<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

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

                   For the quarterly period ended March 31, 2001

                                       OR

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


                         COMMISSION FILE NUMBER 0-20835


                                  LEAPNET, INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                       36-4079500
  (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                        Identification No.)

         420 WEST HURON STREET, CHICAGO, ILLINOIS 60610, (312) 528-2400
    (Address, including zip code, and telephone number, including area code,
                  of registrant's principal executive offices)

                                       N/A
(Former Name, Former Address & Former Fiscal Year, if changed since last report)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods as 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
                                          -----    -----


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.

<TABLE>
<CAPTION>
                                                         Outstanding Shares at
               Class                                          May 4, 2001
    ------------------------------                       ---------------------
<S>                                                      <C>
    Common Stock - $0.01 par value                            29,205,126

</TABLE>

<PAGE>


                                  LEAPNET, INC.

                                    FORM 10-Q
                              FOR THE PERIOD ENDED
                                 MARCH 31, 2001

                                      INDEX

<TABLE>
<S>               <C>
PART I.  FINANCIAL INFORMATION

     ITEM 1.      FINANCIAL STATEMENTS:

                  Condensed Consolidated Balance Sheets --
                           March 31, 2001 (Unaudited)
                           and December 31, 2000

                  Condensed Consolidated Statements of Operations --
                           Three Months Ended
                           March 31, 2001 and 2000 (Unaudited)

                  Condensed Consolidated Statements of Cash Flows --
                           Three Months Ended
                           March 31, 2001 and 2000 (Unaudited)

                  Notes to Unaudited Condensed Consolidated Financial Statements

     ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

PART II. OTHER INFORMATION

     ITEM 1.      LEGAL PROCEEDINGS

     ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

     ITEM 5.      OTHER INFORMATION

     ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K


SIGNATURES

</TABLE>

<PAGE>


PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

<PAGE>


                                  Leapnet, Inc.
                 Unaudited Condensed Consolidated Balance Sheets
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                         March 31,     December 31,
                                                                                           2001            2000
                                                                                         --------      ------------
<S>                                                                                      <C>           <C>
                                          Assets
Current assets:
  Cash and cash equivalents                                                             $   2,213          $   1,248
  Marketable securities                                                                    21,007             27,800
  Accounts receivable, net:
    Trade                                                                                   8,468             13,821
    Employees, interest, and other                                                            863                713
  Costs and fees in excess of billings on uncompleted projects                                 95                217
  Prepaid expenses and other                                                                  659                767
  Assets to be transferred under contractual agreement                                        176                  -
                                                                                       ----------          ---------
    Total current assets                                                                   33,481             44,566
                                                                                       ----------          ---------
Property and equipment, net                                                                 9,411             10,957
Goodwill, net                                                                              25,338             28,378
Other                                                                                         150                125
                                                                                       ----------          ---------
Total assets                                                                           $   68,380          $  84,026
                                                                                       ==========          =========

                          Liabilities And Stockholders' Equity

Current liabilities:
  Accounts payable                                                                     $    2,026          $   2,996
  Accrued expenses:
    Payroll and payroll related                                                             2,129              3,036
    Restructuring accrual                                                                   2,179                  -
    Other                                                                                   1,269              1,579
  Billings in excess of costs and fees on uncompleted projects                              1,603              1,793
                                                                                       ----------          ---------
    Total current liabilities                                                               9,206              9,404
                                                                                       ----------          ---------
Commitments and contingencies
Stockholders' equity:
  Preferred stock,$0.01 par value, 20,000,000 shares
    authorized, no shares issued or outstanding                                                 -                  -
  Common stock $0.01 par, 100,000,000 authorized,
    29,255,126 and 29,181,062 shares issued and
    29,205,126 and 29,131,062 outstanding at
    March 31, 2001 and December 31, 2000, respectively                                        292                292
  Additional paid-in capital                                                              128,109            128,077
  Accumulated deficit                                                                     (69,076)           (53,596)
  Treasury stock - at cost, 50,000 shares                                                    (151)              (151)
                                                                                       ----------          ---------
  Total stockholders' equity                                                               59,174             74,622
                                                                                       ----------          ---------
Total liabilities and stockholders' equity                                             $   68,380          $  84,026
                                                                                       ==========          =========

</TABLE>

See Notes to unaudited condensed consolidated financial statements, including
Note 3 which indicates that the results of SPR are included beginning May 1,
2000.


