SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10QSB


                                 CIK: 0001082603

                  Quarterly Report under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


For Quarter Ended                                     Commission File Number
June 30, 1999                                               0-26559


                                  XIN NET CORP.
                             ---------------------
             (Exact name of registrant as specified in its charter)


               Florida                                     3307251560
          ---------------                                  ----------
      (State of incorporation)                             (I.R.S. Employer
                                                           Identification No.)

          #830 - 789 West Pender Street, Vancouver, B.C. Canada V6C 1H2
        -----------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code:(604) 632-9638


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                                Yes        No    X
                                   -----       -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                  20,975,000 common shares as of June 30, 1999


<PAGE>

ITEM I.           FINANCIAL STATEMENTS

<TABLE>
<CAPTION>


                                      XIN NET CORP. AND SUBSIDIARIES
                                        CONSOLIDATED BALANCE SHEETS
                                    JUNE 30, 1999 AND DECEMBER 31, 1998
                               ( Prepared by management and without audit )

Stated in U.S. dollars                                         June 30, 1999              December 31, 1998
------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                   <C>
ASSETS

Current Assets
  Cash                                                     $          6,399,009  $                  336,189
  Accounts Receivable                                                                                37,376
                                                                         90,090
  Prepaid Expenses
                                                                          1,450                       2,614
  Inventory
                                                                         15,047                           -
                                                             -------------------   -------------------------
Total Current Assets                                                  6,505,596                     376,179

Property and Equipment, Net                                                                         227,427
                                                                        474,657

Other Assets
  Organizational Costs, Net
                                                                            946                         969

                                                             -------------------   -------------------------
Total Assets                                               $         6,981,199   $                 604,575
                                                             ===================   =========================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
  Accounts Payable and Other Accrued
    Liabilities                                            $            114,180  $                   20,504
  Other Advances                                                                                     20,000
                                                                              -
  Current portion of Obligation under
    Capital Lease                                   (Note 2)             30,484                           -
                                                             -------------------   -------------------------
                                                                        144,664                      40,504

Obligation under Capital Lease   (Note 2)                               184,474
                                                                                                          -

Commitments and Contingencies
                                                                              -                           -

Stockholders' Equity   (Note 3)
  Common Stock : $0.001 Par Value
    Authorized : 50,000,000
    Issued and Outstanding : 20,975,000                                  20,975                      14,075
  Additional Paid In Capital                                          6,846,090                     792,990
  Accumulated Deficit                                                 (215,004)                   (242,994)
                                                             -------------------   -------------------------
Total Stockholders' Equity                                            6,652,061                     564,071

                                                             -------------------   -------------------------
Total Liabilities and Stockholders' Equity                 $         6,981,199   $                 604,575
                                                             ===================   =========================


</TABLE>


                                          See Accompanying Notes



<PAGE>

<TABLE>
<CAPTION>

                                              XIN NET CORP. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                  FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998
                                       (Prepared by management and without audited)

                                                  Three Months Ended June 30                Six Months Ended June 30
Stated in U.S. dollars                             1999                1998                 1999                1998
---------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>                      <C>                 <C>
Revenue                                            $  170,088           $  144,112          $  309,403          $  258,915
                                             -----------------   ------------------   -----------------   -----------------

Expenses
   Administration and office
                                                       38,748               13,988              58,253              26,424
   Amortization
                                                        1,842                1,265               3,746               2,558
   Business development
                                                        8,385                1,577               8,386               2,433
   Consulting and management fees
                                                       15,951                    -              25,874                   -
   Foreign exchange (gain) / loss
                                                        (261)                6,034               (261)               3,386
   Interest
                                                        1,621                  969               2,726               1,399
   Professional fees
                                                        9,411                  564              19,479                 908
   Rent
                                                        4,346                    -               6,470                   -
   Salaries and benefits
                                                       17,469               12,639              29,086              35,001
   Selling expenses
                                                      123,252               61,521             169,703             130,017
   Shareholder information, transfer
     agent and filing fees                              3,598                    -               3,598                   -
                                             -----------------   ------------------   -----------------   -----------------

