneficially own more
than  5%  of  our  common  stock  as  of  April  8,  2002.



Name and Position           Exercise    No. of     Date       Vesting  Expriy
                            Price       Options    of Grant   Date     Date
------------------------------------------------------------------------------
FREDRIC MANN                $5.00       100,000    June 15,  June 15,  April 28,
Director, President                                  2001     2001      2005
Chief Executive Officer
Chief Financial Officer

PAUL SCHWARTZ               $5.00        75,000    June 15,   June 15, April 28,
Director, Secretary                                 2001       2001     2005
Executive Vice-President,
Treasurer, Chief Operating
Officer

WEIGUO LANG                 $5.00       100,000     June 15,  June 15, April 28,
Director and Chairman                                2001      2001     2005

                                     34


<PAGE>

MANAGEMENT  AGREEMENTS

Fredric  Mann,  our president and chief executive officer, provides his services
to  us  pursuant  to  an  employment  agreement  dated  October  23,  2001.  The
employment  agreement provides that we will pay Mr. Mann a base annual salary of
$300,000  per  year  in  consideration of Mr. Mann acting as president and chief
executive  officer  on  a  permanent  basis.  Mr. Mann has also agreed to act as
chief  financial  officer and general counsel until such positions are filled by
the  board  of  directors.  The  employment  agreement  also  provides  for  a
performance  and merit based bonus to be not less than $60,000 for any year.  In
addition, we have agreed to grant to Mr. Mann options to purchase 100,000 shares
of  our common stock in each year of the term of the agreement.   The employment
agreement  is for an initial three year term.  We are entitled to terminate this
agreement  upon  one  month's prior written notice and the payment of one year's
salary  and  minimum  bonus.

Mr. Lang provides his services to us on a monthly consulting fee basis through a
private  consulting  company controlled by Mr. Lang. We currently pay Can Tech &
Trade  International  Corp. a consulting fee of $10,000 per month for Mr. Lang's
services.  We  are  currently  negotiating  with Mr. Lang for the execution of a
definitive  fixed  term executive consulting agreement with Mr. Lang whereby Mr.
Lang  will  continue  to  provide  these  services  us.

Mr.  Schwartz  provides  his  services  to  us pursuant to a three year contract
providing  for  a  salary  of  $120,000  annually.  The services provided by Mr.
Schwartz  to  us  include  ensuring  that  proper  corporate,  financial  and
administrative  records  are maintained, supervising and advising on the conduct
of  financial  affairs, and coordinating all auditing functions. Mr. Schwartz is
currently  paid  a  consulting  fee of $10,000 per month by us and has been paid
this  consulting  fee since January 1, 2001.   We are currently negotiating with
Mr.  Schwartz  for the execution of a definitive fixed term executive consulting
agreement  with Mr. Schwartz whereby Mr. Schwartz will continue to provide these
services  to  us.

                                     35

<PAGE>
ITEM  11.     Security  Ownership  of  Certain  Beneficial Owners and Management

The  following  table  sets  forth  certain information concerning the number of
shares  of  our common stock owned beneficially as of April 8, 2002 by: (i) each
person  (including  any group) known to us to own more than five percent (5%) of
any  class  of  our  voting  securities,  (ii)  each  of our directors and named
executive  officers,  and  (iii)  officers  and  directors  as  a  group. Unless
otherwise  indicated, the shareholders listed possess sole voting and investment
power  with  respect  to  the  shares  shown.



                       Name  and  address    Number of Shares   Percentage of
Title of class         of beneficial owner   of Common Stock    Common Stock(1)

Common Stock           FREDRIC R. MANN          820,000(2)         5.59%
                       President, Chief
                       Executive Officer
                       and Chief Financial
                       Officer
                       Director

Common Stock           PAUL  SCHWARTZ            525,000(3)       3.59%
                       Executive Vice-President,
                       Treasurer and Chief
                       Operating Officer
                       Director
                       2  Pine  Drive
                       Woodbury,  NY  11797

Common Stock           WEIGUO LANG              1,132,000(4)      7.72%
                       Director and Chairman
                       A22-Linda  Building
                       8  Dongtucheng  Street
                       Chaoyang  District,
                       Beijing
                       China  100013

Common Stock           All Officers and
                       Directors
                       as a Group (3 persons)   2,477,000        16.9%



