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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                             ---------------------
                                   FORM 10-K

   FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

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

               FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

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

               FOR THE TRANSITION PERIOD FROM ________ TO ________

                        COMMISSION FILE NUMBER 000-27003
                              HEADHUNTER.NET, INC.
             (Exact Name of Registrant As Specified in Its Charter)

<TABLE>
<S>                                              <C>
                    GEORGIA                                         582403177
        (State or Other Jurisdiction of                         (I.R.S. Employer
        Incorporation or Organization)                         Identification No.)

         333 RESEARCH COURT, SUITE 200
               NORCROSS, GEORGIA                                      30092
   (Address of Principal Executive Offices)                        (Zip Code)
</TABLE>

       Registrant's telephone number, including area code:  800.891.8880
                             ---------------------
          Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<S>                                              <C>
              Title of Each Class                     Name of Exchange on Which Registered
                     NONE                                             NONE
</TABLE>

                             ---------------------
          Securities registered pursuant to Section 12(g) of the Act:

                    COMMON STOCK, $0.01 PAR VALUE PER SHARE

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

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.  [X]

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the closing sale price for the Common Stock on
February 26, 2001 as reported by the Nasdaq National Market System, was
approximately $51,984,664. The shares of Common Stock held by each officer and
director and by each person known to the Registrant who owns 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes. As of February 26, 2001, the
Registrant had outstanding 20,279,021 shares of Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the proxy statement for the 2001 Annual Meeting of Shareholders
are incorporated by reference to Part III.
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                               TABLE OF CONTENTS

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                                PART I
Item 1.   Business....................................................     4
Item 2.   Properties..................................................    10
Item 3.   Legal Proceedings...........................................    10
Item 4.   Submission of Matters to a Vote of Security Holders.........    10
                               PART II
Item 5.   Market for Registrant's Common Stock and Related Shareholder
          Matters.....................................................    11
Item 6.   Selected Financial Data.....................................    12
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................    14
Item 7A   Quantitative and Qualitative Disclosures About Market
          Risks.......................................................    27
Item 8.   Financial Statements and Supplementary Data.................    27
Item 9.   Changes In and Disagreements With Accountants on Accounting
          and Financial Disclosure....................................    27
                               PART III
Item 10.  Directors and Executive Officers of the Registrant..........    28
Item 11.  Executive Compensation......................................    28
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management..................................................    28
Item 13.  Certain Relationships and Related Transactions..............    28
                               PART IV
Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form
          8-K.........................................................    28
          Signatures..................................................    31
          Financial Statements........................................    33
</TABLE>

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                           FORWARD-LOOKING STATEMENTS

     In addition to historical information, this Annual Report on Form 10-K
contains forward-looking statements that involve risks and uncertainties. These
forward-looking statements include, among other things, statements regarding our
anticipated costs and expenses, our capital needs and financing plans,
liquidity, product and service development, our growth strategies, market demand
for our products and services, relationships with our strategic marketing
alliances, and competition. These forward-looking statements include, among
others, those statements including the words "expects," "anticipates,"
"intends," "believes" and similar language. Our actual results may differ
significantly from those projected in the forward-looking statements. Factors
that might cause or contribute to such differences include, but are not limited
to, those discussed in the section "Factors That May Affect Future Results of
Operations." You should carefully review the risks described in this Annual
Report on Form 10-K and other reports and documents we file from time to time
with the Securities and Exchange Commission, including Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. You are cautioned not to place undue
reliance on the forward-looking statements, which speak only as of the date of
this Annual Report on Form 10-K. We undertake no obligation to publicly release
any revisions to the forward-looking statements or to reflect events or
circumstances after the date of this document.

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                                     PART I

ITEM 1.  BUSINESS.

     We are a leading provider of online recruiting services to employers,
recruiters, recruitment advertising agencies, and job seekers via our website at
www.headhunter.net. Our website enables employers, recruiters and advertising
agencies to advertise job opportunities and review resumes online. The site
enables job seekers to identify, research, evaluate, and apply to a broad range
of job opportunities online.

     We commenced operations of our website in October 1996 through one of our
predecessors, HNET, Inc., a Georgia corporation. In October 1997, HNET, Inc.
contributed all of the assets related to the operation of our website to
HeadHunters, L.L.C., a Delaware limited liability company, which operated our
website until July 1998. In July 1998, HeadHunter.NET, Inc. was incorporated in
Georgia and assumed operations of the website.

     On July 19, 2000 we acquired CareerMosaic, Inc., a competitor, and issued
7,500,000 shares to the CareerMosaic stockholders. CareerMosaic was a unit of
the marketing communications firm Bernard Hodes Group Inc., a wholly owned
subsidiary of Omnicom Group Inc. We consolidated the operations of CareerMosaic
and were operating under one technical and operational platform at December 31,
2000.

     On August 28, 2000 we acquired MiracleWorkers.com, Inc., a web-based
medical recruiting company, by exchanging 1,444,416 shares of common stock for
all the outstanding shares of MiracleWorkers stock. The MiracleWorkers.com
website operates in conjunction with ours and serves as our medical job
"channel."

     Our website provides employers, recruiters and advertising agencies with
the ability to:

     - access a large number of job seekers through job postings and resume
       database searches;

     - participate in further advertising opportunities through online career
       fairs, becoming a featured employer, or purchasing banner advertisements;

     - cross-post all of their jobs to more than 450 partnered job boards on
       other websites;

     - bulk post jobs from an external website to our website; and

     - track, measure and analyze the results of their online recruiting efforts
       through detailed statistics provided in billing statements and on our
       website.

     Our website provides job seekers with the ability to:

     - access current nationwide job postings representing a wide range of
       industries through anonymous searches of our jobs database or by posting
       their resume on our website;

     - access services offered by other employment service providers that
       specialize in providing resume and cover letter writing, career
       assessment, company research, career training, resume distribution,
       financial information, reference checking, legal advice, interview
       assistance, salary information, relocation services, and insurance
       services;

     - conduct highly focused job searches and to save those searches for use in
       future visits; and

     - set up "informant" searches that will automatically search our jobs
       database for a specified set of criterion and e-mail the job seeker with
       all new opportunities that satisfy such criterion.

     We generate revenue primarily from fees paid by employers, recruiters and
agencies to post job opportunities. We also generate revenue from access fees
paid by employers, recruiters and agencies for viewing our extensive resume
database. To a lesser extent, we derive revenue from selling web page
sponsorships and banner advertising, cross-posting jobs to partnered websites,
and hosting online career fairs.

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OUR SERVICES

     We offer three paid services to employers, recruiters and recruitment
advertising agencies, who we collectively call job posters, which enable them
to: (1) post and upgrade job opportunities; (2) access our resume database; and
(3) participate in other advertising and awareness services available through
our website. We allow individuals who post resumes, who we collectively call job
seekers, to post their resumes and to access our database of jobs free of
charge.

     We offer the following services to job posters:

     - Post and Upgrade Job Opportunities.  Job posters advertise job
       opportunities on our website for a minimum of 30 days. They can post job
       opportunities and instantly update, change (only selected criteria) or
       remove them online by purchasing a Performance Posting. Due to the
       breadth of job opportunities on our website, a single job search can
       return several pages of job opportunities. In order to enhance the
       visibility of their jobs, job posters have the flexibility to improve the
       placement of a job in a search result by purchasing upgraded Performance
       Postings. Jobs are sorted in a search result first by performance level
       and then by date updated. We currently offer four primary levels of
       posting: Priority, Standard, Basic, and Economy. Job posters who post job
       opportunities with us can access statistics online regarding the number
       of times the job showed up in a search, the number of times the job was
       clicked on for additional information, and the number of job seekers who
       chose to apply to the job. This information can be used to quickly
       evaluate the results of any posted job opportunity. Through our site, job
       posters can receive online applications directly through the website from
       registered job seekers or via e-mail to their listed e-mail address as a
       file attachment. We also offer two additional job posting services:
       cross-posting of job opportunities to more than 450 other job boards on
       partnered websites; and bulk posting jobs which automatically maps jobs
       from a customer's website to the Headhunter.net website.

     - Access Resume Database.  Job posters can pay a subscription fee for
       access to our VIP Resume database for periods of three months, six months
       or one year. Job posters are able to search all of our resumes on a
       nearly unlimited basis during their subscription period. They are able to
       specify search criterion for a targeted search. Once a promising
       candidate is found, job posters can contact the candidate via e-mail or
       by using other contact information listed on the resume.

     - Other Advertising and Awareness Services.  Banner advertisements are sold
       either to target specific groups of people (such as employers, job
       seekers, or particular keyword searches) or to appear across our website
       at random. Banners are billed based on a number of impressions, or number
       of times that the banner will appear on our website. In addition to
       banner advertising, we offer other advertising products to our customers
       which enhance their awareness among job seekers including online career
       fairs and Brand Builder. The online career fairs offer customers a custom
       web page, which includes a company profile and up to 25 job postings. The
       fairs are marketed on our home page to maximize traffic for the customer.
       Brand Builder provides customers with a company profile page including
       their logo, a separate listing of all of their job postings and a link to
       the company's web site.

     We also offer a monthly newsletter, Hireadigm, which keeps job posters
aware of current recruiting issues, features of our site, better ways to utilize
our resources, and recruiting advice from a number of sources.

     Job posters can purchase our services through one of the following two
accounts:

     - EaseEPost.  EaseEPost allows job posters access to any of our services
       online using a credit card. This completely automated account is designed
       for job posters with occasional, low volume recruiting needs. Job posters
       pay a monthly fee for Performance Postings on a per-job basis and are
       also able to purchase a VIP Resume subscription in increments of three,
       six or twelve months. Performance statistics are available to these
       customers online through their EaseEPost account and no contact with a
       sales representative is necessary. All transactions are invoiced
       immediately via e-mail and a credit card charge is initiated at the time
       of each purchase.

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     - Corporate Account.  Corporate Account clients work closely with members
       of our sales team to create a package of services tailored to meet their
       needs. These accounts are designed for job posters that have ongoing
       recruiting needs. Corporate Accounts are billed for all purchases at the
       end of the month on one invoice, as opposed to paying for the service at
       the time of purchase. The monthly billing statements contain statistical
       information that the job posters can use to track and measure the success
       of their online recruiting efforts. This statistical information is also
       available on our website within their Corporate Account. Corporate job
       posters pay a negotiated monthly fee for the package of services they
       choose and generally commit to an account duration of three to 12 months.

     We offer the following services to job seekers:

     Job seekers may post their resumes and conduct searches free of charge. If
they choose, these individuals may register with our site and enter their resume
information online without speaking with a company representative. Having a
resume saved on our website enables the job seeker to use our convenient "Apply
Online" feature through which a job seeker can send his or her resume to a job
poster with the click of one button. The job seeker may also track the
performance of his or her resume by viewing the performance statistics available
on our site. These statistics are similar to the ones available to job posters
in that job seekers can see the number of times their resumes showed up in a
search and the number of times on which it was clicked.

     Job seekers also have the ability to remain anonymous and search jobs
without registering with our site. We believe the ability to remain anonymous
attracts a large number of job seekers who would otherwise feel uncomfortable
entering their personal information on the web. These job seekers are still able
to apply for jobs via their personal e-mail account by attaching a resume to an
e-mail.

     We also offer an online monthly newsletter called CareerBytes, which
provides online career advice and information for job seekers.

SALES

     As of December 31, 2000, we employed 152 full-time sales personnel and
leased office space located in Atlanta, Hartford, Chicago, Cincinnati, Dallas,
Austin, Ft. Lauderdale, Bellevue (WA), Columbia (MD), Los Angeles, New York,
Philadelphia, San Francisco, McLean (VA), Needham (MA), Tampa (FL), and Palo
Alto. Our sales teams are divided into three divisions: Corporate, Recruiter,
and Agency sales.

     Our sales force engages in a blend of direct sales and telesales to reach
prospective employers, recruiters and agencies. The majority of our sales in
2000 were through direct sales. Because we believe that local market presence
gives us a better understanding of that market's particular recruiting needs, we
plan to continue our emphasis on direct sales. Our sales staff sells through a
consultative approach, which we believe enables us to build and maintain
stronger relationships with the job posters that utilize our services.
Additionally, as of December 31, 2000, we employed 27 customer and client
service representatives who focus on maintaining the long-term viability of our
corporate relationships.

  Sales Divisions

     Our Corporate Sales Division sells to corporations with ongoing recruitment
needs. This division focuses on direct sales, utilizing face-to-face meetings
with prospective clients to create a customized service package to fit the
companies' needs. The Corporate Sales Division has sales teams located in each
of our sales offices. Within this division, we have sales representatives that
target specific market segments, from small local businesses to Fortune 500
companies.

     The Recruiter Sales Division sells to third party recruiters and utilizes a
telemarketing approach to reach recruiters nationwide. This division has proven
valuable in our efforts to sell to our clients with a specialized approach. The
Recruiter Sales Division was created in the second quarter of 2000 and is
located in Atlanta.

     Our Agency Sales Division sells directly to recruitment advertising
agencies that represent major corporations across the country. From newspaper
ads to online postings to television and radio advertisements,

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recruitment advertising agencies develop comprehensive recruiting campaigns
geared to hire top talent for their clients. By entering into relationships with
these agencies, we have access to opportunities with many of the Fortune 1000
companies that utilize agencies for their Internet recruitment strategies. The
Agency Sales Division was established in July 2000 and has accounted for some of
our largest accounts.

  Customer and Client Service

     We have two service teams focused on our major account segments; EaseEPost
and Corporate.

     Our Client Service representatives are focused on our Corporate accounts
which include employers, recruiters and agencies. They initiate outbound quality
calls as well as receive inbound client questions. Client Services also works
closely with our Sales Divisions to set up customer accounts. This specialized
team was established in February 2000. The Customer Service team is focused on
our EaseEPost job posters as well as job seekers. By creating two teams in
February 2000, we enabled our two teams to become experts in their fields in
order to better assist our customers. This team is also involved in various
research projects related to quality in processes and site flow.

     We believe that our support services are a key component in attracting and
retaining job posters and job seekers. We proactively solicit questions and
feedback from job posters and job seekers who use our website, and our support
staff responds by telephone and by e-mail to inquiries concerning technical,
service, billing and other issues. Our service speed, accuracy and
professionalism is maintained by our service level goals and employee quality
coaching program.

ADVERTISING AND MARKETING

     Our advertising and marketing strategy is designed to establish
Headhunter.net as the leading generalist recruiting website. We use multiple
channels to advertise, market and promote our website, including online
advertising, traditional advertising and direct marketing.

  Online Advertising

     We advertise online to increase market awareness of the Headhunter.net
brand. In 2000 we advertised, or were featured as content provider, on websites
of major Internet portals including: Lycos, Excite, NBCi, AltaVista, Cox
Interactive Media's cities sites, Looksmart, Dogpile, and GoTo.com. These
portals enable us to target potential job seekers and allow them to
click-through to www.headhunter.net. We also purchase keyword targeted banners
and buttons or links to our website. Generally, our agreements to purchase
advertising are short-term and we receive a guaranteed number of banner
advertisement impressions for a fixed fee.

  Traditional Advertising

     We believe that traditional advertising is also an effective means of
increasing awareness of the Headhunter.net brand and attracting job posters and
job seekers. Our traditional advertising efforts have included:

     - local and national television advertising;

     - local radio advertising;

     - national and select local daily newspapers such as USA Today and the New
       York Times, business weeklies, recruitment magazines, and vertical
       industry trade publications; and

     - outdoor billboards, buses, and airport advertising.

  Direct Marketing

     Our direct marketing efforts include direct mail, facsimile and e-mail
campaigns aimed at human resources executives, recruiters and recruitment
advertising agencies. We also publish two monthly newsletters

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via e-mail, CareerBytes for job seekers and Hireadigm for job posters. In
addition, we actively market at trade shows, job seminars and career fairs to
reach job posters and to inform them of the benefits of our website.

     In 2000 we conducted our Headhunter.net Surfari Tour. Two mobile career
centers traveled to more than 30 cities nationwide including major festivals and
landmarks across the country extending overall brand awareness and offering
participants the opportunity to experience Headhunter.net first-hand.

OUR TECHNOLOGY AND WEBSITE MANAGEMENT

     We use an internally developed software system that is scalable and
specifically designed to support a high volume of website traffic and searches,
as well as immediate additions, modifications and deletions of job opportunities
and resumes. We deliver content from our web servers to the Internet via leased
high speed telecommunications lines from Pentium-based servers installed at
multiple locations. We contract co-location services from third party providers.
We maintain location redundancy such that in the event one location experiences
service interruption, the delivery speed of our website will not be
significantly impacted.

     We route requests for information from our website to the closest server
with available capacity. This architecture balances the user load across diverse
geographic locations and provides fault tolerance. We route requests for
information away from any location that may be suffering from a network outage.
This architecture allows our website to remain available 24-hours-a-day,
seven-days-a-week. If any server needs routine maintenance, we can temporarily
route requests for information to alternate servers.

     We distribute job opportunities and resumes submitted to our website to all
of our servers simultaneously, using an internally developed proprietary
technology. This technology is essential to maintaining consistency across a
collection of geographically dispersed parallel servers while still providing
job posters and job seekers with immediate access to new and changing job
opportunities and resumes.

COMPETITION

     The market for online recruiting services is relatively new, intensely
competitive and rapidly evolving. There are minimal barriers to entry, and
current and new competitors can launch new websites and add content at
relatively low costs within relatively short time periods. We expect competition
to intensify and the number of competitors to increase in the future. We compete
against other online recruiting services, such as Monster.com, HotJobs, and
CareerBuilder, as well as corporate Internet sites, and not-for-profit websites
operated by individuals, educational institutions and governments. In addition
to this online competition, we compete against a variety of companies that
provide similar content through one or more media, such as classified
advertising, radio and television. Many of our current and potential
competitors, including those mentioned above, have significantly greater
financial, technical and marketing resources, longer operating histories, better
name recognition and more experience than we do. Many of our competitors also
have established relationships with job posters.

