<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  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 June 30, 2001.

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

     For the transition period from ___________ to ___________.

                      Commission File Number:   000-28391
                                                ---------


                            SourcingLink.net, Inc.
--------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)


                DELAWARE                                      98-0132465
                --------                                      ----------
      (State or other jurisdiction                        (IRS Employer
    of incorporation or organization)                     Identification No.)


           16855 WEST BERNARDO DRIVE, SUITE 260, SAN DIEGO, CA 92127
--------------------------------------------------------------------------------
                   (Address of principal executive offices)

                                (858) 385-8900
--------------------------------------------------------------------------------
                          (Issuer's telephone number)


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

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

Shares of Common Stock outstanding as of August 1, 2001: 8,140,483 shares
<PAGE>

                            SourcingLink.net, Inc.


                                   CONTENTS
                                   --------
<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
PART I        FINANCIAL INFORMATION
<S>           <C>                                                                       <C>

Item 1        Financial Statements

                  Consolidated Condensed Balance Sheets as of
                  June 30, 2001 (unaudited) and March 31, 2001                            3

                  Consolidated Condensed Statements of Operations
                  for the three months ended June 30, 2001 and 2000 (unaudited)           4

                  Consolidated Condensed Statements of Cash Flows
                  for the three months ended June 30, 2001 and 2000 (unaudited)           5

                  Notes to Consolidated Unaudited Financial Statements                    6

Item 2        Management's Discussion and Analysis of Financial Condition and Results
              of Operations                                                               7

PART II       OTHER INFORMATION

Item 6        Exhibits and Reports on Form 8-K                                            15

              Signature                                                                   15

</TABLE>

                                       2
<PAGE>

PART I    FINANCIAL INFORMATION

Item 1    Financial Statements

                            SourcingLink.net, Inc.
                     Consolidated Condensed Balance Sheets

<TABLE>
<CAPTION>
                                                             June 30,       March 31,
                                                               2001           2001
                                                          ------------    ------------
                                                            (Unaudited)
<S>                                                      <C>               <C>
ASSETS
Current assets:
  Cash and cash equivalents                               $  2,962,000    $  4,076,000
  Short-term investments                                       499,000               -
  Accounts receivable, net                                     467,000         353,000
  Other current assets                                         143,000         135,000
                                                          ------------    ------------
    Total current assets                                     4,071,000       4,564,000

Property and equipment, net                                    507,000         523,000
Other non-current assets                                        54,000          54,000
                                                          ------------    ------------
    Total assets                                          $  4,632,000    $  5,141,000
                                                          ============    ============
LIABILITIES
Current liabilities:
  Accounts payable and accrued liabilities                $  1,014,000    $  1,226,000
  Deferred  revenue and other                                  224,000         225,000
                                                          ------------    ------------
    Total current liabilities                                1,238,000       1,451,000

STOCKHOLDERS' EQUITY
Common stock                                                     8,000           8,000
Additional paid in capital                                  24,127,000      24,127,000
Accumulated deficit                                        (20,824,000)    (20,532,000)
Cumulative foreign currency translation adjustments             83,000          87,000
                                                          ------------    ------------
  Total stockholders' equity                                 3,394,000       3,690,000
                                                          ------------    ------------
    Total liabilities and stockholders' equity            $  4,632,000    $  5,141,000
                                                          ============    ============
</TABLE>

             The accompanying notes are an integral part of these
                 consolidated condensed financial statements.

                                       3
<PAGE>

                            SourcingLink.net, Inc.
                Consolidated Condensed Statements Of Operations
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                       Three months ended June 30,
                                                     ------------------------------
                                                        2001               2000
                                                     ----------         -----------
<S>                                                  <C>                <C>
Revenue:
  Professional services                              $  944,000         $   565,000
  Subscribers                                            20,000             200,000
                                                     ----------         -----------
                                                        964,000             765,000
Cost of revenue:
  Professional services                                 292,000             103,000
  Subscribers                                            61,000             255,000
                                                     ----------         -----------
                                                        353,000             358,000

Gross profit                                            611,000             407,000

Operating expenses:
  Selling, general and administrative                   759,000             889,000
  Research and development                              175,000             371,000
  Amortization of warrants issued
   to strategic partners                                      -             185,000
                                                     ----------         -----------
Total operating expenses                                934,000           1,445,000

Operating loss                                         (323,000)         (1,038,000)

