UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K


               [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


                         COMMISSION FILE NUMBER: 0-26109
                                _________________

                                   NETTAXI.COM
             (Exact name of registrant as specified in its charter)
                                _________________


                     NEVADA                                 82-0486102
      (State  or  other  jurisdiction                    (I.R.S.  Employer
     of  incorporation  or  organization)               Identification  No.)

                      1696 DELL AVENUE, CAMPBELL, CA 95008
           (Address of Principal Executive Offices Including Zip Code)

                                 (408) 374-1168
              (Registrant's telephone number, including area code)
                                _________________

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                          Common Stock, $.001 par value

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 a 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.  [_]


<PAGE>
As  of February 28, 2001, the approximate aggregate market value of voting stock
held  by non-affiliates of the registrant was $6,871,860 (based upon the closing
price  for  shares  of  the  registrant's  common stock as reported by the O-T-C
Bulletin  Board  on  that  date).  Shares  of common stock held by each officer,
director,  and  holder  of  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 28, 2001, the registrant had 43,049,486 shares of common stock,
$.001  par  value  per  share,  outstanding.


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<PAGE>
<TABLE>
<CAPTION>
                                   NETTAXI.COM
                                    FORM 10-K
                                TABLE OF CONTENTS



PART I
--------
<S>       <C>                                                  <C>
ITEM 1.   Description of Business                               4
ITEM 1A.  Risk Factors                                         22
ITEM 2.   Properties                                           34
ITEM 3.   Legal Proceedings                                    34
ITEM 4 .  Submission Of Matters To A Vote Of Security Holders  36

PART II
--------

ITEM 5.   Market For The Registrant's Common Stock
          And Related Stockholder Matters                      37
ITEM 6.   Selected Consolidated Financial Data                 40
ITEM 7.   Management's Discussion And Analysis Of
          Financial Condition And Results Of Operations        41
ITEM 7A.  Quantitative And Qualitative Disclosures
          About Market Risk                                    52
ITEM 8.   Financial Statements And Supplementary Data          52
ITEM 9.   Changes In And Disagreements With Accountants
          On Accounting And Financial Disclosure               52

PART III
--------

ITEM 10.  Directors And Executive Officers Of The Registrant   53
ITEM 11.  Executive Compensation                               58
ITEM 12.  Security Ownership Of Certain Beneficial Owners
          And Management                                       65
ITEM 13.  Certain Relationships And Related Transactions       67


PART IV
--------

ITEM 14.  Exhibits, Financial Statement Schedules,
          And Reports On Form 8-K                              71
</TABLE>


                                        3
<PAGE>
                                     PART I


     This  Form  10-K contains forward-looking statements. These forward-looking
statements  are  subject  to  significant  risks  and  uncertainties,  including
information  included  under  Items  1 and 1A of this Form 10-K, which may cause
actual results to differ materially from those discussed in such forward-looking
statements.  The forward-looking statements within this Form 10-K are identified
by  words such as "believes," "anticipates," "expects," "intends," "may," "will"
and  other  similar  expressions  regarding  our  intent,  belief  and  current
expectations.  However,  these  words are not the exclusive means of identifying
such  statements.  In  addition,  any  statements  that  refer  to expectations,
projections  or  other  characterizations  of future events or circumstances and
statements  made in the future tense are forward-looking statements. Readers are
cautioned  that actual results may differ materially from those projected in the
forward-looking  statements  as  a  result of various factors, many of which are
beyond  our  control. We undertake no obligation to publicly release the results
of  any  revisions  to  these  forward-looking  statements  which may be made to
reflect  events or circumstances occurring subsequent to the filing of this Form
10-K with the Securities and Exchange Commission. Readers are urged to carefully
review  and  consider  the  various  disclosures  made  by us in this Form 10-K,
including  those  set  forth  under  "Risk  Factors"  in  Item  1A.

ITEM  1.  DESCRIPTION  OF  BUSINESS

OUR  BUSINESS

     Nettaxi.com  is  an  Internet  marketing  portal  that  provides a range of
content  and  Internet based services for consumers and businesses. Our web site
at  www.nettaxi.com serves as a gathering place for people with shared topics of
interest,  as  well as an entry point, referred to as a portal, to the Internet.
Through  our  web site, we provide content addressing a large number of targeted
categories.  The  content  is  organized  into affinity categories such as news,
sports, entertainment, health, politics, finances, lifestyle, and other areas of
interest.  Visitors  to our web site are provided with comprehensive information
and  content.  Subscribers  to  our  web  site, which we call citizens, are also
provided  with  access  to enhanced content such as broadband video clips, email
accounts  and  personal web pages. We have developed a diversified revenue model
under which we provide our citizens with access to web site hosting services and
a  broad range of content, and we provide affiliated businesses with access to a
large  population  of  Internet  users for advertising and promotional purposes.

     In  2000,  we  focused  our  efforts  on  improving  the quality of content
available  on  our  web  site,  implementing  our  web site hosting services and
reducing  our operating costs by eliminating many of the services which were not
profitable.


                                        4
<PAGE>
     We  have  devoted  significant  resources to developing our content and our
services, including developing an infrastructure and building a management team.
We  have also focused on developing consumer loyalty and subsequently increasing
our  overall  level of traffic and citizenship. While we have incurred losses of
approximately  $27,687,800  since our site was launched in October 1997, traffic
to  our  site  has  increased  consistently.  In  December  1998,  we had 60,000
registered citizens. As of December 31, 2000, there were over 800,000 registered
citizens  in  our  community  and  we  had  a  membership  base  of 1.8 million.

     We  have  also  enjoyed  increases  in  traffic  on  our  web site which is
documented  by  PC  Data Online and their measurements of unique visitors to our
web  site  comparing  all  Internet properties. PC Data Online is an independent
research  firm  which  produces  comprehensive lists of the top web sites on the
Internet  on  a  monthly  and  weekly  basis. Our site had over 1,760,000 unique
visitors during the month of December 1999, causing PC Data Online to rank us as
281st  among all Internet properties for the month. As a result of an aggressive
marketing  campaign  we  conducted  during  the  month of December 2000, PC Data
Online  ranked nettaxi.com as the 94th most visited site on the Internet. We had
6,800,000  unique  visitors  to our web site in December 2000. In the two months
that  followed, we curtailed much of our marketing efforts due to changes in the
Internet  industry  and,  as a result, our ranking by PC Data Online fell to 636
for  the  month  of February 2001. In March 2001, we again launched a redesigned
marketing  program.  By March 24, 2001 PC Data Online had ranked us as the 213th
most  visited  site on the Internet with 1,176,000 unique visitors for the week.

INDUSTRY  BACKGROUND

     The  Internet  is  a significant medium for global communications. Millions
of people around the world use the Internet to send and receive information, for
entertainment,  current  events  and  to  purchase  products  and  services. The
emergence  of  portals,  such  as ours, has been an important development on the
Internet. These web sites provide an online location where users of the Internet
can gain access to a wide variety of information quickly. Traditionally,  portal
sites  have  offered  free services to users of the Internet including access to
e-mail accounts, message boards, news and entertainment. Through these services,
portals  have  attempted to develop consumer loyalty with users of the Internet,
while  increasing  the  level  of  traffic  on  their  web  sites.

     PORTALS.  Portals provide a single online location where users can interact
and find and share pertinent information, products and services related to their
particular  interests  or  needs.  Portal  sites  generally  offer free services
including  access  to  e-mail  accounts,  chat  rooms,  message boards, news and
entertainment.  These  features tend to increase user loyalty towards particular
portal  web  sites.  Users  with an email account with a particular web site are
likely  to  repeat  visits to the web site on a regular basis to check email and
gather other information. As a result, we believe that users tend to be loyal to
and  spend  more  time  online  at  portal  sites.

     Booze  Allen  &  Hamilton,  in  a  study  titled  "The Great Portal Payoff:
Matching  Internet  Marketing  to  Consumer  Behavior"  shows that portals are a
mainstream  destination  site  for  Internet users.  This study shows that sixty
percent (60%) of all Internet user sessions include a visit to a portal.  As the
Internet  grows,  users  seek sources of aggregated and user defined information
and  services  that  portals  have historically provided.


                                        5
<PAGE>
     As  a  result, portals provide advertisers an attractive means of promoting
their  products and services and allow businesses to reach the growing number of
users  who will be purchasing goods or services over the Internet in the future.
Portals  also  offer content providers with an attractive means of disseminating
their  content  to  users  with  particular  interests.

     ADVERTISING.  The  Internet  is  an  attractive medium for advertisers. The
Internet  has often allowed advertisers to demographically target their messages
to groups of Internet users with particular interests, in a manner not available
through  the  means of traditional media. The Internet also allows advertisers a
unique  level  of  interactivity  and  measurability.  Advertisers  can  use the
Internet  to  display messages on certain web pages. These messages are referred
to  as  impressions.  Consumers  wishing  for more information on the advertised
topic  can  use their computers to click, or click-through, on those impressions
and  move through to other web pages which provide the information sought. Using
the Internet, advertisers can change their advertisements frequently in response
to  market  factors,  current events and consumer feedback. Advertisers can also
track  the  effectiveness  of their advertising messages by receiving reports of
the  number  of  advertising  impressions  delivered  to  consumers  and  the
corresponding number of times that consumers click on those impressions and move
through  to  the  advertised  web  page.

     To  date,  Internet  advertising  has  primarily  taken  the form of banner
advertisements,  which  are  comprised  of  advertising  messages displayed on a
portion  of  a  web  page viewed by visitors to the site. Like traditional media
advertising banners are typically priced by advertisers who pay for exposures to
potential  consumers.  However,  this approach, which is called impression-based
advertising,  does  not  take  full advantage of the Internet's direct marketing
potential,  resulting  in  low  consumer  click-through rates, the rate at which
consumers  click  on  advertisements  to  move  to  the  advertised  web  sites.
Advertisers,  therefore  are  paying  for  exposure  to many viewers who are not
interested  in  the  product  or  service  advertised. According to the Internet
Advertising  Bureau  (IAD),  banner  ads  accounted  for  half  of  all Internet
advertising in the second quarter of 2000, while click through rates (CTR's) for
banner  ads fell more than 40 percent between October 1999 and October 2000.  We
believe advertiser's are considering alternatives to banner advertising. We also
believe  that advertisers will focus on more targeted marketing opportunities as
they  recognize  they  can  offer  a  level  of targetability, interactivity and
measurability  not  generally  available  in  other  media.

     CONTENT.  The  Internet offers content providers significant and attractive
economic  mechanisms  that  combine  cost  advantages  with  practices  that are
conducive  to  revenue  generation  or  premiums.  Significantly,  the  Internet
provides  information  dissemination  at  a  materially lower cost than do other
forms  of  media, notably, both printed paper and private networks. The Internet
also  offers the potential for easier access to content, which can expand market
coverage.  We  believe  that by using the capabilities of the Internet to enrich
the  convenience,  utility,  time,  or  entertainment value of content, Internet
content  providers  can  garner  significant  and  even  premium  revenues.


                                        6
<PAGE>
CURRENT  MARKETING  PLANS  &  PROGRAMS

     We  have focused our efforts on marketing, improving the quality of content
and hosting services available on our web site, and reducing our operating costs
by  eliminating many of the services which were not profitable.  In this regard,
we have developed a number of new promotions designed to generate new sources of
revenue  and  build  customer  loyalty.  Some of the powerful business tools and
resources  that  are  part  of  our  solution  include:

     BROADBAND  CONTENT.  We  are  continually  seeking to develop relationships
with  content  publishers  to assist in generating revenue through distribution,
branding,  awareness,  and  promotions.  In 2000 we added sources of new content
that  allow  users  to  view  videos  covering music, sports and other subjects.
Users  are required to register as citizens of our web site prior to viewing the
content.  Advertisements  are  also displayed to users while progressing through
the  registration  process.

     DIRECT MARKETING.  Jupiter Communications forecasts email marketing will be
a  $7.3 billion business by 2005, a boost from $164 million in 1999.  The volume
of  messages  will  swell  to  268  billion  promotional email messages by 2005.

     We  have  been collecting registrations for all our citizens since 1998 and
maintaining  a  large,  accurate,  opt-in  database  that  allows  targeted
communications  based  upon  gender,  age,  income,  interest  and  many  other
demographic  variables.  We  have  a consulting services agreement with Annuncio
Software,  Inc.  under  which they are to provide us with access to their direct
email marketing system. We believe, the campaign management system, Annuncio, is
one  of  the  most sophisticated direct email marketing systems available today.

     We  will incorporate our direct email marketing capability into promotional
offers from companies that we affiliate with, daily emails to registered players
of  our  Internet  games, and communications to generate additional activity and
transactions  with  our  customer  base.

     TARGETED AFFINITY CATEGORIES. We have organized information on our web site
into  an  extensive  network  of  communities  with  a  wide  variety of themes,
including  entertainment,  government, home living, sports, finance, society and
culture.  Users  interested in particular themes can access those themes quickly
and  easily.  This creates marketing opportunities for media companies, Internet
service  providers,  and  Internet  content  companies.

     IMPROVED  SEARCH  METHODOLOGY.  We  had  developed a metasearch engine that
enabled  users to search multiple sites simultaneously and return the results to
one  web  page.  This  feature drove users to our web site, but did not generate
sufficient  revenue.  We  have  revised  our  search  methodology to enhance the
revenue generated from our search services.  Our current search methodology uses
context driven searches where advertisers purchase their placement in the search
engine.  For  example,  a user of our web site may choose the subject "music" to
search.  After  the choice is made, the results of the search are presented in a
list on a new web page.  Advertisers pay for premium placement at the top of the
list.  This  allows advertisers to bid for product placement on our web site and
increases  revenue  generated  from  our  search  services.

     SEASONAL  PROMOTIONS.  During  2000,  we  successfully implemented seasonal
promotions  designed  to  drive Internet users to our e-commerce affiliates. For
example,  in December 2000 we launched a promotion for Storerunner Network, Inc.
Storerunner.com  placed  advertisements for products it was selling as part of a
holiday  sale  on  our  web  site.  Users  of  our  web  site could click on the
Storerunner advertisements and move to the Storerunner.com web site and purchase
the  products. Our agreement provided that we receive revenue for each user that
accessed the  Storerunner.com site  from  our web site.  Although this promotion
successfully  increased  the  amount  of  traffic  on  our site, we discontinued
further  services  with  Storerunner.com  after  they filed for protection under
Chapter  11  of  the  United  States  Bankruptcy  Code  in  February  2001.


                                        7
<PAGE>
     CITIZEN  SERVICES. During 2000, we revised the scope of services offered to
users  of  our  web  site  to  eliminate  many  of  the free services which were
available.  Currently,  users  are offered access to free services such as email
accounts  and  a  limited  variety of content such as video clips or sweepstakes
offerings.  Nevertheless,  we  have  expanded the range of services available to
users  that  subscribe  to our web site.  Such subscribers are provided with web
site  hosting  services,  personal  home pages, access to an expanded variety of
video  clips,  and  permission  based  promotional  offers.  These  services are
provided  in  exchange  for a monthly subscription fee. The minimum subscription
fee  is  currently  $19.95.