     To compete successfully, we must continue to attract and retain job posters
and job seekers. The competitive factors attracting job posters and job seekers
to our website include the quality of presentation and the relevance,
timeliness, depth and breadth of recruiting information and services offered on,
and the ease of use of, our website. The competitive factors also include, among
others, the fees charged to list job opportunities, the cost of upgrades and
other services and the cost and accessibility of similar services through the
Internet or competing media. Our competitors' services may be sufficiently
attractive to job posters and job seekers to dissuade them from using our
website. If we are unable to attract a significant number of job posters and job
seekers to our website, our business, financial condition and results of
operations will suffer.

SEASONALITY

     Our sales and site traffic have consistently reflected the effects of
seasonality during the summer months and toward the end of the year, resulting
in lower revenue growth in those months. We build this assumption into our
projections and planning models. We believe that revenue from classified
advertising and other traditional recruiting services is generally lower in the
months of July, November and December because of

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vacation periods and holiday seasons. As the online recruiting market develops,
we believe that we will experience similar seasonal patterns or discover other
seasonal patterns.

GOVERNMENT REGULATION

     There are an increasing number of laws and regulations pertaining to the
Internet, including laws or regulations relating to user privacy, liability for
information retrieved from or transmitted over the Internet, online content
regulation, and domain name registration. Moreover, the applicability to the
Internet of existing laws governing issues such as intellectual property
ownership and infringement, obscenity, libel, employment and personal privacy is
uncertain and developing. For these reasons, we may become subject to increasing
governmental regulation which may be burdensome and add additional costs to
operating our business on the Internet or decrease demand for our services. See
"Factors That May Affect Future Results Of Operations in Management's Discussion
And Analysis Of Financial Condition And Results Of Operations -- We may become
subject to burdensome government regulation, which may add costs to operating
our business on the Internet or decrease demand for our services."

     Privacy Concerns.  The European Union has adopted a directive that imposes
restrictions on the collection and use of personal data concerning EU residents,
and on any transfer of such data outside of the EU. The directive imposes
restrictions that are more stringent than current Internet privacy standards in
the United States and many other countries. In response to the directive, which
prohibits the transfer of data to countries that are not deemed to have laws
that adequately protect data subjects' privacy rights, other countries have
adopted or are considering adopting laws and regulations regarding the
collection and use of personal data that meet the EU's standard for adequacy.
For instance, Canada, Argentina and Australia have recently enacted privacy acts
that are similar in scope to the directive. The directive and the privacy acts
of these other countries may have an adverse effect on the activities of
businesses that engage in data collection from users in the applicable
countries. In addition, the United States and numerous other governments and
governmental agencies within several countries are considering adopting laws and
regulations regarding the collection and use of personal identifying information
obtained from individuals when accessing websites. While we have implemented and
intend to implement additional programs designed to enhance the protection of
the privacy of our users, these programs may not conform to all or any of these
laws or regulations. In addition, these statutory and regulatory requirements
may adversely affect our ability to collect demographic and personal information
from users, which could have an adverse effect on our ability to provide value-
added opportunities to our advertisers and other third parties.

     Domain Names.  Domain names are the user's Internet "addresses." The
current system for registering, allocating and managing domain names has been
the subject of litigation and of proposed regulatory reform. Although we have
obtained a federal trademark registration for "Headhunter.net," third parties
may bring claims for infringement against us for the use of this trademark.
There can be no assurance that our domain name will not lose its value, or that
we will not have to obtain entirely new domain names in addition to or in lieu
of our current domain names if reform efforts result in a restructuring in the
current system.

     Jurisdictions.  Due to the global nature of the Internet, it is possible
that, although our transmissions over the Internet originate primarily in
Atlanta, the governments of other states and foreign countries might attempt to
regulate our business activities. In addition, because our service is available
over the Internet in multiple states and foreign countries, these jurisdictions
may require us to qualify to do business as a foreign corporation in each of
these states or foreign countries, which could subject us to taxes and other
regulations.

INTELLECTUAL PROPERTY

     Our success and ability to compete depends significantly on our internally
developed proprietary technology and on our brand and marks. We rely upon
trademark, patent and other intellectual property laws, and on confidentiality
and non-disclosure agreements with our employees and third parties to establish
and protect our proprietary rights. We have obtained federal trademark
registrations for "HeadHunters", "Headhunter.net" and "HEADHUNTER.NET." We are
currently in the application process to obtain federal trademark registrations
for "This is the Way to Work" and "Where People with Good Jobs Go when

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They're having a Bad Day." We cannot assure you that any of our trademark
applications will be approved or granted or, if granted, that any registered
trademark will not be successfully challenged by others or invalidated through
administrative process or litigation. If our application for either trademark is
not approved or granted due to the prior issuance of trademarks to third parties
or for other reasons, there can be no assurance that we will be able to enter
into arrangements on commercially reasonable terms to allow us to continue to
use that trademark.

     We seek to protect our proprietary rights through the use of
confidentiality agreements with employees, consultants, advisors and others. We
cannot assure you that these agreements will provide adequate protection for our
proprietary rights if there is any unauthorized use or disclosure of our
proprietary information or if our employees, consultants, advisors or others
fail to maintain the confidentiality of our proprietary information. We also
cannot assure you that our proprietary information will not otherwise become
known, or be independently developed, by competitors.

     In addition, patents recently issued to third parties regarding Internet
business processes indicate additional Internet business process patents may be
issued in the future. While we do not believe we infringe any existing business
process patent, future patents may limit our ability to use processes covered by
such patents or expose us to claims of patent infringement or otherwise require
us to seek to obtain related licenses. There can be no assurance that such
licenses would be available on acceptable terms or at all. The failure to obtain
such licenses on acceptable terms could have a material adverse effect on our
business, financial condition, results of operations and prospects. See "Factors
That May Affect Future Results Of Operations in Management's Discussion And
Analysis Of Financial Condition And Results Of Operations - We may not be able
to protect and enforce our intellectual property rights, which could result in
the loss of our rights, loss of business or increased costs."

     Other than our trademarks and trade names mentioned above, all trademarks
and trade names referred to in this Annual Report on Form 10-K are the property
of their respective owners.

EMPLOYEES

     As of December 31, 2000, we had 377 full-time employees, most of whom are
based at our executive offices. Of these employees, 299 are in sales and
marketing, 51 are in technology and operations and 27 are performing general and
administrative functions. None of our employees are represented by a labor union
and we consider our employee relations to be good.

ITEM 2.  PROPERTIES.

     In March 2000, we moved our executive offices to 333 Research Court, in
Norcross, Georgia, a suburb of Atlanta. As of December 31, 2000, we leased
office space in Austin, Bellevue (WA), Cincinnati, Chicago, Columbia (MD),
Dallas, Ft. Lauderdale, Hartford, Los Angeles, New York, Needham (MA),
Philadelphia, San Francisco, McLean (VA), Tampa (FL), and Palo Alto and
additional office space in Atlanta to support our sales personnel located in
those cities. Our current facilities were sufficient for our headcount at
year-end. We plan to evaluate lease options for additional office space to
expand our direct sales efforts in select major metropolitan markets.

ITEM 3.  LEGAL PROCEEDINGS.

     We are not currently a party to any material legal proceedings. From time
to time, we may be subject to legal proceedings and claims in the ordinary
course of business. Such claims, even if not meritorious, could result in the
expenditure of significant financial and managerial resources.

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

     None.

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<PAGE>   11

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS.

     (a) Our common stock is traded on the Nasdaq National Market under the
symbol "HHNT." The price per share reflected in the table below represents the
range of low and high closing sale prices for our common stock as reported by
the Nasdaq National Market for each of the quarters since our initial public
offering:

<TABLE>
<CAPTION>
FISCAL PERIOD                                                 HIGH PRICE   LOW PRICE
-------------                                                 ----------   ---------
<S>                                                           <C>          <C>
1999
  August 19, 1999 -- September 30, 1999.....................    $19.19      $10.13
  October 1, 1999 -- December 31, 1999......................     15.50       10.63
2000
  January 1, 2000 -- March 31, 2000.........................     26.13       10.75
  April 1, 2000 -- June 30, 2000............................     18.13        7.75
  July 1, 2000 -- September 30, 2000........................     10.13        4.47
  October 1, 2000 -- December 31, 2000......................     11.25        4.75
</TABLE>

     The number of shareholders of record of our common stock as of February 26,
2001 was 153.

     We have never declared or paid any cash dividends and do not intend to
declare or pay cash dividends in the foreseeable future. Our management
anticipates that all of our earnings and other cash resources, if any, will be
retained by us for investment in our business.

     During 2000, we did not sell any securities which were not registered under
the Securities Act of 1933 except for:

        - The issuance on August 28, 2000 of 1,444,416 shares of common stock in
          exchange for all of the outstanding shares of capital stock of
          MiracleWorkers.com, Inc. in a transaction exempt from registration
          under Sections 4(2) and 4(6) of the Securities Act of 1933 and
          Regulation D promulgated under such act.

        - The issuance on September 19, 2000 of 75,000 shares of common stock to
          Chicago Computer Guide in connection with the December 17, 1999
          acquisition of All In One Submit. This issuance was exempt from
          registration under Sections 4(2) and 4(6) of the Securities Act and
          Regulation D.

     (b) On August 19, 1999, the registration statement relating to our initial
public offering of our common stock (File No. 333-80915) was declared effective.
First Union Capital Markets Corp., J.C. Bradford & Co., Wachovia Securities,
Inc. and DLJdirect, Inc. were the managing underwriters of the offering. On
August 24, 1999, we closed the offering. The number of shares registered, the
aggregate price of the shares registered, the number of shares sold and the
aggregate offering price of the shares sold were as follows:

<TABLE>
<CAPTION>
SHARES OF COMMON   AGGREGATE PRICE OF    NUMBER OF    AGGREGATE PRICE
   REGISTERED      SHARES REGISTERED    SHARES SOLD   OF SHARES SOLD
----------------   ------------------   -----------   ---------------
<S>                <C>                  <C>           <C>
 3,000,000          $30,000,000         3,000,000      $30,000,000
</TABLE>

     We incurred the following expenses with respect to the offering through
December 31, 1999, none of which were direct or indirect payments to (i) our
directors, officers or their associates, (ii) persons owning 10% or more of any
class of equity security of the Company or (iii) our affiliates:

<TABLE>
<CAPTION>
UNDERWRITING
DISCOUNTS AND                   UNDERWRITERS'                        TOTAL
 COMMISSIONS    FINDERS' FEES     EXPENSES      OTHER EXPENSES      EXPENSES
-------------   -------------   -------------   --------------   --------------
<S>             <C>             <C>             <C>              <C>
$2,100,000           $0             $0           $900,000         $3,000,000
</TABLE>

     The net proceeds from the offering to us after deducting the foregoing
discounts, commissions, fees and expenses were approximately $27.0 million. On
September 7, 1999, the underwriters exercised their over-

                                       11
<PAGE>   12

allotment option to purchase an additional 450,000 shares at $9.30 per share.
All of these shares were sold by two selling shareholders and the Company did
not receive any proceeds as a result of the sale.

     We used $2.2 million of the net proceeds of the offering to pay all
outstanding indebtedness under our credit facility with ITC Service Company, a
wholly owned subsidiary of ITC Holding Company, Inc. Additionally, we used
approximately $300,000 for the December 1999 acquisition of All In One Submit.
In May 2000 we purchased www.jobsearch.com, a website domain name, and paid
$500,000 in cash and issued a $300,000 note. As of December 31, 2000, we had
paid approximately $96,000 on the note. The balance of the proceeds have been
used for working capital and general corporate purposes. Other than the
repayment of long-term debt to ITC, no proceeds were paid to our affiliates,
other than payments to our officers in accordance with our compensation
structure. As of year-end there remained no net proceeds from our initial public
offering.

ITEM 6.  SELECTED FINANCIAL DATA.

     The following table sets forth our selected financial data as of the year
ended December 31, 1996, the ten months ended October 31, 1997, the two months
ended December 31, 1997 and the years ended December 31, 1998, 1999, and 2000,
which have been derived from the audited financial statements of the predecessor
and our audited financial statements and related notes included in another part
of this Annual Report on Form 10-K. You should read the selected financial data
together with our financial statements and related notes and the section of the
Annual Report on Form 10-K entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Historical results are not
necessarily indicative of results to be expected in the future. See Note 2 of
Notes to Financial Statements for an explanation of the determination of the
shares used in computing basic and diluted net income (loss) per common share
and unaudited pro forma net loss per share. The weighted average shares
outstanding data gives effect to the conversion of our Class A Preferred Stock
into our common stock at August 19, 1999, the date of our initial public
offering. Loss per share for the twelve months ended December 31, 1999 includes
a one-time non-cash charge to accumulated deficit of approximately $21.7 million
for the difference between the fair value and the conversion price of the loan
and security agreement related to conversion of this instrument from debt to
equity in January 1999. This was accounted for as a distribution to ITC, a Class
A preferred shareholder, and, therefore, an increase in net loss attributable to
common shareholders. See Notes 2 and 3 to our financial statements for further
discussion.
<TABLE>
<CAPTION>
                                   PREDECESSOR TO OUR COMPANY                               OUR COMPANY
                              ------------------------------------   ---------------------------------------------------------
                                                     TEN MONTHS         TWO MONTHS
                                 YEAR ENDED            ENDED               ENDED            YEAR ENDED          YEAR ENDED
                              DECEMBER 31, 1996   OCTOBER 31, 1997   DECEMBER 31, 1997   DECEMBER 31, 1998   DECEMBER 31, 1999
                              -----------------   ----------------   -----------------   -----------------   -----------------
<S>                           <C>                 <C>                <C>                 <C>                 <C>
STATEMENT OF OPERATIONS
 DATA:
 Revenues...................      $190,146            $124,437           $  29,591          $ 1,099,868        $  9,253,954
 Costs and expenses:
   Costs of revenues........            --              29,390               2,906               86,963             147,275
   Marketing and selling....         2,740              23,301              41,123            2,719,330           9,898,815
   General and
     administrative.........        52,105              95,967             126,268            1,714,756           3,786,728
   Stock compensation
     expense................            --                  --                  --              205,574           5,528,114
   Depreciation and
     amortization...........         6,842              10,099              41,912              276,706             528,256
                                  --------            --------           ---------          -----------        ------------
Total costs and expenses....        61,687             158,757             212,209            5,003,329          19,889,188
                                  --------            --------           ---------          -----------        ------------
Operating income (loss).....       128,459             (34,320)           (182,618)          (3,903,461)        (10,635,234)
                                  --------            --------           ---------          -----------        ------------
Net income (loss)...........      $128,623            $(35,163)          $(176,392)         $(4,345,868)       $(10,256,036)
                                  ========            ========           =========          ===========        ============
LOSS PER SHARE:
 Basic and diluted..........                                             $   (0.08)         $     (1.98)       $      (5.90)
WEIGHTED AVERAGE SHARES
 OUTSTANDING:
 Basic and diluted..........                                             2,200,000            2,200,000           5,412,135

<CAPTION>
                                 OUR COMPANY
                              -----------------

                                 YEAR ENDED
                              DECEMBER 31, 2000
                              -----------------
<S>                           <C>
STATEMENT OF OPERATIONS
 DATA:
 Revenues...................    $ 49,173,089
 Costs and expenses:
   Costs of revenues........         691,316
   Marketing and selling....      50,982,861
   General and
     administrative.........       9,251,984
   Stock compensation
     expense................       4,012,215
   Depreciation and
     amortization...........       8,801,556
                                ------------
Total costs and expenses....      73,739,932
                                ------------
Operating income (loss).....     (24,566,843)
                                ------------
Net income (loss)...........    $(23,860,068)
                                ============
LOSS PER SHARE:
 Basic and diluted..........    $      (1.60)
WEIGHTED AVERAGE SHARES
 OUTSTANDING:
 Basic and diluted..........      14,931,483
</TABLE>

                                       12
<PAGE>   13

<TABLE>
<CAPTION>
                                PREDECESSOR TO
                                OUR COMPANY AT
                                 DECEMBER 31,                 OUR COMPANY AT DECEMBER 31,
                                --------------   -----------------------------------------------------
                                     1996           1997         1998          1999           2000
                                --------------   ----------   -----------   -----------   ------------
<S>                             <C>              <C>          <C>           <C>           <C>
BALANCE SHEET DATA:
  Cash and cash equivalents...     $25,973       $  853,989   $   254,937   $16,938,708   $ 13,228,336
  Working capital (deficit)...      33,706          788,976    (3,446,422)   21,236,203     14,385,509
  Total assets................      58,550        1,922,915     2,225,180    26,979,744    100,389,929
  Total debt, including
     current maturities.......          --               --     3,500,000            --     10,282,540
  Total shareholders' equity
     (deficit)................      55,500        1,830,517    (1,967,943)   24,743,924     79,751,868
</TABLE>

                                       13
<PAGE>   14

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

     The following discussion should be read in conjunction with the financial
statements and related notes included elsewhere in this Annual Report on Form
10-K. This discussion contains forward-looking statements that involve risk and
uncertainties. Our actual results could differ materially from the results
anticipated in these forward-looking statements as a result of factors including
those set forth below.

