|SECURITIES
AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2002
Commission file number 0-27042
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | AlphaNet
Solutions, Inc. | 
| | ------------------------ | 

| | (Exact Name of Registrant as Specified in Charter) | 
| | -------------------------------------------------- | 

|New Jersey |  | 22-2554535
|---------- |  | ----------

|(State or Other Jurisdiction of Incorporation) |  | (I.R.S. Employer Identification Number)
|---------------------------------------------- |  | ---------------------------------------

|7 Ridgedale Avenue, Cedar Knolls, New Jersey |  | 07927
|-------------------------------------------- |  | -----

|(Address of Principal Executive Offices) |  | (Zip Code)
|---------------------------------------- |  | ----------

|Registrants Telephone Number, Including Area Code | (973) 267-0088 | 
|-------------------------------------------------- | -------------- | 

|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 such filing requirements for the past 90
days.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Yes      X
          No ____ | 
|---------------------------- | 

|Indicate the number of shares outstanding
of each of the Registrants classes of common stock, as of April 30, 2002:
|--------------------------------------------------------------------------------------------------------------------

|Class |  | Number of Shares Outstanding
|----- |  | ----------------------------

|Common Stock, $0.01 par value |  | 6,588,413
|----------------------------- |  | ---------

|ALPHANET
SOLUTIONS, INC.

TABLE OF CONTENTS
|-------------------------------------------

|PART I. | FINANCIAL INFORMATION
|------- | ---------------------

| | Item 1. | Financial Statements | 1
| | ------- | -------------------- | -

| |  | Consolidated Balance Sheets
          
as of March 31, 2002 (unaudited)
          
and December 31, 2001 | 1
| |  | -------------------------------------------------------------------------------------------------------- | -

| |  | Consolidated Statements of Operations
          
for the Three Months Ended
          
March 31, 2002 (unaudited) and March 31, 2001 (unaudited) | 2
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------ | -

| |  | Consolidated Statements of Cash Flows 
          
for the Three Months Ended
          
March 31, 2002 (unaudited) and March 31, 2001 (unaudited) | 3
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------- | -

| |  | Notes to Consolidated Financial Statements (unaudited) | 4
| |  | ------------------------------------------------------ | -

| | Item 2. | Managements Discussion and Analysis of
        Financial Condition and Results of Operations | 10
| | ------- | --------------------------------------------------------------------------------------------- | --

| | Item 3 | Quantitative and
 Qualitative Disclosures About Market Risk | 19
| | ------ | ----------------------------------------------------------- | --

|PART II. | OTHER INFORMATION |  | 20
|-------- | ----------------- |  | --

| | Item 1. | Legal Proceedings | 20
| | ------- | ----------------- | --

| | Item 6. | Exhibits and Reports on Form 8-K | 21
| | ------- | -------------------------------- | --

|SIGNATURES |  |  | 22
|---------- |  |  | --

|PART I.
FINANCIAL INFORMATION

Item 1.  
Financial Statements

ALPHANET
SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

`March 31,       December 31,
                                                                            2002              2001
                                                                         ----------       -----------

ASSETS
Current assets:
        Cash and cash  equivalents . . . . . . . . . . . . .              $ 22,608          $ 23,797
        Accounts receivable, less allowance for doubtful
        accounts of $595 at March 31, 2002 and $622 at
        December 31, 2001 . . . . . . . . . . . . . . . . . .                7,164             7,416
        Inventories . . . . . . . . . . . . . . . . . . . . .                  134               170
        Income tax receivable. . . . . . . . . . . . . . . .                 1,834                 -
        Prepaid expenses and other current assets . . . . . .                  494               374
                                                                         ----------        ----------
                 Total current assets . . . . . . . . . . . .                32,234           31,757
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . .                   366                -
Property and equipment, net . . . . . . . . . . . . . . . . .                 1,735            1,992
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . .                   511              511
Other assets. . . . . . . . . . . . . . . . . . . . . . . . .                    47               52
                                                                         ----------        ----------
                 Total assets. . . . . . . . . . . . . . . .             $   34,893        $  34,312
                                                                         ==========        =========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
        Current portion of capital lease obligations . . . .             $       2         $       8
        Accounts payable . . . . . . . . . . . . . . . . . .                   651             1,020
        Accrued expenses . . . . . . . . . . . . . . . . . .                 3,735             3,992
        Accrued MTA contract liability. . .  . . . . . . . .                 3,040             2,950
                                                                         ----------        ----------
                 Total current liabilities . . . . . . . . .                 7,428             7,970

         Total liabilities . . . . . . . . . . . . . . . . .                 7,428             7,970
                                                                         ----------        ----------
Shareholders' equity:
        Preferred stock -- $0.01 par value; authorized
        3,000,000 shares, none issued . . . . . . . . . . . .                    -                 -
        Common stock -- $0.01 par value; authorized
        15,000,000 shares, 6,588,413 and 6,588,413 shares
        issued and outstanding at March 31, 2002 and December
        31, 2001, respectively . . . . . . . . . . . . . .                      66                66
        Additional paid-in capital. . . . . . . . . . . . . .               35,092            35,092
        Accumulated Deficit. . . . . . . . . . . . . . . . .               (6,973)           (8,096)
        Treasury stock - at cost; 150,600 shares at March 31,
        2002 and December 31, 2001, respectively. . . . . . .                (720)             (720)
                                                                         ----------        ----------
                 Total shareholders' equity . . . . . . . . .               27,465            26,342
                                                                         ----------        ----------
                 Total liabilities and shareholders' equity .            $  34,893         $  34,312
                                                                         =========         =========


           See accompanying notes to consolidated financial statements`

|ALPHANET
SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
|-------------------------------------------------------------------------------------------------------------------

`For the Three Months ended
                                                                March 31,
                                                             2002            2001
                                                             ----            ----
Net sales:
      Product sales. . . . . . . . . . . . . .            $ 1,445         $ 7,699
      Services and support . . . . . . . . . .              5,490          11,017
                                                            -----          ------
                                                            6,935          18,716
Cost of sales:
      Product sales . . . . . . . . . . . . . .             1,292           6,809
      Services and support                                  3,831           7,596
                                                            -----           -----
                                                            5,123          14,405

Gross Profit:
         Product sales. . . . . . . . . . . . .               153             890
         Service and support. . . . . . . . . .             1,659           3,421
                                                            -----           -----
                                                            1,812           4,311

Operating expenses:
      Selling, general & administrative . . .               2,993           4,686
                                                            -----           -----


Operating  loss . . . . . . . . . . . . . . . .            (1,181)           (375)


Other income:
      Interest  income . . . . . . . . . .  . .               104             225
      Other Income . . . . . . . . . . . . . .                  -               6
                                                            -----           -----
                                                              104             231

Loss before income taxes. . . . . . . . . . . .            (1,077)           (144)

Benefit for income taxes . . . . . . . . . . .             (2,200)              -
                                                            -----           -----

Net income (loss) . . . . . . . . . . . . . . .           $ 1,123          $ (144)
                                                            =====           =====


Basic and Diluted net income (loss) per share.             $ 0.17          $(0.02)
                                                            =====           =====