     NETTAXI'S  3D  WORLD.  In  March 2000 we launched a new area within our web
site  pursuant to an agreement with ActiveWorlds. Users that visit our web site,
download  the  appropriate software and pay a monthly fee can access a series of
web pages complete with three dimensional graphics. The graphics are designed so
that  the  area has the look and feel of an urban environment. Users are offered
the  opportunity  to  design  a  personalized  Avatar.  An  Avatar  is  a  three
dimensional  figure  that  represents  the identity of the user. This Avatar can
then  walk  through  the  urban environment and engage in online chat with other
Avatars.  Businesses  can  set  up  storefronts within the urban environment and
advertise  products  on billboards within the urban environment. We believe this
experience  will  change  the  way  people  chat  online.

OUR  STRATEGY

     We  are  now  poised  to  build on our early success and implement a growth
strategy  that  leverages  our  infrastructure, marketing expertise, traffic and
brand.  In 2001, we intend to focus our marketing efforts on generating multiple
sources  of  revenue  while enhancing our advertising products and services. Key
elements  of  our  strategic  growth  plan  are  listed  below.

EXPAND SUBSCRIBER  ACQUISITION  PROGRAM

     We  intend  to  embark  on  aggressive programs to expand our citizen base,
which  we believe will increase our advertising revenues. We also plan to design
programs  tailored  to  increasing  the  number of paying subscribers to our web
site. To this end, we may offer discounted subscription rates to new subscribers
and  offer  new  subscribers  access  to  music,  video, and other entertainment
content  unavailable  to users that do not subscribe to our web site. We believe
these  efforts will increase our revenues from subscription fees for our premium
account  services.  The  program  will  include a concerted effort to refine our
offering  of  products and services to expand demand and an aggressive marketing
campaign  to  create real excitement about our site. We hope to raise additional
capital  for  brand  development  and  expansion  of  our  operations.


                                        8
<PAGE>
DEVELOP  OUR  INFRASTRUCTURE;  BUILD  PREMIUM  CONTENT

     Over  the  next 12 months, we are looking to further develop our managerial
and  technical  infrastructure,  enhance the quality and depth of our content by
developing  new  relationships  with  premium  content providers and improve the
quantity and quality of our broadband content. We expect these improvements will
create  several  distinct  revenues  streams for us from the following sources:

     -  Subscription fees paid by end users for access to broadband and enhanced
content;  and

     -  Advertising  revenues  paid  by advertisers seeking exposure to Internet
users  accessing  our  broadband  and  enhanced  content.

INCREASE  ADVERTISING  REVENUES

     To  date,  our  revenues  have  been  derived  principally from the sale of
advertisements.  We intend to increase our advertising revenue  by focusing on a
number  of  key  strategies,  including:

     -  expanding  the quantity and quality of content available on our web site
in  order  to  increase interest in and traffic on our web site and increase the
number  of  searches  conducted  on  our  web  site;
     -  expanding  our  advertising  customer  base;
     -  increasing  the cost of advertising placement charged to our advertising
customers  through  enhanced  targeting  and  rich  media  programs;
     -  further  improving  the  sophistication  of  our  search  methodology;
     -  increasing  the  average  size  and length of our advertising contracts;
     -  increasing  the  number  of  our  direct  sales  representatives;  and
     -  continuing  to  invest  in improving advertising serving and advertising
targeting  technology.

GAIN  SIGNIFICANT  MARKET  SHARE  AND  CONSOLIDATE  COMPETITORS

     We  hope  to  gain significant market share and consolidate our competitive
position  by  acquiring  strategic  online  community  companies and continue an
aggressive  plan  of infrastructure expansion. In May 1999 we acquired Plus Net,
Inc.,  a  California  corporation  which  operated a portal site with a range of
Internet  related  tools,  including  a  robust  search  engine  and  e-commerce
capabilities which supported consumer buying opportunities and programs designed
to  prevent  credit card fraud. The Plus Net merger also provided us with access
to  a pool of approximately 1,000,000 potential subscribers and provided us with
an opportunity to substantially increase the citizenship base within our portal.
We  are  currently  in the process of acquiring the assets of LookUpGuide.com, a
California  corporation, and broadband portal design and development company. In
March  2001,  we  entered  into an Asset Purchase Agreement with LookupGuide.com
pursuant to which we will issue 2,200,000 shares of common stock in exchange for
the  assets  of  LookupGuide.com upon completion of the transaction. We have not
completed  this  transaction and there can be no assurance that we will complete
this transaction. We believe these acquisitions will accelerate our research and
development efforts, and will enrich the Internet experience of our subscribers.


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<PAGE>
BUSINESS  SERVICES

OUR  WEB  SITE

     Our  web  site  at www.nettaxi.com is designed to appear as a virtual urban
environment.  Information  on  our web site is divided into topic areas which we
refer  to  as  affinity groups. We refer the registered users of our web site as
citizens.  Our  web  site  provides  access  to  information  on  news,  sports,
entertainment and other areas of interest. Citizens also have access to Internet
related  services  such  as  personal  home pages, chat services and free e-mail
accounts.

     When  users  first  arrive  at  www.nettaxi.com,  they view the broad urban
environment,  where  they  find  hyperlinks  to  the  information  categories we
provide,  such  as:

     -     Member  services,  registration,  and web  hosting;
     -     Community  information  links  such  as  message  boards;
     -     Information  sorted  by  topical  areas  of  interest;  and
     -     Content  such  as  movies,  sports clips and other broadband content.

     Upon  selecting  one  of  the  links, for example entertainment, a web page
containing  articles  and  information about entertainment appears along with an
extensive  list of categories, or more specific search topics, such as music and
television.  Choosing  the  more  specific  search topic will further focus your
search  to  uncover  more  specific  information.

APPLICATIONS  AND  FEATURES

     We  offer a wide range of applications and features to our citizens through
our  web  site,  including  the  following:

     OUR  SEARCH  ENGINE.  Users  of  our  web  site  can  access  our specially
configured  search  engine,  which we refer to as our taxi, located in all areas
and  levels  of  our  web  site.  Users may use the search engine by typing in a
search  topic  such  as  sports,  and  they are quickly presented with a list of
hyperlinks to web pages carrying sports related information.  Advertisers on our
site  compete  for  placement  in  the search results by paying fees to us.  The
advertisers  that  pay  the  highest fees  are brought to the top of the list of
search  results.  We  believe  our  search  engine provides greater value to our
users  since  it  presents  small, manageable groups of choices in response to a
search, as opposed to an overwhelming volume of listings turned up by many other
search  engines.

     E-MAIL  SERVICES. Our e-mail services allow users to access their accounts,
through  both  Post  Office Protocol, POP, and the Internet, IMAP. POP e-mail is
the type most commonly used by Internet service providers. Its primary advantage
for  users is that messages are sent and received quickly and with more privacy,
because  they  do  not  stay  resident  on  a server for any length of time. Its
greatest  disadvantage  is  that  e-mail messages, once delivered to a user, are
generally  no  longer available for download again, so that a user who downloads
e-mail  to  a home computer, for example, will generally not be able to download
the same mail at a later time to another computer, such as one at work. IMAP, or
web-based  e-mail,  most  commonly  used  by  portal  services,  allows users to
retrieve  e-mail  messages  from any location that offers access to the Internet
and a specific web site. Sending and receiving messages may be a bit slower than
POP  services,  but  messages  are stored on a server, can be retrieved multiple
times,  and  remain  available until they are either specifically deleted by the
user,  or  a  set  amount  of  time  has  passed.


                                       10
<PAGE>
     Our e-mail service also allows subscribers to our premium services to offer
a  free  web-based  email service with a unique domain name, such as me@you.com,
giving  the  domain  name  free  promotion  with  every  email sent. There is no
software  for  the user to download and we provide all mail and maintenance with
no  added inconvenience to the webmaster. The look and feel can be customized to
look  like  the  subscriber's  home  page.

CONTENT

     A  key  component  of  our  current  and  future  plans  is  the  continued
development  of  relationships with providers of premium content in a variety of
categories.  The  purpose  of  these  relationships  is not to directly generate
revenue,  but  rather  to  enhance  the  quantity and quality of information and
content  on  our  web site. We believe that enhanced information and content may
lead to increased visitors to our site as well as increased subscriptions to our
services. During 2000, we had formal relationships with the five premium content
providers  described below. The companies listed below provide substantially all
of  the  content  on our web site that is currently provided by outside parties.
The  providers  are listed in order by the amount of content they provide to us.

     -  SCREAMINGMEDIA.  In  April 2000 we entered into a license agreement with
ScreamingMedia,  an  aggregator  of  a  broad  range  of content such as current
events,  daily  horoscopes,  world  news,  travel,  medicine  and  health  for
syndication to Internet portals and destination sites. The term of the agreement
is  one  year  and  automatically  renews for successive one year periods unless
terminated.  We  pay a monthly license fee of $5,000 for use of ScreamingMedia's
content.  ScreamingMedia  currently  provides  the majority of our outside party
content.

     -  ACTIVEWORLDS.  In  March 2001 we launched a new area within our web site
pursuant  to  an agreement we entered into in August 2000 with ActiveWorlds.com,
Inc.,  a  Delaware  corporation.  Users  that  visit  our web site, download the
appropriate  software  and  pay  a  monthly fee can access a series of web pages
complete  with three dimensional graphics. The graphics are designed so that the
area  has  the  look  and  feel  of  an urban environment. Users are offered the
opportunity  to  design  a personalized Avatar. An Avatar is a three dimensional
figure  that  represents  the  identity  of  the user. This Avatar can they walk
through  the  urban  environment  and  engage in online chat with other Avatars.
Businesses  can  set  up  storefronts within the urban environment and advertise
products  on billboards within the urban environment. We believe this experience
will  change the way people chat online. We are to receive a portion of the fees
collected  by ActiveWorlds from users of our site that subscribe to the service.
The  agreement  has  term  of  one  year and automatically renews for successive
periods  of  one  year  unless  terminated  prior  to  the  extension.


                                       11
<PAGE>
     -  NETOPIA,  INC.  In  March 1999, we entered into a nonexclusive agreement
with Netopia, a provider of next generation products including web site services
and  high-speed  connectivity  to  the Internet, under which Netopia provides us
with  technology  that  enhances  our  ability  to  provide  services  to  our
subscribers.  The  term  of  the  agreement  is  two years. This agreement is an
expense  sharing  agreement and generates less than one percent of our revenues.

     -  SOLUTIONS  MEDIA, INC. In November 1999, we entered into a non-exclusive
agreement  with  Solutions  Media,  Inc.,  the  operator  of  the  web  site,
SpinRecords.com  to  co-brand  its  content,  which includes digital audio/video
music  files  in  the  MP3  format,  which  SpinRecords.com  has  licensed  from
independent  artists.  This  audio  and  video  content  was downloadable by our
subscribers  from  SpinRecords.com. The term of this agreement was one year with
an option to renew the agreement for successive periods of one year. We received
50% ad revenue for banner advertisements shown on these co-branded content pages
from  Solutions Media, Inc. We also received 5% of gross sales from our citizens
who  purchase  licensed  content or merchandise from these co-branded web pages.
This  agreement  had  a term of one year, and accounted for approximately 13% of
our  revenue  in  2000.  We  do not expect this relationship to continue in 2001
because  Solutions  Media,  Inc.  is  no  longer  in  business.

     -  STORERUNNER.COM.  In  September  2000, we entered into an agreement with
StoreRunner  Network,  Inc.  under which we placed Storerunner advertisements on
our  web  site and were to be compensated based on the number of visitors to our
site  that  visited  the  Storerunner site. This agreement resulted in increased
traffic  on  our  web  site  and  was  part  of the reason PC Data Online ranked
nettaxi.com  as  the  94th  most  visited site on the Internet in December 2000.
Although,  this  promotion  was  very  successful,  we have discontinued further
services  with  Storerunner.com after they filed for protection under Chapter 11
of  the  United  States  Bankruptcy  Code  in  February  2001.

     Under  our  agreements,  we  provide  co-branding  services  to the content
providers  listed  above.  The  content included on our web site is branded with
the logo and similar brand features of the relevant providers.  We also increase
the  traffic  to  their own web sites by linking our sites so that end users can
easily  move  from  our web site to theirs.  We are also working to identify and
develop  a  selection of relationships with providers of proprietary information
content,  particularly individuals and organizations with archives and databases
that  could be easily rendered into digital format.  We believe that a carefully
developed selection of such databases, would act as a powerful attraction to the
type  and  volume  of  subscribers  that  our  advertisers  find  desirable.

WEB  SITE  HOSTING  SERVICES

     One  of the key features that we offer our registered users is our web site
hosting services.  Using these services, we currently host the web sites of over
300  individuals  or  businesses.  These  services  generally  fall  into  two
categories.  First,  we  host  web  pages  for subscribers to our web site for a
monthly  fee.  The minimum fee for these services is currently $19.95 per month.
Subscribers  to  these services are provided with storage space and bandwidth to
support  their web sites. The fee increases depending on the amount of bandwidth
and storage space used  by  the  subscriber.


                                       12
<PAGE>
     Second,  we  provide Internet hosting and connectivity for larger corporate
customers.  These services involve our maintenance of the servers which host the
web  sites of these customers. For example, we have an agreement with White Sand
Communications,  Inc. pursuant to which we host its web site servers and provide
support  for  the  overall  operation of the servers. Our services are delivered
through  Alchemy  Communications  at  its  Internet  data  center located in Los
Angeles,  California.  Customers  pay monthly fees for the professional services
utilized,  one-time  installation  fees, and monthly connectivity charges. These
hosting  revenues  are  recognized  in  the  period  the services were provided.

     In  conjunction  with  these  services,  our customers are able to purchase
advertising  packages within their communities to help market web sites, as well
as  email  tools that will provide them the capability to direct market to their
customer  base.  Our  subscribers  also  provide personal or entrepreneurial and
commercial  content  that  is  available  on  our  web  site.  We  offer  paying
subscribers  25  megabytes of server space to use for a home page and e-mail. In
addition,  subscribers have access to free, easy-to-use web site design software
to  build  their  web home page, and they can designate the community and street
where  they  would  like  to  have  their  home  page  located. We are currently
developing  technologies that we believe will improve the quality of the hosting
services  we  provide.

SUBSCRIBER  SERVICE  PLANS  AND  ASSISTANCE

     In  order  to  provide  subscribers with choices that suit their individual
needs, we offer both free and premium accounts, on a tiered basis similar to the
way  that cable systems do. Premium accounts are configured from a large menu of
options,  to attract subscribers and address the needs and desires of particular
segments  of  online  users.  In  each case, subscribers are provided with free,
easy-to-use  software  for  designing  and  building  their  web  page, tips and
techniques  for making their web sites attractive and exciting to visit, and our
search  engine  to  drive  traffic  to  their  web  site.

     We  also  adhere to the principle that providing excellent customer service
is integral to attracting and, more importantly, retaining subscribers.  To that
end,  we  have  focused on development of a customer service organization keenly
focused  on  satisfying  demand  and  creating  customer  loyalty.

     BASIC  FREE  CITIZEN  ACCOUNT.  Like  most  portals,  we offer a free basic
service  package,  which  we  call  the free citizen account, to attract a large
number  of  subscribers.  This  account offers the following package of features
and  services:

     -  E-mail  service  for  one  personal  e-mail  account;  and

     - Access to chat sessions, message boards, and shopping, as well as premium
content  such  as broadband video clips, news information and other information.

     PREMIUM  ACCOUNTS. Our premium accounts are especially attractive. Citizens
can  build premium accounts from a menu of options, allowing them the ability to
pick  and  choose  which  items they are interested in. Options can be added for
additional  fees. In addition to the services which are provided to free service
account  subscribers,  premium  account  holders are provided with the following
options:


                                       13
<PAGE>
     -  E-mail  service  for  unlimited  e-mail  accounts,  each with a distinct
@nettaxi.com  address  or  a  unique  domain  and customized look and feel;

     -  Disk  space  for  web  page  hosting;  and

     -  Access  to  advertising  and  banner  ads,  and  other cross-promotional
opportunities.