                                                      224,362               98,557             327,060             202,126
                                             -----------------   ------------------   -----------------   -----------------
Operating Profit (Loss)
                                                     (54,274)               45,555            (17,657)              56,789
Other Income
   Interest
                                                       44,614                  514              45,647               1,927
                                             -----------------   ------------------   -----------------   -----------------

Net Earnings (Loss) Available to Common

Stockholders                                       $  (9,660)     $         46,069         $   27,990          $   58,716
                                                   ==========     ================         ===========         ==========

Basic Earnings (Loss) per Common Shares

(Note 4)                                            $      -             $      -            $      -            $      -
                                                    =========            =========           =========           ========

Basic Weighted Average Common Shares
Outstanding   (Note 4)
                                                  18,014,780           14,075,000          16,055,773          14,075,000
                                                  ===========          ===========         ===========         ==========

Diluted Earnings (Loss) per Common Shares

(Note 4)                                          $      -             $      -            $      -            $      -
                                                  ===========          ===========         ===========         ========

Weighted Average Common Shares Outstanding,
Assuming Dilution   (Note 4)
                                                  18,014,780           14,075,000          17,385,106          14,075,000
                                                  ===========          ===========         ===========         ==========


</TABLE>


                                                  See Accompanying Notes


<PAGE>

<TABLE>
<CAPTION>


                         XIN NET CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998
                  ( Prepared by management and without audit )

                                                             Three Months Ended June 30            Six Months Ended June 30
Stated in U.S. dollars                                      1999               1998                 1999               1998
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>                 <C>                 <C>
Cash flows from operating activities
  Net profit (loss)                                         $ (9,660)           $ 46,069             $ 27,990           $ 58,716
  Adjustments to reconcile net loss to net cash
    Provided by (Used in) operating activities
    Depreciation and amortization                                                                       3,746
                                                                1,842              1,265                                   2,558
    Changes in assets and liabilities
      (Increase) Decrease in accounts
       receivable                                            (24,583)             55,366             (52,714)           (62,103)
      (Increase) Decrease in prepaid expenses                 (1,450)
                                                                                       -                1,164                  -
      Increase in inventory                                                     (11,952)             (15,047)           (14,809)
                                                                 (45)
      Increase (Decrease) in accounts payable                  14,254           (28,010)                                 (8,408)
                                                                                                       93,676
      Decrease in other advance                              (20,000)                                (20,000)
                                                                                       -                                       -
                                                        --------------    ---------------      ---------------    ---------------
                                                             (39,642)                                                   (24,046)
                                                                                  62,738               38,815
                                                        --------------    ---------------      ---------------    ---------------

Cash flows from investing activities
  Purchases of property and equipment                       (230,708)            (2,657)            (250,953)           (41,473)

Cash flows from financing activities
  Increase in obligation under capital lease                  214,958                                 214,958
                                                                                       -                                       -
  Issuance of common stock                                      6,900                                   6,900
                                                                                       -                                       -
  Issuance of additional paid in capital                    6,053,100                               6,053,100
                                                                                       -                                       -
                                                        --------------    ---------------      ---------------    ---------------
                                                            6,274,958                               6,274,958
                                                                                       -                                       -
                                                        --------------    ---------------      ---------------    ---------------

Increase (Decrease) in cash and cash equivalents
                                                            6,004,608             60,081            6,062,820           (65,519)

Cash and cash equivalents - beginning of period
                                                              394,401            211,766              336,189            337,366

                                                        --------------    ---------------      ---------------    ---------------
Cash and cash equivalents - end of period                  $6,399,009          $ 271,847           $6,399,009          $ 271,847
                                                           ===========         ==========          ===========         =========


</TABLE>

                             See Accompanying Notes



<PAGE>

<TABLE>
<CAPTION>


                                              XIN NET CORP. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                       FOR THE  SIX-MONTH  PERIOD ENDED JUNE 30,
                                       1999 ( Prepared by management and without audit )