<PAGE>


                                  Leapnet, Inc.
            Unaudited Condensed Consolidated Statements of Operations
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                       Three Months
                                                                                      Ended March 31,
                                                                                 ------------------------
                                                                                  2001               2000
                                                                                 -----               ----
<S>                                                                          <C>                 <C>
Revenues                                                                     $   9,373           $   7,798
Cost of services                                                                11,084               6,490
                                                                             -----------------------------
  Gross (loss) profit                                                           (1,711)              1,308
                                                                             -----------------------------
Other expenses:
  General and administrative                                                     7,573               4,209
  Restructuring and impairment charge                                            3,534                   -
  Amortization of goodwill                                                       3,041                   -
                                                                             -----------------------------
    Total other expenses                                                        14,148               4,209
                                                                             -----------------------------
Operating loss                                                                 (15,859)             (2,901)
                                                                             -----------------------------
  Interest income, net                                                             379                  19
  Gain on sale of building                                                           -                 585
  Other, net                                                                         -                 (33)
                                                                             -----------------------------
Loss before income taxes                                                       (15,480)             (2,330)
Benefit for income taxes                                                             -                (137)
                                                                             -----------------------------
Net loss                                                                     $ (15,480)          $  (2,193)
                                                                             =============================
Net loss per share:
  Basic                                                                      $   (0.53)          $   (0.15)
  Diluted                                                                    $   (0.53)          $   (0.15)

Weighted average number of shares outstanding:
  Basic                                                                         29,131              14,801
  Diluted                                                                       29,131              14,801

</TABLE>

See Notes to unaudited condensed consolidated financial statements, including
Note 3 which indicates that the results of SPR are included beginning May 1,
2000.


<PAGE>


                                  Leapnet, Inc.
            Unaudited Condensed Consolidated Statements of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                         Three Months
                                                                                        Ended March 31,
                                                                                ------------------------------
                                                                                   2001                2000
                                                                                ----------           ---------
<S>                                                                             <C>                  <C>
Cash flows from operating activities:
 Net loss for the period                                                        $  (15,480)          $  (2,193)
 Adjustments to reconcile net loss
     to net cash used in operating activities:
   Depreciation and amortization                                                     3,735                 472
   Provision for lease obligations and impairment charge                             2,033                  --
   Loss (gain) on sale of property                                                       9                (585)
   Changes in operating assets and liabilities:
     Accounts receivable, net                                                        5,203              (1,472)
     Costs and fees in excess of billings on uncompleted projects                       45                 637
     Prepaids and other assets                                                         358                  79
     Accounts payable                                                                 (970)               (347)
     Payroll and other accrued expenses                                                  8                (534)
     Billings in excess of costs and fees on uncompleted contracts                    (190)                (20)
                                                                                ----------           ---------
Net cash used in operating activities                                               (5,249)             (3,963)
                                                                                ----------           ---------
Cash flows from investing activities:
  Purchases of property and equipment                                                 (424)             (1,308)
  Net proceeds from sale of property                                                    89               1,165
  Purchases of marketable securities                                                (7,944)                  -
  Proceeds from sale/maturity of marketable securities                              14,461                   -
                                                                                ----------           ---------
Net cash provided by (used in) investing activities                                  6,182                (143)
                                                                                ----------           ---------
Cash flows from financing activities:
  Proceeds from notes payable                                                            -               2,680
  Repayment of mortgage                                                                  -                (639)
  Capital lease obligation                                                               -                 (68)
  Proceeds from employee stock purchase and option plans                                32                 669
                                                                                ----------           ---------
Net cash provided by financing activities                                               32               2,642
                                                                                ----------           ---------
NET INCREASE (DECREASE) IN CASH                                                        965              (1,464)
Cash and cash equivalents, beginning of period                                       1,248               2,395
                                                                                ----------           ---------
Cash and cash equivalents, end of period                                        $    2,213           $     931
                                                                                ==========           =========
Supplemental disclosure of cash payments made for:
  Interest                                                                      $        -           $     165

</TABLE>

See Notes to unaudited condensed consolidated financial statements, including
Note 3 which indicates that the results of SPR are included beginning May 1,
2000.