(1)     Under  Rule  13d-3, a beneficial owner of a security includes any person
who,  directly  or indirectly, through any contract, arrangement, understanding,
relationship,  or  otherwise has or shares: (i) voting power, which includes the
power  to  vote,  or  to direct the voting of shares; and (ii) investment power,
which  includes  the  power  to  dispose  or  direct  the disposition of shares.
Certain  shares  may  be deemed to be beneficially owned by more than one person
(if, for example, persons share the power to vote or the power to dispose of the
shares).  In addition, shares are deemed to be beneficially owned by a person if
the person has the right to acquire the shares (for example, upon exercise of an
option)  within 60 days of the date as of which the information is provided.  In
computing  the  percentage  ownership  of  any  person,  the  amount  of  shares
outstanding is deemed to include the amount of shares beneficially owned by such
person  (and  only  such  person)  by  reason of these acquisition rights.  As a
result,  the  percentage  of  outstanding  shares of any person as shown in this
table does not necessarily reflect the person's actual ownership or voting power
with  respect  to  the  number of shares of common stock actually outstanding on
April  8, 2002.  As of April 8, 2002, there were 14,568,004 shares of our common
stock  issued  and  outstanding.

(2)     Includes 720,000 shares held by Fredric Mann and 100,000 shares that are
subject  to  stock  options that are exercisable currently or within sixty days.


                                     36

<Page>

(3)     Includes 450,000 shares held by Paul Schwartz and 75,000 shares that are
subject  to  stock  options that are exercisable currently or within sixty days.

(4)     Includes  1,032,000  shares  held by Weiguo Lang and 100,000 shares that
are  subject  to  stock  options  that are exercisable currently or within sixty
days.



CHANGE  IN  CONTROL

We  are not aware of any arrangement that might result in a change in control in
the  future.

ITEM  12.     Certain  Relationships  and  Related  Transactions.

Except  as  described  below,  none  of  the following persons has any direct or
indirect material interest in any transaction to which we are a party during the
past  two years, or in any proposed transaction to which the Company is proposed
to  be  a  party:

(A)     any  director  or  officer;

(B)     any  proposed  nominee  for  election  as  a  director;

(C)     any  person  who  beneficially  owns,  directly  or  indirectly,  shares
carrying  more  than  5%  of  the voting rights attached to our common stock; or

(D)     any  relative or spouse of any of the foregoing persons, or any relative
of  such  spouse,  who has the same house as such person or who is a director or
officer  of  any  parent  or  subsidiary.

Mr.  Paul  Schwartz,  our  secretary  treasurer,  chief  operating officer and a
director,  was  issued  450,000  shares of our common stock on April 23, 2001 in
consideration  for  his  shares in Qinnet Holdings as part of our March 14, 2001
offer  to  acquire  a  majority  interest  in  Qinnet  Holdings.  Mr.  Schwartz
transferred  his 450,000 shares in Qinnet Holdings to us in consideration of one
share  of  our common stock for each share of Qinnet Holdings held.   All shares
issued  to  Mr.  Schwartz  are  restricted  shares  under  the  Securities  Act.

Mr.  Lynn Patterson, formerly one of our directors, was issued 105,000 shares of
our  common  stock  on  June  8,  2001 in consideration for his shares in Qinnet
Holdings  as part of our May 23, 2001 offer to acquire the remaining interest in
Qinnet  Holdings.  Mr.  Patterson  transferred  his  100,000  shares  in  Qinnet
Holdings  to  us  in  consideration  of 1.05 shares of our common stock for each
share  of  Qinnet  Holdings  held.   All  shares  issued  to  Mr.  Patterson are
restricted  shares  under  the  Securities  Act.

Mr.  Fredric  Mann,  our  president,  chief  executive  officer, chief financial
officer  and one of our directors, was issued 720,000 shares of our common stock
on  April 23, 2001 in consideration for his shares in Qinnet Holdings as part of
our March 14, 2001 offer to acquire a majority interest in Qinnet Holdings.  Mr.
Mann transferred his 720,000 shares in Qinnet Holdings to us in consideration of
one  share  of  our  common  stock for each share of Qinnet Holdings held.   All
shares  issued  to  Mr.  Mann  are  restricted  shares under the Securities Act.

