U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB



               Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


      For the Quarter Ended September 30, 2000 Commission File No. 0-31319


                               PRICE NET USA, INC.
                               -------------------
             (Exact name of Registrant as specified in its charter)


            NEVADA                                             33-0775716
            ------                                             ----------
(State or other jurisdiction of                       (I.R.S. Employer I.D. No.)
Incorporation or organization)

                    2575 McCabe Way, Irvine California 92614
                    ----------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


                                 (949) 225-6200
                                 --------------
              (Registrant's Telephone Number, including Area Code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
at least the past 90 days.

                                 Yes [X] No [ ]


The number of shares outstanding of each of the Registrant's classes of common
equity, as of November 30, 2000 is as follows:


    Class of Securities                                   Shares Outstanding
    -------------------                                   ------------------
Common Stock, $.001 par value                                 15,771,366

<PAGE>


                                TABLE OF CONTENTS

                                                                         Page of
                                                                         Report
                                                                         ------


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.                                              3

Consolidated Balance Sheet,
as of September 30, 2000 and December 31, 1999 (Unaudited)                 3

Consolidated Statement of Operations,
for the Three Months and Nine Months ended
September 30, 2000 and 1999 (Unaudited)                                    4

Statement of Stockholder's Equity,
For the period from October 7, 1997 to September 30, 2000 (Unaudited)      5

Statement of Cash Flow,
For the Nine Months ended September 30, 2000 and 1999 (Unaudited)          6

Notes to Financial Statements (Unaudited)                                7 - 17


Item 2. Management's Discussion and Analysis or Plan of Operation.        18


PART II. OTHER INFORMATION                                                21

Item 1. Legal Proceedings.                                                21

Item 2. Changes in Securities.                                            21

Item 3. Defaults Upon Senior Securities.                                  21

Item 4. Submission of Matters to a Vote of Security Holders.              21

Item 5. Other Information.                                                21

Item 6. Exhibits and Reports on Form 8-K.                                 21



Signatures                                                                21


                                       2
<PAGE>

PART I. FINANCIAL INFORMATION

                               Price Net USA, Inc.
                           Consolidated Balance Sheet
                 as of September 30, 2000 and December 31, 1999


                                                       9/30/00        12/31/99
                                                     -----------    -----------
                                     Assets
                                     ------
Cash                                                      18,323        938,272
Receivables                                              204,229        334,498
Inventory                                                134,100        572,925
                                                     -----------    -----------
 Total Current Assets                                    356,652      1,845,695
                                                     -----------    -----------

Equipment and Furniture, net of depreciation             957,148        991,361

Investment                                                95,249         13,500
NCN Customer Base                                      2,153,140      2,954,834
International Rights                                     417,500           --
MNS Eagle Purchase                                       206,250           --
Deposits                                                    --           66,179
                                                     -----------    -----------

 Total Assets                                          4,185,939      5,871,569
                                                     ===========    ===========

                                  Liabilities
                                  -----------

Bank Overdraft                                              --             --
Accounts Payable                                         673,628         72,972
Other Current Liabilities                              1,674,938        864,072
Notes Payable and Contingent Liabilities                 759,974        322,039
                                                     -----------    -----------

 Total Current Liabilities                             3,108,540      1,259,083
                                                     -----------    -----------


                              Stockholders' Equity
                              --------------------

Preferred Stock, 25,000,000 shares authorized
 none outstanding, par value $0.001

Common Stock, 50,000,000 shares authorized
 15,771,366 shares outstanding at 9/30/00
 and 12,147,234 shares outstanding 12/31/99
 par value $0.001                                         15,771         12,147

Paid in Capital                                       18,230,717     15,924,962

Stock Subscribed                                        (330,000)      (630,040)

Retained Earnings (Loss)                             (16,839,090)   (10,694,583)
                                                     -----------    -----------

 Total Stockholders' Equity                            1,077,399      4,612,486
                                                     -----------    -----------

 Total Liabilities and Stockholders' Equity            4,185,939      5,871,569
                                                     ===========    ===========


        The accompanying notes are an integral part of these statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>

                                         Price Net USA, Inc.
                                Consolidated Statement of Operations
            for the comparative three and nine months ended September 30, 2000 and 1999



                                                 Three Months Ended                Nine Months Ended
                                              9/30/00          9/30/99         9/30/00         9/30/99
                                            ------------    ------------    ------------    ------------
Revenue
<S>                                         <C>             <C>             <C>             <C>
 Mall, Service and Product Sales            $     43,703    $  2,810,203    $  3,289,661    $  4,582,382
 Telephone Service Revenue                       132,333
 Other Income                                       --            13,586            --            13,586
                                            ------------    ------------    ------------    ------------

 Total Revenue                                   176,036       2,823,789       3,289,661       4,595,968
                                            ------------    ------------    ------------    ------------

Costs of Sales
 Costs of Goods Sold                             291,420         156,896         408,464         525,452
 Commissions                                      58,464       2,592,847       2,538,930       4,598,577
                                            ------------    ------------    ------------    ------------

 Total Costs of Sales                            349,884       2,749,743       2,947,394       5,124,029
                                            ------------    ------------    ------------    ------------

Gross Profit (Loss)                             (173,848)         74,046         342,267        (528,061)
                                            ------------    ------------    ------------    ------------

Expenses
 Payroll                                         305,036         401,346       1,292,238       4,174,466
 Professional Fees                               202,390         110,099       1,482,751         227,213
 Rent                                            259,934         186,617         683,023         404,361
 Advertising and Promotion                         2,867          87,576          97,050         313,930
 Amortization                                    327,814            --           903,944            --
 Depreciation                                     46,311          49,637         150,543          49,637
 Interest Expense                                  7,625          11,516          12,883          40,488
 Bad Debt                                         50,000           1,223          83,601           1,223
 Inventory Writedown                                --              --           438,825            --
 Other Administrative Expenses                   513,345         455,599       1,341,915         775,369
                                            ------------    ------------    ------------    ------------

 Total Expenses                                1,715,322       1,303,612       6,486,773       5,986,687
                                            ------------    ------------    ------------    ------------

Income Before Income Taxes                    (1,889,170)     (1,229,567)     (6,144,506)     (6,514,748)

Provision for Income Taxes                          --              --              --              --
                                            ------------    ------------    ------------    ------------

Net Income (Loss)                           $ (1,889,170)   $ (1,229,567)   $ (6,144,506)   $ (6,514,748)
                                            ============    ============    ============    ============

Basic Earnings per Share                    $      (0.12)   $      (0.17)   $      (0.44)   $      (0.94)
                                            ------------    ------------    ------------    ------------

Basic Weighted Average Number of Shares       15,577,366       7,100,500      13,850,366       6,933,044

Diluted Earnings per Share                  $      (0.12)   $      (0.17)   $      (0.36)   $      (0.91)
                                            ------------    ------------    ------------    ------------

Diluted Weighted Average Number of Shares     16,149,366       7,145,894      17,149,133       7,145,894


                  The accompanying notes are an integral part of these statements.