OVERVIEW

     We provide online recruiting services to job posters and job seekers via
our website. HNET, Inc., our predecessor, was founded in October 1995 and was
wholly owned by Warren L. Bare. From its inception until late 1996, HNET, Inc.
derived all of its revenues from website development consulting services. As a
result of the experience that it gained during this period, HNET, Inc.
identified online recruiting as an emerging industry. It launched the
www.headhunter.net website in October 1996, and began to focus on growing its
online recruiting service business.

     In October 1997, HNET, Inc. entered into an investment agreement with ITC
Holding Company, Inc. under which:

     - HeadHunters, L.L.C. was formed;

     - HNET, Inc. contributed all of its assets related to the operation of the
       website in exchange for a 45% interest in HeadHunters, L.L.C.; and

     - ITC contributed $1.1 million in cash in exchange for a 55% interest in
       HeadHunters, L.L.C.

     This transaction was accounted for as a purchase.

     In July 1998, HeadHunters, L.L.C., ITC and Warren L. Bare entered into a
contribution agreement under which:

     - HeadHunter.NET, Inc. was incorporated;

     - Mr. Bare contributed all of the outstanding stock of HNET, Inc. to us in
       exchange for 2,200,000 shares of our common stock and 50,000 shares of
       our Class A preferred stock; and

     - ITC Holding Company contributed its 55% interest in HeadHunters, L.L.C.
       to us in exchange for 2,750,000 shares of our Class A preferred stock.

This transaction was accounted for in a manner similar to a pooling of interest.
As a result of this transaction, HeadHunters, L.L.C. and HNET, Inc. became our
wholly-owned subsidiaries.

     Our revenue is generated primarily from fees paid by job posters to post
job opportunities and to improve the position of their job postings in search
results. We also generate revenue from access fees for viewing our extensive
resume database. To a lesser extent, we derive revenue from selling web page
sponsorships, banner advertising, cross-posting jobs to partnered websites, and
hosting online career fairs.

     Prior to August 1998, revenue was earned principally from a combination of
job posting upgrade fees and the sale of banner advertisements on our website,
with sales of banner advertising comprising a more significant percentage of our
revenues. In August 1998, we modified our pricing structure and began offering
upgrade services on a per job basis. On June 1, 1999, we began to charge all job
posters a fee to post job opportunities on our website. As a result of this
pricing change and the growth of our sales force, revenue from job posting and
upgrade fees has become the principal component of our revenues.

     We currently have four primary levels of posting options which provide
different levels of priority in a job search. The four primary levels are
Economy, Basic, Standard, and Priority. As part of a corporate pricing package,
we generally provide favorable pricing terms to job posters based on volume of
job postings and length of service agreement.

     Prior to February 2000, we charged for access to our VIP Resume Reserve
which contained the resumes which had been posted within the prior seven day
period. In February 2000, we implemented a new pricing
                                       14
<PAGE>   15

structure whereby job posters must pay a quarterly, semi-annual or annual
subscription fee to access all of our resumes in the database. Job seekers are
not required to post a resume to our website. If a job seeker chooses to post a
resume, he or she has the option to allow that resume to be searched in the
resume database or to remain private.

     We believe that job posting fees and fees paid to access resumes will
account for a substantial majority of our revenues for the foreseeable future.

     We record advance billings prior to the delivery of services or the display
of an advertisement as deferred revenues and recognize them as revenue ratably
when the services are provided or the advertisements are displayed. At December
31, 2000, we had approximately $2.7 million of deferred revenues compared with
$80,000 at December 31, 1999. The growth in deferred revenue over 1999 is a
direct result of improved sales of multi-month products.

Our costs and expenses include:

     - costs of revenues, consisting of bandwidth access fees, co-location costs
       and Internet connection charges;

     - marketing and selling expenses, consisting primarily of salaries and
       commissions for sales, marketing and customer service personnel,
       advertising costs and other marketing-related expenses (including
       strategic relationship and product design costs);

     - general and administrative expenses, consisting primarily of salaries and
       related costs for general corporate functions, including finance,
       accounting and human resources personnel, software development and
       technical personnel, office facilities and fees for professional
       services; and

     - depreciation and amortization, including depreciation of computer and
       other equipment and amortization of goodwill.

     During 2000, we made significant changes to our pricing policy.
Accordingly, we have a limited operating history on which to base an evaluation
of our company. Thus, period-to-period comparisons of our operating results are
not particularly meaningful, and an investor should not rely on the results for
any period as an indication of our future performance.

     We have a history of losses and at December 31, 2000 we had an accumulated
deficit of approximately $60.3 million. The majority of our expenses are for
advertising and for salaries and benefits, which made up 36% and 31% of our
total expenses in 2000, respectively. Our ability to generate a profit in the
future is directly correlated to our ability to manage these expenses in line
with our revenue growth. We believe that the majority of these expenses are
variable and can be managed if necessary as most of our advertising contracts
can be reduced or canceled with 30 to 90 days notice. However, certain of our
contracts with up to a year term cannot be terminated.

FISCAL YEAR ENDED DECEMBER 31, 2000 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
1999

     Revenues.  Our revenues grew $39.9 million, or 429%, from $9.3 million for
the twelve months ended December 1999 to $49.2 million for the twelve months
ended December 31, 2000. Growth in job posting revenue, which totaled $35.0
million in 2000, resulted in $27.7 million of the total revenue increase. Job
posting revenue growth is attributable to three factors: growth in corporate
customers, higher revenue per customer, and price increases. Our VIP Resume
search product generated $9.1 million for the twelve months ended December 31,
2000, compared with $279,000 for the twelve months ended December 31, 1999. The
growth in VIP Resume revenue is the result of more corporate customers
purchasing access to our VIP Resume database and price increases implemented in
February 2000. Advertising revenue, consisting of banner and sponsorship sales,
contributed $2.5 million for the twelve months ended December 31, 2000 compared
with $1.3 million for the twelve months ended December 31, 1999. The increase in
revenue was due to increased site traffic and the addition of new advertising
products.

                                       15
<PAGE>   16

     Costs of revenues.  Our costs of revenues increased $544,000, or 370%, from
$147,000 for the twelve months ended December 31, 1999 to $691,000 for the
twelve months ended December 31, 2000. The increase in costs of revenue were due
to our increasing bandwidth and server capacity. Additionally, after the
CareerMosaic merger, we kept the CareerMosaic website running until the end of
the year, accounting for approximately $177,000 of additional expenses which are
not expected to recur in 2001. Costs of revenue as a percentage of revenue
decreased from 1.6% for the twelve months ended December 31, 1999 to 1.4% for
the twelve months ended December 31, 2000. The decrease in costs as a percentage
of revenue was due to our realizing economies of scale.

     Marketing and selling expenses.  Expenses from marketing and selling
increased by $41.1 million, or 415%, from $9.9 million for the twelve months
ended December 31, 1999 to $51.0 million for the twelve months ended December
31, 2000. The growth is attributable to a number of factors, including increased
marketing efforts and growth of sales organization. Part of the growth of our
sales organization was due to the acquisitions of All In One Submit in December
1999 and MiracleWorkers in August 2000. We spent $22.0 million on advertising
for the year ended December 31, 2000 compared with $4.3 million for the twelve
months ended December 31, 1999. Our sales and marketing headcount at the end of
2000 was 299 compared with 82 at the end of 1999. The majority of new employees
were salespeople. In 2000, we created the Recruiter Business Unit and the Agency
Sales Division and hired additional staff in the Customer Service and Business
Development departments. The creation of the new departments and hiring of
additional staff resulted in $4.1 million in additional expenses in 2000. We
expect to increase marketing expenses for 2001.

     General and administrative expenses.  Our general and administrative
expenses increased $5.5 million, or 145%, from $3.8 million for the twelve
months ended December 31, 1999 to $9.3 million for the twelve months ended
December 31, 2000. Additions to personnel in all departments was the primary
cause for the growth.

     Stock compensation expense.  Stock compensation expense was $4.0 million
for the twelve months ended December 31, 2000. Due to the CareerMosaic
acquisition, employee stock options immediately vested causing us to recognize a
one time stock compensation expense of $3.3 million in 2000. In 1999, we sold
271,167 shares of Class A preferred stock and 140,000 shares of common stock to
a group of ten executive officers, key employees and directors at $1.50 per
share and $2.00 per share, respectively in 1999. In accordance with Accounting
Principles Board Opinion No. 25, we recognized compensation expense in 2000
related to the difference between the purchase price and the estimated fair
value of the shares of Class A preferred stock and common stock.

     Depreciation and amortization.  Depreciation and amortization grew $8.3
million, or 1566% from $528,000 for the twelve months ended December 31, 1999 to
$8.8 million for the twelve months ended December 31, 2000. Depreciation
increased $1.5 million as a result of $5.8 million in additional capital
purchases during 2000. The majority of the purchases were for servers to support
the website and furniture and computer equipment related to the opening of sales
offices and the move from our previous headquarters to our current location on
Research Court. Amortization grew from $203,000 for the twelve months ended
December 31, 1999 to $7.1 million for the twelve months ended December 31, 2000
primarily due to the amortization of goodwill that resulted from our three
acquisitions.

FISCAL YEAR ENDED DECEMBER 31, 1999 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
1998

     Revenues.  Our revenues increased $8.2 million, or 745%, from $1.1 million
for the twelve months ended December 31, 1998 to $9.3 million for the twelve
months ended December 31, 1999. Revenues from job posting and upgrade fees grew
from $462,000 to approximately $8.0 million. This increase primarily resulted
from the pricing change that was implemented on June 1, 1999, the growth of our
direct sales force, and a more aggressive marketing campaign. During the same
time frame, our advertising revenue grew from $661,000 to approximately $1.3
million. This growth resulted from an increase in traffic to our website over
last year, which enabled us to sell more banner advertisements on our website.

     Costs of revenues.  Our costs of revenues increased $60,000, or 69%, from
$87,000 for the twelve months ended December 31, 1998 to $147,000 for the twelve
months ended December 31, 1999. Costs of revenues
                                       16
<PAGE>   17

increased primarily due to increased bandwidth access fees, co-location costs
and Internet connection charges to accommodate the growth in user traffic and
content on our website. However, as a percentage of revenue, our costs of
revenues decreased from 8% for the twelve months ended December 31, 1998 to less
than 2% for the comparable period in 1999. The decrease in costs as a percentage
of revenues was primarily due to economies of scale.

     Marketing and selling expenses.  Marketing and selling expenses increased
$7.2 million, or 267%, from $2.7 million for the twelve months ended December
31, 1998 to $9.9 million for the twelve months ended December 31, 1999.
Marketing expenses increased $3.9 million, or 195%, from $2.0 million for the
twelve months ended December 31, 1998 to $5.9 million for the twelve months
ended December 31, 1999. This increase is primarily the result of aggressive
advertising and marketing campaigns designed to attract more employers,
recruiters and job seekers to our website. Selling expenses increased $3.3
million, or 456%, from $720,000 for the twelve months ended December 31, 1998 to
$4.0 million for the twelve months ended December 31, 1999. This increase is
primarily due to the addition of direct sales personnel to our sales force from
December 31, 1998 through December 31, 1999, and sales management and
administrative personnel hired to support our sales effort.

     General and administrative expenses.  General and administrative expenses
increased $2.1 million, or 124%, from $1.7 million for the twelve months ended
December 31, 1998 to $3.8 million for the twelve months ended December 31, 1999.
The increase in these expenses was primarily due to an increase of $1.2 million
for salaries, benefits and other employee-related costs due to the hiring of
additional personnel and an increase of $430,000 for accounting and legal fees
related to our year-end audit and organizational changes. We expect general and
administrative expenses to continue to grow as we hire additional personnel and
incur additional expenses to support the growth of our operations.

     Stock compensation expense.  Stock compensation expense was $5.5 million
for the twelve months ended December 31, 1999. During the six months ended June
30, 1999, we sold 271,167 shares of Class A preferred stock and 140,000 shares
of common stock to a group of ten executive officers, key employees and
directors at $1.50 per share and $2.00 per share, respectively. In accordance
with Accounting Principles Board Opinion No. 25, we recognized $3.8 million in
compensation expense related to the difference between the purchase price and
the estimated fair value of the shares of Class A preferred stock and common
stock. Further, we recognized $1.7 million of compensation expense in the twelve
months ended December 31, 1999 related to the difference between the option
exercise price and the estimated fair value of the shares of common stock from
options granted between January 1998 through May 1999. The total difference
between the exercise price and the fair value for the options will be amortized
ratably over the five year vesting period for the options.

     Depreciation and amortization.  Depreciation and amortization increased
$251,000, or 91%, from $277,000 for the twelve months ended December 31, 1998 to
$528,000 for the twelve months ended December 31, 1999. The increase in
depreciation was primarily the result of the purchase of additional capital
equipment. The amortization expense remained relatively level and relates to
goodwill of approximately $1.0 million created upon the formation of
HeadHunters, L.L.C.

                                       17
<PAGE>   18

QUARTERLY RESULTS OF OPERATIONS

     The following table sets forth unaudited statement of operations data for
our eight most recent quarters. This quarterly information has been derived from
our unaudited financial statements and, in the opinion of management, includes
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the information for the periods covered. The quarterly
data should be read in conjunction with our financial statements and related
notes. The operating results for any quarter are not necessarily indicative of
the operating results for any future period.
<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                             ------------------------------------------------------------------------------------
                              MARCH 31,     JUNE 30,     SEPTEMBER 30,   DECEMBER 31,    MARCH 31,     JUNE 30,
                                1999          1999           1999            1999          2000          2000
                             -----------   -----------   -------------   ------------   -----------   -----------
<S>                          <C>           <C>           <C>             <C>            <C>           <C>
Revenues...................  $   828,027   $ 1,584,928    $ 2,892,653    $ 3,948,345    $ 6,379,554   $ 9,762,661
Costs and expenses:
 Costs of revenues.........       25,433        34,821         33,272         53,749         86,876       103,368
 Marketing and selling.....    1,232,352     1,647,578      2,939,547      4,079,339      9,250,432    11,112,107
 General and
   administrative..........      492,270       714,236      1,156,159      1,424,063      1,865,842     2,171,913
 Stock compensation
   expense.................    2,861,676     1,688,912        488,763        488,763        255,062       255,062
 Depreciation and
   amortization............       88,895       109,347        134,483        195,531        297,137       535,405
                             -----------   -----------    -----------    -----------    -----------   -----------
       Total costs and
        expenses...........    4,700,626     4,194,894      4,752,224      6,241,445     11,755,349    14,177,855
                             -----------   -----------    -----------    -----------    -----------   -----------
Operating loss.............   (3,872,599)   (2,609,966)    (1,859,571)    (2,293,100)    (5,375,795)   (4,415,194)
Other income (expense).....       (9,423)      (31,492)       107,112        313,001        277,572       243,948
                             -----------   -----------    -----------    -----------    -----------   -----------
Net loss...................  $(3,882,022)  $(2,641,458)   $(1,752,459)   $(1,980,098)   $(5,098,223)  $(4,171,246)
                             ===========   ===========    ===========    ===========    ===========   ===========

<CAPTION>
                                  THREE MONTHS ENDED
                             ----------------------------
                             SEPTEMBER 30,   DECEMBER 31,
                                 2000            2000
                             -------------   ------------
<S>                          <C>             <C>
Revenues...................   $15,015,136    $18,015,739
Costs and expenses:
 Costs of revenues.........       265,740        235,332
 Marketing and selling.....    15,019,226     15,601,097
 General and
   administrative..........     2,582,041      2,632,188
 Stock compensation
   expense.................     3,502,092             --
 Depreciation and
   amortization............     3,399,095      4,569,918
                              -----------    -----------
       Total costs and
        expenses...........    24,768,194     23,038,535
                              -----------    -----------
Operating loss.............    (9,753,058)    (5,022,796)
Other income (expense).....       157,855         27,400
                              -----------    -----------
Net loss...................   $(9,595,203)   $(4,995,396)
                              ===========    ===========
</TABLE>

     Our quarterly revenue and results of operations may fluctuate significantly
from quarter to quarter, which may cause the price of our common stock to fall
substantially if they do not match the expectations of investors or securities
analysts. Factors which may cause these fluctuations include:

     - changes in the demand for our service offerings;

     - the cancellation of significant numbers of customer accounts;

     - changes in our pricing policies or those of our competitors;

     - the introduction of additional, or enhancement of existing, service
       offerings by us or our competitors;

     - seasonal trends in user traffic;

     - the hiring cycles of employers; and

     - the impact of acquisitions of businesses or technologies.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2000, we had approximately $13.2 million in cash and
cash equivalents. Net cash used in operating activities was $17.0 million for
the twelve months ended December 31, 2000 and $4.5 million for the twelve months
ended December 31, 1999. Net cash used in operating activities primarily
consisted of the net loss for the periods and increases in accounts receivable
resulting from revenue growth.

     Net cash provided by investing activities was $2.9 million for the twelve
months ended December 31, 2000 compared with an outflow of $6.4 million for the
twelve months ended December 31, 1999. Fiscal year 2000 cash provided by
investing activities related to a one-time $5 million cash payment by Omnicom
Finance to us in conjunction with the CareerMosaic merger. Additionally, $4.0
million was provided through the selling of short-term investments for working
capital purposes. The inflows were partially offset by expenditures for capital
assets in 2000 and the purchase of the website domain name jobsearch.com. Net
cash used for investing in 1999 was for capital expenditures and the December
1999 acquisition of the assets of the All In One Submit business and totaled
approximately $6.4 million for the twelve months ended December 31, 1999.
Investing activities in 1999 included the purchase of $4.1 million of high-grade
short-term investments having maturities of less than one year. The majority of
the 1999 capital purchases related

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<PAGE>   19

to telecommunications and computer equipment to build our network infrastructure
and office furniture to accommodate our increased personnel. We currently have
no material commitments for capital expenditures other than in the ordinary
course of business.