<PAGE>

                         LEAPNET, INC. AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Note 1.  Interim Financial Statements

         The accompanying unaudited interim condensed consolidated financial
statements of Leapnet, Inc. (the "Company" or "Leapnet") have been prepared
by the Company in accordance with generally accepted accounting principles
for interim financial information and in conjunction with the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in annual financial statements
have been condensed or omitted pursuant to those rules and regulations.
However, the Company believes that the disclosures contained herein provide a
fair presentation of interim results. These financial statements should be
read in conjunction with the Company's audited financial statements and notes
thereto for the year ended December 31, 2000 in the Company's annual report
on Form 10-K.

         The unaudited interim condensed consolidated financial statements
reflect, in the opinion of management, all material adjustments (which
include only normal recurring adjustments) necessary to present fairly the
Company's financial position and results of operations. The statement of
operations for the three months ended March 31, 2000, has been reclassified
to conform with the financial presentation of companies within the Internet
services industry. Such reclassifications primarily included allocating the
Company's salaries and related expenses into either costs of services for
billable employees or to general and administrative expenses for non-billable
employees. Additionally, certain other amounts as previously reported have
been reclassified to conform to current year classifications. The results of
operations for the three months ended March 31, 2001, are not necessarily
indicative of the results that may be expected for the full year.

Note 2.  Change in Fiscal Year

         Effective May 1, 2000, the Company changed its fiscal year from January
31 to December 31. As such, the new fiscal quarters for the Company will end on
March 31, June 30, September 30, and December 31.

Note 3.  Risks and Uncertainties

         The Company has experienced net losses and negative cash flow from
operations. As of March 31, 2001, the Company had an accumulated deficit of
$69.1 million. The Company expects to incur operating losses over the near
term.

         The Company believes that existing credit facilities, cash and
short-term investments and funds from operations will be sufficient to meet
its cash requirements through the remainder of 2001. However, Leapnet's
ability to achieve successful future operations, to satisfy its obligations
as they become due, and remain listed on the NASDAQ will depend on many
factors. These factors include the Company's ability to maintain its customer
base, attract new customers, attract future equity infusions, and ratify a 5
for 1 reverse stock split. There can be no assurance that the Company will
ever achieve operating profits, continue to satisfy its obligations, or
prevent delisting from the NASDAQ.

         Several actions have been taken to reduce the use of cash, sell
underutilized assets, reduce the number of office locations, and return the
Company to profitability. A reduction in force affecting 89 employees was
completed in March 2001. This reduction is expected to save the Company
approximately $3.2 million during the calendar year 2001. Procedures have
been put into action to improve management of the Company's consultant
utilization and more closely match the inventory of available skills with
project requirements on a continual basis. Increased monitoring of consultant
utilization will assist management in matching the Company's cost of
consultants to the market demand. In addition, a plan has been implemented to
reduce the amount of leased office space and sell or dispose of any
under-performing or under-utilized assets. Further, the shareholders will be
voting on the 5 for 1 reverse stock split at the upcoming shareholder meeting.

Note 4.  Acquisition

         On May 1, 2000, Leapnet completed the acquisition of SPR Inc. ("SPR"),
a company that provides project-based IT consulting services. The amount of
goodwill amortization reflected in the statement of operations for the
three-month period ended March 31, 2001, is $3.0 million. SPR is included in
Leapnet's consolidated financial statements beginning May 1, 2000.

         The following summary reflects unaudited selected pro forma financial
information for the three-month period ended March 31, 2000, as if the
acquisition of SPR had occurred at the beginning of the period.

