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                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, 2000

[ ]   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

                          QINNET.COM, 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 206, 4505 Las Virgenes Road
Calabasas, CA                               91302
---------------------------------           -----
(Address of principal executive offices)    (Zip Code)

Registrant's telephone number, including area code: (818) 871-9482

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

Securities registered pursuant to Section 12 (g) of the Act:
50,000,000 shares of common stock

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 2000 were $NIL.

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 March 26, 2001 is $1,615,009.

The number of shares of the issuer's Common Stock outstanding as of
March 26, 2001 is 1,300,497 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

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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 in the business of developing a Chinese electronic book
publishing business through a joint venture agreement with Liaoning
Group of Companies.  We have also entered into a memorandum of
understanding with Powernet USA Ltd. to collaborate on an exclusive
basis for the development of two initial pilot projects in China
utilizing Powernet's thin-client server technology.

We are also in the process of attempting to merge or acquire a
majority interest in Qinnet Holdings Corp, a Washington corporation
that is engaged in the business of providing Internet technologies
and services to Chinese companies and individuals.  We entered into
a merger agreement with Qinnet Holdings on January 12, 2000. We
made an offer to the shareholders of Qinnet Holdings on March 14,
2001 to acquire a majority interest of Qinnet Holdings.  If we
succeed in completing this acquisition, then we may abandon or
delay the planned merger with Qinnet Holdings.  If we are not
successful with this acquisition, then we plan to proceed with the
merger with Qinnet Holdings on the terms of the merger agreement.
There is no assurance that we will be able to merge with or acquire
any interest in Qinnet Holdings. We do not have any assets other
than our interest in our electronic book publishing joint venture
business, our memorandum of understanding with Powernet and our
interest in the merger agreement with Qinnet Holdings.  If we do
not merge with or acquire a majority interest in Qinnet Holdings,
then our assets will consist solely of our interest in our
electronic book publishing joint venture and our memorandum of
understanding with Powernet.

CORPORATE BACKGROUND

Qinnet.com, Inc. is a Delaware corporation that was incorporated on
May 31, 1989.

PLANNED ACQUISITION OF A MAJORITY INTEREST IN QINNET HOLDINGS

We entered into a merger agreement with Qinnet Holdings on January
12, 2000.  Qinnet

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Holdings Corp. is a Washington state corporation that was incorporated
in June, 1999.  The merger agreement contemplates that we will merge
with Qinnet Holdings and that we will issue one share of our common
stock for each share of Qinnet Holdings common stock upon completion
of the merger (the "Original Merger Plan").  A copy of the merger
agreement was filed as an exhibit to our Form 8-K filed with the
Securities and Exchange Commission on April 14, 2000.

Since January 12, 2000, we have not been able to proceed with the
Original Merger Plan as Qinnet Holdings has not completed its
audited financial statements that are necessary for us to proceed
with the filing of a registration statement with the Securities and
Exchange Commission in connection with the merger.  As a result of
this delay, our board of directors approved on December 8, 2000 an
offer to the U.S. accredited and non-Canadian foreign shareholders
of Qinnet Holdings to acquire their shares on the basis of one
share of our common stock for each share of Qinnet Holdings stock
(the "Offer").  This consideration is the same consideration that
would be issued to each of the shareholders of Qinnet Holdings if
we proceeded with the Original Merger Plan.  We made the Offer to
the U.S. accredited and non-Canadian foreign shareholders of Qinnet
Holdings on March 14, 2001.    The Offer is open for acceptance by
these shareholders of Qinnet Holdings for a period of 40 days
expiring on April 23, 2001.  As of March 26, 2001, there were a
total of 13,088,100 shares of Qinnet Holdings outstanding.  We have
made the Offer to the U.S. accredited and non-Canadian foreign
shareholders of Qinnet Holdings that hold 12,295,100 shares of
Qinnet Holdings, representing 93.9% of the shares of Qinnet
Holdings.  The Offer is subject to acceptance by shareholders of
Qinnet Holdings representing a majority of the shares of Qinnet
Holdings.  Under the terms of the Offer, we may elect to close on
the accepted portion of the Offer prior to April 23, 2001 if
shareholders representing a majority of Qinnet Holdings have
accepted the Offer.

If the Offer is accepted by all shareholders of Qinnet Holdings who
received the Offer, then we would issue a total of 12,295,100
shares of our common stock in consideration for the acquisition of
a 93.9% interest in Qinnet Holdings.  This would increase the
number of our issued and outstanding shares of common stock from
1,300,497 as of March 26, 2001 to 13,595,597. As of March 26, 2001,
we have not yet received acceptances from shareholders holding a
majority of the shares of Qinnet Holdings.  There is no assurance
that the Offer will be accepted by shareholders of Qinnet Holdings
holding a majority of the shares of Qinnet Holdings or that we will
be successful in acquiring a majority interest in Qinnet Holdings.
If the Offer is accepted by a majority of the shareholders of
Qinnet Holdings, then we may determine to abandon the Original
Merger Plan or proceed with a merger with Qinnet Holdings at a
later date.

We plan to grant options to purchase shares of our common stock to
the holders of options to purchase shares of Qinnet Holdings common
stock if we acquire a majority interest in Qinnet Holdings.  There
were options to purchase 1,950,000 shares of Qinnet Holdings common
stock outstanding as of the date of the Offer.  Each option is
exercisable at a price of $5.00 per share.  If we acquire a
majority interest in Qinnet Holdings, we anticipate that we will
approve a new 2001 stock option plan and grant options to purchase
a total of up to 2,700,000 shares of our common stock under this
2001 stock option plan.  Any options granted would be granted to a
holder in consideration of the cancellation of the holder's

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options to purchase shares of Qinnet Holdings common stock.  These
new options are planned to be on the same general terms and conditions
as the holder's original options to purchase shares of Qinnet
Holdings common stock.

If we determine to proceed with the Original Merger Plan, we would
file a Form S-4 registration statement with the Securities and
Exchange Commission under the Securities Act of 1933 (the "Act") in
order to register the issue of our common stock to the shareholders
of Qinnet Holdings.  The closing of the Original Merger Plan would
be subject to approval by our shareholders and by the shareholders
of Qinnet Holdings.  Qinnet Holdings is presently preparing the
audited financial statements that will be necessary to complete the
filing of the Form S-4 registration statement.  We are not able to
proceed with the filing of the Form S-4 registration statement and
completion of the Original Merger Plan until such time as audited
financial statements for Qinnet Holdings have been finalized.    As
of March 26, 2001, there are a total of 13,088,100 shares of Qinnet
Holdings outstanding.  Accordingly, it is anticipated that we would
issue a total of 13,088,100 shares of our common stock if we
proceeded to complete the Original Merger Plan, provided that this
number would increase if any of the outstanding options of Qinnet
Holdings are exercised prior to completion of the merger.  Any
options of Qinnet Holdings not exercised prior to the merger would
survive and continue as options to purchase shares of our common
stock after the merger on the same terms and conditions existing
prior to the merger.

If we acquire a majority interest in Qinnet Holdings pursuant to
the Offer, we may make a subsequent offer to acquire the balance of
shares of Qinnet Holdings held by Canadian shareholders.  We may
offer different consideration to the Canadian shareholders of
Qinnet Holdings in order to acquire the balance of the shares of
Qinnet Holdings.

OUR BUSINESS PLAN

Our business plan is to introduce, market and sell value-added
technology products and services to the Chinese market.  Pursuant
to our business plan, we plan to complete the acquisition of a
majority interest in Qinnet Holdings pursuant to the Offer or to
merge with Qinnet Holdings pursuant to the Original Merger Plan.
Once the acquisition or merger is completed, we plan to pursue the
development of the business of Qinnet Holdings.  Accordingly, the
business plan of Qinnet Holdings is presented below.  There is no
assurance that the acquisition of a majority interest in Qinnet
Holdings or a merger with Qinnet Holdings will be completed.

We also plan to pursue our electronic book publishing joint venture
agreement with Liaoning Publishing Group of Companies and our thin-
client server technology joint venture agreement with Powernet,
each as discussed below.

ELECTRONIC BOOK PUBLISHING JOINT VENTURE

We entered into a joint venture agreement dated August 18, 2000
with Liaoning Publishing Group of Companies ("LPG").  LPG is the
first and largest independently operated publisher in China and is
currently one of the largest publishers in China.  We have agreed

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with LPG to carry out a joint venture electronic book publishing
and distribution business in China.  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 the Enterprise Laws of the People's
Republic of China.  Under the joint venture agreement, we and LPG
have agreed to invest an aggregate of $5,000,000 US.  We will
contribute $3,000,000 and will own 60% of Liaoning Qinnet.  LPG
will contribute $2,000,000 and will own 40% of Liaoning Qinnet.
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 will be to
establish a database of up to 5000 Chinese books and to engage in
the electronic publishing and sale of electronic books for the
Chinese market.

The initial phase of our joint venture with LPG involved an
agreement between us and Liaoning Education Press, a subsidiary of
LPG.  This initial phase contemplated a capital investment of
$400,000.  We contributed $280,000 to acquire a 70% interest in the
joint venture in 2000 in accordance with the joint venture
agreement.  The second phase of the joint venture will be governed
by our August 18, 2000 agreement with LPG.  As at December 31,
2000, we had advanced $280,000 to this joint venture.  We plan to
advance approximately $2,720,000 to Liaoning Qinnet to fund the
balance of our portion of the joint venture expenses over the next
twelve months.