     Net cash provided by financing activities was $10.5 million for the twelve
months ended December 31, 2000 and $27.6 million for the twelve months ended
December 31, 1999. The primary source of funds in 2000 was the $10.0 million
revolving line of credit provided to us by Omnicom Finance in conjunction with
the CareerMosaic merger. We received additional funding in 2000 of $568,462 from
the exercise of employee stock options. The 1999 source of funds were primarily
from net proceeds received from the completion of our initial public offering in
August 1999.

     On July 19, 2000, in connection with the CareerMosaic merger, we entered
into a credit agreement with Omnicom Finance, Inc., under which Omnicom Finance
provided us with a revolving line of credit of up to $10.0 million. On February
27, 2001, we amended and restated the credit agreement with Omnicom Finance. The
amended and restated credit agreement will terminate and the outstanding
principal and accrued but unpaid interest will become due and payable upon the
earliest to occur of: (i) June 30, 2004, (ii) ten business days after the
closing of an acceptable equity issuance, as defined in the credit agreement, or
(iii) the closing of a cash merger, as defined in the credit agreement. Interest
will accrue on outstanding principal borrowed under the credit agreement at a
rate equal to the rate charged by Omnicom Finance to the United States
subsidiaries of the Omnicom Group Inc. for short term borrowings. The credit
agreement is subordinated, and Omnicom Finance is entitled, subject to specified
conditions, to convert any outstanding amounts into shares of our common stock.
During the term of the credit agreement, we must comply with specified
covenants. A copy of the amended and restated credit agreement is filed as an
exhibit to this Annual Report on Form 10-K. At December 31, 2000, there was
outstanding $10.0 million under the credit facility.

     We have incurred losses and negative cash flows from operations since
inception as a result of efforts to build out our network infrastructure,
increase staffing, market our website, and further develop our systems. We
currently estimate that our working capital generated from operations, the
revolving credit facility and Omnicom Finance capital contribution will be
sufficient to meet our anticipated operating and capital expenditure needs for
at least the next 12 months. Depending on market opportunities, circumstances
may arise that would cause us to seek to raise additional funds prior to such
time through borrowings or the issuance of equity or debt securities. The method
and rate of our pursuit of these market opportunities could be impacted by our
ability to raise such funding.

     Our ability to grow will depend in part on our ability to increase the
capacity and effectiveness of our website, the effectiveness of our sales and
marketing efforts, and our customer support capabilities. We may need to raise
funds in excess of our current expectations in order to take advantage of new
opportunities, to react to unforeseen difficulties or to otherwise respond to
competitive pressures. If we raise additional funds by issuing equity or
convertible debt securities, the percentage ownership of our existing
shareholders will be reduced, shareholders may experience additional dilution,
and such securities may have rights, preferences or privileges senior to those
of our common stock.

RECENT ACCOUNTING PRONOUNCEMENTS

     On December 3, 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." The Company is required to adopt this accounting guidance, as
amended by SAB No. 101B, no later than January 1, 2001. SAB 101 provides
additional guidance on revenue recognition as well as criteria for when revenue
is generally realized and earned. Beginning the first quarter of 2000, we began
deferring a portion of our job posting revenue in compliance with SAB 101. Our
jobs are posted for a period of 30 days and the days that fall in a following
month have been deferred for the year ended December 31, 2000. At December 31,
2000 we had a deferred revenue balance on our books, in direct relation to SAB
101, of $1,079,916.

     The Financial Accounting Standards Board ("FASB") issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," in June 1998,
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of the FASB Statement No. 133," in
                                       19
<PAGE>   20

June 1999 and SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities -- an amendment of FASB Statement No. 133," in June
2000. SFAS No. 133 establishes accounting and reporting standards for
derivatives and hedging. It requires that all derivatives be recognized as
either assets or liabilities at fair value and establishes specific criteria for
the use of hedge accounting. SFAS No. 137 defers the effective date of the SFAS
No. 133 by one year to fiscal years beginning after June 15, 2000. SFAS No. 138
amends the accounting and reporting standards of the SFAS No. 133 for certain
derivative instruments and certain hedging activities. The Company's required
adoption date is January 1, 2001. Upon adoption of the three statements, the
Company expects no material impact to its results of operations or financial
position.

FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS

WE MAY BE UNABLE TO MEET OUR FUTURE CAPITAL REQUIREMENTS, WHICH MAY PREVENT US
FROM IMPLEMENTING OUR BUSINESS PLAN.

     Based on our current operating plan, we anticipate that our available funds
will be sufficient to satisfy our anticipated needs for working capital,
including our increased marketing expenses, capital expenditures and business
expansion for at least the next 12 months. After that time, or in the event that
we do not meet our operating plan, we may need additional capital.
Alternatively, we may need to raise additional funds prior to such time in order
to fund more rapid expansion, to increase brand development and market
awareness, to develop new or enhanced technology, to respond to competitive
pressures or to establish strategic relationships. If we raise additional funds
by issuing equity or convertible debt securities, the percentage ownership of
our shareholders will be diluted. Any new securities could have rights,
preferences and privileges senior to those of our common stock.

     We cannot be certain that additional financing will be available when and
to the extent required or that, if available, it will be on acceptable terms.
Recently, some Internet companies with a history of generating losses apparently
have been unable to raise additional financing to fund such continued losses. If
adequate funds are not available on acceptable terms, we may not be able to fund
our expansion, increase brand development and market awareness, develop or
enhance our service offerings, respond to competitive pressures or establish
strategic relationships.

A RECESSION COULD ADVERSELY IMPACT OUR BUSINESS AND CAUSE OUR REVENUE TO BE
LOWER THAN ANTICIPATED.

     Online recruiting is a relatively new industry and we do not know how
sensitive we are to general economic conditions. A reduced level of economic
activity and higher unemployment in the United States may significantly and
adversely affect the demand for online recruiting services. A recession could
cause employers and recruiters to reduce or postpone their recruiting efforts
which could cause our revenue to be lower than anticipated and negatively affect
our business.

SALES OF SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD
MATERIALLY ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.

     As of February 26, 2001, we have 20,279,021 shares of our common stock
outstanding. The 5,827,400 shares issued to Bernard Hodes Group in the
CareerMosaic merger are registered for resale by Bernard Hodes Group under a
Form S-4 Registration Statement. The 14,451,621 remaining outstanding shares are
freely tradable or are tradable subject to volume and other limitations of Rule
144 promulgated under the Securities Act. Sales of substantial amounts of common
stock in the public market, or the perception that such sales might occur,
whether as a result of this distribution or otherwise, could harm the market
price of our common stock.

     Subject to specified conditions, our amended and restated credit facility
entitles Omnicom Finance to convert any outstanding amounts into shares of our
common stock after July 1, 2001 and entitles us to prepay interest owed under
the credit facility by issuing shares of our common stock to Omnicom Finance.
Because the number of shares of our stock that could be issued upon such
conversion or interest prepayment will

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<PAGE>   21

depend on the share price at such time, we are unable to determine the number of
shares which may be issued if such conversion or interest prepayment occurs.

     In addition, ITC Holding Company and Bernard Hodes Group, the collective
owners of approximately 53.8% of our common stock as of February 26, 2001, and,
to the extent Omnicom Finance receives shares of our common stock under our
Amended and Restated Credit Agreement, Omnicom Finance, have registration rights
which allow them to participate in our future public offerings and to demand
registration of their shares for resale after July 19, 2001. Warren L. Bare also
has registration rights which allow him to participate in our future public
offerings.

     Upon closing of the CareerMosaic merger, the vesting of options to purchase
our common stock which were outstanding prior to April 15, 2000 fully
accelerated and became immediately exercisable, except for options held by
Robert M. Montgomery, Jr. All such shares which are not held by affiliates are
freely tradable.

OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS AND PROSPECTS
DIFFICULT.

     We launched our website in October 1996 and have substantially modified it
since that time. As a result, we have a limited operating history upon which an
investor can base an evaluation of our business and prospects. Investors must
consider the risks, expenses and problems frequently encountered by companies in
their early stages of development, particularly companies in new and rapidly
evolving markets such as online recruiting. Some of the risks which we may face
as an early stage company include our ability to:

     - implement our business model and strategy and adapt them as needed;

     - attract employers, recruiters and job seekers to our website; and

     - develop strategic relationships with other Internet sites.

     If we fail to successfully manage these risks, expenses and problems, and
the other risks described below, current evaluations of our business and
prospects may prove to be inaccurate.

WE HAVE A HISTORY OF LOSSES AND MAY NEVER ACHIEVE PROFITABILITY.

     We have a history of losses and may never be profitable. We incurred net
losses of $4.3 million for the year ended December 31, 1998, $10.3 million for
the year ended December 31, 1999 and $23.9 million for the year ended December
31, 2000. As of December 31, 2000, we had an accumulated deficit of
approximately $60.3 million.

     Our ability to become profitable depends on our ability to generate and
maintain greater revenues while incurring reasonable expenses. Our ability to
generate greater revenues depends on:

     - our ability to convince job posters to utilize our website for their
       online recruiting needs;

     - the growth of acceptance of the Internet as a recruiting tool;

     - the number of job seekers who visit our website;

     - our ability to attract and retain sales and technical personnel; and

     - the number of job opportunities and resumes posted on our website.

     Even if we do achieve profitability, we may be unable to sustain or
increase profitability on a quarterly or annual basis in the future. Our
inability to achieve or maintain profitability or positive cash flow could
result in disappointing financial results, impede implementation of our growth
strategy or cause the market price of our common stock to decrease.

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<PAGE>   22

WE HAVE RECENTLY CHANGED OUR METHOD OF PRICING OUR SERVICES, WHICH MAY DECREASE
THE NUMBER OF JOB OPPORTUNITIES AND USERS ON OUR WEBSITE AND MAY RESULT IN
DECREASED REVENUE.

     In 2000, we increased the base price of posting a job opportunity on our
website, began charging job posters to view all resumes on our database and made
other pricing changes. We will likely make additional pricing changes in the
future. As a result, the number of job opportunities posted on our website may
decrease. In the event the number of job opportunities in our database
materially decreases, job seekers may find that our website is not as useful as
other online recruiting sites. A decrease in the number of job seekers on our
website may cause job posters to further reduce the number of job opportunities
they post or the additional services that they are willing to purchase. Job
seekers may not post their resumes on www.headhunter.net which would reduce the
number of employers and recruiters willing to pay to access resumes. These
changes may reduce our revenue.

ONE OF OUR GROWTH STRATEGIES IS TO PURSUE ACQUISITIONS AND WE MAY FACE RISKS IN
ACQUIRING AND INTEGRATING OTHER BUSINESSES AND TECHNOLOGIES.

     One element of our growth strategy is to acquire other businesses and
technologies that we believe will complement our business. Acquiring other
businesses and technologies involves numerous risks, including:

     - difficulties in integrating the operations, services, products and
       personnel of an acquired company;

     - diversion of management's attention from other business concerns;

     - inability to retain and motivate key personnel of the acquired business;
       and

     - inability to retain clients or goodwill of the acquired business.

     In 2000, we acquired CareerMosaic and MiracleWorkers. We may not fully
realize the expected benefits of those acquisitions, and there may be additional
unexpected risks that arise.

     In pursuing acquisitions, we may compete with competitors that may be
larger and have greater financial and other resources than we have. Competition
for these acquisition targets could result in increased prices of acquisition
targets.

     In the future, we may take accounting charges in connection with
acquisitions. We cannot guarantee that the costs and expenses actually incurred
will not exceed the estimates we use to take the accounting charges.

OUR FUTURE REVENUES ARE UNPREDICTABLE, AND OUR FINANCIAL RESULTS MAY FLUCTUATE,
WHICH MAY ADVERSELY AFFECT OUR STOCK PRICE.

     Our revenue and results of operations are difficult to predict, and we
expect them to fluctuate significantly from quarter to quarter. If our revenue
or results of operations fall below the expectations of investors or public
market analysts, the price of our common stock could fall substantially. Our
revenue and results of operations may fluctuate significantly in response to the
following factors, many of which are beyond our control:

     - the cancellation of a significant number of customer accounts;

     - changes in the demand for service offerings;

     - changes in our pricing policies or those of our competitors;

     - the timing and effectiveness of marketing campaigns;

     - the hiring cycles of employers;

     - our ability to hire and retain qualified sales people;

     - seasonal trends in user traffic;

     - introduction of additional, or enhancement of existing, service offerings
       by us or our competitors;

                                       22
<PAGE>   23

     - the incurrence of costs related to acquisitions of businesses or
       technologies;

     - the costs of establishing, and the timing of, strategic relationships;
       and

     - general economic conditions, including the effects of a recession.

ONE OF OUR STRATEGIES IS TO INCREASE AWARENESS OF OUR BRAND, AND IF WE FAIL TO
FURTHER DEVELOP OUR BRAND, WE MAY NOT BE ABLE TO SUSTAIN OR INCREASE THE NUMBER
OF JOB POSTERS AND JOB SEEKERS USING OUR WEBSITE.

     We believe that maintaining and strengthening our brand is an important
aspect of our business. Our brand name is critical in our efforts to sustain or
increase the number of job posters and job seekers who use our website. We
believe that the importance of brand recognition will increase due to the
continued growth in the number of competitors entering the online recruiting
market. Our ability to promote and position our brand depends largely on the
success of our marketing efforts and our ability to effectively satisfy the
needs of job posters and job seekers. To promote our brand, we intend to
increase our marketing budget. If we fail to promote successfully and maintain
our brand, or if we incur excessive expenses attempting to promote and maintain
our brand, we may be unable to implement our business plan and our financial
results may suffer.

THE ONLINE RECRUITING MARKET IS INTENSELY COMPETITIVE AND WE MAY BE UNABLE TO
COMPETE SUCCESSFULLY AGAINST EXISTING AND FUTURE COMPETITORS, WHICH MAY MAKE IT
MORE DIFFICULT TO GROW OUR BUSINESS.

     The online recruiting market is highly fragmented and intensely
competitive. We compete on the Internet with other online recruiting sites,
corporate Internet sites, Internet portal sites, Internet sites that provide
their users with access to content, commonly known as Internet content
providers, and nonprofit professional organizations. Many of our competitors
have longer operating histories in the online recruiting market, exclusive
arrangements with significant Internet companies, significantly greater
financial, technical and marketing resources, more users and larger databases
than we do. We also compete with traditional recruiting methods, such as
classified advertising, radio, television and traditional recruiting firms for a
share of the total recruiting budgets of employers and recruiters.

     Presently, the barriers to entry by competitors in the market for online
recruiting are low. Current and new competitors can launch new Internet sites
and add substantial content on their sites at a low cost within a short time
period. Therefore, we expect competition to continue to intensify, and the
number of competitors could increase significantly in the near future. If we are
unable to compete successfully against existing and future competitors, our
financial results will suffer and we may not benefit from the projected growth
in the online recruiting market.

IF WE LOSE THE SERVICES OF OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER, OR IF WE
CANNOT RECRUIT AND RETAIN ADDITIONAL SKILLED PERSONNEL, OUR BUSINESS MAY SUFFER.

     We depend on the continued services and performance of Robert M.
Montgomery, Jr., our President and Chief Executive Officer, for our future
success. We do not have an employment agreement with Mr. Montgomery, and are not
the beneficiary of any key person life insurance covering him or any other
executive officer.

     Competition for personnel with experience in online recruiting and commerce
is intense. If we are unsuccessful in attracting and training new employees, or
retaining and motivating our current and future employees, our business could
suffer significantly.

WE DO NOT HAVE LONG-TERM AGREEMENTS WITH OUR CUSTOMERS, WHICH MAY CAUSE OUR
REVENUE TO FLUCTUATE.

     We derive a substantial majority of our revenues from job posters that pay
to post job opportunities on our website, to purchase additional services and to
access resumes posted on our website. Generally, these employers and recruiters
post their job opportunities on a monthly basis. They have no obligation to
purchase access to resumes or any other service offerings, or to post any job
opportunities for more than one month at a time. As a result, an employer or
recruiter that generates substantial revenue for us in a particular month may
not do so in a later month. We must continually maintain existing accounts and
establish and develop new
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<PAGE>   24

accounts with employers and recruiters. If we fail to do so, our revenue could
fluctuate, which may cause us to fail to meet expectations in the marketplace
and our stock price may decline.

WE MAY BE UNABLE TO EFFECTIVELY MANAGE OUR RAPID GROWTH, WHICH IS PLACING AND
MAY CONTINUE TO PLACE A STRAIN ON OUR RESOURCES.

     We have rapidly expanded our operations and anticipate that further
expansion will be required to execute our growth strategy. Our rapid growth has
placed significant demands on our management, financial, technical and other
resources. These demands are likely to continue and may increase. To manage our
future growth, we must adapt to changing business conditions and improve
existing systems or implement new systems for our financial and management
controls, reporting systems and procedures. In addition, in order to achieve
rapid growth, we may acquire technologies or products or enter into strategic
alliances. For us to succeed, we must make our existing technology, business and
systems work effectively with those of any strategic partners without undue
expense, management distraction or other disruptions to our business. If we fail
to manage any of the above growth challenges successfully, we may be unable to
implement our business plan and our financial results may suffer.

BECAUSE WE DEPEND ON THIRD PARTIES TO FACILITATE ACCESS TO OUR WEBSITE, WE FACE
RISKS OF CAPACITY CONSTRAINTS, WHICH COULD INCREASE OUR EXPENSES OR REDUCE OUR
REVENUES UNEXPECTEDLY.