<TABLE>
<CAPTION>
         (in thousands, except per share amounts)

                                            Three Months
                                               Ended
                                           March 31, 2000
                                           --------------
<S>                                        <C>
            Revenues                         $ 14,539
            Net loss                         $(10,339)
            Net loss per share               $  (0.36)
</TABLE>


       The pro forma results are not necessarily indicative of what would
have occurred if the acquisition had been in effect for the period presented.
In addition, they are not intended to be a projection of future results nor
do they incorporate or assume any benefits from cost savings or synergies
that the combined company may realize after the merger.


<PAGE>

Note 5.  Sale of Certain Planet Leap Assets

         On March 29, 2001, Planet Leap, Inc., a wholly owned subsidiary of
the Company, signed a definitive Asset Purchase Agreement to sell certain
operating assets and liabilities to Berlitz GlobalNet, Inc. (Berlitz). The
closing took place on April 4, 2001. The terms of the agreement call for a
cash payment of $2.1 million upon closing plus additional contingent
payments. The total amount of the purchase price will be determined based on
a percentage of revenues for the twelve months following the closing. Any
resulting gain from the sale of the assets will be recognized as revenues are
generated over the twelve-month period. Assets with net book values totaling
$0.2 million will be transferred to Berlitz pursuant to the agreement and
will be amortized over the next twelve months.

Note 6. Restructuring and Impairment of Long-lived Assets Charge

        During the quarter ended March 31, 2001, the Company recorded a
restructuring and impairment of long-lived assets charge of $3.5 million
associated with the closing of facilities and related severance payments. The
charge consisted of $1.2 million related to employee severance, $1.2 million
associated with lease obligations for unutilized office space, and an asset
impairment charge of $1.1 million for the write-off of furniture and
leasehold improvements at the unutilized office locations

        Reductions in force, brought about by the closure of offices and the
realignment of the Company's operations, affected 89 employees during the first
quarter of 2001. Of the $1.2 million in employee severance, $0.3 million was
paid in March 2001, $0.7 million will be paid in the second quarter of 2001, and
the remainder will be paid from July 2001, through March 2002, pursuant to
agreements reached with the affected employees.

        The $1.2 million charge for lease obligations was recorded as a
result of approximately 69,000 square feet of unutilized office space in Oak
Brook, Illinois, Dallas, San Francisco, and New York. The amount was recorded
net of estimated sublease revenues, which are estimated to begin in August
and October of 2001. Substantially all of the $1.2 million will be paid on
approximately a straight-line basis through October of 2001.

        The asset impairment charge of $1.1 million was a non-cash item
associated with the leasehold improvements and furniture at the offices that are
no longer being utilized. The carrying amounts of the assets at these locations
have been reduced to a fair value of zero and are expected to be disposed of
prior to the fourth quarter of 2001.

        As of March 31, 2001, the restructuring accrual, recorded as a
component of accrued expenses on the Company's balance sheet, was comprised of
the following amounts:

<TABLE>
<CAPTION>
                                                (in thousands)

                                             Lease
                            Severance      Obligations     Total
                            ---------      -----------     -----
<S>                         <C>            <C>            <C>
First quarter - 2001:
   Restructuring charge      $ 1,250         $ 1,205      $ 2,455
   Payments                     (276)              -         (276)
                            -------------------------------------
Balance at March 31, 2001      $ 974         $ 1,205      $ 2,179
                            =====================================
</TABLE>

Note 7. Marketable Securities

        The Company invests in investment-grade marketable securities with
varying maturities. These securities include certificates of deposit, municipal
bonds, and corporate bonds. The Company owns one equity security received as
reimbursement for services performed. The equity security is valued at market.
Management determines the classification of investments at the time of purchase
and evaluates such classifications as of each balance sheet date.