                                                  4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                        Price Net USA, Inc.
                                                 Statement of Stockholder's Equity
                                  for the period from October 7, 1997 through September 30, 2000


                                                Common Stock             Paid in          Stock          Retained         Total
                                            Shares         Amount        Capital        Subscribed       Earnings         Equity
                                         ------------   ------------   ------------    ------------    ------------    ------------

<S>                                      <C>            <C>            <C>             <C>             <C>             <C>
Capitalization                              2,250,010   $      2,250   $     22,750            --              --      $     25,000

Retained Earnings (Loss)                         --             --             --              --      $   (201,737)   $   (201,737)
                                         ------------   ------------   ------------    ------------    ------------    ------------

Balance, December 31, 1997                  2,250,010   $      2,250   $     22,750    $       --          (201,737)   $   (176,737)

Common Stock Issuances for 1998

Merger Price Net and Gold Star              1,100,000   $      1,100   $     (6,550)           --              --      $     (5,450)

Stock Sales 504 Offering                    1,205,349   $      1,205   $    998,484            --              --      $    999,689

Stock for Independent Rep Commissions          25,000   $         25   $     29,975            --              --      $     30,000

Retained Earnings (Loss)                         --             --             --              --      $ (1,320,920)   $ (1,320,920)
                                         ------------   ------------   ------------    ------------    ------------    ------------

Balance,December 31, 1998                   4,580,359   $      4,580   $  1,044,659    $       --      $ (1,522,657)   $   (473,418)

Common Stock Issuances for 1999

Stock Sale, Private Offering $2/share       2,960,229   $      2,960   $  5,917,498            --              --      $  5,920,458
Stock Sale, Private Offering                    5,000   $          5          2,495            --              --      $      2,500
Stock for Independent Rep Commissions         753,000   $        753   $  1,505,247            --              --      $  1,506,000
Stock for Employee Bonuses                    671,000   $        671   $  1,341,329            --              --      $  1,342,000
Stock for Consulting/Services                 960,966   $        961   $  1,920,971            --              --      $  1,921,932
Stock for Advertising                          11,500   $         12         22,988            --              --      $     23,000
Stock for Debt                                300,000   $        300   $    149,700            --              --      $    150,000
Stock for Inventory                           500,000   $        500   $    393,500            --              --      $    394,000
Stock for NCN Purchase                      1,090,160   $      1,090   $  2,996,850            --              --      $  2,997,940
Stock Subscribed                              315,020   $        315   $    629,725    $   (630,040)           --      $       --


Retained Earnings (Loss)                         --             --             --              --      $ (9,171,926)   $ (9,171,926)
                                         ------------   ------------   ------------    ------------    ------------    ------------

Balance, December 31, 1999                 12,147,234   $     12,147   $ 15,924,962    $   (630,040)   $(10,694,583)   $  4,612,486
                                         ============   ============   ============    ============    ============    ============

Common Stock Issuances for 2000

Stock for Purchase of MNS Eagle               500,000            500        124,500            --              --           125,000
Stock for International Rights              1,000,000          1,000        499,000            --              --           500,000
Stock Options Excersized                      282,500            282        231,013            --              --           231,295
Stock for Services                            827,632            828        794,921            --              --           795,749
Stock Subscribed Cancelled                       --             --             --           300,040            --           300,040
Stock Options Excersized                      500,000            500        304,500            --              --           305,000
Stock Issued for Services                     464,000            464        329,371            --              --           329,835
Stock Issued for Interest on Loans             50,000             50         22,450            --              --            22,500
Retained Earnings (Loss)                         --             --             --              --        (6,144,506)     (6,144,506)
                                         ------------   ------------   ------------    ------------    ------------    ------------

Balance, September 30, 2000                15,771,366   $     15,771   $ 18,230,717    $   (330,000)   $(16,839,089)   $  1,077,399
                                         ============   ============   ============    ============    ============    ============


                                 The accompanying notes are an integral part of these statements.

                                                                 5
</TABLE>
<PAGE>


                               Price Net USA, Inc.
                             Statement of Cash Flow
              for the nine months ended September 30, 2000 and 1999


                                                   Nine Months       Nine Months
                                                      Ended             Ended
                                                     9/30/00           9/30/99
                                                   -----------      -----------
Cash from Operations

Net Loss                                           $(6,144,506)     $(6,514,748)

Expenses paid for with stock                         1,194,208             --
Net Change in Receivables                              130,269          (58,192)
Net Change in Inventory                                438,825         (297,470)
Depreciation                                           150,543           49,637
Amortization                                           903,944             --
Payables and Bank Overdraft                          1,411,832          420,551
Prepaids                                                  --               --
Deposits                                                  --            (14,828)
                                                   -----------      -----------

 Total Cash from Operations                        $(1,914,885)     $(6,415,050)
                                                   -----------      -----------

Cash Used in Investments
 Purchase of Stock held as Investment                     --            (13,500)
 Purchase of MNS Eagle                                (100,000)            --
 Purchase of Fixed Assets                                 --           (795,857)
                                                   -----------      -----------

 Total Cash Used for Investments                      (100,000)        (809,357)
                                                   -----------      -----------

Cash from Financing
 Notes Payable                                         437,935         (297,735)
 Sales of Stock                                        657,000        8,146,330
                                                   -----------      -----------

 Total Cash from Financing                         $ 1,094,935      $ 7,848,595
                                                   -----------      -----------

Net Change in Cash                                 $  (919,950)     $   624,188

Beginning Balance                                  $   938,273      $      --
                                                   -----------      -----------

Ending Balance                                     $    18,323      $   624,188
                                                   ===========      ===========


          See Notes to Financial Statements for a detailed explanation
                          of the non-cash transactions.

                                        6
<PAGE>

NOTES TO FINANCIAL STATEMENTS


NOTE 1. GENERAL BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Results for the three months and nine months
ended September 30,2000 are not necessarily indicative of the results that may
be expected for the fiscal year ended December 31, 2000.

Organization and General Business

Price Net U.S.A., Inc., (the Company) was originally organized in Nevada as Gold
Star Gaming, Inc. on May 31, 1994. The Company was founded in order to market
and operate an Internet based infrastructure that supports a home-based
business. Please refer to Note 2 below regarding the reverse acquisition, which
took place on March 11, 1998.

Internet Shopping Mall Concept

The Company markets an extensive line of products and services on the Internet.
Customers have the service, convenience and advantage of using the Internet from
their home or office to make purchases.

Marketing through Networking

The Company markets their products and services to retail consumers as well as
business to business. Price Net uses a network-marketing program of independent
representatives and mall operators to sell their products and services. The mall
operators typically pay an initial set-up and training charge, and a monthly
mall maintenance fee. This program offers the Company the advantage of a rapidly
expanding sales force without the normal upfront and ongoing costs of
maintaining a sales organization of this size. Each mall operator is compensated
on the retail purchases of products and services from their Internet shopping
mall.

Accounting Basis

The basis is generally accepted accounting principles.

Revenue

The Company receives revenue from retail product sales, services, the sale of
online shopping mall sites, and monthly mall site fees. The Company has over one
million retail products available on its shopping sites. Services available
include long distance telephone service, Internet service provider (ISP)
service, prepaid legal service, income tax audit protection service and Internet
site maintenance and upgrading. Online shopping mall sites are sold by the
company's network of Independent Representatives (IR). Each site is considered
an Independent Mall Operator (IMO).

