SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X]  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 [Fee Required]

For the fiscal year ended December 31, 2001 or

[ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 [No Fee Required]

For the transition period from _______________ to ________________

Commission File No. 333-56250



                                 INSTANET, INC.
                       -----------------------------------
                 (Name of Small Business Issuer in its Charter)


           Nevada                                           84-1575085
           ------                                           ----------
(State or other jurisdiction                     (I.R.S. Employer Identification
  of incorporation Number)                               or organization)

                       26 West Dry Creek Circle, Suite 600
                            Littleton, Colorado 80120
                           --------------------------
           (Address of principal executive offices including Zip Code)

                    Issuer's telephone number: (303) 794-9450



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

Securities registered pursuant to Section 12(g) of the Act:

                          $.001 Par Value Common Stock
                          ----------------------------
                                (Title of Class)

<PAGE>


     Check whether the Registrant (1) 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
                                   -----     -----

     As of February 28, 2002, 1,508,000 shares of the Registrant's $.001 par
value Common Stock were outstanding. As of February 28, 2002, the aggregate
market value of the voting stock held by non-affiliates was $72,500 based upon
the last closing price of $1.25 per share.

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

     The Registrant's revenues for its most recent fiscal year were negligible.

     The following documents are incorporated by reference into Part III, Items
9 through 12 hereof: None.

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS
-------------------------------

     The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein. Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties are detailed throughout the Report and
will be further discussed from time to time in the Company's periodic reports
filed with the Commission. The forward-looking statements included in the Report
speak only as of the date hereof.

History and Current Operations.

     Instanet, Inc. (the "Company") was organized as a Nevada corporation in
January 2001. In February 2001 the Company entered into an agreement (the
"Master Agency Agreement") with KeyCom, Inc. KeyCom developed, and now operates
under the trade name XTRAN, an electronic system for transferring funds from one
location to another. XTRAN has represented that it initiates funds transfers
from approximately 107 remittance locations in Florida, Georgia and Washington,
D.C. and electronically transfers the funds to any of KeyCom's approximately 60
payout locations in Jamaica, although KeyCom has contracted for an additional
2,100 locations in Mexico, Central America and various locations in the
Carribean. At this time the Company has been unable to verify the number of
payout and remittance locations that KeyCom has actively maintained. Further,
the Company has been unable to verify the status of the payout locations that
are serving KeyCom. A remittance location is any retail store or business that
is authorized to accept consumer funds for transfer by the sender. A payout
location is any retail store or business that is authorized to pay out
transferred funds to the recipient.

     Under the Master Agency Agreement, the Company obtained the exclusive right
to initiate funds transfers from a Web site that the Company has been developing
with respect to initiating funds transfers over the XTRAN system. The Company
intends to use XTRAN's proprietary software linked to its Web site in order to
complete funds transfers. The Company also has the right to earn fees from
KeyCom for obtaining additional XTRAN remittance locations worldwide.

     The Company has an exclusive license with KeyCom to act as its agent to
market its electronic funds transfer system through the Internet and a
non-exclusive right to be compensated for merchant remittance locations the
Company obtains for KeyCom. In December 2001, KeyCom was acquired by Emergent
Financial Group, Inc. ("Emergent"). Subsequent to the acquisition, KeyCom's
ability to perform under the Master Agency Agreement may be questionable and
therefore the Company has postponed expending further amounts on completion of
its Web site. Although the Company anticipates that it may continue its
relationship with KeyCom, there can be no assurance that KeyCom will be able or
willing to comply with the Master Agency Agreement. Accordingly, the Company has
entered into discussions with alternative sources of non-bank funds transfer
business and is reviewing other alternatives to developing its non-bank funds
transfer business. If KeyCom is not able or willing to comply with the Master
Agency Agreement and the Company is unable to finalize negotiations with an
alternative source of non-bank funds transfer business, the Company would be
materially adversely affected in that it would be unable to continue in that
business.

                                        1
<PAGE>


     The Company is a development stage enterprise and has not commenced
operations or generated any revenue. In order to achieve revenue and
profitability, the Company must complete the development of and then market its
funds transfer Web site. There can be no assurance that the Web based funds
transfer business will ever achieve broad market acceptance, profitability or
positive operating cash flow.

     The Company's limited operating history, lack of revenue to date and the
uncertainty of its relationship with KeyCom and the electronic funds transfer
market in which it intends to operate, make any prediction of its future results
of operations difficult or impossible. The Company expects to increase
considerably its operating expenses in the future, particularly expenses to
complete the development of its Web site and establish remittance locations. The
Company does not expect that its revenue will cover these expenses. As a result,
the Company expects to incur significant losses and expects that it will need to
raise additional capital. The Company cannot assure that it will be able to
raise additional capital and it does not know what the terms of any such capital
raising would be. Any future sale of the Company's equity securities would
dilute the ownership and control of its stockholders. The Company's inability to
raise capital could require it to significantly curtail its operations.

KeyCom and XTRAN.

     KeyCom was incorporated in Delaware in July 1997 and is based in Westlake
Village, California. KeyCom claims to have developed XTRAN as a method for
transferring cash by electronic means, which KeyCom believes offers significant
technological and cost advantages over traditional funds transfer systems
currently used by market leading competitors such as Western Union and
MoneyGram. XTRAN is KeyCom's sole product and is not protected by any
intellectual property rights, although the name XTRAN is a registered trade
name.

