`SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

         For the fiscal year ended July 31, 2001

[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

                        COMMISSION FILE NUMBER 333-86031

                               PHON-NET.COM, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

          FLORIDA                                        98-0198225
-------------------------------                     -------------------
(State or Other Jurisdiction of                       (I.R.S. Employer
Incorporation or Organization)                       Identification No.)


                         16th West 46th Street 7th Floor
                             New York New York 10039
               --------------------------------------------------
               (Address of Principal Executive Offices)(Zip Code)

                                 (212) 504-8206
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Securities Exchange Act of
1934:
         None.

Securities registered under Section 12(g) of the Securities Exchange Act of
1934:
         None.

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 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 [  ]  No [X]

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

State registrant's revenues for the year ended July 31, 2001:  $4,459

STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT COMPUTED BY REFERENCE TO THE CLOSING BID PRICE OF ITS COMMON
STOCK AS REPORTED BY THE OTC BULLETIN BOARD ON NOVEMBER 13,2001 ($.12):
$1,483,861

                      APPLICABLE ONLY TO CORPORATE ISSUERS

THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK, PAR VALUE
$.001 PER SHARE (THE "COMMON STOCK") AS OF NOVEMBER 13,2001, WAS 12,365,509.

Transitional Small Business Disclosure Format (check one):  Yes [ ]  No [X]


                       DOCUMENTS INCORPORATED BY REFERENCE

         None.


         THIS ANNUAL REPORT FORM 10-KSB CONTAINS "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ALL STATEMENTS,
OTHER THAN STATEMENTS OF HISTORICAL FACTS, INCLUDED IN OR INCORPORATED BY
REFERENCE INTO THIS FORM 10-KSB, ARE FORWARD-LOOKING STATEMENTS. IN ADDITION,
WHEN USED IN THIS DOCUMENT THE WORDS "ANTICIPATE," "ESTIMATE," "INTENDS,"
"PROJECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS,
UNCERTAINTIES AND ASSUMPTIONS. SHOULD ONE OR MORE OF THESE RISKS OR
UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT,
ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE ANTICIPATED, ESTIMATED OR
PROJECTED. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS WE INCLUDE IN
SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT ASSURE YOU THAT THESE
EXPECTATIONS WILL PROVE TO BE CORRECT.

                                     PART 1

ITEM 1. DESCRIPTION OF BUSINESS

     We are a Florida corporation that develops and markets software products
that primarily benefit Internet users, persons and businesses who operate
Internet web sites and advertisers on the Internet. We currently have two
products. One is our "Phon-Net Direct Connect" software. The other is our
"Phon-Net Search Engine".

PHON-NET DIRECT CONNECT

     Direct Connect provides increased capability to the Internet user whose
computer and telephone share the same phone line. A visitor to an Internet web
site can establish telephone contact with the web site operator or web site
advertiser, while continuing to view the web site. Among the features of Direct
Connect are that:

         o        the computer's modem connection is not disconnected during a
                  Direct Connect telephone call;
         o        web site operators and advertisers can increase e-commerce
                  revenues by additional sales assisted by telephone
                  communication between the Internet consumer and the web site
                  retailer;
         o        security risks are reduced by providing personal and credit
                  card data by telephone, rather than transmitting it over the
                  Internet;
         o        following termination of a Direct Connect telephone call,
                  computer contact with the web site is seamlessly
                  reestablished; and
         o        the software is licensed by us to the web site operator or
                  advertiser - we retain all ownership rights - and it is free
                  to the consumer.

     Our experience leads us to believe that security concerns, primarily the
transmission of personal and credit card information over the Internet, have
prevented Internet commerce from achieving widespread acceptance as a method of
commerce. A significant advantage that Direct Connect provides for Internet
commerce is that credit card payment may be made during the telephone portion of
the transaction, rather than transmitting personal and credit card information
over the Internet.

     Direct Connect is currently available directly from us at our web site, as
well as through distributors who market Direct Connect along with their own
Internet related products and services. We license our Direct Connect software
to businesses. At the time of purchase, the customer is provided with a password
that allows the customer to download the information directly to its web site.
Our customers license Direct Connect for an initial one year license fee of $99.
After the expiration of one year, Direct Connect has a mechanism that makes it
inoperable unless the customer renews the license. Prior to the end of the year,
an E-Mail is sent to the customer advising that the license will terminate and
that the customer can then renew the license on a year to year basis.

         A Direct Connect software function routes all telephone calls using
Direct Connect through a central computer server. This enables us to:

         o        activate a customer's initial use of Direct Connect;
         o        monitor usage to ensure that only licensed customers are using
                  Direct Connect;
         o        monitor the termination dates of customers' licenses so they
                  may be notified that it is time to renew; and
         o        gather data concerning usage of direct connect.

     We currently use the services of Netcom Canada Inc. of Toronto, Canada, to
host our central server. We pay Netcom a fee for its services on an invoice
basis, however, there are numerous companies that provide server host services
and we are not dependent upon Netcom for this purpose.

PHON-NET SEARCH ENGINE

     Our other product is the Phon-Net Search Engine.  The Search Engine
incorporates Direct Connect and functions as a yellow pages. This product
enables the user to search the world wide web and a local interactive telephone
database for a desired business listing. Once the business is identified and its
telephone number is found, the user can command Direct Connect to contact the
party by telephone.

     Our Search Engine provides a service to consumers seeking to locate a
business. It is also designed to enable businesses to expand their presence in
the marketplace and to enable them to provide desired information to consumers
seeking their services. We intend to market the Search Engine to businesses for
an annual fee, including a license fee for Direct Connect.

     We have completed  beta-testing of our Search Engine, and believe that this
product is currently complete, operational and ready for market introduction. At
this time, we have elected to devote our efforts and limited financial resources
toward marketing of Direct Connect, and we do not intend to roll-out this
product into the marketplace until we commence generating meaningful revenues
from our marketing of Direct Connect.

PRODUCT DEVELOPMENT

     On January 6, 1999, we entered into an agreement with Quad-Linq Software,
Inc., under which Quad-Linq agreed to develop, maintain, support and upgrade our
Direct Connect software, the concept for which was created by Brian Collins. For
its services, Quad-Linq was to acquire a 49% interest in the software, and 49%
of the net revenues from sales of the software. Under a June 30, 1999 amendment
to the original agreement, Quad-Linq relinquished its ownership interest in the
software, as well as its percentage of net revenues from sales of the software,
in exchange for which we issued 1,000,000 shares of our common stock to
Quad-Linq and an additional 2,000,000 shares to three of its principals. We also
granted options for an additional 1,000,000 shares to Quad-Linq and 1,000,000
shares to the three principals. The options are exercisable at $.40 per share,
until June 30, 2001. Under the amendment, Quad-Linq also agreed to provide
on-going service and support for the software.

     In late 1999, we were advised that Quad-Linq had dissolved, and as a
result, Quad-Linq would not be able to perform under the January 6, 1999
agreement, as amended. Therefore, on December 3, 1999, we entered into an
agreement with Christopher Georgelin and Roger Betterton, two of the former
principals of Quad-Linq. Under this agreement, Messrs. Georgelin and Betterton
assumed the obligations of Quad-Linq under the June 30, 1999 amendment. No
additional consideration was paid to Messrs. Georgelin and Betterton, as they
had been assigned the 1,000,000 shares and 1,000,000 options previously paid to
Quad-Linq.

     On February 2, 2000, we commissioned Quad-Linq Systems Inc., a corporation
recently formed by Messrs. Georgelin and Betterton, to develop a two telephone
line version of Direct Connect. For its services, we paid Quad-Linq Systems
$54,000. The two line version of Direct Connect has been completed and is
available for marketing.

SALES AND MARKETING

     We are marketing Direct Connect using several strategies to reach Internet
web site operators. The target market for Direct Connect includes:

         o        web site operators;
         o        businesses that advertise on web sites;
         o        businesses that create and/or host web sites for others;
         o        distributors and resellers who "bundle" our software with
                  other Internet-related software products;
         o        developers of Internet-related software products, for
                  incorporation into their products; and
         o        resellers who believe that Direct Connect offers a viable
                  alternative to e-commerce security concerns.

     Over the past year, we entered into various exclusive and non-exclusive
territorial license agreements with unrelated third parties. These agreements
covered the United States, Canada, Australia and New Zealand. While the various
third parties with whom we contracted market telecommunications and
Internet-related products and services, these entities have been unable to
successfully develop marketing campaigns including our Direct Connect software.
Consequently, during the fiscal year, we terminated all of our third-party
contractual license and distribution arrangements, other than our licensing
arrangements covering Australia and New Zealand. Termination of these
arrangements was effected by the mutual agreement between us and the contracting
third parties. We continue to discuss licensing arrangements with third parties
located domestically and internationally and may enter into additional licensing
arrangements if circumstances warrant. Termination of these license arrangements
does not preclude us from reaching new understandings with the terminated third
parties to renew use of their marketing services upon terms and conditions to be
agreed upon.