When initially established, each Independent Mall Operator (IMO) receives a
unique reference number for their site. This number is used to track all
Internet retail activity for their site. Each IMO provides access codes to
customers so the customers will purchase items on their shopping site. PriceNet
has associations with various merchandise distributors that actually capture,
process and provide customer support for all Internet retail sales. One a
monthly basis the distributors provide data and submit sales commissions to the
Company, who then distributes commissions to the IMOs and IRs. On December 31,
1998 the malls sites began processing retail product sales orders. During 1999
product sales increased but were still not yet a significant source of revenue.
To maintain active online, each IMO must pay a nominal monthly service fee.

Independent Representative (IR) Commissions

An IR is considered an independent contractor working their own businesses
similar to other network marketing companies in the industry. Each IR receives
commissions from the following potential sources. Commissions are paid on
independent Internet Mall Operator site sales, retail product sales, service
sales and Mall merchandise sales. These are the same sources for which the
Company receives revenue. Each IR receives a greater commission for sales that
he or she directly makes and a lesser commission on sales his or her
organization makes. These commissions vary depending on how large of an
organization an IR has and the particular products and services being sold

                                       7
<PAGE>

Payroll and Professional Fees

The Company incurred a total of $2,774,989 in payroll and professional fees for
the nine months ended September 30, 2000. Included in the total amount, the
Company issued restricted common stock as part of the compensation to IRs,
employee bonuses, and consulting services. As such, the total non-cash portion
of compensation cost associated with the issuances totaled $1,194,208.

Advertising and Promotions

Advertising and promotional expenses are expensed when incurred. The majority of
these costs relate to a monthly sales promotion meeting which the Company
sponsors.

Sales Taxes

Currently the Company follows the normal industry practice of only collecting
sales tax on shipments of products to consumers within its home state of
California. Currently, sales are considered to be sold from the Company
headquarters. The Internet sales industry is new and changing constantly. Local,
state and federal agencies have not fully addressed this new sales medium.
Management cannot predict what if any taxes a particular government or agency
may impose on future or even past sales. A successful assertion by one or more
states or any foreign country could have a material adverse effect on the
Company's business and financial statements if the taxes are applied
retroactively.

Income Taxes

The provision for income taxes is the total of the current taxes payable and the
net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.

Stock Based Compensation

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," in the primary financial statements
and has provided supplemental disclosures required by Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (see
Note 7).

Earnings per Share

The basic earnings (loss) per share is calculated by dividing the Company's net
income (adjusted for certain dividends when paid) by the weighted average number
of common shares during the year. The diluted earnings (loss) per share is
calculated by dividing the Company's net income (loss) (adjusted for certain
dividends and certain interest when expensed) by the diluted weighted average
number of shares outstanding during the year. The diluted weighted average
number of shares outstanding is the basic weighted average number of shares
adjusted as of the first of the year for any potentially dilative debt or
equity.

                                                   09/30/00      12/31/99
                                                   --------      --------
      Basic weighted average number of shares     15,557,366    7,562,520
      Options and Warrants                         1,377,767    1,583,600
      Diluted weighted average number of shares   17,149,133    9,146,120


Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

                                       8
<PAGE>


NOTE 2. REVERSE ACQUISITON

On March 11, 1998 the Company, known then as Gold Star Gaming, Inc.
purchased/merged with Price Net U.S.A., Inc. The surviving entity was Gold Star
Gaming, Inc., which changed its name to Price Net U.S.A., Inc. Price Net was
organized October 7, 1997. For this purchase Gold Star issued 2,250,010 shares
of common stock and exchanged these shares with Price Net shares. The Gold Star
shareholders then gave back to the Company all of their shares except 1,100,000.
The final result left the Company with 3,350,010 shares of common stock issued
and outstanding. This purchase was properly accounted for as a reverse merger
because Gold Star was considered the nominal acquirer. A reverse merger means
that for accounting purposes the nominal acquirer is viewed as having been
acquired by the legally acquired company. Reverse merger also means that the
historical data shown on the financial statements will be that of the acquired
company. In others words, for accounting, the merger is as if Price Net
purchased Gold Star.


NOTE 3. GOING CONCERN

The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As shown in the financial statements
the Company has accumulated a net loss. This factor raises doubt about the
Company's ability to continue as a going concern. The Company is also in a new
emerging industry (internet) which to date has not proven itself profitable. The
financial statements do not include any adjustments that might result from these
uncertainties.


NOTE 4. EQUIPMENT, FURNITURE, FIXTURES AND IMPROVEMENTS

The Company capitalized the purchase of equipment, furniture, fixtures and
improvements for major purchases in excess of $1,000 per item. Capitalized
amounts are depreciated over the useful life of the assets using the
straight-line method of depreciation.

Scheduled below are the assets, lives, costs and accumulated depreciation at
September 30, 2000 and 1999.

                                                       09/30/00     09/30/99
                                                       --------     --------

  Computer Hardware and Office Equipment   5 years    $  248,283   $  160,336
  Computer Software                        5 years        96,169       29,179
  Leasehold Improvements                   10 years      625,244      355,408
  Office Furniture and Fixtures            7 years       187,113      117,750
                                                      ----------   ----------

  Total Equipment and Furniture                       $1,156,809   $  662,673
                                                      ----------   ----------

  Accumulated Depreciation                            $  199,661   $   61,825
                                                      ----------   ----------

  Net Equipment and Furniture                         $  957,148   $  600,848
                                                      ----------   ----------


NOTE 5. INCOME TAXES

The provision for income taxes is the total of the current taxes payable and the
net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements. A valuation
account is established for any tax benefit, which may not be realized. As of
September 30, 2000 the Company has a net operating loss of approximately
$16,839,090.

         Deferred income tax benefit netted with valuation account   0
         Current income taxes payable                                0
                                                                     -

         Provision for Income Taxes                                  0
                                                                     -

                                       9
<PAGE>


NOTE 6. RELIANCE ON OFFICER

Mr. Donald Rackeman serves as the Chairman of the Company's Board of Directors
and also holds the position of Chief Executive Officer. His business experience
is vital to the Company. If Mr. Rackeman were unable to continue in his present
role the Company might be adversely affected. The Company carries no key-man
insurance on Mr. Rackeman. Aside from the business skills and business contacts,
which Mr.Rackeman brings to the Company, he has also guaranteed personally the
leased vehicles, the phone system and the building leases.


NOTE 7. STOCKHOLDER'S EQUITY

The Company has one class of preferred stock. There are 25,000,000 shares of
authorized stock. No preferred stock has been issued or is outstanding at the
end of September 30, 2000 and 1999.

The Company has one class of common stock. There are 50,000,000 shares
authorized. The rights of this class of stock are all the same. The common stock
has all of the rights afforded Nevada shareholders. As of September 30, 2000 the
Company had 15,771,366 shares outstanding. As of September 30, 1999 the Company
had 4,580,366 shares outstanding. Common stock issuances for fiscal 1998, fiscal
1999 and the nine months ended September 30, 2000 are detailed below.

Common Stock Issuances During 1998
----------------------------------

Merger of Gold Star Gaming, Inc. with Price Net, Inc.

On March 11, 1998 the Company, known then as Gold Star Gaming, Inc. merged with
Price Net, Inc. in a reverse merger. The net effect of the merger resulted in an
additional 1,100,000 shares issued.

