U.S. Securities and Exchange Commission
                            Washington, D.C. 20549


                                FORM 10-QSB



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

For the quarterly period ended September 30, 1997

COMMISSION FILE NUMBER   0-20468


                  ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                    (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
       (Exact name of small business issuer as specified in its charter)


        Delaware                                   68-0195770
(State or other jurisdiction of         (IRS Employer Identification No.)
Icorporation or organization)


                    629 J Street, Sacramento, CA  95814
                   (Address of principal executive offices)

                              (916) 325-9370
                          (Issuer's telephone number)


                 (Former address if changed since last report)


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

Number of shares of common stock outstanding as of October 31, 1997:
25,812,787

<PAGE>2


                  ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                  (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
                          CONDENSED BALANCE SHEET
                            SEPTEMBER 30, 1997
                                (UNAUDITED)

ASSETS

CURRENT ASSETS:
  Cash                                                             $    40,750
  Accounts receivable, net                                             298,690
  Other current assets                                                  59,735
                                                                  -------------
    Total current assets                                               399,175

PROPERTY AND EQUIPMENT:
  Equipment                                                             18,407
  Furniture and fixtures                                               148,445
                                                                   ------------
                                                                       166,852
  Accumulated depreciation and amortization                           (157,798)
                                                                   ------------
    Property and equipment, net                                          9,054


                                                                   $   408,229
                                                                   ============

               LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Notes payable to stockholders                                      3,080,262
  Accounts payable to stockholders                                     380,973
  Accounts payable                                                     193,620
  Accrued payroll and related expenses                                 287,865
  Accrued preferred stock dividends                                    398,125
  Other current liabilities                                             73,341
  Other notes payable                                                   11,567
                                                                    -----------
     Total current liabilities                                       4,425,753

Commitments and contingencies

Stockholders' deficit:
  Preferred stock, $6.00 par value - 1,200,000 
    shares authorized, 204,167 Series D shares 
    issued and outstanding; liquidation preference 
    value of $1,623,127                                              1,225,002
  Common stock, $0.01 par value - 100,000,000 shares
    authorized, 25,812,787 shares issued and outstanding               258,128
  Unearned compensation                                                (42,188)
  Additional paid-in capital                                        28,760,541
  Accumulated deficit                                              (34,219,007)
                                                                  -------------
    Total stockholders' deficit                                     (4,017,524)
                                                                  -------------
                                                                  $    408,229
                                                                  =============


SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.

<PAGE>3

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


                    ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                    (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
                      CONDENSED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)


                                                          Three Months
                                                       ENDED SEPTEMBER 30,
                                                      1997              1996

CONTRACT PROGRAMMING:
  Contract programming revenue                   $   921,742       $   360,929
  Programmer costs                                  (709,925)         (287,226)
  Start-up and other costs                          (157,489)          (57,498)
                                                 ------------      ------------
    Contract programming gross profit                 54,328            16,205
                                                 ------------      ------------
SYSTEM SERVICE:
Service revenue                                            -            93,734
Cost of service                                            -           (63,087)
                                                  -----------       -----------
  System service gross profit                              -            30,647
                                                  -----------       -----------
Selling, general and administrative                 (333,785)         (212,253)
                                                  ------------      -----------

Loss from operations                                (279,457)         (165,401)

Other income (expense):
  Interest expense                                   (83,664)          (47,232)
  Other, net                                               -             4,663
                                                   ----------        ----------
                                                     (83,664)          (42,569)

Net loss                                          $ (363,121)      $  (207,970)
                                                  ===========      ============

Preferred stock dividends in arrears                 (30,625)          (30,625)
                                                   ----------       -----------

Net loss applicable to common stockholders        $ (393,746)       $ (238,595)
                                                  ===========       ===========
Net loss per share                                $    (0.02)       $    (0.01)

Shares used in per share calculations              25,325,408        25,218,887
                                                   ==========        ==========
 
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.