     AUSTRALIA AND NEW ZEALAND: On December 9, 1999, we entered into two License
Agreements with Brocker Technology Group (NZ) Limited, a publicly-held New
Zealand corporation. One license agreement covers New Zealand and the other
covers Australia. The agreements grant Brocker the exclusive license to use,
market, distribute and sublicense our Phon-Net Direct Connect software
throughout Australia and New Zealand. We understand that Brocker has established
relationships with Telecom New Zealand and Telstra in Australia, that will
provide Brocker with access to a large segment of the New Zealand and Australian
market for Direct Connect.

     We are entitled to a license fee from  Brocker for each Direct Connect
license activated for Brocker. License fees from Brocker are payable quarterly.
We also share ownership with Brocker of the user database arising by reason of
our license agreement with Brocker. The term of our agreement with Brocker is
one year, upon expiration of which, Brocker may renew the agreement for one
additional year. The agreement may be terminated by either party following an
uncured breach of the agreement by the other party, or upon a party's
liquidation, bankruptcy or similar event. We have agreed to deposit a current
version of the source code for Direct Connect software with a third-party trust
company. The source code may be released to Brocker so that it can continue to
use Direct Connect in the manner provided in the agreement, in the event of our
uncured material breach of the agreement, or our bankruptcy, liquidation or
similar event. We understand that Brocker is currently a formulating marketing
plan that includes Direct Connect.

COMPETITION

     The market for online commerce over the Internet is new, rapidly evolving
and intensely competitive. Competition will likely increase in the future.
Barriers to entry are relatively low, and current and new competitors can launch
new sites at a relatively low cost using commercially available software.

     There are several software and/or hardware products currently available or
under development that perform functions similar to our Direct Connect software.
We believe that the primary advantage Direct Connect has over these other
products is its ability to seamlessly reconnect to the Internet following
completion of a telephone call. To the extent that Direct Connect receives
patent protection, it is our understanding that substantially new technology
must be developed in order for a third party to market software that performs
the primary functions of Direct Connect.

     Our Phon-Net Search Engine will compete with a wide range of interactive
and printed business directories, including those published and/or marketed by
large regional telephone companies such as the Baby Bells and their affiliates.
Interactive search engine directories have become increasingly popular, and we
anticipate that continued competition for our Search Engine will come from
Internet-related and technology companies. These companies are substantially
larger and have greater financial and other resources that we have. We believe
that we can compete successfully with other search engine directories because
the Phon-Net Search Engine incorporates our proprietary Direct Connect software.

PATENT APPLICATION

     We have filed patent applications for our Direct Connect software with the
United States Patent and Trademark Office and with the Canadian Patent and
Trademark Office. The applications are entitled "Communications Method Allowing
for Alternating Voice and Data Connections Over a Single Line". Our U.S. Patent
Application has been accorded Serial No. 09/248,200, and our Canadian
Application has been accorded Serial Number 2,313,287.

     In the event our applications result in the issuance of a patent in the
United State and/or Canada, the ability of others to develop technology that
performs substantially similar functions will be limited. However, the
application and review process can take considerable time and we are unable to
predict whether a patent for Direct Connect will issue in either or both
countries.

GOVERNMENT REGULATION

     We are subject, both directly and indirectly, to various laws and
governmental regulations relating to our business. We believe we are currently
in compliance with such laws and that they will not have a material impact on
our operations. Moreover, there are currently few laws or regulations directly
applicable to access to or commerce on the Internet. However, due to the
increasing popularity and use of the Internet, we expect that laws and
regulations will be adopted. The enactment of any such laws or regulations in
the future may slow the growth of the Internet, which could in turn decrease the
demand for our services and increase our cost of doing business or otherwise
have an adverse effect on our business, results of operations and financial
condition.

CORPORATE HISTORY

     Phon-Net.com, Inc. is a corporation organized under the laws of the State
of Florida on January 16, 1997, under the name XGA Golf International, Inc. XGA
Golf was formed for the purpose of acquiring three companies engaged in various
aspects of the golf and golf-travel industries. However, these acquisitions were
not completed. In June 1998, XGA Golf changed its name to Agrosol, Inc. From
June 1998 until October 1998, XGA Golf could be considered a shell company
seeking to acquire an operating business. Its officers and directors during this
period were Lana Bea Turner, Eric Redd and Steven Dadson. Its principal
shareholders at the time were Eric Redd, John Canavan, Dorothy A. Cleveland and
Richard Dibona.

     Piedmont Technologies, Inc. was organized under the laws of British
Columbia on March 18, 1996. Phon-Net Corp. was organized under the laws of the
State of Nevada on August 28, 1998. Effective October 5, 1998, Piedmont was
reorganized to change its domicile from British Columbia to Nevada. The
reorganization was effected by Phon-Net Corp.'s acquisition of all of the
outstanding shares of Piedmont and its subsidiaries, The National-For-Sale Phone
Company and VNETT Enterprises Inc. At the time of the reorganization, Phon-Net
Corp. owned certain intellectual property developed by Brian Collins and
incorporated in various interactive voice and text products. At the time of the
reorganization, Piedmont, through its subsidiaries, had a Canadian operating
license for the technology that was owned by Phon-Net Corp. At that time, Brian
Collins was also an officer and directors of Piedmont, and owned approximately
20% of Piedmont common stock. Following this transaction, Piedmont became a
wholly-owned subsidiary of Phon-Net Corp. and National and VNETT remain
wholly-owned subsidiaries of Piedmont.

     On October 5, 1998, Agrosol, Inc. exchanged 11,410,000 shares of its common
stock, at an ascribed value of nil, for all of the outstanding shares of
Phon-Net Corp., and changed its name to Phon-Net Corporation. The assets we
acquired from Phon-Net Corp. at the time of the share exchange consisted of
ownership of the rights to our Phon-Net Direct Connect and Phon-Net Search
Engine, as well as the rights and assets of Piedmont including the operations of
National.

     In January 1999, we changed our name to Phon-Net.com, Inc. On April 15,
1999, we increased the number of shares of common stock we are authorized to
issue to 80,000,000.

     Currently, all ownership rights to our Direct Connect and Search Engine
products are owned by Phon-Net.com, Inc. Piedmont's operations are limited to
performing beta-testing of our products. National operates an interactive real
estate and professional listing service which, through an "800" telephone
number, allows users to access real estate listings, as well as providers of
related services such as real estate attorneys, surveyors and title companies.
National's operations are not currently material to our business or financial
condition. VNETT owns the rights to a search engine concept that enables users
to locate and reserve video tapes from retail video rental locations. VNETT is
not currently engaged in active operations.

     IN September 2001, management of Phon-net was change from Brian Collins to
Todd Violette.

EMPLOYEES

     We currently employ two people, one is full-time employee, in the following
capacities of executive officers, one administrative employee.

ITEM 2. DESCRIPTION OF PROPERTIES

     We are currently operating from 16th West 46th Street 7th Floor, New York
New York 10039.

ITEM 3. LEGAL PROCEEDINGS

(NONE)



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

         None.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS


     Our shares of common stock are traded on the OTC Electronic Bulletin Board
under the symbol "PHNT". From October 24, 2000 to November 12, 2001 the
Company's Stock has been trading on the OTC Bulletin Board market. From May 24,
2000 until October 24, 2000 our shares were traded over-the-counter, in the pink
sheets. The reported high and low bid prices for the common stock are shown
below for the period from October 1, 1998 (the date of business combination
between Agrosol, Inc. and Phon-Net Corp.) through September 30, 2000. The
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commissions, and may not represent actual transactions.

Period                                                 High             Low
------
October 1, 1998 - December 31, 1998                    $.37375          $.0625
January 1, 1999 - March 31, 1999                      $1.50             $.12
April 1, 1999 - June 30, 1999                          $.69             $.19
July 1, 1999 - September 30, 1999                      $.41             $.19
October 1, 1999 - December 31, 1999                    $.81             $.07
January 1, 2000 - March 31, 2000                      $8.47             $.73
April 1, 2000 - June 30, 2000                         $2.44             $.55
July 1, 2000 - September 30, 2000                     $1.90             $.50
October 1, 2000- December 31, 2000                    $0.625           $0.105
January 1, 2001- March 31, 2001                       $0.1875          $0.04
April 1, 2001- June 30, 2001                          $0.45            $0.06
July 1, 2001- September 30, 2001                      $0.12            $0.05

     Our common stock is owned of record by approximately 203 holders.  We have
never paid cash dividends on our common stock. We intend to keep future
earnings, if any, to finance the expansion of our business, and we do not
anticipate that any cash dividends will be paid in the foreseeable future. Our
future payment of dividends will depend on our earnings, capital requirements,
expansion plans, financial condition and other relevant factors.