Regulation D, Rule 504 Offering

During the year 1998 the Company had a Regulation D, Rule 504 Offering. The
offering was completed prior to the end of December 31, 1998. The offering sold
shares in four tiers, each one costing more than the last. Share prices ranged
from $0.50 to $2.00. The schedule below summarizes the total number of shares
issued as well as the total amount of the sales proceeds.

          Share Price                     Shares            Amount
          -----------                     ------            ------

             $0.50                       660,000          $330,000
             $1.00                       325,000           325,000
             $1.50                       153,017           229,526
             $2.00                        67,332           115,163
                                          ------           -------

             Totals for 504 Offering   1,205,349          $999,689
                                       ---------          --------

Stock for Independent Representative Commission

In December 1998 the Company issued restricted common stock totaling 25,000
shares as a bonus commission to a key Independent Representative.

Common Stock Issuances During 1999
----------------------------------

During 1999, the Company issued shares of stock for cash payments, distributor
commissions, employee bonuses, consulting and vendor services, cancellation of
company debt, and inventory acquisition. Each of the recipients of the
securities described below represented that they understood that the securities
acquired might not be sold or otherwise transferred absent registration under
the Securities Act of 1933. Each stock certificate issued bears the Rule 144
restriction endorsement.

Stock Sales, Private Offering

The Company sold to various investors during the year 2,960,229 shares of common
stock for $2 per share. Each of these investors completed an appropriate
subscription agreement detailing his or her qualification for such investments.

                                       10
<PAGE>

Stock Sales, Private Offer

The Company sold to a single individual 5,000 shares of common stock bearing the
R144 restriction for $2,500. The sale price was based on a previous commitment
to this individual during 1998.

Stock for Independent Representative Commissions

During the year the Company adopted special promotional campaigns to encourage
the sales of its Internet Malls. Part of the compensation paid to IRs for these
campaigns included restricted common stock. A total of 753,000 shares were
issuance for IR commissions and the non-cash compensation expense associated
with these issuances totaled $1,506,000. The total non-cash compensation cost
for each recipient was properly reported to the appropriate taxing authorities
during 1999.

Stock for Employee Bonuses

In an effort to maintain a positive working environment and to retain key
individuals, the Company issued to its employees 671,000 shares of restricted
common stock as bonuses. The non-cash compensation cost for the Company totaled
$1,342,000 and was properly included in the employee's income calculations for
1999 and included on the Form W-2 and/or Form 1099 submitted to the appropriate
taxing authorities.

Stock for Consulting/Services

The Company reimbursed attorneys, consultants and other professional fees and
costs with its restricted common stock. The Company issued 960,966 shares of
stock at an agreed upon cost of $2 per share for a total value of $1,921,932 for
these services.

Stock for Advertising

The Company sponsored certain professional golfers. In exchange for portraying
the Pricenet logo on golfing material the golfers and their caddies were given a
total of 11,500 shares of stock valued at $23,000.

Stock for Debt

During July of 1999 the Company converted debt of $150,000 by issuing 300,000
shares of stock priced at $0.50 per share. The debt was a note payable to an
individual, R. Slatkin, who had lent money to the Company. The creditor's price
was based on an option to convert the debt into stock at $0.50 per share.

Stock for Inventory

During the quarter ended March 31, 1999 the Company purchased from DR Trust
6,400 Web PAL units for resale. A Web PAL unit allows a regular television set
to become connected to the Internet. The Company paid $100 each for these units,
giving $246,000 in cash and issuing 500,000 shares of restricted common stock
valued at $394,000.

Stock for NCN Purchase

As part of the NCN purchase the Company issued to the shareholders of NCN
1,090,160 shares of restricted common stock. See Note 12 for more detail on this
purchase.

Stock Subscribed

The Company had stock subscribed totaling 315,020 shares valued at $630,040 as
of December 31, 1999. As of June 30, 2000, the review report date, 165,000
shares remain subscribed but un-paid.

Options

As an incentive to Independent Representatives the Company issued options to buy
Company stock. The stock options are available to a significant number of
Independent Representatives (IRs). The Company hosted a promotional campaign
during April 1999 to November 1999 where IRs had the potential to receive
restricted company stock in the form of options. The amount of shares that
potentially could be exercised at December 31, 1999 totaled 98,600. However, in
order to qualify for the granting of such options several performance goals must
be met, including remaining active within the Company's organization. If the IR
leaves the Company either by free will or is terminated for cause, all options
available to that individual are forfeited. As of September 30, 2000 none of the
options have been exercised.

                                       11
<PAGE>

The option stock is not included within the shareholder section of the balance
sheet. The stock options are however figured into the diluted earnings per share
on the Statement of Operations.

Warrants

During 1999 the Company entered into an agreement with a product merchandise
distributor, "The Big Store" (see note 15). The Big Store provides an outlet
where Internet mall operators can send their customers to buy products on-line.
As part of the agreement with The Big Store, the Company has granted warrants to
purchase 1,000,000 shares of the Company's restricted common stock at 110% of
the per share market price at the date of the grant.

Common Stock Issuances During the Nine Months ended September 30, 2000
----------------------------------------------------------------------

During the nine months ended September 30, 2000, the Company issued shares of
stock for distributor commissions, employee bonuses, consulting and vendor
services, and the acquisition of a company. Each of the stock certificates
issued bears the Rule 144 restriction endorsement. The following paragraphs
identify the nature of the stock issuances.

Stock for Independent Representative Commissions

During 1999 the Company adopted special promotional campaigns to encourage the
sales of its Internet Malls. Part of the compensation paid to IRs for these
campaigns included restricted common stock. Most of the stock was issued during
1999 but 22,000 shares totaling $12,410 in non-cash consulting expense was
issued during the six months ended June 30, 2000.

Stock for Employee Bonuses

In an effort to maintain a positive working environment and to retain key
individuals, the Company issued to its employees 149,000 shares of restricted
common stock as bonuses. The non-cash compensation cost for the Company totaled
$138,540.

Stock for Consulting/Services

The Company reimbursed attorneys, consultants and other professional fees and
costs with its restricted common stock. The Company issued 1,459,532 shares for
a total non-cash value of $903,469, which was recorded to professional fees,
consulting expense and Internet services for the nine months ended September 30,
2000.

Stock for Acquisition and Defense of International Sales Rights

On March 28, 2000 the Company resolved a long-standing dispute with Victor
Barron, a former Officer and Director of the Company, regarding the ownership of
international sales rights. The settlement allows Price Net to retain the
international sales rights and in return, the Company issued to Mr. Barron
1,000,000 shares of restricted common stock at a total non-cash value of
$500,000. The sales rights were recorded as a capital asset for the Company (see
Note 17 below).

Stock for Acquisition of MNS Eagle Equity Group II

On June 19, 2000 the Company acquired 100% of MNS Eagle Equity Group II (MNS), a
fully reporting public OCT Bulletin Board company. The Company issued 50,000
shares of restricted common stock and $100,000 in cash for 682,500 shares of
MNS, which represented 100% of the issued and outstanding stock of MNS. The
company issued an additional 450,000 shares of restricted common stock to agents
for the associated finders fees and consulting fees as part of the acquisition.
The non-cash cost associated with the stock issuance portion was valued at
$125,000. See Note 18 below regarding this acquisition.