     XTRAN's electronic transfer system employs specially programmed point of
sale terminals, which are the terminals that read credit cards or ATM cards at
the cash register although only cash funds remittance transactions are being
conducted over the XTRAN terminals. XTRAN transfers cash electronically through
commercial banks that move the funds between remittance and payout locations.
Due to the unexpected occurrences of September 11, 2001, the federal government
has promulgated new rules and regulations regarding the registering of companies
in the funds transfer business. As a result of the events of September 11, 2001,
the Company has not been able to determine whether the XTRAN system meets new
federal and state requirements and there is no assurance that KeyCom will be
able to comply with any additional regulations. In December of 2001, the Company
became aware of the acquisition of KeyCom by Emergent. There is no assurance
that the change of control of KeyCom will not adversely affect our relationship
with KeyCom. The Company has no direct business relationship with Emergent nor
any affiliation with any of the management of Emergent.

     The Company believes that the XTRAN funds transfer system is user friendly
but has not been able to confirm how the events of September 11, 2001 may
adversely affect use of the XTRAN system. The person originating the funds
transfer, often referred to as the remitter, tenders cash, the location agent
programs numbers into the XTRAN terminal, a receipt is generated and the funds
are available nearly instantly at the receiving payout destination point,
directed solely by pin number and transaction number, to the person entitled to
receive the funds. The user also receives a free 2-minute telephone card to
arrange for funds pick-up with the recipient. The tasks performed by the XTRAN
agent at a typical retail location, other than those new tasks necessitated by
governmental requirements since September 11, 2001, set into motion the
following series of computer-driven processes that make XTRAN work seamlessly:

                                        2
<PAGE>


     o    The receiving point is notified;

     o    The system that accomplishes the withdrawal and transfer of funds is
          alerted;

     o    Cash is withdrawn from the sending location and transferred to central
          banking locations for electronic re-transmittal;

     o    Cash is then transmitted from central banking locations to the proper
          receiving accounts;

     o    Fees are identified for payment through the XTRAN distribution system;
          and

     o    Transfers are tracked through secure Internet routing.

     Expatriates sending funds to their country of origin and individuals
without bank accounts and/or credit cards, are two segments of the repetitive
funds transfer business. KeyCom has elected to concentrate its initial funds
transfer marketing efforts to specific targeted expatriate populations.
Specifically, KeyCom selected Jamaica, Mexico and Cuba as well suited for its
initial marketing emphasis. This market of expatriate populations is
concentrated primarily in certain ethnic neighborhoods, and that allow the
Company to focus on existing retail chains in these target remittance and payout
markets.

     Jamaicans in the United States have concentrated their populations in
readily identifiable areas, such as specific neighborhoods in Queens, the Bronx
and Brooklyn, New York, and Ft. Lauderdale, Florida. Other concentrated
populations exist in Toronto, Canada and other smaller cities throughout the
United States. KeyCom has an agreement with Paymasters (Jamaica), LTD. which
operates 51 utility payment locations in Jamaica to provide XTRAN with payout
locations and according to KeyCom, KeyCom has approximately 107 remittance
terminals in Jamaican neighborhoods in Florida, Georgia and Washington, D.C. but
no locations in New York State.

     In Mexico, KeyCom has contracted with Dimex S.A. and Central de
Communicaciones S.A. and Global Cash, Inc., which operate approximately 1,100
agent locations throughout Mexico, to act as payout locations. KeyCom has also
joined the Mexican American Grocer's Association, which has hundreds of retail
member stores suitable for use as remittance locations in Southern California,
Texas, New Mexico and Arizona, where Mexicans and Mexican-Americans concentrate.

     The heaviest concentration of Cuban expatriates live in the South Florida
area. KeyCom has contracted with Global Cash, S. A. which will provide over 500
payout locations through its relationships with banks in Cuba and with other
retail locations in Nicaragua, El Salvador, Honduras and Costa Rica. U.S.
originated funds transfers destined for Cuba must be routed through Central
American locations to comply with U.S. regulations concerning doing business in
Cuba.

Strategy.

     The Company's strategy is to:

     o    Determine whether KeyCom has the ability to perform under the Master
          Agency Agreement and if so, to complete the development of the
          Company's Web site;

                                        3
<PAGE>


     o    If it is determined that KeyCom is unable to perform under the Master
          Agency Agreement, to negotiate and complete arrangements with an
          alternative source of non-bank funds transfer between expatriates and
          locations in countries or origins in the Carribean and Central and
          South America where there are multiple payout locations;

     o    Direct the Company's Web site marketing specifically to concentrated
          populations of expatriates whose countries or origin contain multiple
          payout locations;

     o    Solicit XTRAN or other remittance locations, as applicable, first in
          Florida and then in other U.S. and foreign locations;

     o    Direct the Company's remittance location marketing efforts to retail
          chain store operators; and

     o    Offer Web based funds transfer services at rates below those of the
          Company's competitors.

     The Company expects to complete the development of its Web site for funds
transfer within approximately six months of determining whether to continue its
relationship with KeyCom or upon entering into an agreement or agreements with
alternative sources in the non-bank funds transfer business. Because the Company
has limited funds, it intends to direct its initial marketing efforts to
Internet users who are expatriates of countries served by XTRAN or other
transfer source, as applicable, and who live in concentrated geographical
locations where marketing is expected to be more cost effective. An example of
this approach is the Company's expected emphasis upon expatriates of Jamaica
living in New York and Florida and expatriates of Mexico living in California
and Texas.

     With respect to the Company's rights to obtain new remittance locations for
XTRAN, if the Company continues its relationship with KeyCom, it intends to
focus first on locations in Florida, followed by locations in other expatriate
concentrated population centers such as New York, California and Texas. In this
regard, the Company will direct its selling efforts to operators of retail store
chains and to non-bank financial services companies in the U. S. and abroad in
order to maximize its marketing budget.