     We depend on Internet service providers and other website operators, which
may experience Internet connectivity outages. Such outages may cause users to
experience difficulties in accessing our website. Any system failures at these
third parties may cause an interruption in service or a decrease in
responsiveness of our website and may impair users' perceptions of our website.
Any failure to handle current or increased volumes of traffic on our website may
impede our ability to sustain or increase the number of employers, recruiters
and job seekers who use our website. Additionally, we are dependent on one
provider for all of our co-location services. If that provider, for any reason,
were unable or unwilling to provide us with services, an interruption in service
may occur which also may impair users' perceptions of our website.

     We derive a substantial majority of our revenues from job posters that pay
to post their job opportunities and purchase other services. The amounts they
are willing to pay for such services depend to a significant degree on the
number of job seekers who visit our website. We depend on the performance,
reliability and availability of our website to attract and retain these job
seekers. Capacity constraints could prevent them from accessing our website for
extended periods of time and decrease our traffic. Decreased traffic could
result in fewer employers and recruiters posting job opportunities on our
website or purchasing fewer other services. This would result in decreased
revenues. In addition, if the number of employers, recruiters and job seekers on
our website increases substantially, we may experience capacity constraints and
need to expand or upgrade our technology at a time when we do not have adequate
funds to do so, or when that technology is not readily available.

WE MAY NOT BE ABLE TO PROTECT AND ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS,
WHICH COULD RESULT IN THE LOSS OF OUR RIGHTS, LOSS OF BUSINESS OR INCREASED
COSTS.

     Our success and ability to compete depend to a significant degree on our
internally developed proprietary technology and on our brand, marks and domain
names. We rely on trademark and other intellectual property laws, and on
confidentiality and non-disclosure agreements with our employees and third
parties, to establish and protect our proprietary rights. We cannot assure you
that the steps we have taken to protect our proprietary rights will be adequate
or that we will be able to defend our marks or obtain patents for any of our
internally developed systems. If we are unable to secure or protect our marks
and systems, such failure could result in the loss of our rights to our marks
and systems, or the loss of business.

     Third parties may claim that our business activities infringe upon their
proprietary rights. From time to time in the ordinary course of business, we
have been, and expect to continue to be, subject to claims of infringement of
third parties' trademarks and other intellectual property rights. Although such
claims have not had a material adverse effect on our business, such claims could
subject us to significant liability and result

                                       24
<PAGE>   25

in invalidation of our proprietary rights. These claims could be time-consuming
and expensive to defend, even if we ultimately are not found liable and could
divert our management's time and attention. In addition, patents recently issued
to third parties regarding Internet business processes indicate additional
Internet business process patents may be issued in the future. While we do not
believe we infringe any existing business process patent, future patents may
limit our liability to use processes covered by such patents or expose us to
claims of patent infringement or otherwise require us to seek to obtain related
licenses. There can be no assurance that such licenses would be available on
acceptable terms or at all. The failure to obtain such licenses on acceptable
terms could have a material adverse effect on our business, financial condition,
results of operations and prospects.

OUR BUSINESS MAY SUFFER IF USERS CONFUSE SIMILAR DOMAIN NAMES WITH
HEADHUNTER.NET.

     We cannot assure you that potential users of our website will not confuse
our domain name with other similar domain names such as headhunters.com,
headhunter.org or headhunters.org. If any confusion occurs, we may lose business
to a competitor, or some of our users may have negative experiences with these
other websites that they mistakenly associate with us.

OUR ARTICLES OF INCORPORATION, BYLAWS AND SHAREHOLDER PROTECTION RIGHTS
AGREEMENT AND GEORGIA LAW CONTAIN PROVISIONS THAT COULD DISCOURAGE A TAKEOVER OF
US.

     Our articles of incorporation, bylaws and shareholder protection rights
agreement contain provisions that could make it more difficult for another
company to acquire us, even if that acquisition would benefit our shareholders.
Further, we have adopted provisions of Georgia law that could delay, prevent or
make more difficult a merger, tender offer or proxy contest involving us.

     In connection with the CareerMosaic merger, we entered into a shareholders'
agreement with Bernard Hodes Group Inc. and ITC Holding Company, Inc. under
which Bernard Hodes Group and ITC Holding Company will vote the shares of our
common stock held by each of them to elect nominees selected by them to our
board of directors. The shareholders' agreement also prohibits the parties from
initiating or participating in a proxy solicitation contest, a tender offer,
exchange offer, merger or other business combination transaction not supported
by our board of directors for a period of five years.

WE DEPEND ON THE ACCEPTANCE OF THE INTERNET AS A RECRUITING MEDIUM.

     The Internet is a relatively new medium for recruiting, and employers,
recruiters and job seekers have not reached any consensus that online recruiting
is an effective means for satisfying their recruitment needs. A large number of
employers and recruiters have only limited experience in using the Internet for
recruitment. They are not yet spending a significant amount of their recruiting
budgets on online recruiting or committing to doing so over a long period. As a
result, our sales force spends a substantial amount of time and resources
retaining existing accounts, and educating employers and recruiters about our
services and the online recruiting market. We may be unable to persuade a large
number of employers, recruiters and job seekers that our services will satisfy
their needs more successfully than traditional recruiting methods. If we cannot
meet the needs of employers, recruiters and job seekers or adapt our services to
meet their demands, we may be unable to implement our business plan. Further, if
the market for online recruiting does not grow as projected, we may not be able
to grow our business.

OUR MARKET IS SUBJECT TO RAPID CHANGE AND WE MAY NOT SUCCESSFULLY ADAPT TO THIS
CHANGE.

     Our market is characterized by rapidly changing technology, introductions
and enhancements of competitive services, and changing user demands.
Accordingly, our future success depends on our ability to adapt to such rapid
changes in technology and improve the features, reliability and functionality of
our service offerings in response to our competitors. We cannot assure you that
we will succeed in addressing these issues.

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<PAGE>   26

WE MAY BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION, WHICH MAY ADD COSTS
TO OPERATING OUR BUSINESS ON THE INTERNET OR DECREASE DEMAND FOR OUR SERVICES.

     We are subject to various laws and regulations relating to our business,
although there are few laws or regulations that apply directly to our
Internet-based services. However, due to the increasing popularity and use of
the Internet, it is possible that additional laws and regulations may be adopted
covering user privacy, freedom of expression, pricing, content, quality of
products and services, taxation, advertising, intellectual property rights and
information security. Moreover, the applicability to the Internet of existing
laws governing issues such as intellectual property ownership and infringement,
copyright, trademark, trade secret, obscenity, libel, employment and personal
privacy is uncertain and developing. The nature and effect of any proposed
legislation or regulation, or the application or interpretation of existing
laws, cannot be fully determined. Any new law or regulation pertaining to the
Internet, or the application or interpretation of existing laws, could decrease
the demand for our services or increase our operational costs.

     The adoption of any such legislation could also dampen the growth in use of
the Internet generally, and decrease our acceptance as a communications,
commercial and advertising medium. Any legislation which has an adverse impact
on the growth of the Internet could cause us to incur additional operating
expenses or decrease the demand for our services.

RECENTLY ENACTED PRIVACY ACTS AND THE DIRECTIVE ADOPTED BY THE EUROPEAN UNION
MAY HAVE AN ADVERSE EFFECT ON OUR BUSINESS.

     Our business depends on our ability to collect and use personal data from
the users of our website. The United States and numerous other governments and
governmental agencies within several countries are considering adopting laws and
regulations regarding the collection and use of personal identifying information
obtained from individuals when accessing websites. While we have implemented and
intend to implement additional programs designed to enhance the protection of
the privacy of our users, these programs may not conform to all or any of these
laws of regulations and we may consequently incur civil or criminal liability
for failing to conform. In addition, these statutory and regulatory requirements
may adversely affect our ability to collect demographic and personal information
from users, which could have an adverse effect on our ability to provide
value-added opportunities to our advertisers and other third parties and may
consequently have an adverse effect on our business.

     Additionally, the European Union has adopted a directive that imposes
restrictions on the collection and use of personal data concerning EU residents,
and on any transfer of such data outside of the EU. In response to the
directive, which prohibits the transfer of data to countries that are not deemed
to have laws that adequately protect data subjects' privacy rights, other
countries have adopted or are considering adopting laws and regulations
regarding the collection and use of personal data that meet the EU's standard
for adequacy. The directive and the privacy acts of these other countries may
have an adverse effect on our ability to collect personal data from users in the
applicable countries and consequently may have an adverse effect on our
business.

BECAUSE OUR BUSINESS INVOLVES THE TRANSMISSION OF INFORMATION, WE MAY INCUR
LIABILITY FOR INFORMATION RETRIEVED FROM OR TRANSMITTED OVER THE INTERNET.

     We may be sued for defamation, obscenity, negligence, copyright or
trademark infringement or other legal claims relating to information that is
posted or made available on our website. Other claims may be brought based on
the nature, publication or distribution of content or based on errors or false
or misleading information provided on our website. We could also be sued for the
content that is accessible from our website through links to other Internet
sites. We currently maintain insurance in amounts up to $2.0 million for general
aggregate claims and $1.0 million for personal injury claims. Our insurance may
not adequately protect us against claims related to information on our website.
In addition, we could incur significant costs in investigating and defending
such claims, even if we ultimately are not found liable.

                                       26
<PAGE>   27

CONCERNS REGARDING SECURITY OF TRANSACTIONS AND TRANSMITTING CONFIDENTIAL
INFORMATION OVER THE INTERNET MAY NEGATIVELY IMPACT OUR ELECTRONIC COMMERCE
BUSINESS.

     We believe that concern regarding the security of confidential information
transmitted over the Internet, such as credit card numbers, prevents many
potential customers from engaging in online transactions. If we do not maintain
sufficient security features on our website, our services may not gain market
acceptance, or there may be additional legal exposure. We have included basic
security features in some of our products to protect the privacy and integrity
of customer data, such as password requirements to access some data.

     Despite the measures we have taken, our infrastructure is potentially
vulnerable to physical or electronic break-ins or similar problems. If a person
circumvents our security measures, he or she could misappropriate proprietary
information or cause interruptions in our operations. Security breaches that
result in access to confidential information could damage our reputation and
expose us to a risk of loss or liability. We may be required to make significant
investments and efforts to protect against or remedy security breaches.
Additionally, as electronic commerce becomes more prevalent, our customers will
become more concerned about security. If we do not adequately address these
concerns, we may incur liability and we may not be able to sustain or increase
the number of employers, recruiters and job seekers using our services.

COMPUTER VIRUSES MAY CAUSE OUR SYSTEMS TO INCUR DELAYS OR INTERRUPTIONS AND MAY
INCREASE OUR EXPENSES OR LIABILITIES.

     Computer viruses may cause our systems to incur delays or other service
interruptions, which may cause us to incur additional operating expenses to
correct problems we may experience. In addition, the inadvertent transmission of
computer viruses could expose us to a material risk of loss or litigation and
possible liability. Moreover, if a computer virus affecting our system is
publicly disclosed, our reputation could be materially damaged and our visitor
traffic may decrease. In addition, our sales and marketing efforts could be
impeded due to dissatisfaction among employers, recruiters and job seekers. Most
general business interruption insurance policies do not cover interruptions
caused by computer viruses or hackers. We have not added specific insurance
coverage to protect against these risks.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

     We believe our exposure to market rate fluctuations on our investments is
nominal due to the short-term nature of those investments. At present, we do not
employ any derivative financial instruments, other financial instruments or
derivative commodity instruments to hedge any market risks and we do not
currently plan to employ them in the future. At December 31, 2000, we held $7.6
million in short term investments in high grade instruments having maturities
less than one year.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Our financial statements are submitted as a separate section of this Annual
Report on Form 10-K beginning on page 33.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

     None.

                                       27
<PAGE>   28

                                    PART III

     Certain information required by Part III is omitted from this report in
that the Registrant will file a Definitive Proxy Statement pursuant to
Regulation 14A ("Proxy Statement") not later than 120 days after the end of the
fiscal year covered by this report.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The information required by this item is incorporated herein by reference
to the Company's Proxy Statement.

ITEM 11.  EXECUTIVE COMPENSATION.

     The information required by this item is incorporated herein by reference
to the Company's Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by this item is incorporated herein by reference
to the Company's Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information required by this item is incorporated herein by reference
to the Company's Proxy Statement.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a) Financial Statements and Schedules

        (1) The financial statements are submitted as a separate section of this
     Annual Report on Form 10-K beginning on page 33.

        (2) Financial statement schedules required to be included in this Annual
     Report on Form 10-K are submitted as a separate section beginning
     immediately after our financial statements.

        (3) The exhibits required by Item 601 of Regulations S-K are listed in
     the Exhibit Index in subpart (c) below.

     (b) Reports on Form 8-K

        None.

     (c) Exhibits

                                        28
<PAGE>   29

     The following exhibits are filed as part of, or are incorporated by
reference into, this report on Form 10-K:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                 DESCRIPTION
-------                                -----------
<C>       <C>  <S>
 2.1       --  Purchase Agreement dated December 17, 1999 between
               HeadHunter.NET, Chicago Computer Guide, Inc. and George
               Scholomite (incorporated by reference from Exhibit 2.1 of
               the Registrant's Current Report on Form 8-K filed on January
               3, 2000)
 2.2       --  Agreement and Plan of Merger dated April 15, 2000 among the
               HeadHunter.NET, Resume Acquisition Corporation, ITC Holding
               Company, Inc., Omnicom Group Inc., Bernard Hodes Group Inc.
               and Career Mosaic Inc., as amended by Amendment No. 1 to
               Agreement and Plan of Merger dated June 19, 2000
               (incorporated by reference from Exhibit 2.2 of the
               Corporation's registration statement on Form S-4 (File No.
               333-37430))
 2.3       --  Support Agreement dated April 15, 2000 among Bernard Hodes
               Group Inc., HeadHunter.NET, Inc., ITC Holding Company, Inc.,
               and Robert M. Montgomery, Jr. (incorporated by reference
               from Exhibit 99.2 to HeadHunter.NET's Current Report on Form
               8-K filed on April 19, 2000)
 3.1       --  Articles of Incorporation, as amended (incorporated by
               reference from Exhibit 3.1 of the Registrant's registration
               statement on Form S-1, Registration No. 333-80915)
 3.2       --  Amended and Restated Bylaws (incorporated by reference from
               Exhibit 3.2 to our registration statement on Form S-4 (File
               No. 333-37430))
 4.1       --  Specimen common stock certificate (incorporated by reference
               from Exhibit 4.1 of the Registrant's registration statement
               on Form S-1, Registration No. 333-80915)
 4.2       --  Article II of the Articles of Incorporation, as amended
               (filed as part of Exhibit 3.1)
 4.3       --  Shareholder Protection Rights Agreement dated as of April
               15, 2000, between the Corporation and American Stock
               Transfer & Trust Company, as rights agent (incorporated by
               reference from Exhibit 99.3 to the Corporation's Current
               Report on Form 8-K filed on April 19, 2000)
 4.4       --  Amendment No. 1 to Shareholder Protection Rights Agreement
               dated as of February 27, 2001 between HeadHunter.NET, Inc.
               and American Stock Transfer & Trust Company, as rights agent
10.1       --  HeadHunter.NET, Inc 1998 Long-Term Incentive Plan, as
               amended (incorporated by reference from Exhibit 10.1 of the
               Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
10.2       --  HeadHunters, L.L.C. Employee Common Unit Option Plan dated
               January 14, 1998 (incorporated by reference from Exhibit
               10.2 of the Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
10.3       --  MedicalJobsSource.Com, Inc. 1999 Stock Option Plan
               (incorporated by reference from Exhibit 99.2 to our
               registration statement on Form S-8 (File No. 333-47146)
10.4       --  Form of Indemnity Agreement between directors/executive
               officers and Headhunter.net (incorporated by reference from
               Exhibit 10.4 of the Registrant's registration statement on
               Form S-1, Registration No. 333-80915)
10.5       --  Contribution Agreement dated July 15, 1998 among ITC Holding
               Company, Inc., Warren L. Bare and Headhunter.net
               (incorporated by reference from Exhibit 10.5 of the
               Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
10.6       --  Amended and Restated Stock Purchase Warrant between ITC
               Service Company and Headhunter.net (incorporated by
               reference from Exhibit 10.10 of the Registrant's
               registration statement on Form S-1, Registration No.
               333-80915)
10.7       --  Form of Non-Employee Director Non-Qualified Stock Option
               Agreement (incorporated by reference from Exhibit 10.12 of
               the Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
</TABLE>

                                       29
<PAGE>   30

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                 DESCRIPTION
-------                                -----------
<C>       <C>  <S>
10.8       --  Lease Agreement between AJ Partners, L.P. and
               Headhunter.net, as amended by the Tenant Acceptance
               Agreement dated September 22, 1999 (incorporated by
               reference from Exhibit 10.8 of the Registrant's Annual
               Report on Form 10-K filed on March 30, 2000)
10.9       --  Severance letter between Headhunter.net and Warren Bare
               dated February 24, 1999 (incorporated by reference from
               Exhibit 10.16 of the Registrant's registration statement on
               Form S-1, Registration No. 333-80915)
10.10      --  2000 Qualified Employee Stock Purchase Plan (incorporated by
               reference from Exhibit 4.3 of the Registrant's registration
               statement on Form S-8, Registration No. 333-94027)
10.11      --  NBCi Promotion Agreement dated December 9, 1999 between
               Headhunter.net and NBCInternet, Inc. (incorporated by
               reference from Exhibit 10.11 of the Registrant's Annual
               Report on Form 10-K filed on March 30, 2000)+
10.12      --  Amended and Restated Registration Rights Agreement dated
               February 27, 2001 among the Corporation, Bernard Hodes Group
               Inc., Omnicom Finance, Inc. and ITC Holding Company, Inc.
10.13      --  Amended and Restated Shareholders' Agreement dated February
               27, 2001 among the Corporation, Omnicom Group Inc., Bernard
               Hodes Group Inc., Omnicom Finance, Inc. and ITC Holding
               Company, Inc.
10.14      --  Amended and Restated Credit Agreement between the
               Corporation and Omnicom Finance, Inc. dated as of February
               27, 2001
10.15      --  Non-Competition Agreement dated July 19, 2000 between the
               Corporation and Bernard Hodes Group Inc. (incorporated by
               reference from Exhibit 99.7 of the Registrant's Current
               Report on Form 8-K filed on August 3, 2000)
10.16      --  Form of Indemnification Agreement between the Corporation
               and ITC Holding Company, Inc. and Bernard Hodes Group Inc.
               (incorporated by reference from Exhibit 99.8 of the
               Registrant's Current Report on Form 8-K filed on August 3,
               2000)
21.1       --  Subsidiaries of the Company (incorporated by reference from
               Exhibit 21.1 of the Registrant's registration statement on
               Form S-1, Registration No. 333-80915)
23.1       --  Consent of Arthur Andersen LLP
</TABLE>

---------------

+ Confidential treatment has been granted for certain portions which have been
  blanked out in the copy of the exhibit filed with the Securities and Exchange
  Commission. The omitted information has been filed separately with the
  Securities and Exchange Commission.