<PAGE>4

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


                    ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                    (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
                      CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)


                                                         THREE MONTHS ENDED
                                                            SEPTEMBER 30,
                                                        1997           1996

Net cash used in operating activities             $  (322,569)      $ (155,000)

Cash flows from investing activities:
  Sale of property and equipment                            -            6,165
                                                  ------------      -----------
Net cash provided by investing activities                   -            6,165
                                                  ------------      -----------
Cash flows from financing activities:
  Proceeds from exercise of options and warrants       22,548            1,077
  Proceeds from notes payable to stockholders         293,000          173,000
  Payments on notes payable and capital leases        (11,972)         (15,444)
                                                  ------------      -----------
Net cash provided by financing activities             303,576          158,633
                                                  ------------      -----------
Net (decrease) increase in cash                       (18,993)           9,798
Cash at beginning of period                            59,743           52,106
                                                  ------------      -----------
Cash at end of period                             $    40,750       $   61,904
                                                  ============      ===========


SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.

<PAGE>5

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

                  ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                  (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
                  NOTES TO CONDENSED FINANCIAL STATEMENTS
                            SEPTEMBER 30, 1997

                                (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The   accompanying  unaudited  condensed  financial  statements  have  been
prepared  in  accordance  with generally accepted accounting principles for
interim financial information  and pursuant to the rules and regulations of
the Securities and Exchange Commission.   Accordingly,  they do not include
all  of  the  information  and  footnotes  required  by generally  accepted
accounting  principles  for  complete  financial statements.   For  further
information,  refer  to  the  financial statements  and  footnotes  thereto
included in the Company's annual  report on Form 10-KSB for the fiscal year
ended June 30, 1997.

In the opinion of management, the unaudited  condensed financial statements
contain  all  adjustments  considered  necessary  to   present  fairly  the
Company's financial position at September 30, 1997, results  of  operations
for  the  three  month periods ended September 30, 1997 and 1996, and  cash
flows for the three  months ended September 30, 1997 and 1996.  The results
for the period ended September  30,  1997 are not necessarily indicative of
the results to be expected for the entire fiscal year ending June 30, 1998.

The financial statements and notes thereto  also  include  the  effect of a
one-for-ten  consolidation  of the Company's outstanding Common Stock,  par
value $0.01 per share, which  became  effective  on  December  2, 1996.  In
addition, effective on December 2, 1996, the Company changed its  name from
3Net  Systems,  Inc.,  to  Alternative Technology Resources, Inc., and  the
number of authorized shares of Common Stock was reduced from 200,000,000 to
100,000,000.

Certain amounts for the three  months  ended  September  30, 1996 have been
reclassified to conform with the September 30, 1997 presentation.

The report of independent auditors on the Company's June 30, 1997 financial
statements   includes   an   explanatory  paragraph  indicating  there   is
substantial  doubt about the Company's  ability  to  continue  as  a  going
concern.  The  financial  statements  do  not  include  any  adjustments to
reflect  the uncertainties related to the recoverability and classification
of assets  or the amounts and classification of liabilities that may result
from the inability of the Company to continue as a going concern.  Based on
the recent steps  the  Company has taken to reduce its expenses and refocus
its operations, the Company believes that it has developed a viable plan to
address the Company's ability  to continue as a going concern and that this
plan will enable the Company to continue as a going concern through the end
of  fiscal  year  1998.   However, considering,  among  other  things,  the
Company's historical operating losses and its short history in the contract
computer programming industry,  there  can  be  no assurance that this plan
will be successfully implemented.

NOTE 2 - FINANCING ARRANGEMENTS

See  Part I, Item 2 "Management's Discussion and Analysis  and  Results  of
Operations -- Liquidity and Capital Resources."