     XTRAN's funds transfer rates are less than those of its competitors. Based
upon XTRAN's rates to the Company, the Company believes that it will be able to
offer XTRAN's funds transfer services at rates below those of its competitors.
XTRAN is able to charge lower rates because there is a high profit margin in
funds transfers. However, should rates of competitors be lowered in the future,
XTRAN and the Company may no longer be able to offer lower rates than
competitors. The Company believes that if it utilizes a source other than XTRAN,
that its rates can remain competitive.

Web Based Transfer of Funds.

     The Company has been in the process of developing a Web site that will
allow its customer to initiate, from the customer's computer, a funds transfer
transaction to a specific recipient at a designated payout location within the
XTRAN system. XTRAN uses the customer's credit card and other identifying
customer information in order to allow the customer to transfer the funds in a
secure environment. Because there are security considerations for Web based
funds transfers, the Company is carefully considering the types of software that
will be used and the methods it deploys.

                                        4
<PAGE>


     The Company believes its Web site will be designed to promote ease of use
and is expected to be a less expensive alternative for executing a funds
transfer transaction. The Company's Web site will also provide a directory of
XTRAN payout locations so that the customer will have access to the address of a
payout location close to the recipient. XTRAN also provides a two minute phone
card to be used by the customer to relay transaction and security code
information to the recipient.

     The Company has suspended developing its Web site based upon the XTRAN
system until it can be assured that KeyCom can perform pursuant to the Master
Agency Agreement. If the Company utilizes an alternative system, of which there
can be no assurance, it anticipates a Web site similar to that it has been
developing for use with XTRAN.

     Rapidly changing technology and frequent new product and service
introductions characterize the market for Internet and electronic funds transfer
companies. The Company's future success will depend on its ability to maintain a
fast and secure Web site for funds transfers in response to other competitive
product offerings. The Company's efforts in these areas may not be successful.

The Company's KeyCom Master Agency Agreement.

     Under the Master Agency Agreement with KeyCom, the Company obtained the
exclusive right as XTRAN's agent to originate funds transfers from its Web site
to any payout location which accepts XTRAN funds transfers. The Company also has
the right to use XTRAN's trademark and logos. Currently XTRAN has payout
locations in Jamaica. Under the agreement the Company receives a fee of 15% of
the fee charged the customer by XTRAN to complete the funds transfer.

     The Master Agency Agreement also entitles the Company to obtain on a
non-exclusive basis remittance locations for XTRAN anywhere in the world on a
non-exclusive basis. In such event, the Company is entitled to receive an
additional 9% of the fee charged by XTRAN for payouts outside the U.S. and 5% of
XTRAN's fee for payouts within the U.S. The Company is also entitled to a fixed
fee of $225 for each remittance location established by it for XTRAN. Due to the
change of control of KeyCom, the Company has currently suspended marketing
efforts until the Company has been able to determine whether KeyCom is able to
comply with the Master Agency Agreement. The Company is responsible for its own
expenses in connection with obtaining funds transfer business through its Web
site and in obtaining remittance locations.

     The Master Agency Agreement is not terminable by either party unless
breached by the other party. The Company is not required to generate any minimum
number or amount of Web based transactions in order to maintain its exclusive
Internet funds transfer rights. However, should KeyCom breach the agreement for
any reason or cease its funds transfer business the Company would be unable to
remain in the funds transfer business unless it can negotiate and enter into a
similar agreement with an alternative company, of which there can be no
assurance.

Marketing.

     The Company intends to reach prospective customers by targeting its
advertising and benefitting from XTRAN's or an alternative company's advertising
in the concentrated population centers in which these customers reside which
initially will be Jamaican expatriates living in New York and Florida and
Mexican expatriates living in California if the Company continues utilizing
XTRAN. The Company's advertising will include local and neighborhood foreign

                                        5
<PAGE>


language newspapers, direct mailings and pamphlets. The Company may also use Web
based advertising links and banners on Web sites and portals which appeal to its
target customers, as well as affiliate programs and search engine listings. The
Company will attempt to use key words and phrases for funds transfers in order
to improve its placement ranks in search engines. Nevertheless, the Company's
market will initially be further limited to expatriates who speak English and
have a bank credit card against which the funds transfers will be charged. The
Company hopes to provide a Spanish language Web site in the future, but cannot
assure it will be able to do so.

     With respect to the Company's marketing to obtain remittance and payout
locations, it intends to target U.S. and foreign chain stores which have the
potential to serve as both remittance and payout locations. The Company will
also target international financial service companies, including banks, that
offer check cashing, prepaid telephone cards and prepaid cellular services to
their customers. The Company will also market to retail grocery stores that
offer non-bank financial services. The Company will focus primarily on merchants
already selling products using an existing point of sale terminal rather than
customers that require installation of new point of sale terminals.

Government Regulation.

     Various aspects of KeyCom's service areas may be subject to federal and
state regulation, especially since the events of September 11, 2001. The Company
will monitor the government's regulatory efforts in this regard and will attempt
to comply with new regulations as they are adopted, although there can be no
assurance that the Company will be able to comply, in which case the Company
will not conduct money transfer business.

     Although many states license funds transfer companies and may require bonds
or other forms of collateral, compliance with these laws is the responsibility
of KeyCom's commercial banks who handle the funds transfers, and not by KeyCom
or us. The Company simply acts as a remittance agent to KeyCom, similar to the
retail stores which initiate funds transfers to payout locations. KeyCom is not
required to be licensed by the federal government or any foreign government
because it does not handle funds. All funds transfers to Cuba are initiated by
KeyCom's banks in Canada and sent to payout locations in Cuba licensed by the
Cuban government. However, if KeyCom's commercial banks fail to comply with
applicable laws or regulations and KeyCom is prohibited from doing business in
any state or market, the Company would be unable to originate funds transfers in
those locations.