                                                                   Stock        Additional
                                                    Common       Amount At       Paid In              Accumulated
Stated in U.S. dollars                              Shares       Par Value       Capital         Deficit         Total
---------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>           <C>              <C>          <C>
Balance,  December 31, 1998                         14,075,000      $  14,075      $ 792,990      $(242,994)     $ 564,071

Exercise of Stock Option for cash at $0.40 per
share on April 4, 1999                                 810,000            810        323,190                       324,000

Exercise of Stock Option for cash at $0.40 per
share on April 6, 1999                                 590,000            590        235,410                       236,000

Issuance of Common Stock for cash at $1.00 per
share on May 19, 1999                                5,500,000          5,500      5,494,500                     5,500,000

Profit for the six months ended June 30, 1999
                                                                                                      27,990        27,990

                                                ---------------------------------------------------------------------------
Balance, June 30, 1999                             20,975,000      $  20,975     $6,846,090     $   (215,004)  $ 6,652,061
                                                 =============     ==========    ===========    =============  ============


</TABLE>




                                                  See Accompanying Notes


<PAGE>




                         XIN NET CORP. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 1999 and 1998

                  ( Prepared by management and without audit )



1        Basis of Presentation

         The accompanying  unaudited financial  statements have been prepared in
         conformity  with generally  accepted  accounting  principles.  However,
         certain  information  and  footnote  disclosures  normally  included in
         financial  statements  prepared in accordance  with generally  accepted
         accounting  principles  have been omitted or condensed  pursuant to the
         rules  and  regulations  of  the  Securities  and  Exchange  Commission
         ("SEC").  In the opinion of the management all  adjustments of a normal
         recurring nature necessary for a fair  presentation have been included.
         The results  for interim  periods  are not  necessarily  indicative  of
         results for the entire year.  These  condensed  consolidated  financial
         statements and  accompanying  notes should be read in conjunction  with
         the Company's annual  consolidated  financial  statements and the notes
         thereto for the fiscal  year ended  December  31, 1998  included in its
         Annual Report on Form 10-KSB.

         The unaudited condensed  consolidated  financial statements include Xin
         Net Corp. and its subsidiaries.  Significant inter-company transactions
         and accounts have been eliminated.

         Certain  prior-period  amounts have been reclassified to conform to the
         current period's presentation.



2        Capital Lease Obligation

         The Company  leases  computer  equipment,  repayable  at  approximately
         $5,729 (CND 8,434) per month to June 30, 2002.  The liability  includes
         imputed interest at an average rate of 4.64% per annum.



<PAGE>


                         XIN NET CORP. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 1999 and 1998

                  ( Prepared by management and without audit )


<TABLE>
<CAPTION>

2        Capital Lease Obligation (Continued)

                Total minimum lease payments
                for the year ended December 31
<S>                 <C>                                                <C>
                    1999                                               $       34,373
                    2000                                                       68,746
                    2001                                                       68,746
                    2002                                                       59,686
                                                                       -----------------------
                                                                              231,551
                Less:  Amount representing interest                           (16,593)
                                                                       -----------------------
                Present value of minimum lease payment                        214,958
                Less : Current portion                                        (30,484)
                                                                       =======================
                                                                       $      184,474
                                                                       =======================

</TABLE>

3        Stockholders' Equity

         On February 26, 1999, stock  options for a total of 1.4 million  shares
         at $0.40 per share were  granted.  All the options were exercised as of
         April 6, 1999.

         In May 1999,  the Company  issued  5,500,000  common shares through its
         unit private placement, at $1.00 per share, or $5,500,000.  Each common
         share was issued with a warrant.  Each  warrant  entitles the holder to
         purchase,  on or before March 31, 2001, one  additional  unit of common
         share at a price of $2.00 per unit,  each unit consisting of one common
         share and one additional  warrant.  The additional warrant entitles the
         holder to purchase one additional  common share at a price of $5.00 per
         share on or before March 31, 2002.