                                        30
<PAGE>   31

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          HeadHunter.NET, Inc.

                                          By: /s/ Robert M. Montgomery, Jr.
                                            ------------------------------------
                                                 Robert M. Montgomery, Jr.
                                               President and Chief Executive
                                                           Officer
Date: February 28, 2001

                                          By:      /s/ W. Craig Stamm
                                            ------------------------------------
                                                       W. Craig Stamm
                                                  Chief Financial Officer
Date: February 28, 2001

                               POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert M. Montgomery, Jr. and W. Craig Stamm, and
each of them, his true and lawful attorneys-in-fact and agents, with the full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this Report,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each of said
attorney-in-fact or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                    TITLE                    DATE
                      ---------                                    -----                    ----
<C>                                                    <S>                            <C>

              /s/ William H. Scott, III                Chairman of the Board and      February 28, 2001
-----------------------------------------------------    Director
                William H. Scott, III

            /s/ Robert M. Montgomery, Jr.              President, Chief Executive     February 28, 2001
-----------------------------------------------------    Officer and Director
              Robert M. Montgomery, Jr.

                 /s/ W. Craig Stamm                    Chief Financial Officer        February 28, 2001
-----------------------------------------------------
                   W. Craig Stamm

            /s/ Burton B. Goldstein, Jr.               Director                       February 28, 2001
-----------------------------------------------------
              Burton B. Goldstein, Jr.

                /s/ Bernard S. Hodes                   Director                       February 28, 2001
-----------------------------------------------------
                  Bernard S. Hodes
</TABLE>

                                        31
<PAGE>   32

<TABLE>
<CAPTION>
                      SIGNATURE                                    TITLE                    DATE
                      ---------                                    -----                    ----

<C>                                                    <S>                            <C>

                 /s/ J. Douglas Cox                    Director                       February 27, 2001
-----------------------------------------------------
                   J. Douglas Cox

               /s/ Michael G. Misikoff                 Director                       February 27, 2001
-----------------------------------------------------
                 Michael G. Misikoff

              /s/ Kimberley E. Thompson                Director and Secretary         February 28, 2001
-----------------------------------------------------
                Kimberley E. Thompson
</TABLE>

                                        32
<PAGE>   33

                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

                               TABLE OF CONTENTS

<TABLE>
<S>                                                           <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS....................    34
CONSOLIDATED FINANCIAL STATEMENTS
  Consolidated Balance Sheets -- December 31, 2000 and
     1999...................................................    35
  Consolidated Statements of Operations for the Years Ended
     December 31, 2000, 1999 and 1998.......................    36
  Consolidated Statements of Shareholders' Equity (Deficit)
     for the Years Ended December 31, 2000, 1999 and 1998...    37
  Consolidated Statements of Cash Flows for the Years Ended
     December 31, 2000, 1999 and 1998.......................    38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..................    39
</TABLE>

                                       33
<PAGE>   34

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To HeadHunter.NET, Inc. and Subsidiaries:

     We have audited the accompanying consolidated balance sheets of
HEADHUNTER.NET, INC. AND SUBSIDIARIES as of December 31, 2000 and 1999 and the
related consolidated statements of operations, shareholders' equity (deficit),
and cash flows for each of the three years in the period ended December 31,
2000. 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 auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit 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 that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of HeadHunter.NET, Inc. and
subsidiaries as of December 31, 2000 and 1999 and the results of their
operations and their cash flows for the years ended December 31, 2000, 1999 and
1998 in conformity with accounting principles generally accepted in the United
States.

Atlanta, Georgia
January 24, 2001, except with respect to Note 3
as to which the date is February 27, 2001

                                       34
<PAGE>   35

                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                   FISCAL YEAR ENDED
                                                              ---------------------------
                                                                  2000           1999
                                                              ------------   ------------
<S>                                                           <C>            <C>
                                         ASSETS
Current Assets:
 Cash and cash equivalents..................................  $ 13,228,336   $ 16,938,708
 Short-term investments.....................................        84,500      4,125,084
 Accounts receivable:
   Trade, net of allowance for doubtful accounts of
     $1,064,136 and $209,475 in 2000 and 1999,
     respectively...........................................     9,576,731      1,846,813
   Prepaid expenses.........................................     1,921,855        495,768
   Other current assets.....................................       212,148         65,650
                                                              ------------   ------------
       Total current assets.................................    25,023,570     23,472,023
Property and equipment, net.................................     5,992,894      1,749,711
Intangible assets, net......................................    68,583,035      1,197,071
Other noncurrent assets.....................................       790,430        560,939
                                                              ------------   ------------
       Total assets.........................................  $100,389,929   $ 26,979,744
                                                              ============   ============
                          LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
 Accounts payable...........................................  $  1,873,028   $    614,058
 Current maturities of notes payable (Note 3)...............       216,520              0
 Accrued interest -- affiliates (Note 3)....................        66,020              0
 Accrued trade expenses.....................................     1,997,839        652,423
 Other accrued expenses.....................................     2,566,349        757,500
 Customer deposits..........................................     1,199,138        131,356
 Deferred revenue...........................................     2,719,167         80,483
                                                              ------------   ------------
       Total current liabilities............................    10,638,061      2,235,820
                                                              ------------   ------------
Noncurrent Liabilities:
 Long-term borrowings -- affiliate (Note 3).................    10,000,000              0
                                                              ------------   ------------
                                                                20,638,061      2,235,820
Commitments and Contingencies (Note 9)
Shareholders' Equity (Deficit):
 Convertible Class A preferred stock, $.01 par value;
   7,500,000 shares authorized and no shares issued and
   outstanding..............................................             0              0
 Class B serial preferred stock, $.01 par value; 5,000,000
   shares authorized, no shares issued and outstanding......             0              0
 Common stock, $.01 par value; 45,500,000 shares authorized
   and 20,212,772 and 10,802,833 shares issued and
   outstanding in 2000 and 1999, respectively...............       202,128        108,028
 Additional paid-in capital.................................   139,546,267     64,784,569
 Stock warrants (Note 5)....................................       341,834        341,834
 Accumulated deficit........................................   (60,338,361)   (36,478,292)
 Deferred compensation (Note 6).............................             0     (4,012,215)
                                                              ------------   ------------
       Total shareholders' equity...........................    79,751,868     24,743,924
                                                              ------------   ------------
       Total liabilities and shareholders' equity...........  $100,389,929   $ 26,979,744
                                                              ============   ============
</TABLE>

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

                                       35
<PAGE>   36

                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                               YEAR ENDED     YEAR ENDED     YEAR ENDED
                                                              DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                                  2000           1999           1998
                                                              ------------   ------------   ------------
<S>                                                           <C>            <C>            <C>
Revenues....................................................  $ 49,173,089   $  9,253,954   $ 1,099,868
                                                              ------------   ------------   -----------
Costs and Expenses:
 Costs of revenues..........................................       691,316        147,275        86,963
 Marketing and selling......................................    50,982,861      9,898,815     2,719,330
 General and administrative.................................     9,251,984      3,786,728     1,714,756
 Stock compensation expense.................................     4,012,215      5,528,114       205,574
 Depreciation and amortization..............................     8,801,556        528,256       276,706
                                                              ------------   ------------   -----------
       Total costs and expenses.............................    73,739,932     19,889,188     5,003,329
                                                              ------------   ------------   -----------
Operating Loss..............................................   (24,566,843)   (10,635,234)   (3,903,461)
Other Income (Expense)......................................       706,774        379,198      (442,407)
                                                              ------------   ------------   -----------
Net Loss....................................................  $(23,860,069)  $(10,256,036)  $(4,345,868)
                                                              ============   ============   ===========
Loss Per Share:
 Basic and diluted (Note 5).................................  $      (1.60)  $      (5.90)  $     (1.98)
                                                              ============   ============   ===========
Weighted Average Shares Outstanding:
 Basic and diluted..........................................    14,931,483      5,412,135     2,200,000
                                                              ============   ============   ===========
</TABLE>

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

                                        36
<PAGE>   37

                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
<TABLE>
<CAPTION>
                        CONVERTIBLE CLASS A                                                        RETAINED
                          PREFERRED STOCK          COMMON STOCK         ADDITIONAL                 EARNINGS
                       ---------------------   ---------------------     PAID-IN       STOCK     (ACCUMULATED     DEFERRED
                         SHARES      AMOUNT      SHARES      AMOUNT      CAPITAL      WARRANTS     DEFICIT)     COMPENSATION
                       ----------   --------   ----------   --------   ------------   --------   ------------   ------------
<S>                    <C>          <C>        <C>          <C>        <C>            <C>        <C>            <C>
Balance, December 31,
 1997................   2,800,000   $ 28,000    2,200,000   $ 22,000   $  1,956,909   $      0   $   (176,392)  $         0
 Issuance of stock
   warrants..........           0          0            0          0              0    341,834              0             0
 Issuance of stock
   options...........           0          0            0          0      2,550,950          0              0    (2,550,950)
 Amortization of
   deferred
   compensation......           0          0            0          0              0          0              0       205,574
 Net loss............           0          0            0          0              0          0     (4,345,868)            0
                       ----------   --------   ----------   --------   ------------   --------   ------------   -----------
Balance, December 31,
 1998................   2,800,000     28,000    2,200,000     22,000      4,507,859    341,834     (4,522,260)   (2,345,376)
 Conversion of short-
   term borrowings to
   convertible Class
   A preferred
   stock.............   2,333,333   $ 23,333            0   $      0   $ 25,176,663          0   $(21,699,996)  $         0
 Issuance of Class A
   preferred stock...     271,167      2,712            0          0      2,925,891          0              0             0
 Conversion of Class
   A preferred stock
   to common stock...  (5,404,500)   (54,045)   5,404,500     54,045              0          0              0             0
 Sale of common
   stock, net of
   offering
   expenses..........           0          0    3,140,000     31,400     28,327,389          0              0             0
 Issuance of common
   stock for All in
   One Submit........           0          0       25,000        250        356,000          0              0             0
 Issuance of stock
   options...........           0          0            0          0      3,441,100          0              0    (3,441,100)
 Amortization of
   deferred
   compensation......           0          0            0          0              0          0              0     1,774,261
 Exercise of stock
   options...........           0          0       33,333        333         49,667          0              0             0
 Net loss............           0          0            0          0              0          0    (10,256,036)            0
                       ----------   --------   ----------   --------   ------------   --------   ------------   -----------
Balance, December 31,
 1999................           0   $      0   10,802,833   $108,028   $ 64,784,569   $341,834   $(36,478,292)  $(4,012,215)
 Issuance of common
   stock for Career
   Mosaic
   acquisition.......           0          0    7,500,000     75,000     65,100,000          0              0             0
 Issuance of common
   stock for Miracle
   Workers
   acquisition.......           0          0    1,444,416     14,444      8,640,844          0              0             0
 Issuance of common
   stock for All in
   One Submit........           0          0       75,000        750        456,300          0              0             0
 Amortization of
   deferred
   compensation......           0          0            0          0              0          0              0     4,012,215
 Exercise of stock
   options...........           0          0      390,523      3,906        564,554          0              0             0
 Net loss............           0          0            0          0              0          0    (23,860,069)            0
                       ----------   --------   ----------   --------   ------------   --------   ------------   -----------
Balance, December 31,
 2000................           0   $      0   20,212,772   $202,128   $139,546,267   $341,834   $(60,338,361)  $         0
                       ==========   ========   ==========   ========   ============   ========   ============   ===========

<CAPTION>

                          TOTAL
                       ------------
<S>                    <C>
Balance, December 31,
 1997................  $  1,830,517
 Issuance of stock
   warrants..........       341,834
 Issuance of stock
   options...........             0
 Amortization of
   deferred
   compensation......       205,574
 Net loss............    (4,345,868)
                       ------------
Balance, December 31,
 1998................    (1,967,943)
 Conversion of short-
   term borrowings to
   convertible Class
   A preferred
   stock.............  $  3,500,000
 Issuance of Class A
   preferred stock...     2,928,603
 Conversion of Class
   A preferred stock
   to common stock...             0
 Sale of common
   stock, net of
   offering
   expenses..........    28,358,789
 Issuance of common
   stock for All in
   One Submit........       356,250
 Issuance of stock
   options...........             0
 Amortization of
   deferred
   compensation......     1,774,261
 Exercise of stock
   options...........        50,000
 Net loss............   (10,256,036)
                       ------------
Balance, December 31,
 1999................  $ 24,743,924
 Issuance of common
   stock for Career
   Mosaic
   acquisition.......    65,175,000
 Issuance of common
   stock for Miracle
   Workers
   acquisition.......     8,655,288
 Issuance of common
   stock for All in
   One Submit........       457,050
 Amortization of
   deferred
   compensation......     4,012,215
 Exercise of stock
   options...........       568,460
 Net loss............   (23,860,069)
                       ------------
Balance, December 31,
 2000................  $ 79,751,868
                       ============
</TABLE>

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

                                       37
<PAGE>   38

                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                  YEAR              YEAR              YEAR
                                                                  ENDED             ENDED            ENDED
                                                              DECEMBER 31,      DECEMBER 31,      DECEMBER 31,
                                                                  2000              1999              1998
                                                              -------------     -------------     ------------
<S>                                                           <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss..................................................  $(23,860,069)     $(10,256,036)     $(4,345,868)
                                                              ------------      ------------      -----------
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation and amortization...........................     8,801,556           528,256          276,706
    Amortization of debt issuance costs.....................             0                 0          341,834
    Compensation expense....................................     4,012,215         5,528,114          205,574
    Changes in operating assets and liabilities:
      Accounts receivable...................................    (6,582,986)       (1,550,159)        (287,789)
      Due from affiliates...................................             0                 0            5,100
      Interest receivable...................................        18,779           (65,650)               0
      Prepaid expenses and other current assets.............    (1,517,455)         (300,658)        (181,690)
      Other assets..........................................      (229,491)           77,940         (244,293)
      Accounts payable......................................     1,046,514           216,633          316,802
      Accrued interest-affiliate............................        66,020          (100,100)         100,100
      Accrued expenses......................................      (549,687)        1,281,825          128,098
      Customer deposits.....................................     1,067,780           103,420           27,936
      Deferred revenue......................................       683,339            40,919           27,789
                                                              ------------      ------------      -----------
        Total adjustments...................................     6,816,584         5,760,540          716,167
                                                              ------------      ------------      -----------
        Net cash used in operating activities...............   (17,043,485)       (4,495,496)      (3,629,701)
                                                              ------------      ------------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of short-term investments..............     4,040,584                 0                0
  Purchases of short-term investments.......................             0        (4,125,084)               0
  Purchase of Internet domain name..........................      (550,000)                0          (35,000)
  Purchases of property and equipment.......................    (5,638,433)       (1,627,462)        (434,351)
  Long-term investments.....................................             0          (401,726)               0
  Cash acquired in Career Mosaic transaction................     5,000,000                 0                0
  Acquisition of All In One Submit..........................             0          (250,000)               0
                                                              ------------      ------------      -----------
        Net cash provided by (used in) investing
          activities........................................     2,852,151        (6,404,272)        (469,351)
                                                              ------------      ------------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of convertible Class A preferred
    stock...................................................             0           356,750                0
  Proceeds from issuance of common stock....................             0        27,176,789                0
  Proceeds from exercise of stock options...................       568,462            50,000                0
  Short-term borrowings.....................................    10,000,000                 0        3,500,000
  Repayment on short-term borrowings........................       (87,500)                0                0
                                                              ------------      ------------      -----------
        Net cash provided by financing activities...........    10,480,962        27,583,539        3,500,000
                                                              ------------      ------------      -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS.................................................  $ (3,710,372)     $ 16,683,771      $  (599,052)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR................    16,938,708           254,937          853,989
                                                              ------------      ------------      -----------
CASH AND CASH EQUIVALENTS, END OF YEAR......................  $ 13,228,336      $ 16,938,708      $   254,937
                                                              ============      ============      ===========
</TABLE>

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

                                        38
<PAGE>   39

                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

1. ORGANIZATION AND NATURE OF BUSINESS

ORGANIZATION

     HeadHunter.NET, Inc. and subsidiaries (the "Company") is a C corporation
established under the laws of Georgia on July 13, 1998. The Company has four
wholly owned subsidiaries: HNET, Inc., Headhunters LLC, Resume Acquisition
Corporation, and Headhunterhealth Acquisition Corporation.