     One  of  the  key features that we offer premium account subscribers is our
web  site  hosting  services.  Using  these  services, we currently host the web
sites  of over 300 individuals or businesses.  We host web pages for subscribers
to  our  web  site  for  a  monthly  fee.  The minimum fee for these services is
currently  $19.95  per  month.  The  fee  increases  depending  on the amount of
bandwidth  and  memory  used  by  the  subscriber.

     Premium  subscribers  are  provided  with professional web site services to
assist  with the design and launch of a web site as well as easy-to-use software
for  updating  the site at any time.  In addition, subscribers are provided with
special  tips  and techniques for making their web sites attractive and exciting
to  visit,  as  well as mechanisms to drive traffic to their web site, including
our  search  engine  and  strategically placed, highly visible links to the site
from  other  desirable  web  sites on the Internet.  Subscribers wishing to have
their  own  domain  are  charged  a  one-time  fee  to register the domain for a
two-year  period.

     CUSTOMER  ASSISTANCE.   In  order  to maintain nettaxi.com as a portal that
truly  serves  its subscribers and reflects their interests and needs, we invite
and  encourage  subscribers  and  visitors  to  send  in  their  comments  and
suggestions.  We  track visitor and subscriber activities, and carefully monitor
the nature and content of their comments, as part of our strategy for continuing
product  refinement  and  development.

     Regardless of the type of account selected, subscribers have access to free
online  help at any time by simply clicking on our Help icon and by visiting the
message  boards,  where they can review information posted by other subscribers,
or  post a query of their own.  Subscribers can also find information on billing
matters,  special  promotions,  upcoming events, etc., quickly and easily on the
Nettaxi.com  home  page.

     If they are unable to find what they are looking for, or if the information
they  find  is  confusing,  subscribers  can  submit  queries,  to which we will
actively  and promptly respond with appropriate information or guidance.  We are
also establishing and deploying subscriber-to-subscriber support services, which
are provided by online volunteers in exchange for free account upgrades or other
premiums.


                                       14
<PAGE>
INTERNET  TRAINING  CD-ROM

     We  had  developed  a CD-ROM product, called "Nettaxi.com; The Experience",
which  was  a  comprehensive,  interactive  training  tool  that enabled new and
intermediate users of computers to learn about and begin using the many powerful
capabilities and features of the Internet.  The CD-ROM product was also designed
to  direct  people  to  our web site once they began using the Internet.  During
2000  we  ceased  distribution  of our the CD-ROM product due to the substantial
costs  associated  with  its  maintenance,  development  and  distribution.

CUSTOMERS

     ADVERTISING  CUSTOMERS.  In  2000  we  attracted  both mass market consumer
product  companies  as  well as technology-related businesses advertising on the
Internet. Due to our advantages as an Internet marketing portal, we believe that
we  are  well  positioned to capture a portion of the growing number of consumer
product  and  service  companies  seeking  to  advertise  on  the  Internet.

     Currently,  advertisers  and  advertising  agencies  enter  into short-term
agreements,  on  average  one  to  two  months, pursuant to which they receive a
guaranteed  number  of  impressions for a fixed fee. If the guaranteed number of
impressions  is not delivered, the term of the agreements are extended until the
impressions  can  be  delivered.  Advertising  on our site currently consists of
banner-style  advertisements  that are prominently displayed at the top of pages
on  a rotating basis throughout the web pages in our web site.  From each banner
advertisement,  viewers can hyperlink directly to the advertiser's own web site,
thus  providing  the  advertiser  an  opportunity  to  directly interact with an
interested  customer.  Our standard cost per thousand impressions depends upon a
number  of factors including the location of the advertisement, its size and the
extent  to  which  it  is  targeted  for  a particular audience.  Discounts from
standard  cost per thousand impressions rates may be provided for higher volume,
longer-term  advertising  contracts.

     We  have  also  implemented a search methodology to enhance the advertising
revenue generated from our search services.  Our current search methodology uses
context driven searches where advertisers purchase their placement in the search
engine.  For  example,  a user of our web site may choose the subject "music" to
search.  After  the choice is made, the results of the search are presented in a
list on a new web page.  Advertisers pay for premium placement at the top of the
list.  This  allows advertisers to bid for product placement on our web site and
increases  revenue  generated  from  our  search  services.

     We  have  entered  into  an agreement with GoTo.com, under which we use its
search services to provide recommended web sites based upon a listing of the top
search  categories  and user defined keywords. We are to receive a percentage of
the  revenue  generated  from  users  of our site using the search services. The
agreement  has  a  one  year term commencing in September 2000 and automatically
renews  for  periods  of  one  year  unless  terminated.

     In  April  2000  we  placed  the  advertising of Hearme.com on our web site
pursuant  to  an  Online  Advertising  Insertion Order.  Under the agreement, we
received  between $18.00 and $25.00 per million impressions delivered. A portion
of  the  revenue  received  from  this  agreement  was reciprocal revenue.  This
agreement accounted for 10% of our revenue in 2000.  The agreement had a term of
three  months.


                                       15
<PAGE>
     In  July  1999,  we entered into an Advertising Impression Network Contract
with  White  Sand  Communications,  Inc. White Sand Communications engaged us to
deliver  banner  advertising,  sponsorship  advertising  and  exit  traffic
advertising.  The  term of the agreement was initially six months and thereafter
continued on a month-to-month basis. White Sand Communications pays us a minimum
monthly  guaranteed payment for exclusive use of banner advertising impressions.
This  agreement  accounted  for  6%  of  our  revenue  in  1999.

     WEB  SITE HOSTING CUSTOMERS.  In 2000, we focused on the development of our
web  site  hosting  services.  We  currently  host  the  web  sites  of over 300
individuals and  businesses.  These services generally fall into two categories.
First, we host web pages for subscribers to our web site for a monthly fee.  The
minimum  fee  for  these  services is currently $19.95 per month. Subscribers to
these  services  are  provided with storage space and bandwidth to support their
web  sites.  The  fee  increases depending on the amount of bandwidth and memory
used  by  the subscriber.  We also provide Internet hosting and connectivity for
larger  corporate  customers.  These  services  involve  our  maintenance of the
servers  which  host  the  web  sites of these customers.  For the twelve months
ended  December  31, 2000,  web  hosting  revenues  accounted  for  40% of total
revenues.

     In  August 1999, we entered into a Data Center Service Agreement with White
Sand  Communications,  Inc.   We provide White Sand Communications with space in
our  Data  Center and provide support for the overall operation of the their web
servers.  The  fee  for this agreement is a monthly recurring fee which includes
charges  for  use  and  occupancy  of  the  Data Center, connectively fee, power
charges, and where applicable, technical support and system administration fees.
The  term  of  this agreement is one year.  This agreement accounted  for 11% of
our  revenue  in  2000  and  4%  of  our  revenue  in  1999.

     In July 1999, we entered into a Data Center Service Agreement with Babenet,
Ltd, a California corporation.  We provide Babenet with space in our Data Center
for their web servers and provide support for the overall operation of the their
web  servers.  The  fee  for  this  agreement  is  a monthly recurring fee which
includes  charges  for  use  and occupancy of the Data Center, connectively fee,
power charges, and where applicable, technical support and system administration
fees.  The  term  of this agreement is one year and continues on a monthly basis
thereafter.  This  agreement  accounted  for  20%  of  our  revenue  in  2000.

ADVERTISING  SALES  AND  DESIGN

     We  seek to distinguish ourselves from our competition through the creation
of  advertising  and  sponsorship opportunities that are designed to build brand
loyalty  for  our corporate sponsors by seamlessly integrating their advertising
messages  into  our  content.  Sponsorship  programs  involve  other  business
advertising  particular  programs  on  web  pages  within our web site which are
branded  with  both our brand features and the brand features of the advertiser.
We have used sponsorship programs to advertise holiday sales of particular types
of  merchandise.  This  is distinguished from advertising opportunities in which
business  display  general  messages about their products or services on our web
site.


                                       16
<PAGE>
     Through our close relationship with our subscribers, we have the ability to
deliver  advertising  to specific targets within our site's theme content areas,
allowing  advertisers  to  single  out and effectively deliver their messages to
their  respective  target  audiences.  For example, an advertiser can target its
message  solely  to women with an interest in recreation and sports.  We believe
that  such sophisticated targeting is a critical element for capturing worldwide
advertising  budgets  for the Internet.  In the next twelve months, we intend to
expand the amount and type of demographic information our site collects from our
members,  which will allow us to offer specific data to our advertising clients.

     In  2001  we intend to enter into arrangements with a number of third-party
advertising  sales  representatives  pursuant  to  short-term agreements that in
general may be terminated by either party, without notice or penalty.  The sales
organization would consult regularly with advertisers and agencies on design and
placement  of  their  web-based  advertising, provide customers with advertising
measurement analysis and focus on providing a high level of customer service and
satisfaction.

     During  2001,  we also intend to implement special software on our web site
in  the immediate future. The software allows us to track a user surfing through
the  overall  web site, follow the user's patterns of activity, present ads that
are  targeted  and  relevant  to  the user's interests, and recommend particular
products  or  services,  based  on the user's activity profile. In addition, the
software  will  be  able to track the particular banner and other advertising to
which  the  user  has been exposed while visiting our site. This will provide us
with  a  record  of the number and type of advertisement views accessed by users
over  a  specified  period  of  time,  useful  for determining rates for outside
advertisers  wishing to have a presence on our web site. It will also provide us
with  the opportunity to rotate the particular ads it presents to a user to keep
the  ads  fresh  and  appropriate  in context. Eventually, we hope to expand our
activity  tracking  functions to include serving content to users based on their
preferences.  The  result  will  be  content  that  is  customized  for  a user,
automatically  and  seamlessly.

     We  have  also  licensed  advertisement  management software from Accipiter
Technology,  and written some custom code to extend the software's capabilities.
The  software  tracks  how  many ads are served on the web site, which areas and
which pages to which they were served, and how many people have clicked on them.
The  software  allows  us  to  manage  advertisement  selection and placement by
providing  an  accurate  advertisement  count  on  both  a  real-time  and  a
compiled-over-a-specified-time  basis,  information  crucial  to  billing  an
advertiser.  The  software  also  provides advertisers with the ability to audit
their advertisement performance on our web site on a real-time basis. We provide
a user identification and password to the advertiser, who can then come onto the
web  site  and  track  their  ads  at  any  time.

SALES  AND  MARKETING

     In  2000,  we  committed  approximately $5.9 million to sales and marketing
activities,  including  offline  and  online  media  advertising.  Our sales and
marketing  efforts  are  focused  on:


                                       17
<PAGE>
     -  Generating  additional  traffic  to  our  site;
     -  Building  and  defining a desirable online destination for consumers and
businesses;  and
     -  Creating  and  enhancing  our  brand  within  the  Internet  and  online
industries.

Among  the  key  elements of our sales and marketing strategy are the following:

     ADVERTISING  PROGRAMS.  We  plan  to  invest in online advertising to drive
traffic  to our site by placing advertisements on selected high volume sites, as
well  as  purchasing targeted keywords on several popular search engines such as
Yahoo!,  Excite,  Lycos,  and  others.  We also plan to advertise in traditional
media such as print, radio and broadcast, on a selective, highly targeted basis,
to  increase  the  awareness  of  our  site.

     PUBLIC  RELATIONS  SUPPORT.  By  virtue  of  its broad appeal and focus, we
anticipate that a targeted public relations campaign will yield material results
in building both national and targeted local and regional awareness for Nettaxi.
We  do  not  currently  have  an  agreement  with  a  national  public relations
professional,  but  are  seeking  to  enter  into an arrangement with a suitable
public  relations  company  in  2001.

OPERATING  INFRASTRUCTURE

     At  this time, the basic components of our technology infrastructure are in
place  and  operational.  Our  UNIX-based  electronic  network  for  Nettaxi.com
operates  on  a  one terabyte Ethernet backbone, with two Cisco Systems Ethernet
switches  that prevent collisions on the network.  Traffic direction for the web
servers  is  handled by Arrowpoint's CS-100, which tracks server load conditions
in  real  time and sends traffic to the most appropriate server to spread around
and  balance  the  load.  The network is comprised primarily of Sun Microsystems
high-capacity  servers, and include a mix of Enterprise 450s, Ultra 1, and Ultra
5  models, all running the newest version of Sun's Solaris operating environment
for  network  systems.  These  servers  collectively  provide  approximately 1.6
terabytes  of  hard  drive  space  for  subscriber  capacities.

     In  addition,  the  network  currently  includes  NT  servers  to  handle
registration  and  selected  other  database  functions,  using  Microsoft's SQL
database  software.

     Our electronic network is located at Alchemy Communications in Los Angeles,
California.  We  have  a  Gigabit  Data  Services  Agreement  with  Alchemy
Communications  pursuant to which they provide a secure location for our network
servers,  multiple high-speed Internet connections, and access to 24-hour-a-day,
7-day-a-week  technical  support  personnel and services. Alchemy Communications
also  provides  critically  important  routing,  redundancy, streaming media and
maintenance  services for the network and its Internet connections, as well as a
back-up  power  supply capable of continuing network operations for up to a week
in  the  event  of a power failure. We pay monthly fees for the services and the
agreement  has  a  term  of  1  year.

COMPETITION

     The markets in which we are engaged are new, rapidly evolving and intensely
competitive,  and  we  expect  competition  to  intensify further in the future.
Barriers to entry are relatively low, and current and new competitors can launch
new  sites  at  a relatively low cost using commercially-available software.  We
currently  or  potentially  compete  with a number of other companies for users,
advertisers  and  electronic  commerce  marketers,  including  a number of large
online  communities  and  services  that  have  expertise  in  developing online
commerce,  and  a  number  of  other  small services, including those that serve
specialty  markets.


                                       18
<PAGE>
     Other  companies  that  offer web site hosting, email, and content services
include  MegaGo.com,  theglobe.com,  Yahoo!,  Xoom,  Homestead.com,  WBS.net,
Angelfire,  Fortune  City,  Lycos  and  Talk  City  and, in the future, Internet
communities  may  be  developed  or  acquired  by  companies currently operating
Internet  directories,  search  engines,  shareware  archives,  content  sites,
Internet  Service  Providers  and  other entities, which may have more resources
than  ours.

     In  addition,  we  currently  and  in  the  future  face  competition  from
traditional media companies, a number of which, including CBS, Fox and NBC, have
recently  made  significant  acquisitions  or investments in Internet companies.

     Furthermore,  we  compete  for  users  and  advertisers  with other content
providers  and  with  thousands  of  web  sites  operated  by  individuals,  the
government  and educational institutions.  Such providers and sites include AOL,
Angelfire,  CNET,  CNN/Time Warner, Excite, Hotmail, Infoseek, Lycos, Microsoft,
Netscape,  Switchboard,  Xoom,  ESPN.com,  ZDNet.com  and  Yahoo!

     We  believe  that  the  following are the principal competitive factors for
companies  seeking  to  create  online  communities  on  the  Internet:

     -  community  cohesion  and  interaction;
     -  customer  service;
     -  brand  recognition;
     -  web  site  convenience  and  accessibility;
     -  price;
     -  quality  of  search  tools;  and
     -  system  reliability.