     If the Company terminates its relationship with KeyCom and utilizes an
alternative non-bank funds transfer business source, the Company anticipates
similar governmental regulations affecting its business.

Competition.

     The consumer funds transfer services industry is large and intensely
competitive. The Company's primary competitor will be the two multinational
companies serving the industry, Western Union and MoneyGram, as well as smaller
local and regional funds transfers companies. Western Union is a wholly- owned
subsidiary of First Data Corporation, a public company, and MoneyGram is a
wholly-owned subsidiary of Travelers Express Company, Inc., which in turn is a
wholly-owned subsidiary of Viad Corp., a public company. These two companies
have substantially longer operating histories, greater name recognition and
financial resources than the Company. Applicable competitive factors in the
funds transfer business relate to the amount charged for the funds transfer, the
convenience of multiple remittance and payout locations and the variety of other
financial products offered at the remittance or payout locations. Through KeyCom
or an alternative company, the Company will have substantially fewer remittance

                                        6
<PAGE>


and payout locations than competitors and offer no financial products other than
funds transfer. KeyCom or an alternative company and the Company will also have
little name recognition and significantly smaller financial resources for
marketing and other purposes. The Company intends to charge less for its funds
transfers but cannot assure that its competitors will not also lower their funds
transfer charges in the future.

Employees.

     The Company has no employees and three executive officers. The three
executive officers work part- time and are uncompensated.

     Competition for qualified employees in the Internet services and electronic
funds transfer industries is intense and there are a limited number of people
with knowledge of and experience in either industry. The process of locating
personnel with the skills required to carry out the Company's strategies may be
lengthy and costly. The Company does not have employment agreements with any of
its executive officers nor does it carry key man insurance on their lives. The
Company's success depends to a significant degree upon its ability to attract
and retain qualified management, technical, marketing and sales personnel and
upon the continued contributions of such people. The Company's executive
officers may voluntarily terminate their employment with the Company at any
time. There can be no assurance that the Company will be successful in
attracting and retaining qualified executives and personnel or that it will have
the funds to pay such personnel. The loss of the services of key personnel, or
the inability to attract additional qualified personnel, could have a material
adverse effect on the Company's business, operating results and financial
condition.

Reports to Security Holders

     The Company is subject to reporting obligations under the Exchange Act.
These obligations include an annual report under cover of Form 10-KSB, with
audited financial statements, unaudited quarterly reports and the requisite
proxy statements with regard to annual shareholder meetings. The public may read
and copy any materials the Company files with the Commission at the Commission's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information of the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0030. The Commission maintains an Internet
site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission.

ITEM 2. DESCRIPTION OF PROPERTY
-------------------------------

     The Company's President provides the Company with 450 square feet of office
space in his offices at 26 West Dry Creek Circle, Suite 600, Littleton, Colorado
80120 on a month-to-month basis at no cost. The Company is also not responsible
for reimbursement for out-of-pocket office expenses, such as telephone, postage
or supplies.

ITEM 3. LEGAL PROCEEDINGS
-------------------------

     The Company is not a party to any litigation and, to its knowledge, no
action, suit or proceedings have been threatened against the Company.

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

     Not applicable.


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
----------------------------------------------------------------

Common Stock Information

     As of February 28, 2002, the Company had approximately 70 record and
beneficial holders of its Common Stock and a total of 1,508,000 shares of the
Company's Common Stock were outstanding. The Company's Common Stock has been
traded on the OTC Bulletin Board under the symbol "INST." On February 28, 2002,
the bid price of the Company's Common Stock was $.10 per share although the last
closing price in December 2001 was $1.25 per share.

     The range of high and low bid prices of the Company's Common Stock for the
quarter ending December 31, 2001 was $.10, however, the closing price of the
only sale during this quarter was $1.25 per share.

     The above quotations were reported by the OTC Bulletin Board and reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.

                                       7
<PAGE>


Dividend Policy

     The Company has not paid any dividends since its inception. The Company
currently intends to retain any earnings for use in its business, and therefore
does not anticipate paying dividends in the foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-----------------------------------------------------------------

Results of Operations.

For the period ending December 31, 2001.

     The Company commenced operations on January 9, 2001. From January 9, 2001
through December 31, 2001, we reported no revenue. Our expenses were limited to
costs incurred in connection with entering into our agreement with KeyCom and
preparing our prospectus. All of our expenses were paid for in cash.

     We intend to focus our limited cash resources on completing our Web site in
order to begin soliciting fees for funds transfers and obtaining remittance
locations for XTRAN transactions, which will earn us location fees and
commissions for funds transfers originating from these locations. We do not
intend to conduct research and development beyond completing our Web site and we
have no commitments to purchase equipment or add employees.

     Liquidity and Capital Resources.

     In October 2001, the Offering was completed and the Company received
$158,000 from the sale of 158,000 shares of common stock. A portion of the funds
were used to repay the outstanding loans and to pay the costs of the Offering.
The remaining funds from the Offering are expected to satisfy our operating
expenses for approximately six months following the Offering. There are no
agreements among officers, directors or shareholders to loan us additional funds
in the future.

     We expect to need additional funds to finance the further development of
our funds transfer business. However, there can be no assurance that such funds
will be available to us or that adequate funds for our operations, whether from
debt or equity financings, will be available when needed or on terms
satisfactory to us. Our failure to obtain adequate additional financing may
require us to delay or curtail some or all of our business efforts. Any
additional equity financing may involve substantial dilution to our
then-existing stockholders.