NATURE OF BUSINESS

     HeadHunter.NET, Inc. is a leading provider of online recruiting services to
employers, recruiters, third party advertising agencies, and job seekers via our
website at www.headhunter.net. The website enables employers, recruiters and
advertising agencies to advertise job opportunities and review resumes online.
The site enables job seekers to identify, research, evaluate, and apply to a
broad range of job opportunities online.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRESENTATION

     The accompanying consolidated financial statements have been prepared on
the accrual basis of accounting. All significant intercompany accounts and
transactions have been eliminated in consolidation. Certain prior year amounts
have been reclassified to conform to the current year presentation.

ACCOUNTING ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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.

REVENUE RECOGNITION

     Revenues consist of job posting revenues, VIP Resume search revenues, and
advertising revenues. Job posting revenues and VIP Resume revenue is recognized
over the service period. Advertising revenues are recognized in the month that
the advertising impressions are delivered.

DEFERRED REVENUE

     Deferred revenue represents the liability for advance billings to
customers. Such amounts are recognized as revenues when the related services are
provided.

CASH AND CASH EQUIVALENTS

     The Company considers all short-term, highly liquid investments with an
original maturity of three months or less to be cash equivalents. Cash and cash
equivalents are stated at cost, which approximates fair value.

                                       39
<PAGE>   40
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost and are depreciated using the
straight-line method over the estimated useful lives of the respective assets
for financial reporting purposes. Major additions and improvements are charged
to the property accounts, while maintenance and repairs, which do not improve or
extend the lives of the respective assets, are expensed in the current period.
Property and equipment and estimated useful lives for the Company's assets as of
December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                2000          1999        ESTIMATED LIVES
                                             -----------   ----------   -------------------
<S>                                          <C>           <C>          <C>
Telecommunications and computer
  equipment................................  $ 5,583,313   $1,785,614           Three years
Furniture, fixtures and improvements.......    2,342,099      370,947   Three to five years
                                             -----------   ----------
          Total property and equipment.....    7,925,412    2,156,561
Accumulated depreciation...................   (1,932,518)    (406,850)
                                             -----------   ----------
          Total property and equipment,
            net............................  $ 5,992,894   $1,749,711
                                             ===========   ==========
</TABLE>

     Leasehold improvements are amortized using the straight-line method over
the shorter of the service lives of the improvements or the remaining term of
the lease. Depreciation expense was $1,694,738, $325,076 and $77,994 for the
years ended December 31, 2000, 1999 and 1998, respectively.

INTANGIBLE ASSETS

     Intangible assets consist of the following amounts for December 31, 2000
and 1999:

<TABLE>
<CAPTION>
                                                                 2000          1999
                                                              -----------   ----------
<S>                                                           <C>           <C>
Goodwill....................................................  $74,447,657   $1,288,896
Acquired intangibles........................................      830,000      300,000
Domain name.................................................      846,720       42,700
                                                              -----------   ----------
                                                               76,124,377    1,631,596
Accumulated amortization....................................   (7,541,342)    (434,525)
                                                              -----------   ----------
                                                              $68,583,035   $1,197,071
                                                              ===========   ==========
</TABLE>

     The Company classifies as goodwill the cost in excess of fair value of the
net liabilities acquired in a transaction accounted for as a purchase. Goodwill
is being amortized on a straight-line basis over a period of five years.
Acquired intangibles represent assets acquired through the All In One Submit and
Career Mosaic acquisitions and are being amortized on a straight-line basis over
five years. Domain name represents acquired rights to domain names and is being
amortized on a straight-line basis ranging from two to five years.

LONG-LIVED ASSETS

     The Company periodically reviews the values assigned to long-lived assets,
such as property and equipment and other long-term assets, to determine whether
any impairments are other than temporary. Management believes that the
long-lived assets in the accompanying consolidated balance sheets are
appropriately valued.

                                       40
<PAGE>   41
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER NONCURRENT ASSETS

     Other assets consist of the following at December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Deposits....................................................  $388,704   $159,213
Long-term investments.......................................   401,726    401,726
                                                              --------   --------
                                                              $790,430   $560,939
                                                              ========   ========
</TABLE>

INCOME TAXES

     The Company utilizes the liability method of accounting for income taxes.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

ADVERTISING COSTS

     The Company expenses the costs of advertising as incurred. Advertising
expenses included in marketing and selling expenses were $22,026,028, $4,291,017
and $1,627,011 for the years ended December 31, 2000, 1999 and 1998,
respectively. Prepaid advertising costs of approximately $860,000 and $276,000
were recorded as assets in the accompanying consolidated balance sheets as of
December 31, 2000 and 1999, respectively.

SOURCES OF SUPPLIES

     The Company relies on local telephone companies and other companies to
provide data communications capacity. Although management feels that alternative
telecommunications facilities could be found in a timely manner, disruption of
these services for more than a brief period would have an adverse effect on
operating results.

     Although the Company attempts to maintain multiple vendors for each
required product, its property and equipment, which are important components of
its operations, are each currently acquired from only a few sources. In
addition, some of the Company's suppliers have limited resources and production
capacity. If the suppliers are unable to meet the Company's needs as the Company
expands its network infrastructure and sells services, then delays and increased
costs in the expansion of the Company's network infrastructure or losses of
potential customers could result, which would adversely affect operating
results.

CONCENTRATION OF CREDIT RISK

     Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of trade receivables. The
Company's cash investment polices limit investments to short-term, low-risk
instruments. Concentrations of credit risk with respect to trade receivables are
limited due to advance billings to customers for services and the ability to
terminate service on delinquent accounts. In addition, the number of customers
comprising the customer base mitigates the concentration of credit risk. The
carrying amount of the Company's receivables approximates their fair value.

                                       41
<PAGE>   42
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SEGMENTAL DISCLOSURES

     The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 131, "Segmental Disclosures," effective December 31, 1998. The statement had
no effect, as the Company has only one operating business segment.

STOCK-BASED COMPENSATION PLANS

     The Company accounts for its stock-based compensation plans under
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees." Effective in 1997, the Company adopted the disclosure option of
SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 requires
that companies that do not choose to account for stock-based compensation as
prescribed by this statement shall disclose the pro forma effects on earnings
and earnings per share as if SFAS No. 123 had been adopted. Additionally,
certain other disclosures are required with respect to stock compensation and
the assumptions used to determine the pro forma effects of SFAS No. 123.

NET LOSS PER SHARE

     The Company follows SFAS No. 128, "Earnings Per Share." That statement
requires the disclosure of basic net income (loss) per share and diluted net
income (loss) per share. Basic net income (loss) per share is computed by
dividing net income (loss) available to common shareholders by the weighted
average number of common shares outstanding during the period and does not
include any other potentially dilutive securities. Diluted net income (loss) per
share gives effect to all potentially dilutive securities. The Company has
presented basic and diluted loss per share in accordance with SFAS No. 128. As
the Company had a net loss in all periods presented, basic and diluted loss per
share is the same.

     In January 1999, a one-time noncash distribution was recorded in
conjunction with the conversion of the loan and security agreement to equity
(Note 3). The following table represents a reconciliation of the net loss per
the statements of operations for the year ended December 31, 1999 to the net
loss attributable to common shareholders:

<TABLE>
<S>                                                           <C>
Net loss....................................................  $(10,256,036)
Distribution to a preferred shareholder.....................   (21,699,996)
                                                              ------------
Net loss available to common shareholders...................  $(31,956,032)
                                                              ============
Weighted average shares outstanding.........................     5,412,135
                                                              ============
Net loss per share..........................................  $      (5.90)
                                                              ============
</TABLE>

COMPREHENSIVE LOSS

     In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income." Comprehensive income represents the change in equity of a business
during a period, except for investments by owners and distributions to owners.
The Company does not have any other components of comprehensive loss. For the
years ended December 31, 2000, 1999 and 1998, total comprehensive loss is equal
to the net loss.

NEW ACCOUNTING PRONOUNCEMENTS

     The Financial Accounting Standards Board ("FASB") issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," in June 1998,
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of the FASB Statement No. 133," in
June 1999 and SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities -- an Amendment of FASB Statement No. 133," in June
2000. SFAS No. 133 establishes

                                       42
<PAGE>   43
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accounting and reporting standards for derivatives and hedging. It requires that
all derivatives be recognized as either assets or liabilities at fair value and
establishes specific criteria for the use of hedge accounting. SFAS No. 137
defers the effective date of SFAS No. 133 by one year to fiscal years beginning
after June 15, 2000. SFAS No. 138 amends the accounting and reporting standards
of SFAS No. 133 for certain derivative instruments and certain hedging
activities. The Company's required adoption date is January 1, 2001. Upon
adoption of the three statements, the Company expects no material impact to its
results of operations or financial position.

3. INDEBTEDNESS

     In connection with the July 19, 2000 merger with CareerMosaic, the Company
was extended a $10 million revolving line of credit by Omnicom Finance, Inc.
Principal amounts outstanding under the credit facility incur interest at an
annual rate equal to Omnicom Finance, Inc.'s cost of debt capital as reasonably
determined from time to time by Omnicom Finance, Inc. ranging from 7.58% to
7.75% during the year ended December 31, 2000. The Company pays quarterly
interest-only payments and had $66,020 in accrued interest payable and principal
balance outstanding of $10 million at December 31, 2000.

     Subsequent to December 31, 2000, the Company amended and restated the
revolving line of credit agreement with Omnicom Finance, Inc. to extend the due
date to the earliest of (i) June 30, 2004, (ii) ten business days after the
closing of an acceptable equity offering as defined, (iii) the closing of a cash
merger as defined. Principal amounts outstanding under the credit facility bear
interest at a fixed rate of 6.65% until March 31, 2002. Beginning April 1, 2002
the interest rate will be based on Omnicom Finance's 30-day commercial paper
rate plus 110 basis points. Subject to specified conditions, Omnicom Finance can
convert any outstanding amounts into shares of HeadHunter.NET common stock after
July 1, 2001. Additionally, HeadHunter.NET can prepay interest owed under the
credit facility by issuing shares of common stock to Omnicom Finance. According
to the amended credit agreement, HeadHunter.NET can prepay the loan (in whole or
in part) at any time without premium or penalty.

     On January 28, 1999, the Company and ITC Service Company entered into a
revolving loan and security agreement (the "Loan and Security Agreement"),
pursuant to which ITC Service Company made available to the Company a revolving
line of credit of up to $3 million which is payable in full the earlier of (i)
December 31, 1999, (ii) the closing of an initial public offering of the
Company's common stock at a minimum aggregate offering price of $20 million, or
(iii) any sale, transfer, or exchange of the Company's common stock, not
requiring registration under the Securities and Exchange Commission, in excess
of $20 million. Principal amounts outstanding under the credit facility bear
interest at a fixed rate of 11% per annum. Upon completion of the initial public
offering, the Company repaid the outstanding balance and canceled the Loan and
Security Agreement. In conjunction with the Loan and Security Agreement, the
principal balance of $3.5 million outstanding under the Credit Agreement was
converted into 2,333,333 shares of the Company's Convertible Class A preferred
stock at a price of $1.50 per share. As this represented an extinguishment of
debt among related parties, it was accounted for as a capital transaction. The
difference between the estimated fair value $(10.80) and the conversion price
was recorded to accumulated deficit as a one-time noncash distribution to ITC
Service Company, a preferred shareholder, with an offsetting amount recorded to
additional paid-in capital.

                                       43
<PAGE>   44
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Total borrowings at December 31, 2000 consisted of the following:

<TABLE>
<S>                                                           <C>
$10,000,000 unsecured revolving credit facility, variable
  interest rate ranging from 7.58% to 7.75% for the year
  ended December 31, 2000; interest-only quarterly payments
  with principal payable in full on June 30, 2004...........  $10,000,000
Notes payable to seller of jobsearch.com domain name,
  interest at 8%............................................      216,520
                                                              -----------
                                                               10,216,520
Less current maturities.....................................      216,520
                                                              -----------
                                                              $10,000,000
                                                              ===========
</TABLE>

4. RELATED-PARTY TRANSACTIONS

     Beginning in January 1998, the Company entered into an agreement with
ITCDeltaCom, Inc. ("ITCDeltaCom") to serve as the Company's Internet service
provider and host of the Company's Web site. ITCDeltaCom is related to ITC
through both common ownership and board membership. Internet access and
long-distance telephone charges totaled $149,286, $119,100 and $72,028 for the
years ended December 31, 2000, 1999 and 1998, respectively.

     The Company utilizes an entity for insurance coverage that is related to
ITC through common ownership. Insurance expense related to this entity for the
years ended December 31, 2000, 1999 and 1998 was $290,849, $258,854 and $8,928,
respectively.

     The Company entered into an agreement in January 2000 with ITC Service
Company, Inc., an affiliate of ITC, to purchase a small interest in two
airplanes. During 2000, the Company paid approximately $103,000 to ITC Service
Company for its interest in the two planes.

5. SHAREHOLDERS' EQUITY

     During August 1999, the Company completed the sale of 3,000,000 shares of
its common stock to the public at an offering price of $10 a share.

     In January 1999, the Company decreased the authorized number of common
stock, par value $.01, from 50,200,000 shares to 45,500,000 shares and increased
the number of Convertible Class A preferred shares to 7,500,000. The Class A
preferred stock is entitled to one vote per share owned of record on all matters
which shareholders are entitled to vote. Upon the closing of the initial public
offering, each share of Class A preferred stock then outstanding was
automatically converted into one share of common stock and there are no shares
of Class A preferred stock outstanding. The Company has also authorized
5,000,000 shares of Class B serial preferred stock. The Company's board of
directors has the authority to issue shares of Class B serial preferred stock in
one or more series. There are no shares of Class B serial preferred stock
outstanding.

     During 1999, the Company sold 271,167 and 140,000 shares of Convertible
Class A preferred stock and common stock, respectively, to certain executive
officers, key employees, and directors at $1.50 and $2 per share, respectively.
In accordance with APB No. 25, the Company recognized $3,753,853 in compensation
expense in 1999 related to the difference between the purchase price and the
estimated fair value of $10.80 with the offset to additional paid-in capital.

     In connection with the amendments to the revolving credit agreement with
ITC and ITC Service Company, dated July 1998, the Company issued to ITC Service
Company a warrant to purchase $375,000 of common stock at a price of $1.50 per
share, which was amended and restated to $625,000 of common stock at a price of
$1.50 per share in October 1998. This warrant vested upon issuance and is
exercisable for a term of ten years. In connection with the warrant issued to
ITC Service Company, the estimated $342,000 fair value of the warrant was
calculated under the Black-Scholes option pricing model at the date of grant and
was

                                       44
<PAGE>   45
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

included in stock warrants and interest expense. The assumptions used in the
Black-Scholes calculation were as follows: risk-free interest rate, 5.52%;
expected dividend yield, 0%; expected lives, three years; and expected
volatility, 79%.

6. EMPLOYEE BENEFIT PLANS

1998 LONG-TERM INCENTIVE PLAN

     On July 15, 1998, the Company's board of directors adopted the Company's
1998 Long-Term Incentive Plan (the "Incentive Plan"). At the plan's inception,
the Company reserved 500,000 shares of its common stock for issuance in
connection with options and awards granted under the Incentive Plan. In April
1999, the Company increased the common shares reserved for issuance in
connection with options and awards granted under the Incentive Plan to 1,000,000
shares.

     The Company may grant options and awards to officers and employees of the
Company, a parent or subsidiary, and to nonemployee directors and consultants to
the Company. The Incentive Plan authorizes the granting of awards to eligible
participants in the form of (i) options to purchase shares of the Company's
common stock, which may be incentive stock options or nonqualified stock
options, (ii) stock appreciation rights, (iii) performance shares, (iv)
restricted stock awards, (v) dividend equivalents, or (vi) other stock-based
awards. The Incentive Plan is administered by the Company's board of directors
or the board's compensation committee in accordance with its term. The options
vest ratably over five years from the date of grant. The options expire ten
years from the date of grant.

     In connection with the purchase of MiracleWorkers.com, Inc., the Company
assumed the legacy stock option plan. Each MiracleWorkers.com, Inc. employee
received 0.10975 options of common shares of the Company (assumed options). The
assumed options were at exercise prices that preserve the economic benefit of
the MiracleWorkers.com, Inc. option at the purchase date. The assumed options
have an exercise price of $3.83 and $4.01.

