U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB
                       (Mark one)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended September 30, 2001

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
       For the transition period from _______________ to ________________
                         Commission File Number: 0-24217

                                  YP.NET, INC.
                 (Name of Small Business Issuer in its Charter)

             NEVADA                                 85-0206668
(State or other jurisdiction of                   (IRS Employer
 incorporation or organization)                 Identification No.)

     4840 EAST JASMINE STREET, SUITE 105
              MESA, ARIZONA                           85205
(Address of principal executive offices)           (Zip Code)


                                 (480) 654-9646
                           (Issuer's telephone number)
       Securities registered under Section 12(b) of the Exchange Act: NONE
         Securities registered under Section 12(g) of the Exchange Act:
                          COMMON STOCK, $.001 PAR VALUE
                                (Title of Class)

     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
                                                                       ---   ---
 .

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [ ]

     Registrant's revenues for its most recent fiscal year were 15,084,917

     The aggregate market value of the common stock held by non-affiliates
computed based on the closing price of such stock on November 23, 2001 was
approximately $3,110,714.

     The number of shares outstanding of the registrant's classes of common
stock, as of November 23, 2001 was 43,813,680.


                                        1
<PAGE>
                                     PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS

     Except for historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties.  Such forward-looking statements include, but are not limited to,
statements regarding future events and our plans and expectations.  Our actual
results could differ materially from those discussed herein.  Factors that could
cause or contribute to such differences include, but are not limited to, those
discussed elsewhere in this Form 10-KSB or incorporated herein by reference,
including those set forth in "Factors Which May Affect Future Results," and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," below.

GENERAL

     YP.Net, Inc., a Nevada corporation (the "Company," "we," "us," or "our"),
is in the business of providing Internet-based yellow page listing services on
our Yellow-Page.Net and yp.net websites.  Our websites serve as a search engine
    ---------------     ------
for yellow page listings in the United States and Canada.  We charge our
customers for a "preferred" listing of their businesses on searches conducted by
Internet consumers on our websites.  We currently have approximately 91,348
preferred listing customers subscribing on a monthly basis.

     We were originally incorporated in Nevada in 1996 as Renaissance Center,
Inc.  Our Articles of Incorporation were restated in July 1997 and our name was
changed to Renaissance International Group, Ltd.  Effective July 1998, we
changed our name to RIGL Corporation.  In June 1999, we acquired Telco Billing,
Inc. ("Telco") and commenced our current operations through this entity.  In
October 1999 we amended our Articles of Incorporation to change our corporate
name to YP.Net, Inc. to better identify our company with our business focus.

     From August through December 1999, we abandoned all subsidiaries previously
involved in the multi-media software and medical billing and practice management
areas.  With the acquisition of Telco, our business focus shifted to the
Internet yellow page services business and this business is currently our main
source of revenue.  Telco is operated as our wholly owned subsidiary.

WEBSITES

     We control the domain names Yellow-Page.Net and yp.net and maintain these
                                 ---------------     ------
Web pages for Internet access.  At these websites, consumers can search a
listing database containing approximately 18 million United States and Canadian
businesses.  We provide yellow page listings for these businesses along with
directories and maps to the business location.  We also provide nationwide 800
and 888 directory listings and search engines for e-mail addresses of individual
persons.  Our site offers stock quotes, job searches, travel services, news and
weather information, movie reviews and listings, entertainment, restaurant and
shopping information.


                                        2
<PAGE>
     Our directory search service integrates yellow page information by
utilizing yellow page category headings in combination with a natural word
search feature to provide a user-friendly interface and navigation vehicle.  We
have enhanced accurate responses to user questions by utilizing category
searches in the directory services.  This allows users to search by specific
city, state and business categories.

     We currently derive all of our revenue from selling preferred listings for
the search results on our websites.  A preferred listing is displayed at the
beginning of search results in response to a user's specific questions.  A
preferred listing is enhanced on the display of search results and includes a
"mini-Web page" listing where the preferred lister can use up to 40 words to
advertise and provide additional information regarding its business.  A
preferred listing customer can also link its own Web page to the search results.
We are developing banner advertisements and outside marketing efforts as an
additional source of revenue.  We are also attempting to develop additional
revenue sources and expand services to our customers through logo advertisements
on our direct mailer.

TECHNOLOGY  AND  INFRASTRUCTURE

     One of our principal strengths is our internally developed technology that
we have designed specifically for handling our Internet-based data.  Our
technology architecture features specially designed capabilities to enhance
performance, reliability and scalability of our listing data.  These features
consist of multiple proprietary software modules and processes that support the
core internal functions of operations.  The technologies include Customer
Service Applications, Billing Applications, LEC Filtering Processes and Database
Management.

     Customer Service Applications.  While we have designed proprietary Customer
Service Applications to enable rapid object-oriented development and management
of information related to our preferred listing customers in a variety of
formats we are finding that it might be advisable to purchase a third party
software package from a reliable vendor that can be modified for our needs.  Our
or any that is purchased would need to incorporates an automated retrieval
system that integrates with our other technologies.  This integration enables
real-time updates to our database as our customer service representatives
interact with and obtain data from our preferred listing clientele.  This
application provides detailed notes on each account as well as credit card and
paper check payment processing.  Customer Service Representatives (CSR's)
quickly view all contact information for the subscriber, as well as Service
description, pricing, LOA, and billing history. With these functions in place,
CSR's have the ability to handle every aspect of the call.

     Billing Applications.  We bill primarily through local exchange carriers
("LECs") that are local telephone service providers.  Our LEC billings are
routed to the LEC's and appear on our preferred customers' telephone billing
statements.  To a lesser extent, we direct bill some of our preferred customers.
Our Billing Applications technology facilitates both our LEC and direct billing
functions.


                                        3
<PAGE>
     LEC Filtering Processes.  The LEC Filtering Processes are core technologies
developed to enhance the applications that support our systems.  By using these
processes, we are able to more accurately bill our preferred listings through
the appropriate LEC.  These processes are a vital component of our ability to
aggregate content from multiple sources for our billing process.  Information is
sorted and updated with a method of maintaining an expanding a diverse database
and allows different data sources to be combined and deployed through a single
uniform interface, regardless of data structure or content.  This allows a
single database query to produce a single result set containing data extracted
from multiple databases.  Database clustering in this manner reduces the
dependence on single data sources, facilitates data updates, and reduces
non-conforming data submitted to the LECs.

     Database Management.  We have also developed a proprietary database
technology to address specific requirements of our business strategy and
information infrastructure services.  This technology enables us to provide our
services with fewer service personnel.  Our database is integrated with the
applications modules and the LEC filtering processes.  This database consists of
our current and potential customers and is updated on a real-time basis as a
customer's data is received from new listings or through our customer service
representatives.  We utilize this database to maintain customer service and
monitor the quality of service provided by our customer service personnel.  We
also use the database to determine new products desired by our customers.  Our
technology has been specifically designed to function with a high degree of
efficiency within the unique operating parameters of the Internet, as opposed to
commonly used database systems.

     Custom List Generation. We license the Axiom database technology that
consists of over 18 million business listings throughout the United States,
updated quarterly. Under this licensing agreement, we are able to custom craft
mailing lists that suit our customer's needs. Customers have the ability to
filter their custom list against an array of attributes ranging from gross sales
of the company listed, SIC code, whether or not the listing is a publicly traded
company, or if the company listed is minority owned. These lists can be
generated in various ODBC and text formats. Lists are priced by record and the
criteria provided for the query.


                                        4
<PAGE>
STRATEGIC ALLIANCES

     In order to service users more effectively and to extend our
Yellow-Page.Net brand to other Internet sources, we have entered into strategic
---------------
relationships with business partners offering content, technology and
distribution capabilities.  We utilize i411 as our data-listing provider. i411
provides the server for our web pages and our search engine capabilities.

     We are members of the Yellow Page Publication Association and the
Association of Directory Publishers.  These organizations are trade associations
for yellow page publishers that promote quality of published content and
advertising methods.

     In order to broaden Yellow-Page.Net's user base, we have established
                         ---------------
cross-linking relationships with operators of commercial websites and Internet
access providers.  There are over 400 affiliated websites that link to
Yellow-Page.Net.  We believe these arrangements are important to the promotion
---------------
of Yellow-Page.Net, particularly among new Internet users who may access the
   ---------------
Internet through these other websites.  These co-promotional arrangements
typically are terminable at will.  We also utilize Fax4free.com in a
                                                   ------------
co-promotional effort to provide services to our website users to allow these
users to receive and send unlimited facsimiles, and receive voicemail and e-mail
at no charge.

     We have also managed a link partnership with Amazon.com that allows
Yellow-Page.net to generate revenue by purchases made through the link on our
---------------
home page.  The University of California - Santa Cruz is also participating in a
link exchange as well as having Yellow-Page.Net sponsor a men's college
basketball tournament.  We believe that this directly heightens our brand
awareness.

BILLING SERVICE AGREEMENTS

     In order to bill our preferred listing customers through their LECs, we are
required to use one or more billing service integrators.  These integrators have
been approved by various LECs to provide billing, collection, and related
services through the LECs.  We have entered into customer billing service
agreements with Integretel, Inc. ("IGT") and with Enhanced Services Billing,
Inc. ("ESBI") for these services.  Under these agreements, our service providers
bill and collect our charges to preferred listing customers through LEC
billings.  These amounts, net of reserves for bad debt, billing adjustments,
telephone company fees and billing company fees, are remitted to us on a monthly
basis.  Presently we are primarily billing though IGT and credit card
processing.

     We have entered into a billing agreement with OAN Billing, Inc. ("OAN").
This contract will provide us with another billing integrator that will allow us
to broaden our billing area among all LECs.  OAN is a reputable billing company
that will provide us more flexibility and will reduce our concentration of
billing risk with billing integrators.


                                        5
<PAGE>
COMPETITION

     We operate in a highly competitive and rapidly expanding Internet services
market, however our primary market sector is business-to-business services
instead of a pure technology industry.  We compete with online services, website
operators, and advertising networks.  We also compete with traditional offline
media such as television, radio, and traditional yellow page directory
publishers, and print share advertising.  Our services also compete with
numerous directory website production, and Internet information service
providers.  Our largest competitors are the LECs service providers.

     The principal competitive factors of these markets include personalization
of service, ease and use of directories, quality and responsiveness of search
results, availability of quality content, value-added products and services, and
access to end users.  We compete with the suppliers of Internet navigational and
informational services, high-traffic websites and Internet access providers, and
with other media for advertising listings. This competition could result in
significantly lower prices for advertising and reductions in advertising
revenues.  Increased competition could have a material adverse effect on our
business.

     Our competitors have greater capital resources than us.  These capital
resources could allow our competitors to engage in advertising and other
promotional activities that will enhance their brand name recognition at levels
we cannot match.  The LECs have brand name recognition and access to potential
customers since they have existing local access customers.

     We believe we can successfully compete in this market by providing quality
services at competitive prices and by actively developing new products for
customers and seeking potential acquisitions to broaden services to our
customers.

REGULATION

          The Federal Trade Commission ("FTC") has aggressively pursued what it
perceives as deceptive practices related to direct mailer and other promotions
involving the Internet and/or LEC billing type practices.  We have been involved
in significant FTC enforcement action regarding these matters.

     Existing laws and regulations or ones that may be enacted in the future
could have a material adverse effect on our business.  These effects could
include substantial liability including fines and criminal penalties, preclusion
from offering certain products or services and the prevention or limitation of
certain marketing practices.   As a result of such changes, our ability to
increase our business through Internet usage could also be substantially
limited.

     On July 30, 2001, the Stipulated Final Judgment and Order for Permanent
Injunction and other Equitable Relief (the "Order") was filed with the United
States District Court.  The FTC and the Company agreed to this stipulation and
the complaint states a claim upon which relief may be granted against the
Company.  There have been no findings or admissions of any wrongdoing by us.  We
have been restrained from using the word "rebate" on their solicitation and must
state that the mailer is a solicitation of goods and services.  We have
voluntarily agreed not to use the "walking fingers" logo and further have
extended our refund policy to our new customers from 90 days to 120 days.  Our
test solicitation of 250,000 mail pieces incorporating all of the FTC changes in
different formats, has brought in satisfactory results and based on that we have
resumed our regular mail solicitation program in October 2001 to date over 8,000
customers have decided to order our services. We have replaced all direct
mailers with the required stipulations as agreed with the FTC.  All parties have
been exonerated of the preliminary injunction filed on June 26, 2000. See "Legal
Proceedings," below


                                        6
<PAGE>
MARKETING

     Our primary marketing efforts are through direct mail solicitations that
utilize a promotional discount for listing.  We market exclusively to businesses
and focus on businesses that use traditional published yellow page services.  We
utilize our database as a source for our mailing list.  We have also implemented
a "customer satisfaction" program.  Through this program we have retained a firm
to contact each of our customers to update the customer information regarding
their business and links to their Web page, if applicable.

     We intend to increase market share in our current markets through strategic
acquisitions providing value-added services to our core business, as well as
other marketing campaigns.  We intend to develop marketing strategies to
increase the credibility and visibility of our Web page service to targeted
markets.  We also intend to promote value-added services and product areas.  Our
future success will depend on our ability to continue to integrate and
distribute information services of broad appeal.  Our ability to maintain and
build new relationships with content providers will be critical to our success.
These relationships and strategic acquisitions will, in addition to increasing
revenue, lower dilution by creating a source for businesses to find the services
they need. Our preferred customers will be able to obtain services at discounted
prices as a consequence of their listing with us.

     We have entered into a co-branded syndication with i411.com has provided
our preferred customers and those using our site to find goods and services
easier and faster. This arrangement allows us to have additional advertising
space on our website which we believe will generate additional revenue.  We
believe this syndication will help attract more people to our websites.  We now
have the ability to sell syndicate yellow page sites.  We are able to offer our
clients visible storefronts. Through visible storefronts our clients will be
able to set up "Web Stores" easily and cheaply; complete with the ability to
utilize credit cards to process orders.  We are currently testing these products
and believe that they have the potential to increase income.  Our management is
also in the process of expanding its syndication revenue by offering web page
designs and maps for Internet yellow page customers.  We presently have
approximately 3.5 million hits per month, which we believe will expand our
customer base.