     The market for securities of Internet-related technology companies and
companies that participate in emerging markets historically has been more
volatile than the market for stocks in general. The price of our common stock
may be subject to wide fluctuations in response to the following and other
factors:

         o        quarter-to-quarter variations in our operating results;
         o        our announcement of material events that affect our business;
         o        price fluctuations in sympathy to others engaged in our
                  industry; and
         o        the effects of coverage of our business or our management by
                  the press.

     If we do not have a substantial market for our shares, a significant number
of shares being sold could greatly affect the market and cause a decline in the
price of our common stock. Moreover, historic market prices may not be
indicative of the prices at which our shares can be bought or sold.

     The Securities and Exchange Commission has adopted regulations which
generally define a "penny stock" to be any equity security that has a market
price of less than $5.00 per share, subject to certain exceptions. Depending on
market fluctuations, our common stock could be considered to be a "penny stock".
A penny stock is subject to rules that impose additional sales practice
requirements on broker/dealers who sell these securities to persons other than
established customers and accredited investors. For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase of these securities. In addition he must receive the purchaser's
written consent to the transaction prior to the purchase. He must also provide
certain written disclosures to the purchaser. Consequently, the "penny stock"
rules may restrict the ability of broker/dealers to sell our securities, and may
negatively affect the ability of holders of shares of our common stock to resell
them.

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

RESULTS OF OPERATIONS

Fiscal Year Ended July 31, 2000 Compared to Fiscal Year Ended July 31, 1999

     For the fiscal year ended July 31, 2001, we generated revenues of $4,459, a
36% decrease from revenues of $6,896 for the fiscal year ended July 31, 2000.
This decrease was primarily caused by completion of beta sales on our search
engine product, lack of meaningful revenues from sales of Direct Connect and
fluctuations due to inconsistent sales while we develop more effective and
efficient marketing capabilities.

     For the 2001 fiscal year, we incurred a net loss of $(1,504,749) or
approximately $(.16) per share, compared to a net loss of $(4,540,842) or
approximately $(.59) per share for the 2000 fiscal year. The decrease in our net
loss was primarily attributable to reduced research and development expenses
following completion of development of Direct Connect and our search engine, as
well as efforts to curtail operating expenses. While we may continue to
experience a reduction in research and development expenses in the near term,
costs attributable to marketing activities will likely increase.

     Expenses of $1,509,208 for the year ended July 31, 2001 reflect a decrease
from expenses of $4,547,738 incurred during the fiscal year ended July 31, 2000.
This decrease in expenses results mainly from non-recurring costs associated
with the value of securities issued under management compensation plans.

LIQUIDITY, CAPITAL RESOURCES AND PLAN OF OPERATIONS

     As of July 31, 2001, 2000 and 1999, our auditors indicated in their audit
report that our net loss and working capital deficit raised substantial doubt
that we would be able to continue as a going concern.

     Our operations through fiscal 1999 were related to the interactive real
estate and professional listing service conceived by our subsidiary, and not to
our current products and services. Our historic business and results of
operations should not be viewed as indicative of future operations. While little
or no revenues are currently being generated from contracts relating to our
interactive real estate and professional listing service, the viability of the
service has been established and we are not discontinuing its operation.
However, we are currently focusing our marketing efforts on the launch of Direct
Connect, and we may not devote substantial resources to our listing service
until after the launch of Direct Connect is complete.

     Our business model includes our establishing marketing agreements and
strategic alliances with companies who have access to large databases of
business directories. We are currently re-evaluating our business model for the
Direct Connect Product due to the tremendous decline in web-based businesses. We
have the right to sell four multi-media products from our marketing channel
partnership.

     To date, we have funded our cash requirements from limited revenues from
operations and from the sale of shares of our common stock. As of July 31, 2001,
we had cash reserves of approximately $150 and no working capital. We no longer
anticipated that revenues from Direct Connect license fees would become
sufficient effort to pay for the operational cost during 2002. During the next
year we will dividend out our four subsidiaries with the intents to sell them.
We are expecting to net $300,000 per subsidiary. We anticipate hiring a tax
consultant to determine the value of the sale of our tax loss to generate cash.

     It is also possible that our proprietary Direct Connect software will be of
sufficient value to a third party to warrant an offer to acquire it. We will
consider all proposals designed to enhance shareholder values. Until such time
as we generate meaningful revenues, we will require additional funds in order to
fund our operations, including our payment of rent at our offices, and the
salaries of our executive officers. If we are unable to generate sufficient
revenues from operations, we will be required continue sales of our securities,
and we may be required to borrow funds, in order to sustain our operations. We
will continue to seek out strategic partners whose access to our target customer
base can increase our sales and profitability. We are engaged in active
discussions with several lenders to secure interim funding; however, these
discussions have not yet resulted in our receipt of financing. We may not be
able to secure financing on acceptable terms.



ITEM 7. FINANCIAL STATEMENTS


                               PHON-NET.COM, INC.
                          (A Development Stage Company)


                        CONSOLIDATED FINANCIAL STATEMENTS


                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)








                          INDEPENDENT AUDITORS' REPORT



To the Shareholders
Phon-net.com, Inc.
(A development stage company)

We have audited the consolidated balance sheets of Phon-net.com, Inc. (a
development stage company) as at July 31, 2001 and 2000, and the consolidated
statements of operations and deficit, cash flows, and stockholders' equity for
the years ended July 31, 2001, 2000, and 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with United States and Canadian generally
accepted auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable assurance 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.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at July 31, 2001 and
2000 and the results of its operations and its cash flows for the years ended
July 31, 2001, 2000, and 1999 in accordance with United States generally
accepted accounting principles.

Without qualifying our opinion, we draw attention to Note 1 to the consolidated
financial statements. The Company incurred a net loss of $1,504,749 during the
year ended July 31, 2001, and, as at that date, has not attained profitable
operations and is dependent upon obtaining adequate financing to fulfil its
development activities. These factors raise substantial doubt that the Company
will be able to continue as a going concern.

Vancouver, Canada

October 24, 2001                                           Chartered Accountants


            COMMENTS BY AUDITORS ON UNITED STATES - CANADA DIFFERENCE

In Canada, reporting standards for auditors do not permit the addition of an
explanatory paragraph when the financial statements account for, disclose and
present in accordance with generally accepted accounting principles conditions
and events that cast substantial doubt on the Company's ability to continue as a
going concern. Although our audit was conducted in accordance with both United
States and Canadian generally accepted auditing standards, our report to the
shareholders, dated October 24, 2001, is expressed in accordance with United
States reporting standards which require a reference to such conditions and
events in the Auditors' Report.

Vancouver, Canada

October  24, 2001                                          Chartered Accountants



PHON-NET.COM, INC.
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEETS
                            (Stated in U.S. Dollars)

                                                           JULY 31
                                                      2001          2000
                                                  -----------   -----------
ASSETS
Current
     Cash                                         $       150   $   154,421
     Accounts receivable                               16,714        23,927
     Due from related parties                               -       178,490
     Prepaid expenses                                     956         2,133
                                                  -----------   -----------
                                                       17,820       358,971

Capital Assets (Note 3)                                51,941        89,688
Intangibles (Note 4)                                  298,835       635,687
                                                  -----------   -----------
                                                  $   368,596   $ 1,084,346
                                                  ===========   ===========

LIABILITIES
Current
     Accounts payable and accrued liabilities     $   237,358   $   143,787
     Due to related parties                           194,535        10,691
     Notes payable (Note 5)                            34,965        36,035
                                                  -----------   -----------
                                                      466,858       190,513
                                                  -----------   -----------

STOCKHOLDERS' EQUITY (DEFICIENCY)

Capital Stock (Note 6)
     Authorized:
         25,000,000 common shares,
         par value $0.005
         2,000,000 preferred shares,
         par value $0.05

     Issued and outstanding
         11,058,809 common shares
         at July 31, 2001 and
         8,630,809 common shares
         at July 31, 2000                           1,155,957     1,143,817

     Additional paid-in capital                    11,857,757    11,330,697

Deficit                                           (13,070,903)  (11,566,154)
Other                                                 (41,073)      (14,527)
                                                  -----------   -----------
                                                      (98,262)      893,833
                                                  -----------   -----------
                                                  $   368,596   $ 1,084,346
                                                  ===========   ===========

Approved by the Sole Director:

--------------------------------------------------


PHON-NET.COM, INC.
                          (A Development Stage Company)

                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
                            (Stated in U.S. Dollars)