Stock Sale to Foreign Investor

On July 2, 2000 the Company sold 500,000 shares of restricted common stock to a
foreign investor for $500,000 cash. The sale was conducted pursuant to
Regulation S and the investor acknowledged in the subscription agreement that
they conformed to the Regulation S requirements.

                                       12
<PAGE>


SFAS No. 123

As permitted under SFAS No. 123, the Company has not recognized compensation
expense for the theoretical value of its options and warrants at the grant date
(in excess of the recognition of the intrinsic value). Had compensation expense
for the Options and Warrants been based on the fair value of the options at the
grant date amortized over any potential vesting period, the Company's pro forma
net loss and net loss per share would have been as follows:

                                        September 30, 2000   December 31, 1999
                                        ------------------   -----------------
Net Loss:
         As Reported                       $(6,144,506)        $(9,171,926)
         Pro forma                         $(6,451,118)        $(9,571,076)
Net Loss Per Share:
         As Reported - Basic and Diluted   $    (0.36)         $     (1.00)
         Pro forma - Basic and Diluted     $    (0.38)         $     (1.05)

In determining the fair value of options and warrants granted for purposes of
the preceding pro forma disclosures, the Company used the minimum value
option-pricing model with the following weighted-average assumptions for the
nine months ended September 30, 2000 and year ended December 31, 1999,
respectively: risk-free interest rate of 5%, dividend yield of zero, and
expected life of 1 year for the options and 5 years for the warrants. The
options granted during 1999 had a weighted average fair value of $1.57 per share
and the warrants and options granted during 2000 had a weighted average fair
value of $0.35 per share.


NOTE 8. COMMITMENTS AND CONTINGENCIES

Office Leases

On November 1, 1999 the Company entered into an agreement to lease a 24,342
square feet facility located at 2575 McCabe Way, Irvine California. The lease
term is 60 months and the initial monthly rent is $41,381.

The Company has an existing facility located at 2424 S.E. Bristol, Newport
Beach, California which incurs a lease payment of $18,323 per month. The lease
term for this facility expires on December 31, 2003. The Company is actively
marketing the property for another entity to assume the lease. The lease tables
below do not factor the lease cancellation or assumption possibility.

The Company leases a storage facility located at Brook hollow Office Park, Santa
Ana, California for $3,500 per month. The term for this lease expired on April
5, 2000.

Vehicle Leases

The Company provides leased vehicles to a select group of independent
representatives and corporate senior management. At the end of September 2000
there were a total of twenty-one vehicles leased with a total monthly payment of
$21,734.

Office Equipment

The Company leases photocopying and other computer equipment from vendors. The
monthly payments for this leased equipment totals approximately $300 per month.

Below is a listing of the operating lease commitments for the next five years as
of December 31, 1998.

                             Year 1    Years 2     Year 3     Year 4     Year 5
                             ------    -------     ------     ------     ------

Office Lease                $374,074   $513,999   $532,356   $548,419   $564,482
Vehicles $1,690/mth           20,184     20,184     20,184      4,752      4,752
Office Equipment $900/qtr      3,600      3,600      3,600      3,600      3,600
                            --------   --------   --------   --------   --------

Total                       $397,858   $537,783   $556,140   $556,771   $572,834
                            --------   --------   --------   --------   --------

                                       13
<PAGE>

Below is a listing of the operating lease commitments for the next five years as
of December 31, 1999.
<TABLE>
<CAPTION>

                              Year 1       Years 2      Year 3       Year 4       Year 5
                              ------       -------      ------       ------       ------

<S>                         <C>          <C>          <C>          <C>          <C>
Offices Lease               $  781,593   $  849,856   $  875,077   $  805,593   $  540,392
Vehicles $21,734/mth           260,812      197,782       24,663       14,498       14,498
Office Equipment $900/qtr        3,600        3,600        3,600        3,600        3,600
                            ----------   ----------   ----------   ----------   ----------

Total                       $1,046,005   $1,051,238   $  903,340   $  823,691   $  558,490
                            ----------   ----------   ----------   ----------   ----------
</TABLE>


NOTES 9. NOTES PAYABLE

During 1998, the Company held several notes for individuals who had lent the
company money. Most of the notes payable had been paid off during 1999 by either
cash or common stock payments. Below is a summary of the notes payable as of
September 30, 2000 and December 31, 1999 respectively.

             Description              Terms      06/30/00   12/31/99
             -----------              -----      --------   --------

             DR. Trust             7.5% and 6%   $  8,199   $ 77,039
             NCN Note              no interest    105,000    125,000
             McInerney             no interest    120,000          0
             Go Fast Automotive          10%       53,375          0
             Matthews                    10%       43,750          0
             Khan                        10%      200,000          0
             Artunian, R                 10%       65,000          0
             Artunian, T                 10%      164,650          0
                                                 --------   --------

             Total Notes Payable                 $759,974   $202,039
                                                 --------   --------

             Accrued Interest                           0          0
                                                 --------   --------

             Total Notes Payable                 $759,974   $202,039
                                                 --------   --------


NOTE 10. YEAR 2000 COMPLIANCE

The Company reviewed its product line and supportive in-house software to ensure
all applications within the software, firmware and hardware utilizing "clocks"
were able to identify and process date data, including leap year. All software
using dates for calculation or to take any action is year 2000 compliant.

The manufacturer must address compliance of any additional third party software
including operating systems used with any Company equipment.

The Company is dependent upon the smooth functioning of the Internet systems and
the line providers for its uninterrupted operations. It is also dependent upon
the smooth operation of the banking, and credit card industry. These outside
industries have, as far as the Company can tell, responded adequately to the
year 2000 compliance problem. However, no assurance can be given that service of
these or other necessary industries will not be interrupted in the near future,
thus materially affecting the operations of the Company. As time passes, the
2000 compliance problem becomes less significant.


NOTE 11. RELATED PARTIES

The Chairman of the Board of Directors and the Company's Chief Executive Officer
is the father of the administrator of the DR & LR Trust. The trust purchased the
office facility at 2575 McCabe Way, Irvine CA from the Company's landlord after
the Company had moved into the facility. The trust has also lent money to the
Company on numerous occasions and currently has an outstanding note receivable
due from the Company. During 1999 the Company purchased from the DR & LR Trust
inventory items that consisted of the 6,400 Web PAL units. The price per unit
was reduced from an estimated wholesale value of $249 per unit to $100 per unit.

                                       14
<PAGE>


NOTE 12. PURCHASE OF NCN COMMUNICATIONS

On October 11, 1999 the Company purchased 100% of shareholder interest in NCN
Investments, Inc. NCN Investments is a holding company, which wholly owns NCN
Communications, Inc. NCN Communications, Inc. is a long distance telephone
service provider company. NCN Investments has no assets or debt except for owing
the communications company. NCN has gross telephone service sales revenue of
approximately $800,000 per month that contributes to a net revenue stream of
approximately $75,000 per month.

The acquisition was consummated because management felt that a long distance
telephone service would complement their growing list of products offered by the
super store. Equally important, management feels strongly that the large,
seasoned customer base that NCN owns has tremendous value in and of itself.
However, there was no reflection of this significant intangible asset on the
balance sheet of NCN at the time of the acquisition. Below is a summary of NCN
Communications balance sheet as of the purchase date.