                                        7
<PAGE>
     Management believes that our Direct Response Program whereby we contact our
customers to obtain information for their mini-web-page and if partnered with
other reputable companies, could be an additional source of revenue.  Management
is looking for products and services to sell as part of our direct response
program.

EMPLOYEES

     As of December 15, 2001, we employed 20 full time personnel, including a
Director of Operations, a Director of Technology, five software developers, nine
customer service representatives, and four administrative personnel.  Our
employees are not covered by any collective bargaining agreements.

 ITEM 2.     DESCRIPTION OF PROPERTY

     Our corporate offices are located in Mesa, Arizona.  We lease a 16,772
square foot facility for approximately $120,000 annually on a long-term
operating lease through June 2003. As part of the consideration related to our
license of the Yellow-Page.Net URL, we sublease approximately 8,000 square feet
               ---------------
of leased space to Business Executive Services, Inc., an entity controlled by an
affiliate, for $1.00 annually.  See "Certain Relationships and Related
Transactions," below.

     We are also obligated on another lease for office space that was entered
into prior to consolidating operations at our Mesa facility.  The lease
terminates in August 2002 and annual rent ranges from $202,000 at inception to
$280,000 for the final rent payment.  This space has been sublet for the full
amount of the lease payment through its term.  However, we remain liable on the
lease if the sub-tenant defaults.

ITEM 3.     LEGAL PROCEEDINGS

We are party to certain legal proceedings and other various claims and lawsuits
in the normal course of our business, which, in the opinion of management, are
not individually or collectively material to our business or financial
condition.

     Due to the rapid growth of Internet communications, laws and regulations
relating to the Internet industry have been adopted.  Such laws include
regulations related to user privacy, pricing, content, taxation, copyrights,
distribution, and product and services quality.  Concern regarding Internet user
privacy has led to the introduction of federal and state legislation to protect
Internet user privacy.  In addition, the FTC has initiated investigations and
hearings regarding Internet user privacy that could result in rules or
regulations that could adversely affect our business.  As a result, the adoption
of new laws or regulations could limit our ability to conduct targeted
advertising, or distribute or to collect user information.

     We entered into a final settlement with the FTC regarding the allegations
that we engaged in deceptive advertising.  We entered into a Final Stipulated
Order for Permanent Injunction or Other Equitable Relief with the FTC on July
30, 2001.  There were no findings or admissions of any wrongdoing by us in this
Order.


                                        8
<PAGE>
     During the marketing moratorium from June 2000 to August 2001 we have been
able to maintain most of our customer base, with only some attrition by
developing a customer contact marketing strategy.  We have been contacting our
customers to update their websites and the descriptions of their businesses.
Through these efforts, we have been able to maintain our customer base without
the direct mail advertising efforts.

     We paid Hudson Consulting Group, Inc. ("Hudson") $82,000 for the settlement
of a lawsuit.  We entered into a settlement agreement with Hudson on July 16,
2001, where we agreed to pay Hudson $82,000 in return for 1,425,334 shares of
our common stock that were issued to Hudson by prior management for services
that were not rendered to us.  Our current management was informed that the SEC
barred one of the principals of Hudson, Allen Wolfson, from working in the
securities industry.  Our current management has assured the NASD that prior
management is no longer an employee, officer or director of us.

     We are plaintiffs in pending law suites against Alan Z. Wolfson and Ruth
Anderson regarding the issuance of common stock by prior management where no
services by the dependents in this action.

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

Our annual meeting of shareholders was held on September 24, 2001, and the
following matters where submitted to our shareholders to vote.

1.   The election of seven directors.

2.   The ratification of the selection of Marshall & Weber, CPAs, PLC as our
independent auditor for the fiscal year ended September 30, 2001.

3.   The transaction of such other business as may properly come before the
meeting. No such other business came before the annual meeting.

     The following individuals were elected to serve on our Board of Directors
at our annual meeting of shareholders on September 24, 2001:  Angelo Tullo,
Walter Vogel, Gregory B. Crane, Daniel Coury, Harold Roberts, DeVal Johnson, and
Pamela Thompson, by mutual agreement Wallace Olsen declined to service another
term.  See "Directors and Executive Officers, Promoters, and Control Persons;
Compliance with Section 16(A) of the Exchange Act," below.

     The firm of Weber and Company, P.C. was elected to serve as our independent
auditor for the year ended September 30, 2001.

     The following actions were taken by written consent by the majority
stockholders in lieu of a special meeting of the stockholders of YP.Net, Inc.
dated November 20, 2001.  The stockholders voting represented 24,083,118 voting
common shares of stock.


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<PAGE>
That the capitalization of the Corporation be changed as follows:

     Increase the authorized common stock to 50,000,000 to
100,000,000 shares.

     Create three classes of authorized preferred shares:

     50,000,000 of Blank Check Preferred

     45,000,000 of Series C of Convertible Preferred Stock.  Holders of the
Series C convertible preferred stock shall receive dividends at the rate of 5%
per annum on the liquidation preference of $.30 per share payable each March
31st, June 30th, September 30th, and December 31st starting with the first date
following the issuance of stock.  This stock will be convertible any time after
two years and before five years with the payment by the holder of $1.00 per
converted share.

     45,000,000 of Series D Preferred Stock with no convertible feature.
Holders of the Series D preferred stock shall receive dividends at the rate of
7% per annum on the liquidation preference of $.50 per share payable each March
31st, June 30th, September 30th, and December 31st starting with the first date
following the issuance of stock.  This stock will be convertible any time after
two years and before five years with the payment by the holder of $1.00 per
converted share.

     The Company's outstanding shares of Common Stock, $.001 par value per share
would be allowed a reverse split of up to one-for-ten basis.  The officers of
the YP.Net have the authority to prepare and file an amendment to the company's
Articles of Incorporation to proceed and effectuate the reverse split without
further shareholders approval.  Presently management has not elected to proceed
in effectuating a reverse split.

                                     Part II

      ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our Common Stock

     Our common stock is traded in the over-the-counter market under the symbol
"YPNT."  Prior to March 23, 2000, our common stock was traded on the OTC
Bulletin Board ("OTCBB"), but was delisted due to our failure to timely file
required reports under the Exchange Act.    We have taken corrective actions to
regain our listing on the OTCBB.  We are hopeful that our common stock will be
relisted soon and we are working toward satisfying all OTCBB listing criteria.


                                       10
<PAGE>
     The following table sets forth the quarterly high and low bid prices per
share for the common stock, as reported by the OTCBB for the periods prior to
March 23, 2000 and by the National Quotation Bureau for the periods on and after
March 23, 2000.  The quotes represent inter-dealer quotations, without
adjustment for retail mark-up, markdown or commission and may not represent
actual transactions.

     FISCAL YEAR  QUARTER ENDED        HIGH   LOW
     -----------  -------------------  -----  ----
            2000  December 31, 1999    $ .24  $.21

                  March 31, 2000       $ .52  $.25

                  June 30, 2000        $ .35  $.30

                  September 30, 2000   $ .50  $.32

            2001  December 31, 2000    $ .22  $.21

                  March 31, 2001       $ .45  $.20

                  June 30, 2001        $ .23  $.18

                  September 30, 2001   $ .17  $.10

     On September 30, 2001, there were approximately 574 shareholders of record
of our common stock.  The transfer agent for our common stock is Continental
Stock Transfer and Trust in New York City, New York.

DIVIDEND POLICY

     Under Nevada law, dividends may only be paid out of net profits.  Prior to
our acquisition of Telco, no significant revenue had been generated.  We have
not paid, and do not intend to pay in the foreseeable future, cash dividends on
our common stock.  The current policy of the Board of Directors is to retain all
earnings to provide funds for operation and expansion of our business.  The
declaration of dividends is subject to the discretion of the Board of Directors,
which may consider such factors as our results of operations, financial
condition, capital needs and acquisition strategies, among others.

SALES OF UNREGISTERED SECURITIES

     During the three month ended period ended September 30, 2001, the following
shares of our common stock were issued.

     On July 10, 2001, we issued 25,000 shares of our common stock at $0.14 per
share to an investment banker that is assisting us with relisting on the OTCBB
for services rendered.  The restricted shares were issued which was the average
bid and ask price as of July 10, 2001 and is in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act.


                                       11
<PAGE>
     On September 25, 2001, we issued 50,000 shares of our common stock at $0.09
per share to the newly elected Secretary of the Company as compensation for
services as Secretary for the current year.  The restricted shares were issued
which was the average bid and ask price as of September 25, 2001 and is in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act.

     On September 25, 2001, we issued 4,000,000 shares of our common stock at
$0.09 per shares to Matthew Markson Ltd. as part of a settlement agreement for a
payment of penalty fee for breach of a noncompliance provision in the original
acquisition agreement between the Company and Telco, dated June 16, 1999.  The
restricted shares were issued which was the average bid and ask price as of
September 25, 2001 and is in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act.


ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     This Form 10-KSB, including documents incorporated herein by reference,
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.  Such statements include, but are not limited to,
projections of revenues, income or loss, capital expenditures, acquisitions,
plans for future operations, financing needs or plans, the impact of economic
and business factors and plans relating to our products or services, as well as
assumptions relating to the foregoing.  The words "believe," "expect,"
"estimate," "anticipate," "may," and "project" and similar expressions generally
identify forward-looking statements. Forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be predicted or
quantified.  Future events and actual results could differ materially from those
set forth in, contemplated by, or underlying our forward-looking statements.
Statements in this Form 10-KSB, including those set forth in "Risk Factors," as
well as statements incorporated by reference herein that are included in
"Business," and other sections of this Annual Report on Form 10-KSB describing
factors, among others, that could contribute to or cause such difference.

     Although we believe that the assumptions underlying the forward-looking
statements in this Form 10-KSB are reasonable, any of these assumptions could
prove inaccurate.  In addition, our business and operations are subject to
substantial risks, some of which are identified in this report and which
increase the uncertainties inherent in the forward-looking statements included
in this Form 10-KSB.  There can be no assurance that the results contemplated in
these forward-looking statements will be realized.

     The inclusion of forward-looking information should not be regarded as a
representation by us or any other person that the future events, plans or
expectations contemplated will be achieved.  We disclaim any obligation to
subsequently revise forward-looking statements to reflect subsequent events or
circumstances or the occurrence of unanticipated events.


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<PAGE>
OVERVIEW

     We provide Internet-based yellow page listing services on our
Yellow-Page.Net and yp.net websites.  We acquired Telco in June 1999 as a wholly
             --     ------
owned subsidiary, and, as a result of this acquisition, changed our primary
business focus to become an electronic yellow page listing service.  Our
websites serve as a search engine for yellow page listings in the United States
and Canada.  We charge our customers for a preferred listing of their businesses
on searches conducted by consumers on our websites.

     The Company was originally incorporated in Nevada in 1996 as Renaissance
Center, Inc.  Renaissance Center and Nuclear Corporation merged in 1997.  Our
articles of incorporation were restated in July 1997 and our name was changed to
Renaissance International Group, Ltd.  Our name was subsequently changed to RIGL
Corporation in July 1998.  With the acquisition of Telco and shift of the focus
of our business, our corporate name was again changed to YP.Net, Inc., effective
October 1, 1999.  The new name was chosen to reflect our focus on Internet-based
yellow page services.

RESULTS OF OPERATIONS

Fiscal Year End September 30, 2001 Compared to Fiscal Year End September 30,
2000.

     Revenue for the year ended September 30, 2001 ("Fiscal 2001") was
$15,984,917 compared to $15,836,422 for the year ended September 30, 2000
("Fiscal 2000").  The slight increase in revenue is principally the result of
Telco generating revenues for the full fiscal period.  Our revenue decreased
marginally primarily due to the completion of the audited financial statements
and at the recommendation of our auditor Weber & Company, PC, we applied the
Staff Accounting Bulletin #101 ("SAB 101") to our subscription revenue.

The Staff Accounting Board at the Securities Exchange Commission promulgated SAB
#101.  Their staff reviewed revenue reorganization and created the criteria that
has implemented as a guideline to SAB #101 and it is believed that revenue
generally is realized or realizable and earned when all of the following
criteria are met:

     1. Pervasive evidence of an arrangement exits
     2. Delivery has occurred or services have been rendered
     3. The seller's price to the buyer is fixed or determinable AND
     4. Collectibility is reasonably assured.

In regards to the subscription/direct invoice gross revenue, and at the
recommendation of our auditor we believed that SAB #101 applies and there should
be impairment to gross revenue since we meet all the criteria except item #4.
The collectibility of subscription revenue, in the past, has been between 7% -
13% and we have recorded an allowance for bad debt to reflect the bad debt as
required.  Therefore this year our gross revenue for subscription revenues has
been reduced by $1,900,000 in compliance with SAB #101.


                                       13
<PAGE>
Presently, our new operations department has reevaluated and re-filtered our
subscription customers and we have experienced increases in cash collected from
the invoice billings.  Progressing forward through the year, we expect a higher
collection of subscription receivable since new procedures and processes have
been implemented in operations.

     We utilize direct mailings as our primary marketing program and this
program generates our principal revenue of the Company.  Our subscribing
customers increased to 114,409 at December 31, 1999, 129,457 at March 31, 2000,
143,292 at June 30, 2000 and 130,592 at September 30, 2000, a 21% increase for
the fiscal year.  Our subscribing customers decreased to 123,408 at December 31,
2000, 103,187 at March 31, 2001, 99,862 at June 30, 2001 and 91,348 at September
30, 2001.  The decrease in our customers for Fiscal 2001 is primarily due to
management's decision to stop all direct mail marketing efforts until we had
entered into a final settlement agreement with the FTC.  In August 2001 we
entered into a settlement agreement and voluntarily complied with the order set
forth by the FTC.  See our Form 10-QSB for the period ended June 30, 2001.