        The carrying amounts and fair values of the Company's marketable
securities are as follows:

<PAGE>


<TABLE>
<CAPTION>
                                                                              (in thousands)
                                                                               Period Ended
                                                       ------------------------------------------------------------------
                                                              March 31, 2001                      December 31, 2000
                                                       ---------------------------          -----------------------------
                                                       Amortized          Aggregate         Amortized          Aggregate
                                                       Cost Basis         Fair Value        Cost Basis         Fair Value
                                                       ----------         ----------        ----------         ----------
<S>                                                    <C>                <C>               <C>                <C>
Available-for-sale:
 U.S. corporate notes maturing within 1 year            $  7,393           $  7,393          $ 10,840           $ 10,840
 U.S. corporate notes maturing within 2 - 10 years         4,235              4,235             4,147              4,147
 U.S. corporate notes maturing after 10 years              6,829              6,829             7,142              7,142
 Corporate equity securities                                  50                 50                71                 71
 Municipal obligations maturing after 10 years             2,500              2,500             5,600              5,600
                                                        --------           --------          --------           --------
Total short-term investments                            $ 21,007           $ 21,007          $ 27,800           $ 27,800
                                                        ========           ========          ========           ========
</TABLE>


Note 8.  Comprehensive Income

         In September 1997, the Financial Accounting Standards Board issued SFAS
No. 130, "Reporting Comprehensive Income". The standard requires the reporting
and display of comprehensive income, which includes all changes in stockholders'
equity with the exception of investments by, or distributions to, stockholders.
During the three months ended March 31, 2001 and 2000, the components of
comprehensive income are as follows:


<TABLE>
<CAPTION>
                                                                     (in thousands)
                                                                       (unaudited)
                                                               Three Months Ended March 31,
                                                               2001                    2000
                                                            ---------                --------
<S>                                                         <C>                      <C>
     Net loss                                               $ (15,480)               $ (2,193)
     Unrealized (loss)/gain on short term investments               0                    (127)
                                                            ---------                --------
        Comprehensive (loss)/income                         $ (15,480)               $ (2,320)
                                                            =========                ========
</TABLE>




Note 9.  Business Segments

         Amounts by service line for the three-month periods ended March 31,
2001 and 2000, are shown in the table below:


<PAGE>

<TABLE>
<CAPTION>
                                             (in thousands)
                                      Three Months Ended March 31,
                               ------------------------------------------
                                      2001                     2000
                               -----------------        -----------------
                               Revenues      %          Revenues      %
                               --------    -----        --------    -----
<S>                            <C>         <C>          <C>         <C>
 E-business                    $ 5,335     56.9%        $ 3,578     45.9%
 General IT consulting           1,756     18.7%              -      0.0%
 Globalization                   1,223     13.1%          1,597     20.5%
 Advertising                     1,059     11.3%          2,623     33.6%
                               -------                  -------
 Total                         $ 9,373                  $ 7,798
                               =======                  =======
</TABLE>

Note 10.

         In August 2000, the Company received a copy of a Demand for
Arbitration filed with the American Arbitration Association ("AAA") whereby
claimants Eliot Kang Productions, Inc. and Eliot Kang and Associates Inc. are
seeking $1 million for an alleged breach of contract. In November 1997, the
Company and a subsidiary of the Company entered into an Asset Purchase
Agreement with the claimants, who were then operating under different names.
Discovery is being conducted. It is not possible to ascertain the ultimate
outcome of this matter. The Company intends to vigorously defend its position
and pursue all remedies available to it. An adverse determination could have
a material adverse effect on the Company's results of operations and
financial position.

         There are no other active claims or lawsuits against the Company
that management believes are material.

Note 11. New Accounting Pronouncements

         During 1998, the Financial Accounting Standards Board issued SFAS No.
133 "Accounting for Derivative Instruments and Hedging Activities". SFAS No.
133, as amended by SFAS No. 137 and SFAS No. 138, is effective for fiscal years
beginning January 1, 2001. Adoption of SFAS 133 on January 1, 2001, had no
impact on the reported results of operations or financial position of the
Company.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following presentation of management's discussion and analysis of
the Company's financial condition and results of operations should be read in
conjunction with the Company's consolidated financial statements, accompanying
notes thereto and other financial information appearing in the Company's Annual
Report of Form 10-K which was filed with the Securities and Exchange Commission
on December 31, 2000.