Weighted average number of common shares
outstanding . . . . . . . . . . . . . . . . . .             6,438           6,398
                                                            =====           =====
Weighted average number of common and common
equivalent shares outstanding. . . . . . .                  6,438           6,398
                                                            =====           =====

          See accompanying notes to consolidated financial statements.`

|ALPHANET
SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands)
(unaudited)
|------------------------------------------------------------------------------------------

`Three Months ended
                                                                                   March 31,
                                                                                   ---------
                                                                            2002                 2001
                                                                            ----                 ----
Cash flows from operating activities:
    Net income (loss) . . . . . . .. . . . . . . . . . . . . . . . . .      $1,123            $  (144)
    Adjustments to reconcile net income to net cash
    (used in) provided by operating activities:
          Depreciation and amortization . . . . . . . . . . . . . . .          296                499
          Provision for accounts receivable. . . . . . . . . . . . . .          30                 83
          Nex-i.com loss recognition. . . . . . . . . . . . . . . . .            -                  -
          MTA contract loss. . . . . . . . . . . . . . . . . . . . . .           -                  -
          Income taxes. . . . . . . .. . . . . . . . . . . . . . . . .      (2,200)                 -
          Increase (decrease) from changes in:
               Accounts receivable. . . . . . . . . . . . . . . . . .          222             (2,760)
               Inventories . . . . . . . . . . . . . . . . . . . . . .          36                183
               Prepaid expenses and other current assets . . . . . . .        (120)              (154)
               Other assets . . . . . . . . . . . . . . . . . . . . .            5                  6
               Accounts payable . . . . . . . . . . . . . . . . . . .         (369)            (1,596)
               Accrued expenses . . . . . . . . . . . . . . . . . . .         (257)               778
               Accrued MTA contract liability. . . . . . . . . . . . .          90                935
                                                                            ------             ------
          Net cash  used in operating activities . . . . . . . . . . .      (1,144)            (2,170)
Cash flows from investing activities:
    Loan to Eureka Broadband. . . . . . . . . . . . . . . . . . . . .            -               (382)
    Property and equipment expenditures. . . . . . . . . . . . . . . .         (39)              (119)
                                                                            ------             ------
    Net cash used in investing activities . . . . . . . . . . . . . .          (39)              (501)

Cash flows from financing activities
    Employee stock purchases and exercises of stock
    options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           -                 30
    Repayment of capital lease obligations. . . . . . . . . . . . . .           (6)                (4)
                                                                            ------             ------
         Net cash provided by (used in) financing activities. . . . .           (6)                26
                                                                            ------             ------
Net decrease in cash and cash equivalents. . . . . . . . . . . . . . .      (1,189)            (2,645)
Cash and cash equivalents, beginning of period . . . . . . . . . . . .      23,797             17,164
                                                                            ------             ------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . .     $ 22,608           $ 14,519
                                                                            ======             ======


          See accompanying notes to consolidated financial statements.`

|ALPHANET
SOLUTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



Note 1 - Description of the
Business and Basis of Presentation:

AlphaNet Solutions,
Inc. (the Company) is an information technology (IT)
professional services firm providing expertise in Business Advisory, Technology
Implementation, and Managed Services. The Company also provides professional
development services.

The accompanying
unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim periods. The foregoing
financial information reflects all adjustments which are, in the opinion of
management, necessary for a fair presentation of the Companys financial
position, results of operations and cash flows as of the dates and for the
periods presented. Certain information and footnote disclosure normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These consolidated
financial statements should be read in conjunction with the Companys
audited financial statements for the year ended December 31, 2001, which were
included as part of the Companys Annual Report on Form 10-K, as filed with
the Securities and Exchange Commission. Certain prior year amounts have been
reclassified to conform with current year presentation.

Results for the
interim periods are not necessarily indicative of results that may be expected
for the entire year.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 2 -  Net Income Per Share:



COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts))
(unaudited)
|--------------------------------------------------------------------------------------------------------------------------

`Three Months ended
                                                                             March 31
                                                                      2002         2001
                                                                      ----         ----

Net income (loss) . . . . . . . . . . . . . . . . . . . .         $  1,123     $  (144)
                                                                  ========     =======
Basic:

  Weighted average number of shares outstanding. . . . .             6,438       6,398
                                                                  ========     =======
   Net income (loss) per share.  . . . . . . . . . . . .          $   0.17     $ (0.02)
                                                                  ========     =======
Diluted:
   Weighted average number of shares outstanding . . . .             6,438       6,398
   Dilutive effects of stock options . . . . . . . . . .                25           -
                                                                  --------     -------
   Weighted average number of common and common
   Equivalent shares outstanding                                     6,463       6,398

   Net income (loss) per share . . . . . . . . . . . . .          $   0.17     $ (0.02)
                                                                  ========     =======`

|In February 1997, the Financial  Accounting  Standards
 Board issued Statement No. 128 Earnings per Share (SFAS No. 128) which
specifies the  computation,  presentation  and disclosure  requirements  for earnings per share (EPS) of entities with  publicly-held
common stock or potential  common stock.  The statement  defines two EPS  calculations,  basic and diluted.  The objective of basic EPS
is to measure the  performance  of an entity over the  reporting  period by dividing  income  available to common  stockholders  by the
weighted  average  number of shares  outstanding.  The objective of diluted EPS,  consistent  with that of basic EPS, is to measure the
performance of an entity over the reporting period,  while giving effect to all dilutive  potential common shares that were outstanding
during the period.  The  calculation  of diluted EPS is similar to basic EPS except both the  numerator and  denominator  are increased
for the conversion of potential dilutive common shares.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 3 - Investment in nex-i.com:


In January  2000,  the Company  invested  $1.8 million in
exchange for 3,101,000 shares of Series A
Convertible Participating Preferred Stock (the Series A
Financing) in a private internet start-up--nex-i.com Inc.
(nex-i.com). The investment represented approximately 30% of
nex-i.com equity on an as converted basis. The Company
recorded its share of losses to the extent of its investment based upon its
preferred stock funding interest. On July 27, 2000, nex-i.com received
$12,100,000 in a Series B Convertible Participating Preferred Stock financing
(the Series B Financing), in which the Company did not
participate. Following the Series B Financing, the Company investment
in nex-i.com represented approximately 15% of nex-i.com equity on an
as converted basis. In connection with the Series B
Financing, and in consideration of the Company release of nex-i.com
from certain commercial commitments to the Company made at the time of the
Series A Financing, the Company received 100,000 warrants to purchase shares of
nex-i.com Series B Convertible Participating Preferred Stock at an exercise
price ranging from $1.50 to $1.85 per share. In February 2001, a wholly-owned
subsidiary of Eureka Broadband Corporation, a Delaware corporation
(Eureka), merged with and into nex-i.com, in connection with
which merger the Company received several classes of preferred stock in Eureka
in exchange for the Companys Series A Convertible Participating
Preferred Stock in nex-i.com. Coincident to and as a condition of the merger,
the Company was required to lend $382,098 to Eureka in exchange for a
convertible promissory note. The note bore interest at the rate of 8% per annum,
which would have been paid by Eureka in cash on March 31, 2001 (the
Maturity Date) or converted by Eureka into shares of Eureka
preferred stock on the Maturity Date, in the discretion of the holders of 51% of
the aggregate outstanding principal of all similar notes. In July 2001, the
Eureka preferred stock and note held by the Company was converted to common
stock. The Company wrote off its investment in Eureka common stock of $382,000
in the fourth quarter of 2001, after Eurekas principal operations were
impacted by the negative events of September 11th, 2001. In consideration of the
Companys investment in Eureka, Eureka committed to purchase a minimum
of $146,000 of the Companys network monitoring, cabling, field
engineering and other services during the first twelve months following the
closing of the merger and a minimum of $182,100 of such services during the
second twelve months following the closing. Eureka also committed to use good
faith efforts to ultimately purchase a minimum of $500,000 of the
Companys services during the twenty-four month period following the
closing. To date, Eureka has failed to honor these commitments; however, on
March 6, 2002, Eureka entered into a Support Agreement with the Company pursuant
to which Eureka agreed to purchase network monitoring and call center support
services from the Company in the aggregate amount of approximately $87,835. This
sum includes payment of a past-due receivable in the amount of $20,000.