     Sales and marketing expenses for Fiscal 2001 was $688,349 compared to
$1,619,113 for Fiscal 2000.  The decrease was principally the result of our
decreased or ceasing of all marketing efforts.  The marketing expenses are
attributed to our direct response marketing, which is our primary source of
attracting new customers.  The decrease in our marketing expenses for Fiscal
2001 is primarily due to management's decision to cease all direct mail
marketing efforts until we had entered into a final settlement agreement with
the FTC.  In July 2001 we entered into a settlement agreement and voluntarily
complied with the order set forth by the FTC.  See our Form 10-QSB for the
period ended June 30, 2001.

     General and administrative expenses for Fiscal 2001 were $5,320,709
compared to $5,392,860 for Fiscal 2000.  The decrease was principally the result
of billing fees in connection with the operations of Telco and the increase in
consulting fees, legal fees, and accounting fees.  The general expenses are
attributed to the additional costs incurred to become current on our SEC filings
and legal fees incurred to reach a regulatory settlement with the FTC.
Management does not expect the legal expenditures for those periods to continue
in the amounts incurred in Fiscal 2002.

     On July 16, 2001, we paid Hudson Consulting Group ("Hudson") $82,000 for
the settlement of a lawsuit. In connection with this settlement, Hudson has
returned 1,425,334 shares of common stock, Tiger Lewis LLC has returned 82,5000
shares of common stock, Harold Rubenstein has returned 100,000 shares of common
stock, and HK Elrod has returned 154,284 shares of common stock. The common
stock issued to the above parties, issued by prior management, for services that
were never rendered by the recipients of the common stock. The cancellation of
these shares will decrease our total outstanding shares, which will affect our
earnings per share. The return of the common shares was recorded as other income
to the Company. See "Legal Proceedings," above.


                                       14
<PAGE>
     The cost of the Yellow-Page.Net URL was capitalized at its cost of
                     ---------------
$5,000,000.  The URL is amortized on an accelerated basis over the twenty-year
term of the licensing agreement.  Amortization expense on the URL was $447,087
for the year ended September 30, 2001.  Annual amortization expense in future
years related to the URL is anticipated to be approximately $300,000.

     Interest expense for Fiscal 2001 was $571,248 compared to $853,761 for
Fiscal 2000.  The decrease in interest expense was a result of decreased debt
due to the acquisition of Telco and the acquisition of the URL Yellow-Page.Net.
                                                               ---------------
The reduction in interest expense is also related to the payoff of Finovia
Financial credit facility in June 2001

     During Fiscal 2001,we have no available net operating loss carryforwards
under the separate return limitation year and have unavailable net operating
loss carryforwards of $3,985,962.  We may utilize the unavailable net operating
loss carryforwards of $3,985,962 upon generating taxable income in YP.Net or
develop a new product in YP.Net.  Therefore Telco is not allowed to utilize the
unavailable net operating loss carryforward.

          During Fiscal 2001, we had no available net operating loss
carryforwards under the separate return limitation year and has unavailable net
operating loss carryforwards of $1,931,900.  We may utilize the unavailable net
operating loss carryforwards of $1,931,900 upon generating taxable income in
YP.Net or develop a new product in YP.Net.  Therefore Telco is not allowed to
utilize the unavailable net operating loss carryforward.

     Net profits for Fiscal 2001 were $1,812,281, or $.04 per share, compared to
$2,847,977, or $.07 per share for Fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

     Our cash balance increased to $683,847 for Fiscal 2001 from a $219,613 for
Fiscal 2000.  We funded working capital requirements primarily from cash
generated from financing activities and utilized cash in operating activities
and investing activities and the reduction of debt.  We have no credit facility
with Finovia Financial as that debt was paid off in June 2001.

     Operating Activities.  Cash provided by operating activities was $3,880,158
for Fiscal 2001 compared to $960,303 for Fiscal 2000.  The principal source of
our operations revenue is from sales of electronic yellow page advertising.

     Investing Activities.  Cash used by investing activities was $165,672 for
Fiscal 2001 compared to $211,803 for Fiscal 2000.  We purchased $28,520 of
computer equipment in Fiscal 2001 compared to $211,803 of additional computer
equipment to upgrade and replace incompatible equipment for Fiscal 2000.  In
Fiscal 2001 we advanced $137,152 to an affiliate and the note was repaid in full
in October 2001.


                                       15
<PAGE>
     Financing Activities.  Cash flows used from financing activities were
$3,250,252 for Fiscal 2001 compared to $784,211 for Fiscal 2000.  We had cash
outflow from the repaid our credit facility and Matthew Markson Ltd. of
$3,199,452 for Fiscal 2001 compared to $1,657,781 for Fiscal 2000.  We purchased
treasury stock in the amount of $50,800 for Fiscal 2001.  We had cash inflow
from the financing arrangements in the amount of $789,241 for Fiscal 2000 and we
realized inflow from the sale of common stock of $84,329 for Fiscal 2000.

     We incurred debt in the acquisition of the license right to the
Yellow-Page.Net URL.  A total of $4,000,000 was borrowed, $2,000,000 from Joseph
---------------
and Helen VanSickle and $2,000,000 as a carry-back from Matthew & Markson Ltd.
Management has dedicated payments in the amount of $100,000 per month for the
payment of the VanSickle note.  Management has also dedicated payments to the
Matthew & Markson note in the amount of $100,000 per month, with the provision
that no payment be made if we have less than 30 days operating capital reserved,
or if we are in an uncured default with any of our lenders.  A total of
4,500,000 shares of our common stock were issued to secure these notes and are
held in escrow.

     Collections on accounts receivables are received primarily through the
billing service integrators under contract to administer this billing and
collection process.  The billing service providers generally do not remit funds
until they are collected.  The billing companies maintain holdbacks for refunds
and other uncertainties.  Generally, cash is collected and remitted to us over a
90 to 120 day period subsequent to the billing dates.

     We market our products primarily through the use of direct mailers to
businesses throughout the United States.  We generally pay for these marketing
costs when incurred and amortize the costs of direct-response advertising on a
straight-line basis over eight months.  The amortization lives are based on
estimated attrition rates.  During Fiscal 2001 we paid $3,781,485 in advertising
and marketing compared to $3,206,576 in Fiscal 2000.  Management anticipates the
outlays for direct-response advertising to remain consistent over the next year.

     We do not intend to incur significant capital expenditures in the near
future.

FUTURE OUTLOOK

     For fiscal year 2002 we expect to continue our customer direct response
program whereby we contact our existing customers for their many mini-web-page
information and to develop and market new products.  We also are generating a
new revenue source to provide customer service and technical services to related
and industry entities.  We presently have agreements with Simple. Net, Inc. to
provide both customer and technical services.  Simple.Net is an Internet service
provider ("ISP") that currently operates with us in a joint venture capacity.


                                       16
<PAGE>
     We have offered our customers a dial-up ISP and are currently gaining
customers weekly.  Our dial-up ISP backbone provider is Level 3 and is providing
a Tier 1 network that will ultimately provide the dial-up service for YP.net
dial-up customers and Simple. Net, Inc. through our joint venture arrangement.
Under our current provider's network, over 65 percent of the US's population has
the ability to dial to a local point of presence.  The remaining population will
be allowed access through an 800 number solution.  This revenue stream will
prove vital in expanding our ability to reach various customer needs.

     Our future success will depend on our ability to integrate continually and
distribute information services of broad appeal.  Our ability to maintain our
relationships with content providers and to build new relationships with
additional content providers is critical to our marketing plan.

     We have entered into a billing agreement with OAN Billing, Inc. ("OAN").
This contract will provide us with another billing integrator that will allow us
to broaden our billing area among all LECs.  OAN is a reputable billing company
that will provide us more flexibility and will reduce our concentration of
billing risk with billing integrators.

     We have entered into a credit card processing agreement with Bank of
American.  This agreement will provide us with the ability to expeditiously
process our subscription invoices on a recurring basis.  That is we will be able
to process monthly billing in a recurring batch by this method we will be able
to have a higher collection of our subscription revenue.

     We have filed a preliminary 14-C information statement to increase our
authorized common stock and create Class B and Class C preferred shares.  We
intend to offer our shareholders class B and C preferred shares.  The preferred
offer was at the request of our shareholders that were looking for an avenue to
receive income rather than waiting for the gains in equity.  "See item 4,
Submission of Matter to Vote to Security Holders" Having received no comments
back from the SEC to our Preliminary 14-C Information Statement, management will
file a 14-C definitive statement and do a formal offering.  See our Form 14-C
filed with the SEC on November 1, 2001

     Management believes that the future of this company will be based on its
ability to market business services to its proprietary business customer base.
We are actively seeking potential acquisitions and mergers to broaden our
services offered to our customer base.  We are presently seeking companies that
will provide a diversified revenue stream with a strong revenue model that will
provide more services to our existing customers.  Management believes its strong
financial controls and operating philosophy will help generate profits from its
future acquisitions for the benefit of its shareholders.


                                       17
<PAGE>
FACTORS WHICH MAY AFFECT FUTURE OPERATING RESULTS

     Set forth below and elsewhere in this Annual Report and in the other
documents we file with SEC, including the most recent Form 10-QSB, are risks and
uncertainties that could cause actual results to differ materially from the
results contemplated by the forward-looking statements contained in the Annual
Report.

     Gross Margins May Decline Over Time:We expect that gross margins may be
     ------------------------------------
adversely affected because we have determined that profit margins from the
electronic yellow pages offerings that we have profited from in the past have
fluctuated. We have experienced a decrease in revenue from the LEC from the
effects of the Competitive Local Exchange Carriers (CLEC) that are participating
in providing local telephone services to customers.  We have begun to address
this problem and we are implementing data filters to reduce the effects of the
CLEC's.  We have also sought other billing methods to reduce the adverse effects
of the CLEC billings. These other billing methods may be cheaper or more
expensive than our current LEC billing and we have not yet determined if they
will be less or more effective.  We continue to look for profitable Internet
opportunities; however there are no assurances that we will be successful, and
presently we have no acquisitions in progress.

     Dependence on Key Personnel:  Our performance is substantially dependant on
     ----------------------------
the performance of our executive officers and other key employees and our
ability to attract, train, retain and motivate high quality personnel,
especially highly qualified technical and managerial personnel. The loss of
services of any executive officers or key employees could have a material
adverse effect on our business, results of operations or financial condition.
Competition for talented personnel is intense, and there is no assurance that we
will be able to continue to attract, train, retain or motivate other highly
qualified technical and managerial personnel in the future.

     Since our Growth Rate may slow, operating results for a particular quarter
     --------------------------------------------------------------------------
are difficult to predict: We expect that in the future, our net sales may grow
-------------------------
at a slower rate on a quarter-to-quarter basis than experienced in previous
periods. This may be a direct cause of the projected changes to our direct
marketing pieces as well as the fact that we have not been performing our direct
marketing at this time.  See "Marketing," above. As a consequence, operating
results for a particular quarter are extremely difficult to predict. Our ability
to meet financial expectations could be hampered if we are unable to correct the
billing through the CLEC markets seen in the fourth quarter continue in the
future. Additionally, in response to customer demand, we continue to attempt
develop new products to reduce our customer attrition rates.

     We Expect to make Future Acquisitions where Advisable and Acquisitions
     ----------------------------------------------------------------------
involve Numerous Risks:  The Internet business is highly competitive, and as
-----------------------
such, our growth is dependent upon market growth, our ability to enhance our
existing products and our ability to introduce new products on a timely basis.
One of the ways we will address the need to develop new products through the
acquisition of other companies. Acquisitions involve numerous risks, including
difficulties in integrating the operations, technologies, and products of the
acquired companies; the risk of diverting management's attention from normal
daily operations of the business; risks of entering markets in which we have no
or limited direct prior experience and where competitors in such markets have
stronger market positions; insufficient revenue to offset increased expenses
associated with acquisitions; and the potential loss of key employees of the
acquired companies.  Mergers and acquisitions of high-technology companies are
inherently risky, and there is no assurance that our previous or future
acquisitions will be successful and not have a material adverse affect on our
business, operating results, or financial condition.  We must also manage any
growth effectively. Failure to manage growth effectively and successfully
integrate acquisitions we may make could have a material adverse effect on our
business and operating results.


                                       18
<PAGE>
     Regulatory Environment.Existing laws and regulations and any future
     -----------------------
regulation may have a material adverse effect on our business.  These effects
could include substantial liability including fines and criminal penalties,
preclusion from offering certain products or services and the prevention or
limitation of certain marketing practices.   As a result of such changes, our
ability to increase our business through Internet usage could also be
substantially limited.

ITEM 7.          FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                  YP.NET, INC.

                                TABLE OF CONTENTS
                                -----------------


                                                                PAGES
<S>                                                             <C>
  INDEPENDENT AUDITORS' REPORT                                     20

  CONSOLIDATED FINANCIAL STATEMENTS:

     Consolidated Balance Sheet at September 30, 2001              21

     Consolidated Statements of Operations for the years ended
       September 30, 2001 and September 30, 2000                   22

     Consolidated Statements of Stockholders' Equity for the
       years ended September 30, 2001 and September 30, 2000    23-24

Consolidated Statements of Cash Flows for the
       years ended September 30, 2001 and September 30, 2000    25-26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                      27-41
</TABLE>


                                       19
<PAGE>
                         INDEPENDENT ACCOUNTANTS' REPORT
                         -------------------------------



To  the  Stockholders  and  Board  of  Directors  of
     YP.Net,  Inc.:

We  have  audited the accompanying consolidated balance sheet of YP.Net, Inc. as
of  September  30,  2001  and the related consolidated statements of operations,
stockholders'  equity  and  cash  flows  for each of the two years in the period
ended  September  30, 2001. These financial statements are the responsibility of
the  Company's management.  Our responsibility is to express an opinion on these
financial  statements  based  on  our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that  we  plan  and perform the audits to
obtain  reasonable  assurance about whether the financial statements are free of
material  misstatement.  An  audit includes examining, on a test basis, evidence
supporting  the  amounts  and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by  management,  as  well  as  evaluating  the overall financial statement
presentation.  We believe our audits provide a reasonable basis for our opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of YP.Net,
Inc.  as  of  September 30, 2001, and the consolidated results of its operations
and cash flows for each of the two years in the period ended September 30, 2001,
in  conformity  with  generally  accepted  accounting  principles.