                                                                               INCEPTION
                                                                            MARCH 19, 1996
                                                YEAR ENDED JULY 31            TO JULY 31
                                        2001          2000          1999          2001
                                    -----------   -----------   -----------   -----------

Revenue                             $     4,459   $     6,896   $    43,867   $   452,844
                                    -----------   -----------   -----------   -----------

Expenses
     Advertising and promotion          291,316       299,117       506,329       980,123
     Amortization of intangibles        336,852       342,280        43,448       770,402
     Amortization of capital assets      50,783        66,635        80,041       283,283
     Amortization of convertible
       note discount
                                              -       471,525       315,857       787,382
     Bank charges and interest            3,751        33,395        18,497        61,874
     Contract cancellation               80,500       762,000             -       842,500
     Office and sundry                   28,767        29,935        55,295       229,212
     Professional fees                  220,246       159,340        87,015       518,007
     Rent and utilities                  21,894        23,792        34,439       130,279
     Software development                 7,736        81,311             -        89,047
     Software support                         -       121,000        11,000       132,000
     Telephone                           53,685        40,145        52,130       333,860
     Transfer agent and filing fees      11,296        18,858         6,500        36,654
     Travel                              24,324        57,452        18,608       208,688
     Salaries and benefits              378,058     2,040,953     4,850,866     7,849,422
                                    -----------   -----------   -----------   -----------
                                      1,509,208     4,547,738     6,080,025    13,252,733
                                    -----------   -----------   -----------   -----------

Loss Before The Following             1,504,749     4,540,842     6,036,158    12,799,889
     Forgiveness of debt                      -             -             -      (230,961)
     Write-down of investments                -             -             -        99,028
                                    -----------   -----------   -----------   -----------

Net Loss For The Year                 1,504,749     4,540,842     6,036,158   $12,667,956
                                                                              ===========

Accumulated Deficit, Beginning
  Of Year
                                     11,566,154     7,025,312       989,154
                                    -----------   -----------   -----------

Accumulated Deficit, End Of Year    $13,070,903   $11,566,154   $ 7,025,312
=================================  ============   ===========   ===========

Loss Per Share                      $      0.16   $      0.59   $      1.78
=================================  ============   ===========   ===========

Weighted Average Number
   Of Shares Outstanding              9,458,039     7,754,060     3,384,660
=================================  ============   ===========   ===========

Comprehensive Income
     Net loss for the year          $(1,504,749)  $(4,540,842)  $(6,036,158)
     Foreign currency
       translation adjustment            (1,546)      (15,540)       (2,949)
                                    -----------   -----------   -----------

Total Comprehensive Income (Loss)   $(1,506,295)  $(4,556,382)  $(6,039,107)
=================================  ============   ===========   ===========


PHON-NET.COM, INC.
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Stated in U.S. Dollars)

                                                                                              INCEPTION
                                                                                            MARCH 19, 1996
                                                        YEAR ENDED JULY 31                   TO JULY 31
                                              2001             2000             1999             2001
                                         --------------   --------------   --------------   --------------

Cash Flows From Operating Activities
     Loss for the year                   $   (1,504,749)  $   (4,540,842)  $   (6,036,158)  $  (12,817,623)
                                         --------------   --------------   --------------   --------------

Adjustments To Reconcile Loss To Net
   Cash Used By Operating Activities
     Stock issued for other than cash           429,200        2,579,079        4,918,000        7,926,279
     Amortization                               387,635        1,001,440          450,346        1,963,234
     Write-down of investments                        -                -                -           99,028
     Forgiveness of debt                              -                -                -         (230,961)
     Change in accounts receivable                7,213          (10,098)          (8,886)         (16,714)
     Change in due from related parties         178,490         (178,490)          29,932                -
     Change in prepaid expenses                   1,177           (2,133)           7,950             (956)
     Change in accounts payable and
       accrued liabilities
                                                 93,571           (2,589)         (33,318)         237,358
     Change in due to related parties           183,844          (55,340)          39,373          194,535
                                         --------------   --------------   --------------   --------------
Total Adjustments                             1,281,130        3,331,869        5,403,397       10,171,803
                                         --------------   --------------   --------------   --------------
Net Cash Used In Operating Activities          (223,619)      (1,208,973)        (632,761)      (2,645,820)
                                         --------------   --------------   --------------   --------------

Cash Flows From Investing Activities
     Capital assets                             (13,036)         (60,026)         (15,613)        (335,226)
     Intangibles                                      -                -                -          (81,404)
     Excess of purchase price over net
       assets of subsidiaries acquired                -                -                -         (253,278)
     Investments                                      -                -                -         (160,068)
     Proceeds on sale of investments                  -                -                -           61,040
                                         --------------   --------------   --------------   --------------
Net Cash Used In Investing Activities           (13,036)         (60,026)         (15,613)        (768,936)
                                         --------------   --------------   --------------   --------------

Cash Flows From Financing Activities
     Common stock issued                         85,000          635,000          232,365        1,985,723
     Stock issue costs                                -                -         (157,920)        (157,920)
     Convertible notes                                -          600,250          737,000        1,337,250
     Notes payable                               (1,070)             549                -          265,926
                                         --------------   --------------   --------------   --------------
Net Cash From Financing Activities               83,930        1,235,799          811,445        3,430,979
                                         --------------   --------------   --------------   --------------

Effect Of Exchange Rate Changes On Cash
                                                 (1,546)         (15,540)          (2,949)         (16,073)
                                         --------------   --------------   --------------   --------------

Net Increase (Decrease) In Cash                (154,271)         (48,740)         160,122              150

Cash, Beginning Of Year                         154,421          203,161           43,039               -
                                         --------------   --------------   --------------   --------------

Cash, End Of Year                        $          150   $      154,421    $     203,161   $          150
                                         ==============   ==============   ==============   ==============


PHON-NET.COM, INC.
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Stated in U.S. Dollars)



SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES

July 31, 2001
-------------

     The Company issued 1,320,000 common shares at a value of $180,500 for
     termination of an investor relations contract and an employment contract.

     The Company issued 595,500 common shares at a value of 273,700 for
     consulting services and salary compensation.

July 31, 2000
-------------

     The Company issued 40,000 common shares at a value of $762,000 for the
     termination of an investor relations contract.

     The Company issued 356,402 common shares on the conversion of promissory
     notes and accrued interest totalling $623,704.

     The Company issued 640,000 common shares at a value of $1,644,000 to a
     director for consideration of the relinquishment of all the rights to a
     stock appreciation rights agreement.

     The Company issued 714,000 common shares at a value of $129,625 for
     consulting services and salary compensation.





PHON-NET.COM, INC.
                          (A Development Stage Company)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                            (Stated in U.S. Dollars)


                                                     Common Stock
                                           ---------------------------------
                                                                  Additional
                                             Number                 Paid-In              Accumulated
                                           Of Shares    Amount      Capital      Other     Deficit      Total
                                           ---------  ----------  ----------  ---------  ----------  ----------

Balance, July 31, 1997                     7,455,676     415,099           -       2,975    (401,069)     17,005

Issuance Of Common Stock                   1,966,324     618,259           -           -           -     618,259

Translation Adjustment                             -           -           -         987           -         987

Loss For The Year                                  -           -           -           -    (588,085)   (588,085)
                                          ----------  ----------  ----------  ----------  ----------  ----------

Balance, July 31, 1998                     9,422,000   1,033,358           -       3,962    (989,154)     48,166

Issuance Of Common Stock                     578,000      77,365           -           -           -      77,365
                                          ----------  ----------  ----------  ----------  ----------  ----------
                                          10,000,000   1,110,723           -       3,962    (989,154)    125,531

Consolidation Of Stock On 1 For 2 Basis   (5,000,000)          -           -           -           -           -
                                          ----------  ----------  ----------  ----------  ----------  ----------
                                           5,000,000   1,110,723           -       3,962    (989,154)    125,531

Adjustment To Number Of Shares Issued And
  Outstanding As A Result Of The Reverse
  Take-Over Transaction
     Piedmont Technologies Inc.           (5,000,000)          -           -           -           -           -
     Phon-net Corp.                        7,000,000           -           -           -           -           -
                                          ----------  ----------  ----------  ----------  ----------  ----------
                                           7,000,000           -           -           -           -     125,531

Ascribed Value Of The Shares Issued In
  Connection With The Acquisition Of
  Piedmont Technologies Inc.               5,000,000       5,000       2,000           -           -       7,000
                                          ----------  ----------  ----------  ----------  ----------  ----------
                                          12,000,000   1,115,723       2,000       3,962    (989,154)    132,531



PHON-NET.COM, INC.
                          (A Development Stage Company)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                            (Stated in U.S. Dollars)