ITEM 7. FINANCIAL STATEMENTS
----------------------------


                                       8
<PAGE>

                                 INSTANET, INC.
                          (a Development Stage Company)

                              Financial Statements
                                       and
                          Independent Auditors' Report
             For the Period from January 9, 2001 (Inception) Through
                                December 31, 2001



                                Table of Contents
                                -----------------

                                                                            Page
                                                                            ----
Independent Auditors' Report                                                 F-1

Financial Statements

         Balance Sheet                                                       F-2

         Statement of Operations                                             F-3

         Statement of Changes in Stockholders' Equity                        F-4

         Statement of Cash Flows                                             F-5

Notes to Financial Statements                                                F-6



<PAGE>


                          INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholders
Instanet, Inc.
Littleton, CO


We have audited the accompanying balance sheet of Instanet, Inc.(a Development
Stage Company) as of December 31, 2001, and the related statements of
operations, changes in stockholders' equity and cash flows for the period from
January 9, 2001 (Inception) through December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Instanet, Inc. (a Development
Stage Company) as of December 31, 2001, and the results of its operations and
its cash flows for the period then ended in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has experienced circumstances which raise substantial
doubt about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.



                                       /s/  Ehrhardt Keefe Steiner & Hottman PC
                                       ----------------------------------------
                                            Ehrhardt Keefe Steiner & Hottman PC


January 31, 2002
Denver, Colorado


                                       F-1

<PAGE>


                                 INSTANET, INC.
                          (a Development Stage Company)


                                  Balance Sheet
                                December 31, 2001



                                     Assets

Current assets
     Cash                                                              $ 68,889
                                                                       --------
        Total current assets                                           $ 68,889
                                                                       ========

                      Liabilities and Stockholders' Equity

Current liabilities
     Accounts payable                                                  $    163
                                                                       --------
        Total current liabilities                                           163
                                                                       --------

Commitments

Stockholders' equity
     Preferred stock, authorized 5,000,000 shares,
      $.001 par value; none issued or outstanding                          --
     Common stock, authorized 50,000,000 shares,
      $.001 par value; 1,508,000 shares issued and outstanding            1,508
     Additional paid-in capital                                          86,715
     Deficit accumulated during the development stage                   (19,497)
                                                                       --------
        Total stockholders' equity                                       68,726
                                                                       --------

Total liabilities and stockholders' equity                             $ 68,889
                                                                       ========


                       See notes to financial statements.

                                      F-2

<PAGE>


                                 INSTANET, INC.
                          (a Development Stage Company)


                             Statement of Operations
    For the Period from January 9, 2001 (Inception) Through December 31, 2001



Revenues                                                            $      --

Expenses
     General and administrative                                          15,968
     Interest expense                                                     3,529
                                                                    -----------
        Total expenses                                                   19,497
                                                                    -----------

Net loss                                                            $   (19,497)
                                                                    ===========

Basic and diluted weighted average common shares outstanding          1,389,143
                                                                    ===========

Basic and diluted loss per common share                             $     (0.01)
                                                                    ===========


                       See notes to financial statements.

                                      F-3

<PAGE>
<TABLE>
<CAPTION>


                                                INSTANET, INC.
                                         (a Development Stage Company)


                                 Statement of Changes in Stockholders' Equity
                   For the Period from January 9, 2001 (Inception) Through December 31, 2001



                                                                                   Deficit
                                                                                 Accumulated
                                           Common Stock            Additional      During           Total
                                     ------------------------       Paid-in      Development     Stockholders'
                                       Shares         Amount        Capital         Stage           Equity
                                     ---------      ---------      ---------      ---------       ---------
<S>                                  <C>            <C>            <C>            <C>             <C>
Balance - January 9, 2001                 --        $    --        $    --        $    --         $    --

Issuance of stock for cash           1,350,000          1,350         28,650           --            30,000

Issuance of stock for cash, net
  of offering costs of $99,777         158,000            158         58,065           --            58,223

Net loss                                  --             --             --          (19,497)        (19,497)
                                     ---------      ---------      ---------      ---------       ---------

Balance - December 31, 2001          1,508,000      $   1,508      $  86,715      $ (19,497)      $  68,726
                                     =========      =========      =========      =========       =========


                                      See notes to financial statements.

                                                     F-4
</TABLE>

<PAGE>


                                 INSTANET, INC.
                          (a Development Stage Company)


                             Statement of Cash Flows
    For the Period from January 9, 2001 (Inception) Through December 31, 2001



Cash flows from operating activities
   Net loss                                                           $ (19,497)
     Changes in assets and liabilities
        Accounts payable                                                    163
                                                                      ---------
        Net cash used in operating activities                           (19,334)
                                                                      ---------

Cash flows from financing activities
   Proceeds from sale of common stock                                   188,000
   Payments for offering costs                                          (99,777)
   Proceeds from notes payable - stockholders                            78,000
   Payments on notes payable - stockholders                             (78,000)
                                                                      ---------
        Net cash provided by financing activities                        88,223
                                                                      ---------

Net increase in cash                                                     68,889

Cash - beginning of year                                                   --
                                                                      ---------

Cash - end of year                                                    $  68,889
                                                                      =========


Supplemental disclosure of cash flow information:
        The Company paid $3,529 for interest during the period ended
        December 31, 2001.


                       See notes to financial statements.