/s/  WEBER  &  COMPANY,  P.C.
     Scottsdale,  Arizona
     December  20,  2001


                                       20
<PAGE>
<TABLE>
<CAPTION>
YP.NET, INC.

CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2001
------------------


<S>                                                              <C>
ASSETS:
CURRENT ASSETS
   Cash                                                          $  683,847
   Accounts receivable, net of allowance of $1,035,993            2,870,109
   Customer acquisition costs, net of accumulated amortization
     of $3,588,242                                                  193,244
   Prepaid expenses and other assets                                 20,169
   Deferred income taxes                                            414,397
                                                                 -----------
      Total current assets                                        4,181,766

PROPERTY AND EQUIPMENT, net                                         374,885

DEPOSITS                                                             23,287

INTELLECTUAL PROPERTY- URL, net of accumulated
  amortization of $1,077,916                                      3,932,084

ADVANCES TO AFFILIATE                                               116,316
                                                                 -----------
    TOTAL ASSETS                                                 $8,628,338
                                                                 ===========

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts payable                                              $  314,904
   Accrued liabilities                                               76,234
   Notes payable - current portion                                  888,236
   Income taxes payable                                           1,222,318
                                                                 -----------
      Total current liabilities                                   2,501,692

NOTES PAYABLE - long term portion                                   410,669

DEFERRED INCOME TAXES                                                17,439


                                                                 -----------
      Total liabilities                                           2,929,800
                                                                 -----------

STOCKHOLDERS' EQUITY:
   Common stock, $.001 par value, 50,000,000 shares authorized,
     41,340,798 issued and outstanding                               43,814
   Paid in capital                                                4,556,806
   Treasury stock at cost                                          (171,422)
   Retained earnings                                              1,269,340
                                                                 -----------
      Total stockholders' equity                                  5,698,538
                                                                 -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $8,628,338
                                                                 ===========
</TABLE>


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


                                       21
<PAGE>
<TABLE>
<CAPTION>
YP.NET, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000
-------------------------------------------------------------

                                                      2001          2000
                                                  ------------  ------------
<S>                                               <C>           <C>
NET REVENUES                                      $15,084,917   $15,836,422
                                                  ------------  ------------

OPERATING EXPENSES:
     Cost of services                               6,399,367     5,234,906
     General and administrative expenses            5,320,709     5,392,860
     Sales and marketing expenses                     688,349     1,619,113
     Franchising expense
     Depreciation and amortization                    603,426       616,660
                                                  ------------  ------------
         Total operating expenses                  13,011,851    12,863,539
                                                  ------------  ------------

OPERATING INCOME                                    2,073,066     2,972,883
                                                  ------------  ------------

OTHER (INCOME) AND EXPENSES
     Interest expense and other financing costs       571,248       853,761
     Interest income                                   (7,342)         (802)
     Other Income                                  (1,533,568)      (82,846)
                                                  ------------  ------------

     Total other expense                             (969,662)      770,113
                                                  ------------  ------------

INCOME BEFORE INCOME TAXES                          3,042,728     2,202,770

INCOME TAX  PROVISION (BENEFIT)                     1,230,447      (645,207)
                                                  ------------  ------------

NET INCOME                                        $ 1,812,281   $ 2,847,977
                                                  ============  ============

NET INCOME PER SHARE:
 Basic                                            $      0.04   $      0.07
                                                  ============  ============

 Diluted                                          $      0.04   $      0.07
                                                  ============  ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                            40,623,126    40,120,829
                                                  ============  ============

  Diluted                                          40,623,126    40,120,829
                                                  ============  ============
</TABLE>


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


                                       22
<PAGE>
YP.NET, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
YEARS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000
-----------------------------------------------------

<TABLE>
<CAPTION>
                                              COMMON STOCK          PREFERRED A       TREASURY    PAID-IN     ACCUMULATED
                                            SHARES    AMOUNT     SHARES     AMOUNT     STOCK      CAPITAL       DEFICIT
                                          ----------  -------  ----------  --------  ----------  ----------  -------------
<S>                                       <C>         <C>      <C>         <C>       <C>         <C>         <C>
BALANCE OCTOBER 1, 1999                   39,156,853  $39,157  1,700,000   $ 1,700   $ (69,822)  $4,892,538  $ (3,390,918)

  Common stock issued for
    consulting services                      500,000      500                                       463,450

  Common stock issued for
    exercised options                         53,611       54                                        84,275

  Common stock issued as board of
    directors' fees                          550,000      550                                       114,950

   Common stock issued to former
    officer to convert preferred shares
    and as final compensation settlement     200,000      200   (200,000)     (200)                  89,800

   Common stock issued to settle
    lease agreement                          100,000      100                                       124,100

   Net income                                                                                                   2,847,977
                                          ----------  -------  ----------  --------  ----------  ----------  -------------
BALANCE
    SEPTEMBER 30, 2000                    40,560,464  $40,561  1,500,000   $ 1,500   $ (69,822)  $5,769,113  $   (542,941)





                                            TOTAL
                                          ----------
<S>                                       <C>
BALANCE OCTOBER 1, 1999                   $1,472,655

  Common stock issued for
    consulting services                      463,950

  Common stock issued for
    exercised options                         84,329

  Common stock issued as board of
    directors' fees                          115,500

   Common stock issued to former
    officer to convert preferred shares
    and as final compensation settlement      89,800

   Common stock issued to settle
    lease agreement                          124,200

   Net income                              2,847,977
                                          ----------
BALANCE
    SEPTEMBER 30, 2000                    $5,198,411
</TABLE>


                                    (CONTINUED)


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


                                       23
<PAGE>
YP.NET, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
YEARS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000     (CONTINUED)
-----------------------------------------------------     -----------

<TABLE>
<CAPTION>
                                             COMMON  STOCK            PREFERRED A       TREASURY     PAID-IN      ACCUMULATED
                                           SHARES      AMOUNT     SHARES      AMOUNT     STOCK       CAPITAL        DEFICIT
                                         -----------  --------  -----------  --------  ----------  ------------  -------------
<S>                                      <C>          <C>       <C>          <C>       <C>         <C>           <C>
BALANCE OCTOBER 1, 2000                  40,560,464   $40,561    1,500,000   $ 1,500   $ (69,822)  $ 5,769,113   $   (542,941)

  Common stock issued for
    consulting services                     850,000       850                                          147,950

   Common stock received and retired
      under legal settlements            (1,596,784)   (1,597)                                      (1,723,433)

  Common stock issued for extension
      on debt                             4,000,000     4,000                                          356,000

  Cancellation of preferred stock                               (1,500,000)   (1,500)

  Purchase of treasury stock                                                            (101,600)

  Value of commom stock warrants issued                                                                  7,176

  Net income                                                                                                        1,812,281
                                         -----------  --------  -----------  --------  ----------  ------------  -------------

BALANCE
    SEPTEMBER 30, 2001                   43,813,680   $43,814            -   $     -   $(171,422)  $ 4,556,806   $  1,269,340
                                         ===========  ========  ===========  ========  ==========  ============  =============




                                            TOTAL
                                         ------------
<S>                                      <C>
BALANCE OCTOBER 1, 2000                  $ 5,198,411

  Common stock issued for
    consulting services                      148,800

   Common stock received and retired
      under legal settlements             (1,725,030)

  Common stock issued for extension
      on debt                                360,000

  Cancellation of preferred stock             (1,500)

  Purchase of treasury stock                (101,600)

  Value of commom stock warrants issued        7,176

  Net income                               1,812,281
                                         ------------

BALANCE
    SEPTEMBER 30, 2001                   $ 5,698,538
                                         ============
</TABLE>


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


                                       24
<PAGE>
<TABLE>
<CAPTION>
YP.NET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
YEARS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000
-----------------------------------------------------


CASH FLOWS FROM OPERATING ACTIVITIES:                           2001          2000
                                                            ------------  ------------
<S>                                                         <C>           <C>
  Net income                                                $ 1,812,281   $ 2,847,977
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
  Depreciation and amortization                                 156,343       144,993
  Issuance of common stock as compensation for services         148,800       669,250
  Penalties related to acquisition debt paid
      by issuance of debt, warrants and stock                   917,967             -
  Non-cash income recognized on recapture of common stock    (1,725,030)
  Deferred income taxes                                         268,556      (645,207)
  Provision for uncollectible accounts                         (760,859)    1,590,840
  Amortization of intellectual property                         447,083       471,667
  Changes in assets and liabilities:
    Trade and other accounts receivable                       1,617,467    (4,345,544)
    Customer acquisition costs                                   37,654       403,002
    Other receivables                                                 -        77,182
    Prepaid and other current assets                             79,060        39,621
    Other assets                                                (11,500)            -
    Accounts payable                                            161,089        48,014
    Accrued liabilities                                        (251,894)     (119,232)
    Deferred Financing Costs                                     21,250       102,500
    Income taxes payable                                        961,891             -
    Deferred revenue                                                  -      (324,760)
                                                            ------------  ------------
          Net cash  provided by operating activities          3,880,158       960,303
                                                            ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Advances made to affiliate                                   (137,152)            -
  Purchases of  equipment                                       (28,520)     (211,803)
                                                            ------------  ------------
          Net cash (used in)  investing activities             (165,672)     (211,803)
                                                            ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal repayments on borrowings from line of credit     (1,577,547)      789,241
  Principal repayments on notes payable                      (1,621,905)   (1,657,781)
  Purchase of treasury stock                                    (50,800)
  Proceeds from sale of common stock                                  -        84,329
                                                            ------------  ------------
          Net cash (used)/provided by financing activities   (3,250,252)     (784,211)
                                                            ------------  ------------

(DECREASE)/INCREASE IN CASH                                     464,234       (35,711)

CASH, BEGINNING OF YEAR                                         219,613       255,324
                                                            ------------  ------------

CASH, END OF YEAR                                           $   683,847   $   219,613
                                                            ============  ============
</TABLE>


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


                                       25
<PAGE>
YP.NET, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS, (CONTINUED)
FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000
-----------------------------------------------


SUPPLEMENTAL CASH FLOW INFORMATION:

<TABLE>
<CAPTION>
                            2001      2000
                                                                  --------  --------
<S>                                                               <C>       <C>
       Interest Paid                                              $421,013  $833,993
                                                                  ========  ========

       Income taxes paid                                          $    -0-  $    -0-
                                                                  ========  ========
</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

<TABLE>
<CAPTION>
                                                                    2001      2000
                                                                  --------  --------
<S>                                                               <C>       <C>
Common stock issued in settlement of lease                        $    -0-  $124,200
                                                                  ========  ========

Note payable issued in payment of debt extension fee              $550,791  $    -0-
                                                                  ========  ========

Value of common stock issued as payment of debt    extension fee
                                                                  $360,000  $    -0-
                                                                  ========  ========

Liability incurred for purchase of treasury stock                 $ 50,800  $    -0-
                                                                  ========  ========
</TABLE>



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


                                       26
<PAGE>
YP.NET, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000
-----------------------------------------------

1.   ORGANIZATION AND BASIS OF PRESENTATION

     YP.Net, Inc. (the "Company"), formally RIGL Corporation, had previously
     attempted to develop software solutions for medical practice billing and
     administration. The Company had made acquisitions of companies performing
     medical practice billing services as test sites for its software and as
     business opportunities. The Company was not successful in implementing its
     medical practice billing and administration software products and looked to
     other business opportunities. The Company acquired Telco Billing Inc.
     ("Telco") in June 1999, through the issuance of 17,000,000 shares of the
     Company's common stock. Prior to its acquisition of Telco, RIGL had not
     generated significant or sufficient revenue from planned operations.

     Telco was formed in April 1998, to provide advertising and directory
     listings for businesses on its Internet web site in a "Yellow Page" format.
                                                            -----------
     Telco provides those services to its subscribers for a monthly fee. These
     services are provided primarily to all business throughout the United
     States. Telco became a wholly owned subsidiary of YP.Net, Inc. after the
     June 16, 1999 acquisition.

     At the time that the transaction was agreed to, the Company had 12,567,770
     common shares issued and outstanding. As a result of the merger transaction
     with Telco, there were 29,567,770 common shares outstanding, and the former
     Telco stockholders held approximately 57% of the Company's voting stock.
     For financial accounting purposes, the acquisition was a reverse
     acquisition of the Company by Telco, under the purchase method of
     accounting, and was treated as a recapitalization with Telco as the
     acquirer. Accordingly, the historical financial statements have been
     restated after giving effect to the June 16, 1999, acquisition of the
     Company. The financial statements have been prepared to give retroactive
     effect to October 1, 1998, of the reverse acquisition completed on June 16,
     1999, and represent the operations of Telco. Consistent with reverse
     acquisition accounting: (i) all of Telco's assets, liabilities, and
     accumulated deficit, are reflected at their combined historical cost (as
     the accounting acquirer) and (ii) the preexisting outstanding shares of the
     Company (the accounting acquiree) are reflected at their net asset value as
     if issued on June 16, 1999.

     The accompanying financial statements represent the consolidated financial
     position and results of operations of the Company and includes the accounts
     and results of operations of the Company and Telco, its wholly owned
     subsidiary, for the years ended September 30, 2001 and September 30, 2000.


                                       27
<PAGE>
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Cash includes all short-term highly liquid investments that are readily
     ----
     convertible to known amounts of cash and have original maturities of three
     months or less. At times cash deposits may exceed government insured
     limits. At September 30, 2001, cash deposits exceeded those insured limits
     by $580,000.

     Principles of Consolidation: The consolidated financial statements include
     ----------------------------
     the accounts of the Company and its wholly owned subsidiary, Telco Billing,
     Inc. All significant intercompany accounts and transactions are eliminated.

     Customer acquisition costs represent the direct response marketing costs
     --------------------------
     that are incurred as the primary method by which customers subscribe to the
     Company's services. The Company purchases mailing lists and sends
     advertising materials to prospective subscribers from those lists.
     Customers subscribe to the services by positively responding to those
     advertising materials which serve as the contract for the subscription. The
     Company capitalizes and amortizes the costs of direct-response advertising
     on a straight-line basis over eight months. The amortization lives are
     based on estimated attrition rates. The Company capitalized expenditures of
     $575,000 and $1,177,000 during the years ended September 30, 2001 and 2000
     respectively. The Company amortized those capitalized amounts at $613,000
     and $1,580,000 during the years ended September 30, 2001 and 2000
     respectively.