              Cash and Cash Equivalents               $     7,622
              Receivables                                 297,547
              Fixed Assets                                  7,000
              Deposits                                      2,180
              Current Payables                            252,834
              Note Payable and Contingent Liability       245,000
              Common Stock                              1,313,250
              Retained Earnings (Loss)                 (1,496,735)
                                                      -----------

              Net Tangible Equity                     $  (183,485)
                                                      -----------

The Company paid the following for 100% interest in NCN

    Shares of common stock 1,090,160 valued at $2.75 per share   $2,997,940
    Cash paid to shareholders                                        25,350
                                                                 ----------
    Total Price of NCN                                           $3,023,290

The purchase price on NCN is being recorded in the following manner.

   Negative assets vs. liabilities as listed above              $  (183,485)
   Goodwill recorded as an asset to cover the negative equity   $   183,485

   Total Goodwill recognized from purchase                      $ 3,206,775
   Amortization Expense at September 30, 2000                   $(1,053,635)

The Goodwill is being amortized over 36 months on a straight-line basis.


NOTE 13. INVESTMENTS

The Company purchased 1,000 shares of stock in Pacific Mercantile Bank for
$13,500 ($13.50 per share cost) as a long-term investment. The stock was split 2
for 1 during March 2000. The market value of the stock as of September 30, 2000
was $6.25 per share. This creates an unrealized and unrecorded loss for the
2,000 shares of $1,000.


NOTE 14. REFUNDS

The Company had adopted a policy during 1999 of refunding an IMO site of up to a
year from the date of purchase. The refunds are netted against future
commissions that an IR might receive because of the original commissions paid.
Beginning January 15, 2000 the Company has changed its refund policy. They will
refund a distributor the amount of a mall purchase minus any associated
commissions if the request is received within 72 hours of the purchase date.
This change conforms to federal law.

When an IMO site is sold, the IR receives a commission. The IRs related
organization, or up line, also receives a commission on the sale. If an IMO
requests and receives a refund, the Company assesses a charge to the IRs and up
line that are affected by the refund. The charge can also be netted against any
current or future commissions and bonuses of the IRs and up lines if they are
active within the organization.

                                       15
<PAGE>

As of September 30, 2000 the amount of refunds payable totaled $789,738 and is
included as a part of the accrued liabilities as reported on the balance sheet.
Since the majority (between 70% to 80%) of the IMO sales are paid out to the IRs
and up line as commissions, the majority of any potential refund payments would
necessitate a receivable due from the IRs. A holding list (receivable list) is
created and updated for such refunds or credit card charge backs. As of June 30,
2000, the holding list totaled $397,406. However, because of the nature of
network marketing and the uncertainty of collection, this receivable amount has
not been recognized in the financial statements as a receivable. If collected,
the proceeds will be netted against any refunds paid, reducing the overall
refund costs.


NOTE 15. TERMINATION OF AGREEMENTS WITH "THE BIG STORE.COM" and "THE BIG
HUB.COM"

In the fall of 1999, the Company signed agreements with "The Big Store.com" and
"The Big Hub.com" to facilitate web site product searches, merchandise sales,
order fulfillment, distribution, and provide full customer service for IMO
customer retail sales. These agreements are outlined as follows:

The Big Store

The agreement with "The Big Store" was for the back-end processing or order
fulfillment, distribution, and customer service phase of mall product sales
applications. The agreement required the Company to pay a one-time private label
development fee of $150,000 to connect all of the Companies current IMO sites.
In addition, the Company was accessed a store fee commission on monthly gross
sales ranging from 2% to 6%. The agreement also granted "The Big Store.com"
warrants for 1,000,000 shares of restricted common stock. The warrants have a
five-year exercise period.

The Big Hub

The agreement with "The Big Hub" was for the licensing of web site mega-search
engine technology and also for licensing of a private label web page to access
"The Big Store" products. The agreement required the Company to pay $25 for each
IMO set up with back-end processing by "The Big Store", a monthly maintenance
fee of $5 for each IMO currently using "The Big Store" private label mall, and
an annual renewal fee of $7.50 for each active IMO.

The two aforementioned agreements were hereby terminated during May 2000 due to
a dispute between the Company and the representatives of the organizations
mentioned above regarding the terms of the agreements.


NOTE 16. PLEDGED ASSETS

The Company has pledged assets in the form of a Certificate of Deposit to secure
the vehicle leases. The Certificate of Deposit is with First Security Bank in
the amount of $50,000.


NOTE 17. INTERNATIONAL SALES RIGHTS

On March 28, 2000 the Company resolved a long-standing dispute with Victor
Barron, a former Officer and Director of the Company, regarding the ownership of
international sales rights. The settlement allows Price Net to retain the
international sales rights but requires the Company to provide certain nominal
payments for IMO site sales as well as providing foreign ownership interest as
follows:

     o    $2.00 for each new IMO site sold worldwide for duration of 36 months.
     o    $4.50 for each new IMO sold outside of the United States for duration
          of 60 months or until the foreign country is officially opened for
          business.
     o    5% ownership stake of each foreign operation, plus 2% of the proceeds
          received from stock offerings of those foreign locations. This
          includes a $10,000 cash advance each month for a 6-month period to be
          credited against the foreign capital raised.
     o    Beginning in July, 2000, each month the Company must buy back as much
          as $15,000 worth of the Company's common stock that Mr. Barron holds,
          at Mr. Barron's discretion, until the Company has fulfilled its
          registration requirements with the Securities and Exchange Commission.

In addition to the ongoing payments and costs identified above, the Company
issued to Mr. Barron 1,000,000 shares of restricted common stock at a total
non-cash value of $500,000. The sales rights were recorded as a capital asset
for the Company.

                                       16
<PAGE>


NOTE 18. ACQUISITION OF MNS EAGLE EQUITY GROUP II

On June 19, 2000 the Company acquired 100% of MNS Eagle Equity Group II (MNS), a
fully reporting public OCT Bulletin Board company. The Company issued 50,000
shares of restricted common stock and $100,000 in cash for 682,500 shares of
MNS, which represented 100% of the issued and outstanding stock of MNS. The
company issued an additional 450,000 shares of restricted common stock to agents
for the associated finders fees and consulting fees as part of the acquisition.
The non-cash cost associated with the stock issuance portion was valued at
$125,000.

The Company effectively became the parent of MNS and will retain MNS's reporting
status with the U.S. Securities and Exchange Commission (SEC). The Company filed
"Form 8K" with the SEC on June 30, 2000, which announced the stock exchange
agreement between the Company and the shareholders of MNS. The Form 8K also gave
detailed information as to the change in control of MNS. The filing was amended
at the request of the SEC and was re-submitted on October 23, 2000. The SEC
accepted the amended Form 8K-12G3/A on October 26, 2000.


NOTE 19. LEGAL ISSUES

Breakaway Solutions

Breakaway Solutions, formerly known as the Counsel Group, filed an action in the
Orange County Superior Court for a contract executed in 1998 by former PriceNet
President Melanie McCarthy for the merging and modification of existing systems
relative to the mall site and sales in the sum of $132,000. The matter was
settled on July 24, 2000 and PriceNet agreed to pay Breakaway Solutions a total
of $50,000, with $25,000 payable on August 1, 2000 and the remaining $25,000 to
be paid in monthly installments of $5,000 beginning September 1, 2000 until
paid.