                                      F-5

<PAGE>


                                 INSTANET, INC.
                          (a Development Stage Company)

                          Notes to Financial Statements



Note 1 - Description of Business and Summary of Significant Accounting Policies
-------------------------------------------------------------------------------

Instanet, Inc., (the Company), a Nevada corporation, was incorporated in January
2001. The Company is organized for the purpose of providing market extensions,
including on the Internet, for an electronic cash transmission system developed
and owned by an outside company.

The Company is a development stage company that has not had any revenue from
operations since inception. The Company is in the process of developing its
infrastructure including Internet websites and strategic partner relationships.
There is no assurance that the Company will generate revenue or earn profit in
the future.

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

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

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

The Company will recognize revenues as services are performed.

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

The Company recognizes deferred tax liabilities and assets based on the
differences between the tax basis of assets and liabilities and their reported
amounts in the financial statements that will result in taxable or deductible
amounts in future years. As the Company had no operations for the period, there
are no differences in the book and tax basis of its assets and liabilities.

Basic and Diluted Earnings Per Common Share
-------------------------------------------

In accordance with FAS 128, basic earnings per share is computed based upon the
weighted average number of common shares outstanding during the period. The
Company has presented only basic earnings per share as potentially dilutive
common shares outstanding would have an anti-dilutive effect.

                                      F-6

<PAGE>


                                 INSTANET, INC.
                          (a Development Stage Company)

                          Notes to Financial Statements



Recently Issued Accounting Pronouncements
-----------------------------------------

In July 2001, the FASB issued SFAS Nos. 141 and 142 " Business Combinations "
and " Goodwill and other Intangible Assets ". Statement 141 requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method. Under the guidance of Statement 142, goodwill is no longer
subject to amortization over its estimated useful life. Rather, goodwill will be
subject to at least an annual assessment for impairment by applying a fair value
base test. Statement 142 is effective for financial statement dates beginning
after December 15, 2001. The Company anticipates that the adoption of Statements
141 and 142 will not have a material impact on its financial condition, results
of operations or cash flows.

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

The carrying amounts of financial instruments including accounts payable
approximated fair value as of December 31, 2001 because of the relatively short
maturity of these instruments.

Comprehensive Income
--------------------

The Company adopted Statement of Financial Accounting Standard No. 130 ("SFAS
130"), Comprehensive Income. There were no components of comprehensive income;
consequently, no separate statement of comprehensive income has been presented.

Stock Options/Warrants
----------------------

The Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25"), and related interpretations (FIN 44) in
accounting for all stock option plans. Under APB 25, no compensation cost has
been recognized for stock options granted to employees as the option price
equals or exceeds the market price of the underlying common stock on the date of
grant.

Stock Options/Warrants (continued)
----------------------------------

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), requires the Company to provide pro forma
information regarding net income as if compensation cost for the Company's stock
option plans had been determined in accordance with the fair value based method
prescribed in SFAS 123. To provide the required pro forma information, the
Company estimates the fair value of each stock option at the grant date by using
the Black-Scholes option-pricing model.


Note 2 - Commitments
--------------------

Master Agency Agreement
-----------------------

In February 2001 the Company entered into a Master Agency Agreement with Key
Com, Inc. ("Key Com") which developed, and now operates under the trade name
XTRAN, an electronic system for transferring funds from one location to another.
Currently, XTRAN initiates funds transfer from approximately 107 remittance
locations in Florida, Georgia and Washinton, D.C. and electronically transfers
the funds to any of Key Com's approximately 60 locations in Jamaica although Key
Com has contracted for an additional 2,100 locations in Jamaica.

                                      F-7

<PAGE>


                                INSTANET, INC.
                          (a Development Stage Company)

                          Notes to Financial Statements



Under the Master Agency Agreement the Company obtained exclusive right to
initiate funds transfers from the Company's Web site to any payout location,
which accepts XTRAN funds transfers. Under the agreement the Company will
receive fees from Key Com for obtaining additional XTRAN remittance locations
worldwide.

The Master Agency Agreement also entitles the Company to obtain remittance
locations for XTRAN anywhere in the world on a non-exclusive basis. In such
event, the Company is entitled to 9% of the fee charged by XTRAN for payouts
outside the U.S. and 5% of XTRAN's fee for payouts within the U.S. The Company
is also entitled to a fixed fee of $225 for each remittance location established
on behalf of XTRAN, and a $3,000 monthly fee, cancelable by Key Com on 30 days
notice, to assist Key Com in developing new Florida remittance locations. No
payments have been made or accrued pursuant to this provision since KeyCom has
cancelled such payments, however, KeyCom may reinstate this provision in the
future. No operations have commenced under this agreement.


Note 3 - Stockholders' Equity
-----------------------------

2001 Public Offering
--------------------

In December 2001 the Company completed a public offering of 158,000 shares of
common stock at $1.00 per share. The proceeds of the offering were approsimately
$88,000 net of offering costs of approximately $99,000.

Stock Options
-------------

In February 2001, the Company adopted the 2001 Stock Option Plan (the "Plan"),
which provides for the grant to employees, officers, directors and consultants
of options to purchase up to an aggregate of 250,000 shares of common stock,
consisting of both incentive stock options and non-qualified options. For
options granted to an employee owning shares of common stock possessing more
than 10% of the total combined voting power of all classes of the Company's
common stock, the option price shall not be less than 110% of the fair market
value of the common stock, on the date of grant. The incentive stock options
granted under the Plan expire ten years from the date of grant except incentive
stock options issued to 10% or greater stockholders are limited to five-year
terms. The Plan provides for a three-year vesting period. The Company has
granted 100,000 options under the Plan to an executive officer, and 25,000
options to an employee, exercisable at $.25 per share. No compensation expense
was recognized in the financial statements as the exercise price was in excess
of the fair market value of the Company's stock on the date of grant.