     The Company also incurs advertising costs that are not considered
     direct-response advertising. These other advertising costs are expensed
     when incurred. These advertising expenses were $75,000 and $30,000 for the
     years ended September 30, 2001 and 2000 respectively.

     Property and equipment is stated at cost less accumulated depreciation.
     ----------------------
     Depreciation is recorded on a straight-line basis over the estimated useful
     lives of the assets ranging from 3 to 5 years. Depreciation expense was
     $156,343 and $144,993 for the years ended September 30, 2001 and 2000
     respectively.

     Revenue recognition: The Company's revenue is generated by customer
     -------------------
     subscriptions of directory and advertising services. Revenue is billed and
     recognized monthly for services subscribed in that specific month. The
     Company utilizes outside billing companies to transmit billing data, much
     of which is forwarded to Local Exchange Carriers ("LEC's") that provide
     local telephone service. Monthly subscription fees are generally included
     on the telephone bills of the customers. The Company recognizes revenue
     based on net billings accepted by the LEC's. Due to the periods of time for
     which adjustments may be reported by the LEC's and the billing companies,
     the Company estimates and accrues for dilution and fees reported subsequent
     to year-end for initial billings related to services provided for periods
     within the fiscal year.

     Revenue for billings to certain customers whom are billed directly by the
     Company and not through the LEC's, is recognized on the basis of cash
     received due to poor experience associated with the collection of such
     billings. The Company recognizes revenue on these billings on estimated
     future collections which are determined on the basis of historical
     collections.


                                       28
<PAGE>
     Income taxes: The Company provides for income taxes based on the provisions
     ------------
     of Statement of Financial Accounting Standards No. 109, Accounting for
     Income Taxes, which, among other things, requires that recognition of
     deferred income taxes be measured by the provisions of enacted tax laws in
     effect at the date of financial statements.

     Financial Instruments: Financial instruments consist primarily of cash,
     ---------------------
     accounts receivable, and obligations under accounts payable, accrued
     expenses and notes payable. The carrying amounts of cash, accounts
     receivable, accounts payable, accrued expenses and notes payable
     approximate fair value because of the short maturity of those instruments.
     The Company has applied certain assumptions in estimating these fair
     values. The use of different assumptions or methodologies may have a
     material effect on the estimates of fair values.

     Net income per share is calculated using the weighted average number of
     --------------------
     shares of common stock outstanding during the year. The Company has adopted
     the provisions of SFAS No. 128 Earnings Per Share.

     Use of Estimates: The preparation of financial statements in conformity
     ----------------
     with generally accepted accounting principles requires management to make
     estimates and assumptions that affect the reported amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the financial statements and the reported amounts of revenues and
     expenses during the reporting period. Actual results could differ from
     those estimates.

     Stock-Based Compensation: Statements of Financial Accounting Standards No.
     ------------------------
     123, Accounting for Stock-Based Compensation, ("SFAS 123") established
     accounting and disclosure requirements using a fair-value based method of
     accounting for stock-based employee compensation. In accordance with SFAS
     123, the Company has elected to continue accounting for stock based
     compensation using the intrinsic value method prescribed by Accounting
     Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees." The proforma effect of the fair value method is discussed in
     Note 15.

     Recently Issued Accounting Pronouncements: In December 1999, the Securities
     -----------------------------------------
     and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101,
     Revenue Recognition in Financial Statements. SAB No. 101 summarizes the
     staff's views in applying generally accepted accounting principles to
     revenue recognition in financial statements. Management believes that the
     Company's revenue recognition policies have complied with those prescribed
     in SAB 101 and therefore, the adoption of SAB No. 101 did not have a
     material effect on the Company's revenues or revenue recognition policy.

     In June 2001, the Financial Accounting Standards Board issued Statements of
     Financial Accounting Standards No.'s 141 Business Combinations and 142
     Goodwill and Other Intangible Assets. The Company has reviewed the
     provisions of the new accounting pronouncements and does not believe the
     adoption of such will have a material effect on the financial position and
     results of operations of the Company. However, the Company will likely be
     required to review its process of analyzing the carrying value of its
     intangible assets.


                                       29
<PAGE>

     Impairment of long-lived assets is assessed by the Company for impairment
     whenever there is an indication that the carrying amount of the asset may
     not be recoverable. Recoverability of these assets is determined by
     comparing the forecasted undiscounted cash flows generated by those assets
     to the assets' net carrying value. The amount of impairment loss, if any,
     is measured as the difference between the net book value of the assets and
     the estimated fair value of the related assets.


                                       30
<PAGE>
3.   ACCOUNTS RECEIVABLE

     The Company provides billing information to third party billing companies
     for the majority of its monthly billings. Billings submitted are "filtered"
     by these billing companies and the LEC's. Net accepted billings are
     recognized as revenue and accounts receivable. The billing companies remit
     payments to the Company on the basis of cash ultimately received from the
     LEC's by those billing companies. The billing companies and LEC's charge
     fees for their services which are netted against the gross accounts
     receivable balance. The billing companies also apply holdbacks for the
     remittances for potentially uncollectible accounts. These dilution amounts
     will vary due to numerous factors and the Company may not be certain as to
     the actual amounts of dilution on any specific billing submittal until
     several months after that submittal. The Company estimates the amount of
     these charges and holdbacks based historical experience and subsequent
     information received from the billing companies. The Company estimates
     uncollectible account balances and provides an allowance for such
     estimates.

     The Company entered into a customer billing service agreement with
     Integretel, Inc. Integretel provides billing and collection and related
     services. Determining the net realizable value requires an estimation of
     both uncollectible receivables or any returns and allowances. The trade
     receivable due from Integretel at September 30, 2001 was $2,126,219. These
     receivables have been reduced by an allowance for doubtful accounts of
     $637,866.

     The Company also entered into a customer billing service agreement with
     Enhanced Services Billing, Inc. (ESBI). ESBI provides billing and
     collection and related services very similar to Integretel discussed above.
     Determining the net realizable value requires an estimation of both
     uncollectible receivables or any returns and allowances. The trade
     receivable due from ESBI at September 30, 2001 was $1,146,644 less
     aggregated amounts for telco fees, and reserve holdbacks based on dilution.
     This trade receivable has been reduced by an allowance for doubtful
     accounts of $298,127.

     Trade subscription receivables, which are directly administered and carried
     by the Company, are valued and reported at net realizable value, the net
     amount expected to be received. This amount may or may not be necessarily
     the amount received. Determining the net realizable value requires an
     estimation of both uncollectible accounts or any returns and allowances.
     The net trade subscriptions receivable at September 30, 2001 was $395,000.

     The Company experiences significant dilution from the billing companies.
     The Company negotiates collections with the billing companies on the basis
     of the contracted terms and historical experience. The Company's cash flow
     can be affected by holdbacks, fees and other matters that are determined by
     the LEC's and the billing companies.


                                       31
<PAGE>
4.   INTELLECTUAL PROPERTY

     In connection with the Company's acquisition of Telco, the Company was
     required to provide accelerated payment of license fees for the use of the
     Internet domain name or Universal Resource Locator (URL) Yellow-page. net.
                                                              ----------------
     Telco had previously entered into a 20-year license agreement for the use
     of the URL with one of its two 50% stockholders. The original license
     agreement required annual payments of $400,000. However, the agreement
     stated that upon a change in control of Telco, a $5,000,000 accelerated
     payment is required to maintain the rights under the licensing agreement.
     The URL holder agreed to discount the accelerated payments from $8,000,000
     to $5,000,000 at the time of the acquisition. The Company agreed to make
     that payment upon effecting the acquisition of Telco.

     The Company made a $3,000,000 cash payment and issued a note payable for
     $2,000,000 to acquire the licensing rights of the URL. The Company also
     issued 2,000,000 shares of its common stock to be held as collateral on the
     note. The note payable was originally due on July 15, 1999. The Company
     failed to make the $2,000,000 payment when due. The repayment terms were
     renegotiated to extend the due date to January 15, 2000. An extension fee
     of $200,000 was paid by the Company at that time. The Company again
     renegotiated the repayment terms on April 26, 2000, to a demand note, with
     monthly installments of $100,000 subject to all operating requirements,
     which, management believes, have subsequently been met by the Company.

     In the year ended September 30, 2001, the former URL holder claimed that it
     was due additional amounts for the prior loan extensions. The Company
     reached a settlement with the former URL holder that required the Company
     to issue to the former URL holder, 4,000,000 shares of the Company's common
     stock, warrants to purchase 500,000 shares of the Company's common stock
     and a note payable for $550,000. The Company recorded an expense of
     approximately $917,000 related to the settlement representing the principal
     amount of the note payable, $360,000 as the fair value of the 4,000,000
     common shares and $7,176 as the fair value of the warrants. The value of
     the common stock was determined on the basis of the quoted trading price of
     the shares on the date of the agreement. The fair value of the warrants was
     determined on the using the Black-Scholes option pricing model.

     The URL is recorded at its cost net of accumulated amortization. Management
     believes that the Company's business is dependent on its ability to utilize
     this URL given the recognition of the Yellow page term. Also, its current
                                           -----------
     customer base relies on the recognition of this term and URL as a basis for
     maintaining the subscriptions to the Company's service. Management believes
     that the current revenue and cash flow generated through use of
     Yellow-page.net substantiates the net book value of the asset. The Company
     ---------------
     will periodically analyze the net book value of this asset and determine if
     impairment has occurred. The URL is amortized on an accelerated basis over
     the twenty-year term of the licensing agreement. Amortization expense on
     the URL was $447,083 and $471,667 for the years ended September 30, 2001
     and 2000 respectively.


                                       32
<PAGE>
5.   PROPERTY AND EQUIPMENT

     Property and equipment consisted of the following at September 30, 2001:

               Leasehold improvements         $    319,150
               Furnishings and fixtures            197,261
               Office and computer equipment       275,364
                                              -------------
               Total                               791,775
               Less accumulated depreciation      (416,889)
                                              -------------

               Property and equipment, net    $    374,886
                                              =============

     The Company has provided certain equipment and improvements to an
     affiliated entity at no cost to that affiliated entity. This arrangement
     was made as part of the Company's original default settlement with the
     prior owners of the URL discussed in Note 4. The Company retains title and
     control of these assets. However, they are not being utilized by the
     Company. The net book value of the office equipment and leasehold
     improvements being utilized by the affiliated entity was approximately
     $136,000 at September 30, 2001.


6.   NOTES PAYABLE AND LINE OF CREDIT

     Notes payable at September 30, 2001 are comprised of the following:

<TABLE>
<CAPTION>
<S>                                                              <C>
     Term loan from bank.  Original balance of $40,525.
     Repayment terms require monthly installments of
     principal and interest of $1,844.  Interest at 8.5% per
     annum.  Due January 13, 2001.  Collateralized by
     equipment.                                                  $    1,805

     Note payable to stockholders, original balance of
     2,000,000, interest at 10% per annum.  Repayment
     terms require monthly installments of $100,000 plus
     interest.  Due January 11, 2001.  Collateralized by
     2,000,000 shares of the Company's common stock.
     Note is currently in default.                                  400,000

     Note payable to former Telco shareholder for balance
     of URL purchase price (Note 4). Repayment terms
     require monthly installments of principal and interest at
     20% per annum of $100,000 and due upon demand.
     Collateralized by 2,000,000 shares of the Company's
     common stock.  Note is currently in default.                   346,309


                                       33
<PAGE>
     Note payable to former Telco shareholder, original
     balance of $550,000, interest at 10.5% per annum.
     Repayment terms require monthly installments of
     principal and interest of $19,045 beginning December
     15, 2001.  Due September 25, 2004.  Collateralized by
     all assets of the Company.                                     550,791


                                                                 -----------
     Totals                                                       1,298,905

     Less current portion                                          (888,236)
                                                                 -----------

     Long-term portion                                           $  410,669
                                                                 ===========
</TABLE>


7.   PROVISION FOR INCOME TAXES

     Deferred income taxes reflect the net tax effects of temporary differences
     between the carrying amounts of assets and liabilities for financial
     reporting purposes and the amounts used for income tax purposes.

     The deferred tax consequences of temporary differences in reporting items
     for financial statement and income tax purposes are recognized, if
     appropriate. Realization of the future tax benefits related to the deferred
     tax assets is dependent on many factors, including the Company's ability to
     generate taxable income within the net operating loss period. The Company
     has considered these factors in reaching its conclusion as to the valuation
     allowance for financial reporting purposes.

     At September 30, 2001 the Company has unused federal net operating losses
     of $3,985,962 that may be unavailable under Internal Revenue Code 382 -
     change in control rules - expiring from 2011 through 2014. The Company may
     utilize the unavailable net operating loss carryforwards upon generating
     taxable income in that operating entity. At September 30, 2001 the Company
     had unused state net operating losses of $1,931,900 that may be unavailable
     under the change in control rules expiring 2003.

     Income taxes for years ended September 30, is summarized as follows:

<TABLE>
<CAPTION>
                                             2001         2000
                                          ----------  ------------
<S>                                       <C>         <C>

     Current Provision                    $  961,891  $ 1,527,389
     Deferred Provision (Benefit)            268,556   (2,172,596)
                                          ----------  ------------

     Net income tax (benefit) provision   $1,230,447  $ (645,207))
                                          ==========  ============
</TABLE>

A  reconciliation for the differences between the effective and statutory income
tax  rates  for  years  ended  September  30,  is  as  follows:

<TABLE>
<CAPTION>
                   2001                           2000
                   ----                           ----

<S>                                      <C>           <C>    <C>         <C>
     Federal statutory rates             $ 1,034,527     34%  $ 748,942     34%
     State income taxes                      197,777      6%    132,166      6%
     Utilization of valuation allowance   (1,527,389)  (69)%
     Other                                    (1,857)     -       1,074      -
                                         ------------  -----  ----------  -----
     Effective rate                      $ 1,230,447     40%  $(645,207)  (29)%
                                         ============  =====  ==========  =====
</TABLE>


                                       34
<PAGE>
     Deferred tax assets totaling $1,983,000 are comprised of $512,000 for
     differences in book and tax bases of accounts receivable and intangible
     assets and approximately $1,471,000 relates to net operating loss
     carryforwards which is offset by a an equal valuation allowance resulting
     in a net deferred income tax asset of $512,000. The valuation allowance was
     provided due to the uncertainty of future realization of federal and state
     net operating loss carryforwards that give rise to approximately $1,471,000
     of the deferred tax asset because of restrictions on the utilization of
     such carryforwards due to the change in control rules under Internal
     Revenue Code Section 382. The valuation allowance decreased $1,070,000 in
     the year ended September 30, 2000, due to resolution of uncertainties as to
     the Company's ability to generate sufficient taxable income to utilize the
     net operating loss carryforwards that could be utilized. There was no
     change in the valuation allowance in the year ended September 30, 2001.