     We  also compete with companies in the online commerce market.  This market
is new, rapidly evolving and intensely competitive.  Current and new competitors
can launch new web sites at relatively low cost.  The products and services that
might  be  offered through our site will compete with other retailers and direct
marketers,  some  of  which may specifically target our potential customers.  We
anticipate that we will compete with various mail-order and web-based retailers;
various  traditional  retailers,  either  in  their  physical  or online stores;
various  online  service  providers  that  offers  products  of  interest to our
potential  customers,  including  AOL,  Microsoft, and other providers mentioned
above;.

     We  believe that the following are the principal competitive factors in the
online  commerce  market:

     -  brand  recognition;
     -  quality  of  site  content;


                                       19
<PAGE>
     -  merchandise  selection;
     -  convenience;
     -  price;
     -  customer  service;  and
     -  reliability  and  speed  of  fulfillment.

     Many  of  our  current  and  potential  competitors  have  longer operating
histories,  larger  customer  bases, greater brand recognition in other business
and  Internet  markets and significantly greater financial, marketing, technical
and other resources than us.  In addition, other online services may be acquired
by,  receive  investments from or enter into other commercial relationships with
larger,  well-established and well-financed companies as use of the Internet and
other  online services increases.  Therefore, our competitors with other revenue
sources  may  be  able  to devote greater resources to marketing and promotional
campaigns,  adopt more aggressive pricing policies and devote substantially more
resources  to  web  site  and  systems development than us or may try to attract
traffic  by  offering  services  for  free.  Increased competition may result in
reduced  operating  margins,  loss  of  market share and diminished value of our
brand.

INTELLECTUAL  PROPERTY

     We  currently have pending applications before the United States Patent and
Trademark  Office  for  trademark  and service mark protection for "Nettaxi" and
"NetroNews".  If  these  applications are approved, protection will be available
for  the  periods  prescribed  by  law.

     We  regard  the  protection  of  our copyrights, service marks, trademarks,
trade  dress  and  trade secrets as critical to our future success and rely on a
combination  of  copyright,  trademark,  service  mark and trade secret laws and
contractual  restrictions  to  establish  and  protect our proprietary rights in
products  and  services.  We  have  entered  into  confidentiality and invention
assignment  agreements  with  our  employees  and contractors, and nondisclosure
agreements  with our suppliers in order to limit access to and disclosure of our
proprietary  information.  There  can  be  no  assurance  that these contractual
arrangements or the other steps taken by us to protect our intellectual property
will  prove sufficient to prevent misappropriation of our technology or to deter
independent third-party development of similar technologies.  While we intend to
pursue  registration  of  our  trademarks  and  service  marks  in the U.S.  and
internationally,  effective  trademark, service mark, copyright and trade secret
protection  may not be available in every country in which our services are made
available  online.


                                       20
<PAGE>
     We  also  rely  on technologies that we license from third parties, such as
the  suppliers  of  key  database  technology, the operating system and specific
hardware  components  for  our products and services.  These licenses extend for
terms  ranging  from  one  year to perpetuity and are subject to satisfaction of
conditions  laid  out  in  the  specific  licensing agreements.  There can be no
assurance  that  these  third-party  technology  licenses  will  continue  to be
available  to  us on commercially reasonable terms.  The loss of such technology
could require us to obtain substitute technology of lower quality or performance
standards  or  at  greater  cost,  which  could  materially adversely affect our
business,  results  of  operations  and  financial  condition.

     Although we do not believe that we infringe the proprietary rights of third
parties,  there  can  be  no  assurance  that  third  parties  will  not  claim
infringement  by  us  with  respect to past, current or future technologies.  We
expect  that  participants  in  our  markets  will  be  increasingly  subject to
infringement  claims  as  the number of services and competitors in our industry
segment  grows.  Any  such  claim,  whether  meritorious  or  not,  could  be
time-consuming,  result  in  costly  litigation, cause service upgrade delays or
require  us  to  enter  into  royalty  or licensing agreements.  Such royalty or
licensing agreements might not be available on terms acceptable to us or at all.
As  a  result,  any  such  claim  could  have a material adverse effect upon our
business,  results  of  operations  and  financial  condition.

GOVERNMENT  REGULATION

     Our  company,  operations  and  products  and  services  are all subject to
regulations  set  forth by various federal, state and local regulatory agencies.
We  take  measures  to  ensure  our  compliance  with  all  such  regulations as
promulgated  by  these  agencies  from time to time.  The Federal Communications
Commission  sets  standards and regulations regarding communications and related
equipment.

     There  are  currently  few  laws and regulations directly applicable to the
Internet.  It  is  possible that a number of laws and regulations may be adopted
with  respect  to  the  Internet  covering issues such as user privacy, pricing,
content,  copyrights, distribution, antitrust and characteristics and quality of
products  and services.  The growth of the market for online commerce may prompt
calls  for  more  stringent  consumer protection laws that may impose additional
burdens  on  those  companies  conducting business online.  Tax authorities in a
number  of  states  are  currently  reviewing  the  appropriate tax treatment of
companies  engaged in online commerce, and new state tax regulations may subject
us  to  additional  state  sales  and  income  taxes.

     Several  states have also proposed legislation that would limit the uses of
personal  user  information  gathered  online  or  require  online  services  to
establish  privacy  policies.  The  Federal  Trade Commission has also initiated
action  against  at  least  one  online  service  regarding  the manner in which
personal  information  is  collected  from  users and provided to third parties.
Changes  to  existing  laws or the passage of new laws intended to address these
issues,  including  some  recently proposed changes, could create uncertainty in
the  marketplace  that  could  reduce  demand  for  our products and services or
increase the cost of doing business as a result of litigation costs or increased
service  delivery  costs,  or could in some other manner have a material adverse
effect  on  our  business,  results  of  operations and financial condition.  In
addition,  because our services are accessible worldwide and we facilitate sales
of  goods to users worldwide, other jurisdictions may claim that we are required
to  qualify  to  do  business  as a foreign corporation in a particular state or
foreign  country.  Our  failure  to  qualify  as  a  foreign  corporation  in  a
jurisdiction  where  it  is  required  to  do  so  could subject us to taxes and
penalties  for  the  failure  to  qualify  and  could result in our inability to
enforce  contracts  in  such  jurisdictions.  Any  such  new  legislation  or
regulation,  or  the application of laws or regulations from jurisdictions whose
laws  do  not  currently  apply  to  our business, could have a material adverse
effect  on  our  business,  results  of  operations  and  financial  condition.


                                       21
<PAGE>
EMPLOYEES

     As  of  December  31,  2000,  we  had  19  employees,  including:

     -  1  in  customer  support;

     -  3  in  product  development;

     -  10  in  sales,  marketing  and  business  development;  and

     -  5  in  administration.

     We  believe  that  our  future success will depend in part on our continued
ability  to  attract,  integrate, retain and motivate highly qualified technical
and  managerial  personnel,  and  upon  the  continued  service  of  our  senior
management  and key technical personnel. The competition for qualified personnel
in  our  industry  and  geographical  location  is  intense, and there can be no
assurance  that  we will be successful in attracting, integrating, retaining and
motivating a sufficient number of qualified personnel to conduct our business in
the future. From time to time, we also engage independent contractors to support
our  research  and  development, marketing, sales and support and administrative
organizations.  We  have  never  had  a  work  stoppage,  and  no  employees are
represented  under  collective  bargaining agreements. We consider our relations
with  our  employees  to  be  good.


ITEM  1A.   RISK  FACTORS

     Our  business,  financial  condition  or  results  of  operations  could be
materially  and  adversely  affected  by  any  of  the  following  risks.

WE  HAVE  A LIMITED OPERATING HISTORY, HAVE INCURRED LOSSES SINCE INCEPTION, AND
EXPECT  LOSSES  FOR  THE  FORESEEABLE  FUTURE.

     We  were incorporated in October 1997.  Accordingly, we have only a limited
operating history upon which you can evaluate our business and prospects.  Since
our  inception,  we  have  incurred  net  losses, resulting primarily from costs
related  to  developing  our  web  site,  attracting  users  to our web site and
establishing the Nettaxi.com brand.  At December 31, 2000, we had an accumulated
deficit  of $27,687,800.  Losses have continued to grow faster than our revenues
during our limited operating history.  This trend is reflective of our continued
investments  in technology and sales and marketing efforts to grow the business.
Because  of  our plans to continue to invest heavily in marketing and promotion,
to  hire  additional  employees,  and  to  enhance  our  web  site and operating
infrastructure,  we  expect  to incur significant net losses for the foreseeable
future.  We  believe  these  expenditures  are necessary to strengthen our brand
recognition,  attract  more  users  to  our web site and generate greater online
revenues.  If  our  revenue growth is slower than we anticipate or our operating
expenses  exceed our expectations, our losses will be significantly greater.  We
may  never  achieve  profitability.


                                       22
<PAGE>
WE  REQUIRE  FURTHER  CAPITAL  TO  PURSUE  OUR  BUSINESS  OBJECTIVES.

     We  currently  believe  that  we  have  sufficient cash to fund our current
operations through December 2002.   However, to fully execute our business plan,
we will be required to seek additional capital.  We expect to generate a portion
of  the  necessary  cash flow through advertising and hosting revenues, but will
also  need  to  obtain  capital  through  other  sources  such as equity or debt
financing.  We  cannot  assure  you  that we will be able to achieve and sustain
positive cash flow or profitability or that we will have other sources available
to  provide  the  financial  resources necessary to continue our operations.  No
assurances  can  be  given  that  we  will  be  able  to  obtain such additional
resources.  If  we are unsuccessful in generating anticipated resources from one
or  more  of  the  anticipated sources, and unable to replace the shortfall with
resources  from  another  source,  we may be able to extend the period for which
available  resources would be adequate by deferring the creation or satisfaction
of  various commitments, deferring the introduction of various services or entry
into  various  markets, and otherwise scaling back operations.  If we are unable
to  generate  the required resources, our ability to meet our obligations and to
continue  our  operations  would  be  adversely  affected.

SHARES ELIGIBLE FOR FUTURE SALE BY OUR CURRENT STOCKHOLDERS MAY ADVERSELY AFFECT
OUR  STOCK  PRICE.

     As  of  February  28,  2001,  18,091,516  shares  of  our common stock were
immediately  eligible  for  sale  in  the  public  market without restriction or
further  restriction  under  the  Securities Act of 1933, unless purchased by or
issued  to  any  "affiliate"  of  ours,  as  that  term  is  defined in Rule 144
promulgated under that Act. Additionally, we have filed a registration statement
on  Form  S-8  (File No. 333-32678) to register 6,300,000 shares of common stock
issuable  upon  exercise  of options granted or to be granted under our 1998 and
1999  stock  option  plans.  As  a  result, shares issued upon exercise of stock
options  are  eligible  for  resale in the public market without restriction. We
also  intend  to  file  a  registration  statement  on  Form S-8 to register the
additional 5,600,000 shares of common stock under our 1999 Stock Option Plan, as
amended.  We  have  also  filed  a  registration statement on Form S-1 (File No.
333-36826), declared effective by the Securities and Exchange Commission on June
12,  2000  registering  32,730,849 shares issued and issuable pursuant to recent
private  placement  transactions.  Additionally,  we  have  filed a registration
statement on Form S-1 (File No. 333-38538), declared effective by the Securities
and  Exchange  Commission on September 21, 2000, registering 4,219,692 shares of
common  stock  issued  and  issuable  pursuant  to  recent  private  placement
transactions.  As of February 28, 2001 approximately 7 million additional shares
of  common stock were eligible for sale under Rule 144. If our stockholders sell
substantial  amounts  of  our  common  stock  under  Rule 144 or pursuant to the
aforementioned  registration  statements,  the  market price of our common stock
could  be adversely affected and our ability to raise additional capital at that
time  through  the  sale  of  our  securities  could  be  impaired.

FUTURE  EXERCISE OF WARRANTS OR ISSUANCES OF SECURITIES MAY SIGNIFICANTLY DILUTE
YOUR  HOLDINGS.

     There  are  currently  warrants to purchase 18,650,816 shares of our common
stock  outstanding  and  exercisable  over  the  next  four to five years having
exercise prices ranging from $1.50 to $12.38, subject to adjustment.  The shares
underlying  all  of  these  warrants  have  been  registered  pursuant  to  our
registration  statements  on  Form  S-1  filed  with the Securities and Exchange
Commission.  There  are  also  warrants to purchase 350,000 shares of our common
stock outstanding having an exercise price of $0.35 per share. If the holders of
our outstanding warrants and other convertible securities were to exercise their
rights,  purchasers of our common stock could experience substantial dilution of
their  investment.


                                       23
<PAGE>
     It  is  likely that we will need to raise additional funds in the future in
order  to execute our business plan.  If additional funds are raised through the
issuance  of  equity or convertible debt securities, the percentage ownership of
our  stockholders  will  be  reduced,  stockholders  may  experience  additional
dilution  and such securities may have rights, preferences and privileges senior
to  those  of our common stock.  This may make an investment in our common stock
less attractive to other investors, thereby weakening the trading market for our
common  stock.

WE  ARE  SUBJECT  TO THE RISKS AND UNCERTAINTIES FREQUENTLY ENCOUNTERED BY EARLY
STAGE  COMPANIES  IN  NEW  AND  RAPIDLY  EVOLVING  MARKETS.

     Due  to  our limited operating history, we are subject to many of the risks
and  uncertainties  frequently  encountered  by early stage companies in new and
rapidly  evolving markets, such as e-commerce.  Among other things, we are faced
with  the need to establish our credibility with customers, advertising, content
providers,  and  companies  offering  e-commerce products and services, and such
parties  are  often  understandably reluctant to do business with companies that
have  not  had  an  opportunity  to  establish a track record of performance and
accountability.  For  example, our ability to enter into exclusive relationships
to  provide  content  over  the  Internet  will  be  dependent on our ability to
demonstrate  that  we  can  handle  high  volumes  of  traffic through our site.
Similarly,  early  stage companies must devote substantial time and resources to
recruiting  qualified  senior  management  and employees at all levels, and must
also  make  significant  investments  to establish brand recognition.  If we are
unable  to  overcome  some  of  these obstacles, we may be unable to achieve our
business  goals  and  raise  sufficient  capital  to  expand  our  business.

OUR  REVENUE  GROWTH  IN PRIOR PERIODS IS NOT INDICATIVE OF FUTURE GROWTH AND WE
CANNOT  ACCURATELY  PREDICT  OUR  FUTURE  REVENUES.

     We  had  revenues  of approximately $9,418,400, $5,032,800 and $258,000 for
the  years  ended  December  31,  2000,  1999 and 1998, respectively.  While our
growth  rate  has been strong, it is unlikely that revenue will continue to grow
at  this  rate in the future and our performance during these periods should not
be  taken  as  being  indicative  of  future trends.  In addition, approximately


                                       24
<PAGE>
$1,285,000  of  the  revenues  for the year ended December 31, 1999 were derived
from credit card transaction processing fees, a revenue stream that has declined
significantly  and that we do not believe will be material in future periods. In
the  year 2000, we generated approximately $2,200,000 in revenue from reciprocal
advertising  transactions.  We  anticipate  that  these arrangements will not be
significant  in  the  future. Accurate predictions regarding our revenues in the
future  are difficult and should be considered in light of our limited operating
history and rapid changes in the ever evolving Internet market. For example, our
ability  to  generate revenues in the future is dependent in part on the success
of  our  capital-raising  efforts  and the investments that we intend to make in
sales  and  marketing, infrastructure, and content development. Our revenues for
the  foreseeable  future  will  remain  primarily  dependent  on  the  number of
customers  that  we  are able to attract to our web site, and secondarily on web
hosting,  sponsorship  and  advertising  revenues.  We  cannot forecast with any
degree  of  certainty  the  number  of  visitors  to our web site, the number of
visitors who will become customers, or the amount of sponsorship and advertising
revenues.  Similarly,  we  cannot  provide any guarantees regarding the revenues
that  will  be generated from e-commerce products and services that we intend to
make  available  on  our  site.