The
  Companys  interests in Eureka are subject to two  agreements
among  Eureka and its  shareholders.  The Company  does not deem the rights
and  restrictions  set  forth in the two  agreements  to be  material.  The
restrictions  include a  limitation  on  transfer of the  Companys  equity
interest in Eureka in certain  circumstances  and the  requirement  to sell
the equity  interest  when a transfer is approved by a vote of the interest
holders.  In addition,  upon the agreement of a substantial amount of other
interest  holders,  the Company has the right to demand that the  Companys
equity  interest be registered  under the  Securities  Act of 1933, and the
right,  without  other  interest  holders,  to have  the  Companys  equity
interest included in certain other registrations under such Act.


Note 4 - Recently Issued Accounting Standards:


In December 1999, the  Securities  and Exchange  Commission  (SEC)
issued  a  Staff  Accounting   Bulletin  No.  101  (SAB  101),   Revenue
Recognition in Financial  Statements.  This SAB summarizes  certain of the
SEC staffs views in applying generally accepted  accounting  principles to
revenue  recognition in financial  statements.  Adoption of SAB No. 101 did
not have a material effect on the Companys results of operations.

In July 2001,  the  Financial  Accounting  Standard  Board  (FASB)
issued  Statement  of  Financial   Accounting   Standard  (SFAS)  No.  141,
Business  Combinations,  which  supersedes  Accounting  Principles  Board
(APB)  Opinion  No. 16. SFAS No. 141  requires  all  business  combinations
initiated  after June 30, 2001 be accounted for under the purchase  method.
In  addition,  SFAS No. 141  establishes  criteria for the  recognition  of
intangible  assets  separately from goodwill.  The adoption of SFAS No. 141
did not have a material  effect on the  Companys  results  of  operations,
financial position or cash flow.

In July 2001,  the FASB issued SFAS No. 142,  Goodwill  and Other
Intangible  Assets,  which  supersedes  APB Opinion No. 17. Under SFAS No.
142  goodwill  and  indefinite  lived  intangible  assets will no longer be
amortized,  but rather will be tested for impairment at least annually.  In
addition,  the amortization  period of intangible  assets with finite lives
will no longer  be  limited  to 40 years.  SFAS No.  142 is  effective  for
fiscal years  beginning  after  December  15, 2001,  which for us means the
standard  was adopted on January 1, 2002.  The adoption of SFAS No. 142 did
not  have  a  material  effect  on its  results  of  operations,  financial
position or cash flow.

On August 15, 2001, the FASB issued FASB No. 143,  Accounting for
Asset  Retirement   Obligations.   This  statement   addresses   financial
accounting and reporting for obligations  associated with the retirement of
tangible  long-lived  assets and the associated asset retirement  costs. It
applies to legal  obligations  associated with the retirement of long-lived
assets that result from the acquisition,  construction,  development and/or
the normal operation of long-lived assets,  except for certain  obligations
of lessees.  The  adoption  of FASB No. 143 did not have a material  effect
on its results of operations.

On
October 3, 2001, the FASB issued FASB No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. The objectives of FASB No.
144 are to address the significant issues relating to the implementation of FASB
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of, and to develop a single
accounting model, based on the framework established in FAS No.121, for
long-lived assets to be disposed of by sale, whether previously held and used or
newly acquired. The adoption of FAS No. 144 did not have a material effect on
its results of operations.

On
November 15, 2001, the FASB issued Topic No. D-103, Income Statement
Characterization of Reimbursements Received For Out-of-Pocket Expenses
Incurred. The FASB will require in 2002 companies to report these
disbursements as revenues, versus a reduction of cost of sales. This
classification has no impact on reported losses. The Company had such
reimbursements of $283,000 in 2001. For the years 2000 and 1999, this
information was not segregated in the accounting records. The Company has
adopted such reporting in the first quarter of 2002, such reimbursements were
$21,000 and $39,000 in 2002 and 2001, respectively.

Note 5 - MTA Contract:

In
December 1997, the Company entered into a four-year, $20.4 million contract (the
MTA Contract) with New York City Transit, an agency of the
Metropolitan Transportation Authority of the State of New York (the
MTA) to furnish and install local and wide-area computer network
components, including network and telecommunications hardware, software and
cabling throughout the MTAs over 200 locations. The aggregate amount of
this contract was subsequently increased to $20.6 million. The Company is the
prime contractor on this project and is responsible for project management,
systems procurement, and installation. The work is provided in contiguous
locations and payment is predicated upon achieving specific milestone events. In
the event of default, in addition to all other remedies at law, the MTA reserves
the right to terminate the services of the Company and complete the MTA Contract
itself at the Companys cost. In the event of unexcused delay by the
Company, the Company may be obligated to pay, as liquidated damages, the sum of
$100 to $200 per day, per site. While the Company is currently performing in
accordance with the contract terms, there can be no assurance that any such
events of default or unexcused delays will not occur. In addition, the MTA
Contract is a fixed unit price contract, and the quantities are approximate, for
which the MTA has expressly reserved the right, for each item, to direct the
amount of equipment and related installation be increased, decreased, or omitted
entirely on 30 days notice. The MTA has the right to suspend the work on 10 days
notice for up to 90 days and/or terminate the contract, at any time, on notice,
paying only for the work performed to the date of termination. The project is
subject to the prevailing wage rate and classification for telecommunications
workers, as determined by the New York City Comptrollers office, over
which the Company has no control, and which is generally adjusted in June of
each year and may be so adjusted in the future.

The
Company has performed services and supplied products to the MTA since the
inception of the MTA Contract. The work performed to date at MTA sites has
required greater than the originally estimated labor and other costs to
complete. In May 1999, the Company submitted a formal request to the MTA for
equitable adjustment in the amount of approximately $1.5 million and for a time
extension. This request was supplemented with a further submission in October
1999. In January 2000, the Project Manager for the MTA Contract denied the
Companys request, thereby triggering the Companys right under the
contract to appeal the Project Managers denial to the MTAs Dispute
Resolution Office (the DRO). The Company filed a Notice of Appeal
with the DRO in February 2000, and pursuant to the DROs request, filed
further written submissions and participated in an arbitral session with the DRO
subsequent thereto. In November 2000, the DRO rendered a written decision
denying in full the Companys Request for Equitable Adjustment and Time
Extension. Pursuant to the terms of the MTA Contract, in March 2001, the Company
appealed the DROs denial of the Companys Request to the New York
Supreme Court. On April 22, 2002, the Court rendered its decision on the
Companys appeal, denying all of the Companys claims for review of
the determination made by the DRO. The Company is reviewing the Courts
decision and will decide upon an appropriate course of action after completing
its review.