                                                     Common Stock
                                           ---------------------------------
                                                                  Additional
                                             Number                 Paid-In              Accumulated
                                           Of Shares    Amount      Capital      Other     Deficit      Total
                                           ---------  ----------  ----------  ---------  ----------  -----------

Balances Carried Forward                  12,000,000   1,115,723       2,000       3,962    (989,154)    132,531

Adjustment To Number Of Shares Issued
  And Outstanding As A Result Of
  The Reverse Take-Over Transaction
     Phon-net Corp.                      (12,000,000)          -           -           -           -           -
     Phon-net.com, Inc.                      730,000           -           -           -           -           -
                                         -----------  ----------  ----------  ----------  ----------  ----------
                                             730,000   1,115,723       2,000       3,962    (989,154)    132,531

Ascribed Value Of The Shares Issued
  In Connection With The
  Acquisition Of Phon-net Corp.            2,282,000           -           -           -           -           -
                                         -----------  ----------  ----------  ----------  ----------  ----------
                                           3,012,000   1,115,723       2,000       3,962    (989,154)    132,531

Issuance Of Common Stock
     For cash                                 92,000         460     154,540           -           -     155,000
     For services                            343,000       1,715     480,285           -           -     482,000
     For technology                          528,649       2,643     975,357           -           -     978,000
     For compensation expense              2,617,000      13,085   4,470,915           -           -   4,484,000
     On conversion of promissory notes       541,486       2,707   1,050,150           -           -   1,052,857
     For deferred compensation expense        71,352         357     131,643    (132,000)          -           -

Stock Issue Costs                                  -           -    (212,920)          -           -    (212,920)

Amortization Of Deferred Compensation              -           -           -      11,000           -      11,000

Translation Adjustment                             -           -           -      (2,949)          -      (2,949)

Loss For The Year                                  -           -           -           -  (6,036,158) (6,036,158)
                                         -----------  ----------  ----------  ----------  ----------  ----------

Balance, July 31, 1999                     7,205,487   1,136,690   7,051,970    (119,987) (7,025,312)  1,043,361



PHON-NET.COM, INC.
                          (A Development Stage Company)

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                            (Stated in U.S. Dollars)


                                                     Common Stock
                                           ---------------------------------
                                                                  Additional
                                             Number                 Paid-In               Accumulated
                                           Of Shares    Amount      Capital      Other      Deficit       Total
                                          ----------  ----------  ----------  ---------   -----------  ----------

Balances Carried Forward                   7,205,487   1,136,690   7,051,970    (119,987)  (7,025,312)  1,043,361

Issuance Of Common Stock
     For compensation expense                640,000       3,200   1,660,800           -            -   1,664,000
     For services                             71,400         357     129,268           -            -     129,625
     For contract cancellation                40,000         200     761,800           -            -     762,000
     For conversion of promissory notes      356,422       1,782     621,922           -            -     623,704
     Options exercised                       317,500       1,588     633,412           -            -     635,000

Discount On Convertible Notes                      -           -     471,525           -            -     471,525

Amortization Of Deferred Compensation              -           -           -     121,000            -     121,000

Loss For The Year                                  -           -           -           -   (4,540,842) (4,540,842)

Translation Adjustment                             -           -           -     (15,540)           -    (15,540)
                                          ----------  ----------  ----------  ----------  -----------  ----------

Balance, July 31, 2000                     8,630,809   1,143,817  11,330,697     (14,527) (11,566,154)    893,833

Issuance Of Common Stock
     For compensation expenses             1,217,500       6,088     135,912           -            -     142,000
     For services                            315,500       1,577     205,123           -            -     206,700
     For contract cancellations               70,000         350      80,150           -            -      80,500
     Options exercised                     1,112,500       5,563   1,279,437           -            -   1,285,000
     Cancelled on redemption                (600,000)     (3,000) (1,197,000)          -            -  (1,200,000)
     For deferred compensation expense       312,500       1,562      23,438     (25,000)          -            -

Loss For The Year                                  -           -           -           -   (1,504,749) (1,504,749)

Translation Adjustment                             -           -           -      (1,546)           -      (1,546)
                                          ----------  ----------  ----------  ----------  -----------  ----------

Balance, July 31, 2001                    11,058,809  $1,155,957 $11,857,757  $  (41,073)$(13,070,903) $  (98,262)
                                          ==========  ========== ===========  ========== ============  ==========


PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



1.   NATURE OF OPERATIONS

     Development Stage Activities

     Phon-net.com Inc., through its Direct-Connect software allows consumers to
     voice connect to businesses from the Internet while viewing that business'
     web page, using a single phone line connection and no special hardware. The
     Company also provides consumers with quick and easy access through any
     touch tone telephone, cellular/PCS phone, screenphone and the Internet to
     instantly access interactive information on area business and their current
     product and services, special promotions and other source information.
     Phon-net.com, Inc. provides information services in a published directory
     format or through telephone information input to locate a business, product
     or service, by either a generic category search, or by entering a specific
     ad number listed in the Company's director.

     Phon-net.com, Inc. is in the development stage; therefore recovery of its
     assets is dependent upon future events, the outcome of which is
     indeterminable. In addition, successful completion of Phon-net.com, Inc.'s
     development program and its transition, ultimately to the attainment of
     profitable operations is dependent upon obtaining adequate financing to
     fulfil its development activities and achieve a level of sales adequate to
     support its cost structure.

     Management is of the opinion that sufficient short-term funding will be
     obtained and that current negotiations with potential users of its products
     will be successful.


2.   SIGNIFICANT ACCOUNTING POLICIES

     The financial statements of the Company have been prepared in accordance
     with generally accepted accounting principles in the United States. Because
     a precise determination of many assets and liabilities is dependent upon
     future events, the preparation of financial statements for a period
     necessarily involves the use of estimates which have been made using
     careful judgement.

     The financial statements have, in management's opinion, been properly
     prepared within reasonable limits of materiality and within the framework
     of the significant accounting policies summarized below:

     a)   Consolidation
          These financial statements include the accounts of the Company and its
          wholly-owned subsidiaries, Phon-net Corp., (incorporated in Nevada,
          U.S.A.), Piedmont Technologies Inc., The National For Sale Phone
          Company Inc., and V NETT Enterprises Inc., all incorporated in Canada.



PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     b)   Revenue Recognition

          The Company's revenue arises from contracts entered into to facilitate
          beta-testing of its various products and is recognized over the term
          of the contract.  The Company's revenues through July 31, 2000 were
          generated from contracts relating to its interactive real estate and
          professional listing service which was the initial product under
          development, as well as the search engine product. No revenue has been
          generated to July 31, 2000 from the Direct Connect product.  Once
          revenue is generated by the Direct Connect or Search Engine products,
          the revenue allocated to post contract support will be recognized
          rateably over the term of the support and revenue allocated to service
          elements will be recognized as the services are performed.

     c)   Capital Assets

          Capital assets are recorded at cost and amortized as follows:

                  Computer equipment          3 years straight line basis
                  Computer software           3 years straight line basis
                  Telephone and equipment     2 and 3 years straight line basis

     d)   Intangibles

          Intangibles are recorded at cost and amortized as follows:

                  Goodwill                    5 years straight line basis
                  Technology costs            3 years straight line basis

          Management reviews goodwill and technology costs for impairment
          whenever events or changes in circumstances indicate that the carrying
          amounts may not be recoverable.

     e)   Capitalized Costs

          Costs for developing computer software will be capitalized when
          technological feasibility has been established for the computer
          software product.  Capitalization of computer software costs will be
          discontinued when the product is available for general release to
          customers and such costs are amortized on a product-by-product basis
          over the estimated lives of the products.  At each balance sheet date,
          the unamortized capitalized costs of a computer software product shall
          be compared to the net realizable value of that product. The amount by
          which the unamortized capitalized costs of a computer software product
          exceed the net realizable value of that asset shall be written off. To
          date, the Company has not capitalized any costs related to the
          development of computer software.


PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     e)   Capitalized Costs (Continued)

          Purchased computer software, which includes programs used for company
          management and software development are capitalized and amortized as
          disclosed in the capital assets significant accounting policy note.

     f)   Income Taxes

          The Company has adopted Statement of Financial Accounting Standards
          No. 109 - "Accounting for Income Taxes" (SFAS 109).  This standard
          requires the use of an asset and liability approach for financial
          accounting and reporting on income taxes.  If it is more likely than
          not that some portion of all of a deferred tax asset will not be
          realized, a valuation allowance is recognized.

     g)   Foreign Currency Translation

          The Company's subsidiary's operations are located in Canada, and its
          functional currency is the Canadian dollar. The financial statements
          of the subsidiary have been translated using the current method
          whereby the assets and liabilities are translated at the year end
          exchange rate, capital accounts at the historical exchange rate, and
          revenues and expenses at the average exchange rate for the period.
          Adjustments arising from the translation of the Company's subsidiary's
          financial statements are included as a separate component of
          shareholders' equity.

     h)   Financial Instruments

          The Company's financial instruments consist of cash, accounts
          receivable, accounts payable, notes payable, and amounts due to and
          from related parties.