<PAGE>



                         XIN NET CORP. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 1999 and 1998

                  ( Prepared by management and without audit )



4        Earnings Per Share

         Basic earnings per share is computed by dividing net earnings available
         to common stockholders by the weighted-average  number of common shares
         outstanding  during the period.  Diluted earnings per share is computed
         by  dividing  net  earnings  available  to common  stockholders  by the
         weighted-average  number of common shares outstanding during the period
         increased to include the number of additional  common shares that would
         have been  outstanding if potentially  dilutive  common shares had been
         issued.

          The  following  table  sets forth the  computations  of shares and net
         earnings  used in the  calculation  of basic and diluted  earnings  per
         share for the second quarter and the first half of 1999 and 1998 :

<TABLE>
<CAPTION>

                                                                Three months ended         Six months ended
                                                               6/30/99      6/30/98       6/30/99     6/30/98

<S>                                                            <C>         <C>           <C>         <C>
         Net earnings (loss) for the period                     $ (9,660)    $ 46,069      $ 27,990    $ 58,716


         Weighted-average shares outstanding                   18,014,780  14,075,000    16,055,773  14,075,000
                                                             -------------------------  ------------------------

         Effect of dilutive securities :
         Dilutive options                                               -                   222,488
                                                                                    -                         -
         Dilutive warrants                                              -                 1,106,844
                                                                                    -                         -
                                                             -------------------------  ------------------------

         Dilutive potential common shares                               -                 1,329,332
                                                                                    -                         -
                                                             -------------------------  ------------------------

         Adjusted weighted-average shares and assumed
         conversions                                           18,014,780  14,075,000    17,385,106  14,075,000
                                                               ==========  ==========    ==========  ==========

         Basic earnings per share                               $  (0.00)    $  0.00       $  0.00     $  0.00
                                                                =========    ========      ========    =======

         Diluted earnings per share                             $  (0.00)    $  0.00       $  0.00     $  0.00
                                                                =========    ========      ========    =======

</TABLE>


         Due to the loss for the three months ended June 30, 1999, the effect of
         outstanding  options and  warrants was not included as the effect would
         be anti-dilutive.



<PAGE>



                         XIN NET CORP. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 1999 and 1998

                  ( Prepared by management and without audit )



4        Earnings Per Share (Continued)

         Warrants to purchase approximately 2,767,000 weighted-average shares of
         common stock were  outstanding  during the quarter ended June 30, 1999,
         that were not included in the computation of diluted earnings per share
         for the six months ended June 30, 1999,  because the warrants' exercise
         price was greater than the average market price of the Company's common
         stock   during  the  period  and,   therefore,   the  effect  would  be
         anti-dilutive.



5        Segment and Geographic Data

         The Company's  reportable  segments are  geographic  areas that provide
         internet  services  and  products  to the Chinese  markets.  Summarized
         financial  information  concerning the Company's reportable segments is
         shown in the following  table.  The "Other" column  includes  corporate
         related items, and, as it relates to segment profit (loss),  income and
         expenses not allocated to reportable segments.

<TABLE>
<CAPTION>


         For three months ended 6/30/1999               China         Canada        Other        Total
         --------------------------------               -----         ------        -----        -----
<S>                                                       <C>           <C>         <C>          <C>
         Revenue from customers                           $170,088         $   -       $    -    $ 170,088
         Interest revenue                                    1,064                     43,550       44,614
                                                                               -
         Inter-segment revenue
                                                                 -             -            -            -
         Operating income (loss)                            34,873      (29,849)     (14,684)      (9,660)
         Total assets                                    1,311,607       322,818    5,346,774    6,981,199

         For three months ended 6/30/1998               China         Canada        Other        Total
         --------------------------------               -----         ------        -----        -----

         Revenue from customers                           $144,112         $   -       $    -    $ 144,112
         Interest revenue                                      460            54                       514
                                                                                            -
         Inter-segment revenue
                                                                 -             -            -            -
         Operating income (loss)                            70,513      (24,233)        (211)       46,069
         Total assets                                      574,316        30,365          395      605,076


</TABLE>


<PAGE>



                         XIN NET CORP. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 1999 and 1998

                  ( Prepared by management and without audit )