     At September 30, 2001, there was a deferred tax liability of $114,739
     related to the differences in book and taxes bases of property and
     equipment.

8.   LEASES

     The Company leases its office space under long-term operating leases
     expiring through 2003. Rent expense under these leases was $175,464 and
     $176,637 for the years ended September 30, 2001 and 2000.

     The Company consolidated office space from a variety of locations to a
     single facility effective with the Telco merger. The Company has subleased
     the former Telco office space.

     Future minimum annual lease payments and sublease rentals under operating
     lease agreements for years ended September 30:

<TABLE>
<CAPTION>
                     Sublease
             Rents   Rentals
           --------  --------

<S>        <C>       <C>
     2002  $392,862  $203,500
     2003    95,598         -
           --------  --------

           $488,460  $203,500
           ========  ========
</TABLE>


9.   STOCKHOLDERS' EQUITY

Telco Acquisition

     The Company issued 17,000,000 shares of its Common Stock in connection with
     the Telco acquisition. The transaction was valued at the book value of the
     net assets of RIGL as of the date of the transaction.

     Common Stock Issued for Services
     --------------------------------

     The Company has historically granted shares of its common stock to
     officers, directors and consultants as payment for services rendered. The
     value of those shares was determined based on the trading value of the
     stock at the dates on which the agreements were made for the services.
     During the year ended September 30, 2001, the Company issued 850,000 shares
     of common stock to officers, directors and consultants valued at $148,800.

     During the year ended September 30, 2000, the Company issued 500,000 shares
     to consultants valued at $464,950. Also in the year ended September 30,
     2000, the Company issued 550,000 shares of its common stock valued at
     $115,500 to members of the board of directors as consideration and payment
     for directors' fees.

     Common Shares Rescinded
     -----------------------

     The Company made claims against numerous parties for return of common
     shares issued to consultants by former management. Some of these claims
     resulted in litigation. During the year ended September 30, 2001, the
     Company settled with six of those parties resulting in 1,596,784 shares of
     the Company's common stock being returned and retired. These transactions
     have been recognized as other income of $1,725,030 in the accompanying
     statement of operations for the year ended September 30, 2001. The
     rescissions and returns of the common stock were recorded at the value of
     the original transactions that were rescinded, that is, the recorded
     expense for the original issuance of the shares was, in effect, reversed in
     the year ended September 30, 2001.

     Common Stock Issued for Debt Extension
     --------------------------------------

     The former holder of the Yellow-page. net. URL made a claim against the
                              ----------------
     Company in the year ended September 30, 2001. The former URL holder claimed
     that it was owed $1,000,000 that represented a loan extension fee for an
     extension given in 1999. The Company disputed the claim but ultimately
     settled with the former URL holder. The settlement agreement required the
     Company to pay the former URL holder $550,000, 4,000,000 shares of the
     Company's common stock and warrants for and additional 500,000 shares of
     the Company's common stock. The Company recorded an expense of
     approximately $917,000 related to the settlement representing the principal
     amount of the note payable, $360,000 as the fair value of the 4,000,000
     common shares and $7,176 as the fair value of the warrants. The value of
     the common stock was determined on the basis of the quoted trading price of
     the shares on the date of the agreement. The fair value of the warrants was
     determined on the using the Black-Scholes option pricing model.

     Treasury Stock
     --------------

     During the year ended September 30, 2001, the Company acquired 254,000
     shares of its common stock from a single stockholder. The Company agreed to
     purchase the common stock for $101,600. The Company paid cash of $50,800
     prior to September 30, 2001 and accrued the remaining $50,800 due at
     September 30, 2001

     Other
     -----

     During the year ended September 30, 2000, the Company issued 100,000 shares
     of its common stock to a sub lessee of certain office space for which the
     Company is the primary lessee. Management agreed to issue these shares as
     an inducement to the sub-lessee and allow the Company to eliminate the
     monthly obligation under that lease.


                                       35
<PAGE>
     Also in the year ended September 30, 2000, the Company agreed to settle all
     outstanding issues with a former officer by agreeing to convert 200,000
     shares of Series B preferred stock held by this individual to 200,000,
     shares of common stock. The conversion was set at the original conversion
     rate for the preferred shares. However, under the original terms, the
     preferred shares were not convertible until the occurrence of certain
     "trigger events". Those "trigger events" had not occurred but the former
     officer was allowed to convert as part of the settlement agreement. The
     conversion was recorded at the estimated value of the common stock on the
     date of the conversion.

     The Company granted 1,700,000 shares of Series B preferred stock to certain
     employees during the year ended September 30, 1999. The Series B preferred
     stock has no stated dividend. The preferred shares are convertible to
     common stock at the option of the holder. The shares are convertible at
     varying rates depending upon the trading price of the common stock at the
     time of conversion. The initial conversion rate is one share of common for
     each share of preferred. Conversion may not occur until certain "trigger
     events" occur and all rights with respect to the preferred shares terminate
     on November 30, 2004. "Trigger events" are defined as trading prices of the
     Company's common stock reaching or exceeding $5 through $10 per share and
     net income reaching or exceeding $5,000,000. No value was assigned to the
     preferred shares in the accompanying balance sheet nor was any compensation
     expense recognized for the year ended September 30, 2000, because the
     preferred shares were not exercisable at the time of issuances because of
     the failure of the Company to meet the "trigger events". Subsequently,
     management has cancelled the Series B preferred stock and rescinded those
     issuances and all shares of the Series B preferred stock were returned as
     of September 30, 2001.


10.  COMMITMENTS AND CONTINGENCIES

     Telco Billing
     -------------

     The acquisition of Telco by the Company called for the issuance of
     17,000,000 new shares of stock in exchange of the existing shares of Telco.
     As part of that agreement, the Company gave the former shareholders the
     right to "Put" back to the Company certain shares of stock at a minimum
     stock price of 80% of the current trading price with a minimum strike price
     of $1.00. The net effect of which was that the former Telco shareholders
     could require the Company to repurchase shares of stock of the Company at a
     minimum cost of $10,000,000. The agreement required the Company to attain
     certain market share levels.

     New management has renegotiated the "Puts", by which the "Puts" were
     retired and the Company provided a credit facility of up to $5,000,000 to
     the former Telco shareholders, collateralized by the stock held by the
     shareholders, with interest at least 0.25 points higher than the Company's
     average cost of borrowing. Additional covenants warrant that no more that
     $1,000,000 can be advanced at any point in time and no advances can be made
     in excess with out allowing at least 30 days operating capital plus reserve
     or if the company is in an uncured default with any of its lenders.

     Billing Service Agreements
     --------------------------

     The Company has entered into a customer billing service agreement with
     Integretel, Inc. (IGT). IGT provides billing and collection and related
     services associated to the telecommunications industry. The agreement term
     is for two years, automatically renewable in two-year increments unless
     appropriate notice to terminate is given by either party. The agreement
     will automatically renew on September 1, 2003, unless either party gives
     notice of termination 90 days prior to that renewal date. Under the
     agreement, IGT bills, collects and remits the proceeds to Telco net of
     reserves for bad debts, billing adjustments, telephone company fees and IGT
     fees. If either the Company's transaction volume decreases by 25% from the
     preceding month, less than 75% of the traffic is billable to major
     telephone companies, IGT may at its own discretion increase the reserves
     and holdbacks under this agreement. IGT handles all billing information and
     collection of receivables. The Company's cash receipts on trade accounts
     receivable are dependent upon estimates pertaining to holdbacks and other
     factors as determined by IGT. IGT may at its own discretion increase the
     reserves and holdbacks under this agreement.


                                       36
<PAGE>
     The Company has also entered into a customer billing service agreement with
     Enhanced Services Billing, Inc. (ESBI). ESBI provides billing and
     collection and related services associated to the telecommunications
     industry. The agreement term is for two years, automatically renewable in
     one-year increments unless appropriate notice to terminate is given by
     either party. The agreement automatically renews on December 3, 2001,
     unless either party gives notice of termination 91 days prior to that
     renewal date. Under the agreement, ESBI bills, collects and remits the
     proceeds to Telco net of reserves for bad debts, billing adjustments,
     telephone company fees and ESBI fees. If either the Company's transaction
     volume decreases by 25% from the preceding month, less than 75% of the
     traffic is billable to major telephone companies, ESBI may at its own
     discretion increase the reserves and holdbacks under this agreement.

     These agreements with the billing companies provide significant control to
     the billing companies over cash receipts and ultimate remittances to the
     Company. The Company estimates the net realizable value of its accounts
     receivable on historical experience and information provided by the billing
     companies reflecting holdbacks and reserves taken by the billing companies
     and LEC's.

     United States Federal Trade Commission (FTC)
     --------------------------------------------

     The Company was a subject of an FTC investigation pertaining to claims made
     of deceptive marketing practices. The Company has reached an agreement with
     the FTC requiring the Company to make certain changes to mailing and
     promotional materials and notify certain customers that a refund of past
     paid service fees is available. The settlement requires the Company to
     notify approximately 11,000 customers. Each of those customers may receive
     a refund of up to $12.50. At September 30, 2001, the Company accrued
     $45,413 which was all paid after September 30, 2001. Management does not
     believe that there will be any additional material refunds. The Company may
     also be required to pay certain expenses incurred in the FTC investigation.
     The Company intends to contest payment of these expenses but believes that
     if such is a requirement of any final settlement with the FTC, the amount
     could range from $50,000 to $70,000.

11.  NET INCOME PER SHARE

     Net loss per share is calculated using the weighted average number of
     shares of common stock outstanding during the year. Preferred stock
     dividends are subtracted from the net income to determine the amount
     available to common shareholders. There were no preferred stock dividends
     in the years ended September 30, 2001 and 2000. Warrants to purchase
     500,000 shares of common stock were excluded from the calculation for the
     year ended September 30, 2001. The exercise price of those warrants was
     greater than the trading value of the common stock and therefore inclusion
     of such would be anti-dilutive.


                                       37
<PAGE>
     Preferred stock convertible to 1,500,000 shares of common stock were not
     considered in the calculation for diluted earnings per share for the year
     ended September 30, 2000 because the ability to convert is contingent upon
     the Company attaining certain stock price and profitability goals. None of
     which was met at September 30, 2000. Also, warrants to purchase 350,000
     shares of common stock were not considered in the calculation for diluted
     earnings per share for the year ended September 30, 2000 because the
     exercise price of the warrants is greater than the average common stock
     price for the period, therefore the effect of their inclusion would be
     antidilutive. Also excluded from the calculation for the year ended
     September 30, 2000, were 890,334 shares of common stock that are in
     dispute.

     The following presents the computation of basic and diluted loss per share
     from continuing operations:

<TABLE>
<CAPTION>
              20012000
              --------
                                                                        Per
                                                 Income      Shares    Share     INCOME      Shares   Per share
                                               ----------                      ----------  ----------  ----------
<S>                                            <C>         <C>         <C>     <C>         <C>         <C>
Net  Income (Loss)                             $1,812,281                      $2,847,977
Preferred stock dividends
                                               ----------                      ----------
Income from continuing operations
                                                1,812,281                       2,847,977

BASIC EARNINGS PER SHARE:

Income Loss available to common stockholders
                                               $1,812,281  40,623,126  $ 0.07  $2,847,977  40,120,829  $     0.07
                                               ==========              ======  ==========              ==========

Effect of dilutive securities                  N/A                             N/A

DILUTED EARNINGS PER SHARE                     $1,812,281  40,623,126  $ 0.07  $2,847,977  40,120,829  $     0.07
                                               ==========              ======  ==========              ==========
</TABLE>


12.  RELATED PARTY TRANSACTIONS

     The Company from time to time advances and borrows funds from Board members
     and other related entities. At September 30, 2001, the Company was owed
     approximately $116,000 along with $6,190 in accrued interest and also owed
     $10,386 to such entities.

     The Company engaged an entity owned by the Chief Executive Officer for
     consulting services. The costs related to this engagement for the year
     ended September 30, 2001 were approximately $158,000. The Company's Chief
     Financial Officer also provided other professional services to the Company
     through an entity wholly owned by this officer. The costs related to these
     services for the year ended September 30, 2001 were approximately $67,000.

     The Board of Directors' fees for the year ended September 30, 2001 were
     approximately $45,000. The Company also compensated certain members of the
     Board of Directors for services other than routine duties of the Board.
     Fees paid to Board members for other services in the year ended September
     30, 2001 were approximately $147,000. Fees paid to Board members in the
     year ended September 30, 2000 were $150,000. The Company also granted
     550,000 shares of common stock to members of the Board of Directors as
     directors' fees in the year ended September 30, 2000.


                                       38
<PAGE>
     As part of the Company's original default settlement with the prior owners
     of the URL discussed in Note 4, the Company has provided certain equipment
     and improvements to an affiliated entity at no cost to that affiliated
     entity. The Company retains title and control of these assets. However, the
     assets are not being utilized by the Company. The net book value of the
     office equipment and leasehold improvements being utilized by the
     affiliated entity was approximately $136,000 at September 30, 2001. The
     Company is also providing office space to this entity for substantially
     below market rental rates. This entity is affiliated through commonality of
     certain management members.