          Unless otherwise noted, it is management's opinion that this Company
          is not exposed to significant interest or credit risks arising from
          these financial instruments.  The fair value of these financial
          instruments approximate their carrying values, unless otherwise noted.

     i)   Loss Per Share

          The loss per share is calculated using the weighted average number of
          common shares outstanding during the year.  Fully diluted loss per
          share is not presented, as the impact of the exercise of options is
          anti-dilutive.




PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     j)   Deferred Compensation

          Deferred compensation arising from the issue of capital stock is shown
          as a reduction of stockholders' equity.

          Amortization of the deferred amount is provided for over the term of
          the contract for which the services are provided.


3.   CAPITAL ASSETS
                                                      2001                       2000
                                    ---------------------------------------   -----------
                                                  Accumulated    Net Book      Net Book
                                        Cost     Depreciation     Value          Value
                                    -----------  ------------   -----------   -----------
     Computer equipment             $   136,284   $    95,036   $    41,248   $    62,277
     Telephone and equipment             38,918        29,813         9,105         6,241
     Computer software                  157,703       156,115         1,588        21,170
                                    -----------   -----------   -----------   -----------
                                    $   332,905   $   280,964   $    51,941   $    89,688
                                    ===========   ===========   ===========   ===========


4.   INTANGIBLES
                                                      2001          2000
                                                  -----------   -----------
     Goodwill, at cost                            $    81,404   $    81,404
     Technology, at cost                              978,000       978,000
                                                  -----------   -----------
                                                    1,059,404     1,059,404
     Less:  Accumulated amortization                 (760,569)     (423,717)
                                                  -----------   -----------
                                                  $   298,835   $   635,687
                                                  ===========   ===========

5.   NOTES PAYABLE

                                                      2001          2000
                                                  -----------   -----------

    Unsecured with interest at 5% per annum       $    34,965   $    36,035
                                                  ===========   ===========



PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



6.   CAPITAL STOCK

     a)   On March 30, 2001, the Company consolidated its share capital on a
          five-old for one-new basis.  In addition, the Company increased the
          number of authorized common shares to 25,000,000 shares.

          All references to share capital in the financial statements are on a
          post-consolidated basis.

     b)   On December 15, 2000, the Company issued 600,000 common shares
          pursuant to the exercise of stock options of a director at a price of
          $2.00 per share.  Consideration was received in the form of an 8%
          promissory note with the principal and interest due and payable on
          June 15, 2002.

          On July 27, 2001, 600,000 common shares were returned to Treasury and
          cancelled. The promissory note was cancelled.

     c)   During the year ended July 31, 2001, the Company issued 595,500 common
          shares at a value of  $273,700 for consulting services and salary
          compensation. The Company also issued 70,000 common shares at a value
          of $80,500 for termination of an investors relations contract

     d)   During the year ended July 31, 2001, the Company issued 1,250,000
          common shares to a director at a value of $100,000 (Note 8(a)).

     e)   During the year ended July 31, 2000, the Company issued 8% promissory
          notes in the amount of $600,250, convertible, including accrued
          interest, into common stock and non-transferable share purchase
          warrants at a price of $0.35 per share.  Each share purchase warrant
          entitled the holder to purchase one additional share at a price of
          $0.50 per share for a period of twelve months from the conversion
          date.

          An amount of $471,525 was charged to operations arising from the
          discount from fair market value of the shares at the date of issue of
          the promissory notes.

          The Company issued 1,356,402 common shares and 178,202 share purchase
          warrants on the conversion of the promissory notes, including accrued
          interest of $23,454.  As at July 31, 2001, all share purchase warrants
          have expired.

     f)   During the year ended July 31, 2000, the Company issued 640,000 common
          shares to the director of the Company at a value of $1,664,000, and
          for which the director relinquished all rights to the stock
          appreciation rights referred to in Note 8(a).

     g)   During the year ended July 31, 2000, the Company issued 40,000 common
          shares at a value of $762,000 for the termination of an investor
          relations contract.



PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



6.   CAPITAL STOCK (Continued)

     h)   During the year ended July 31, 2000, the Company issued 71,400 common
          shares for consulting services and salary at a value of $129,625.

     i)   In accordance with the terms of an employment agreement, the Company's
          vice president of technology is to be issued 20,000 common shares on
          each of November 1, 1999, 2000 and 2001.  During the year ended July
          31, 2001, 20,000 common shares were issued at a value of $3,000.

     j)   On May 29, 1999, the Company adopted a Stock Option Plan that provides
          for the granting to employees of stock options designed to qualify as
          "incentive stock options" under the Internal Revenue Code. An option
          gives the participant the right to purchase, from the Company, a
          specified number of shares of common stock for a specified price
          during a specified period not exceeding 10 years. A total of 1,600,000
          shares of common stock have been reserved for issuance under the Stock
          Option Plan.

          Options issued as follows:

                                                                 Weighted Average
                                     Number of    Exercise Price  Exercise Price
                                      Shares        Per Share      Per Share
                                     ---------    -------------- ----------------


          Outstanding July 31, 1999   440,000      $  1.80-2.00     $  1.95

          Granted                      49,600      $  1.80-6.25     $  2.10
                                     ---------     ------------     -------

          Outstanding July 31, 2000   489,600      $  1.80-6.25     $  2.00
                                     ---------     ------------     -------
          Granted                     200,000      $    2.00        $  2.00

          Cancelled                     9,600      $  1.80-6.25     $  3.44
          Exercised                  (600,000)          2.00        $  2.00
                                     ---------     ------------     -------

          Outstanding July 31, 2001    80,000      $    1.80        $  1.80
                                     =========     ============     =======

          At July 31, 2001, the weighted average contractual life of options is
          6 years. All options are exercisable at July 31, 2001.

          The weighted-average grant-date fair value of options granted in 2001
          is $1.80.  The fair value of the options is estimated using the
          Black-Scholes options pricing model with the following assumptions:
          dividend yield, Nil percent for all years; expected volatility of
          205%; risk free interest rate of 5.25%; and expected life ranging from
          three to five years.


PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



6.   CAPITAL STOCK (Continued)

     j)   (Continued)

          The Company has elected not to adopt the fair value method of
          accounting for employee stock compensation  plans as prescribed by
          Statement of Financial Accounting Standards (SFAS) No. 123 issued by
          the Financial Accounting Standards Board. Instead, as permitted by
          SFAS No. 123, the Company has elected to continue to apply the
          intrinsic value method of accounting prescribed by Accounting
          Principles Board Opinion No. 24.  If the fair value method of
          accounting under SFAS No. 123 had been followed, net income and
          earnings per share of the Company would have been reduced by
          amortization of the grant-date fair value of the options over the
          vesting period.

          The pro forma net loss and earnings per share for 2001, 2000 and 1999
          as if the fair value method had been used is as follows:

                              2001             2000             1999
                         ------------     ------------     ------------

          Net loss       $  1,884,155     $  4,595,055     $  6,781,648
                         ------------     ------------     ------------

          Per share      $       0.20     $       0.12     $       0.40
                         ============     ============     ============

          Under the Stock Option Plan the Company may grant non-qualifying stock
          options at an exercise price of not less than 75% of fair market value
          at the date the option is granted. Compensation expense will be
          recognized at the date of grant of any  non-qualifying options at the
          difference between the fair market value and the exercise price.  No
          non-qualifying stock options are granted as at July 31, 2001.


7.   RELATED PARTY TRANSACTIONS

     During the year ended July 31, 2001, the Company paid $187,500 (2000 -
     $1,830,000; 1999 - $4,662,716) to a director for salaries.

     The amount paid in fiscal 2001 includes $100,000 paid by the issue of
     1,250,000 common shares at a price of $0.08 per share. As at July 31, 2001,
     $25,000 has been recorded as deferred compensation.

     The amount paid in fiscal 2000 includes the issue of 640,000 common shares
     of the Company, at a value of $2.60 per share, for relinquishments of
     certain rights under the stock  appreciation rights agreement.  The amount
     paid in 1999 includes the issue of 5,000,000 common shares of the Company,
     at a value of $0.25 per share issued  pursuant to an employment agreement,
     and 8,085,000 common shares at a value of $0.40 per share for accomplishing
     certain development goals.



PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



8.   COMMITMENTS

     a)   TheCompany entered into an employment agreement dated July 1, 1999
          with a director for a period of three years at an annual remuneration
          of $150,000. In addition, and as an  inducement to enter into the
          employment contract the Company has agreed to issue to the director,
          1,000,000 common shares. The employment  agreement also grants the
          director an annual Stock Appreciation  Right ("SAR"), pursuant to
          which, on (i) February 15, 2000, the director shall be entitled to
          receive a sum of money in an amount equal to four hundred thousand
          (400,000) times the difference between the "fair market value" of the
          Company's common stock at the close of trading on June 30, 1999 and
          February 1, 2000, (ii) on February 15, 2001, the director shall be
          entitled to receive a sum of money in an amount equal to six hundred
          thousand (600,000) times the difference between the "fair  market
          value" of the Company's common stock at the  close of  trading  on
          February 1, 2000 and February 1, 2001 and (iii) on February 15, 2002,
          the director shall be entitled to receive a sum of money in an amount
          equal to six hundred thousand  600,000) times the difference between
          the "fair market value" of the Company's common stock at the close on
          February 1, 2001 and February 1, 2002.

          During the fiscal 2000, the Company entered into an agreement with a
          director to issue 640,000 common shares of the Company to the director
          in consideration of the relinquishment of all entitlements under the
          Stock Appreciation Rights referred to above.

     b)   On July 21, 2001, the Company entered into an investor relations
          agreement for a three month period.  Under the agreement, the Company
          will pay $5,000 per month or issue a total of 150,000 common shares
          together with a warrant to purchase 350,000 common shares of the
          Company at a price of $0.10 per share.

     c)   On December 9, 1999, the Company entered into two licence agreements
          with Brocker Technology Group (NZ) Limited, a publicly-held New
          Zealand corporation.  One licence agreement covers New Zealand and the
          other covers Australia.  The agreements grant Brocker the exclusive
          licence to use, market, distribute and sublicense the Direct Connect
          software throughout Australia and New Zealand.

          The Company will be entitled to a licence fee from Brocker for each
          Direct Connect licence activated for Brocker.  Licence fees from
          Brocker are payable quarterly. The agreement expires December, 2001.

          The agreement does not result in any significant funding obligations
          or contingent liabilities for the Company.

     d)   The Company leases premises at an annual minimum rental of $10,668
          until July 31, 2002.



PHON-NET.COM, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             JULY 31, 2001 AND 2000
                            (Stated in U.S. Dollars)



9.   SUBSEQUENT EVENTS

     a)   On September 6, 2001, the Company increased its authorized capital to
          200,000,000 common shares with a par value of $0.01, 20,000,000
          preferred shares with a par value of $0.001, and 6,000,000 Class B
          common shares with a par value of $Nil. Each Class B common share
          entitles the holder to ten votes per share and has no cash value.

     b)   On September 17, 2001, the Company entered into an agreement with a
          director to terminate the employment contract with that director for
          consideration of $20,000 and the forgiveness of amounts due to
          directors. As at July 31, 2001, an amount of $194,535 was payable.

     c)   On September 7, 2001, the Company entered into an employment contract
          with a director at an annual salary of $80,000 in the first year
          increasing to $100,000 in the third year.  In addition, the director
          will receive 6,000,000 Class B common shares as incentive, and 250,000
          common shares each quarter for three years, together with a bonus of
          10,000,000 common shares if still employed by the Company after three
          years. The term of the contract is for an indefinite period.

     d)   On September 7, 2001, the Company entered into a marketing agreement
          with an Alberta, Canada, corporation  under which the Company will
          market the software products of the other corporation.  In addition,
          the Company will be provided with a training and sales program
          together with customer service and support for its Direct Connect
          product. As consideration for the services to be provided, the Company
          shall pay a total of $80,000, and issue 1,000,000 common shares, 90
          days after the signing of the agreement.

     e)   Pursuant to the agreement referred to in Note 8(b), the Company issued
          150,000 common shares at a price of $0.10 per share.

     f)   On August 20, 2001, the Company entered into a consulting agreement,
          for a four month period commencing August 20, 2001, for consideration
          of the issuance of 200,000 common shares.




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

DIRECTORS AND EXECUTIVE OFFICERS

     The following table includes the names, positions held and ages of our
executive officers and directors. All directors serve for one year and until
their successors are elected and qualify. Officers are elected by the Board and
their terms of office are, except as otherwise stated in employment contracts,
at the discretion of the Board.

Name                   Age       Position
----                   ---       --------

Todd Violette          32        Chairman of the Board of Directors, Chief
                                 Executive Officer, President, Chief Operating
                                 Officer, Secretary, Treasurer and Director

Sloan Young            31        Vice President of Technology and
Operations



Mr. Todd Violette, Chairman of the Board

     Mr Violette is employed as our Chief Operating Officer.  Mr. Violette is
also currently employed by Cormax Business Solutions Inc. as the President and
has been since February 2000. Mr. Violette was the President of Centurion
Financial Communication from 1997 to 2000. Centurion was a consulting firm,
advising company on methods for public communication. Prior to work for
Centurion Mr. Violette was a Stock Broker with West America Securities Inc. and
M.A. Gillespie Securities starting 1996.


     Sloan Young has served as our Vice President of Technology and Operations
since October 1998. From 1993 until he joined us, Mr. Young was employed as a
restaurant manager for Cactus Club Cafe from November 1996 to June 1997, and
Zachary's Restaurant from June 1995 to September 1996. He attended CDI College
of Business and Technology from September 1997 to November 1998 and received a
Programmer Analyst Diploma in 1998.

     DIRECTOR COMPENSATION.  We have not adopted a formal policy with respect to
the compensation of directors. However, we do not currently compensate our
directors for their services as such.

     BOARD COMMITTEES:  We do not as yet have an audit committee or a
compensation committee. We may organize these committees in the future.

     EMPLOYMENT AGREEMENTS.  Effective September 8, 2001 we have entered into an
employment contract with Todd Violette to serve as our Chief Operating Officer
for a period of five years. Mr. Violette has been hired to restructure and
recruit new management to the company over the next year. Mr. Violette's
employment shall pay $80,000 dollars over the next year and 2,000,000 shares.
Mr. Violette's employment entitles him to six million Class B shares which have
a 10-1 voting rights with no cash value.

     Effective November 1, 1999, we entered into a three year employment
agreement with Sloan Young, our Vice President of Technology and Operations. Mr.
Young's salary was $55,000 for the first year, $59,500 for the second year and
$66,000 for the last year of the term. We granted Mr. Young options to purchase
200,000 shares of our stock, exercisable at $.36 per share, which vest one-third
each year of the agreement, and expire on December 31, 2004. We also agreed to
issue Mr. Young 100,000 shares of our stock on each of November 1, 1999, 2000
and 2001. In addition, we have agreed to pay Mr. Young $1.00 for each Direct
Connect license sold, with such payment being made in the local currency of
sale. We may discontinue the payment of the $1.00 per license at any time, at
our discretion. Effective November 1, 2000, we paid Mr. Young a bonus equal to
50,000 shares of our common stock, for services rendered during the fiscal year
ended July 31, 2000.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     We are not subject to Section 16(a) of the Securities Exchange Act of 1934,
and, therefore, our directors and executive officers, and persons who own more
than ten percent of our common stock are not required to file with the
Securities and Exchange Commission reports disclosing their initial ownership
and changes in their ownership of our common stock.

ITEM 10. EXECUTIVE COMPENSATION



The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal year ended July 31, 2002.

                           Summary Compensation Table
                                                                                            All
Name                                                 Restricted     Securities              Other
And                                  Other Annual    Stock          Underlying     LTIP     Compens-
Principle          Salary   Bonus    Compensation    Award(s)       Options/SARs   Payouts  ation
Position   Year    ($)      ($)      ($)             ($)            (#)            ($)      ($)
------------------------------------------------------------------------------------------------------
Todd A     2002
Violette            80,000 USD         $              2,000,000
Chairman
President
------------------------------------------------------------------------------------------------------

Todd Violette received Six Million Shares of Class B Common with No Cash Value
but Voting right of 10 votes per share.



     INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN On May 27, 1999, the board of
directors and shareholders adopted our 1999 stock option plan. On October 11,
2000, our sole director and holder of a majority of our outstanding shares
authorized an amendment to our stock option plan to increase the number of
shares reserved for issuance under the plan from 3,000,000 shares to 4,000,000
shares. Accordingly, we have reserved 4,000,000 shares of common stock for
issuance upon exercise of options granted from time to time under the 1999 stock
option plan. The 1999 stock option plan is intended to assist us in securing and
retaining key employees, directors and consultants by allowing them to
participate in our ownership and growth through the grant of incentive and
non-qualified options.