The  number  of  shares held by each director and officer in Qinnet Holdings and
the  number  of  shares  of  our common stock that were issued on closing of our
acquisition  of  Qinnet  Holdings  are  summarized  as  follows:

                                   37

<Page>
-----------------------------------------------------------------------------
Name  of  Officer                    Number of
and Director                         Shares of               Number of
and Position                  Qinnet Holdings Corp. Held     Shares Issued
-----------------------------------------------------------------------------
Weiguo Lang                            NIL                         NIL
President and Director

Paul Schwartz                      450,000 Shares           450,000 Shares
Secretary, Treasurer
and Director

Lynn Patterson                     100,000 Shares           105,000 Shares
Former Director

Fredric Mann                        720,000 Shares          720,000 Shares
Director

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


Each  of our directors and officers who was also a director or officer of Qinnet
Holdings  was granted options to purchase shares of Qinnet Holdings.  Subsequent
to  the acquisition of Qinnet Holdings, we granted to our directors and officers
options  to  purchase  shares  of  our  common  stock  in  consideration  of the
cancellation  of  their  options  to  purchase  shares of common stock of Qinnet
Holdings.  These  options  are generally on the same terms and conditions as the
options  to purchase Qinnet Holdings shares previously held by each director and
officer.  The  following  table  shows  the options granted to our directors and
officers  in  consideration  of  the  cancellation  of their options to purchase
shares  of  the  common  stock  of  Qinnet  Holdings:





Name and Position           Exercise    No. of     Date       Vesting  Expriy
                            Price       Options    of Grant   Date     Date
------------------------------------------------------------------------------
FREDRIC MANN                $5.00       100,000    June 15,  June 15,  April 28,
Director, President                                  2001     2001      2005
Chief Executive Officer
Chief Financial Officer

PAUL SCHWARTZ               $5.00        75,000    June 15,   June 15, April 28,
Director, Secretary                                 2001       2001     2005
Executive Vice-President,
Treasurer, Chief Operating
Officer

WEIGUO LANG                 $5.00       100,000     June 15,  June 15, April 28,
Director and Chairman                                2001      2001     2005

LYNN PATTERSON              $5.00        50,000      June 15,  June 15, April 28
Former Director                                       2001      2001     2005
                            $5.00        25,000      June 15,  June 15, April 28
                                                      2001      2001     2005
                            $5.00        25,000      June 15,  June 15, April 28
                                                      2001      2001     2005

The  options  granted  to  Mr.  Patterson  have  subsequently been terminated in
accordance  with  Mr.  Patterson's stock option agreement with us as a result of
his  resignation  as  a  director.

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

Each  of  our  directors and officers, other than Fredric Mann, is a director of
Qinnet  Holdings.  Mr.  Weiguo Lang is the president and director of the company
and  Qinnet  Holdings.  Mr.  Paul  Schwartz,  our  secretary and treasurer and a
director,  is  the  secretary  and  treasurer  of  Qinnet  Holdings.

Mr. Lang provides his services to us on a monthly consulting fee basis through a
private  consulting company controlled by Mr. Lang. The services provided by Mr.
Lang  to  Qinnet  Holdings  include exercising general direction and supervision
over its business. Qinnet Holdings currently pays Can Tech & Trade International
Corp.  a  consulting  fee  of $10,000 per month for Mr. Lang's services.  Qinnet
Holdings  is  currently  negotiating  with  Mr.  Lang  for  the  execution  of a
definitive  fixed  term executive consulting agreement with Mr. Lang whereby Mr.
Lang  will  continue  to  provide  these  services  to  Qinnet  Holdings.

                                       38
<Page>

Mr.  Schwartz  provides  his services to us for a three-year term at a salary of
$120,000  per  year. The services provided by Mr. Schwartz include ensuring that
proper  corporate,  financial  and  administrative  records  are  maintained,
supervising  and  advising on the conduct of financial affairs, and coordinating
all  auditing  functions.

We  entered into an employment agreement dated October 23, 2001 with Mr. Fredric
Mann,  our  president  and  chief  executive  officer.  See  Item  10. Executive
Compensation  -  Management  Agreements.

Mr.  Patterson, a former director, was paid a monthly fee of $3,500 per month by
Qinnet  Holdings  up  to  November  30,  2000  in  consideration  for  business
development  work  provided  by  Mr.  Patterson.  Mr.  Patterson  resigned  as a
director  in  2001.

GSG  Global  Synergy  Group, of which Paul Schwartz was president until December
31,  2000,  was  paid  a consulting fee of $20,000 per month from May 1, 2000 to
December 31, 2001.  Under this agreement, GSG provides us with funding, investor
relations  and  accounting  consulting  services.

We  paid  an amount of $25,000 to Qinnet Holdings during the year ended December
31,  2000  in  consideration  of  Qinnet  Holdings providing the services of Mr.
Weiguo  Lang and Paul Schwartz and providing office and administration services.
Of  this  total  amount,  an  amount of $10,000 was attributable to the services
provided  by  Mr.  Lang and $10,000 was attributable to the services provided by
Mr.  Paul  Schwartz.