Our joint venture with LPG contemplates the marketing and sale of
an electronic book reader device that would incorporate books
published by LPG  and other publishers in an electronic format.
Development of the electronic book reader device has not been
completed and will be subject to selection or development of final
hardware and software for the device.  We have not achieved any
revenues from this joint venture to date.  We will not realize
revenues from this joint venture until such time as the development
of the electronic book reader device has been completed and is
ready for marketing to consumers. The joint venture's initial phase
of operations has been approved by the Liaoning Provincial
Government.  Liaoning Qinnet has acquired the exclusive rights to
over 120,000 titles from the China National Digital Library.  The
exclusive period is for 2 years and is renewable at the end of the
2-year period subject to mutual agreement on the terms of the
renewal.  Liaoning Qinnet also plans to acquire additional
electronic book rights outside of LPG's proprietary content.
Liaoning Qinnet is completing the construction of its database and
web site for the book download under the name of www.cnbook.com.cn.
This web site is expected to become operational by the third
quarter of 2001.  Liaoning Qinnet has entered into an agreement for
the development of technology in connection with its electronic book
publishing business.  Liaoning Qinnet has agreed to minimum purchase
commitments if development of this technology is completed.

THIN-CLIENT SERVER TECHNOLOGY JOINT VENTURE

We have entered into a memorandum of understanding dated January 8,
2001 with Powernet USA, Inc. ("Powernet") to establish a joint
venture corporation called Qin Powernet Inc. in Montreal, Canada.
We have agreed with Powernet to collaborate on an exclusive basis
for the establishment of two initial pilot projects in China
utilizing Powernet's thin-client server technology.  The thin-
client server technology is designed to

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provide low-cost computing facilities through the on-line connection of
a monitor, keyboard and related components to a central remote server as
a lower priced alternative to purchasing a complete personal computer.
The pilot projects will be established in Tianjin and Beijing, or other
agreed locations in China.  We will own a 49% interest in Qin Powernet,
Inc. and Powernet will own a 51% interest.  We will share any revenues
generated from the joint venture with Powernet on a 50/50 basis.  The
Beijing and the Tianjin pilot projects are subject to the completion of
technical feasibility studies and a business plan for each project and
to securing financing for each project.  We are currently undertaking
technical feasibility studies for each pilot project with Powernet.  If
we and Powernet determine that the pilot projects are feasible, we will
then negotiate a shareholders agreement with Powernet for the timing and
amount of funding for the joint venture and a license agreement
whereby Powernet will grant a license of its technology to enable
the joint venture to proceed with each pilot project.   We
presently have not proceeded beyond the technical feasibility phase
for each pilot project and there is no assurance that the joint
venture will proceed with any pilot project.   If either pilot
project proceeds, we will be obligated to fund 49% of the
development costs associated with each pilot project.  We have not
received any revenues from this arrangement to date.  We anticipate
that we will only realize revenues if we determine to proceed with
the pilot projects, the pilot projects are successfully implemented
and revenues are earned by the pilot projects.

BUSINESS PLAN OF QINNET HOLDINGS

Qinnet Holdings is engaged in the business of establishing
operations in China as an Internet technology provider (ITP) to
Chinese companies and businesses engaged in electronic commerce.
The business activities of Qinnet Holdings are carried out in China
by Beijing QinNet Electronic Technologies Co., Ltd. ("Qinnet
Beijing").  Qinnet Beijing is a wholly owned subsidiary of Qinnet
Holdings.  Qinnet Beijing is engaged in the businesses of providing
the following services in China:  (i) dial-up and broadband
Internet access services; (ii)  voice-over Internet protocol long
distance telephony (VoIP); (iii) Internet solution software; (iv)
Internet web site design and consulting services.  The business
objective of Qinnet Holdings is to provide full Internet,
electronic business and electronic commerce solutions to government
entities, private enterprises and individuals within China.

OPERATIONS OF QINNET BEIJING

Qinnet Beijing carries out its business in China directly and
through joint venture arrangements with established Chinese
companies.  These businesses and joint venture arrangements are
summarized as follows:

A.    Shenyang Qinnet
      ---------------

Qinnet Beijing has 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 Corporation Ltd. ("Shenyang Qinnet") to
develop and market an

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Internet service business in Shenyang, China.  Shenyang Qinnet
is in the business of providing Internet web site design and
content development and related customer and technical
support services.  Shenyang Qinnet earns revenues from fees charged
to its customers for providing these services.   Shenyang Qinnet is
currently earning only minimal revenues.

Mr. Weiguo Lang, our president and the president of Qinnet
Holdings, 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
$6,200 US as of March 26, 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.  Funds
used by Mr. Lang to acquire his interest in Shenyang Qinnet were
provided by Qinnet Beijing.

Qinnet Beijing has also entered into an equipment lease agreement
and an exclusive consulting and services agreement with Shenyang
Qinnet.  Under the equipment lease agreement, Qinnet Beijing has
acquired and leased equipment to Shenyang Qinnet.  Shenyang Qinnet
pays to Qinnet Beijing 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,
Qinnet Beijing is the exclusive provider of technical consulting
and services to Shenyang Qinnet.   Shenyang Qinnet pays to Qinnet
Beijing 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.  Upon exercise of its option, Qinnet Beijing will have the
further option to increase its ownership interest to 70% of
Shenyang Qinnet by providing additional funding in the approximate
amount of $200,000.  Qinnet Holdings has recently determined to
reduce the amount of funds it expects to advance to Shenyang Qinnet
in order to focus its business efforts on other areas.  Qinnet
Holdings has determined to reduce the emphasis placed on the
Shenyang Qinnet business based on higher anticipated growth rates
of other areas of Qinnet Holdings' business.  In addition, staff
from Shenyang Qinnet have been assigned to other areas of Qinnet
Holdings' business.

B.    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, our president and the president of Qinnet
Holdings, 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

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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 $8,700 US
as of March 26, 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.  Funds
used by Mr. Lang to acquire his interest in Tianjin Qinnet were
provided by Qinnet Beijing.

Qinnet Beijing has also entered into an equipment lease agreement
and an exclusive consulting and services agreement with Tianjin
Qinnet.  Under the equipment lease agreement, Qinnet Beijing has
acquired and leased equipment to Tianjin Qinnet.  Tianjin Qinnet
pays to Qinnet Beijing 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,
Qinnet Beijing is the exclusive provider of technical consulting
and services to Tianjin Qinnet.   Tianjin Qinnet pays to Qinnet
Beijing 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.

Tjvan.com is the second largest Internet service provider in the
city of Tianjin in China. With capital invested by Qinnet Beijing,
Tjvan.com and Qinnet Beijing have agreed that the business plan for
Tianjin Qinnet is to upgrade existing equipment, add more lines and
strengthen marketing development to increase the current customer
base from 12,000 to 20,000 within a year.  Qinnet Beijing has
advanced 3 million RMB (equal to approximately $373,000 US as of
March 26, 2001) to finance Tianjin Qinnet's Internet service
provider business expansion.  Tjvan.com's partnership with China
Unicom Tianjin includes Internet dial-up service provision in
Tianjin.  Tianjin Qinnet began to provide ISDN service in Tianjin
with China Unicom Tianjin on an exclusive basis in the late third
quarter of 2000.  In 2000, a total of 92 customers began to receive
this ISDN service.  Revenues from this business are split 50/ 50
between Tianjin Qinnet and China Unicom Tianjin. With a required
capital injection, the business plan for Tianjin Qinnet is to
increase its dial-up subscriber base from 12,000 to greater than
20,000 within two years to become the largest Internet service
provider in Tianjin.

Qinnet Holdings anticipates spending approximately $500,000 on
funding its joint venture arrangement for Tianjin Qinnet over the
next twelve months. Qinnet Holdings purchased equipment to provide
the ISDN services in Tianjin to 700 subscribers during the fourth
quarter of 2000.  Qinnet Holdings plans to fund further purchases
of ISDN equipment as required by Tianjin Qinnet to pursue its
business plan.

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C.    Beijing IT Consulting Co., Ltd. ("BITC")
      ----------------------------------------

Qinnet Beijing has acquired Beijing IT Consulting Co., Ltd.
("BITC").  BITC has been involved in the business of Internet web
site development.  Since BITC is headquartered in Beijing, Qinnet
Beijing has merged the operations of BITC with its operations in
Beijing.


Qinnet Beijing is currently in the process of developing a "One-
Stop Total Solutions" internet software package (referred to as the
"XSP Software Package") to offer total solutions to medium and
small sized companies through BITC.  In this manner, Qinnet Beijing
plans to provide the software necessary to establish a presence in
the rapidly growing e-commerce market.  Development of the XSP
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 prepackaged 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.  Traditionally, a corporation 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.

Functions of the XSP Software Package will be designed in modules,
allowing the client to choose the desired function(s) from
module(s).  Each module is planned to work independently or can be
linked to other modules to work together.  The client may choose
one or two modules initially, and subsequently expand its web site
at any time by adding additional modules.  The user may spend as
little as $400 to install an entry-level module.  Qinnet Beijing
also plans to provide online/offline consulting services for
companies for site management and promotion, e-commerce and other
services being developed.  Management believes over the development
life of clients, and as a result of their "web experience",
additional modules and services may be required.  While broad based
solutions for diverse corporate requirements are planned to be
available from XSP, other affiliates may provide additional
services.  This "know how" is planned to be channeled through
Qinnet Beijing for implementation.  Qinnet Beijing anticipates that
10-20% of its clients will desire custom website design and plans
to be in the position to offer such services efficiently and
seamlessly while satisfying the client needs to maintain a high
customer retention level.

Qinnet Beijing plans to commence marketing and sales efforts for
XSP Software Package and services in the second quarter of 2001.
Qinnet Holdings plans to spend approximately $250,000 US over the
next twelve months to develop the business of BITC and the XSP
Software Package.