On
July 19, 2000, the MTA advised the Company of a determination by the Bureau of Labor Law (the
Bureau) of the New York City Comptrollers Office,
communicated to the MTA by letter from the Bureau dated June 22, 2000, that, as
of July 1, 2000, the labor classification for all low voltage cabling carrying
voice, data, video, or any combination thereof, is electrician. The
Bureaus determination is based on a New York State Supreme Court
Appellate Division decision dated May 18, 2000. The workers currently and
historically used by the Company to perform cabling work have been classified as
telecommunications workers. The Company believes it is probable that the
Bureaus determination will apply to the Companys cabling
activities under the contract, thereby likely requiring the reclassification of
its telecommunications workers as electricians retroactive to July 1, 2000.
Since the prevailing wage for electricians is substantially higher than that for
telecommunications workers, the Company expects to incur materially increased
labor costs as a result of the Bureaus determination. On October 16,
2000, the MTA Project Manager denied the Companys request for a change
order to compensate the Company for the increased costs it expects to incur in
connection with the reclassification of certain of its telecommunications
workers as electricians. On January 19, 2001, the Company initiated a
dispute within the meaning of the applicable federal
regulations governing the MTA Contract by filing a complaint with the United
States Department of Labor (the Department of Labor). In its
complaint, the Company requests that the Department of Labor adjudicate this
dispute and either issue a determination affirming that the prevailing wage rate
for telecommunications workers, as originally specified by the MTA, is the
applicable rate for this project, or directing the MTA to compensate the Company
for the change in wage classification made during the performance of the
contract in violation of federal regulations. By letter dated March 12, 2001,
the Department of Labor advised the Company that, without knowing which, if any,
federal wage decision was included in the MTA Contract, it is unable to make a
determination that any violation of federal labor law has occurred. On February
12, 2002, the Company was informally advised by the Department of Labor that the
Department has concluded that no federal wage determinations were included or
required to be included in the MTA Contract because the project has insufficient
federal funding to trigger the federal wage regulations. The Department of Labor
asserts that the Companys claim is not one which is governed by
federal regulations or one over which the Department is willing to exercise
jurisdiction. On April 23, 2002, the Company received a letter from the
Department of Labor dated April 9, 2002 stating that the Department does not
have jurisdiction over the dispute because it was advised by the New York City
Comptrollers office that no federal funds were provided for the MTA
Contract. The Company is currently evaluating this letter and will decide upon
an appropriate course of action after completing its evaluation. There can be no
assurance the Company will be successful, either in whole or in part, in its
efforts.

Note 6 - Income Taxes:

Set forth below is a
summary of the Companys tax provision (benefit) for the three months ended
March 31, 2002.
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`Three Months Ended
                                                           March 31, 2002
                                                         ------------------
Federal income tax benefit at statutory rate
(34%)                                                      ($ 366,000)

State income tax benefit net of federal effect                (75,000)
                                                         -------------
Income tax benefit                                           (441,000)
Valuation allowance                                        (1,759,000)
                                                         -------------
                                                         ($ 2,200,000)
                                                         =============`

|For the three months ended
March 31, 2002, the Company has recognized a tax benefit of $2,200,000.
|--------------------------------------------------------------------------------------------------

|The Company  reduced its valuation  allowance in the amount of  $1,834,000,  reflecting  expected  federal  income tax refunds
related to the  carryback  of 2001 tax losses to prior years as a result of changes to the Internal  Revenue  Code  enacted  during the
first quarter of 2002.  This reduction was offset by a $75,000  valuation  allowance on current  period state income tax benefits.  The
Company  expects it can recover 2002 federal  income tax benefits from expected  federal income tax refunds from tax carryback of these
losses to prior  periods.  As such,  no valuation  allowance was recorded on federal  income tax benefits of $366,000  generated in the
first quarter of 2002. In the first quarter of 2001, the Company  recorded a $59,000  benefit before an income tax valuation  allowance
provision.



Item 2    Managements Discussion and Analysis of Financial Condition and
                  Results of Operations


General

Founded in 1984, AlphaNet Solutions,  Inc. is an information  technology
 (IT) professional services firm providing expertise in
Business  Advisory,  Technology  Implementation,  and  Managed  Services.  We  also  provide  professional  development  services.  Our
customers are primarily Fortune 1000 and other large and mid-sized companies located in the New York-to-Philadelphia corridor.

Our
results for the first quarter of 2002 include certain items that affect
comparability to prior periods. We quantify the impact of these items in order
to explain our results on a comparable basis. Such items are collectively
referred to as special items. Special items in the three months
ended March 31, 2002, consisted of severance costs of $104,000, of which $70,000
reflected in cost of sales and $34,000 is reflected in SG&A; a state income
tax valuation allowance of $75,000; and a federal income tax refund of
$1,834,000.

Results of
Operations

Three Months Ended March 31, 2002 Compared To Three Months Ended March 31, 2001

Net Sales.   Net sales decreased by $11.8 million,  to $6.9 million for the first quarter of 2002 from $18.7 million for the first
quarter of 2001.  The decline of $11.8  million was  due to a reduction in product  sales of $6.3 million and a reduction in
service revenues of $5.5 million.

Gross Profit.   During the first  quarter of 2002,  gross profit  declined to $1.8  million  from $4.3  million  during the first
quarter of 2001.  This decline was  attributable  to the decline in both product sales and service and support revenue during
the first  quarter of 2002.  Including  severance  costs,  our  combined  gross  profit was 26.1% in the first  quarter of 2002,  which
increased  from 23.1% in the first  quarter of 2001.  Excluding  severance  costs,  our  combined  gross  profit was 27.1% in the first
quarter of 2002,  which increased from 23.3% in the first quarter of 2001. We recorded $70,000 of severance  compensation  costs during
the first  quarter of 2002,  as compared to $46,000 in the first quarter of 2001.  The gross profit  percentage  on technology  product
sales was  10.6% in the first  quarter  of 2002 down from  11.6% in the first  quarter  of 2001.  Service  and  support  gross  profits
excluding severance costs, was 31.5% in the first quarter of 2002, compared to 31.5% in the first quarter of 2001.

Selling,  General and  Administrative  Expenses.  
  Selling,  general and  administration  expenses  were $3.0 million in the first
quarter of 2002 as  compared  to $4.7  million in the first  quarter of 2001.  Selling,  general  and  administrative  expenses  before
special  items in each period were $3.0  million in the first  quarter of 2002,  as  compared to $4.6  million in the first  quarter of
2001.  Special  items of $34,000  reflecting  severance  compensation  costs were  recorded in the first  quarter of 2002. In the first
quarter of 2001, special items of $128,000 in severance costs were recorded.

Interest income,  net.   Due to declining  interest rates,  interest  income,  net, totaled $104,000 for the first quarter of 2002,
down from $225,000 in the first quarter of 2001.