Other expense, net                                       (7,000)             (1,000)
Interest income                                          38,000              73,000
                                                     ----------         -----------
Net loss                                             $ (292,000)        $  (966,000)
                                                     ==========         ===========

Net loss per share (basic and diluted)               $    (0.04)        $     (0.12)
                                                     ==========         ===========

Weighted average number of shares used
in per share calculation (basic and                   8,135,000           8,059,000
diluted)                                             ==========         ===========
</TABLE>

      The accompanying notes are an integral part of these consolidated
                        condensed financial statements

                                       4
<PAGE>

                            SourcingLink.net, Inc.
                Consolidated Condensed Statements of Cash Flows
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                                    Three months ended June 30,
                                                                                  -----------------------------------
                                                                                     2001                    2000
                                                                                  -----------              ----------
<S>                                                                               <C>                      <C>
Cash flows from operating activities:
  Net loss                                                                        $  (292,000)             $ (966,000)
Adjustments to reconcile net loss to net cash
 used in operating activities:
  Depreciation and amortization expense                                                78,000                  50,000
  Unrealized exchange (gain) loss                                                      (1,000)                  1,000
  Amortization of stock-based compensation                                                  -                 185,000
  Changes in operating assets and liabilities - net                                  (335,000)                (76,000)
                                                                                  -----------              ----------
      Net cash used in operating activities                                          (550,000)               (806,000)
                                                                                  -----------              ----------
Cash flows from investing activities:
  Purchases of fixed assets                                                           (62,000)               (169,000)
  Purchases of short-term investments                                                (499,000)                      -
  Maturities of short-term investments                                                      -               1,955,000
                                                                                  -----------              ----------
      Net cash provided by (used in) investing activities                            (561,000)              1,786,000
                                                                                  -----------              ----------
Cash flows from financing activities:
  Proceeds from exercise of stock options                                                   -                  18,000
                                                                                  -----------              ----------
    Net cash provided by financing activities                                               -                  18,000
                                                                                  -----------              ----------

Effect of exchange rate changes on cash                                                (3,000)                 (1,000)
                                                                                  -----------              ----------
    Net increase (decrease) in cash and cash equivalents                           (1,114,000)                997,000

Cash and cash equivalents, beginning of the period                                  4,076,000               3,870,000
                                                                                  -----------              ----------
Cash and cash equivalents, end of the period                                      $ 2,962,000              $4,867,000
                                                                                  ===========              ==========
</TABLE>
             The accompanying notes are an integral part of these
                 consolidated condensed financial statements.

                                       5

<PAGE>

                             SourcingLink.net, Inc.
                    NOTES TO UNAUDITED FINANCIAL STATEMENTS

1.  Basis of presentation:
--------------------------

On July 20, 1999, the stockholders of the Company approved a proposal to change
the Company's name from QCS.net Corporation to SourcingLink.net, Inc.  The name
change became effective as of that date upon the Company's filing of its Amended
and Restated Certificate of Incorporation with the Delaware Secretary of State.

The interim consolidated condensed financial statements of SourcingLink.net,
Inc. ("SourcingLink" or the "Company") are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments), which are, in the opinion of
management, necessary for a fair presentation, in all material respects, of the
financial position and operating results of the Company for the interim periods.
The results of operations for the three months ended June 30, 2001 are not
necessarily indicative of the results to be expected for the entire fiscal year
ending March 31, 2002.  The year-end balance sheet data at March 31, 2001 was
derived from the audited financial statements.

The consolidated condensed financial statements include the accounts of
SourcingLink.net, Inc. and its wholly owned subsidiary.  All significant
intercompany transactions and account balances have been eliminated in
consolidation.

This financial information should be read in conjunction with the audited
financial statements and notes thereto included in the Company's Form 10-KSB for
the fiscal year ended March 31, 2001.

2.  Computation of net loss per share:
--------------------------------------

Net loss per share is presented on a basic and diluted basis.  Basic earnings
(loss) per share is computed by dividing the income (loss) by the weighted
average number of shares of Common Stock outstanding for the period.  Diluted
earnings per share are computed by giving effect to all dilutive potential
shares of Common Stock that were outstanding during the period.  For the
Company, dilutive potential shares of Common Stock consist of incremental shares
of Common Stock issuable upon the exercise of stock options and warrants and
conversion of preferred stock for all periods.