<TABLE>
<CAPTION>


5        Segment and Geographic Data (Continued)

         For six months ended 6/30/1999                 China         Canada        Other        Total
         ------------------------------                 -----         ------        -----        -----
<S>                                                      <C>           <C>          <C>          <C>
         Revenue from customers                           $309,403         $   -       $    -     $309,403
         Interest revenue                                    2,097                     43,550       45,647
                                                                               -
         Inter-segment revenue
                                                                 -             -            -            -
         Operating income (loss)                           108,450      (51,043)     (29,417)       27,990
         Total assets                                    1,311,607       322,818    5,346,774    6,981,199

         For six months ended 6/30/1998                 China         Canada        Other        Total
         ------------------------------                 -----         ------        -----        -----

         Revenue from customers                           $258,915         $   -       $    -     $258,915
         Interest revenue                                      646         1,281            -        1,927
         Inter-segment revenue
                                                                 -             -            -            -
         Operating income (loss)                           106,125      (46,788)        (621)       58,716
         Total assets                                      574,316        30,365          395      605,076



         Reconciliation of segment                         3 months ended             6 months ended
         -------------------------
         Information                                   6/30/99        6/30/98      6/30/99      6/30/98

         Revenue from customers                          $ 170,088      $144,112     $309,403     $258,915
         Interest revenue                                   44,614           514       45,647        1,927
         Inter-segment revenues
                                                                 -             -            -            -
                                                    -------------------------------------------------------
         Total consolidated revenues                    $ 214,702      $144,626     $355,050     $260,842
                                                        ==========     =========    =========    ========

</TABLE>



<PAGE>

ITEM 2. MANAGEMENTS  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED JUNE 30, 1999 COMPARED TO THE
SAME PERIOD IN 1998.

The Company experienced  expenses for the three month period of $224,362 in 1999
and $98,557 in 1998. The Company had revenues for the period in 1999 of $170,088
and in 1998 had revenues of $144,112. The Company recorded a loss for the period
in 1999 of  ($54,274)  but had a net income of $45,555 in the same period  1998.
The Company losses may continue as the Company makes expenditures  to expand its
operations in China.

RESULTS OF  OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 1999,  COMPARED TO THE
SAME PERIOD IN 1998.

The Company had  revenues  from  operations  for the six month period in 1999 of
$309,403 and in 1998  revenues of  $258,915.  The Company  incurred  $327,060 in
operating  expenses in the period in 1999,  resulting  in an  operating  loss of
($17,657)  compared to expenses in 1998 of $202,126 and an  operating  profit of
%56,789.  The Company had miscellaneous  income of $45,647 in the period in 1999
as a result of the interest on deposits.  In the period in 1998, the Company had
interest  income of $1,927.  The net loss in 1999 in the period was  ($9,660) as
compared to a net profit of $46,069 in 1998 in the same period.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash capital at the end of the period of  $6,399,009  which will
be used to fund  operations in China.  The Company has material  commitments  to
expend  funds  to cover  operating  expenses  of its  operations  in  China  and
investment to open two more cities in China with Internet  servers for which the
Company has budgeted $1,000,000 over the next six months. The trend of operating
losses  should be expected to continue due to costs of equipment  and  marketing
which precede development of additional revenue for Internet related business.

At the period end, the assets of the Company  were  $6,981,199  and  liabilities
were $144,644, not including long term lease obligations.


                           PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS
                  -----------------

                  None

ITEM 2.           CHANGES IN SECURITIES
                  ---------------------

                  None


<PAGE>



ITEM 3.           DEFAULT UPON SENIOR SECURITIES
                  ------------------------------

                  None


ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                  ---------------------------------------------------

                  None

ITEM 5.           OTHER INFORMATION
                  -----------------

                  None

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
                  --------------------------------

          No reports on Form 8-K were made for the period for which this  report
is filed.



<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Date: September 2, 1999



                                            XIN NET CORP.



                                            /s/ Marc Hung
                                            ------------------------------------
                                            Marc Hung, President