<PAGE>6

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


MANAGEMENT'S DISCUSSION AND ANALYSIS

The  following   discussion   provides   information   to   facilitate  the
understanding  and assessment of significant changes in trends  related  to
the financial condition  of  the Company and its results of operations.  It
should be read in conjunction  with  the Company's financial statements and
the notes thereto and other financial information included elsewhere in the
10-KSB for the fiscal year ended June  30,  1997.   Dollar amounts reported
have been rounded to the nearest thousand.

OVERVIEW

The  Company  was  founded in 1989 to develop and sell computer  integrated
laboratory systems ("LIS").   The  Company  operated  under  the  name 3Net
Systems,  Inc.  and was never successful in the LIS market.  Therefore,  in
fiscal 1996, the  Company  stopped new system development and later decided
to exit LIS entirely.

During fiscal 1997, the Company  changed its name to Alternative Technology
Resources, Inc. ("ATR") and focused  its  efforts  to  develop its computer
programmer  placement  business.  During fiscal years 1995  and  1996,  the
Company  developed  and  implemented   a   program   whereby   it  recruits
experienced,  qualified  computer  programmers  primarily  from  the former
Soviet  Union,  obtains necessary visas, and places them for assignment  in
the United States.   The Company started this process to support its former
LIS business and the needs  of  a  customer  that  was  developing  medical
administrative  systems.   ATR  soon  discovered  an encouraging demand for
these programmers from others and began its present  business  on a limited
basis.   Initial success placing programmers and increasing expressions  of
demand have  encouraged ATR to focus entirely upon growing its niche in the
contract programming marketplace.

RESULTS OF OPERATION

CONTRACT PROGRAMMING

CONTRACT  PROGRAMMING   REVENUE.    Contract  programming  revenue  results
primarily from sales of  programmer services.  During fiscal 1997, sales of
custom programming and software development  and  acting as an intermediary
in  providing  such  services  are  also  included in Contract  Programming
Revenue.  These sales are immaterial in fiscal 1998.

Revenues increased  $561,000 or 155% in the  quarter  ended  September  30,
1997,  compared  to  the  quarter  ended September 30, 1996.  The increased
revenue in the first quarter of fiscal 1998 resulted from having an average
of 58 programming personnel working  at  customer  sites during the quarter
ended September 30, 1997, compared to an average of  28 programmers working
during the first quarter of fiscal 1997 and from increased billing rates in
the first quarter of fiscal 1998.  This increase was partially  offset by a
decrease   of    $49,000   in   revenues  from  providing  contract  system
enhancements  programming  for LIS  customers,  a  service  ATR  no  longer
provides.

PROGRAMMER COSTS.  Programmer  costs  are  the  salary,  other wage and benefit
costs of ATR's programmer employees.  This cost increased  147%  for  the three
months  ended September 30, 1997, compared to the same period last year.   This

<PAGE>7

PART 1.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis and Result of Operations

increase  is  primarily  due  to  more  than  doubling  the  average  number of
programmers  working  at customer sites in the current quarter compared to  the
comparable period.

START-UP AND OTHER COSTS.  Start-up and other costs primarily represent the
costs of recruiting, training,  and  travel for programmer employees coming
to  the United States from the Former Soviet  Union  for  the  first  time,
relocation  costs  within  the  United  States,  and  legal and other costs
related  to  obtaining  and  maintaining  compliance  with required  visas,
postings and notifications.

Also included in this category of costs are wage, other salary, and benefit
costs incurred by ATR whenever programmer employees are hired and enter the
United States or are relocated once in the United States  but  before these
programmers  begin working at a customer's work site.  There are  sometimes
periods of up to several days when under immigration law, ATR, as employer,
must pay a programmer  employee  prevailing  wages for his or her specialty
even when the programmer is not placed.

ATR expenses start-up and other costs as incurred,  which results in timing
differences between the incurring of expense and recognition  of  resulting
revenue.   Such  differences  may  be  particularly  evident  in ATR's case
because of its relatively small revenue base and rapid growth.   The affect
may  be  particularly  noticeable  whenever  the  timing  of  placement  of
employees is such that the major start-up costs occur late in one reporting
period and the revenues appear in subsequent periods.