Income taxes.    The Company reduced its valuation  allowance in the amount of $1,834,000,  reflecting  expected federal income tax
refunds  related to the carryback of 2001 tax losses to prior years as a result of changes to the Internal  Revenue Code enacted during
the first quarter of 2002.  This  reduction was offset by a $75,000  valuation  allowance on current  period state income tax benefits.
We currently  anticipate  our company can recover 2002 federal  income tax benefits from expected  federal  income tax refunds from tax
carryback of these losses to prior  periods.  As such, no valuation  allowance was recorded on federal  income tax benefits of $366,000
generated in the first  quarter of 2002. In the first  quarter of 2001,  we recorded a $59,000  benefit  before an income tax valuation
allowance provision.

Risks and
Uncertainties

We offer business consulting,  infrastructure design, managed services,  business continuity planning, and security. We also
offer  enterprise  solutions  including  remote  network  management  and call center  support,  as well as  professional  development.
Services  revenue is recognized as such services are  performed.  Most of our services are billed on a  time-and-materials  basis.  Our
professional  development and services are fee-based on a per-course  basis.  Generally,  our service  arrangements  with our customers
may be terminated by such customers with limited advance notice and without  significant  penalty.  The most  significant cost relating
to the services  component  of our  business is personnel  costs which  consist of  salaries,  benefits,  payroll-related  expenses and
training and  recruiting  costs.  Thus,  the financial  performance of our service  business is based  primarily  upon billing  margins
(billable  hourly rates less the cost to us of such  service  personnel  on an hourly  basis) and  utilization  rates  (billable  hours
divided by paid hours).

In 1999, we embarked on an effort to reposition  ourselves  from a value-added  reseller
to a professional  services  company.
The competition for low-margin technology products increased  significantly and, more recently,  the demand for technology products has
declined.  As a result,  we have been  attempting  to  transition  to  selling  higher-margin  services,  some of which are  related to
technology  product orders.  During the first quarter of 2002, we have been selective in accepting  product  orders.  Our product sales
declined from $83.3  million in 1999,  to $44.0  million in 2000,  and declined to $15.8 million in 2001. In the first quarter of 2002,
our product sales declined to $1.4 million in the quarter as compared to $7.7 million in the first quarter of 2001.

In  January  2002,  we entered  into an agency  agreement  with  MoreDirect,  Inc.,  an  internet-based,  business-to-business
electronic marketplace which enables information technology buyers to efficiently source,  evaluate,  purchase and track a wide variety
of computer  hardware,  software and related  technology  products.  This agreement will permit us to further exit the product business
and  concentrate  on our core  professional  service  offerings.  Certain  of our  professional  service  offerings  are  dependent  on
technology  product  purchases by our existing and  prospective  clients,  irrespective  of how such clients  procure  their  products.
Accordingly,  the downturn in technology  spending has adversely  impacted our  professional  service  revenues.  Competition by larger
firms such as  Siemens,  EDS and IBM Global  Services  in such areas as desktop  support  and  integration  services  has  resulted  in
significant  reductions  in the  services  we provide to certain of our key  customers.  We have been unable to secure  sufficient  new
projects to offset this decline and,  accordingly,  our professional  service  revenues have declined.  There can be no assurance these
negative trends will not continue or accelerate.

Our professional  service  revenues  declined from $53.3 million in 1999, to $46.4 million in 2000, and declined to $35.9
million in 2001. In the first quarter of 2002, our professional  service  revenues  declined to $5.5 million in the quarter as compared
to $11.0 million in the first quarter of 2001.

Portions of our  professional  service revenue are derived from fixed-fee  projects,  under which we assume greater  financial
risk if we fail to accurately  estimate the costs of projects.  We assume greater risk on fixed-fee projects than on  time-and-material
projects.  If a miscalculation  for resources or time occurs on fixed-fee  projects,  the costs of completing these projects may exceed
the price,  which could result in a loss on the project and a decrease in net income.  We recognize  revenue  from  fixed-fee  projects
based on our estimate of the percentage of each project completed in a reporting period.

The trading  price of our Common Stock is likely to be,  subject to  significant  fluctuations  in response to  variations  in
quarterly  operating  results,  the gain or loss of  significant  contracts,  changes in  management,  general  trends in the industry,
recommendations  by industry  analysts,  and other events or factors.  In  addition,  the equity  markets in general  have  experienced
extreme  price and  volume  fluctuations  which  have  affected  the market  price of our  Common  Stock,  as well as the stock of many
technology  companies.  Often,  price  fluctuations  are unrelated to operating  performance of the specific  companies  whose stock is
affected.

We  currently  anticipate  the  need to make  significant  investments  in the  reconstruction  and  upgrading  of our  sales,
revenue-generating and technical  capabilities in an effort to stem the continuing decline in our professional service revenues,  which
decline may accelerate in 2003.  These  investments  and the decline in our revenue will likely cause us to continue to incur operating
losses for the foreseeable  future.  Notwithstanding  these  anticipated  investments,  there can be no assurance that our professional
service revenues will not continue to decline.

MTA

In
December 1997, we entered into a four-year, $20.4 million contract (the
MTA Contract) with New York City Transit, an agency of the
Metropolitan Transportation Authority of the State of New York (the
MTA) to furnish and install local and wide-area computer network
components including network and telecommunications hardware, software and
cabling throughout the MTAs over 200 locations. The aggregate amount of
this contract was subsequently increased to $20.6 million. We are the prime
contractor on this project and are responsible for project management, systems
procurement, and installation. The work is grouped in contiguous locations and
payment is predicated upon achieving specific milestone events. In the event of
default, in addition to all other remedies at law, the MTA reserves the right to
terminate our services and complete the MTA Contract itself at our cost. In the
event of unexcused delay by our company, we may be obligated to pay, as
liquidated damages, the sum of $100 to $200 per day, per site. While we are
currently performing in accordance with the contract terms, there can be no
assurance that any such events of default or unexcused delays will not occur. In
addition, the MTA Contract is a fixed unit price contract, and the quantities
are approximate, for which the MTA has expressly reserved the right, for each
item, to direct the amount of equipment and related installation be increased,
decreased, or omitted entirely on 30 days notice. The MTA has the right to
suspend the work on 10 days notice for up to 90 days and/or terminate the
contract, at any time, on notice, paying only for the work performed to the date
of termination. The project is subject to the prevailing wage rate and
classification for telecommunications workers, as determined by the New York
City Comptrollers Office, over which we have no control, and which is
generally adjusted in June of each year and may be so adjusted in the future.