D.    QinTop
      ------

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 "voice and data
transmission" between

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North America and Asia to China.  Beijing
Qinnet has invested approximately $242,000 US (2,000,000 RMB) to
date for equipment to facilitate this project.  Beijing Qinnet's
QinTop business involves providing VoIP telecommunications services
to North America.  These services provide call termination within
the PRC from North America through the Chinese strategic partner's
network.  Qinnet Holdings has entered into a 12 month leasing
arrangement for communication lines within North America and has
established relationships for data traffic within China. Qinnet
Holdings anticipates it may spend additional capital over the next
twelve months of approximately $200,000 on this communication
network. Qinnet Holdings, through Qincom Networks Inc., a 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 demands
require, subject to available financing.

E.    Hulenbeier Qinnet
      -----------------

Hulunbeier is a district within the Inner Mongolia Region.  Qinnet
Beijing established Hulunbeier Qinnet, a 100% owned subsidiary in
August 2000 to facilitate information services, personal chatting
channels, website design and construction, etc.  Operating under an
agreement with the Hulunbeier Government, Hulunbeier Qinnet and the
Government will jointly construct Government-Online and Enterprise-
Online platforms, and establish the Hulunbeier Information Port
Development Project.  Hulunbeier is relatively remote from Beijing
and undeveloped in the high tech industries with virtually no high
tech companies in the entire region.  The local government and
community have planned programs to catch up to the rest of the
country.  Qinnet targets this area to establish a pioneer presence
by establishing a high tech corporation benefiting from the local
government's incentive policy and support.  If this business model
is successful, Qinnet plans to use this business model to bring
Internet technology to other remote areas of China.

EMPLOYEES

We currently do not have any employees, other than our officers,
Mr. Weiguo Lang, our president, and Mr. Paul Schwartz, our
secretary and treasurer.  Each of our officers devotes his full
business time to our business and to the business of Qinnet
Holdings.  We anticipate hiring a full-time Chief Executive Officer
in the second quarter of 2001 and we are presently in the process
of negotiating with an individual for this position.  We also plan
on engaging a full-time Chief Financial Officer during the second
quarter of 2001.

Qinnet Holdings currently employs approximately 100 people in its
operations and anticipates hiring additional employees over the
next twelve months if Qinnet Holdings is successful in implementing
its plan of operations.  Of these additional employees, a majority
are anticipated to be located in China.  Qinnet Holdings plans on
adding to its management teams in North America and China.


                                11

<PAGE>

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 reader device and commence marketing of our product to consumers.
To counter this competition, we have entered into our joint venture
with LPG in order to secure access to a large volume of Chinese book
publications on an exclusive basis.

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 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 cheaper and more affordable
alternative to traditional personal computers.   We believe that a
thin-client server will be able to offer many of the features and
functions of a traditional personal computer at a more affordable
price to consumers.   Thin-client servers will be cheaper than
traditional personal computers 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 over 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.

                                12

<PAGE>

Internet Service Provider Business of Qinnet Holdings

The market for the provision of Internet access to businesses and
individuals in China is extremely competitive and highly
fragmented. Management expects that competition will continue to
intensify. Management believes that the primary competitive factors
determining success in this market are:

-     a reputation for reliability and service;

-     pricing;


-     access speed;

-     effective customer support;

-     access to capital;

-     creative marketing; and

-     geographic coverage.

Qinnet Holdings' current and prospective competitors include many
large companies that have substantially greater market presence and
financial, technical, marketing and other resources than it has.
Qinnet Holdings currently competes or expects to compete with the
following types of Internet access providers:

-     commercial online service providers based in China;

-     China nation-wide ISP's and national Chinese
      telecommunications providers, such as China Unicom, China
      Telecom and China Netcom;

-     numerous regional and local ISPs;

-     regional Chinese telecommunications providers;

-     cable operators;

-     wireless communications companies; and

-     satellite companies.

Management believes that new competitors, including large computer
hardware and software, media and telecommunications companies, will
continue to enter the Chinese Internet services market. In
addition, as consumer awareness of the Internet grows, existing
competitors are likely to further increase their emphasis on
Internet access services, resulting in even greater competition.
The ability of these competitors or others to enter into business
combinations, strategic alliances or joint ventures or to bundle
services
                                13

<PAGE>


and products with Internet access could put Qinnet
Holdings at a significant competitive disadvantage.

Most of the major long-distance companies in China offer Internet
access services and compete with Qinnet Holdings. Local Chinese
telecommunications companies have also entered the Internet service
provider market. Management believes long-distance and local
carriers are moving toward horizontal integration through
acquisitions of, and joint ventures with, Internet service
providers. Accordingly, management expects Qinnet Holdings to
experience increased competition from the traditional
telecommunications carriers for both customers and potential
acquisitions. Many of these telecommunications carriers have
greater coverage and market presence, as well as substantial
financial, technical and marketing resources than Qinnet Holdings.
These telecommunications providers may have the ability to bundle
Internet access with basic local and long-distance voice services. This
bundling of services may make it difficult for Qinnet Holdings to
compete effectively and may cause Qinnet Holdings to lower its prices.

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 determine 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
investment 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 telecommunications and Internet
projects are prohibited by the PRC.  As such, we may not be
directly involved 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.  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. Publishing of books 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 comply with all applicable laws and regulations.  The
initial phase of our joint venture with LPG has been approved by
the required local government authority.

                                14

<PAGE>

Thin-Client Server Technology

We must ensure that any pilot projects undertaken pursuant to our
memorandum of understanding with Powernet 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 prohibit foreign ownership
of Internet and telecommunications services. We plan to structure
our projects as joint ventures 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 joint venture arrangements, we
would supply advisory services and equipment to the Chinese joint
venture partner and the Chinese joint venture partner would provide the
Internet and telecommunications component of the undertaking.

Foreign Ownership Laws

Qinnet Holdings is subject to the strict foreign ownership of 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, Qinnet Holdings has
structured its 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, Qinnet Holdings is currently not able to
consolidate on its financial statements with the financial results
of Shenyang Qinnet and Tianjin Qinnet.  This inability to
consolidate may impact adversely on investors perception of the
value of Qinnet Holdings and may impact adversely on our stock
price if we succeed in acquiring an interest in Qinnet Holdings.
Qinnet Holdings is consulting with legal, tax and accounting
advisors in the PRC as to the optimum structure of ownership of its
business interests in China in order to enable consolidation of all
of its business interests in its financial statements.  There is no
assurance that such a structure can be achieved.  Furthermore, the
foreign ownership laws of the PRC may change to adversely impact on
the ability of Qinnet Holdings to own its Chinese operations and to
achieve and re-patriate earnings from its Chinese operations.
Conversely, with the anticipated entry of China into the World
Trade Organization (WTO), ownership laws and restrictions may be
relaxed to permit minority foreign ownership in the Internet and
telecommunications sectors.


RESEARCH AND DEVELOPMENT

We estimate that we incurred expenses on research and development
activities in the amount of approximately $12,000 during the fiscal
year ended December 31, 2000.  These expenses were incurred in
connection with our electronic book publishing joint venture.  We
did not incur any expenses on research and development activities
during the year ended December 31, 1999.

                                15

<PAGE>

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 Acquisition of Qinnet Holdings
-----------------------------------------------

There Is No Assurance That We Will Be Able To Acquire A Majority
Interest in Qinnet Holdings or Complete a Merger with Qinnet
Holdings

Our Offer to the shareholders of Qinnet Holdings is made to
shareholders holding only 93.9% of the outstanding shares of Qinnet
Holdings.  If our Offer is accepted by shareholders of Qinnet
Holdings owning not less than 50% of the outstanding shares of
Qinnet Holdings, then we will own between 50% and 93.9% of the
outstanding shares of Qinnet Holdings.  There is no assurance that
we will be able to subsequently acquire the balance of the shares
of Qinnet Holdings such that we will own all of the outstanding
shares of Qinnet Holdings.  Furthermore, we may be required by
market conditions to offer different consideration to the remaining
shareholders of Qinnet Holdings, including the Canadian
shareholders, in order to acquire a greater interest in Qinnet
Holdings.  This different consideration could be a greater number
of shares of our common stock for each share of Qinnet Holdings
stock or a combination of stock and cash and share purchase
warrants.

If our Offer is not accepted by the shareholders of Qinnet Holdings
owning more than 50% of the outstanding shares of Qinnet Holdings,
then we plan to pursue a merger with Qinnet Holdings on the terms
of our January 12, 2000 merger agreement with Qinnet Holdings.
Approval of the shareholders of Qinnet Holdings will be a condition
of any merger with Qinnet Holdings.  If our Offer is not accepted
by the shareholders of Qinnet Holdings owning more than 50% of the
outstanding shares of Qinnet Holdings, there is a substantial risk
that shareholder approval would not be obtained and we would not be
able to complete any merger with Qinnet Holdings.

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.  Qinnet Holdings, our proposed
merger/ acquisition target, was incorporated in June 1999 and is
presently in the process of establishing its business operations as
an Internet technology and service provider in China.  We do not
have any independent business operations, other than our electronic
book publishing joint venture with Liaoning Publishing Group of
Companies and our memorandum of understanding with

                                16

<PAGE>

Powernet for the initial pilot projects in China using Powernet's
thin-client server technology.  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 the merger or other stock acquisition of Qinnet
        Holdings;
(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;
(iv)    expand the existing businesses of Qinnet Holdings;
(v)     achieve financing to fund our plan of operations;
(vi)    fund our obligations under our electronic book publishing
        joint venture;
(vii)   respond effectively to competitive pressures
(viii)  complete the establishment of the pilot projects in
        China using Powernet's thin client server technology.

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 not earned any
revenues.  Furthermore, Qinnet Holdings has not been profitable and
has only earned minimal revenues to date. As our business plan and
the business plan of Qinnet Holdings is implemented, we expect to
incur increased operating expenses and thus significant losses
until significant 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 expenses associated with the
expansion and acquisition of Qinnet Holdings' Internet technology
and service provider businesses, our Liaoning Qinnet joint venture
and our Powernet memorandum of understanding.  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.