Start-up  and  other costs increased  $100,000 or 174% in the quarter ended
September 30, 1997,  as  compared to the same quarter in fiscal 1997.  This
increase is due to placing  or  relocating  16 programmers during the first
quarter  of  fiscal 1998 compared to placing or  relocating  9  programmers
during  the first  quarter  of  fiscal  1997.   In  addition,  the  Company
experienced increased costs in the current period associated with expanding
recruiting and training efforts overseas.

CONTRACT   PROGRAMMING   GROSS   PROFIT.   The  gross  profit  on  contract
programming revenue was 6% for the  three  months ended September 30, 1997,
compared  to  4%  in the same quarter of fiscal  1997.   This  increase  is
primarily due to the increase in the total number of programmers generating
revenues at higher  billing  rates  during  fiscal  1998 compared to fiscal
1997.

SYSTEM SERVICE

In  fiscal  1997,  the  Company  phased  out all LIS software  support  and
hardware services.  As a result, there are no revenues or costs from system
service in fiscal 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

SELLING,  GENERAL  AND  ADMINISTRATIVE EXPENSES  ("SG&A").   SG&A  expenses
increased  $122,000 or  57%  for  the three months ended September 30, 1997
compared to the same quarter of fiscal  1997.   This  increase is primarily
due to almost doubling the average number of employees  currently  assigned
to  administrative  functions  during  the quarter ended September 30, 1997
compared to September 30, 1996.

<PAGE>8

PART 1.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis and Results of Operations

OTHER INCOME (EXPENSE)

INTEREST EXPENSE.  Interest expense increased   $36,000 in the three months
ended September 30, 1997 compared to the same period  in fiscal 1997 due to
a  net  increase  in  notes payable and other debt of  $1.2  million  since
September 30, 1996.

INCOME TAXES

As of June 30, 1997, the  Company had a net operating loss carryforward for
federal and state income tax  purposes  of  $24  million  and  $12 million,
respectively.  The federal net operating loss carryforward expires  in  the
years  2006  through  2012  and  the  state net operating loss carryforward
expires in 1998 through 2002.  The Company  expects that annual limitations
on the use of loss carryforwards generated before  September  13, 1993 will
result in  $3.6 million of net operating loss carryovers which  may  not be
utilized prior to the expiration of the carryover period.

NET LOSS

Net loss increased $155,000 or 75% for the three months ended September 30,
1997  compared to the same quarter in fiscal 1997.

NET LOSS PER SHARE

The  Company's  net  loss  per share has been computed by dividing net loss
after deducting Preferred Stock  dividends  ($30,625  in  each of the three
months ended September 30, 1997 and 1996) by the weighted average number of
shares of Common Stock outstanding during the quarters presented, including
Common Stock to be issued, after giving effect to the Company's one-for-ten
consolidation of Common Stock approved by the stockholders  on November 21,
1996, and effective December 2, 1996.

LIQUIDITY AND CAPITAL RESOURCES

Since its inception, the Company has used a combination of equity  and debt
financing  and  internal  cash flow to fund operations and finance accounts
receivable.   The Company expects  to  generate  positive  cash  flow  from
operations during  fiscal  1998,  but  not  at levels sufficient to pay off
current  obligations  and  fund  rapid  growth  of  its  contract  computer
programming  and  consulting services; therefore the  Company  contemplates
needing to raise additional financing during fiscal 1998.