On
July 19, 2000, the MTA advised us of a determination by the Bureau of Labor Law
(the Bureau) of the New York City Comptrollers Office,
communicated to the MTA by letter from the Bureau dated June 22, 2000, that, as
of July 1, 2000, the labor classification for all low voltage cabling carrying
voice, data, video or any combination thereof is electrician. The Bureaus
determination is based on a New York State Supreme Court Appellate Division
decision dated May 18, 2000. The workers currently and historically used by us
to perform cabling work have been classified as telecommunications workers. We
believe it is probable the Bureaus determination will apply to our cabling
activities under the contract, thereby likely requiring the reclassification of
our telecommunications workers as electricians retroactive to July 1, 2000.
Since the prevailing wage for electricians is substantially higher than that for
telecommunications workers, we expect to incur materially increased labor costs
as a result of the Bureaus determination. On October 16, 2000, the MTA
Project Manager denied our request for a change order to compensate our company
for the increased costs it expected to be incurred in connection with the
reclassification of certain of our telecommunications workers as electricians.
On January 19, 2001, we initiated a dispute within the meaning of
the applicable federal regulations governing the MTA Contract by filing a
complaint with the United States Department of Labor (the Department of
Labor). In our complaint, we requested that the Department of Labor
adjudicate this dispute, and either issue a determination affirming that the
prevailing wage rate for telecommunications workers, as originally specified by
the MTA, is the applicable rate for this project, or directing the MTA to
compensate us for the change in wage classification made during the performance
of the contract in violation of federal regulations. By letter dated March 12,
2001, the Department of Labor advised us that, without knowing which, if any,
federal wage decision was included in the MTA Contract, it is unable to make a
determination that any violation of federal labor law has occurred. On February
12, 2002, we were informally advised by the Department of Labor that the
Department has concluded that no federal wage determinations were included or
required to be included in the MTA Contract because the project has insufficient
federal funding to trigger the federal wage regulations. The Department of Labor
asserts that our claim is not one that is governed by federal regulations or one
over which the Department is willing to exercise jurisdiction. On April 23,
2002, we received a letter from the Department of Labor dated April 9, 2002
stating that the Department does not have jurisdiction over the dispute because
it was advised by the New York City Comptrollers office that no federal
funds were provided for the MTA Contract. We are currently evaluating this
letter and will decide upon appropriate action after completing our evaluation.
There can be no assurance we will be successful, either in whole or in part, in
our efforts.

We
have performed services and supplied products to the MTA since the inception of
the MTA Contract. The work performed to date at MTA sites has required greater
than the originally estimated labor and other costs to complete. In May 1999, we
submitted a formal request to the MTA for equitable adjustment in the amount of
approximately $1.5 million and for a time extension. This request was
supplemented with a further submission in October 1999. In January 2000, the
Project Manager for the MTA Contract denied our request, thereby triggering our
right under the contract to appeal the Project Managers denial to the
MTAs Dispute Resolution Office (the DRO). We filed a Notice of
Appeal with the DRO in February 2000, and pursuant to the DROs request,
filed further written submissions and participated in an arbitral session with
the DRO subsequent thereto. In November 2000, the DRO rendered a written
decision denying in full our Request for Equitable Adjustment and Time
Extension. Pursuant to the terms of the MTA Contract, in March 2001, we appealed
the DROs denial of the Companys Request to the New York Supreme
Court. On April 22, 2002, the Court rendered its decision on our appeal, denying
all of our claims for review of the determination made by the DRO. We are
reviewing the Courts decision and will decide upon an appropriate course
of action after completing our review.

nex-i.com

In January  2000, we invested  $1.8 million in exchange for  3,101,000  shares of Series A Convertible  Participating
Preferred Stock (the Series A Financing) in a private internet  start-up--nex-i.com  Inc.  (nex-i.com).  The investment represented
approximately  30% of nex-i.com  equity on an as  converted  basis.  We recorded our share of losses to the extent of our  investment
based  upon our  preferred  stock  funding  interest.  On July 27,  2000,  nex-i.com  received  $12,100,000  in a Series B  Convertible
Participating  Preferred  Stock  financing  (the  Series  B  Financing),  in which we did not  participate.  Following  the  Series B
Financing,  our investment in nex-i.com  represented  approximately  15% of nex-i.com equity on an "as converted"  basis. In connection
with the Series B Financing,  and in  consideration of our release of nex-i.com from certain  commercial  commitments to us at the time
of the Series A Financing,  we received 100,000 warrants to purchase shares of nex-i.com Series B Convertible  Participating  Preferred
Stock at an exercise  price ranging from $1.50 to $1.85 per share.  In February  2001, a  wholly-owned  subsidiary of Eureka  Broadband
Corporation,  a Delaware corporation  (Eureka),  merged with and into nex-i.com,  in connection with which merger we received several
classes of preferred stock in Eureka in exchange for our Series A Convertible  Participating  Preferred Stock in nex-i.com.  Coincident
to and as a condition of the merger,  we were required to lend $382,098 to Eureka in exchange for a convertible  promissory  note.  The
note bore interest at the rate of 8% per annum,  which would have been paid by Eureka in cash on March 31, 2001 (the  Maturity  Date)
or converted by Eureka into shares of Eureka  preferred  stock on the Maturity  Date,  in the  discretion  of the holders of 51% of the
aggregate  outstanding  principal of all similar notes.  In July 2001, the Eureka  preferred stock and note held by us was converted to
common stock.  We wrote off our investment in Eureka common stock of $382,000 in the fourth quarter of 2001,  after Eurekas  principal
operations  were  impacted by the negative  events of September  11th,  2001. In  consideration  of our  investment  in Eureka,  Eureka
committed to purchase a minimum of $146,000 of our network monitoring,  cabling,  field engineering and other services during the first
twelve  months  following  the  closing of the merger  and a minimum of  $182,100  of such  services  during the second  twelve  months
following the closing.  Eureka also  committed to use good faith  efforts to ultimately  purchase a minimum of $500,000 of our services
during the twenty-four month period following the closing.  To date, Eureka has failed to honor these  commitments;  however,  on March
6, 2002,  Eureka  entered into a Support  Agreement  with us pursuant to which Eureka agreed to purchase  network  monitoring  and call
center support services from us in the aggregate amount of approximately  $87,835,  including  payment of a past-due  receivable in the
amount of $20,000.

Our  interests  in Eureka are  subject to two  agreements  among  Eureka and its  shareholders.  We do not deem the rights and
restrictions set forth in the two agreements to be material.  The restrictions  include a limitation on transfer of our equity interest
in Eureka in certain  circumstances  and the  requirement  to sell the equity  interest  when a transfer  is  approved by a vote of the
interest holders.  Upon the agreement of a substantial  amount of other interest  holders,  we have the right to demand that our equity
interest be registered  under the Securities Act of 1933, and the right,  without other interest  holders,  to have our equity interest
included in certain other registrations under such Act.


Executive Management of AlphaNet Solutions, Inc.
and Certain Compensation Arrangements with Respect Thereto

Following Stan Gangs retirement as Chief Executive  Officer of our company effective  December 1, 2001, the duties of the CEO
devolved upon the  Executive  Committee of our Board of  Directors,  consisting  of Ira Cohen,  Thomas F. Dorazio and Doreen A. Wright.
Effective  March 15, 2002,  the Board  retained  Richard  Erickson,  a technology  and  operations  executive with 20 years of industry
experience,  as Chief  Executive  Officer.  Mr.  Erickson,  who joined  our  company  in a  consulting  capacity  through  New  England
Associates,  LLC, a professional  services  turnaround  consultancy of which Mr.  Erickson is president,  was most recently Senior Vice
President,  Operations  of Scient,  Inc.,  an e-business  consulting  firm.  Mr.  Erickson  previously  held the same position with iXL
Enterprises,  Inc.  prior to the 2001  merger of Scient and iXL.  From 1998 to 2000,  Mr.  Erickson  was  Managing  Director,  Tri-Sate
Region, of Aztec Technology Partners,  a network and  e-infrastructure  consulting services firm. From 1988 to 1998, Mr. Erickson was a
principal and President of Digital Network Associates, a network integration services company.