                                      F-8

<PAGE>


                                INSTANET, INC.
                          (a Development Stage Company)

                          Notes to Financial Statements



The following table presents the activity for options outstanding and
exercisable:

                                                                       Weighted
                                                          Weighted     Average
                                             Incentive    Average     Remaining
                                               Stock      Exercise   Contractual
                                              Options      Price         Life
                                             --------     --------     --------

Outstanding - January 9, 2001 (Inception)        --       $   --
         Granted                              125,000         0.25
         Exercised                               --           --
                                             --------     --------

Outstanding - December 31, 2001               125,000     $   0.25         4.08
                                             ========     ========     ========


Had compensation cost for stock-based compensation been determined based on the
fair value or the grant date consistent with the method of SFAS 123, the
Company's net income and earnings per share would not have been reduced due to
the fair value of grants to employees had no fair value based upon calculating
the fair value utilizing the Black-Scholes option pricing model with the
following assumptions: expected life of 5 years, 0% volatility, risk free
interest rate of 5.5%, and a 0% dividend yield.


Note 4 - Related Party Transactions
-----------------------------------

The corporate offices of the Company are located at the corporate offices of the
president of the Company. No rent has been charged, but there can be no
assurance that rent will not be charged in the future. The value of the rent
received is immaterial to the financial statements as a whole.

In 2001, the Company signed note agreements with the stockholders of the Company
for aggregate loans in the amount of $78,000 and bearing interest at an annual
rate of 12%. During October 2001, the Company repaid the notes in full along
with the related accrued interest from the proceeds of its offering of common
stock.


                                      F-9
<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
-----------------------------------------------------------------------

     None.


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT
--------------------------------------------------------------------------------

     The name, age and position held in the Company by its executive officers
and directors as of the date of this Report are as follows:

<TABLE>
<CAPTION>

      Name              Age                   Office                       Officer/Director Since
      ----              ---                   ------                       ----------------------
<S>                     <C>     <C>                                             <C>
Earnest Mathis, Jr.     42      Chief Executive Officer, Chief Financial        January 2001
                                Officer and Director
Van R. Perkins          55      Vice President, Secretary and Director          January 2001
Michael G. Carpenter    44      Chief Technical Officer                        February 2001

</TABLE>

     Directors hold office for a period of one year from their election at the
annual meeting of stockholders and until their successors are duly elected and
qualified. Officers are elected by, and serve at the discretion of, the Board of
Directors. None of the above individuals has any family relationship with any
other. The Company's audit committee is composed of Messrs. Mathis and Perkins.
Directors do not receive payment for attending Board meetings, but are
reimbursed for out-of-pocket expenses.

     The following is a summary of the business experience of the Company's
three executive officers and directors, none of whom has had any experience
managing Internet companies or companies engaged in the funds transfer business:

     Earnest Mathis, Jr. has been President and a director of Inverness
Investments, a privately held financial consulting company based in Denver,
Colorado, since 1987. Since February 1998, Mr. Mathis has also been a manager of
Amerigolf, LLC, a golf course development company. From January 1997 to the
present, Mr. Mathis has been President of Integrated Medical Services, Inc.,
previously a medical waste processor and hauler that was sold in 1999 to
Stericycle, Inc. Integrated Medical Services, Inc. is a non-operating company.
He is a director of Vov Enterprises, Inc., Zedik Enterprises, Inc., and Care
Concepts, Inc. all of which are inactive companies with no current business
operations that are seeking to merge with operating companies, but are subject
to SEC reporting requirements. Mr. Mathis attended Denver University where he
studied finance. He devotes 40 hours per month to the Company's affairs.

     Van R. Perkins has been the President and Chief Executive Officer of
Business Development Corporation, a privately held Colorado corporation, since
1985. Business Development Corporation is engaged in the business of investing
in securities for its own account and in providing strategic financial
consulting services. He devotes 40 hours per month to the Company's affairs.

     Michael G. Carpenter agreed to become the Company's Chief Technical Officer
in February 2001. Since January 2000, Mr. Carpenter has been the Chief Executive
Officer of Linux Wizardry, Inc., a software company that produces new products
in the Linux and router areas. From July 1997 to January 2000, Mr. Carpenter was
President of Internet Software Group, a firm specializing in the development of
database-driven Web sites. In 1999 Mr. Carpenter was also employed by IBM in its
voice synthesis software division. From October 1997 to December 1998, Mr.
Carpenter was also employed by Motorola as a system administrator. From December
1994 to September 1997, Mr. Carpenter was President and founder of EmiNet
Domain, Inc., a Web design and programming company. He devotes ten hours per
month to the Company's affairs but is expected, upon completion of the offering,
to devote up to 70 hours per month for which he will be compensated on an hourly
basis.

                                       9
<PAGE>


ITEM 10. EXECUTIVE COMPENSATION
-------------------------------

     None of the Company's executive officers has received or currently receives
compensation. The Company does not have employment agreements with any of its
executive officers.

Option Grants in Last Year and Stock Option Grants

     The following table provides information on option grants during the year
ended December 31, 2001 to the named executive officers:

                               Individual Grants
                               -----------------

                                     % of Total Options
                         Options        Granted to        Exercise  Expiration
Name                     Granted     Employees in Year     Price       Date
----                     -------     -----------------     -----       ----

Earnest Mathis             -0-              0%               --         --
Van R. Perkins             -0-              0%               --         --
Michael G. Carpenter     100,000          100%             $.25       2/5/06


Aggregate Option Exercise of Last Fiscal Year and Fiscal Year-End Option Values

     There were 100,000 executive officers' unexercised options at December 31,
2001. No shares of Common Stock were acquired upon exercise of options during
the fiscal year ended December 31, 2001.