OUR  QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY, THEREBY INCREASING
THE  VOLATILITY  OF  OUR  STOCK  PRICE

     We  anticipate that our operating results will fluctuate significantly from
quarter  to  quarter.  These  fluctuations  may  be due to seasonal and cyclical
patterns that have emerged in Internet related spending. For example, the use of
our  web  site is somewhat lower during periods of the year during the first and
third  calendar  quarters  because of the summer vacation period and post winter
holiday season slowdown. This results in lower revenues for us during periods of
the year. Quarterly results may also vary because it is difficult to predict the
long-term  revenue  growth  of  our  business.  If  investments in marketing and
content  development  are  delayed,  we  may  experience corresponding delays in
anticipated  revenues from such investments, thereby leading to uneven quarterly
results.  Because  of  these  factors,  we  believe  that  quarter-to-quarter
comparisons  of  our results of operations are not good indicators of our future
performance.  If  our operating results fall below the expectations of investors
in  future  periods,  then  our  stock  price  may  decline.

OUR  PLANNED  ONLINE  AND  TRADITIONAL  MARKETING  CAMPAIGNS  MAY  NOT  ATTRACT
SUFFICIENT  ADDITIONAL  VISITORS  TO  OUR  WEB  SITE.

     We  plan to pursue aggressive marketing campaigns online and in traditional
media  to  promote  the  Nettaxi.com  brand  and attract an increasing number of
visitors  to  our  web  site.  We believe that maintaining and strengthening the
Nettaxi.com  brand  will  be  critical  to  the  success  of our business.  This
investment  in  increased marketing carries with it significant risks, including
the  following:

     -     Our  advertisements  may  not  properly  convey the Nettaxi.com brand
image,  or  may even detract from our image.  Advertising in print and broadcast
media  is  expensive and is often typically difficult to modify quickly in order
to  take  into  account feedback that may indicate that we have failed to convey
the optimal message.  If our advertisements fail to positively promote our brand
and  image, the damage to our business may be long-lasting and costly to repair.


                                       25
<PAGE>
     -     Even if we succeed in creating the right messages for our promotional
campaigns, these advertisements may fail to attract new visitors to our web site
at  levels commensurate with their costs.  We may fail to choose the optimal mix
of  television,  radio,  print  and  other media to cost effectively deliver our
message.  Moreover,  if  these  efforts are unsuccessful, we will face difficult
and  costly  choices  in  deciding  whether  and  how  to redirect our marketing
dollars.

WE  MAY  FAIL  TO  ESTABLISH AN EFFECTIVE INTERNAL SALES ORGANIZATION TO ATTRACT
SPONSORSHIP  AND  ADVERTISING  REVENUES.

     To  date,  we  have  relied  principally on outside advertising agencies to
develop sponsorship and advertising opportunities. We believe that the growth of
sponsorship  and advertising revenues will depend on our ability to establish an
aggressive  and  effective  internal sales organization. Our internal sales team
currently  has  ten  members.  We will need to substantially increase this sales
force  in  the coming year in order to execute our business plan. Our ability to
increase our sales force involves a number of risks and uncertainties, including
competition and the length of time for new sales employees to become productive.
If  we  do  not  develop an effective internal sales force, our business will be
materially  and  adversely  affected by our inability to attract sponsorship and
advertising  revenues.

OUR  PROJECTED  BROADBAND SERVICES AND ENHANCED CONTENT MAY NOT BE LAUNCHED ON A
TIMELY  BASIS  AND  MAY  NOT  GENERATE  THE  ANTICIPATED  LEVEL  OF  REVENUES

     Our  strategic  growth  plan  calls  for  development and implementation of
broadband  services  and enhanced content for our subscribers.  The availability
of  many  of  these tools is dependent on our ability to enter into satisfactory
contractual  relationships  with  parties  offering related content and services
which  can  be  made available to our subscribers, as well as relationships with
parties  seeking  to  make online sales to our subscribers and other visitors to
our  web  site.  To  date,  our  revenues  from  broadband services and enhanced
content  have  not  been  material,  and  we  have yet to launch a number of the
services  that  we  hope  to  provide to our subscribers.  We may not be able to
commence  those  services  on a timely basis, and there can be no assurance that
the  services  will  generate  the  anticipated  amount  of  revenues.

OUR  LONG-TERM  SUCCESS  DEPENDS  ON  THE  DEVELOPMENT OF THE BROADBAND SERVICES
MARKET,  WHICH  IS  UNCERTAIN

     Our  future  revenues  and profits substantially depend upon the widespread
acceptance  and  use of the Internet as an effective medium for the distribution
and viewing of broadband content.  The use of the Internet for these services is
a  recent phenomenon.  Demand for recently introduced services and products over
the Internet and online services is subject to a high level of uncertainty.  For
example,  the distribution and viewing of broadband content over the Internet is
at  an  early  stage  and buyers may be unwilling to shift their purchasing from
traditional  vendors  of  such  content  to  online  vendors.  If the demand for
broadband  services  does  not  develop  or  increase rapidly, this could have a
material  adverse  effect  on  our  results  of  operations.



                                       26
<PAGE>
WE RELY HEAVILY ON THIRD PARTIES FOR DEVELOPMENT OF SOFTWARE AND CONTENT AND FOR
ESSENTIAL  BUSINESS  OPERATIONS  AND MAY BE ADVERSELY AFFECTED BY OUR FAILURE TO
MAINTAIN  SATISFACTORY  RELATIONSHIPS  WITH  SUCH  PARTIES.

     We  depend  on  third  parties  for  important  aspects  of  our  business,
including:

     -     Internet  access;
     -     development  of  software  for  new  web  site  features;
     -     content;  and
     -     telecommunications.

     We have limited control over these third parties, and we are not their only
client.  We  may  not be able to maintain satisfactory relationships with any of
them  on  acceptable commercial terms, and there is no guarantee that we will be
able  to  renew  these  agreements  at all.  Further, we cannot be sure that the
quality  of  products  and  services  that they provide may remain at the levels
needed  to  enable  us  to  conduct  our  business  effectively.

WE  ARE  HEAVILY  RELIANT ON THIRD PARTIES TO HOUSE AND SERVICE OUR WEB SITE AND
ARE  VULNERABLE  TO  POSSIBLE  DAMAGE  TO  OUR  OPERATING  SYSTEMS.

     We  maintain  substantially  all  of  our computer systems at our Campbell,
California  site and the Los Angeles, California site of Alchemy Communications.
We  are  heavily  reliant  on the ability of Alchemy Communications to house and
service our web site.  This system's continuing and uninterrupted performance is
critical  to  our success.  Growth in the number of users accessing our web site
may  strain  its  capacity, and we rely on Alchemy Communications to upgrade our
system's  capacity  in  the  face  of  this growth.  Alchemy Communications also
provides  our connection to the Internet.  Sustained or repeated system failures
or  interruptions  of  our  web  site  connection  services  would  reduce  the
attractiveness of our web site to customers and advertisers, and could therefore
have a material and adverse effect on our business due to loss of membership and
advertising  revenues.

     In addition, our operations are dependent in part on our ability to protect
our  operating  systems  against physical damage from fire, floods, earthquakes,
power  loss,  telecommunications  failures,  break-ins  or other similar events.
Furthermore,  our  servers  are  vulnerable  to  computer viruses, break-ins and
similar disruptive problems.  The occurrence of any of these events could result
in  interruptions,  delays or cessations in service to our users and result in a
decrease  in  the  number  of  visitors  to  our  site.

WE  PLAN  TO GROW RAPIDLY, AND EFFECTIVELY MANAGING OUR GROWTH MAY BE DIFFICULT.

     Our business plan contemplates a period of significant expansion.  In order
to  execute  our  business  plan,  we must grow significantly.  This growth will
strain  our  personnel, management systems and resources.  To manage our growth,
we  must  implement  operational and financial systems and controls and recruit,
train  and  manage  new  employees.  We  cannot  be sure that we will be able to
integrate  new executives and other employees into our organization effectively.
In  addition,  there  will  be  significant administrative burdens placed on our
management  team  as  a  result of our status as a public company.  If we do not
manage  growth  effectively,  we  will  not be able to achieve our financial and
business  goals.


                                       27
<PAGE>
WE  DEPEND  ON OUR KEY PERSONNEL TO OPERATE OUR BUSINESS, AND WE MAY NOT BE ABLE
TO  HIRE ENOUGH ADDITIONAL MANAGEMENT AND OTHER PERSONNEL AS OUR BUSINESS GROWS.

     Our performance is substantially dependent on the continued services and on
the  performance of our executive officers and other key employees, particularly
Robert  A.  Rositano,  Jr.,  our Chief Executive Officer, and Dean Rositano, our
President  and  Chief Operating Officer.  The loss of the services of any of our
executive  officers  could  materially  and adversely affect our business due to
their experience with our business plan and the disruption in the conduct of our
day-to-day operations.  Additionally, we believe we will need to attract, retain
and  motivate  talented  management  and  other  highly  skilled employees to be
successful.  Competition  for  employees  that  possess  knowledge  of  both the
Internet  industry and our target market is intense.  We may be unable to retain
our  key  employees  or  attract,  assimilate  and retain other highly qualified
employees  in  the  future.

INTENSE  COMPETITION FROM OTHER INTERNET-BASED BUSINESSES MAY REDUCE OUR MARGINS
AND  MARKET  SHARE  AND  CAUSE  OUR  STOCK  PRICE  TO  DECLINE.

     The markets in which we are engaged are new, rapidly evolving and intensely
competitive,  and  we  expect  competition  to  intensify further in the future.
Barriers to entry are relatively low, and current and new competitors can launch
new  sites  at  a  relatively  low  cost  using commercially available software.
Competition  could  result  in  price  reductions for our products and services,
reduced  margins  or  loss  of  market  share.  Consolidation  within the online
commerce  industry  may  also  increase  competition.

     We  currently  or  potentially  compete  with  a  number of other companies
including  a number of large online communities and services that have expertise
in  developing  online commerce, and a number of other small services, including
those  that  serve  specialty  markets.  Many  of our potential competitors have
longer  operating histories, larger customer bases, greater brand recognition in
other  business  and  Internet  markets  and  significantly  greater  financial,
marketing,  technical  and  other  resources  than  us.

WE  MAY  FAIL  TO  ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH OTHER WEB
SITES  TO  INCREASE  NUMBERS  OF  WEB  SITE  USERS  AND  INCREASE  OUR REVENUES.

     We  intend  to  establish numerous strategic relationships with popular web
sites  to  increase  the  number  of visitors to our web site.  There is intense
competition  for placements on these sites, and we may not be able to enter into
these  relationships  on  commercially  reasonable  terms or at all.  Even if we
enter  into  relationships with other web sites, they themselves may not attract
significant  numbers  of  users.  Therefore, our site may not receive additional
users  from  these relationships.  Moreover, we may have to pay significant fees
to  establish these relationships.  Our inability to enter into new distribution
relationships  and  expand  our  existing ones could have a material and adverse
effect  on  our business due to our inability to increase the number of users of
our  site.


                                       28
<PAGE>
OUR  ADVERTISERS  ARE  EMERGING  INTERNET COMPANIES THAT REPRESENT CREDIT RISKS.

     Some  of our advertisers have limited operating histories, are operating at
a  loss,  have  limited cash reserves or have limited access to capital.  If any
significant part of our customer base experiences financial difficulties, is not
commercially successful or is unable to pay our advertising fees for any reason,
our  business,  operating  results and financial condition may be materially and
adversely  affected.

WE  MAY  NOT  BE  ABLE  TO  ADAPT  AS INTERNET TECHNOLOGIES AND CUSTOMER DEMANDS
CONTINUE  TO  EVOLVE.

     To  be  successful, we must adapt to rapidly changing Internet technologies
and  continually enhance the features and services provided on our web site.  We
could  incur substantial, unanticipated costs if we need to modify our web site,
software  and  infrastructure  to  incorporate  new technologies demanded by our
audience.  We may use new technologies ineffectively or we may fail to adapt our
web  site,  transaction-processing  systems  and  network infrastructure to user
requirements  or  emerging industry standards.  If we fail to keep pace with the
technological  demands  of our web-savvy audience for new services, products and
enhancements,  our  users  may not use our web site and instead use those of our
competitors.

WE  MAY  NOT  BE  ABLE  TO PROTECT AND ENFORCE OUR TRADEMARKS, WEB ADDRESSES AND
PROPRIETARY  RIGHTS.

   Our  Nettaxi.com  brand and our web address, www.nettaxi.com, are critical to
our  success.  We  have filed a trademark application for "Nettaxi", among other
trademark  applications.  We  cannot  guarantee  that  any  of  these  trademark
applications  will be granted.  In addition, we may not be able to prevent third
parties  from  acquiring  web  addresses  that  are  confusingly  similar to our
addresses,  which  could  harm  our  business.  Also, while we have entered into
confidentiality  agreements  with  our  employees,  contractors and suppliers in
order  to  safeguard  our trade secrets and other proprietary information, there
can  be  no assurance that technology will not be misappropriated or that others
may  lawfully  develop  similar  technologies.

ACQUISITIONS  MAY  DISRUPT  OR OTHERWISE HAVE A NEGATIVE IMPACT ON OUR BUSINESS.

     We  may  acquire or make investments in complementary businesses, products,
services  or  technologies  on  an opportunistic basis when we believe they will
assist  us  in  carrying out our business strategy.  Growth through acquisitions
has been a successful strategy used by other Internet companies.  We do not have
any present understanding relating to any such acquisition or investment.  If we
were  to  buy  a  content, service or technology company, the amount of time and
level  of  resources required to successfully integrate their business operation
could  be  substantial.  The  challenges  in  assimilating  their  people  and
organizational  structure,  and  in  encountering potential unforeseen technical
issues  in  integrating  their  content,  service or technology into ours, could
cause  significant  delays  in  executing  other key areas of our business plan.
This  could  include delays in integrating other content, services or technology
into  our  communities,  or  moving  forward  on  other  business  development
relationships,  as management and employees, both of which are time constrained,
may  be  distracted.  In addition, the key personnel of the acquired company may
decide  not  to  work for us, which could result in the loss of key technical or
business knowledge to us.  Furthermore, in making an acquisition, we may have to
incur  debt  or issue equity securities to finance the acquisition, the issuance
of  which  could  be  dilutive  to  our  existing  shareholders.


                                       29
<PAGE>
WE  ARE VULNERABLE TO ADDITIONAL TAX OBLIGATIONS THAT COULD BE IMPOSED ON ONLINE
COMMERCE  TRANSACTIONS.