Tate

Arbitration has been filed by Larry Tate, a former employee of the Company for
claimed breach of his consulting agreement. Tate contends that despite leaving
the Company and executing a release of claims and payment of 100,000 shares of
stock, the shares do not apply to the settlement and was a part of his initial
payment, thereby claiming that 100,000 additional shares are due him. The
Company contends the settlement and release signed by Tate, along with payment
of 100,000 shares represents payment in full to Tate. Tender of 50,000 shares of
stock to Tate has subsequently settled this matter.

Sweeney

The Company against the former Co-Chairman/Chief Operations Officer James A.
Sweeney has commenced litigation for International Interference with economic
relationship, Breach of Fiduciary Duty, Fraud, Breach of Contract, and Trade
Libel. The Company has obtained a preliminary injunction against Sweeney. Mr.
Sweeney has filed a cross-complaint for breach of contract, constructive
termination, fraud, conversion and interference with contract/perspective
business advantage and defamation. The Company is vigorously pursuing the matter
toward a favorable outcome. The discovery process is ongoing and the matter is
set for trial in late November 2000.

Ballah, The Big Store, The Big Hub, The Big Biz.com, OhGolly.com, IPowerBiz,
PriceNet Marketing, and MGI WorldNet.com (the Ballah group)

The Company against the former Director/President Jerry Ballah, Bruce Ballah,
The Big Store.com, The Big Hub.com, The Big Biz.com, OhGolly.com, IPowerBiz,
PriceNet Marketing, and MGI WorldNet.com (the Ballah group) has commenced
litigation in the amount of not less than $25,000,000 for Breach of Fiduciary
Duty, Fraud, Breach of Contract, International Interference with Contractual
Relationships, Misappropriation of Trade Secrets, Unfair Competition,
Accounting, and Injunctive Release. The discovery process is ongoing and the
Company is vigorously pursuing the matter toward a favorable outcome.

In addition to the matters discussed above, the Company is involved in various
legal matters that arise in the normal course of business. The Company believes
that the ultimate resolution of the matters described above and other matters it
is currently aware of will not have an unfavorable material impact on its
financial condition, results of operations or cash flows.

                                       17
<PAGE>


2. Management's Discussion and Analysis or Plan of Operation.
-------------------------------------------------------------

Business Overview

Price Net U.S.A., Inc., (the Company) was founded in order to market and operate
an Internet based infrastructure that supports a home-based business. We market
an extensive line of products and services on the Internet. Customers have the
service, convenience and advantage of using the Internet from their home or
office to make purchases. We market our products and services to retail
consumers as well as business to business. We utilize an alliance-marketing
program of independent representatives and mall operators to sell our products
and services. The mall operators typically pay an initial set-up and training
charge, and a monthly mall maintenance fee. Our program affords the Company the
advantage of a rapidly expanding sales force without the normal upfront and
ongoing costs of maintaining a sales organization of this size. Each mall
operator is compensated on the retail purchases of products and services from
their Internet shopping mall.

The Company has experienced substantial growth in retail sales in the past
couple of years. From 1998 to 1999, the Company's retail sales grew from $124
thousand to $8.3 million, representing a tremendous annual growth rate for the
first full year of operation. The Company's sales revenue totaled $3.3 million
for the nine months ended September 30, 2000, compared to the $4.6 million
revenue generated for the comparative nine months ended September 30, 1999.

The Company's products are marketed exclusively through an alliance marketing
system. This system enables the Company's independent mall operators to earn
profits by selling products from the Company's branded super store and outlet
stores to retail consumers and other representatives. Independent
Representatives may also develop their own down-line organizations by sponsoring
other independent mall operators to join the organization and provide e-commerce
business in any market where the Company operates, entitling the sponsors to
receive commission overrides on product sales within their down-line
organizations.

We believe that the Company's alliance marketing system is ideally suited for
Internet e-commerce, because sales of such products and services are
strengthened by ongoing personal contact between the retail consumers and the
independent mall operators. Many of the customers are close friends or relatives
of the mall operators and are willing to purchase products based on the notion
that they are helping the mall operator receive a commission while receiving a
very reasonable or discounted price for the products. The Company's alliance
marketing system appeals to a broad cross-section of people throughout the
world, particularly those seeking to supplement family income, start a home
business or pursue employment opportunities other than conventional, full-time
employment.

Statements included in this "Management's Discussion and Analysis or Plan of
Operation" Section, and in other sections of the Report and in prior and future
filings by the Company with the Securities and Exchange Commission, in the
Company's prior and future press releases and in historical or current facts are
"forward-looking statements" made pursuant to safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those presently anticipated or projected. The Company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. There are numerous risk factors that in
some cases have affected and in the future could affect the Company's actual
results and could cause the Company's actual financial and operating performance
to differ materially from that expressed in any forward-looking statement. The
following discussion and the analysis should be read in conjunction with the
Financial Statements and notes to Financial Statements which appear elsewhere in
this report.

Results of Operations for the Three Months Ended September 30, 2000 Compared to
Three Months Ended September 30, 1999

Revenue

Revenue decreased to $176,036 for the three months ended September 30, 2000 from
$2,823,789 for the comparable period in 1999 as a result of the significant
reorganization and restructuring of our operation and customer base stemming
from the termination of our Company President as well as the departure of
certain field leadership associated with the president. Of the $176,036 revenue
for the three months ended September 30, 2000, $43,703 represents independent
mall site sales; merchandise sales and monthly service fees. The remainder
represents long-distance phone service revenue of $132,333.

                                       18
<PAGE>


Cost of Sales

Cost of sales consists primarily of the costs of commissions paid to our network
of independent sales representatives. Also included are refunds from prior
period sales. Cost of sales decreased to $349,884 for the three months ended
September 30, 2000 from $2,749,743 for the comparable period in 1999. This
decrease was primarily attributable to our decrease in sales volume. Cost of
sales for the three months ended September 30, 2000 outpaced total revenue for
the period due to the large amounts of refund requests. As mentioned in the
notes to the financial statements, refund requests are recorded immediately to
the financial statements. However, most of the refund requests are subject to
offset by commissions paid to the independent representatives and the offset
amounts are not reflected in the financial statement. We expect the overall
dollar cost of sales to increase in future periods to the extent that our sales
volume increases but not as a percentage of revenue.

Operating Expenses

Selling, General and Administrative. Selling, general and administrative
expenses consist of advertising and promotional expenditures, payroll and
related expenses for executive and administrative personnel, facilities
expenses, professional and consulting services expenses, travel and other
general corporate expenses. Selling, general and administrative expenses
increased to $1.7 million for the three months ended September 30, 2000 from
$3.3 million for the comparable period in 1999. Two significant non-cash
transactions totaling $679 thousand occurred during the three months ended
September 30, 2000 as compared to the similar period, which contributed to the
increased costs. They include the amortization of the goodwill associated with
the NCN Communication acquisition for $328 thousand and the development fees
associated with the set up of Price Net's shopping mall site for $351 thousand
(paid for by issuing restricted common stock). Overall operating expenses are
expected to decrease as a percentage of revenue during future periods because
our sales of mall sites and merchandise are based on e-commerce, which allows
increases in the volume of purchases without having to incrementally add
overhead. We expect selling, general and administrative expenses to increase in
absolute dollars as we continue to pursue advertising and marketing efforts,
expand our locations worldwide, expand our staff and incur additional costs
related to the growth of our business and being a public company.