Basic and diluted earnings (loss) per share are calculated as follows for the
three months ended June 30, 2001 and 2000 (unaudited):

                                     Three months ended June 30,
                                   --------------------------------
Basic and diluted:                    2001                  2000
                                   ----------            ----------

Net loss                           $ (292,000)           $ (966,000)
                                   ==========            ==========
Weighted average shares
 outstanding for the period         8,135,000             8,059,000

Net loss per share                 $    (0.04)           $    (0.12)
                                   ==========            ==========

At June 30, 2001, the Company had 1,060,000 options and 742,000 warrants
outstanding to purchase shares of Common Stock compared to 711,000 options and
754,000 warrants outstanding at March 31,

                                       6
<PAGE>

2001. These options and warrants were not included in the computation of diluted
earnings per share because their inclusion would be anti-dilutive.

3.  Comprehensive loss:
-----------------------

Comprehensive loss for the three months ended June 30, 2001 and 2000 was
$296,000 and $ 967,000, respectively.  The difference between comprehensive loss
and net loss is the treatment of cumulative foreign currency translation
adjustments.

4.  Recent pronouncements:
-------------------------

In July 2001, the Financial Accounting Standards Board (FASB) issued Statements
Nos. 141 and 142 (FAS 141 and FAS 142), Business Combinations and Goodwill and
Other Intangible Assets. FAS 141 replaces APB 16 and eliminates pooling-of-
interests accounting prospectively. It also provides guidance on purchase
accounting related to the recognition of intangible assets and accounting for
negative goodwill. FAS 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Under FAS 142, goodwill will
be tested annually and whenever events or circumstances occur indicating that
goodwill might be impaired. FAS 141 and FAS 142 are effective for all business
combinations completed after June 30, 2001. Upon adoption of FAS 142,
amortization of goodwill recorded for business combinations consummated prior to
July 1, 2001 will cease, and intangible assets acquired prior to July 2001 that
do not meet the criteria for recognition under FAS 141 will be reclassified to
goodwill. Companies are required to adopt FAS 142 for fiscal years beginning
after December 15, 2001, but early adoption is permitted. The Company will adopt
FAS 142 on April 1, 2002. In connection with the adoption of FAS 142, the
Company will be required to perform a transitional goodwill impairment
assessment. The Company has not yet determined the impact these standards will
have on its results of operations and financial position.

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

Certain statements contained in this Report, including, without limitation,
statements containing the words "may," "will," "believes," "anticipates,"
"expects" or the negative or other variations thereof or comparable terminology,
constitute "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. In addition, any statements that refer to expectations,
projections, or other characterizations of future events or circumstances are
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of SourcingLink to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. These factors include, but are not limited to,
the factors discussed under the caption "Risk Factors" below, and are discussed
in more detail in the "Risks Related to Our Business" section of SourcingLink's
Annual Report on Form 10-KSB for the fiscal year ended March 31, 2001. Given
these uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. SourcingLink disclaims any obligation to update any
such factors or to announce publicly the results of any revisions of the
forward-looking statements contained or incorporated by reference herein to
reflect future events or developments.

Overview

SourcingLink provides comprehensive merchandise sourcing solutions for the
retail industry.  Our Internet-based hosted solution, branded
MySourcingCenter(TM), addresses the pre-order phase of business-to-business
merchandise sourcing.  MySourcingCenter(TM) provides immediate connectivity
between retail merchandise buyers and their suppliers worldwide.  The solution
organizes and automates a broad range

                                       7
<PAGE>

of sourcing activities, improving productivity and reducing costs and buying
lead-times. For merchandise suppliers, MySourcingCenter(TM) provides a sales
tool to expand market reach, enhance existing trading relationships, and reduce
costs. SourcingLink provides complementary enablement and strategic sourcing
services for retail buyers and their suppliers. Strategic sourcing services
involves a methodology and process for providing savings to retailers through
auction-based trading events. MySourcingCenter(TM) enablement services includes
the training of buyers and suppliers on Internet-based business-to-business
tools and exchanges to bring buyers and suppliers together in on-line
environments.

In March 2000, SourcingLink entered into a services contract with Paris, France-
based Carrefour S.A. (the "Carrefour contract").  The agreement with Carrefour,
the world's second largest retailer, provides that SourcingLink will receive a
minimum of $9 million for services to be performed over a three-year period
which began April 1, 2000.  The Carrefour contract followed an announcement by
Carrefour that it, Sears, Roebuck & Co. and Oracle Corporation were forming a
new company named GlobalNetXchange ("GNX"), for the purpose of connecting
electronically and facilitating certain merchandise buying activities with
suppliers worldwide.  Under our contract, we are assisting Carrefour with its
implementation of GNX functionality and processes.