     We  do  not  expect  to  collect sales or other similar taxes in respect of
transactions  engaged  in by customers on our web site.  However, various states
or  foreign  countries  may seek to impose sales tax obligations on us and other
e-commerce and direct marketing companies.  A number of proposals have been made
at  the state and local levels that would impose additional taxes on the sale of
goods  and  services  through  the Internet.  These proposals, if adopted, could
substantially  impair  the growth of e-commerce and cause purchasing through our
web  site  to  be less attractive to customers as compared to traditional retail
purchasing.  Further,  states  have  attempted  to impose sales taxes on catalog
sales  from  businesses  such  as  ours.  A  successful assertion by one or more
states that we should have collected or be collecting sales taxes on the sale of
products  could  have  a  material and adverse effect on our business due to the
imposition  of  fines  or  penalties  or  the  requirement  that  we pay for the
uncollected  taxes.

WE MAY NOT BE ABLE TO TAKE FULL ADVANTAGE OF POTENTIAL TAX BENEFITS FROM OUR NET
OPERATING  LOSS  CARRYFORWARDS.

     At  December  31,  2000  we  had  Federal  net operating loss carryforwards
available  to reduce future Federal taxable income that aggregated approximately
$25,143,000  for  Federal  income  tax  purposes.  These  benefits will begin to
expire  in  2017.  Pursuant  to  a  "change  in  ownership"  as  defined  by the
provisions  of the Tax Reform Act of 1986, utilization of our net operating loss
carryforwards  may  be limited, if a cumulative change of ownership of more than
50%  occurs  within a three-year period.  We have not determined if an ownership
change  has  occurred.  If  it has, we may not be able to take full advantage of
potential  tax  benefits  from  our  net  operating  loss  carry  forwards.

WE  ARE  DEPENDENT  ON  THE CONTINUED DEVELOPMENT OF THE INTERNET INFRASTRUCTURE

     Our industry is new and rapidly evolving.  Our business is highly dependant
on  the  growth  of the internet industry and would be adversely affected if web
usage  and e-commerce does not continue to grow.  web usage may be inhibited for
a  number  of  reasons,  including:

     -     inadequate  Internet  infrastructure;
     -     security  concerns;
     -     inconsistent  quality  of  service;
     -     unavailability  of  cost-effective,  high-speed  service;
     -     imposition  of  transactional  taxes;  or
     -     limitation  of third party service provider's ability and willingness
           to  invest  in  new  or  updated equipment  to handle traffic volume.


                                       30
<PAGE>
     If  Internet  usage  grows,  the Internet infrastructure may not be able to
support  the  demands  placed  on  it  by  this  growth,  or its performance and
reliability  may  decline.  We  are  highly  dependant  on  third  party service
providers.  Any  interruption  experienced by these service providers may have a
material  impact  on  our business due to our inability to serve our advertising
customers or end users. In addition, web sites, including ours, have experienced
a  variety  of  interruptions  in their service as a result of outages and other
delays  occurring  throughout  the  Internet  network  infrastructure.  If these
outages  or delays frequently occur in the future, web usage, including usage of
our  web  site, could grow slowly or decline. This may have a material impact on
future  revenues.

WE RELY ON A CONTINUOUS POWER SUPPLY TO CONDUCT OUR OPERATIONS, AND CALIFORNIA'S
CURRENT  ENERGY  CRISIS  COULD DISRUPT OUR OPERATIONS AND INCREASE OUR EXPENSES.

     California  is  in  the  midst  of  an energy crisis that could disrupt our
operations  and  increase our expenses. In the event of an acute power shortage,
that  is,  when  power  reserves  for  the  State of California fall below 1.5%,
California  has on some occasions implemented, and may in the future continue to
implement,  rolling  blackouts  throughout  California. Our computer systems are
supplied  primary  power  by  power  companies  in  California. In addition, the
systems  are  connected  to  battery  backup systems. This alternative source of
power  is  provided  by  our  hosting  provider  and  is  subject  to upkeep and
maintenance. Our current insurance does not provide coverage for any damages our
customers  or we may suffer as a result of any interruption in our power supply.
If  blackouts  interrupt  our  third party power supply, we would be temporarily
unable  to continue operations at our affected facilities. Any such interruption
in  our  ability  to  continue  operations  at  our  facilities could damage our
reputation and could result in lost revenue, which could have a material adverse
effect  on  our  business,  operating  results  and  financial  condition.

ADOPTION  OF  THE  INTERNET  AS  AN  ADVERTISING  MEDIUM  IS  UNCERTAIN.

     The  growth of Internet sponsorships and advertising requires validation of
the  Internet  as  an  effective advertising medium.  This validation has yet to
fully  occur.  In order for us to generate sponsorship and advertising revenues,
marketers  must  direct  a  significant portion of their budgets to the Internet
and, specifically, to our web site.  To date, sales of Internet sponsorships and
advertising represent only a small percentage of total advertising sales.  Also,
technological developments could slow the growth of sponsorships and advertising
on  the  Internet.  For example, widespread use of filter software programs that
limit  access  to  advertising  on our web site from the Internet user's browser
could reduce advertising on the Internet.  Our business, financial condition and
operating  results  would  be  adversely  affected  if  the  market for Internet
advertising  fails  to  further develop due to the loss of anticipated revenues.


                                       31
<PAGE>
BREACHES  OF  SECURITY ON THE INTERNET MAY SLOW THE GROWTH OF E-COMMERCE AND WEB
ADVERTISING  AND  SUBJECT  US  TO  LIABILITY.

     The need to securely transmit confidential information, such as credit card
and other personal information, over the Internet has been a significant barrier
to  e-commerce  and communications over the web.  Any well-publicized compromise
of  security  could  deter  more  people  from using the web or from using it to
conduct transactions that involve transmitting confidential information, such as
purchases  of  goods or services.  Furthermore, decreased traffic and e-commerce
sales as a result of general security concerns could cause advertisers to reduce
their  amount  of  online  spending.  To  the  extent that our activities or the
activities  of  third  party contractors involve the storage and transmission of
proprietary  information,  such  as credit card numbers, security breaches could
disrupt  our  business, damage our reputation and expose us to a risk of loss or
litigation  and  possible  liability.  We  could  be  liable for claims based on
unauthorized  purchases  with  credit  card  information, impersonation or other
similar  fraud  claims.  Claims could also be based on other misuses of personal
information,  such as for unauthorized marketing purposes.  We may need to spend
a  great  deal of money and use other resources to protect against the threat of
security  breaches  or  to  alleviate  problems  caused  by  security  breaches.

WE  COULD FACE LIABILITY FOR INFORMATION DISPLAYED ON AND COMMUNICATIONS THROUGH
OUR  WEB  SITE.

     We  may  be  subjected  to  claims for defamation, negligence, copyright or
trademark infringement or based on other theories relating to the information we
publish  on  our  web  site.  These types of claims have been brought, sometimes
successfully,  against  Internet  companies as well as print publications in the
past.  Based  on links we provide to other web sites, we could also be subjected
to  claims  based  upon online content we do not control that is accessible from
our  web site.  Claims may also be based on statements made and actions taken as
a  result  of participation in our chat rooms or as a result of materials posted
by  members  on bulletin boards at our web site.  We also offer e-mail services,
which  may  subject  us  to  potential  risks,  such  as:

     -     liabilities  or  claims  resulting  from  unsolicited  e-mail;
     -     lost  or  misdirected  messages;
     -     illegal  or  fraudulent  use  of  e-mail;  or
     -     interruptions  or  delays  in  e-mail  service.

These  claims  could  result  in  substantial  costs  and  a  diversion  of  our
management's  attention  and  resources.

     Efforts  to regulate or eliminate the use of mechanisms which automatically
collect  information  on users of our web site may interfere with our ability to
target  our marketing efforts and tailor our web site offerings to the tastes of
our  users.

     Web sites typically place a tracking program on a user's hard drive without
the  user's  knowledge or consent.  These programs automatically collect data on
anyone  visiting  a  web  site.  web  site  operators use these mechanisms for a
variety  of  purposes,  including  the  collection  of  data derived from users'
Internet  activity.  Most  currently available web browsers allow users to elect
to remove these mechanisms at any time or to prevent such information from being
stored  on  their hard drive.  In addition, some commentators, privacy advocates
and  governmental bodies have suggested limiting or eliminating the use of these
tracking  mechanisms.  Any  reduction  or limitation in the use of this software
could  limit  the  effectiveness  of  our  sales  and  marketing  efforts.


                                       32
<PAGE>
WE  COULD  FACE  ADDITIONAL BURDENS ASSOCIATED WITH GOVERNMENT REGULATION OF AND
LEGAL  UNCERTAINTIES  SURROUNDING  THE  INTERNET.

     Any new law or regulation pertaining to the Internet, or the application or
interpretation of existing laws, could have a material and adverse effect on our
business,  results  of operations and financial condition due to increased costs
of  doing  business.  Laws  and  regulations  directly  applicable  to  Internet
communications,  commerce  and advertising are becoming more prevalent.  The law
governing  the Internet, however, remains largely unsettled, even in areas where
there  has been some legislative action.  It may take years to determine whether
and  how  existing  laws  governing  intellectual  property, copyright, privacy,
obscenity,  libel  and  taxation apply to the Internet.  In addition, the growth
and  development  of  e-commerce  may  prompt  calls for more stringent consumer
protection  laws,  both in the United States and abroad.  We also may be subject
to  future  regulation  not specifically related to the Internet, including laws
affecting  direct  marketers.

WE  COULD  INCUR  MONETARY  DAMAGES  FROM LITIGATION ARISING OUT OF OUR BUSINESS
ACTIVITIES.

     On  July  9,  1999, we were named as one of several defendants in a lawsuit
filed  by  four disaffected shareholders in Simply Interactive, Inc. The lawsuit
arises  out  of  a  series  of  events  relating to certain assets our operating
company,  Nettaxi  Online  Communities, purchased from SSN Properties in October
1997.  The  complaint  alleges  that  we  owed,  and  either  intentionally  or
negligently  breached,  fiduciary duties to the plaintiffs. The suit also claims
that  we  either  intentionally  or  negligently interfered with the plaintiffs'
contract  or  prospective  advantage.  A Case Management Conference is currently
scheduled  for  April  13,  2001 at which time the parties must represent to the
court  whether  or  not  this  matter  is  ready  to be set for trial. While our
officers and directors believe that the suit is without merit, we cannot provide
you  with any assurances that we will prevail in this dispute. If the plaintiffs
successfully  prosecute  any  of their claims against us, the resulting monetary
damages  and  reduction  in  our  working  capital  could significantly harm our
business.

ANTI-TAKEOVER  PROVISIONS  AND  OUR  RIGHT TO ISSUE PREFERRED STOCK COULD MAKE A
THIRD  PARTY  ACQUISITION  OF  US  DIFFICULT.

     We  are a Nevada corporation.  Anti-takeover provisions of Nevada law could
make  it more difficult for a third party to acquire control of us, even if such
change  in  control  would  be  beneficial  to  stockholders.  Our  articles  of
incorporation  provide  that  our  board  of directors may issue preferred stock
without  stockholder  approval.  The  issuance  of preferred stock could make it
more  difficult  for  a  third  party to acquire us.  All of the foregoing could
adversely  affect  prevailing  market  prices  for  our  common  stock.


                                       33
<PAGE>
OUR COMMON STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE AS IS TYPICAL OF INTERNET
COMPANIES.

     The market price of our common stock has been, and is likely to continue to
be,  highly  volatile  as  the  stock  market  in  general,  and  the market for
Internet-related  and  technology  companies  in  particular,  has  been  highly
volatile.  Investors  may not be able to resell their shares of our common stock
following  periods  of  volatility  because  of the market's adverse reaction to
volatility.  The  trading  prices  of  many  technology  and  Internet-related
companies'  stocks  have  decreased  substantially within the last 52 weeks. The
market  downturn  and  adjustment for the high valuations for internet companies
may  not  return to the levels of late 1999 and early 2000. We cannot assure you
that  our  stock  will trade at the same levels of other Internet stocks or that
Internet  stocks in general will regain their prior market prices. The per share
closing  price  of  our  common  stock in 2000 ranged from a high of $8.09 as of
March 13, 2000 to a low of $0.14 as of December 29, 2001. In addition, an active
public  market  for  our  common  stock  may  not  continue.

     Factors  that  could cause such volatility may include, among other things:

     -    actual or anticipated fluctuations in our quarterly operating results;
     -    announcements  of  technological  innovations;
     -    conditions  or  trends  in  the  Internet  industry;  and
     -    changes  in  the  market  valuations  of  other  Internet  companies.


ITEM  2.  PROPERTIES

     Our  headquarters  are  currently located in a leased facility in Campbell,
California,  consisting  of  approximately  8,600 square feet of office space to
accommodate  management,  operations,  and  research  and development functions,
which  is under a lease that expires at the end of April 2002.  We are currently
evaluating  our need for the current accommodations and believe that the current
market conditions will allow the Company to either renew the current lease space
or  find  additional  space  if  needed.

ITEM  3.  LEGAL  PROCEEDINGS

     On  July  9,  1999,  after  our  public  announcement  of the filing of our
registration  statement  on  Form  S-1,  (Registration  No.  333-78129)  four
disaffected  shareholders  in  Simply  Interactive,  Inc., led by Ronald Ventre,
filed  an  action  in  the  Santa  Clara County Superior Court against Warren J.
Kaplan,  Frank McGrath, Bruno Henry, Alan K.  Fetzer, Robert Divenere, Robert A.
Rositano, Sr., Robert A. Rositano, Jr., Dean Rositano, Glenn Goelz, Nettaxi.com,
Nettaxi  Online  Communities,  Inc.,  SSN Properties, LLC and others.  In August
1999  this  claim  was  consolidated with another claim filed by Carlo Bruno, et
al.,  on  September  17,  1998.  The  case  number  is  CV  783127.

     Mr.  Kaplan  was  formerly  the  chief  executive officer and a director of
Simply  Interactive.  He also became a member of SSN Properties and is currently
the chief operating officer of AboveNet Communications, Inc.  Mr.  McGrath was a
director  of  Simply Interactive.  He also became a member of SSN Properties and
is  currently  a  vice  president  of MCI WorldCom.  Messrs.  Henry, Fetzer, and
DiVenere  were  all  former  officers of Simply Interactive, and Mr.  Henry also
served  as  a  director  of  Simply Interactive.  Robert A. Rositano, Sr.  was a
director of Simply Interactive and became the managing member of SSN Properties.
He  currently  owns  more  than 5% of the outstanding shares of our common stock
following a distribution by SSN Properties to its members in March 1999.  Robert
A. Rositano, Jr.  was formerly an executive vice president of Simply Interactive
and  served  as  a  director  until  May  1996.  He is currently chief executive
officer,  secretary  and  a  director of Nettaxi.  Dean Rositano was formerly an
executive  vice  president  of Simply Interactive and served as a director until
May  1996.  He is currently president, chief operating officer and a director of
Nettaxi.  Mr.  Goelz  was the chief financial officer of Simply Interactive from
August  1996 to July 1997 and was our chief financial officer from April 1999 to
April  2000.  All  individual  defendants  held  shares,  or options to purchase
shares,  of  Simply  Interactive.


                                       34
<PAGE>
     Distinctions  can  be  made  between  the  claims  that the Ventre group is
pursuing against us and the other defendants.  As to us, the suit claims that we
owed,  and either intentionally or negligently breached, fiduciary duties to the
Ventre  group.  The suit also claims that we either intentionally or negligently
interfered  with  the  Ventre  group's  contract  or prospective advantage.  The
Ventre  group  is  seeking  the  following  relief  against  us:

     -    an  unstated  amount of compensatory and special damages in the sum of
          their  investments  in  Simply Interactive, plus prejudgment interest;

     -    an  accounting  of  profits;

     -    punitive  damages;  and

     -    costs  of  suit,  including  attorney  fees  as  permitted  by  law.