                                17

<PAGE>

If We Do Not Succeed in Acquiring Qinnet Holdings, then Our
Business May Fail

There is no assurance that we will be able to acquire Qinnet
Holdings through the merger or other stock acquisition.  In the
event that we do not acquire Qinnet Holdings, then our business
assets will consist entirely of our electronic book publishing
joint venture with Liaoning Publishing Group of Companies and our
interest in our Powernet memorandum of understanding.  We presently
do not have sufficient funds to fund our obligations under these
joint ventures.  Accordingly, our failure to acquire Qinnet
Holdings may cause our business to fail.

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

If The Internet Is Not Widely Accepted in China, Our Business Will
Suffer

We expect to derive a portion of our revenue for the foreseeable
future from technology products and services related to the
Internet. Technologies and services related to the Internet are new
and rapidly evolving income sources, particularly in developing
nations such as China.  As a result, we cannot determine at this
time the probability of our success in earning income from sales of
our planned products and services.

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 Qinnet Holdings' ability to expand its
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

                                18

<PAGE>

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 Internet Use In China Does Not Grow, Our Business Will Suffer

The Internet market in China is in an early stage of development.
Our future success depends on the continued growth of the Internet
in China.   In addition, our future success depends on increasing
numbers of Chinese businesses and consumers accepting and using the
Internet.  Our business, financial condition and results of
operations will be adversely affected if Internet usage by the
Chinese population does not continue to grow or grows more slowly
than we anticipate. Internet usage in these markets may be
inhibited for a number of reasons, including:

(i)     the cost of Internet access;
(ii)    the availability of a telecommunications infrastructure;
(iii)   ease of use;
(iv)    language barriers; and
(v)     quality of service.

If The Telecommunications Infrastructure In China Is Not Improved,
Our Business Will Be Limited In It's 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 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 business operations will
undergo significant expansion as we establish our business
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

                                19

<PAGE>

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 president and chief executive officer, Mr.
Weiguo Lang. The loss of the services of Mr. Lang or any of our key
management, sales or technical personnel could have an 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.

                                20

<PAGE>

ITEM 2.    Description of Property

Our corporate headquarters are located at Suite 206, 4505 Las
Virgenes Road, Calabasas, California, where our principal executive
functions are carried out. We lease approximately 1200 square feet
in Calabasas, California on a month to month basis.  We do not own
any real estate. We believe that all of our facilities are
adequately maintained and suitable for their present use.

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 fiscal year ending December 31, 2000.

                                21

<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 QNNT.  The first day on which the Company's shares
were traded under the stock symbol QNNT was January 10, 2000.  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 (to date)   $10.00       $5.875

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 March 26, 2001, there were seven hundred (700)
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 on September,
2000.  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 260,000 shares of our
common stock under the stock option plan during the year ended
December 31, 2000.  Each option granted is for a term of four years
from the date of grant and is exercisable at price of $10.00 per
share.

                                22

<PAGE>

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

Our plan of operations includes completion of the acquisition of a
majority interest in Qinnet Holdings or a merger with Qinnet
Holdings and pursue the development of the business of Qinnet
Holdings once the acquisition or merger is complete.  Accordingly,
we have included the plan of operations of Qinnet Holdings
presented below.  We anticipate that we will spend approximately
$100,000 in legal, accounting and other professional fees in
connection with the completion of this acquisition or merger over
the next six months.  There is no assurance that the acquisition or
merger of Qinnet Holdings will be completed.

We plan to pursue our Liaoning Qinnet electronic book publishing
joint venture.  We plan to advance an additional $2,720,000 to
Liaoning Qinnet to fund our portion of the joint venture expenses
over the next twelve months.

We also plan to advance a total of $980,000 to the Qin Powernet
Inc. joint venture to fund the thin-client server technology pilot
projects in Tianjin and Beijing, pursuant to our memorandum of
understanding with Powernet, subject to a determination to proceed
with these pilot projects.

The plan of operations of Qinnet Holdings over the next twelve
months includes the following elements:

1.    Qinnet Holdings plans to spend approximately $500,000 on the
      purchase of equipment for Tianjin Qinnet.

2.    Qinnet Holdings plans to spend approximately $250,000 US over
      the next twelve months to complete development and commence
      marketing of the Internet solution software (XSP) being
      developed by Beijing Qinnet.

3.    Qinnet Holdings plans to spend approximately $200,000 on the
      development of the QinTop communication network.

4.    Qinnet Holdings anticipates requiring $800,000 for working
      capital over the next twelve months.

We plan to generate revenues from the following activities upon
completion of our stated plan of operations and the acquisition of
Qinnet Holdings:

1.    Internet content related services including web hosting, web
      design and on-line services.

2.    VoIP telephony services.

3.    Electronic reading device sales, electronic book publishing,
      on-line book sales via joint venture and new e-Book web site.

                                23

<PAGE>

4.    Electronic commerce services.

5.    Data communications services, including narrowband and
      broadband installations and access services such as ISDN.

6.    Dial up and leased line access to individuals and corporate
      customers.

We plan to spend approximately $3,800,000 over the next twelve
months in pursuing our stated plan of operations.  Of these
anticipated expenditures, we anticipate that a total of
approximately $2,000,000 will be spent in the next six months,
subject to our achieving financing.  Qinnet Holdings plans to spend
an additional amount of approximately $1,750,000 over the next
twelve months in pursuing its stated plan of operations.

We had cash in the amount of $291,338 as of December 31, 2000.
Qinnet Holdings and its subsidiaries currently have cash in the
approximate amount of $2,050,000.  Accordingly, we will require
significant amounts of additional financing in order to: (i)
complete the acquisition of a majority interest in Qinnet Holdings
or merge with Qinnet Holdings; (ii) fund our Liaoning Qinnet joint
venture agreement and our Qin Powernet Inc. memorandum of
understanding; and (iii) complete the plan of operations of Qinnet
Holdings if we are successful in acquiring a majority interest in
Qinnet Holdings or if we merge with Qinnet Holdings.  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 expand or accelerate 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.

Our business plan may differ from our stated plan of operations.
We may decide not to pursue the stated plan of operations of Qinnet
Holdings if we are successful in acquiring a majority interest in
Qinnet Holdings.  In addition, we may modify our stated plan of
operations or the stated plan of operations of Qinnet Holdings 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

The results of our operations are presented below.  These results
of operations do not include the results of operations of Qinnet
Holdings or its Chinese subsidiaries and operations.

2000 compared with 1999

                                24

<PAGE>

We did not earn any revenues during the year ended December 31,
2000.  We anticipate that we will not earn revenues until such time
as the acquisition of Qinnet Holdings is complete or until such
time as we realize revenues from our Liaoning Qinnet joint venture
agreement or our Qin Powernet, Inc. joint venture with Powernet.

We incurred a net loss in the amount of $1,301,004 for the year
ended December 31, 2000.  We did not incur any operating expenses
for the year ended December 31, 1999 as we did not have any active
business operations during this period.  Our operating loss was
primarily attributable to operating expenses incurred in the amount
of $1,315,614 for the year ended December 31, 2000.

Our operating expenses incurred during the year ended December 31,
2000 consisted of general and administrative expenses in the amount
of $27,380, non-cash consulting expenses in the amount of $918,763,
start-up costs in the amount of $36,471 attributable to our
electronic book publishing joint venture and reorganization
expenses in the amount of $333,000 associated with our agreement
with Internet Corporation of America, Inc.  Our general and
administrative expenses included an amount of $25,000 payable
to Qinnet Holdings in consideration of Qinnet Holdings providing
the services of Weiguo Lang and Paul Schwartz during 2000 and
providing office and administration services.  Our non-cash
consulting expenses were attributable to non-cash compensation
costs associated with stock options granted to non-employees.  This
non-cash compensation expense was the primary component of our
increased operating costs for 2000.  The increase in operating
expenses also reflects increased professional expenses incurred as
a result of our becoming a reporting company under the United
States Securities Exchange Act of 1934 during 2000.  We expect to
continue to incur higher 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 as we carry out our stated plan of operations, subject to
our achieving the required financing.  We also anticipate that our
operating expenses will increase substantially if we are successful
in completing the acquisition of Qinnet Holdings.  We anticipate
that we will not incur any further reorganization expense in
connection with our reorganization agreement with Internet
Corporation of America.

1999 compared with 1998

We did not earn any revenues during the year ended December 31,
1999 as we did not have any active business operations during the
year ended December 31, 1999.

We did not incur any operating expenses during either of the years
ended December 31, 1999 or December 31, 1998 as we did not have
active business operations in either of these years.

Liquidity and Capital Resources

We had cash in the amount of $291,338 as of December 31, 2000.  We
had a working capital deficit in the amount of $56,251 as of
December 31, 2000.

                                25

<PAGE>

Our operations were funded during the year ended December 31, 2000
by advances from Qinnet Holdings.  Qinnet Holdings has advanced
funds to us as an unsecured loan without a specific repayment
schedule.  We had a total liability of $345,072 to Qinnet Holdings
as of December 31, 2000.

We invested a total of $280,000 in our Liaoning Qinnet joint
venture during the year ended December 31, 2000.  Funds for this
investment were advanced by Qinnet Holdings and form part of our
outstanding liability to Qinnet Holdings.

We did not obtain any financing from any sales of our common stock
during the year ended December 31, 2000.  None of our granted stock
options were exercised during 2000.  We currently have options to
purchase a total of 260,000 shares of our common stock outstanding
at a price of $10.00 per share.  None of these options have been
exercised as of March 26, 2001.

We have relied on loans from Qinnet Holdings to fund our
operational expenses to date. Our current cash reserves are only
sufficient to enable us to operate for a period of less than one
month without further advances from Qinnet Holdings.  Qinnet
Holdings has assured us that it will continue to advance funds to
us on a loan basis in the short term to fund our continuing
operating requirements.