The majority of the Company's revenue is derived from services performed under
the Carrefour contract.  The Company is actively pursuing subscribers for its
MySourcingCenter(TM) solution, as well as additional customers for its
professional services.

Accumulated Losses

From its inception in 1993 through June 30, 2001, SourcingLink has incurred net
losses of approximately $20.8 million, primarily as a result of costs to develop
its technology, to develop and introduce its sourcing solutions and services, to
establish marketing and distribution relationships, to recruit and train a sales
and marketing group and to build an administrative organization.  The Company's
prospects must be considered in light of its operating history, and the risks,
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new, unproven and rapidly
evolving markets.  The limited operating history of the Company makes the
prediction of future results of operations difficult or impossible and,
therefore, there can be no assurance that the Company will grow or that it will
be able to achieve or sustain profitability.  The Company's success is highly
dependent on its ability to execute in a timely manner its sales and marketing
plans, including the expansion of its customer base, of which no assurance can
be made.  Additional factors in the Company's success include the ability to
raise additional capital, continued satisfactory performance under the major
Professional Services contract, and continued contributions of key management,
consulting, development, sales and marketing, and finance personnel, certain of
whom would be difficult to replace.  The loss of the services of any of the key
personnel or the inability to attract or retain qualified management and other
personnel in the future, or delays in hiring required personnel, could have a
material adverse effect on the Company's business, prospects, operating results
or financial condition.

Results of operations for the three months ended June 30, 2001 and 2000

Revenue.  Total revenue for the three months ended June 30, 2001 increased
$199,000, or 26%, to $964,000, from $765,000 in the three months ended June 30,
2000.  This includes an increase in Professional Services revenue of $379,000 to
$944,000 this year from $565,000 in the same period one year ago.  Such increase
is attributable to a higher amount of services being provided under the
Carrefour contract, a three-year, $9 million services agreement that began April
1, 2000.  Last year's first quarter was the initial period of work on the
contract, and the level of contract activity has increased since then. The
increase in Professional Services revenue was partially offset by a decrease in
Subscriber revenue of $180,000 to $20,000 from $200,000 in last year's first
quarter.  This decrease in Subscriber revenue is attributable to two factors.
The first factor is that the majority of the Subscriber revenue last year was
from desktop solutions SourcingLink provided for use by its major customer in
managing inspection and shipping tracking data.  Use of these desktop solutions
declined significantly over the second half of fiscal

                                       8
<PAGE>

year 2001, and effective in this year's first quarter, the customer moved these
applications in-house. Therefore, there is no revenue from the inspection or
shipping tracking applications in this year's first quarter. The second factor
is that a portion of the Subscriber revenue in both the current and prior year
quarters is from subscriptions of suppliers that were made available to
SourcingLink by Paris, France-based Promodes, which was acquired by Carrefour
late in calendar 1999. As previously mentioned, Carrefour has contracted with
GNX for facilitating certain buying activities electronically with its
merchandise suppliers, and the number of former Promodes suppliers subscribing
to our solution has been decreasing since the acquisition of Promodes by
Carrefour, and Carrefour's subsequent involvement with GNX. We expect that the
remaining such suppliers will discontinue their subscriptions in the near
future.

The Company is working with Europe-based Leroy Merlin on its use of
MySourcingCenter(TM) with its buyers and merchandise suppliers, and also
continues to plan roll-outs with certain buyers of our other charter retailers.
We are also pursuing new retail customers with suppliers that could adopt our
solution, which is targeted at the home improvement segment of the retail
market, and we are seeking customers in addition to Carrefour for our strategic
sourcing services.

Due to the Carrefour contract, the Company expects that Professional Services
revenue will continue to comprise a significant portion of the Company's overall
revenue in its fiscal year ending March 31, 2002.  For MySourcingCenter(TM)
Subscriber revenue, the Company's solution for the home improvement industry
involves marketing directly to merchandise suppliers, a group that includes
small and highly dispersed target customers thus increasing the difficulty of
the sales and marketing task.  In addition, supplier adoption may be linked to
use of MySourcingCenter(TM) by large retail companies, which generally requires
the approval of multiple parties and management levels within the retail
organization, frequently resulting in lengthy sales and implementation cycles.