Net Loss

We incurred a net loss of $(1,889,170) for the three months ended September 30,
2000 as compared to $(1,229,567) for the comparable period in 1999. Net loss for
the three months ended September 30, 2000 was primarily affected by the non-cash
transactions and refund requests as mentioned above.

Recent Developments

In May 2000 we negotiated a strategic arrangement with Cyrsh Technologies
Corporation, a high-tech developer of Internet user services and search
protocols, which will allow us to be the primary marketer and co-distributor of
this cutting edge technology. This strategic partner will also provide certain
Internet connectivity and infrastructure support to our existing Internet
networks.

In June 2000 we negotiated a strategic arrangement with 2HQ.com, Inc., for mall
product sales applications including the back-end processing, order fulfillment,
distribution, and customer service. The arrangement also provides for web site
mega-search engine technology and private labeling of the Company's web page.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through private sales
of equity and debt and cash generated from operations. As of September 30, 2000,
we had approximately $222,552 of cash and cash equivalents. As of that date, our
principal commitments consisted of obligations outstanding under operating
leases for facilities, vehicles and equipment, obligations to vendors stemming
from costs associated with the daily on-going operations, and obligations for
certain costs associated with the phone company acquisition in October 1999.

Net cash used in operating activities was $1,914,885 for the nine months ended
September 30, 2000 compared to $6,415,050 for the nine months ended September 30
1999. Net cash used in operating activities for the nine months ended September
30, 2000 primarily consisted of net operating losses adjusted for expenses paid
by stock issuances, decreases in accounts receivable, increases in accounts
payable, amortization costs and the adjustment for the write down of inventory.
Net cash used in operating activities for the nine months ended September 30,
1999 primarily consisted of net operating losses adjusted for items such as the
increase in inventory, an increase in accounts payable and decreases in prepaids
and deposits.

                                       19
<PAGE>

Net cash used in investing activities for the nine months ended September 30,
2000 consisted the purchase of MNS Eagle Equity Group II. Net cash used for
investing activities for the nine months ended September 30, 1999 included fixed
asset purchases. Net cash used in investing activities was $100,000 for the nine
months ended September 30, 2000 compared to $809,357 for the comparative
nine-month period in 1999.

Net cash provided by financing activities was $1,094,935 for the nine months
ended September 30, 2000 compared to $7,848,595 for the nine months ended June
30, 1999. Net cash provided by financing activities for 1999 was affected by the
large sales of private placement common stock.

The Company had a working capital position as of September 30, 2000 of
approximately $18,323 as compared to a working capital position of approximately
$938,000 as of December 31,1999.

The Company had a Stockholders' Equity of $1,077,399 as of September 30, 2000 as
compared to a Stockholders' Equity $4,612,486 as of December 31,1999. The
Company had an accumulated Retained Earnings deficit of $16,839,090 at September
30, 2000, in comparison to an accumulated Retained Earnings deficit of
$10,694,583 as of December 31, 1999. The increase in the accumulated deficit is
due to the net loss of $6,144,506 for the nine months ended September 30, 2000.

The Company does not currently possess a financial institution source of
financing and the Company cannot be certain that it's existing sources of cash
will be adequate to meet its liquidity requirements. Therefore, the Company is
considering the following options to meet its liquidity requirements:

     (a)  Attempting to raise additional funds through the sale of equity
          securities to persons or entities who are not presently stockholders
          of the Company;
     (b)  Attempting to franchise or license its technology and proprietary
          rights to foreign countries;
     (c)  Reducing the Company's present rate of expenditures, which might
          materially adversely affect the ability of the Company to market its
          products and services effectively.

The Company's future capital requirements will depend on factors, including (i)
the progress and effectiveness of its sales activities and marketing approach,
and (ii) the ability of the Company to maintain its existing customer base and
establishing and expanding its customer base into new domestic and foreign
markets. However, if operating expenses are higher than expected or if cash flow
from operations is lower than anticipated, there can be no assurance that the
Company will have sufficient capital resources to be able to continue as a going
concern.

We may need to raise additional capital funds if, for example, we pursue
business or technology acquisitions or experience operating losses that exceed
our current expectations. If we raise additional funds through the issuance of
equity, equity-related or debt securities, such securities may have rights,
preferences or privileges senior to those of the rights of our common stock and
our stockholders may experience additional dilution. We cannot be certain that
additional financing will be available to us on favorable terms when required,
or at all.

Unless the Company is able to continue to generate revenues or obtain additional
financing in the future, the continuing losses incurred by the Company might
raise substantial doubt about the Company's ability to continue as a going
concern. Therefore, the Company's ability to continue in business as a going
concern depends upon its continuing ability to sell its products, to generate
franchise and licensing fees from the potential sales of its technology and
products, to conserve liquidity by setting sales and marketing goals and other
priorities, reducing expenditures, and to obtain financing through equity
offerings or conventional banking sources. In any event, there is no assurance
that any expenditure reductions, financings or other measures that the Company
may enact will enable it to meet its working capital requirements.

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<PAGE>


PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 19 of the "Notes to Financial Statements" in Part I of this document.

Item 2. Changes in Securities.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Submission of Matters to a Vote of Security Holders.

None

Item 5. Other Information.

None

Item 6. Exhibits and Reports on Form 8-K.

The Company originally filed Form 8-K12G3 on June 30, 2000 and re-filed the
amended Form 8-K12G3/A on October 23, 2000 with all related attachments and
exhibits. The Item disclosed in the Form 8-K12G3/A related to a "Change in
Control" of MNS Eagle Equity Group II.

Pursuant to a Stock Exchange Agreement (the "Exchange Agreement") dated as of
June 19, 2000 between Price Net U.S.A., Inc (PRICENET), a Nevada corporation,
and the shareholders of MNS Eagle Equity Group II, Inc. ("MNS"), a Nevada
corporation, 100% of the outstanding shares of common stock of which is held by
less than 20 MNS shareholders were exchanged for 50,000 shares of common stock
of PRICENET and $100,000 cash in a transaction in which PRICENET effectively
became the parent corporation of MNS.


EXHIBIT
NUMBER      DESCRIPTION OF EXHIBIT
------      ----------------------

2.0         Stock Exchange Agreement date June 19, 2000 between Price Net USA,
            Inc. and MNS Eagle Equity Group II, Inc. (included as Exhibit 2.0 to
            the Company's Form 8-K12G3 dated June 30, 2000, previously filed
            with the Commission and is incorporated herein by reference).

3.1         Articles of Merger and Articles of Incorporation (included as
            Exhibit 3.1 to the Company's Form 8-K12G3 dated June 30, 2000,
            previously filed with the Commission and is incorporated herein by
            reference).

3.2         Bylaws (included as Exhibit 3.3 to the Company's Form 8-K12G3 dated
            June 30, 2000, previously filed with the Commission and is
            incorporated herein by reference).

27.1        Financial Data Schedule (for SEC use only).



                                    SIGNATURE

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

Price Net USA, Inc.


By: /s/ Donald Rackemann
------------------------
Donald Rackemann
Chief Executive Officer

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