     The  Ventre  group's  claims against the other defendants, while not clear,
include  all  of  the claims described above with respect to us as well as other
claims  of  ineffective  management,  waste  of  assets  and similar claims.  In
addition  to  the  relief  described  above with respect to us, the Ventre group
seeks  the  following  from  the  other  defendants:

     -    declaratory  relief  concerning  the  validity  of the election of the
          board  of  directors  of  Simply  Interactive;  and

     -    orders  for the inspection of corporate records in, and the holding of
          shareholder  meetings  for,  Simply  Interactive.

     The factual basis for the proceedings as alleged by the Ventre group can be
summarized as follows.  The Ventre group alleges that between February and April
1996, they made a series of investments in Simply Interactive and thereby became
minority  shareholders.  Thereafter,  according  to  the complaint, the board of
directors  of  Simply  Interactive,  without due diligence and disclosure to the
minority  shareholders,  increased the debts and expenses of Simply Interactive.
The  Ventre  group  then  alleges that the defendants raised capital through the
sale  of  $5.5 million principal amount of convertible notes, secured by all the
assets  and  properties  of Simply Interactive, to three of the defendants, that
the minority shareholders were not given notice of the proposed financing and an
opportunity  to participate, and that the entire transaction is void or voidable
because  the board of directors of Simply Interactive was improperly constituted
at  the  time.  The  Ventre  group  goes on to allege that SSN Properties, which
acquired  the  notes  from  the  original purchaser, foreclosed on the assets of
Simply  Interactive  without  reason  in  August  1997.  Finally,  the complaint
alleges  that the assets formerly used by Simply Interactive were transferred to
us  through  a series of transactions in violation of fiduciary obligations owed
by  the  defendants  to  the  minority  shareholders  of  Simply  Interactive.


                                       35
<PAGE>
     Our  officers  and  directors  believe  that  the Ventre group's claims are
without  merit  and  that  significant  issues of proof exist with regard to the
relevant  facts  as  alleged  in  the  complaint.  For  example,  the individual
defendants  have advised that the issuance of the notes followed numerous failed
attempts  to  raise  additional funds from outside sources, and that foreclosure
occurred  only  after  Simply  Interactive's  default in its obligations to make
required  interest  payments.   Moreover, while the complaint does include us as
defendants  with  respect to the allegations arising out of the events described
above,  our  current  operating  company,  Nettaxi  Online  Communities, was not
launched  until  September  1997.

     In  fact,  Nettaxi  Online Communities did purchase certain assets from SSN
Properties  in  October  1997,  including  the original Internet the City CD-ROM
product;  a  domain  name; furniture, fixtures, and equipment; plus other assets
which have since been abandoned.  However, the assets acquired by Nettaxi Online
Communities  from  SSN  Properties at that time represented less than 50% of the
value  of  the  foreclosed  assets.  As  described in the notes to our financial
statements,  the  aggregate  value  of  the  assets  acquired  by Nettaxi Online
Communities  from SSN Properties was $2,000,000, which amount was verified by an
independent  appraiser.

     In  1998,  we  experienced  several  significant  functional  problems with
portions  of a purchased technology program, namely the web to database software
application, due to those components incompatability with subsequent releases of
upgraded  versions  of  its  operating  system. Following attempts to make these
components  of the acquired technology compatible, we decided, in December 1998,
not to spend additional monies on these components but to replace them. We wrote
off  the  unamortized portion of this impaired technology that reduced the value
of  the  assets  by  approximately  $700,000.  As  of  December  31,  2000,  the
unamortized  cost  of  the  remaining  assets purchased from SSN Properties as a
percentage  of  our  total  assets was less than 5%. Moreover, the role of these
assets,  which  were  intended  to  be  revenue-generating  products  in  Simply
Interactive's  business model, is substantially different for us in that we view
them  primarily as a tool to drive traffic to our site and not necessarily as an
independent  revenue source. It should also be noted that our business model for
an  online  community  is  substantially  different  than  Simply  Interactive's
objective  of  licensing,  distribution,  and  sale  of  the  CD-ROM product and
marketing  and  sales  of  the  impaired  software  application described above.

     A  Case  Management Conference is currently scheduled for April 13, 2001 at
which time the parties must represent to the court whether or not this matter is
ready  to  be  set  for  trial.


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


None.


                                       36
<PAGE>
                                     PART II

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

     Our  common  stock  has been traded on the NASD O-T-C Market Bulletin Board
under the trading symbol "NTXY" since October 12, 1998.  Prior to that date, our
common  stock was not actively traded in the public market.  The following table
sets  forth,  for  the  periods  indicated,  the high and low bid prices for our
common  stock  as  reported  by  various  Bulletin  Board  market  makers.  The
quotations  do  not  reflect  adjustments  for  retail  mark-ups, mark-downs, or
commissions  and  may  not  necessarily  represent  actual  transactions.

<TABLE>
<CAPTION>
Period                                           Low Bid  High Bid
------------------------------------------------------------------
<S>                                              <C>      <C>
FISCAL YEAR ENDED DECEMBER 31, 1998:
Fourth Quarter (October 12 - December 31, 1998)  $ 4.375  $ 8.875
FISCAL YEAR ENDED DECEMBER 31, 1999:
First Quarter (January 1 - March 31, 1999)       $ 6.187  $18.750
Second Quarter (April 1 - June 30, 1999)         $11.500  $34.500
Third Quarter (July 1 - September 30, 1999)      $ 7.375  $16.500
Fourth Quarter (October 1 - December 31, 1999)   $ 1.843  $ 7.875
FISCAL YEAR ENDED DECEMBER 31, 2000:
First Quarter (January 1 - March 31, 2000)       $ 1.406  $ 9.062
Second Quarter (April 1 - June 30, 2000)         $ 0.940  $ 5.968
Third Quarter (July 1 - September 30, 2000)      $ 0.420  $ 1.420
Fourth Quarter (October 1 - December 31, 2000)   $ 0.125  $ 0.520
FISCAL YEAR ENDING DECEMBER 31, 2001
First Quarter (January 1 - March 16, 2001)       $ 0.130  $ 0.240
</TABLE>

     On  March  16,  2001,  the high and low bid prices per share for our common
stock  on  the  Bulletin  Board  were  $0.240  and  $0.180, respectively.  As of
February  28, 2001, there were 434 stockholders of record who held shares of our
common  stock

DIVIDEND  POLICY

     To  date,  no  dividends  have  been declared or paid on any of our capital
stock.  We  currently intend to retain earnings, if any, to fund the development
and  growth  of  our business and do not anticipate paying cash dividends in the
foreseeable  future.  Payment  of  future  dividends,  if  any,  will  be at the
discretion  of our board of directors after taking into account various factors,
including  our  financial  condition, operating results, current and anticipated
cash  needs  and  plans  for  expansion.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     Set  forth in chronological order is information regarding shares of common
stock  issued  and options and warrants and other convertible securities granted
by  the  Company  during the year ended December 31, 2000.  Also included is the
consideration,  if  any, received by the Company for such shares and options and
information  relating  to  the section of the Securities Act of 1933, or rule of
the  Securities  and  Exchange  Commission  under  which  exemption
from  registration  was  claimed.


                                       37
<PAGE>
(1)     In January 2000, we issued options to purchase up to 1,508,800 shares of
common  stock  under  our 1999 stock option plan to three current and one former
member  of  our  board  of  directors  who  were not employees of the Company, 5
officers  and  23 key employees with an exercise price of $2.44 per share, which
was not less than the fair market value of the shares on the date of grant.  The
issuances  were  made  in reliance on Section 4(2) of the Securities Act of 1933
and/or  Rule  701  promulgated  under  the  Securities  Act of 1933 and was made
without  general solicitation or advertising.  The purchasers were sophisticated
investors  with  access  to  all  relevant information necessary to evaluate the
investments,  and  who  represented  to  the  Company that the shares were being
acquired  for  investment.

(2)     In  January, 2000, the Company issued options to purchase 230,000 shares
of  common  stock  to 8 vendors and consultants, with an exercise price of $2.44
per  share.  These  issuances  were  made  in  reliance  on  Section 4(2) of the
Securities  Act  of 1933 and/or Rule 701 promulgated under the Securities Act of
1933  and were made without general solicitation or advertising.  The purchasers
were  sophisticated  investors with access to all relevant information necessary
to  evaluate  these  investments,  and  who  represented to the Company that the
shares  were  being  acquired  for  investment.

(3)   In February 2000 we issued 6,250 shares of common stock, having a value of
$9,700,  to  PPC  Racing  in settlement of cancellation of a letter of intent to
provide  sponsorship.  The  issuance was made in reliance on Section 4(2) of the
Securities  Act of 1933 and/or Regulation D promulgated under the Securities Act
of  1933 and was made without general solicitation or advertising. The purchaser
was  a  sophisticated investor with access to all relevant information necessary
to  evaluate  these  investments,  and  who  represented to the Company that the
shares  were  being  acquired  for  investment.

(4)     In  February  2000  we issued 175,000 shares of Common Stock to Sinclair
Davis Trading Corp.  in exchange for consulting services.  The issuance was made
in  reliance  on  Section 4(2) of the Securities Act of 1933 and/or Regulation D
promulgated  under  the  Securities  Act  of  1933  and was made without general
solicitation  or  advertising.  The  purchaser was a sophisticated investor with
access  to all relevant information necessary to evaluate these investments, and
who  represented  to  the  Company  that  the  shares  were  being  acquired for
investment.

(5)     In  February  2000 we issued approximately 15.4 million shares of Common
Stock  and  warrants to purchase up to an equal number of shares of common stock
in  exchange for approximately $23 million.  The issuances were made in reliance
on  Section  4(2)  of the Securities Act of 1933 and/or Regulation D promulgated
under  the  Securities Act of 1933 and were made without general solicitation or
advertising.  The  purchasers  were  accredited  investors  with  access  to all
relevant  information  necessary  to  evaluate  these  investments,  and  who
represented  to  the Company that the shares were being acquired for investment.


                                       38
<PAGE>
(6)     In February, 2000, the Company issued options to purchase 150,000 shares
of  common  stock to Fontanelle, LLC, with an exercise price of $1.88 per share.
These  issuances  were made in reliance on Section 4(2) of the Securities Act of
1933  and/or Rule 701 promulgated under the Securities Act of 1933 and were made
without  general solicitation or advertising.  The purchasers were sophisticated
investors  with  access  to all relevant information necessary to evaluate these
investments,  and  who  represented  to  the  Company that the shares were being
acquired  for  investment.

(7)     In  February  2000, we issued options to purchase up to 1,850,800 shares
of  common  stock  under  our  1999  stock option plan to, 5 officers and 17 key
employees with an exercise price of $1.44 per share, which was not less than the
fair  market  value of the shares on the date of grant.  The issuances were made
in  reliance  on  Section  4(2)  of  the  Securities Act of 1933 and/or Rule 701
promulgated  under  the  Securities  Act  of  1933  and was made without general
solicitation  or  advertising.  The purchasers were sophisticated investors with
access  to  all  relevant information necessary to evaluate the investments, and
who  represented  to  the  Company  that  the  shares  were  being  acquired for
investment.

(8)     In March and April 2000, the Company issued warrants to purchase 389,491
shares  of common stock and 778,982 shares of common stock to 2 vendors, with an
exercise  price  of  $2.76  per  share in exchange for the conversion of certain
accounts  payable.  The  issuance  was  made  in reliance on Section 4(2) of the
Securities  Act of 1933 and/or Regulation D promulgated under the Securities Act
of 1933 and was made without general solicitation or advertising.  The purchaser
was  a  sophisticated investor with access to all relevant information necessary
to  evaluate  these  investments,  and  who  represented to the Company that the
shares  were  being  acquired  for  investment.

(9)     From  March,  2000  to  December, 2000, the Company pursuant to its 1999
Stock  Option Plan, issued options to purchase 192,000 shares of common stock to
its  employees,  with  exercise  prices  ranging from $0.37 to $6.812 per share.
These  issuances  were made in reliance on Section 4(2) of the Securities Act of
1933  and/or Rule 701 promulgated under the Securities Act of 1933 and were made
without  general solicitation or advertising.  The purchasers were sophisticated
investors  with  access  to all relevant information necessary to evaluate these
investments,  and  who  represented  to  the  Company that the shares were being
acquired  for  investment.

(10)     In  July  2000 we issued 80,000 shares of Common Stock to James Stubler
in  exchange  for  consulting  services.  The  issuance  was made in reliance on
Section 4(2) of the Securities Act of 1933 and/or Regulation D promulgated under
the  Securities  Act  of  1933  and  was  made  without  general solicitation or
advertising.  The  purchaser  was  a  sophisticated  investor with access to all
relevant  information  necessary  to  evaluate  these  investments,  and  who
represented  to  the Company that the shares were being acquired for investment.

(11)     In  July  2000  we  issued  100,000  shares  of Common Stock to Newport
Capital  Consultants,  Inc.  in  exchange for consulting services.  The issuance
was  made  in  reliance  on  Section  4(2)  of the Securities Act of 1933 and/or
Regulation  D  promulgated under the Securities Act of 1933 and was made without
general solicitation or advertising.  The purchaser was a sophisticated investor
with access to all relevant information necessary to evaluate these investments,
and  who  represented  to  the  Company  that the shares were being acquired for
investment.


                                       39
<PAGE>
(12)     In  August  2000  we  issued  250,000  shares of Common Stock to Robert
Shatles  in exchange for consulting services.  The issuance was made in reliance
on  Section  4(2)  of the Securities Act of 1933 and/or Regulation D promulgated
under  the  Securities  Act of 1933 and was made without general solicitation or
advertising.  The  purchaser  was  a  sophisticated  investor with access to all
relevant  information  necessary  to  evaluate  these  investments,  and  who
represented  to  the Company that the shares were being acquired for investment.

(13)     In  September  2000 we issued 75,000 shares of Common Stock to Sinclair
Davis  Trading  Corp.  in  consideration of our failure to execute on the demand
registration  rights  exercised  by  Sinclair  Davis  in  a  timely manner.  The
issuance  was  made  in  reliance  on Section 4(2) of the Securities Act of 1933
and/or  Regulation  D  promulgated under the Securities Act of 1933 and was made
without  general solicitation or advertising.  The purchaser was a sophisticated
investor  with  access  to  all relevant information necessary to evaluate these
investments,  and  who  represented  to  the  Company that the shares were being
acquired  for  investment.

(14)     In  October 2000 we issued warrants to purchase up to 350,000 shares of
Common  Stock  to  Mr. Michael Gardner in exchange for consulting services.  The
exercise  price  for  the warrants is $0.35 per share.  The issuance was made in
reliance  on  Section  4(2)  of  the  Securities Act of 1933 and/or Regulation D
promulgated  under  the  Securities  Act  of  1933  and was made without general
solicitation  or  advertising.  The  purchaser was a sophisticated investor with
access  to all relevant information necessary to evaluate these investments, and
who  represented  to  the  Company  that  the  shares  were  being  acquired for
investment.

ITEM  6.   SELECTED  CONSOLIDATED  FINANCIAL  DATA

SUMMARY  FINANCIAL  DATA

     Set  forth  below  are summary statements of operations data for the period
from  October  23, 1997, date of incorporation, to December 31, 1997 and for the
years  ended December 31, 1998, 1999 and 2000, and summary balance sheet data as
of  December  31, 1997, 1998, 1999 and 2000.  This information should be read in
conjunction  with  the  Consolidated  Financial Statements and Notes thereto and
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations",  appearing  elsewhere  in  this  Form.