Pursuant to the terms of his  engagement,  Mr.  Erickson  has been  retained  for a minimum  term of six months at $15,000 per
month,  plus a bonus of $90,000  payable upon  certain  contingencies  and a  fully-vested  option or warrant for 25,000  shares of our
Common Stock.  During the term of his consulting  engagement,  Mr.  Erickson will execute the duties and exercise the  responsibilities
of chief  executive  officer and  president.  At the discretion of our Board of Directors,  the consulting  engagement may be converted
into an  employment  agreement at an annual base salary of $260,000.  Upon such  conversion,  Mr.  Erickson  would also be entitled to,
among other things, a performance  bonus of up to 80% of base salary based on mutually agreed criteria and an additional  275,000 stock
options,  including a guaranteed minimum realizable sum of $600,000,  representing the aggregate  difference between the exercise price
of options and the fair market value of our Common Stock  underlying such options,  on the exercise of all options held by Mr. Erickson
in the  event of a sale or  merger  of our  Company  within  two  years of the  commencement  of his  employment.  In the  event of the
conversion of the consulting engagement into an employment  agreement,  Mr. Erickson would be nominated for election as a member of our
Board of Directors.

Effective  April 12, 2002,  Vincent  Tinebra,  who held the titles of President and Chief  Operating  Officer,  entered into a
Severance and Release  Agreement with our company providing for Mr. Tinebras  resignation from our company.  Pursuant to the Severance
and Release  Agreement,  Mr.  Tinebra  agreed to serve in a  consulting  capacity  with our company from April 12, 2002 through May 10,
2002,  during which period and for an  additional  twenty-six  (26) weeks  thereafter,  he will continue to receive his base salary and
certain other benefits.  In connection  with Mr.  Tinebras  resignation,  the president title has been assumed by Mr. Erickson and the
position of Chief Operating Officer has been eliminated.


Forward-Looking
Statements

Certain statements are included in this Quarterly Report on Form 10-Q which are not historical and are forward-looking,
  within the meaning of The  Private  Securities  Litigation  Reform Act of 1995 and may be  identified  by such terms as  expect,  believe,
may, will, and intend or similar terms. These forward-looking  statements may include,  without limitation,  statements regarding
possible  future growth in the IT markets,  the status of the trends  favoring  outsourcing of management  information  systems (MIS)
functions by large and mid-sized  companies,  the  anticipated  growth and higher margins in the services and support  component of our
business,  the timing of the development and  implementation  of our new service  offerings and the utilization of such services by our
customers,  and trends in future operating  performance.  Such forward-looking  statements include risks and uncertainties,  including,
but not limited to:
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| |  | The significant decline in demand for our services;
| | - | ---------------------------------------------------

| |  | Frequent changes in the executive management of our company and
the risks associated with our recent retention of a new CEO;
| | - | ----------------------------------------------------------------------------------------------------------------------------

| |  | The repositioning of our company as an IT professional services firm and all
expected and unexpected costs and events related to such repositioning,
including, among other things:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | The substantial  variability of our quarterly operating results caused by
 a variety of factors,  some of which are not within our control,
| |  | - | -------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Intense competition from other IT service providers,
| |  | - | ----------------------------------------------------

| |  |  | The short-term nature of our customers commitments,
| |  | - | ----------------------------------------------------

| |  |  | Patterns of capital spending by our customers,
| |  | - | ----------------------------------------------

| |  |  | The timing, size and mix of product and service orders and deliveries,
| |  | - | ----------------------------------------------------------------------

| |  |  | The ability of our company to maintain its vendor certifications,
| |  | - | -----------------------------------------------------------------

| |  |  | The timing and size of new projects,
| |  | - | ------------------------------------

| |  |  | Competitive pricing factors,
| |  | - | ----------------------------

| |  |  | Market factors affecting the availability of qualified technical personnel,
| |  | - | ---------------------------------------------------------------------------

| |  |  | The timing and customer response of new product and service offerings,
| |  | - | ----------------------------------------------------------------------

| |  |  | Changes in trends affecting outsourcing of IT services,
| |  | - | -------------------------------------------------------

| |  |  | Disruption in sources of supply,
| |  | - | --------------------------------

| |  |  | Changes in product, personnel and other operating costs, and
| |  | - | ------------------------------------------------------------

| |  |  | Industry and general economic conditions;
| |  | - | -----------------------------------------

| |  | Changes in technical personnel realized billing and utilization rates;
| | - | ----------------------------------------------------------------------

| |  | The intense competition in the markets for our companys products and services;
| | - | -------------------------------------------------------------------------------

| |  | The ability to develop, market, provide, and achieve market
acceptance of service offerings to new and existing customers;
| | - | --------------------------------------------------------------------------------------------------------------------------

| |  | Our ability to attract, hire, train, and retain qualified technical personnel;
| | - | ------------------------------------------------------------------------------

| |  | Our substantial reliance on a concentrated number of key customers;
| | - | -------------------------------------------------------------------

| |  | Uncertainties relating to potential acquisitions, if any, made by our company,
such as our ability to integrate acquired operations and retain key customers
and personnel of the acquired business;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Our reliance on the continued services of key executive officers and salespersons; and
| | - | --------------------------------------------------------------------------------------

| |  | Material risks and uncertainties associated with the MTA Contract.
| | - | ------------------------------------------------------------------

|These  risks and  uncertainties  could  cause  actual  results  to  differ  materially  from  results  expressed  or  implied  by
forward-looking statements contained in the document.  These forward-looking statements speak only as of the date of this document.

Recently
Issued Accounting Standards

In December  1999,  the Securities and Exchange  Commission  (SEC) issued a Staff  Accounting  Bulletin No. 101 (SAB 101),
Revenue  Recognition in Financial  Statements. This SAB summarizes  certain of the SEC staffs views in applying  generally  accepted
accounting  principles to revenue  recognition in financial  statements.  Adoption of SAB No. 101 did not have a material effect on our
results of operations.

In July 2001, the Financial  Accounting  Standard Board (FASB) issued  Statement of Financial  Accounting  Standard (SFAS) No.
141, Business  Combinations,  which supersedes  Accounting  Principles Board (APB) Opinion No. 16. SFAS No. 141 requires all business
combinations  initiated  after June 30,  2001 be  accounted  for under the  purchase  method.  In  addition,  SFAS No. 141  establishes
criteria for the  recognition  of intangible  assets  separately  from  goodwill.  The adoption of SFAS No. 141 did not have a material
effect on our results of operations, financial position or cash flow.

In July 2001,  the FASB issued SFAS No. 142,  Goodwill and Other  Intangible  Assets,  which  supersedes APB Opinion No. 17.
Under SFAS No. 142  goodwill  and  indefinite  lived  intangible  assets  will no longer be  amortized,  but rather  will be tested for
impairment at least annually.  In addition,  the amortization  period of intangible  assets with finite lives will no longer be limited
to 40 years.  SFAS No. 142 is  effective  for fiscal years  beginning  after  December  15,  2001,  which for us means the standard was
adopted on January 1, 2002.  The  adoption  of SFAS No.  142 did not have a material  effect on our  results of  operations,  financial
position or cash flow.