We will require additional capital if we are to complete the
acquisition of Qinnet Holdings and proceed with our Liaoning Qinnet
joint venture and the Qin Powernet memorandum of understanding.  We
anticipate that Qinnet Holdings will advance a portion of these
funds.  If we are successful in completing the acquisition of
Qinnet Holdings, we will require additional financing to complete
the plan of operations of Qinnet Holdings, as discussed above.

We are currently seeking private placement financing in order to
enable us to achieve the required funds.  We anticipate that any
additional financing would be through the sales of our common
stock.  We do not have any arrangements in place for the sale of
any of our common stock and there is no assurance that we will be
able to achieve funding through the sales of our common stock.

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.

Our stated plan of operations includes forward-looking statements.
Our actual results may differ materially from this stated plan of
operations. Factors which may cause our actual results or our
actual plan of operations to vary include decisions of the board of
directors not to pursue the stated plan of operations based on a
reassessment by our board of directors of the plan which is in our
best interest, change in the Internet business environment and
changes in general economic conditions and those factors which we
have identified as risk factors in this Form 10-KSB Annual Report.

                                26

<PAGE>

Impact of the Year 2000 Issue

The "Year 2000 problem" arose because many existing computer
programs use only the last two digits to refer to a year.
Therefore, these computer programs were not expected to properly
recognize a year that begins with "20" instead of the familiar
"19".  Many experts believed that if not corrected this problem
would lead to widespread computer failures.  Since the turn of the
century, however, we have not experienced any adverse effects of
this Year 2000 problem.

                                27

<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, 2000 and 1999       F-2

     Consolidated Statements of Operations                              F-3
     for the years ended December 31, 2000 and 1999
     and cumulative from Inception to December 31, 2000

     Consolidated Statement of Stockholders' Equity                     F-4
     for the years ended December 31, 2000 and 1999
     and cumulative from Inception to December 31, 2000

     Consolidated Statements of Cash Flows                              F-6
     for the years ended December 31, 2000 and 1999
     and cumulative from Inception to December 31, 2000

     Notes to Consolidated Financial Statements                         F-7

                                28

<PAGE>

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


Board of Directors
Qinnet.com, Inc.

We have audited the accompanying consolidated balance sheets of
Qinnet.com, Inc. (the "Company") (a development stage company) as
of December 31, 2000 and 1999, and the related consolidated
statements of operations and cash flows for the years then ended
and for the period from May 31, 1989 (inception) to December 31,
2000.  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 Qinnet.com, Inc. as of December 31, 2000
and 1999, and the consolidated results of its operations and its
consolidated cash flows for the years then ended and for the
period from May 31, 1989 (inception) to December 31, 2000, 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 A 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 A.  These matters raise substantial doubt about
its ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.


/s/ Grant Thornton LLP
Irvine, California
March 23, 2001

                               F-1

<PAGE>

                         Qinnet.com, Inc.
                  (a development stage company)
                   CONSOLIDATED BALANCE SHEETS
                           December 31,


                                                 2000           1999
                                              -----------    -----------
                       ASSETS

CURRENT ASSETS
   Cash                                       $   291,338    $         -
   Accounts receivable                                249              -
                                              -----------    -----------
        Total current assets                      291,587              -

PROPERTY AND EQUIPMENT
   Furniture and equipment                         48,061              -
   Less - accumulated depreciation                   (393)             -
                                              -----------    -----------
                                                   47,668              -
                                              -----------    -----------
                                              $   339,255    $         -
                                              ===========    ===========


      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

   Accounts payable                           $     2,766    $         -
   Amount due to related parties                  345,072              -
                                              -----------    -----------
        Total current liabilities                 347,838              -

MINORITY INTEREST                                  76,321              -

STOCKHOLDERS' EQUITY

   Common stock, par value $0.00001 per share;
     authorized-50,000,000, issued and
     outstanding-1,300,497 shares in 2000 and
     1,250,497 in 1999                                 13             13
   Additional paid-in capital                   1,221,605         55,505
   Stock subscription receivable                        -        (50,000)
   Deficit accumulated during the
     development stage                         (1,306,522)        (5,518)
                                              -----------    -----------
        Total stockholders' equity                (84,904)             -
                                              -----------    -----------
                                                 $339,255    $         -
                                              ===========    ===========


The accompanying notes are an integral part of these statements.

                               F-2

<PAGE>

                          Qinnet.com, Inc.
                  (a development stage company)
              CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                 Cumulative
                                                             From inception
                                                             (May 31, 1989)
                                  Year ended    Year ended          through
                                 December 31,  December 31,     December 31,
                                     2000          1999             2000
                                 -----------   -----------   --------------
Revenues                         $         -   $         -   $            -

Operating expenses
   General and administrative
     Expenses                         27,380             -           31,380
   Consulting expense                918,763             -          918,763
   Start-up cost of joint venture     36,471             -           36,556
   Reorganization cost               333,000             -          333,000
                                 -----------   -----------   --------------
Operating loss                    (1,315,614)            -       (1,319,699)

Interest income                          984             -              984
Other expenses                          (641)            -           (2,074)
                                 -----------   -----------   --------------
   Loss before minority interest  (1,315,271)            -       (1,320,789)

   Minority interest in net loss
     of subsidiary                    14,267             -           14,267
                                 -----------   -----------   --------------
   Net loss                      $(1,301,004)  $         -   $   (1,306,522)
                                 ===========   ===========   ==============

Basic and diluted net loss per
   Share                         $     (1.01)  $         -
                                 ===========   ===========
Weighted average shares
   Outstanding                     1,285,743     1,250,497
                                 ===========   ===========

The accompanying notes are an integral part of these statements.

                               F-3

<PAGE>

                          Qinnet.com, Inc.
                  (a development stage company)
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
       For the period from May 31, 1989 to December 31, 2000

                                                          Deficit
                                                          accumulated
                  Common Stock   Additional     Stock     during the
              -----------------  paid-in     subscription development
                Shares   Amount  capital      receivable  stage        Total
              ---------  ------  ----------  ------------ -----------  -------
Issuance
  of stock
  at form-
  ation on
  May 31,
  1989       16,000,000  $  160  $        -  $          - $         -  $   160

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    7,714,000      77      49,923       (50,000)          -        -

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

Net loss for
  the period
  May 31, 1989
  Through
  December 31,
  1998                -       -           -             -      (5,518)  (5,518)
              ---------  ------  ----------  ------------ -----------  -------
Balance at
  December
  31, 1998   10,000,000 $   100  $   55,418 $     (50,000) $   (5,518) $     -

                                 -Continued-
        The accompanying notes are an integral part of these statements.

                                      F-4

<PAGE>

                          Qinnet.com, Inc.
                  (a development stage company)
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
       For the period from May 31, 1989 to December 31, 2000

                                                         Deficit
                                                         accumulated
                  Common Stock   Additional    Stock     during the
              -----------------  paid-in    subscription development
                Shares   Amount  capital     receivable  stage        Total
              ---------  ------  ---------- ------------ -----------  -------
Balance
  at
  December
  31,1998    10,000,000 $   100  $   55,418 $    (50,000)$   (5,518) $      -

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

Balance
  at
  December
  31, 1999    1,250,497      13      55,505      (50,000)    (5,518)        -

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

Receipt of
  stock
  subscription        -       -           -       50,000          -     50,000

Stock options
  granted to
  nonemployees        -       -     883,100            -          -    883,100

Net loss for
  the year            -       -           -            - (1,301,004)(1,301,004)
              ---------  ------  ---------- ------------ ---------- ----------
Balance at
  December
  31, 2000    1,300,497  $   13  $1,221,605 $          -$(1,306,522)$  (84,904)
              =========  ======  ========== ============ ========== ==========


The accompanying notes are an integral part of these statements.

                                F-5

<PAGE>


                          Qinnet.com, Inc.
                  (a development stage company)
              CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                 Cumulative
                                                             From inception
                                                             (May 31, 1989)
                                  Year ended    Year ended          through
                                 December 31,  December 31,     December 31,
                                     2000          1999             2000
                                 -----------   -----------   --------------
Cash flow from operating
 activities:
  Net loss for the period        $(1,301,004)  $         -   $   (1,306,522)
  Adjustments to reconcile
   net loss to net cash used
   in operating activities
     Minority interest in net
       loss of subsidiary            (14,267)            -          (14,267)
     Depreciation                        393             -              393
     Compensation expense from
       stock option grants           883,100             -          883,100
     Reorganization cost             283,000             -          283,000
     Changes in assets and
      Liabilities
        Increase in accounts
         Receivable                     (249)            -             (249)
        Increase in accounts payable   2,766             -            2,766
                                 -----------   -----------   --------------

Net cash used in operating
  Activities                        (146,261)            -         (151,779)
                                 -----------   -----------   --------------

Cash flows from investing activities:
  Purchase of furniture and
   Equipment                         (48,061)            -          (48,061)
                                 -----------   -----------   --------------

Cash flows from financing activities:
  Capital contributed to support
   Development                             -             -            5,518
   Minority interest investment in
    Subsidiary                        90,588             -           90,588
   Net borrowings from related
    Entities                         345,072             -          345,072
   Receipt of stock subscription      50,000             -           50,000
                                 -----------   -----------   --------------

        Net cash provided by
         financing activities        485,660             -          491,178
                                 -----------   -----------   --------------

        Increase in cash             291,338             -          291,338

Cash at beginning of period                -             -                -
                                 -----------   -----------   --------------

Cash at end of period            $   291,338  $          -   $      291,338
                                 ===========   ===========   ==============


The accompanying notes are an integral part of these statements.