     The Company has contracted the services of several related entities in its
     daily operations. The Company leases its employees from an entity in which
     certain officers have financial interests. The Company also has a contract
     with a related entity to provide dial-up services to the Company's
     customers. This affiliated entity's president is on the Company's Board of
     Directors. For the year ended September 30, 2001, the Company had recorded
     $10,000 in deposits due from this entity. Another affiliated entity
     provides customer service and technical support to the Company's customers,
     and this entity's president is also on the Company's Board of Directors.
     The Company has recorded revenues of $22,813 and costs of sales of $67,948
     related to the activities contracted for form this entity for the year
     ended September 30, 2001.


13.  CONCENTRATION OF CREDIT RISK

     The Company maintains cash balances at banks in Arizona. Accounts are
     insured by the Federal Deposit Insurance Corporation up to $100,000. At
     September 30, 2001, the Company had bank balances exceeding those insured
     limits of $580,000.

     Financial instruments that potentially subject the Company to
     concentrations of credit risk are primarily trade accounts receivable. The
     trade accounts receivable are due primarily from business customers over
     widespread geographical locations within the LEC billing areas across the
     United States. The Company historically has experienced significant
     dilution and customer credits due to billing difficulties and uncollectible
     trade accounts receivable. The Company estimates and provides an allowance
     for uncollectible accounts receivable. The handling and processing of cash
     receipts pertaining to trade accounts receivable is maintained by two third
     party billing companies. The Company is dependent upon those two billing
     companies for collection of its accounts receivable.


14.  STOCK BASED COMPENSATION

     From time to time, the Company issues stock options to executives, key
     employees and members of the Board of Directors. The Company has adopted
     the disclosure-only provisions of Statement of Financial Accounting
     Standards No. 123, "Accounting for Stock-Based Compensation," and continues
     to account for stock based compensation using the intrinsic value method
     prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
     Stock Issued to Employees". Accordingly, no compensation cost has been
     recognized for the stock options granted to employees. There were no
     options granted in the years ended September 30, 2001 and 2001 nor was
     there any additional vesting of options previously granted.


                                       39
<PAGE>
     Under the Employee Incentive Stock Option Plan approved by the stockholders
     in 1998, the total number of shares of common stock that may be granted is
     1,500,000. The plan provides that shares granted come from the
     Corporation's authorized but unissued common stock. The price of the
     options granted pursuant to this plan shall not be less than 100 percent of
     the fair market value of the shares on the date of grant. The options
     expire from five to ten years from date of grant. At September 30, 2001,
     the Company had granted an aggregate of 1,212,000 options under this plan.

     In addition to the Employee Incentive Stock Option Plan, the Company will
     occasionally grant options to consultants and members of the board of
     directors under specific stock option agreements. There were no such
     options granted in the years ended September 30, 2001 and 2000.

     The summary of activity for the Company's stock options is presented below:

<TABLE>
<CAPTION>
                                                                                                   Weighted
                                                                                                    Average
                                                                       2001              2000      Exercise
                                                                     ---------       ------------  ---------
                                                                                                     Price
                                                                                                   ---------
<S>                                                                  <C>        <C>  <C>           <C>

     Options outstanding at beginning of year                              -0-  N/A
                                                                                       1,107,000   $    1.34
     Granted                                                               -0-               -0-
     Exercised                                                             -0-  N/A      (53,611)  $    1.00
     Terminated/Expired                                                    -0-       ( 1,053,389)
     Options outstanding at end of year                                    -0-               -0-
     Options exercisable at end of year                                    -0-               -0-
     Options available for grant at end of year
                                                                     1,341,389         1,341,389


     Price per share of options outstanding                          N/A             N/A


     Weighted average remaining contractual lives
                                                                     N/A


     Weighted Average fair value of options granted during the year
                                                                     N/A
</TABLE>


     The Company has issued warrants in connection with certain debt and equity
     transactions. Warrants outstanding are summarized as follows:


                                       40
<PAGE>
<TABLE>
<CAPTION>
                                                  2001                    2000
                                                  ----                    ----
                                                      Weighted                Weighted
                                                       Average                 Average
                                                      Exercise                Exercise
                                                        Price                   Price
                                                      ---------               ---------
<S>                                        <C>        <C>        <C>          <C>
     Warrants outstanding at beginning of
     year                                   350,000   $    2.00   1,355,000   $    2.00
     Granted                                500,000   $    2.12         -0-
     Expired                               (350,000)  $    2.00  (1,005,000)  $    2.00
      Exercised                                 -0-                     -0-
                                           ---------  ---------  -----------  ---------
        Outstanding at September 30,        500,000   $    2.12     350,000   $    2.00
                                           =========  =========  ===========  =========
</TABLE>

     The warrants granted in the year ended September 30, 2001 were issued in
     connection with the settlement with the former URL holder (NOTE 4). The
     exercise prices of the warrants range from $1.00 to $3.00. The fair value
     of each warrant grant is estimated on the date of grant using the
     Black-Scholes option-pricing model with the following assumptions for year
     ended September 30, 2001:

          Dividend yield           None
          Volatility                   0.491
          Risk free interest rate       4.18%
          Expected asset life      2.5 years


     The 500,000 warrants outstanding at September 30, 2001, expire in September
     2006.


15.  EMPLOYEE BENEFIT PLAN

     The Company maintains a 401(k) profit sharing plan for its employees.
     Employees are eligible to participate in the plan upon reaching age 21 and
     completion of three months of service. The Company made no contributions to
     the plan for the years ended September 30, 2001 and 2000.


                                *  *  *  *  *  *


                                       41
<PAGE>
ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURES

     On March 14, 2000, we reported that we replaced McGladry and Pullen LLP as
our principal certified public accountants.  McGladry and Pullen LLP had been
engaged as the independent auditors, but had not issued any audited reports.

     On March 30, 2000, we appointed King, Weber & Associates, P.C., as our
independent auditors to conduct the audit of our September 30, 2000 fiscal year
financial statements.  On December 31, 2000 King, Weber & Associates, P.C.
changed its corporate name to Marshall & Weber, CPA's, PLC and subsequently
changed its corporate name to Weber and Company P.C.

                                    PART III

ITEM 9.      DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Directors and Executive Officers

     The following biographical information is provided for each of the
Company's Directors and Executive Officers:

     Angelo Tullo has served as our Chairman of the Board since February 2000.
Mr. Tullo was hired as Chief Executive Officer and President on September 10,
2000.  Mr. Tullo is the president of Sunbelt Financial Solutions, Inc., an
investment banking and consultant firm in Scottsdale, Arizona.  For over 20
years, Mr. Tullo has been active as a business consultant.  Mr. Tullo has
actively worked with commercial financing and factoring for the past ten years.
He has owned and operated factoring companies, leasing companies, consulting
companies, wholesale companies, professional employment organizations, insurance
agencies, heating and air-conditioning contractors, retail oil companies, real
estate companies and restaurants.  He is a former member of the CEO Club in New
York and is a currently a member of the Republican Presidential Roundtable.

     In February 2000, American Business Funding Corp. filed for protection
under Chapter 11 of the Bankruptcy Code in the Federal District Court of
Arizona.  Mr. Tullo had previously been a director, officer and shareholder of
American Business Funding prior to the time of its bankruptcy filing.  Mr. Tullo
and his former fellow shareholders have been involved in intense litigation
regarding certain activities of one of the directors and a group of individuals
that worked directly for a director.

     Walter Vogel.  Mr. Vogel has been a director since February 2000 and was
previously a member of our board from March to October 1998.  Mr. Vogel has been
involved extensively in international business for many years.  From 1996 to
present, Mr. Vogel has been the owner and president of MC Management GmbH, a
business-consulting firm in Ottenfing, Germany.  Mr. Vogel has served as a
director of several companies both in the United States and Europe.


                                       42
<PAGE>
     Gregory B. Crane.  Mr. Crane has been a director of the Company since
February, 2000 and also served as our Director of Operations from February 2000
to September 2000.  From September 1998 to June 1999, Mr. Crane was the General
Manager of Telco Billing, Inc. ("Telco").  Mr. Crane owned and operated several
businesses, including residential and commercial builders, multi-state mail
order, and document-preparation companies, and was also the creator of the
Yellow-Page.Net concept.  Mr. Crane is a former member of the Young
---------------
Entrepreneur's Organization ("YEO").

     In connection with providing homestead declaration document preparation and
filing services to the public, Mr. Crane and certain of his associated
businesses have been subject to injunctive actions brought by the states of
Arizona, Florida, Texas and Washington.  These actions generally raised legal
questions concerning mailer solicitations for document preparation services.
Mr. Crane and various of the state plaintiffs have entered into consent orders
in connection with these actions that required the modification of mailers and
the payment of civil penalties, restitution, and attorneys' fees.  The use of
the mail solicitation for document preparation services was prohibited in the
State of Washington.  Mr. Crane voluntarily entered into an agreement with the
State of Florida in connection with these matters and, due to an error in type
size made by printer, which was a technical violation of that order, a judgment
was placed based on that agreement.  In connection with that violation of the
Florida order, Mr. Crane is subject to a judgment in the amount of approximately
$1.4 million, plus accrued interest.  Mr. Crane is attempting to resolve this
Florida judgment.

     Mr. Crane was also named in the action filed by the Federal Trade
Commission ("FTC") against us and has been included in the stipulated
preliminary order entered into by the FTC and us and approved by the FTC.  The
Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable
Relief by and between the FTC, Mr. Crane, Telco, us and others (the "Order")
places certain restrictions on the way mail solicitations will appear.  The
Order has been approved by the U.S. District Court Judge and the matter is
closed with no findings of wrong doing on the part of the company, its officers
and directors or Mr. Crane.

     Daniel L. Coury.  Mr. Coury has served as a director of the Company since
February 2000.  For the last ten years, Mr. Coury's principal business has been
Mesa Cold Storage, Inc. that owns and operates the largest cold storage
facilities in Arizona.  He is also involved in the ownership and operation of
various real estate interests and business ventures.

     Harold Roberts.  Mr. Roberts has served as a director of the Company since
February, 2000 and previously served as a director of its predecessor from 1994
to 1998.  Mr. Roberts has practiced law in Santa Fe, New Mexico since 1955 and
since 1975 has engaged primarily in matters regulated by various regulatory
agencies, including the Securities and Exchange Commission.  He has served as a
director and president of SunRay Oil Company, a company engaged in drilling,
exploration and distribution, from 1996 to present, as a director and officer of
Candu, Inc., a company engaged in electronic marketing, from 1985 to the
present, and as a director and president of Verilite Aircraft Corporation, a
company engaged in aircraft development, from 1994 to the present.  Mr. Roberts
is a graduate of the University of Colorado Law School.


                                       43
<PAGE>
     DeVal Johnson.  Mr. Johnson has served as a director since October 1999.
Mr. Johnson was the graphics designer and director of Telco from September 1998
until June 1999, when the Company acquired it.  Mr. Johnson was responsible for
the design of the in-house sales presentation and creation of the corporate logo
and image for YP.Net.  From 1995 through 1998, Mr. Johnson was a graphics
designer for Print Pro, Inc. Mr. Johnson is actively involved with Website
promotion, interactive design and Internet advertising.  Mr. Johnson also serves
as an officer and board member of Simple.Net a national Internet service
provider.

     Pamela J Thompson.  Mrs. Thompson was hired to serve as Chief Financial
Officer, Secretary and Treasurer of the Company on January 15, 2001.  Mrs.
Thompson holds a Bachelor of Science from Moorhead State University in
Accountancy and holds her licenses as a Certified Public Accountant in the State
of Arizona.  She is a member of the Arizona Society of Certified Public
Accountants, American Institute of Certified Public Accountants, and Arizona
Women's Society of Certified Public Accountants and is the founder and principle
Executive Officer of The Thompson Group, CPA's.  She is also a member of Behind
the Bench: National Basketball Wives Association exclusive of wives of NBA
players.

Prior to joining the Company, Mrs. Thompson practiced public accounting for the
international firm of Arthur Andersen and Pannell Kerr Forester, and one of the
larger regional firms Eide, Bailey and Company.  She has had over 18 years of
experience in tax, accounting, and SEC compliance for publicly traded companies.
Ms. Thompson has been featured in Arizona Women's Success Magazine, National
Basketball Players Association Magazine, and Behind the Bench: National
Basketball Wives Association Magazine.


SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     Based solely on review of reports under Section 16(a) of the Securities
Exchange Act of 1934, as amended, that were filed by executive officers and
directors and beneficial owners of 10% or more of our common stock during the
fiscal year ended September 2000, to the best of the Company's knowledge, all
16(a) filing requirements have been made through the fiscal year ended September
30, 2000, and September 30, 2001.  This information is based on a review of
Section 16(a) reports furnished to us and other information.


                                       44
<PAGE>
ITEM 10.     EXECUTIVE COMPENSATION

DIRECTORS  AND  EXECUTIVE  OFFICERS

     The  directors  and  executive officers of YP.Net, their ages and positions
are  as  follows:

<TABLE>
<CAPTION>
NAME                     AGE                             POSITIONS HELD(1)
-----------------------  ---  -----------------------------------------------------------------------
<S>                      <C>  <C>
Angelo Tullo              45  Chairman of the Board, Director, Chief Executive Officer and President
Walter Vogel              61  Director, Vice Chairman of
        the Board
Gregory B. Crane          37  Director
Daniel L. Coury, Sr.      47  Director
Harold A. Roberts         75  Director
DeVal Johnson             36  Director
Donald Reese              38  Director of Operations
Pamela J. Thompson, CPA   38  Chief Financial Officer, Treasurer,
          Secretary
<FN>
(1)  All  current  directors  serve  until  the  next  annual  shareholders  meeting or their earlier
resignation  or  removal.
</TABLE>

OFFICER  COMPENSATION

     The following table reflects all forms of compensation for the fiscal years
ended  September  30,  2001,  and  September  30,  2000, for the Chief Executive
Officer  and the other two most highly compensated executive officers of YP.Net,
Inc.,  whose  salaries  exceed  $100,000  annually,  for  the  years  stated.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                   Annual Compensation
----------------------------  ---------------------------------
                              FISCAL              OTHER ANNUAL
NAME AND PRINCIPAL POSITION    YEAR    SALARY     COMPENSATION
----------------------------  ------  ---------  --------------
<S>                           <C>     <C>        <C>
Angelo Tullo (1)                2001  $ 210,000  $   44,000 (1)
Chairman, Chief Executive       2000             $   21,000 (2)
Officer,
President
----------------------------  ------  ---------  --------------
Daniel Madero                   2001  $ 100,000  $   16,500 (3)
Director of Operations          2000  Resigned
----------------------------  ------  ---------  --------------
Pamela Thompson                 2001  $ 125,000  $    4,500 (4)
Chief Financial Officer,
Secretary,
Treasurer
----------------------------  ------  ---------  --------------
Donald Reese                    2001  $ 120,000
Director of Operations
----------------------------  ------  ---------  --------------
<FN>
(1)     Includes a bonus of 200,000 shares of YP.Net stock valued at $.22 per
share.
(2)     Includes 100,000 shares of YP.Net stock valued at $.21 per share.
(3)     Includes 75,000 shares of YP.Net stock valued at $.22 per share.
(4)     Includes 50,000 shares of YP.Net stock valued at $.09 per share.
</TABLE>


                                       45
<PAGE>
COMPENSATION  PURSUANT  TO  STOCK  OPTIONS

     No stock options were granted to executive officers during the fiscal years
ended  September  30,  2000,  and  September  30,  2001.