On August 15, 2001, the FASB issues FASB No. 143,  Accounting for Asset  Retirement  Obligations.  This statement  addresses
financial  accounting and reporting for  obligations  associated with the retirement of tangible  long-lived  assets and the associated
asset  retirement  costs.  It applies to legal  obligations  associated  with the retirement of long-lived  assets that result from the
acquisition,  construction,  development and/or the normal operation of long-lived assets,  except for certain  obligations of lessees.
The adoption of FASB No. 143 did not have a material effect on our results of operations.

On October 3, 2001,  the FASB issued FASB No. 144,  Accounting  for the  Impairment or Disposal of Long-Lived  Assets. The
objectives  of FASB No.  144 are to  address  the  significant  issues  relating  to the  implementation  of FASB  Statement  No.  121,
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived  Assets to be Disposed Of, and to develop a single  accounting
model,  based on the framework  established in FAS No.121, for long-lived assets to be disposed of by sale, whether previously held and
used or newly acquired.  The adoption of FAS No. 144 did not have a material effect on our results of operations.

On November  15, 2001,  the FASB issued Topic No.  D-103,  Income  Statement  Characterization  of  Reimbursements  Received For
Out-of-Pocket  Expenses  Incurred.  The FASB will  require in 2002  companies  to report these  disbursements  as  revenues,  versus a
reduction of cost of sales.  This  classification  has no impact on reported losses.  Our company had such  reimbursements  of $283,000
in 2001. For the years 2000 and 1999,  this  information  was not segregated in the  accounting  records.  Our company has adopted such
reporting  in the first  quarter  of 2002;  such  reimbursements  were  $21,000  and  $39,000  in the first  quarter  of 2002 and 2001,
respectively.

Liquidity and
Capital Resources

Cash and cash  equivalents  at March 31, 2002 were $22.6  million,  compared to $23.8 million at December 31, 2001, a decrease of
$1.2 million.  Working  capital at March 31, 2002 was $24.8 million as compared to $23.8 million at December 31, 2001,  representing an
increase of $1.0 million.

Since its  inception,  our company has funded its operations  primarily from cash generated by operations,  as well as with funds
from  borrowings  under a credit  facility and the net proceeds from the Companys  public  offerings.  Our credit  agreement  with the
First Union National Bank expired on December 31, 2000 and was not renewed.

The decrease  during the first quarter in cash from  operating  activities  reflected  cash  operating  losses and  reductions of
accounts payable and accrued expenses.  Our days sales outstanding in accounts  receivable  increased from 73 days at December 31, 2001
to 90 days at March 31, 2002,  resulting from delays in collecting amounts due from the MTA contract.  Excluding MTA receivables,  days
sales  outstanding  in accounts  receivable  at March 31, 2002 was 66 days.  Cash used in  investing  activities  included  our capital
expenditures  for the first three months of 2002 of $39,000  primarily for the purchase of computer  equipment and software used by our
company.

Cash provided and utilized by financing activities included a reduction of $6,000 for repayment of capital lease obligations.

Our Employee Stock Purchase Plan was approved by our  shareholders in May 1998.  During 1998,  80,888 shares of common stock were
purchased  by  employees  under the plan for  approximately  $509,000,  an average  price of $6.29 per share.  During  1999,  employees
purchased an additional  49,691 shares under the plan for  approximately  $177,000,  an average price of $3.54 per share.  During 2000,
33,548 shares of common stock were purchased by employees  under the plan for  approximately  $117,  000, an average price of $3.51 per
share. During 2001,  employees purchased 52,204 shares of stock for approximately  $78,000, at an average price of $1.50 per share. Our
company has issued an aggregate of 216,331  shares since the  inception of the  Employee  Stock  Purchase  Plan at an average  price of
$4.07 per share,  receiving  total proceeds of  approximately  $881,000.  As of September 1, 2001,  our company  suspended the Employee
Stock Purchase Plan as a cost conservation measure.

We purchased  certain  inventory and equipment through a financing  arrangement with IBM Credit  Corporation.  At March 31, 2002,
there was an outstanding  balance of approximately  $187,000 to IBM Credit  Corporation under this arrangement.  Obligations under this
financing  arrangement  are  collateralized  by the current  inventory  balance  purchased from IBM through March 31, 2002. The current
credit limit with IBM Credit Corporation is $300,000.

We  currently  anticipate  the  need  to  make  significant  investments  in the  reconstruction  and  upgrading  of  our  sales,
revenue-generating and technical  capabilities in an effort to stem the continuing decline in our professional service revenues,  which
decline may accelerate in 2003.  These  investments  and the decline in our revenue will likely cause us to continue to incur operating
losses for the foreseeable  future.  Notwithstanding  these  anticipated  investments,  there can be no assurance that our professional
service revenues will not continue to decline.

We believe that our available funds,  together with existing and anticipated credit  facilities,  will be adequate to satisfy our
current and planned operations for at least the next 12 months.

Item 3.  Quantitative and Qualitative Disclosures About
Market Risk.

Not applicable.
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|PART II.  OTHER INFORMATION


Item 1. Legal Proceedings

In connection  with our ongoing  disputes with the MTA concerning a contract  entered into with the MTA in December 1997, we have
filed  certain  legal  proceedings  as discussed in Part I, Item 2 of this Report  (Managements  Discussion  and Analysis of Financial
Condition and Results of Operations) at p. 13.

On March 18, 2002, we received a copy of a Complaint  filed by a current and former employee in the Superior Court of New Jersey,
Law Division (Bergen County) against us and certain of our employees  alleging  employment-related  claims.  The plaintiffs are seeking
compensatory  and  punitive  damages  in an  unspecified  amount,  attorneys  fees  and  costs of suit.  We and the  named  individual
defendants believe they have meritorious defenses to the plaintiffs claims and are prepared to defend against them vigorously.

We have no knowledge of any other material litigation to which we are a party or to which any of our property is subject.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | (a) | Exhibits.
| | --- | ---------

| | 10.44 | Severance and
Release Agreement dated April 12, 2002 by and between the Company and Vincent Tinebra.
| | ----- | ----------------------------------------------------------------------------------------------------

| | (b) | Reports on Form 8-K.
| | --- | --------------------

| | On March 18, 2002, the Company filed with the Commission a current report on Form
8-K reporting an event under Item 5-Other Events.
| | -----------------------------------------------------------------------------------------------------------------------------------

|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:  May 8, 2002 |  | ALPHANET SOLUTIONS, INC.By:    RICHARD G.  ERICKSON
         Richard G. Erickson*
         President and Chief Executive Officer
        (Principal Executive Officer)
|------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DATE:  May 8, 2002 |  | By:    WILLIAM S. MEDVE
          William S. Medve      
    Executive Vice President, Chief Financial 
           Officer and Treasurer
          (Principal Financial and Accounting Officer)
|------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|* Mr. Erickson currently serves as President and Chief Executive Officer of AlphaNet Solutions, Inc. in a consulting capacity through
New England Associates, LLC, a professional services turnaround consultancy of which he is president.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------