                                F-6

<PAGE>

                          Qinnet.com, Inc.
                    (a development stage company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    December 31, 2000 and 1999

NOTE A - DESCRIPTION OF BUSINESS

Qinnet.com, Inc., a Delaware 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 Limited changed its name to
Qinnet.com, Inc.  On April 13, 2000, Qinnet.com acquired all of
the issued and outstanding shares of Internet Corporation of
America, Inc. (ICA).  At the date of acquisition, ICA was a
reporting company under the Securities Exchange Act of 1934 and
had no operations, assets or employees (see Note C).

Qinnet.com's business plan is to become a leading provider of
value-added technology products and services to government
entities, private enterprises and individuals within China in the
areas of electronic book publishing, thin-client server
technology and internet related technologies and services.

Qinnet.com entered into a joint venture agreement effective
August 18, 2000 for electronic publishing of books for the
Chinese market with Liaoning Publishing Group, a publisher
located in the Province of Liaoning of the People's of Republic
of China (PRC).  Under the terms of agreement, the parties will
invest $5,000,000 to establish a joint venture company called
Liaoning Qinnet E-book Technologies Co., Ltd. (Qinnet E-book)
under the enterprise laws of the PRC.  Qinnet.com will contribute
$3,000,000 to own 60% of the joint venture company.  The joint
venture will be for an initial term of 20 years.  As of December
31, 2000, Qinnet.com has contributed $280,000 to Qinnet E-Book as
its initial start-up capital and plans to advance approximately
$2,720,000 to Qinnet E-book to fund Qinnet.com's portion of the
joint venture expenses over the next twelve months, subject to
Qinnet.com achieving the required financing.  The activities of
Qinnet E-book are consolidated with Qinnet.com and are
collectively referred to as the Company.

The Company is a development stage enterprise and its activities
through December 31, 2000 have been principally devoted to
organizational activities, acquiring equity interests in ICA and
Qinnet E-book and other efforts.  The business plan of the
Company calls for increased expenses associated with the
expansion and acquisition of Qinnet Holdings (see Note D) and the
funding and development of Qinnet E-book.  Management anticipates
that revenues from operations will initially be insufficient to
cover these expenses.  As a result, the Company is fully
dependent upon management and significant stockholders to provide
sufficient working capital to preserve the integrity of the
corporate entity until commencement of operations.

                                F-7

<PAGE>

                          Qinnet.com, Inc.
                   (a development stage company)
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    December 31, 2000 and 1999


NOTE A - DESCRIPTION OF BUSINESS - Continued

Management plans to raise approximately $3,000,000 through a
private placement for Qinnet E-book during the second quarter of
fiscal year 2001 and will continue to pursue additional financing
necessary to fund its other operations.  There is no assurance
that the Company will be able to raise the necessary capital to
fund the initial and continuing investments in Qinnet Holdings
and Qinnet E-Book, or to consummate the merger with Qinnet
Holdings.


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of
Qinnet.com, Inc., its wholly-owned subsidiary, Internet
Corporation of America, Inc. and its 60% owned subsidiary,
Liaoning Qinnet E-book Technologies Co., Ltd.  All significant
intercompany transactions and balance have been eliminated in
consolidation.

The minority shareholder's 40% interest in Liaoning Qinnet E-
book Technologies Co., Ltd. and the proportionate share of loss
therefrom have been reflected as "Minority Interest" in the
accompanying consolidated financial statements.

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.

Foreign Currency Translation

Qinnet E-book uses the local currency as the functional currency
for its China operations.  Accordingly, assets and liabilities
outside the U.S. are translated into U.S. dollars at the rate of
exchange in effect at the balance sheet date.  Income
and expense items are translated at the weighted average
exchange rates prevailing during the year.  The cumulative
translation gain or loss is shown as an adjustment to
stockholder's equity and included in the comprehensive loss.
There were no significant foreign currency transaction or
translation gains or losses at December 31, 2000.

Furniture and equipment

Furniture and equipment are recorded at cost.  Depreciation is
computed using the straight-line method over the estimated
useful lives of the assets of five years.

                               F-8

<PAGE>

                         Qinnet.com, Inc.
                 (a development stage company)
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    December 31, 2000 and 1999

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Loss Per Share

Net loss per share is calculated in accordance with Statement of
Financial Accounting Standards No. 128, Earnings Per Share.
Basic net loss per share is based upon the weighted average
number of common shares outstanding.  Diluted net loss per
shares is based on the assumption that options are included in
the calculation of diluted earnings per share, except when their
effect would be anti-dilutive.  Dilution is computed by applying
the treasury stock method.  Under this method, options and
warrants are assumed to be exercised at the beginning of the
period (or at the time of issuance, if later), and as if funds
obtained thereby were used to purchase common stock at the
average market price during the period.

Fair value of financial instruments

The carrying amount of cash, accounts receivable and accounts
payable approximates fair value because of the short maturity of
these financial instruments.

Use of estimates

In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amount of
assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amount of revenue and expenses during the reporting
period.  Actual results could differ from those estimates.

Reclassification

The amount previously reported as cash at December 31, 1999 has
been reclassified to stock subscription receivable as payment
for the shares was completed after that date.

                                F-9

<PAGE>

                         Qinnet.com, Inc.
                  (a development stage company)
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   December 31, 2000 and 1999

NOTE C - ACQUISITION OF INTERNET CORPORATION OF AMERICA

On April 13, 2000, Qinnet.com 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.  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 Qinnet.com.  As a result of this
transaction, ICA became a wholly-owned subsidiary of Qinnet.com.
Upon effectiveness of the Reorganization Agreement, Qinnet.com
became the successor issuer to ICA for reporting purposes under
the Securities Exchange Act of 1934.

The common stock of Qinnet.com 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.


NOTE D - MERGER TRANSACTION

The Company has an agreement dated January 12, 2000 to merge
with Qinnet Holdings Corp. (a Washington State corporation).
Both the Company and Qinnet Holdings Corp. share common
directors and officers.  Under the terms of the agreement, the
Company will issue one share of common stock for each share of
Qinnet Holdings Corp. issued and outstanding common stock, if
the merger is consummated.  As of December 31, 2000, Qinnet
Holdings Corp. had 13,088,100 shares of common stock issued and
outstanding.

The business activities of Qinnet Holdings are carried out in
China by Beijing QinNet Electronic Technologies Co., Ltd.
(Qinnet Beijing).  Qinnet Beijing and Qincom Network, Inc. (a
British Columbia, Canada company) are wholly owned subsidiaries
of Qinnet Holdings.

                                F-10

<PAGE>

                           Qinnet.com, Inc.
                    (a development stage company)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      December 31, 2000 and 1999

NOTE D - MERGER TRANSACTION - Continued

Qinnet Beijing participates in several joint venture agreements
with Chinese internet companies and has options to purchase
equity interests in two joint ventures.  Currently, the
President and CEO of the Company is the registered owner of a
51% and 70% ownership interest in these joint ventures.  The
funds used to purchase the President and CEO's equity interests
in these joint ventures were provided by Qinnet Beijing.
Exercise of the first option would transfer 51% ownership of the
joint venture to Qinnet Beijing and would require the payment of
50,000 Chinese RMB or approximately $6,200.  Further, Qinnet
Beijing 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 the second
joint venture to Qinnet Beijing and would require the payment of
70,000 Chinese RMB or approximately $8,700.  The option
agreements have a five-year term expiring on March 24, 2005.
The option arrangements have 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 expiration of the option period
or the option will be extended.

Qinnet Beijing also has two wholly-owned subsidiaries, Beijing
IT Consulting Co., Ltd. and Hulunbeier Qinnet.  Qinnet Holdings
does not have any obligation to invest further capital in its
joint ventures and subsidiary companies; however, Qinnet
Holdings anticipates that it may provide additional funding of
approximately $1,000,000 subject to available financing.

As of December 31, 2000, the proposed merger with Qinnet
Holdings has not been completed.  Due to common management of
the two merging corporations, this transaction will be accounted
for in a manner similar to a pooling of interests, whereby no
step-up will be made in the valuation of the assets of the
acquired company and the combined financial statements of the
merged entities will become the historical financial statements
of the Company.

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
Qinnet.com on the basis of one share of Qinnet.com common stock
for each share of Qinnet Holdings common stock.  This offer is
valid until April 23, 2001 and covers approximately 94% of the
outstanding shares of Qinnet Holdings.  There can be no
assurance that this offer will be accepted or that Qinnet.com
will obtain a controlling interest in Qinnet Holdings.  If the
offer is accepted, Qinnet.com may abandon or delay the planned
merger with Qinnet Holdings.

                                F-11

<PAGE>

                           Qinnet.com, Inc.
                   (a development stage company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     December 31, 2000 and 1999

NOTE E - AMOUNT DUE TO RELATED PARTIES

The amount due to related parties consists of advances from
Qinnet Holdings Corp. and its subsidiary for working capital.
The advance is unsecured, interest-free and does not have
specific repayment terms.

Qinnet Holdings has consulting agreements with certain
individuals who are officers of the Company.  A portion of the
consulting fees and rental costs incurred by Qinnet Holdings
have been allocated to the Company.  The total allocation for
these costs was $25,000 for the year ended December 31, 2000.


NOTE F - 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 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.

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 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.

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.  No
options to employees were granted during the year ended December
31, 2000.

                                F-12

<PAGE>


                           Qinnet.com, Inc.
                   (a development stage company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     December 31, 2000 and 1999

NOTE F - STOCK OPTION PLAN - Continued

Under the new Plan, 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.  Compensation is charged to expense over the
shorter of the service or vesting period.  Unearned amounts
are shown as deferred compensation in shareholders' equity.
Total compensation cost recognized in the accompanying
statement of operations for options granted to non-employees
was $883,100 for the year ended December 31, 2000.

