U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-QSB


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

For the Quarterly Period Ended September 30, 1999

Commission File Number 313-12979


                                 VOICENET, INC.
          (Exact name of small business issuer as specified in charter)

Delaware                                                    13-3896031
(State of either jurisdiction of                            (IRS Employer
incorporation  or organization)                             Identification No.)



                                1040 First Avenue
                               New York, New York
                    (Address of principal executive offices)

                                  212-572-4861
                           (Issuer's telephone number)


     -----------------------------------------------------------------------
   (former name, address and former fiscal year, if changed since last report)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.  Yes X   No
                                                               --     --

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: 3,261,550



<PAGE>


                                 VOICENET, INC.

                                      INDEX


Part I - Financial Statements

         Balance Sheets -September 30, 1999 and December 31, 1998

         Statements  of  Operations - For the Three Months Ended  September  30,
         1999 and September 30, 1998

         Statements of Operations - For the Nine Months Ended September 30, 1999
         and September 30, 1998

         Statements  of Cash Flows for the Nine Months Ended  September 30, 1999
         and September 30, 1998

         Notes to Unaudited Financial Statements

         Management's Discussion and Analysis





                                      -2-
<PAGE>






                                 VOICENET, INC.
                                  BALANCE SHEET


ASSETS:                                            Sept 30, 1999   Dec. 31, 1998
                                                    (unaudited)      (audited)
                                                    -----------      ---------
Current Assets:

Cash and Cash Equivalents                           $2,979,182         $34,610
Investments                                                  -          12,246
Accounts Receivables                                       824          44,500
Due from VNA                                                 -          45,015

         Total current assets                        2,980,006         136,371

Organization costs, net                                      -             900
Intangible Assets, net                               4,074,600       4,410,000
Security Deposits                                       12,891          12,475
Deferred Compensation                                        -          26,450
Total Other Assets                                   4,087,491       4,449,825

         Total Assets                                7,067,497       4,586,196

CURRENT LIABILITIES
Accounts Payable                                       118,029         217,249
Total current liabilities                              118,029         217,249

Advances from Parent                                 3,078,485               -

Stockholders' Equity

Preferred  Stock,  $.01  par  value,
1,000,000 shares authorized, no shares
outstanding Common Stock, $.01 par value,
10,000,000 shares authorized 3,261,550
shares
issued and outstanding                                  33,387          33,387
Additional Paid in Capital                           6,168,700       6,168,700
Stock Options Outstanding                              916,500         916,500
Other non-owner changes in equity                            -         (15,719)
Retained Deficit                                    (3,247,604)     (2,733,921)
Total stockholders' equity                           3,870,983       4,368,947

Total liabilities and stockholders' equity           7,067,497       4,586,196




                                      -3-
<PAGE>





                                 VOICENET, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)
                    FOR THE THREE MONTHS ENDED SEPTEMBER 30,


                                                         1999            1998
                                                        ------          ------

Revenues                                                      -          45,500
Interest Income                                               -           3,608

Costs and Expenses
Cost of Sales                                                 -           7,958
General and Administrative Expenses                      48,000          99,642
Depreciation and Amortization                           170,000               -

Total Costs                                             218,000         107,600

Net Loss                                               (218,000)        (58,492)

Net loss per Common Share                                 ($.07)          ($.02)

Weighted Average number of
shares outstanding during the period                  3,261,550       3,261,550




                                      -4-
<PAGE>





                                 VOICENET, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,


                                                         1999            1998
                                                        ------          ------

Revenues                                                      -          45,500
Interest Income                                               -           8,533

Costs and Expenses
Cost of Sales                                                 -           7,958
General and Administrative Expenses                     178,283         433,409
Depreciation and Amortization                           335,400               -

Total Costs                                             513,683         441,367

Net Loss                                               (513,683)       (387,334)

Net loss per Common Share                                 ($.16)          ($.12)
Weighted Average number of
shares outstanding during the period                  3,261,550       3,261,550





                                      -5-
<PAGE>





                                 VOICENET, INC.
                             STATEMENT OF CASH FLOWS
                            FOR THE NINE MONTHS ENDED
                                  SEPTEMBER 30,


                                                        1999            1998
                                                       ------          ------


Net loss                                               (513,683)       (387,334)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Amorization Expense                                     336,300               -
Increase (Decrease) in accounts receivable               38,876         (45,500)
Increase (Decrease) in other receivables                  4,800               -
(Increase) in security deposits                            (416)              -
(Decrease) in deferred compensation                     (26,450)              -
(Increase) Decrease in accounts payable                  99,220         (64,260)
Advances from Parent                                    (45,015)       (320,769)

Total                                                  (106,368)       (817,863)

Financing Activities

Purchase of investments                                       -         (27,965)
Sale of Investments                                     (27,965)              -
Advances from Parent                                  3,078,905               -
Total                                                 3,050,940         (27,965)

Net increase (decrease) in cash                       2,944,572        (845,828)

Cash, beginnning of period                               34,610         909,217

Cash, end of period                                   2,979,182          63,389





                                      -6-
<PAGE>




                                 VOICENET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                                   (UNAUDITED)


Note 1 - Basis of Presentation

The  financial  statements  have been  prepared by the Company,  without  audit,
pursuant to the rules and regulations of the Securities and Exchange  Commission
and reflect all adjustments which are, in the opinion of management,  nescessary
to present fairly the  information  required  herein.  Certain  information  and
footnote  disclosures  normally included in the financial statements prepared in
accordance  with  generally  accepted  accounting  principles  have been omitted
pursuant to such rules and regulations,  although  management  believes that the
disclosures are adequate to make the information  presented not misleading.  The
results of operations for the nine months ended  September 30, 1999 and 1998 are
not nescessarily  indicative of the results of operations to be expected for the
full year.