DIRECTOR  COMPENSATION
     Upon appointment to the Board, Mr. Tullo was awarded 100,000 shares of our
common stock and Mr. Vogel was awarded 75,000 shares.  All other directors were
awarded 50,000 shares.  The shares awarded were earned monthly for director
services performed.  The 425,000 shares of common stock paid to the directors as
compensation for their services were valued at $.22 per share for a total value
of $93,500 and the value is considered based upon the average bid and ask price
as of date of issuance by the Board of Directors and is in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act.
Additionally, the directors receive $2,000 per meeting or per quarter for their
service on the Board and may receive $250 per hour for services related to any
Board Committee on which they serve.

1998 Stock Option Plan

     In June 1998, our Board of Directors adopted, and our shareholders
approved, the 1998 Stock Option Plan (the "Plan").  The purpose of the Plan was
to provide incentives to employees, directors and service providers to promote
our success.  The Plan provides for the grant of both qualified and
non-qualified options to purchase up to 1,500,000 shares of our common stock at
prices determined by the Board of Directors, but in the case of incentive
options, at a price not less than the fair market value of the stock on the date
of the grant.  The Plan is administered by the Board of Directors or by a
committee appointed by the Board.  As of September 31, 2001, all outstanding
options to purchase our stock have expired and there are no options currently
outstanding under the Plan.


                                       46
<PAGE>
ITEM 11.     SECURITY OWNERSHIP OF OWNERS AND MANAGEMENT

     The following table sets forth, as of December 15, 2001, the ownership of
each person known by us to be the beneficial owner of five percent or more of
our common stock, each officer and director individually, and all officers and
directors as a group.  We have been advised that each person has sole voting and
investment power over the shares listed below unless otherwise indicated.

<TABLE>
<CAPTION>
     NAME AND ADDRESS                      AMOUNT AND NATURE    PERCENT
     OF BENEFICIAL OWNER                     OF OWNERSHIP     OF CLASS(1)
     ------------------------------------  -----------------  -----------

<S>                                        <C>                <C>
     Angelo Tullo                                    300,000           *
     4840 East Jasmine Street
     Suite 105
     Mesa, AZ  85205

     Walter Vogel                                    195,000           *
     4840 East Jasmine Street
     Suite 105
     Mesa, AZ  85205

     Gregory B. Crane                                 75,500           *
     4840 East Jasmine Street
     Suite 105
     Mesa, AZ  85205

     Daniel L. Coury, Sr.                            180,000           *
     4840 East Jasmine Street
     Suite 105
     Mesa, AZ  85205

     Harold A. Roberts                               258,000           *
     P.O. Box 101
     Santa Fe, NM 87504

     Wallace Olsen, Jr.                              547,500        1.34%
     4840 East Jasmine Street
     Suite 105
     Mesa, AZ  85205

     DeVal Johnson                                   125,000           *
     4840 East Jasmine Street
     Suite 105
     Mesa, AZ  85205


                                       47
<PAGE>
     NAME AND ADDRESS                      AMOUNT AND NATURE    PERCENT
     OF BENEFICIAL OWNER                     OF OWNERSHIP     OF CLASS(1)
     ------------------------------------  -----------------  -----------

     Matthew & Markson Ltd. (3)                   11,600,000          27%
     Woods Centre, Frair's Road
     P.O. Box 1407
     St. John's
     Antigua, West Indies

     Morris & Miller Ltd.                          9,325,000          23%
     Woods Centre, Frair's Road
     P.O. Box 1407
     St. John's
     Antigua, West Indies

     All Directors as a Group (7 persons)          1,133,500           3%

*  Represents less than one percent (1%) of our issued and outstanding common
stock.

(1)  Based on 43,813,680 shares outstanding as of December 15, 2001.  This
amount excludes 4,500,000 shares issued and held as collateral for obligations
of YP.Net under two promissory notes.  Upon payment of the notes, the shares
will be returned to YP.Net for cancellation.
 (2) The number of shares held by Matthew & Markson, Ltd. excludes 2,000,000
shares issued as collateral for a note payable issued by YP.Net.  These shares
will be returned to YP.Net and cancelled upon payment of the note.
</TABLE>


ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Note Conversion.  We borrowed $500,000 from Mr. Wallace Olsen, a
shareholder who later became a member of the Board of Directors effective
February 4, 2000.  In September 1999, we repaid $250,000 of the balance in cash
and Mr. Wallace Olsen converted the remaining $250,000, plus $100,000 in accrued
interest. This notes was exchanged into 400,000 shares of our common stock with
a total value of $200,000; the stock was issued at a price of 50 cents per
share.

     Acquisition of Telco.  In June 1999, the Company's predecessor acquired all
of the outstanding stock of Telco in exchange for 17,000,000 shares of our
common stock.  Matthew & Markson, Ltd. and Morrison & Miller, Ltd., as the
shareholders of Telco, were issued 7,650,000 and 9,350,000 shares, respectively.
As to these shares, the original acquisition agreement provided for certain Put
rights that were later terminated.  In exchange for cancellation of the Put
rights, we agreed to provide the former Telco shareholders with a $10,000,000
credit facility. Loans made to these shareholders under this facility are to be
secured by a pledge of our stock.  Interest for borrowings under this facility
is to be at least 0.25% higher than our average borrowing costs.  No advances in
excess of $1,000,000 may be made at any one time and no advances in excess of
$1,000,000 are to be made unless we have available at least 30 days operating
capital plus other reserves.  No advances are permitted to be made if we are in
default with respect to any of our lender obligations.  The credit facility has
not been formally documented and no advances have been made or are expected
until documentation is completed.


                                       48
<PAGE>
     Gregory B. Crane and DeVal Johnson were employees of and primarily involved
in the start-up of Telco.  Mr. Crane continues to serve as a liaison for Matthew
& Markson, Ltd. and Morrison & Miller, Ltd. and negotiated the acquisition of
Telco by the Company's predecessor entity on behalf of the former Telco
shareholders.

     License of URL.  In connection with the acquisition of Telco, the Company's
predecessor entity also agreed to pay Matthew & Markson, Ltd. $5,000,000 as a
discounted accelerated royalty payment for a 20-year license of the URL
Yellow-Page. Net.  The royalty was made under the terms of an Exclusive
        --------
Licensing Agreement dated September 21, 1998, between Telco and Matthew &
Markson, Ltd.  The payment was originally to be paid in full upon the
acquisition of Telco.  The Company paid $3,000,000 as a down payment; however,
the Company defaulted on payment of the $2,000,000 balance on August 15, 1999.
To extend the payment obligations, we agreed to provide, for the benefit of
Mathew & Markson, $250,000 in tenant improvements for approximately one-half of
our Mesa facility.  The premises were leased to Matthew & Markson's designee for
$1.00 per year throughout the term of the 5-year lease.  The annual fair rental
value of the lease premises is $4,500 per month.  A one million dollar
($1,000,000.00) extension fee may also be due if exercised.  On November 15,
1999, we paid an extension fee of $200,000.  The $200,000 extension fee was
applied against the $5,000,000 accelerated royalty payment and an additional
$2,000,000 was paid on the royalty payment in July 1999.  Matthew & Markson,
Ltd. also agreed to take a $2,000,000 note for the balance due that remains due
and outstanding.

     After we defaulted on the November 1999 extension agreement, on January 15,
2000,  the  note  was renegotiated to a demand note with monthly installments of
$100,000  per  month.  The  payments  may be suspended if we do not have certain
cash  reserves or are otherwise in default under other obligations.  The note is
secured  by  2,000,000 shares of our common stock held in escrow, to be returned
for  cancellation  upon  payment  of  the  note.

On September 25, 2001, we agreed in settlement of the company's breach and
noncompliance with the original acquisition agreement and extension agreement
with Telco dated June 16, 1999 to pay Matthew Markson, Ltd., $550,000 and issued
4,000,000 shares of our common stock at $0.09, and the value is considered based
upon the average bid and ask price as of September 25, 2001 and is in reliance
on the exemption from registration provided by Section 4(2) of the Securities
Act.

     The $550,000 will be paid over a thirty-six month term at a 10.5% annual
interest rate.  Matthew Markson Ltd. has agreed and waived any future payments
for the original default of the and extension fee for the acquisition of Telco.
Matthew Markson Ltd will continue its security interest in the company and
collateral shares held by Matthew Markson. Ltd.


                                       49
<PAGE>
     Business  Executive Services, Inc. ("BESI"), as the nominal rent sublessee,
leases  portions  of our Mesa facility to other businesses associated with other
third  parties.  Mr.  Crane  is  employed  by  BESI  and  receives  a  salary of
approximately  $2,000 per month from BESI and bonuses in an undetermined amount.

     We have entered into a joint venture with Simple. Net, Inc., an Internet
service provider ("Simple") where we manage certain Simple operations for a fee.
Such operations include customer service, technology and billing.  The Thompson
Group P.C.  also performs accounting services for Simple.  Matthew & Markson,
Ltd. is Simple's primary investor.

     Related  Party  Transaction  Policy.  The Company's general policy requires
adherence to Nevada corporate law regarding transactions between the Company and
a director, officer or affiliate of the corporation.  Transactions in which such
persons  have  a  financial interest are not void or voidable if the interest is
disclosed  and  approved  by  disinterested  directors or shareholders or if the
transaction  is  otherwise  fair  to  the  corporation.  It  is  our policy that
transactions with related parties are conducted on terms no less favorable to us
than  if they were conducted with unaffiliated third parties. During fiscal year
ended September 30, 2000, through September 31, 2001, there have been no related
party  transactions.


ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>

EXHIBITS
<C>                  <S>

            3.1 (1)  Certificate of Restated Articles of Incorporation of Renaissance
                     International, Inc.

            3.2 (4)  Amended Articles - To change the name to YP.Net, Inc., and
                     Authorized Capital Increase to 50,000,000 Form 8-K 7/6/98

            3.3 (4)  Amended Articles - Name Change to YP.Net

            3.4 (4)  Certificate of Designation - Series B preferred shares

            3.5 (1)  Bylaws of Renaissance International Group, Ltd.

            3.5 (4)  Amended Bylaws

           10.1 (2)  1998 Stock Option Plan

          10.18 (5)  Agreement dated November 1, 2000 between Intelligenx, Inc. d/b/a
                     i411.com and YP.Net


                                       50
<PAGE>
          10.19 (5)  Forbearance Letter Agreement dated February 8, 2001 between Telco and
                     Finova Capital Corporation

          10.20 (7)  Federal Trade Commission Settlement Agreement

          10.21 (7)  Hudson Consulting Group, Inc. Settlement Agreement

          10.22 (6)  S.G. Martin Securities LLC agreement with investment banker

            10.23*   OAN contract with billing integrator

            10.24*   Level 3, Inc. contract for ISP dial-up services

                11   Statement Regarding Computation of Per Share Earnings: incorporated in Item
                     7 of the Audited Financial Statements for period ending September 30, 2000 and
                     September 30, 2001

                21   Subsidiaries of YP.Net, Inc.: Telco Billing, Inc.
<FN>
1     Incorporated by reference from Form 10-QSB as filed May 6, 1998.
2     Incorporated by reference from Form S-8 as filed July 10, 1998.
3     Incorporated by reference from Form 10-QSB for the quarter ended June 30, 2000.
4     Incorporated by reference from Form 10-QSB for the fiscal year ended September 30, 2000.
5     Incorporated by reference from Form 10-QSB for the quarter ended December 31, 2000
6     Incorporated by reference from Form 10-QSB for the quarter ended March 31, 2001
7     Incorporated by reference from Form 10-QSB for the quarter ended June 30, 2001
*     Filed herewith.
</TABLE>

REPORTS ON FORM 8-K

     One report on Form 8-K was filed in the fiscal quarter ended September 30,
2001.  A Form 8-K filed on September 20, 2001 disclosed the resignation of
Wallace Olsen from being a member of the Board of Directors.

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   YP.NET, INC.


Dated: December 29, 2001           By  /s/  Angelo Tullo
                                     --------------------------------------
                                        Angelo Tullo, Chairman of the Board


                                   BOARD OF DIRECTORS


Dated: December 29, 2001           By  /s/  Angelo Tullo
                                     --------------------------------------
                                        Angelo Tullo


                                       51
<PAGE>
Dated: December 29, 2001           By  /s/  Walter Vogel
                                     --------------------------------------
                                        Walter Vogel


Dated: December 29, 2001           By  /s/  Gregory B. Crane
                                     --------------------------------------
                                        Gregory B. Crane


Dated: December 29, 2001           By  /s/  Daniel L. Coury, Sr.
                                     --------------------------------------
                                        Daniel L. Coury, Sr.


Dated: December 29, 2001           By  /s/  Harold A. Roberts
                                     --------------------------------------
                                        Harold A. Roberts


Dated: December 29, 2001           By  /s/  DeVal Johnson
                                     --------------------------------------
                                        DeVal Johnson


                                       52
<PAGE>