Cost of Revenue.  The overall dollar amount of the cost of revenue for the three
months ended June 30, 2001 was $353,000, nearly unchanged from the $358,000 of
the prior year's first quarter.  The amount of the components of the cost of
revenue changed, however, as the cost of Professional Services revenue increased
by $189,000 to $292,000 in the current year from $103,000 last year, while this
year's first quarter cost of Subscriber revenue decreased by $194,000 to $61,000
from $255,000 in the same period last year.  The cost of Professional Services
revenue increased due to the increased labor and associated costs in support of
the higher level of revenue.  The cost of Subscriber revenue decreased due to
the higher cost of network infrastructure support and hosting under a prior year
agreement with IBM for such services compared to the Company's current Southern
California-based co-location arrangement for our solution infrastructure that
was put in place effective October 1, 2000.

Total gross profit increased $204,000 to $611,000, or 63% of total revenues,
from $407,000, or 53% of total revenues, in the three months ended June 30,
2000.  The increase in gross profit is attributable to the increase in
Professional Services revenue, and associated profit, under the Carrefour
contract.


Operating Expenses
------------------

Selling, General and Administrative Expenses.  In the three months ended June
30, 2001, SourcingLink's selling, general and administrative expenses decreased
by $130,000, or 15%, to $759,000 from $889,000 in the three months ended June
30, 2000.  The decrease in these expenses is primarily attributable to the
reduction in this quarter of year-end incentive compensation accruals to reflect
the amount ultimately approved by the Company's board of directors and reduced
legal fees as compared to the prior year.  These reductions were partially
offset by an increase in sales and marketing costs of the Company's solutions
and services.

Management expects that selling, general and administrative expenses will
increase as we incur additional labor and other costs related to management and
marketing, including the addition of a new Chief Executive Officer in June 2001,
and as we increase our sales efforts related to our strategic sourcing

                                       9
<PAGE>

services and MySourcingCenter(TM) solution with buyers and merchandise suppliers
in the home improvement or other segments of the retail industry.

Product Development Expenses.  Product development expenses during the first
quarter of fiscal year 2002 decreased by $196,000, or 53%, to $175,000 from
$371,000 in the three months ended June 30, 2000.  The decrease in product
development expenses is primarily due to lower labor and subcontract costs as
compared to the prior year's first quarter.  We had ramped-up our development
costs in fiscal 2000 for a major enhancement of our core solution.  This effort
was completed during the first quarter of fiscal 2001, and such costs were
subsequently reduced to a lower level.  In addition, new accounting guidelines
under  Emerging Issues Task Force Issue No. 00-2 became effective for the
Company on July 1, 2000.  Under these guidelines, certain Web site development
costs must be capitalized and amortized rather than expensed, which reduced the
amount of product development costs that were expensed in this year's first
quarter by $44,000 compared to $0 in the same period last year.

Recently, the Company has upgraded its development staff, and management expects
that product development expenses may be higher in subsequent quarters of the
current fiscal year than such costs were in the quarter just completed.

Stock-based Compensation.  The stock-based compensation in last year's first
quarter relates to the cost of warrants for the purchase of SourcingLink common
stock issued to two strategic partner companies during fiscal year 2000.  The
related expense was determined under the Black-Scholes valuation method, and was
being amortized over the periods associated with the business agreements
underlying the warrants.  Such amortization amounted to $185,000 in the first
quarter of fiscal year 2001.  There is no such amortization this year as one of
the warrants was cancelled by the Company last fiscal year, and the cost of the
other warrant is fully amortized.

Other Expense, net and Interest Income.  The principal components of other
expense, net, are certain franchise taxes, and exchange gains or losses on
foreign currency transactions with SourcingLink's subsidiary in France.
Primarily as a result of these costs, other expense, net was $7,000 and $1,000
in the three months ended June 30, 2001 and 2000, respectively.  Interest income
was $38,000 and $73,000 for the three months ended June 30, 2001 and 2000,
respectively.  The decrease in interest income is attributable to both the
decline in interest rates applicable to cash investments and the decrease in
cash on-hand this year as compared to the prior year.

Income Taxes.  SourcingLink recorded a net loss of $292,000 during the three
months ended June 30, 2001, and had net losses of $1.6 and $4.5 million in
fiscal years 2001 and 2000, respectively.  Accordingly, no provision for income
taxes was recorded in any of these periods.  As of June 30, 2001, SourcingLink
had net operating loss carryforwards for United States income tax purposes of
approximately $13.5 million.  These losses expire at various dates between 2011
and 2022.  The Internal Revenue Code of 1986, as amended, contains provisions
that limit the use in any future period of net operating loss and credit
carryforwards upon the occurrence of certain events, including a significant
change in ownership interests.  A valuation allowance has been recorded for the
tax benefit of the net operating loss carryforwards and the deferred tax assets
of SourcingLink due to the fact that, as of the present time, it is more likely
than not that such assets will not be realized.