     A summary of the status of the Company's stock options at December 31, 2000
and 1999 and changes during the years then ended is presented in the following
table:

<TABLE>
<CAPTION>
                                                                           WEIGHTED
                                                                            AVERAGE
                                                                           PRICE PER
                                                                SHARES       SHARE
                                                              ----------   ---------
<S>                                                           <C>          <C>
December 31, 1997...........................................           0    $ 0.00
                                                              ----------    ------
  Granted...................................................     550,750      0.87
  Forfeited.................................................     (68,500)    (0.43)
                                                              ----------    ------
Outstanding at December 31, 1998............................     482,250    $ 0.93
  Granted...................................................   1,018,750      7.95
  Forfeited.................................................     (91,500)    (1.31)
  Exercised.................................................     (33,333)    (1.50)
                                                              ----------    ------
Outstanding at December 31, 1999............................   1,376,167    $ 6.02
  Granted...................................................   2,560,500      8.46
  Assumed in MiracleWorkers.com, Inc. transaction (Note
     10)....................................................     143,778      3.83
  Forfeited.................................................    (750,723)    (7.84)
  Exercised.................................................    (390,523)    (1.56)
                                                              ----------    ------
Outstanding at December 31, 2000............................   2,939,199    $ 8.28
                                                              ==========    ======
Exercisable at December 31, 2000 and 1999...................     961,557    $ 7.56
                                                              ==========    ======
</TABLE>

                                       45
<PAGE>   46
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     During 1999 and 1998, the Company granted options with exercise prices
below the fair value at the date of grant. The estimated fair value for options
granted February 1998 to July 1999 was $10.80. Accordingly, the Company
recognized deferred compensation of $3.4 million and $2.5 million for options
granted during the years ended December 31, 1999 and 1998, respectively. The
Company amortized the remaining balance of deferred compensation in conjunction
with the July 19, 2000 merger with Career Mosaic. The Company recognized
$4,012,215, $1,774,261 and $205,574 of compensation expense for the years ended
December 31, 2000, 1999 and 1998, respectively, related to option grants.

     The following table summarizes information about stock options outstanding
at December 31, 2000:

<TABLE>
<CAPTION>
                                        WEIGHTED     WEIGHTED AVERAGE                   WEIGHTED AVERAGE
                                         AVERAGE         EXERCISE                           EXERCISE
      RANGE OF             OPTIONS      REMAINING    PRICE OF OPTIONS      OPTIONS      PRICE OF OPTIONS
   EXERCISE PRICES       OUTSTANDING      LIFE         OUTSTANDING       EXERCISABLE      EXERCISABLE
   ---------------       -----------    ---------    ----------------    -----------    ----------------
<S>                      <C>            <C>          <C>                 <C>            <C>
$0.40 - $ 2.00.......       361,967       2.00            $1.38            361,800           $0.86
$3.83 - $14.38.......     2,577,232       2.30            $8.91            599,757           $2.93
</TABLE>

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123

     The Company accounts for its stock-based compensation plans in accordance
with APB No. 25, "Accounting for Stock Issued to Employees." SFAS No. 123
encourages but does not require the use of a fair value-based method of
accounting for stock-based compensation plans under which the fair value of
stock options is determined on the date of grant and expensed over the vesting
period of the stock options. While the Company has elected to continue to apply
the provisions of APB No. 25, under which no compensation cost has been
recognized by the Company, SFAS No. 123 requires pro forma disclosure of net
loss and loss per share as if the fair value-based method under SFAS No. 123 had
been adopted. The value of all options for shares of the Company's common stock
to employees of the Company has been determined under the market value method
using Black-Scholes valuation principles and the following assumptions:

<TABLE>
<CAPTION>
                                                            2000            1999
                                                        -------------   -------------
<S>                                                     <C>             <C>
Risk-free interest rate...............................  5.75% - 6.63%   4.53% - 6.24%
Expected dividend yield...............................             0%              0%
Expected lives........................................    Seven years      Five years
Expected volatility...................................           121%             94%
</TABLE>

     The total value of options granted during the years ended December 31, 2000
and 1999 was computed as approximately $7.2 million and $7.3 million,
respectively. If the Company had accounted for these plans in accordance with
SFAS No. 123, the Company's net loss for the years ended December 31, 2000 and
1999 would have increased as follows:

<TABLE>
<CAPTION>
                                                                2000           1999
                                                            ------------   ------------
<S>                                                         <C>            <C>
Net loss:
  As reported.............................................  $(23,860,068)  $(10,256,036)
  Pro forma...............................................  $(25,924,780)  $(11,895,815)
Net loss per share:
  As reported:
     Basic and diluted....................................  $      (1.60)  $      (5.90)
  Pro forma:
     Basic and diluted....................................  $      (1.74)  $      (2.20)
</TABLE>

                                       46
<PAGE>   47
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. STATEMENT OF CASH FLOW INFORMATION

Supplemental Disclosures of Cash Flow Information

<TABLE>
<CAPTION>
                                                      2000             1999             1998
                                                    --------        ----------        --------
<S>                                                 <C>             <C>               <C>
Cash paid during the year for interest              $222,344        $   73,700        $ 18,165
Conversion of short-term borrowings to equity       $      0        $3,500,000        $      0
Issuance of note for purchase of domain name        $304,020        $        0        $      0
</TABLE>

Cash paid for acquisitions accounted for as purchases are as follows:

<TABLE>
<CAPTION>
                                                                 2000            1999
                                                              ----------        -------
<S>                                                           <C>               <C>
Fair value of assets acquired                                 75,105,357        600,000
Less liabilities assumed                                       1,449,136             --
Less common stock issued to sellers                           68,656,221        350,000
Less cash acquired from transaction                            5,000,000             --
                                                              ----------        -------
Net cash paid                                                         --        250,000
                                                              ==========        =======
</TABLE>

8. INCOME TAXES

     Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and income tax purposes. Significant components of the Company's
deferred tax assets and liabilities for federal and state income taxes as of
December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                 2000          1999
                                                             ------------   -----------
<S>                                                          <C>            <C>
Deferred tax assets:
  Net operating loss carryforwards.........................  $  9,088,203   $ 2,672,993
  Depreciation and amortization............................     3,161,913       127,928
  Allowance for doubtful accounts..........................       425,654        83,790
  Deferred compensation....................................     2,396,820       791,934
  Deferred revenues........................................     1,023,700        32,193
  Other....................................................       207,236        35,391
                                                             ------------   -----------
          Total deferred tax assets........................    16,303,526     3,744,229
Deferred tax liabilities:
  Accelerated depreciation.................................             0        27,628
                                                             ------------   -----------
Net deferred tax asset.....................................    16,303,526     3,716,601
  Valuation allowance......................................   (16,303,526)   (3,716,601)
                                                             ------------   -----------
Net deferred taxes.........................................  $          0   $         0
                                                             ============   ===========
</TABLE>

     The Company's net operating loss carryforward will expire in the years 2018
through 2020 unless utilized. Due to the fact that the Company is unable to
conclude that it is more likely than not that its deferred tax assets will be
recognized, the Company has provided a 100% valuation allowance against its net
deferred tax assets. In addition, the Company's ability to recognize the benefit
from the net operating loss carryforwards may be limited under the Code, as the
ownership of the Company has changed more than 50%, as defined.

                                       47
<PAGE>   48
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     A reconciliation of the income tax benefit computed at statutory tax rates
to the actual income tax benefit for the years ended December 31, 2000, 1999 and
1998 is as follows:

<TABLE>
<CAPTION>
                                                         2000      1999      1998
                                                         -----     -----     -----
<S>                                                      <C>       <C>       <C>
Income tax benefit at statutory rate...................    (34)%     (34)%     (34)%
State and local income taxes...........................     (6)       (6)       (6)
Increase in valuation allowance........................     40        40        40
                                                         -----     -----     -----
          Total income tax provision...................      0%        0%        0%
                                                         =====     =====     =====
</TABLE>

9. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

     Lease expense relates to the lease of office space for the administrative
and sales offices. At December 31, 2000, future minimum lease payments under
these noncancelable operating leases are as follows:

<TABLE>
<S>                                                           <C>
2001........................................................   2,504,425
2002........................................................   1,546,568
2003........................................................   1,469,399
2004........................................................   1,173,655
2005........................................................     762,945
                                                              ----------
                                                              $7,456,992
                                                              ==========
</TABLE>

     Rental expense under the operating lease amounted to $1,449,420, $198,898
and $40,050 for the years ended December 31, 2000, 1999 and 1998 respectively.

PURCHASE COMMITMENTS

     The Company has entered into various agreements with Internet companies to
purchase a minimum of approximately $10.2 million in banner advertisements in
2001. Purchase commitments under the agreements are being expensed as the
advertisements are incurred.

LEGAL PROCEEDINGS

     The Company is not currently a party to any material legal proceedings. The
Company, from time to time, may be subject to legal proceedings and claims in
the ordinary course of business, including claims of alleged infringement of
trademarks and other intellectual property of third parties by the Company. Such
claims, even if not meritorious, could result in the expenditure of significant
financial and managerial resources.

10. ACQUISITIONS

     In July 2000, the Company acquired CareerMosaic, Inc., a division of
Omnicom Group Inc. and issued 7,500,000 shares of HeadHunter.NET common stock to
the CareerMosaic stockholders. Excess purchase price over fair value of net
assets acquired of $63,634,814 as of December 31, 2000 has been recorded as
goodwill and will be amortized on a straight-line basis over five years. This
transaction has been accounted for as a purchase.

     In August 2000, the Company acquired MiracleWorkers.com, Inc.
MiracleWorkers shareholders received 1,444,416 shares of HeadHunter.NET common
stock. Excess purchase price over fair value of net assets acquired of
$9,016,897 as of December 31, 2000 has been recorded as goodwill and will be
amortized on a straight-line basis over five years. This transaction has been
accounted for as a purchase.

                                       48
<PAGE>   49
                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In December 1999, the Company purchased all of the assets of All In One
Submit a division of Chicago Computer Guide, Inc. Chicago Computer Guide
received a total of 100,000 shares of HeadHunter.NET common stock since the
purchase date. Excess purchase price over fair value of net assets acquired of
$816,970 as of December 31, 2000 has been recorded as goodwill and will be
amortized on a straight-line basis over five years. This transaction has been
accounted for as a purchase.

     The following unaudited pro forma results of operations for the years ended
December 31, 2000 and 1999 assume acquisitions completed during 2000 and 1999
which were accounted for as purchases occurred as of January 1, 1999:

<TABLE>
<CAPTION>
                                                                2000           1999
                                                             -----------   ------------
<S>                                                          <C>           <C>
Revenues...................................................  $57,438,193   $ 23,034,852
Net loss...................................................  (38,413,615)   (12,401,542)
                                                             ===========   ============
Basic and diluted net loss per share.......................        (2.57)         (2.29)
                                                             ===========   ============
</TABLE>

                                       49
<PAGE>   50

            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE

To HeadHunter.NET, Inc and Subsidiaries:

     We have audited in accordance with auditing standards generally accepted in
the United States, the financial statements of HEADHUNTER.NET, INC. AND
SUBSIDIARIES as of December 31, 2000 and 1999 and for the years ended December
31, 2000, 1999 and 1998, and have issued our report thereon dated January 24,
2001, except with respect Note 3 which is dated February 27, 2001. Our audits
were made for the purpose of forming an opinion on those statements taken as a
whole. The schedule listed under Schedule II herein as it relates to
HeadHunter.NET, Inc. is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
January 24, 2001

                                        50
<PAGE>   51

                     HEADHUNTER.NET, INC. AND SUBSIDIARIES

                 SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
          FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998, 1999 AND 2000

<TABLE>
<CAPTION>
                                            CHARGED TO
                                          BEGINNING COSTS                  ENDING
DESCRIPTION                                AND BALANCES      EXPENSE     WRITE-OFFS    BALANCE
-----------                               ---------------   ----------   ----------   ----------
<S>                                       <C>               <C>          <C>          <C>
1998 allowance for doubtful accounts....     $     --       $   37,346    $     --    $   37,346
1999 allowance for doubtful accounts....     $ 37,346       $  404,210    $232,081    $  209,475
2000 allowance for doubtful accounts....     $209,475       $1,296,087    $441,426    $1,064,136
</TABLE>

                                       51
<PAGE>   52

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                 DESCRIPTION
-------                                -----------
<C>       <C>  <S>
 2.1       --  Purchase Agreement dated December 17, 1999 between
               HeadHunter.NET, Chicago Computer Guide, Inc. and George
               Scholomite (incorporated by reference from Exhibit 2.1 of
               the Registrant's Current Report on Form 8-K filed on January
               3, 2000)
 2.2       --  Agreement and Plan of Merger dated April 15, 2000 among the
               HeadHunter.NET, Resume Acquisition Corporation, ITC Holding
               Company, Inc., Omnicom Group Inc., Bernard Hodes Group Inc.
               and Career Mosaic Inc., as amended by Amendment No. 1 to
               Agreement and Plan of Merger dated June 19, 2000
               (incorporated by reference from Exhibit 2.2 of the
               Corporation's registration statement on Form S-4 (File No.
               333-37430))
 2.3       --  Support Agreement dated April 15, 2000 among Bernard Hodes
               Group Inc., HeadHunter.NET, Inc., ITC Holding Company, Inc.,
               and Robert M. Montgomery, Jr. (incorporated by reference
               from Exhibit 99.2 to HeadHunter.NET's Current Report on Form
               8-K filed on April 19, 2000)
 3.1       --  Articles of Incorporation, as amended (incorporated by
               reference from Exhibit 3.1 of the Registrant's registration
               statement on Form S-1, Registration No. 333-80915)
 3.2       --  Amended and Restated Bylaws (incorporated by reference from
               Exhibit 3.2 to our registration statement on Form S-4 (File
               No. 333-37430))
 4.1       --  Specimen common stock certificate (incorporated by reference
               from Exhibit 4.1 of the Registrant's registration statement
               on Form S-1, Registration No. 333-80915)
 4.2       --  Article II of the Articles of Incorporation, as amended
               (filed as part of Exhibit 3.1)
 4.3       --  Shareholder Protection Rights Agreement dated as of April
               15, 2000, between the Corporation and American Stock
               Transfer & Trust Company, as rights agent (incorporated by
               reference from Exhibit 99.3 to the Corporation's Current
               Report on Form 8-K filed on April 19, 2000)
 4.4       --  Amendment No. 1 to Shareholder Protection Rights Agreement
               dated as of February 27, 2001 between HeadHunter.NET, Inc.
               and American Stock Transfer & Trust Company, as rights agent
10.1       --  HeadHunter.NET, Inc 1998 Long-Term Incentive Plan, as
               amended (incorporated by reference from Exhibit 10.1 of the
               Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
10.2       --  HeadHunters, L.L.C. Employee Common Unit Option Plan dated
               January 14, 1998 (incorporated by reference from Exhibit
               10.2 of the Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
10.3       --  MedicalJobsSource.Com, Inc. 1999 Stock Option Plan
               (incorporated by reference from Exhibit 99.2 to our
               registration statement on Form S-8 (File No. 333-47146)
10.4       --  Form of Indemnity Agreement between directors/executive
               officers and Headhunter.net (incorporated by reference from
               Exhibit 10.4 of the Registrant's registration statement on
               Form S-1, Registration No. 333-80915)
10.5       --  Contribution Agreement dated July 15, 1998 among ITC Holding
               Company, Inc., Warren L. Bare and Headhunter.net
               (incorporated by reference from Exhibit 10.5 of the
               Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
10.6       --  Amended and Restated Stock Purchase Warrant between ITC
               Service Company and Headhunter.net (incorporated by
               reference from Exhibit 10.10 of the Registrant's
               registration statement on Form S-1, Registration No.
               333-80915)
10.7       --  Form of Non-Employee Director Non-Qualified Stock Option
               Agreement (incorporated by reference from Exhibit 10.12 of
               the Registrant's registration statement on Form S-1,
               Registration No. 333-80915)
</TABLE>
<PAGE>   53

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                 DESCRIPTION
-------                                -----------
<C>       <C>  <S>
10.8       --  Lease Agreement between AJ Partners, L.P. and
               Headhunter.net, as amended by the Tenant Acceptance
               Agreement dated September 22, 1999 (incorporated by
               reference from Exhibit 10.8 of the Registrant's Annual
               Report on Form 10-K filed on March 30, 2000)
10.9       --  Severance letter between Headhunter.net and Warren Bare
               dated February 24, 1999 (incorporated by reference from
               Exhibit 10.16 of the Registrant's registration statement on
               Form S-1, Registration No. 333-80915)
10.10      --  2000 Qualified Employee Stock Purchase Plan (incorporated by
               reference from Exhibit 4.3 of the Registrant's registration
               statement on Form S-8, Registration No. 333-94027)
10.11      --  NBCi Promotion Agreement dated December 9, 1999 between
               Headhunter.net and NBCInternet, Inc. (incorporated by
               reference from Exhibit 10.11 of the Registrant's Annual
               Report on Form 10-K filed on March 30, 2000)+
10.12      --  Amended and Restated Registration Rights Agreement dated
               February 27, 2001 among the Corporation, Bernard Hodes Group
               Inc., Omnicom Finance, Inc. and ITC Holding Company, Inc.
10.13      --  Amended and Restated Shareholders' Agreement dated February
               27, 2001 among the Corporation, Omnicom Group Inc., Bernard
               Hodes Group Inc., Omnicom Finance, Inc. and ITC Holding
               Company, Inc.
10.14      --  Amended and Restated Credit Agreement between the
               Corporation and Omnicom Finance, Inc. dated as of February
               27, 2001
10.15      --  Non-Competition Agreement dated July 19, 2000 between the
               Corporation and Bernard Hodes Group Inc. (incorporated by
               reference from Exhibit 99.7 of the Registrant's Current
               Report on Form 8-K filed on August 3, 2000)
10.16      --  Form of Indemnification Agreement between the Corporation
               and ITC Holding Company, Inc. and Bernard Hodes Group Inc.
               (incorporated by reference from Exhibit 99.8 of the
               Registrant's Current Report on Form 8-K filed on August 3,
               2000)
21.1       --  Subsidiaries of the Company (incorporated by reference from
               Exhibit 21.1 of the Registrant's registration statement on
               Form S-1, Registration No. 333-80915)
23.1       --  Consent of Arthur Andersen LLP
</TABLE>

---------------

+ Confidential treatment has been granted for certain portions which have been
  blanked out in the copy of the exhibit filed with the Securities and Exchange
  Commission. The omitted information has been filed separately with the
  Securities and Exchange Commission.