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


                                                       Weighted average
                                           Shares       exercise price
                                         ----------    ----------------
Options outstanding January 1, 2000               -              -
Granted                                     372,500            $10.00
Exercised                                         -              -
Canceled                                   (112,500)           $10.00
                                         ----------
Options outstanding December 31, 2000       260,000            $10.00
                                         ==========
Options available for grant                       -
                                         ==========

The exercise price of all options outstanding at December 31,
2000 is $10.00, and the options have a weighted average
remaining contractual life of 5 years.  All outstanding options
are fully vested.

Weighted average fair value of options granted during the year are
as follows:

Exercise price is below market price at date of grant          $4.10

Exercise price equals market price at date of grant            $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                                           -

                               F-13

<PAGE>

                           Qinnet.com, Inc.
                   (a development stage company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     December 31, 2000 and 1999

NOTE G - INCOME TAXES

Income taxes are provided pursuant to Statement of Financial
Accounting Standards No. 109 Accounting for Income Taxes.  The
statement requires the use of an asset and liability approach
for financial reporting for income taxes.  Deferred tax assets
and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in years in which those temporary differences are
expected to be recovered or settled.  The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.  If it is
more likely than not that some portion or all of a deferred tax
asset will not be realized, a valuation allowance is recognized.
As a result, the tax benefit of the loss carryforward and stock
options granted of $170,000 and $40,000, respectively, have been
offset by a valuation allowance totaling $210,000.

As of December 31, 2000, the Company had approximately $397,000
of federal and state operating loss carryforwards available to
reduce future federal and state tax liability through the year
2020 for federal purposes and 2005 for state purposes.
Utilization of these tax losses will be limited in any one year
as a result of the change in the Company's ownership.


NOTE H-FOREIGN CASH BALANCES

The Company maintains all cash balances in financial
institutions located in Canada and China.  The Company has not
experienced significant losses in such accounts due to changes
in foreign currency exchange rates at December 31, 2000.


NOTE I - SUBSEQUENT EVENT

On January 8, 2001, Qinnet.com entered into a memorandum of
understanding with Powernet USA Ltd., a Delaware corporation,
wherein the parties will combine efforts to establish and
provide thin-client server-based services in the People's
Republic of China.  As part of this effort, operational centers
will be established in Beijing and Tianjin, China on a pilot
project basis, each with one server capable of serving 2,000 end
users or terminals.

                                F-14

<PAGE>

                           Qinnet.com, Inc.
                   (a development stage company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     December 31, 2000 and 1999

NOTE I - SUBSEQUENT EVENT - Continued

The parties have incorporated QinPowerNet Inc., a Canadian
Federal Corporation, to carry out the joint venture.
QinPowerNet Inc. will be 49% owned by Qinnet.com and 51% by
Powernet USA, Ltd.  Revenues from the joint venture will be
shared on a 50/50 basis and Qinnet.com will be required to
contribute 49% of the necessary working capital as required by
the designated management committee of the joint venture.  The
project is subject to completion of technical feasibility
studies.  Financing for the joint venture will be negotiated
upon determination of technical feasibility.  The timetable for
evaluating and implementing the project is scheduled to begin in
January 2001 and continue through August 2001.

On January 4, 2001, Qinnet E-Book entered into a cooperative
agreement with Guangzhou Bolisi Softwares Co., Ltd. (GBSC)
wherein GBSC will develop POCKET1X 1.5-2000 OS.  As part of the
agreement, Qinnet E-Book will purchase 100,000 units of this
product within one year after GBSC has started production and
will pay supporting service charges of 45 Chinese RMB
(approximately $5) for each unit purchased.

                               F-15

<PAGE>

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

S.W. Hatfield, CPA has declined reappointment as the principal
accountant to audit our financial statements, beginning with our
financial statements for the year ending December 31, 2000, by
notice dated December 8, 2000 and received by us on December 15,
2000.

The reports of S.W. Hatfield, CPA on the financial statements for
the years ended December 31, 1999 and December 31, 1998 did not
contain any adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting
principles, except as described below.

The audit report of S.W. Hatfield, CPA dated April 10, 2000 on our
financial statements for the years ended December 31, 1999 and
December 31, 1998 contained a separate paragraph stating as
follows:

     "The accompanying financial statements have been prepared
     assuming that the Company will continue as a going
     concern.  As discussed in Note A to the financial
     statements, the Company has no viable operations or
     significant assets and is dependent upon significant
     shareholders to provide sufficient working capital to
     maintain the integrity of the corporate entity.  These
     circumstances create substantial doubt about the
     Company's ability to continue as a going concern and are
     discussed in Note A.  The financial statements do not
     contain any adjustments that might result from the
     outcome of these uncertainties."

During our fiscal years ended December 31, 1999 and December 31,
1998, and each interim period subsequent to December 31, 1999
preceding S.W. Hatfield, CPA's resignation, there were no
disagreements between us and S.W. Hatfield, CPA on any matter of
accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreement(s), if not
resolved to the satisfaction of S.W. Hatfield, CPA, would have
caused S.W. Hatfield, CPA to make reference to the subject matter
of the disagreement (s) in connection with its report on our
financial statements.

At our request, S.W. Hatfield, CPA has furnished its letter dated
December 20, 2000 addressed to the Securities and Exchange
Commission stating that it agrees with the statements made by us
regarding the change in our certifying accountant.

We engaged Grant Thornton LLP as our independent auditor on January
30, 2001 to audit our financial statements for the year ending
December 31, 2000.

Except as discussed above, we have had no changes in or
disagreements with our accountants on accounting or financial
disclosures.

                                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 Qinnet.com, and their
biographical information.


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

Weiguo Lang                  42           Chief Executive Officer,
                                          President and Director

Paul Schwartz                37           Secretary, Treasurer and Director

Lynn Patterson               58           Director


Dr. Weiguo Lang was appointed as our president and to our board of
directors on October 26, 1999.  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 Corporation.  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 and simulation.  Dr. Lang
speaks fluent mandarin and English. Dr. Lang is a director and is
the president of Qinnet Holdings.

Mr. Paul Schwartz was appointed to our board of directors on May 8,
2000. 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

                               30

<PAGE>

bachelors degree in finance from Syracruse University in 1985.  Mr.
Schwartz is a director and is the secretary, treasurer and senior
vice-president of Qinnet Holdings.

Mr. Lynn Patterson was appointed to our board of directors on May
8, 2000. Mr. Patterson was a senior executive with B.C. Telecom
("B.C. Tel) until his retirement in 1995.  Mr. Patterson was the
president and chief operating officer of B.C. Tel when he retired
in 1995.  Mr. Patterson worked for 31 years with B.C. Tel in many
senior management and executive positions, including the position
of executive vice-president of diversified operations from 1987 to
1990.  Mr. Patterson was appointed chief operating officer of B.C.
Tel in 1990 and was appointed president in 1992.

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 will 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, 2000.

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.

                               31

<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

The following persons have failed to file, on a timely basis, the
identified reports required by section 16(a) of the Exchange Act
during the most recent fiscal year.

----------------------------------------------------------------------------
                              Number     Transactions     Known Failures
                              Of Late    Not Timely       To File a Required
Name and Principal Position   Reports    Reported         Form
----------------------------------------------------------------------------
Weiguo Lang, Director            1           0            None
President

Paul Schwartz, Director          1           0            None
Secretary and Treasurer

Lynn Patterson, Director         1           0            None
----------------------------------------------------------------------------

                               32

<PAGE>

ITEM 10.	Executive Compensation

The following table sets forth certain information as to our
highest paid executive officers and directors for our fiscal year
ended December 31, 2000. No other compensation was paid to officer
or directors other than the cash and stock option compensation set
forth below.


==============================================================================


                        SUMMARY COMPENSATION TABLE

==============================================================================


                 Annual Compensation    Long Term Compensation
                 -------------------    ----------------------
                                        Awards               Payouts
                                        ------               -------
                               Other               Securities         All
                               Annual   Restricted Under-             Other
Name and                       Compen-  Stock      lying              Compen-
Principal         Salary Bonus sation   Awards(s)  Options/  LTIP     sation
Position      Year ($)    ($)  ($)        ($)      SARs(#)   Payouts   ($)
==============================================================================


WEIGUO        2000  NIL   NIL    NIL       NIL       NIL       NIL      NIL
LANG(1), (4)
President and
Director

PAUL          2000  NIL   NIL    NIL       NIL       NIL       NIL      NIL
SCHWARTZ(2), (4)
Secretary,
Treasurer and
Director

LYNN          2000  NIL   NIL    NIL       NIL       NIL       NIL      NIL
PATTERSON(3)
Director
------------------------------------------------------------------------------

Notes:

(1)   Mr. Lang was appointed as one of our directors and as our
      president on October 26, 1999.

(2)   Mr. Schwartz was appointed as one of our directors on May 8,
      2000.  Mr. Schwartz was appointed as our secretary and
      treasurer on August 24, 2000.

(3)   Mr. Patterson was appointed as one of our directors on May 8, 2000.

(4)   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, our secretary
      and treasurer and a director.

                                33

<PAGE>

Stock Option Grants

The following table sets forth information with respect to stock
options granted to each of our directors and officers during our
most recent fiscal year ended December 31, 2000:


-----------------------------------------------------------------------------
                      Common Shares    % of Total     Exercise
                      Under            Options/SARs   or Base
                      Options/SARs     Granted to     Price            Expi-
                      Granted          Employees in   ($/Common Share) ration
Name                  #                Financial Year                  Date
----------------------------------------------------------------------------
WEIGUO LANG,(1)       NIL              N/A            N/A              N/A
President and
Director
-----------------------------------------------------------------------------
PAUL SCHWARTZ,(2)     NIL              N/A            N/A              N/A
Secretary, Treasurer
and Director
-----------------------------------------------------------------------------
LYNN PATTERSON,(3)    NIL              N/A            N/A              N/A
Director
-----------------------------------------------------------------------------
Notes:

(1)   Mr. Lang was appointed as one of our directors and as our
      president on October 26, 1999.