         The statement of operations of Leapnet, Inc. for the three-month
period ended March 31, 2000, has been reclassified to conform to the
financial presentation of companies within the Internet Services Industry.
Such classifications primarily included allocating the Company's salaries and
related expenses into either cost of services for billable employees or to
general and administrative expenses for non-billable employees. Additionally,
certain amounts as previously reported have been reclassified to conform to
current year classifications.

         On May 1, 2000, Leapnet, Inc. acquired SPR Inc., an information
technology services provider. The acquisition was accounted for as a purchase.
The amount of goodwill amortization reflected in the statement of operations for
the three-month period ended March 31, 2001, is $3.0 million. If Leapnet is
unable to secure assignments that would utilize the skills of the SPR employees,
or the difficult market conditions for Internet professional services companies
do not improve, the Company may not be able to realize the value inherent in the
goodwill resulting from the SPR acquisition. If the goodwill related to the SPR
acquisition becomes impaired, Leapnet will incur a one-time non-cash charge for
the write-off of all or a portion of such goodwill at the time of impairment.
Results of operations of SPR are included in the consolidated financial
statements commencing May 1, 2000.

         The results of operations for the three-month period ended March 31,
2001, are not necessarily indicative of the results of operations to be expected
for the entire year ended December 31, 2001.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 AND 2000

REVENUES

         Revenues increased to $9.4 million for the three months ended March
31, 2001, from $7.8 million for the three months ended March 31, 2000, an
increase of approximately $1.6 million or 20%. The $1.6 million increase in
revenues was primarily due to the acquisition of SPR. The increase related to
the acquisition was reduced by revenues generated from contracts completed in
2000 that were not entirely replaced in the 2001 period, and $0.9 million
related to the loss of the Hardee's account.

<PAGE>

GROSS PROFIT

         Gross profit consists of revenues less cost of services, which
includes direct costs of servicing clients, including direct labor and
related benefits and taxes, and direct production costs. Direct production
costs include costs such as freelance and contract labor, filming, animation,
editing, special effects, photography and illustrations, artwork, computer
design and various related production services which are generally outsourced
and reflect production done on traditional media as well as with new
technologies and multimedia. For the three months ended March 31, 2001, gross
profit was a loss of $1.7 million, compared to a profit of $1.3 million for
the comparable 2000 period, a decrease of $3.0 million. The decrease in gross
profit is primarily attributable to decreased utilization rates for the
Company's consultants during the three months ended March 31, 2001.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and Administrative Expenses include salaries and benefits of
management and support staff, space and facilities expenses, depreciation,
insurance, outside professional fees, and other corporate costs. General and
administrative expenses increased to $7.6 million for the three months ended
March 31, 2001, from $4.2 million for the three months ended March 31, 2000, an
increase of approximately $3.4 million. The $3.4 million increase in general and
administrative expenses was due to the addition of sales, recruiting, and
employee relations staff that resulted primarily from the SPR acquisition.

RESTRUCTURING AND IMPAIRMENT OF LONG-LIVED ASSETS CHARGE

         During the quarter ended March 31, 2001, the Company recorded a
restructuring and impairment of long-lived assets charge of $3.5 million
associated with the closing of facilities and related severance payments. The
charge consisted of $1.2 million related to employee severance, $1.2 million
associated with lease obligations for unutilized office space, and an asset
impairment charge of $1.1 million for the write-off of furniture and
leasehold improvements at the unutilized office locations.

         Reductions in force, brought about by the closure of offices and the
realignment of the Company's operations, affected 89 employees during the
first quarter of 2001. Of the $1.2 million in employee severance, $0.3
million was paid in March 2001, $0.7 million will be paid in the second
quarter of 2001, and the remainder will be paid from July 2001, through March
2002, pursuant to agreements reached with the affected employees.