Shenyang  Qinnet

Qinnet  Beijing,  one  of our Chinese subsidiaries, entered into a joint venture
arrangement  with  Shenyang  Brainn  Information  Co., Ltd. ("Braininfo.com") of
Shenyang,  China.  Qinnet  Beijing  and  Braininfo.com  have established a joint
venture  corporation called Shenyang Qinnet-Brainn Information Technologies Co.,
Ltd.  ("Shenyang  Qinnet")  to develop and market Internet services in Shenyang,
China.  Shenyang  Qinnet  is  in  the  business  of  providing Internet web site
design,  e-commerce  and  related  customer and technical support services.  Mr.
Weiguo  Lang, one of our directors, is the registered owner of a 51% interest in
Shenyang  Qinnet.  Ownership  is in the name of Mr. Lang to comply with the laws
and regulations of the PRC.  Mr. Lang has granted to Qinnet Beijing an option to
purchase  Mr.  Lang's 51% interest in Shenyang Qinnet at a price equal to 50,000
RMB  (equal to approximately US $6,200 as of December 31, 2001).  This option is
exercisable  by  Qinnet Beijing for a five-year term expiring on March 24, 2005.
The  option  arrangement  has been structured to enable Qinnet Beijing to comply
with PRC foreign ownership laws and restrictions.  The option is transferable by
Qinnet  Beijing  to  give  flexibility in structuring its ownership arrangement.
Qinnet  Holdings  anticipates  that  the  foreign  ownership laws of the PRC may
change  prior to the expiry of the option period or the option will be extended.
Beijing  Qinnet  provided  funds  used  by  Mr.  Lang to acquire his interest in
Shenyang  Qinnet. We have determined not to proceed with the business activities
of  Shenyang  Qinnet.

Tianjin  Qinnet

Qinnet Beijing has entered into a joint venture arrangement with Tianjin Xiandao
Information  Network  Co., Ltd. ("Tjvan.com") of Tianjin, China.  Qinnet Beijing
and  Tjvan.com  have  established  a  joint venture corporation known as Tianjin
QinNet  Xiandao  Information  Technology  Co.,  Ltd. (Tianjin QinNet) to own and
operate  an  Internet  service  provider business in Tianjin, China.  Mr. Weiguo
Lang, one of our directors, is the registered owner of a 70% interest of Tianjin
QinNet and Tjvan.com owns the balance of 30% of Tianjin QinNet.  Ownership is in
the  name  of  Mr. Lang to comply with the laws and regulations of the PRC.  Mr.
Lang has granted to Qinnet Beijing an option to purchase Mr. Lang's 70% interest
in  Tianjin  Qinnet  at  a  price equal to 70,000 RMB (equal to approximately US
$8,700  as  of December 31, 2001).  This option is exercisable by Qinnet Beijing
for  a  five  year  term expiring on March 24, 2005.  The option arrangement has
been  structured  to  enable Qinnet Beijing to comply with PRC foreign ownership
laws  and  restrictions.  The  option  is transferable by Qinnet Beijing to give
flexibility  in  structuring  its  ownership  arrangement.  Qinnet  Holdings
anticipates  that  the foreign ownership laws of the PRC may change prior to the
expiry  of  the  option  period  or the option will be extended.  Qinnet Beijing
provided  funds  used by Mr. Lang to acquire his interest in Tianjin Qinnet.  We
have  determined  not to proceed with the business activities of Tianjin Qinnet.


                                      39
<PAGE>
ITEM  13.     Exhibits,  Financial  Statement  Schedules and Reports on Form 8-K

(a)     Exhibits

The  following exhibits are either provided with this Report or are incorporated
herein  by  reference:

Exhibit  Number      Description  of  Exhibit
---------------      ------------------------

Exhibit 2.1          Agreement and Plan of Reorganization between Qinnet.com and
                     Internet  Corporation  of  America,  Inc.,  dated
                     April  11,  2000.  (1)

Exhibit  3.1:        Certificate  of  Incorporation  of Specialistics Inc. (1)

Exhibit  3.2:        Certificate  for  Renewal  and  Revival of Certificate of
                     Incorporation.  (1)

Exhibit  3.3:        Certificate  of Amendment to Certificate of Incorporation
                     changing  the  Corporation's  name  from  "Specialistics
                     Inc." to "Eastern Group International  Co.,  Ltd."  (1)