(2)   Mr. Schwartz was appointed as one of our directors on May 8,
      2000.  Mr. Schwartz was appointed as our secretary and
      treasurer on August 24, 2000.

(3)   Mr. Patterson was appointed as one of our directors on May 8, 2000.


                                34

<PAGE>

Exercises of Stock Options and Year-End Option Values

The following is a summary of the share purchase options exercised
by our officers, directors and employees during the financial year
ended December 31, 2000:


-----------------------------------------------------------------------------
             AGGREGATED OPTION/SAR EXERCISES DURING THE LAST
        FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION/SAR VALUES
-----------------------------------------------------------------------------
                                                              Value of
                                                              Unexercised
                      Common                    Unexercised   in-the-Money
                      Shares         Aggregate  Options       Options/SARs at
                      Acquired on    Value      at Financial  Financial
                      Exercise       Realized   Year-End (#)  Year-End
Name                  (#)            ($)        ($)
-----------------------------------------------------------------------------
WEIGUO LANG           NIL            N/A        NIL           N/A
President and Director

PAUL SCHWARTZ         NIL            N/A        NIL           N/A
Secretary, Treasurer
and Director

LYNN PATTERSON        NIL            N/A        NIL           N/A
Director
-----------------------------------------------------------------------------


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 March
26, 2001.


-----------------------------------------------------------------------------
Name and            Exercise    No. of      Date of     Vesting     Expiry
Position            Price       Options     Grant       Date        Date
-----------------------------------------------------------------------------
WEIGUO LANG         N/A         NIL         N/A         N/A         N/A
President and Director

PAUL SCHWARTZ       N/A         NIL         N/A         N/A         N/A
Secretary, Treasurer
and Director

LYNN PATTERSON      N/A         NIL         N/A         N/A         N/A
Director
-----------------------------------------------------------------------------


                                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 March
26, 2001 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 (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      Weiguo Lang            1,032,000(2)         79.4%(2)
                  Director, President
                  Ste 635, 632 Anhua Building
                  35 Anding Street
                  Chaoyang District, Beijing
                  China  100029

Common Stock      Paul Schwartz          NIL(3)               NIL %(3)
                  Director, Secretary
                  and Treasurer
                  2 Pine Drive
                  Woodbury, NY  11797

Common Stock      Lynn Patterson         NIL (4)              NIL %(4)
                  Director
                  4054 W. 39th Avenue
                  Vancouver, BC  V6N 3B2

Common Stock      All Officers           1,032,000(5)         79.4%(5)
                  and Directors as a
                  Group (3 persons)
==============================================================================
(1)   Based on 1,300,497 shares of our common stock issued and
      outstanding as of March 26, 2001.

(2)   Includes 1,032,000 shares held by Weiguo Lang.

(3)   Paul Schwartz is the owner of 450,000 shares of Qinnet
      Holdings.  We have offered to purchase these shares from Mr.
      Schwartz in consideration for the issuance of 450,000 shares
      of our common stock as part of our offer to the U.S.
      accredited and non-Canadian foreign shareholders of Qinnet
      Holdings.  See Item 1 - Description of Business. Mr. Schwartz
      has accepted our offer, however our offer is not binding on us
      to issue these shares as it remains contingent upon acceptance
      by shareholders of Qinnet Holdings holding a majority of the
      shares of Qinnet Holdings.  Accordingly, Mr. Schwartz cannot
      require us to issue these shares to him at this time and they
      are not included in the disclosure of the number of shares of
      our common stock owned by Mr. Schwartz.

(4)   Lynn Patterson is the owner of 100,000 shares of Qinnet
      Holdings.  We have not offered to purchase these shares from
      Mr. Patterson as he is a Canadian shareholder.  See Item 1 -
      Description of Business.

                                36

<PAGE>


(5)   Includes 1,032,000 shares of our common stock held by Weiguo Lang.
==============================================================================

Except as otherwise noted, it is believed by the Company that all
persons have full voting and investment power with respect to the
shares indicated. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a
"beneficial owner" of a security if he or she, directly or
indirectly, has or shares the power to vote or to direct the voting
of such security, or the power to dispose of or to direct the
disposition of such security.  Accordingly, more than one person
may be deemed to be a beneficial owner of the same security. A
person is also deemed to be a beneficial owner of any security,
which that person has the right to acquire within 60 days, such as
options or warrants to purchase the Common Stock of the Company.

Security Ownership of Management.

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

                                37

<PAGE>

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 and treasurer and a director, was
offered shares of our common stock in consideration for his shares
in Qinnet Holdings as part of our March 14, 2001 Offer to acquire a
majority interest in Qinnet Holdings.  Our Offer was not extended
to Mr. Patterson, one of our directors, as he is a Canadian
shareholder.  See Item 1. - Description of Business.  Mr. Schwartz
has accepted our offer and has agreed to sell his shares in Qinnet
Holdings in consideration of one share of our common stock for each
share of Qinnet Holdings held.   All shares that may be issued to
Mr. Schwartz on closing of our acquisition of a majority interest
in Qinnet Holdings will be 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
may be issued on closing of our acquisition of a majority interest
in Qinnet Holdings are summarized as follows:

==============================================================================
                               Number of Shares of      Number of Shares of
Name of Officer and Director   Qinnet Holdings Corp.    Qinnet.com, Inc. That
and Position                   Held                     May Be Issued
==============================================================================
Weiguo Lang                    NIL Shares               NIL Shares
President and Director

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

Lynn Patterson                 100,000 Shares           NIL Shares
Director
==============================================================================

Each of our directors and officers has been granted options to
purchase shares of Qinnet Holdings.  If we are successful in
acquiring a majority interest in Qinnet Holdings, then we
anticipate that we will grant 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

                                38

<PAGE>

common stock of Qinnet Holdings.  See Item 1 - Description of Business.
We anticipate that these options will be generally on the same terms
and conditions as the options to purchase Qinnet Holdings shares
currently held by each director and officer.  The following table
shows the issued and outstanding stock options to purchase shares
of Qinnet Holdings common stock currently held by our directors and
officers:


-----------------------------------------------------------------------------
Name and       Exercise No. of   Date of        Vesting        Expiry
Position       Price    Options  Grant          Date           Date
-----------------------------------------------------------------------------
WEIGUO LANG    $5.00    100,000  April 28, 2000 April 28, 2000 April 28, 2005
President and
Director

PAUL SCHWARTZ  $5.00     75,000  April 28, 2000 April 28, 2000 April 28, 2005
Secretary,
Treasurer and
Director

LYNN
PATTERSON      $5.00     25,000  April 28, 2000 April 28, 2000 April 28, 2005
Director       $5.00     25,000  April 28, 2000 April 28, 2001 April 28, 2005
               $5.00     25,000  April 28, 2000 April 28, 2002 April 28, 2005
               $5.00     25,000  April 28, 2000 April 28, 2003 April 28, 2005
-----------------------------------------------------------------------------

Each of our directors and officers is a director of Qinnet
Holdings.  Mr. Weiguo Lang, our president and a director, is the
president of 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 Qinnet Holdings on a monthly
consulting fee basis. The services provided by Mr. Lang to Qinnet
Holdings include exercising general direction and supervision over
its business and financial affairs, providing overall direction to
its management and performing such other duties and observing such
instructions as may be reasonably assigned to his from time to time
in his capacity as president. Mr. Lang is currently paid a
consulting fee of $10,000 per month by Qinnet Holdings.  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.

Mr. Schwartz provides his services to Qinnet Holdings on a monthly
consulting fee basis. The services provided by Mr. Schwartz to
Qinnet Holdings 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 Qinnet Holdings and has been paid this
consulting fee since January 1, 2001.   Qinnet Holdings is
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 Qinnet Holdings.

                                39

<PAGE>

Mr. Lynn Patterson 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.  Qinnet
Holdings currently does not pay to Mr. Patterson any amount in
consideration for his acting as a director of Qinnet Holdings.

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.

                                40

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

Exhibit 2.2   Merger Agreement between Qinnet.com and Qinnet Holdings
              Corp. dated January 12, 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 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.

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

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

Exhibit 16.1  Letter of S.W. Hatfield, CPA dated December 8,
              2000 regarding resignation of Certifying Accountant. (3)

Exhibit 16.2  Letter of S.W. Hatfield, CPA dated December 20, 2000
              regarding the change in the Registrant's Certifying
              Accountant.(3)

(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.

                                41

<PAGE>

(3)   Previously filed as an exhibit to Qinnet.com's Current Report
on Form 8-K filed on December 21, 2000 and incorporated herein
by reference.

(b)   Reports on Form 8-K

On April 14, 2000, we filed a Current Report on Form 8-K to
announce the completion of our agreement and plan of reorganization
with Internet Corporation of America.

On December 21, 2000, we filed a Current Report on Form 8-K to
announce the resignation of Scott Hatfield, CPA as our independent
auditor.

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.

                               42

<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.

QINNET.COM, INC.

      /s/ Weiguo Lang
By:   ___________________________________
      Weiguo Lang, President
      Director
      Date: March 30, 2001


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.

      /s/ Weiguo Lang
By:   ___________________________________
      Weiguo Lang, President
      (Principal Executive Officer)
      Director
      Date: March 30, 2001


      /s/ Paul Schwartz
By:   ___________________________________
      Paul Schwartz, Secretary and Treasurer,
      (Principal Financial Officer and Principal Accounting Officer)
      Director
      Date: March 30, 2001


      /s/ Lynn Patterson
By:   ___________________________________
      Lynn Patterson
      Director
      Date: March 30, 2001