         The $1.2 million charge for lease obligations was recorded as a
result of approximately 69,000 square feet of unutilized office space in Oak
Brook, Illinois, Dallas, San Francisco, and New York. The amount was recorded
net of estimated sublease revenues, which are estimated to begin in August
and October of 2001. Substantially all of the $1.2 million will be paid on
approximately a straight-line basis through October of 2001.

         The asset impairment charge of $1.1 million was a non-cash item
associated with the write-off of the leasehold improvements and furniture at the
offices that are no longer being utilized. The carrying amounts of the assets at
these locations have been reduced to a fair value of zero and are expected to
be disposed of prior to the fourth quarter of 2001.

         As of March 31, 2001, $2.2 million of the restructuring charge is
recorded as a component of accrued expenses on the Company's balance sheet.

AMORTIZATION OF GOODWILL

         Amortization of goodwill was $3.0 million for the three months ended
March 31, 2001, and represents the goodwill resulting from the purchase of SPR
Inc. on May 1, 2000. Goodwill amortization will approximate $1.0 million per
month for a total of 36 months.

INTEREST INCOME, NET

         Interest income totaled $0.4 million for the three months ended March
31, 2001, versus $0.2 million for the comparable period in 2000, and represents
interest earned on investments in marketable securities. Interest expense was
zero for the three months ended March 31, 2001. Interest expense was $0.2
million for the three months ended March 31, 2000, on debt that totaled
approximately $10.8 million at March 31, 2000.

<PAGE>

GAIN ON SALE OF BUILDING

         The $0.6 million gain in the 2000 period was due to the sale of a
building at 22 W. Hubbard in Chicago.

INCOME TAXES

         The income tax benefit recorded in the 2000 period was related to a
refund due from the State of New York.

LIQUIDITY AND CAPITAL RESOURCES

         During the past three months, the Company has primarily financed its
operations and investments in property and equipment through cash generated from
the sale of marketable securities acquired through the purchase of SPR Inc.,
which was completed in May 2000.

         At March 31, 2001, the Company had $24.3 million of working capital,
inclusive of $23.2 million in cash, cash equivalents, and marketable securities.
During the three months ended March 31, 2001, cash used in operating activities
was $5.2 million.

         Several actions have been taken to reduce the use of cash, sell
underutilized assets, reduce the number of office locations, and return the
Company to profitability. A reduction in force affecting 89 employees was
completed in March 2001. The reduction is expected to save the Company
approximately $3.2 million during the calendar year 2001. On March 29, 2001,
Planet Leap, Inc., a wholly owned subsidiary of the Company, signed a
definitive Asset Purchase Agreement to sell certain operating assets and
liabilities to Berlitz GlobalNet, Inc. (Berlitz). The closing took place on
April 4, 2001. The terms of the agreement call for a cash payment of $2.1
million upon closing plus additional contingent payments. The total amount of
the purchase price will be determined based on a percentage of revenues for
the twelve months following the closing. Any resulting gain from the sale of
the assets will be recognized as revenues are generated over the twelve-month
period. Assets with net book values totaling $0.2 million will be transferred
to Berlitz pursuant to the agreement and will be amortized over the next
twelve months.

         Procedures have been implemented to improve management of the
Company's consultant utilization and more closely match the inventory of
available skills with project requirements, on a continual basis. Increased
monitoring of consultant utilization will assist management in matching the
Company's cost of consultants to the market demand. In addition, a plan is in
place to reduce the amount of leased office space, through subleasing or
renegotiating the lease contracts, and sell or dispose of any
under-performing or unutilized assets.