Exhibit  3.4:        Certificate  of Amendment of Certificate of Incorporation
                     changing  the Corporation's name from "Eastern Group
                     International Co., Ltd." to
                     "TeleSpace  Limited".  (1)

Exhibit  3.5:        Certificate  of Amendment of Certificate of Incorporation
                     amending  Article  5.  (1)

Exhibit  3.6:        Certificate  of Amendment of Certificate of Incorporation
                     amending  Article  IV.  (1)

Exhibit  3.7:        Certificate  of Amendment of Certificate of Incorporation
                     changing  the  Corporation's name from "TeleSpace Limited"
                     to "qinnet.com, Inc."(1)

Exhibit  3.8:        By-Laws  of  Qinnet,  as  amended  (1)

Exhibit  3.9:        Restated  Certificate  of  Incorporation filed
                     August 13, 2001(5)

Exhibit  10.1:       Agreement  dated August 18, 2000 between Qinnet.com, Inc.
                     and Liaoning  Publishing  Group  of  Companies(2)

Exhibit  10.2:       Memorandum  of  Understanding  dated  January 8, 2001
                     between Qinnet.com,  Inc.  and  PowerNet  USA  Ltd.  (3)

Exhibit  10.3:       Offer  of  Qinnet.com  to  the  Accredited  United  States
                     Shareholders  of  Qinnet  Holdings  dated
                     March  14, 2001  (3)

Exhibit  10.4:       Offer  of  Qinnet.com to non-Canadian Foreign Shareholders
                     of Qinnet  Holdings  dated  March  14,  2001  (3)

Exhibit  10.5:       Form  of Offer of Qinnet.com to the Remaining Shareholders
                     of Qinnet  Holdings  dated  May  23,  2001(4)

Exhibit  10.6:       Employment  Agreement  dated  October  23, 2001 between
                     Q-Net Technologies,  Inc.  and  Fredric  Mann(6)

(1)     Previously  filed  as  an exhibit to Qinnet.com's Current Report on Form
8-K  filed  on  April  14,  2000  and  incorporated  herein  by  reference.

(2)     Previously  filed as an exhibit to Qinnet.com's Quarterly Report on Form
10-QSB  filed  on  November  14,  2000  and  incorporated  herein  by reference.

                                    40
<Page>

(3)     Previously  filed  as  an exhibit to Qinnet.com's Current Report on Form
10-KSB  filed  on  April  2,  2000  and  incorporated  herein  by  reference.

(4)     Previously filed as an exhibit to Qinnet.com's Current Report on Current
Report  on  Form 8-K filed on July 9, 2001 and incorporated herein by reference.

(5)     Previously  filed  as  an exhibit to Qinnet.com's Current Report on Form
10-QSB  Quarterly  Report  filed  on  August 17, 2001 and incorporated herein by
reference.

(6)     Filed  as  an  exhibit  to  this  Form  10-KSB  annual  report.


(b)     Reports  on  Form  8-K

On  February  6,  2001,  we  filed  a Current Report on Form 8-K to announce the
appointment  of  Grant  Thornton,  LLP  as  our independent auditor to audit our
financial  statements  for  the  year  ended  December  31,  2001.

On  May  4,  2001,  we  filed  a  Current  Report  on  Form  8-K to announce the
acquisition  of  a  93.8%  interest  in  Qinnet  Holdings  Corp.,  a  Washington
corporation.  We  filed  an amendment to this Current Report on Form 8-K on July
9, 2001 to include the audited financial statements of Qinnet Holdings Corp. and
the  unaudited pro forma financial statements required by Current Report on Form
8-K.

                                     41

<Page>


                                   SIGNATURES

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

Q-NET  TECHNOLOGIES,  INC.


By:  ___________________________________
     Fredric  R.  Mann,  President
     Chief  Executive  Officer
     Chief  Financial  Officer
     Director

Date:     April  16,  2002


In  accordance  with  the  Securities  Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and  on  the  dates  indicated.


By:  ___________________________________
     Fredric  R.  Mann,  President
     Chief  Executive  Officer
     Chief  Financial  Officer
     (Principal  Executive  Officer)
     (Principal  Financial  Officer  and  Principal  Accounting  Officer)
     Director
     Date:     April  16,  2002



By:  ___________________________________
     Paul  Schwartz,  Secretary  and  Treasurer,
     Chief  Operating  Officer  and  Director
     Date:     April  16,  2002



By:  ___________________________________
     Weiguo  Lang
     Director
     Date:     April  16,  2002