Fluctuations in Quarterly Operating Results

Our quarterly operating results have varied significantly in the past and will
likely vary significantly in the future.  We believe that period-to-period
comparisons of our results of operations are not meaningful and should not be
relied upon as indicators of future performance.  Our operating results could
fall below the expectations of securities analysts or investors in some future
quarter or quarters.  Our failure to meet these expectations would likely
adversely affect the market price of our common stock.

Our quarterly operating results may vary depending on a number of factors,
including: demand for our

                                       10
<PAGE>

solutions and services; actions taken by our competitors, including new
alliances, product introductions and enhancements; delays or reductions in
spending for, or the adoption of, pre-order supply chain management solutions by
our potential customers as companies review business-to-business applications;
ability of our solution, network and operations infrastructure to handle
measurable activity; ability to develop, introduce and market our solutions on a
timely basis; changes in our pricing policies or those of our competitors;
ability to expand our sales and marketing operations, including hiring
additional sales personnel; size and timing of sales of our solution and
services; success in maintaining and enhancing existing relationships and
developing new relationships with strategic partners; ability to control costs;
technological changes in our markets; deferrals of customer subscriptions in
anticipation of competitive solutions, or new developments or features of our
solution; customer budget cycles and changes in these budget cycles; and general
economic factors.

We have incurred significant operating expenses to expand our management team
and sales and marketing operations, fund product development, provide general
and administrative support, develop new partnerships, increase our professional
services and support capabilities and improve our operational and financial
systems.  We plan on incurring significant additional expenses of this nature,
and if our revenues are not maintained or increased, our business, operating
results and financial condition could be seriously harmed and net losses in a
given quarter could be larger than expected.


Liquidity and Capital Resources

SourcingLink's cash and cash equivalents at June 30, 2001 were $3.0 million, a
decrease of $1.1 million from March 31, 2001.  However, $499,000 of this
decrease is a reclassification to short-term investments of cash that is
invested for a period greater than 90 days.  Cash used in operating activities
for the three months ended June 30, 2001 was $550,000, compared to $806,000 for
the three months ended June 30, 2000.  The cash usage in each period was
primarily due to the net losses as well as the payment of accrued incentive
compensation and other year-end accruals.

We believe that our current working capital, including cash to be received in
the fiscal year ending March 31, 2002 under our services contract with
Carrefour, will be sufficient to meet our working capital requirements for the
next 12 months.  We plan to actively seek additional equity investment to fund
operations beyond that period.  If such efforts are unsuccessful, we will need
to reduce operating spending significantly, which would materially and adversely
affect SourcingLink's business.

The Company currently does not have a bank credit line. The Company does not
intend to pay cash dividends with respect to capital stock in the foreseeable
future.


RISK FACTORS

The market for our solution and services is at an early stage.  We need
retailers and their merchandise suppliers to implement and use our solution and
services.

The market for Internet-based business-to-business solutions and services is at
an early stage of development. Our success depends on a significant number of
retailers and their merchandise suppliers implementing our solution and
contracting for our services. The  decision to implement our solution or
services by major retailers and their merchandise suppliers is controlled by
multiple parties within the retail organization. In order to implement our
solution or services, often these organizations must change established business
practices and conduct business in new ways. Our ability to attract customers for
our solution and services may depend on leveraging our existing major customer
as a reference account. Unless a significant number of retailers and their
merchandise suppliers implement our solution or contract for our services, our
solution and services may not achieve widespread market acceptance and our
business will be seriously harmed.

                                       11
<PAGE>

We have a history of losses and expect to incur losses in the future.

We incurred a net loss of $292,000 in the first quarter of fiscal year 2002, and
net losses of $1.6 million and $4.5 million in fiscal years 2001 and 2000,
respectively. As of June 30, 2001, we had an accumulated deficit of
approximately $20.8 million. While we expect the Carrefour contract will provide
a total of $9 million of revenue over the three-year period that began on April
1, 2000, we also expect to derive a portion of our future revenues from
subscription fees of our Internet sourcing solution, which is based on an
unproven business model. In addition, with Carrefour's acquisition of Promodes
and subsequent formation, along with Sears, Roebuck & Co. and Oracle
Corporation, of GlobalNetXchange, we have lost subscribing suppliers of the
former Promodes central buying organization. Moreover, we expect to incur
significant sales and marketing, product development, and general and
administrative expenses. As a result, we expect to incur losses in upcoming
financial quarters.