         The Company believes that the existing credit facilities, cash and
short-term investments, and funds from operations will be sufficient to meet its
cash requirements for the remainder of 2001.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This report contains forward-looking statements (within the meaning of
the Private Securities Litigation Reform Act of 1995) that involve risks and
uncertainties. When used in this report, words such as "anticipates,"
"believes," "continues," "estimates," "expects," "goal," "may," "opportunity,"
"plans," "potential," "projects," "will," and similar expressions as they relate
to the Company or its Management are intended to identify such forward-looking
statements. A number of important factors could cause the Company's actual
results, performance or achievements for 2001 and beyond to differ materially
from that expressed in such forward-looking statements. These factors are set
forth in the Company's Registration Statement on Form S-1 (File No. 333-05051)
under the heading "Risk Factors" and also include, without limitation, material
changes in economic conditions in the markets served by the Company's clients;
operating losses; changes in government regulation and legal uncertainties;
competition in the Company's industry; uncertainties relating to the developing
market for new media; general economic conditions; ability to collect amounts
owed to the Company; changing technologies and any inability to meet
expectations in the performance of services which could lead to claims or
liabilities; failure to accurately estimate the time and resources necessary for
the performance of services; ability to maintain and expand its name
recognition; costs and uncertainties relating to closing offices or establishing
new offices and bringing new or existing offices to profitability; any inability
of the Company to raise additional financing in the future on favorable terms,
or at all; potential adverse effects of litigation; the Company's dependence on
key personnel and vendors; the Company's dependence on key clients and projects;
the Company's ability to mange growth effectively; possible continued volatility
and wide fluctuations in the price of the Company's stock; the ability of the
Company to maintain the listing on the NASDAQ National Market or




<PAGE>


another principal trading exchange. While the Company reduced certain
expenses, as the Company works to grow and expand the business, management
will need to increase expenses to expand operations. Management will continue
to assess its overall cost structure in relation to existing and anticipated
revenues. Due to the nature of client contracts, which are difficult to
forecast precisely or for any extended period of time, if the Company
experiences declines in client demand, or if significant expenses precede or
are not immediately followed by increased revenues, the results of operations
and financial condition may suffer.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         The Company's market-risk exposures are set forth in its Annual Report
on Form 10-K for the year ended December 31, 2000, and have not changed
significantly.

PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

          In August 2000, the Company received a copy of a Demand for
Arbitration filed with the American Arbitration Association ("AAA") whereby
claimants Eliot Kang Productions, Inc. and Eliot Kang and Associates Inc. are
seeking $1 million for an alleged breach of contract. In November 1997, the
Company and a subsidiary of the Company entered into an Asset Purchase
Agreement with the claimants, who were then operating under different names.
Discovery is being conducted. It is not possible to ascertain the ultimate
outcome of this matter. The Company intends to vigorously defend its position
and pursue all remedies available to it. An adverse determination could have
a material adverse effect on the Company's results of operations and
financial position.

          There are no other active claims or lawsuits against the Company
that management believes are material.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

None.

ITEM 5.   OTHER INFORMATION

          The Company received a Nasdaq Staff Determination on May 8, 2001
indicating that the Company fails to comply with the minimum bid price
requirement for continued listing set forth in Marketplace Rule 4450(a)(5),
and that its securities are, therefore, subject to delisting from The Nasdaq
National Market. The Company intends to request a hearing before a Nasdaq
Listing Qualifications Panel to review the Staff Determination. There can be
no assurance that the Panel will grant the Company's request for continued
listing.

          Leapnet's Board of Directors has approved a proposal to amend the
Company's Certificate of Incorporation to effect a five-for-one reverse stock
split of its outstanding Common Stock. This proposal is being submitted for
shareholder approval at the Annual Meeting scheduled on June 5, 2001.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

                  a.  Exhibits

                      None.

                  b.  Reports on Form 8-K

                      None.


ITEMS 2 AND 3  ARE NOT APPLICABLE AND HAVE BEEN OMITTED.


<PAGE>


                           SIGNATURES

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

                               LEAPNET, INC.
                               (Registrant)

Date: May 14, 2001             BY:   /s/ Robert M. Figliulo
                               -----------------------------------------------
                               Robert M. Figliulo
                               Vice Chairman and Chief Executive Officer

Date: May 14, 2001             BY:   /s/ Stephen J. Tober
                               -----------------------------------------------
                               Stephen J. Tober
                               President and Chief Operating Officer

Date: May 14, 2001             BY:   /s/ Stephen T. Gambill
                               ----------------------------------------------
                               Stephen T. Gambill
                               Vice President and Chief Financial Officer