The report of independent auditors on the Company's June 30, 1997 financial
statements  includes   an   explanatory   paragraph   indicating  there  is
substantial  doubt  about  the  Company's ability to continue  as  a  going
concern.   The financial statements  do  not  include  any  adjustments  to
reflect the  uncertainties related to the recoverability and classification
of assets or the  amounts and classification of liabilities that may result
from the inability of the Company to continue as a going concern.  Based on
the steps the Company  has  taken  to  reduce  its expenses and refocus its
operations, the Company believes that it has developed  a  viable  plan  to
address  the Company's ability to continue as a going concern and that this
plan will enable the Company to continue as a going concern through the end
of fiscal year 1998.  However, considering, among other things, the

<PAGE>9

PART 1.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis and Results of Operations

Company's historical operating losses and its short history in the contract
computer programming  industry,  there  can  be no assurance that this plan
will be successfully implemented.

The Company received short-term financing in the  form  of notes payable of
$1.0  million during fiscal 1997 and $0.7 million during fiscal  1996  from
two stockholders,  James  W.  Cameron,  Jr.  ("Cameron")  and Dr. Max Negri
("Negri"),  to  fund  its  operations.   The Company borrowed another  $0.3
million from these stockholders during the  first  quarter  ended September
30,  1997.   These  notes mature on December 31, 1997 and bear interest  at
10.25%.  The Company  must  obtain  additional  funds during fiscal 1998 in
order to meet its obligations while attempting to  grow revenues to a level
necessary to generate cash from operations.  Although  the  Company has not
entered  into  any  written  agreement  with  Cameron  or Negri, management
believes, based on discussions with these two individuals,  that  these two
stockholders  will  continue  to  finance  the  Company's operations during
fiscal  1998.  In December 1996, Cameron and Negri  extended  the  maturity
date on all notes payable currently maturing from December 31, 1996, to the
earlier of  December  31,  1997, or such time as the Company obtains equity
financing.  Although the Company has not entered into any written agreement
with Cameron or Negri, management believes, based on discussions with these
two individuals, that Cameron  and  Negri  will continue to fund operations
and extend the maturity dates of the various  notes  payable until at least
June  30,  1998,  or  until such time as the Company can repay  the  notes.
However, there can be no  assurance  that events may arise which may affect
these stockholders' ability to finance  the Company or that the Company may
experience significant and unanticipated cash flow problems which may cause
these two stockholders to reconsider their  investment.   Further,  if  the
Company  experiences  significant  cash  flow  problems, the Company may be
required to reduce the level of its operating activities  or be forced into
seeking protection under federal bankruptcy laws.

On April 21, 1997, the Company issued a note payable (the "Straight  Note")
to Cameron for  $1,000,000 in accordance with a Reimbursement Agreement the
Company  signed  on  February  28,  1994.  Terms of the note provide for an
interest rate of 9.5% and monthly interest  payments.   No maturity date is
stated  in  the  note;  however,  under  the  terms  of  the  Reimbursement
Agreement,  upon  written  demand  by  Cameron,  the Straight Note will  be
replaced  by  a convertible note (the "Convertible Note")  in  a  principal
amount equal to  the  Straight  Note and bearing interest at the same rate.
The conversion ratio of the Convertible  Note is equal to 20% multiplied by
the average trading price of the Company's  Common Stock over the period of
ten  trading  days ending on the trading day next  preceding  the  date  of
issuance of such Convertible Note.

EFFECTS OF INFLATION

The Company's most  significant cost is personnel.  To the extent personnel
costs increase, management  of  the  Company believes that customer billing
rates can be increased to cover such personnel increases.

PART II.OTHER INFORMATION

Items 1, 2, 3, 4, 5 and 6

None

<PAGE>10

                                SIGNATURES

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

ALTERNATIVE TECHNOLOGY RESOURCES, INC.
(FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
(Registrant)


Dated: November 14, 1997                      W. ROBERT KEEN

                                              W. Robert Keen
                                              Chief Executive Officer
                                              (Principal Executive Officer)


Dated: November 14, 1997                      EDWARD L. LAMMERDING
                                              Edward L. Lammerding
                                              Chief Financial Officer
                                              (Principal Financial Officer)