We believe that our current working capital, including amounts to be received
under the Carrefour contract, will be sufficient to meet our working capital
requirements for the next 12 months. We plan to actively seek additional equity
investment to fund operations beyond that period. If such efforts are
unsuccessful, we will need to reduce operating spending significantly, which
would materially and adversely affect our business.

We expect to depend on our solution to augment revenue from our consulting
contract with Carrefour in the future.

We anticipate that revenues from our solution will constitute substantially all
of our non-service revenues for the foreseeable future. Consequently, if we are
unable to generate sales of, or demand at an adequate price for, our solution,
or if it fails to achieve market acceptance, our prospects will be seriously
harmed. Likewise, substantial non-performance by us on the Carrefour contract
would seriously harm our ability to collect the minimum payments due to us under
the contract, which amount to a total of $9 million over the three-year period
that began April 1, 2000.

We expect implementation of our solutions by large retailers to be complex, time
consuming and expensive, and we may experience long sales and implementation
cycles.

Our supply chain management solution is often viewed as an enterprise-wide
solution that must be deployed to many users within a large retailer's sourcing
organization.  An enterprise-wide adoption by large retailers is often
characterized by long sales cycles beginning with pilot studies and concluding
with retailers strongly encouraging their merchandise suppliers to subscribe to
our solution. In addition, our potential customers generally consider other
issues before adopting our solution, including product benefits, integration,
interoperability with existing computer systems, scalability, functionality and
reliability.  As a result, we must educate potential customers on the use and
benefits of our solution. Enterprise-wide sales characteristically take several
months to finalize, and such a  sale must often be approved by a number of
management levels within the customer organization.  Entering into an agreement
with a customer for the implementation of our solution does not assure that the
customer will in fact make such implementation or assure the time frame in which
the implementation may occur.

We are currently marketing our solution to buyers within retail companies, and
directly to suppliers, in addition to targeting enterprise-wide rollouts for
large retailers.  There is no assurance that this strategy will shorten sales
cycles or result in significant new customer subscriptions to our solution.

We derive most of our revenue from sales to one main retailer. If we are not
able to retain this retailer as a customer our revenues will be reduced and our
financial results and prospects will suffer.

Our largest customer accounts for a substantial majority of our revenues.  We
may not be able to retain our customers or our strategic partners may decrease
their commitment to require their suppliers to use our solution.  Specifically,
due to Carrefour's participation in GlobalNetXchange, we may not have the

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opportunity to market to its suppliers in combination with Carrefour.  We may be
unable to adequately perform the required services under our contract with
Carrefour, which would  harm our sales and financial results.

Our customers and prospective customers are either in, or supplying goods to,
the retail industry.  A significant change or downturn in this industry could
adversely affect our prospects.

We face intense competition. If we are unable to compete successfully, our
prospects will be seriously harmed.

The market for business-to-business eCommerce solutions in general, and supply
chain management solutions and services in particular, is extremely competitive,
evolving and characterized by continuous rapid development of technology.
Competition to capture business users of both solutions and services is intense
and is expected to increase dramatically in the future. Such competition will
likely result in realizing lower profit margins, which could have a serious
adverse impact on our business and prospects.

Recently formed exchanges such as GlobalNetXchange and WorldWide Retail Exchange
are owned primarily by retailers and are focused exclusively on retail
merchandise procurement. Companies such as FreeMarkets, Inc. provide general
Internet-based sourcing capabilities and services for buyers and suppliers in a
business-to-business electronic marketplace. Companies that provide electronic
catalogs and content management services could expand their offerings to include
sourcing functionality. Our indirect competitors are traditional value-added
network solution providers that have extended their value-added network
connections over the Internet. We also face indirect competition from  both new
and traditional companies that are focused on trading exchanges or marketplaces
that allow merchandise buyers and sellers to access each other on channels
within new or existing portals. One or more of these companies may develop and
add preorder merchandise sourcing capabilities to their existing product
offerings, giving these companies a broader or more comprehensive solution than
our solution, which could adversely affect our business. We also expect that
additional established and emerging companies will seek to enter our solutions
market as it continues to develop and expand.