Note 2 - Nature of Business

Voicenet,  Inc. (the " Company"),  a Delaware  corporation,  was incorporated on
April 2, 1996. The Company was established for the marketing and distribution of
continuous  speech and voice  recognition  systems.  The Company has had minimal
sales and, has incurred losses since inception. The Company is majority owned by
Voicenet (Aust.) Ltd. ("VNA") an Australian company.

Note 3 - Net Loss per Common Share

Net loss per common share is computed  based on the weighted  average  number of
shares of common stock outstanding for the periods pressented. The effect of the
stock  options and warrants on the net loss per share was  anti-diutive  for the
periods presented.

Note 4 - Purchase of Technology

On August 1, 1996, the Company  entered into a Technology and Sales  Agreement (
the "technology  agreement" ) with VNA to acquire certain  exclusive  rights and
ownership  with  respect  to  the  development,   use,   marketing,   sales  and
distribution  of  a  continuous   computer  based  digital  voice   compression.
recognition  and  recording  technology.  The term of the  agreement  is for the
longer of 25 years or the life of any patents and  extensions  granted under the
patent applications.




                                      -7-
<PAGE>





Note 5 - Due to Parent Company

The Company was  advanced  monies by VNA for  completion  of its  marketing  and
development of technology. In October 1999, advances aggregating $3,000,000 were
credited for the purchase of newly issued convertible preferred stock.

On October 16 , 1999, VNA elected its conversion  option and 1,576,861 shares of
common stock were issued to VNA.

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations:

The Company had no revenues from continuing  operations  through the nine months
ended  September  30,1999.  Revenues  aggregating  $45,500  occured in the third
quarter of 1998.  The Company has incurred  losses since its  inception in 1996.
The Company's losses have related principally from legal, accounting,  printing,
marketing and travel expenditures.  The Company expects to incur operating costs
and  possible  losses  therefrom  over the next several  years due  primarily to
expanded sales and marketing  efforts,  including the  establishment  of product
sales office,  the staffing of such office and other  marketing  activities  and
costs  to be  incurred  as they  seek  potential  customers  for  the  Company's
products.

There can be no assurance of when and whether the Company will generate  revenue
or become  profitable  on a sustained  basis,  if at all.  Although  the Company
anticipates  sales  to  commence   shortly,   results  of  operations  may  vary
significantly  from  quarter  to  quarter  due to timing of  payments  and other
factors. The timing of revenues,  if any, may not match the timing of associated
product development and other expenses.

RESULTS OF OPERATIONS FOR THE PERIODS ENDED SEPTEMBER 30,1999;  AS COMPARES WITH
SEPTEMBER 30, 1998

Net losses for the nine month period ended  September  30, 1999 were $513,683 as
compared to $387,334 for the nine months ended September 30, 1998. There were no
revenues  for the period  ended  September  30,  1999 as compared to revenues of
$45,500  for the nine  months  ended  September  30,  1998.  Total  general  and
administrative  expenses  were $178,283 for 1999 as compared to $433,409 for the
nine months ended September 30, 1999.

In the fourth quarter of 1998, the Company  commenced  amortizing its intangible
asset over a twenty five year useful  life.  In the third  quarter of 1999,  the
Company reviewed the estimated life of the intangible asset and reduced the life
of the useful  asset to seven  years.  Amortization  expense for the nine months
ended September 30, 1999 aggregated $335,400.





                                      -8-
<PAGE>




LIQUIDITY AND CAPITAL RESOURCES

The Company had a working capital  deficit as of December  31,1998 of $80,878 in
comparison  to working  capital of  $2,861,977  as of September  30,  1999.  The
additional  working  capital was primarily  due to the advances (and  subsequent
conversion into permanent  capital) made by VNA. The increase in the accumulated
deficit  is  primarily  related  to  continuing  operating  costs  with  minimal
operating  income.  For the three months ended  September  30,1999 the Company's
cash  requirements  were  satisfied  from the cash reserves in its operating and
investment accounts.

The Company  believes that its existing cash and cash  equivalents,  (based upon
the recent $3,000,000  capital injection  obtained from VNA) , are sufficient to
meet its operating expense and capital expenditures for at least the next twelve
months.  The Company's  future  capital  requirements,  however,  will depend on
numerous factors  including (i) the  effectiveness of product  commercialization
and marketing  activities,  including the creation and progress of its sales and
marketingactivities  (ii) the effect of competing  technological  and  marketing
developments,  from  competitors  that have greater  resources than the Company.
However,  if operating  expenses are higher than  expected or if cash flows from
operations  are  lower  than  anticipated,  there can be no  assurance  that the
Company  will  have  sufficient  resources  available  to it on  terms  that are
satisfactory to the Company.

OTHER MATTERS

Filings Submitted on Form 8-K

During the quarter ended September 30, 1998 the Company  submitted one Report on
Form 8-K dated September 21, 1999 relating to the changing of accountants.





                                      -9-
<PAGE>




                                    SIGNATURE

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

November 15, 1999

                                                 VOICENET, INC.



                                                 By: /s/ Howard J. Messer
                                                 Name: Howard J. Messer
                                                 Title: Chief Financial Officer





                                      -10-