     Under the stock option plan we may grant incentive stock options only to
key employees and employee directors, or we may grant non-qualified options to
our employees, officers, directors and consultants. The 1999 stock option plan
is currently administered by our board of directors.

     Subject to the provisions of each of the stock option plans, the board will
determine who shall receive options, the number of shares of common stock that
may be purchased under the options, the time and manner of exercise of options
and exercise prices. The term of options granted under the stock option plan may
not exceed ten years or five years for an inventive stock option granted to an
optionee owning more than 10% of our voting stock. The exercise price for
incentive stock options will be equal to or greater than 100% of the fair market
value of the shares of the common stock at the time granted. However, the
incentive stock options granted to a 10% holder of our voting stock are
exercisable at a price equal to or greater than 110% of the fair market value of
the common stock on the date of the grant. The exercise price for non-qualified
options will be set by the board, in its discretion, but in no event shall the
exercise price be less than 75% of the fair market value of the shares of common
stock on the date of grant. The exercise price may be payable in cash or, with
the approval of the board, by delivery of shares or by a combination of cash and
shares. Shares of common stock received upon exercise of options will be subject
to restrictions on sale or transfer. As of July 31, 2001, A total of 1,600,000
shares of common stock have been reserved for issuance under the Stock Option.



LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

     As authorized by the Florida Business Corporation Law, our articles of
incorporation provides that none of our directors shall be personally liable to
us or our shareholders for monetary damages for breach of fiduciary duty as a
director, except for liability for:

         o        any breach of the director's duty of loyalty to our company or
                  its shareholders;
         o        acts or omissions not in good faith or which involve
                  intentional misconduct or a knowing violation of law
         o        unlawful payments of dividends or unlawful stock redemptions
                  or repurchases; or
         o        any transaction from which the director derived an improper
                  personal benefit.

     This provision limits our rights and the rights of our shareholders to
recover monetary damages against a director for breach of the fiduciary duty of
care except in the situations described above. This provision does not limit our
rights or the rights of any shareholder to seek injunctive relief or rescission
if a director breaches his duty of care. These provisions will not alter the
liability of directors under federal securities laws.

     Our articles of incorporation further provides for the indemnification of
any and all persons who serve as our director, officer, employee or agent to the
fullest extent permitted under Florida law.

     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that in the opinion
of the SEC, this indemnification is against public policy as expressed in the
securities laws, and is, therefore unenforceable.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information known to us, as of October 31,
2001, relating to the beneficial ownership of shares of common stock by: each
person who is known by us to be the beneficial owner of more than five percent
of the outstanding shares of common stock; each director; each executive
officer; and all executive officers and directors as a group.

     Unless otherwise indicated, the address of each beneficial owner in the
table set forth below is care of Phon-Net.com, Inc., 16th West 46th Street 7th
Floor, New York, New York 10039.

     We believe that all persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as being owned
by them.

     Under securities laws, a person is considered to be the beneficial owner of
securities owned by him and that can be acquired by him within 60 days from the
date of this Report, including upon the exercise of options, warrants or
convertible securities. We determine a beneficial owner's percentage ownership
by assuming that options, warrants or convertible securities that are held by
him, but not those held by any other person, and which are exercisable within 60
days of the date of this Report, have been exercised or converted.




 Name and Address of                Amount and Nature of           Percentage
 Beneficial Owner                   Beneficial Ownership            of Class
 ------------------                 --------------------           ----------

Todd Violette                           62,000,000  (1)(2)          86.11%

Brian Collins                            5,036,287                   6.96%

Executive Officers and
 Directors (as a group of 2)            67,365,509


(1)      60,000,000 votes from the Class B share issued from the Employment
         Contract
(2)      2,000,000 Violette will receive for his employment.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In April 1999, in connection with our acquisition of the outstanding shares
of Phon-Net Corp. and as consideration for the satisfaction of certain product
development goals provided for as part of our share exchange with Phon-Net
Corp., we issued 8,085,000 additional shares to Brian Collins, our President and
CEO.

     During the years ended July 31, 2000 and 1999, we paid compensation to
Brian Collins, our President and Chief Executive Officer, aggregating $1,830,800
and $4,662,716, respectively. The amount paid during 2000 includes our issuance
to Mr. Collins of 3,200,000 shares of our common stock, in consideration for
which Mr. Collins relinquished all stock appreciation rights previously granted
to him. The amount paid during 1999 includes the issuance of 5,000,000 shares as
an inducement to enter into an employment agreement and 8,085,000 shares for
accomplishing certain development goals. Further information concerning
compensation paid to Mr. Collins is set forth above under "Item 10. Executive
Compensation".

     During the fiscal year ended July 31, 2000, we loaned an aggregate  of
$183,900 to Brian Collins, $171,400 of which remains outstanding. The loan is to
be repaid in equal monthly installments of $13,200, comprised of principal and
interest at the rate of 8% per annum. Any unpaid balance of the loan becomes due
and payable on March 31, 2001.

     We have not entered into any other material transactions with our officers,
directors or affiliates except for employment arrangements, which are described
elsewhere in this Report. While we have not adopted any corporate policies for
entering into transactions with affiliated parties,

         o        we are subject to Section 617.0832 of the Florida
                  Business Corporation Law which requires that transactions
                  between Phon-Net and one or more of its directors be approved
                  by disinterested directors, be approved by Phon-Net's
                  shareholders or be fair to Phon-Net; however,

         o        we are not subject to Section 617.0901 of the Florida
                  Business Corporation Law which places additional limitations
                  and restrictions on certain business transactions with
                  affiliated parties.

     During the fiscal year ended July 31, 2001 the company paid $187,500 total
director for salary. The amount paid includes $100,000 paid by the issuance of
stock of 1,250,000 share at a price of $.08 per share.

     In September of 2001 the Company entered into a Market Channel Agreement
with Cormax Business Solution Inc, the Sole Director of Phon-Net is Todd
Violette the CEO of Cormax Business Solutions Inc.


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

A.       EXHIBITS:

         Exhibit
         Number                     Description
         -------                    ------------

         2            Agreement of Share Exchange between XGA Golf
                      International, Inc. and Phon-Net Corp.(1)

         3.1(a)       Articles of Incorporation of XGA Golf International,
                      Inc.(1)

         3.1(b)       Articles of Amendment changing name to Agrosol, Inc.(1)

         3.1(c)       Articles of Amendment changing name to Phon-Net
                      Corporation(1)

         3.1(d)       Articles of Amendment changing name to Phon-Net.com,
                      Inc.(1)

         3.1(e)       Articles of Amendment increasing authorized capital(1)

         3.2          Bylaws(1)

         10.1         Stock Option Plan(1)

         10.2         Employment Agreement with Brian Collins(1)

         10.3         Office Lease for 750 Pender Street(1)

         10.4         Agreement, as amended, with Quad-Linq Software, Inc.(1)

         10.5         Employment Agreement with Solan Young(1)

         10.6         License Agreement with Transcontinental Group(1)

         10.7         Agreement with Wazzu Corporation(1)

         10.8         Agreements with Brian Collins re: SARs(1)

         10.9         License Agreement with Brocker Technology Group (NZ)
                      Ltd.(Australia)(1)

         10.10        License Agreement with Brocker Technology Group (NZ)
                      Ltd.(New Zealand)(1)

         10.11        License Distribution Agreement with Volt Information
                      Sciences, Inc.(1)

         10.12        Form of 8% Convertible Promissory Note, including Form of
                      Common Stock Purchase Warrant(1)

         10.13        Amendment to License Agreement with Transcontinental
                      Group(1)

         10.14        Agreements with Alliance Corporate Services(1)

         10.15        Agreements with AMYX Corporation(1)

         10.16        Letter of clarification with Roger L. Betterton and
                      Christopher E. Georgelin(1)

         10.17        Termination Agreement with Volt Information Sciences,
                      Inc.(1)

         23(i)        Consent of Morgan & Company(2)

         21           Subsidiaries of Registrant(1)

         27           Financial Data Schedule(2)

-------------------------

(1)      Incorporated by reference to exhibits with the corresponding number
         filed with our registration statement on Form SB-2 (File No.
         333-86031).

(2)      Filed herewith.

B.       REPORTS ON FORM 8-K:

     A report on Form 8-K was filed on September 28, 2001 with the United States
Securities and Exchange Commission.






                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized, in Calgary, Alberta on November 13,
2001.

                                     PHON-NET.COM, INC.


                                     By: /s/ Todd Violette
                                         ---------------------------------------
                                         Todd Violette
                                         Chairman, Chief Executive Officer,
                                         Sole Director, Principal Financial and
                                         Accounting Officer


     In accordance with the Securities Exchange Act of 1934, this Report has
been signed by the following persons on behalf of the registrant in the
capacities and on the dates indicated.`