In our services business, competitors include the major consulting companies
such as Accenture and A.T. Kearney, Inc., the consulting arms of the
international accounting firms and several large computer-industry companies,
including IBM.  FreeMarkets, Inc. offers professional services along with their
electronic marketplace tools and capabilities. In addition, there are many
smaller firms that provide services in this market. While many of these
companies do not have the hands-on experience that we have gained through our
work with Carrefour, some of these companies have been involved in services
projects with the retail industry exchanges.

We may not be able to compete successfully against current or future
competitors, especially those with significantly greater financial, marketing,
service, support, technical and other resources, greater name recognition or a
larger installed base of customers.

We depend on our key personnel.

Our future performance depends on the continued service of our senior
management, product development, professional services, and sales and marketing
personnel. The loss of the services of one or more of our key personnel could
seriously harm our prospects. Our future success also depends on our continuing
ability to attract, hire, train and retain a substantial number of highly
skilled managerial, services, technical, sales, marketing and customer support
personnel. We are particularly dependent on hiring additional personnel to
increase our professional services, direct sales and product development
organizations. Competition for qualified personnel is intense, and we may fail
to retain our key employees or to attract or retain other highly qualified
personnel.

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<PAGE>

Our software may contain errors or defects.

Our software is complex and may contain undetected errors or failures when first
introduced.  This may result in failure to achieve or maintain market acceptance
of our solution.  We have in the past discovered programming errors in our new
releases after their introduction.  We have experienced delays in release, and
we may discover errors in the future in existing versions or new versions after
release, which could materially and adversely affect our business.

Our current systems, procedures and controls may be inadequate to support the
expected growth and the expansion of our services business.

We currently plan to hire new employees and to expand the geographic scope of
our services customer base and operations. These activities will result in
substantial demands on our management resources. Our ability to compete
effectively and to manage future expansion of our services and operations will
require us to continue to improve our financial and management controls,
reporting systems, project management and procedures on a timely basis, and
expand, train and manage our employee work force. We may encounter difficulties
in transitioning and expanding our business in the services area, and our
personnel, systems, procedures and controls may be inadequate to support our
future operations.

Our business is susceptible to risks associated with international operations.

We market our solution and services to retailers and their merchandise suppliers
on a worldwide basis, and historically have derived a significant portion of our
revenues from international sales. As such, we are subject to risks associated
with international business activities, including unexpected changes in
regulatory requirements and the burdens of compliance with a wide variety of
foreign laws; longer accounts receivable payment cycles and difficulties in
collecting accounts receivable; difficulties in managing and staffing
international operations; and currency exchange rate fluctuations, which could
increase the cost of our solutions and services.

We depend on increasing use of the Internet and on the growth of eCommerce. If
the use of the Internet and eCommerce do not grow as anticipated, our business
will be seriously harmed.

Our success depends on the increased acceptance and use of the Internet as a
medium of commerce on a global basis. Growth in the use of the Internet for
eCommerce is a recent phenomenon and has fluctuated in the recent past. As a
result, acceptance and use of the Internet may not continue to develop at
significant rates and a sufficiently broad base of business customers may not
adopt or continue to use the Internet as a medium of commerce. Demand and market
acceptance for recently introduced services and products over the Internet are
subject to a high level of uncertainty, and there exist few proven services and
products.

Our business would be seriously harmed if:

    .  Use of the Internet, the Web and other online services does not
       increase or increases more slowly than expected;

    .  The infrastructure for the Internet, the Web and other online services
       does not effectively support expansion that may occur; or

    .  The Internet, the Web and other online services do not create a viable
       commercial marketplace, inhibiting the development of eCommerce and
       reducing the need for our solution.

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<PAGE>

PART II     OTHER INFORMATION


Item 6      Exhibits and Reports on Form 8-K

     a.      Exhibits

     10.1  Employment Agreement dated June 1, 2001 between the Company and
           Dan Rawlings

     b.    Reports on Form 8-K

     No reports on Form 8-K were filed, or required to be filed, with the
     Securities and Exchange Commission during the quarter for which this report
     is filed.


                                   SIGNATURE

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

Dated:  August 14, 2001       SourcingLink.net, Inc.


                              By:  /s/ Gary Davidson
                                  ------------------
                              Gary Davidson,
                              Vice President Finance and Administration, Chief
                              Financial Officer
                              (Principal Financial Officer)

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