Stock Option Plan.

     In February 2001, the Company's stockholders adopted its 2001 Stock Option
Plan, which provides for the grant to employees, officers, directors and
consultants of options to purchase up to an aggregate of 250,000 shares of
common stock, consisting of both "incentive stock options" within the meaning of
Section 422A of the United States Internal Revenue Code of 1986 (the "Code") and
"non-qualified" options. Incentive stock options are issuable only to employees,
while non-qualified options may be issued to non-employee directors, consultants
and others, as well as to employees.

     The Plan is administered by the Company's board of directors, which
determines those individuals who are to receive options, the time period during
which the options may be partially or fully exercised, the number of shares of
common stock that may be purchased under each option, and the option price.

     The per share exercise price of the common stock subject to an incentive
stock option or non-qualified option may not be less than the fair market value
of the common stock on the date the option is granted. The per share exercise
price of the common stock subject to a non-qualified option will be established
by the board of directors. The aggregate fair market value, determined as of the
date the option is granted, of the common stock that any employee may purchase
in any calendar year pursuant to the exercise of incentive stock options may not
exceed $1,000,000. No person who owns, directly or indirectly, at the time of
the granting of an incentive stock option to him, more than 10% of the total
combined voting power of all classes of the Company's stock is eligible to
receive any incentive stock options under the Plan unless the option price is at
least 110% of the fair market value of the common stock subject to the option,
determined on the date of grant. Non-qualified options are not subject to this
limitation.

     No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by him or her. In the event of
termination of employment other than by death or disability, the optionee has
three months after such termination during which he or she can exercise the
option. Upon termination of employment of an optionee by reason of death or
permanent total disability, his or her option remains exercisable for one year
thereafter to the extent it was exercisable on the date of such termination. No
similar limitation applies to non-qualified options.

     Options under the Plan must be granted within ten years from the effective
date as amended of the Plan. The incentive stock options granted under the Plan
cannot be exercised more than ten years from the date of grant except that
incentive stock options issued to 10% or greater stockholders are limited to
five year terms. Options granted under the Plan may provide for the payment of
the exercise price in cash or by delivery to us of shares of common stock
already owned by the optionee having a fair market value equal to the exercise
price of the options being exercised, or by a combination of such methods of
payment. Therefore, an optionee may be able to tender shares of common stock to
purchase additional shares of common stock and may possibly exercise all of his
stock options with no additional investment other than his original shares.

                                       10
<PAGE>


     Any unexercised options that expire or that terminate upon an optionee
ceasing to be an officer, director or an employee becomes available once again
for issuance. To date, the Company has granted 100,000 options under the Plan to
Mr. Carpenter, one of its executive officers, and 25,000 options to an employee,
exerciseable at $.25 per share.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------

     The following table sets forth information with respect to the beneficial
ownership of the Company's common stock owned, as of December 31, 2001, by:

o    Holders of more than 5% of the Company's common stock;

o    Each of the Company's directors; and

o    All of the Company's directors and executive officers as a group.

     Each stockholder's address is in care of the Company at 26 West Dry Creek
Circle, Suite 600, Littleton, Colorado 80120.

                                       Number of            Percent of Common
                                    Shares of Common           Stock Owned
  Name of Beneficial Owner            Stock Owned            After Offering
  ------------------------            -----------            --------------

Mathis Family Partners, Ltd.            450,000                   28.0%
Van R. Perkins                          900,000                   56.0%
Michael G. Carpenter (1)                100,000                    6.2%
All officers and directors as a        1,450,000                  90.2%
  group (two persons)

(1)  Represents stock options to purchase 100,000 shares at $.25 per share.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

     Management of the Company believes that the transactions described below
were no less fair than the terms of transactions which the Company might
otherwise have entered into with third party non-affiliated entities. All
related party transactions must be approved by a majority of the disinterested
members of the Company's Board of Directors.

     Mathis Family Partners, Ltd., a limited partnership controlled by Mr.
Mathis, and Mr. Perkins, purchased $125,000 and $225,000, respectively of debt
securities of KeyCom as part of a private placement of these securities to a
number of accredited investors. The securities are repayable only out of
transaction fees charged by KeyCom for its funds transfers and included stock
options to purchase shares of common stock of KeyCom. Neither Mr. Perkins nor
Mr. Mathis are officers, directors or principal stockholders of KeyCom or with
KeyCom's parent company, Emergent.

                                       11
<PAGE>


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

     a.   Exhibits:

          Exhibit No.       Title
          -----------       -----

          3.01     Articles of Incorporation of the Registrant(1)

          3.02     Bylaws of the Registrant(1)

          10.01    Master Agency Agreement with Key Com, Inc.(1)

          10.02    Stock Option Plan(1)

          (1)  Previously filed.

     b.   Reports on Form 8-K.

     No reports on Form 8-K were filed during the last quarter of the period
     covered by this Report.




                                       12
<PAGE>


                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized, in Littleton, Colorado, on March 29, 2002.

                                         INSTANET, INC.



                                         By: /s/ Earnest Mathis
                                         ---------------------------------------
                                         Earnest Mathis, Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on the dates
indicated.

      Signature                       Title                           Date
      ---------                       -----                           ----


/s/ Earnest Mathis       Chief Executive Officer, Chief           March 29, 2002
---------------------    Financial Officer (Principal
Earnest Mathis           Accounting Officer), and Director


/s/ Van R. Perkins       Vice President, Secretary and Director   March 29, 2002
---------------------
Van R. Perkins






                                       13