<TABLE>
<CAPTION>
-------------------------------------------  -----------  ------------  ------------  -------------
                                                1997          1998          1999          2000
-------------------------------------------  -----------  ------------  ------------  -------------
<S>                                          <C>          <C>           <C>           <C>
-------------------------------------------  -----------  ------------  ------------  -------------
STATEMENT OF OPERATIONS DATA(1):
-------------------------------------------  -----------  ------------  ------------  -------------
Net revenues                                 $  144,900   $   258,000   $ 5,032,800   $  9,418,400
-------------------------------------------  -----------  ------------  ------------  -------------
Gross profit                                 $   57,500   $    18,200   $ 1,029,000   $  2,110,700
-------------------------------------------  -----------  ------------  ------------  -------------
Loss from operations                         $ (142,100)  $(3,082,300)  $(9,402,500)  $(10,367,900)
-------------------------------------------  -----------  ------------  ------------  -------------
Net loss                                     $ (159,700)  $(3,113,600)  $(9,880,400)  $(14,351,400)
-------------------------------------------  -----------  ------------  ------------  -------------
Net loss available to common  shareholders   $ (327,200)  $(3,127,900)  $(9,880,400)  $(14,351,400)
-------------------------------------------  -----------  ------------  ------------  -------------
Basic loss per share                         $    (0.06)  $     (0.32)  $     (0.46)  $      (0.36)
-------------------------------------------  -----------  ------------  ------------  -------------
Diluted loss per share                       $    (0.06)  $     (0.32)  $     (0.46)  $      (0.36)
-------------------------------------------  -----------  ------------  ------------  -------------
WEIGHTED-AVERAGE COMMON SHARES:
-------------------------------------------  -----------  ------------  ------------  -------------
Basic outstanding shares                      5,483,500     9,724,781    21,274,203     39,381,211
-------------------------------------------  -----------  ------------  ------------  -------------
Diluted outstanding shares                    5,483,500     9,724,781    21,274,203     39,381,211
-------------------------------------------  -----------  ------------  ------------  -------------

-------------------------------------------  -----------  ------------  ------------  -------------
Balance Sheet Data:
-------------------------------------------  -----------  ------------  ------------  -------------
Working capital (Deficiency)                 $ (222,900)  $   300,400   $(2,053,000)  $ 14,144,500
-------------------------------------------  -----------  ------------  ------------  -------------
Total Assets                                 $2,082,300   $ 1,652,700   $ 6,031,200   $ 18,123,600
-------------------------------------------  -----------  ------------  ------------  -------------
Long-term Liabilities                        $  773,500   $     5,400   $ 3,200,000   $          0
-------------------------------------------  -----------  ------------  ------------  -------------
Total stockholders' equity (Deficiency)      $  973,400   $ 1,332,100   $(2,000,300)  $ 16,563,300
-------------------------------------------  -----------  ------------  ------------  -------------
</TABLE>

(1)     We  have  not  given  effect  to the possible liability arising from the
litigation  with the Ventre group described in the section of this annual report
entitled,  Legal Proceedings.  At this time, in the opinion of management, there
are  no pending claims, the outcome of which is expected to result in a material
adverse  effect  on  our  financial  position.


                                       40
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

     This  report  contains  forward-looking  statements  within  the meaning of
Section  27A  of  the  Securities  Act of 1933 and section 21E of the Securities
Exchange  Act  of  1934, including, without limitation, statements regarding the
company's  expectations,  beliefs,  intentions  or  future  strategies  that are
signified  by  the  words  "expects",  "anticipates",  "intends", "believes", or
similar language.  These forward-looking statements involve risks, uncertainties
and other factors.  All forward-looking statements included in this document are
based  on information available to the company on the date hereof and speak only
as  of  the  date  hereof.  The factors discussed below under "Risk Factors" and
elsewhere  in  this  Annual  Report on Form 10-K are among those factors that in
some  cases  have  affected  the  company's  results  and could cause the actual
results  to  differ  materially  from  those  projected  in  the forward-looking
statements.  The  following  discussion  should  be read in conjunction with the
condensed  consolidated  financial  statements  and  notes  thereto.

OVERVIEW

     Nettaxi.com  is  an Internet marketing portal that provides a wide range of
content  and Internet based services for consumers and businesses.  Our web site
at  www.nettaxi.com serves as a gathering place for people with shared topics of
interest,  as  well as an entry point, referred to as a portal, to the Internet.
Through  our  web site, we provide content addressing a large number of targeted
categories  The  content  is  organized  into  affinity categories such as news,
sports, entertainment, health, politics, finances, lifestyle, and other areas of
interest.  Visitors  to our web site are provided with comprehensive information
and  content.  Subscribers  to  our  web  site, which we call citizens, are also
provided  with  access  to enhanced content such as broadband video clips, email
accounts  and personal web pages.  We have developed a diversified revenue model
under which we provide our citizens with access to web site hosting services and
a  broad range of content, and we provide affiliated businesses with access to a
large  population  of  Internet  users for advertising and promotional purposes.


                                       41
<PAGE>
     In  2000,  we  focused  our  efforts  on  improving  the quality of content
available  on  our  web  site,  implementing  our  web site hosting services and
reducing  our operating costs by eliminating many of the services which were not
profitable.  During the year we developed a number of new promotions designed to
generate  new  sources  of  revenue.

     In  the  third  quarter  of  1999,  we began providing web site hosting and
Internet  connectivity  services  for  corporate  customers.  Our  services  are
delivered  through  a  state-of-the-art Internet data center located in Southern
California  using  a  high-performance Internet backbone network.  Customers pay
monthly fees for the professional services utilized, one-time installation fees,
and connectivity charges.  These "hosting" revenues are recognized in the period
the  services are provided.  The loss or reduction of revenue from this customer
may  have  a  material  impact  on  total  net  revenues.

     The  Company  also  receives other revenues from premium account membership
subscriptions.  Our  membership  programs  offer  premium services for a monthly
fee,  providing  additional  services such as unlimited personal e-mail accounts
for family or friends, unlimited Nettaxi Site Builder web pages, themed web page
templates,  a  personal  event  calendar,  discussion  groups,  and  options  to
customize  personal  homepages  with  pictures,  colors  and  content.

     In  May  1999,  we  completed  the merger with Plus Net, Inc., a California
corporation,  which  has allowed us to provide our users with a web based e-mail
program  and  a  robust  meta  search  engine.  Plus  Net also has an e-commerce
processing  engine  that  enables the acceptance and processing of online credit
card transactions.  We believe this merger also enhanced our electronic commerce
and advertising opportunities.  As a result of this merger, we received revenues
from  credit  card  processing  fees during the first half of 1999, with minimal
revenues  being earned in the third quarter of 1999.  The contract through which
these  fees have been derived terminated in December 1999 and we anticipate that
revenues  of  this  type  will  be  minimal  in  the  foreseeable  future.

     In  February  2000,  we  completed  our  private  placement,  which  raised
approximately $23 million in exchange for issuance of the Company's common stock
and warrants, to purchase shares of our common, which, if fully exercised by all
investors,  will  result  in  an  additional  $62  million  in equity funding to
Nettaxi.com.  The  acquisition  of this new capital will provide Nettaxi.com the
ability  to  become  a more aggressive competitor in the community portal arena.
The Company plans to use the funds raised to increase our ability to develop new
community  content  and  commerce  relationships,  and  enhance each Nettaxi.com
citizen's  experience within our communities.  This funding will also facilitate
potential acquisitions, mergers, and other strategic partnerships which fit into
the  company's  overall  long-term  business  strategy.

     To  date, we have entered into business and technology license arrangements
in  order  to  build our web site community, provide community-specific content,
generate  additional  traffic,  and  provide  our  subscribers  with  additional
products  and  services,  including  e-commerce tools. During the fourth quarter
ended  September  30,  2000,  we entered into a contract with Screaming Media to
provide content for users of our website. We expect this new content to increase
brand  awareness  to our web site. We also entered into a contract with Annuncio
Software,  Inc.  to  enhance  our  marketing efforts for direct marketing to our
citizens  that  may  enhance  their  time  spent  online with other products and
services  for  purchase.


                                       42
<PAGE>
     We  intend  to  continue  to investigate potential acquisitions and to seek
additional  relationships  with  content providers that fall within the scope of
our  business  strategy,  and  will  serve  to  increase our subscriber base and
overall  site  traffic.  Acquisitions carry numerous risks and uncertainties and
we  cannot  guarantee  that  we  will  be  able  to  successfully  integrate any
businesses,  products,  technologies  or personnel that might be acquired in the
future.

RESULTS  OF  OPERATIONS; COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 2000
AND  1999

     NET  REVENUES.  Net revenues for the year ended December 31, 2000 increased
87%  to approximately $9.4 million from $5.0 million for the year ended December
31, 1999.  The absolute dollar increase is the result of an increase in revenues
from  the  corporate  web  hosting  and  the  increase  in advertising revenues.
Advertising  revenues  included  third  party revenues from both traditional and
internet  related  advertisers which also includes reciprocal arrangements.  For
the year ended December 31, 2000, four customers each accounted for greater than
10%  of  total  net revenues for a total of approximately $5.1 million or 54% of
the  total  revenues.  These  customers,  Babenet,  SpinRecords.com,  Whitesand
Communications,  and  Hearme.com,  accounted  for  20%,  13%,  11%  and  10%,
respectively  of  our total revenues.  For the year ended December 31, 1999, one
customer,  Whitesand Communications, accounted for greater than 10% of total net
revenues.  The  loss  of any one of all of these customers could have a material
adverse  affect  on  our  revenue.

     ADVERTISING  REVENUES. Advertising revenues for the year ended December 31,
2000  and  1999  were approximately $5.7 million and approximately $2.7 million,
respectively,  which  represented  60%  and  53%,  respectively,  of  total  net
revenues.  The  year  over  year  increase  in absolute dollars resulted from an
increase  in  reciprocal advertising transactions and increases in the number of
advertisers  as  well  as  the increase in average contract commitments of these
advertisers  as  a  result  of  increased web traffic to our web site.Reciprocal
advertising  arrangements  are exchanges of similar services between the Company
and  the  advertisers. These arrangements accounted for approximately 28% and 7%
of  total  revenues  for  the  twelve  months  ended December 31, 2000 and 1999,
respectively.  Reciprocal  arrangements for the twelve months ended December 31,
2000  are  the  result  of  the  Company's  strategy  in  developing  strategic
relationships  with  other  advertisers  or service providers for non-cash media
advertising.

     TRANSACTION  PROCESSING FEES. There were no transaction processing fees for
the year ended December 31, 2000. Transaction processing fees were approximately
$1.29  million  for  the year ended December 31, 1999, which represented 26%, of
total  net  revenues. Transactions fees consisted of revenue derived from credit
card  evaluations  and  from the processing of on-line credit card transactions.
The  1999 revenue is attributable to the merger with Plus Net, Inc. in May 1999.
The  contract through which these fees have been derived terminated in December,
1999  and  we  do  not  expect revenues of this type to be significant in future
periods.

     HOSTING REVENUES.  Our hosting revenues were approximately $3.7 million and
$945,000  for  the  years  ended December 31, 2000 and 1999, respectively, which
represented  40%  and  19%,  of  total net revenues, respectively.  For the year
ended  December  31,  2000,  we  recognized  hosting  revenues  for  the  twelve


                                       43
<PAGE>
months  as  compared  to only six months in the year ended December 31, 1999. In
the  third quarter of 1999, we began providing internet hosting and connectivity
services  for  corporate  customers.  Our  services  are  delivered  through  a
state-of-the-art  Internet  data  center  located in Southern California using a
high-performance  Internet  backbone network. Customers pay monthly fees for the
professional  services  utilized,  one-time  installation  fees,  and  monthly
connectivity charges. These "hosting" revenues were recognized in the period the
services were provided. The Company has experienced strong revenue growth in the
internet web hosting for corporate customers, but does not expect this growth to
continue  at  the  current  rate, or that the Company will sustain profitability
from  this business segment. Additionally, the Company cannot assure that it can
increase  the  number  of  corporate  customers or maintain the current customer
base. As previously described, two web-hosting customers accounted for more than
10%  of  total  net  revenues  for  the  twelve  months ended December 31, 2000.

COST  OF OPERATIONS. Cost of operations were approximately $7.3 million and $4.0
million  for  the  years ended December 31, 2000 and 1999, respectively. Cost of
operations  increased  83%,  Approximately  85% of the increase is the result of
additional  expenses  related  to  costs  for  co-location  (Internet connection
charges)  expenses.  In  the  third quarter of 1999, we began providing Internet
connectivity  services  to  corporate  customers  and  required  purchases  of
additional  bandwidth  to  service  these customers. These costs are expected to
continue  to  increase  as  our web traffic increases and our corporate customer
require additional bandwidth for our "citizens". For the year ended December 31,
2000,  we  recognized hosting expenses for twelve months as compared to only six
months in the year ended December 31, 1999. Approximately 11% of the increase is
related  to  increased  depreciation  expense  for  capital  purchased  in 1999.
Approximately  6%  of  the  increase  is related to the costs for consultants to
improve  our  website.  Separately, during the third quarter ended September 30,
2000,  we  also  initiated  cost effective measurement tools to limit the use of
unauthorized excessive bandwidth or charging the individual users for the use of
additional  bandwidth.  These  cost  measures  resulted  in  cost savings to the
Company  in the third and fourth quarter of year 2000. We cannot be assured that
these cost saving measures will continue to result in substantial savings or any
savings  at  all.

     SALES  AND  MARKETING  EXPENSES.  Sales  and  marketing  expenses  were
approximately  $5.9  million and $4.8 million for the twelve month periods ended
December 31, 2000 and 1999, respectively. Sales and marketing expenses consisted
primarily  of advertising, including co-branding and reciprocal, salaries of our
sales and marketing personnel and related costs, marketing, and promotion costs.
Approximately  $1.9  million of the net increase is the result of the redirected
marketing approach for brand awareness implemented in the third quarter of 2000.
This  consisted  of using reciprocal online advertising arrangements to increase
brand  awareness rather than the traditional print and media marketing approach.
The  Company  recorded  reciprocal  advertising  expenses  in  relation  to  the
reciprocal  advertising revenues of $2.2 million for the year ended December 31,
2000  compared  to  approximately  $0.3  million for the year ended December 31,
1999. The Company utilizes reciprocal advertising arrangements as an inexpensive
advertising media for increasing brand awareness. There can be no assurance that
these  increased  expenditures will result in increased visitors to our web site
or additional revenues in the future. This increase was offset by a reduction of
approximately  $0.8 million reduction in spending on traditional marketing media
expenditures.


                                       44
<PAGE>
     RESEARCH  AND  DEVELOPMENT EXPENSES. Research and development expenses were
$1.6  million and $2.2 million for the twelve months ended December 31, 2000 and
1999,  respectively.  The  28%  decrease was primarily attributable to the lower
utilization  of  consultants  by  the  Company and decrease in average number of
technical  personnel  during  the  year  2000. Approximately $0.6 million of the
decrease was related to the lower utilization of consultants and $0.2 million of
the  decrease  was  related  to the decrease in recruiting fees paid to hire new
employees.  The  above  two  costs  were offset by an approximately $0.3 million
increase  which  was  related  to  increased  depreciation  expense  for capital
equipment.  The  Company  has experienced a difficulty in its ability to recruit
and  retain  technical  personnel as a result of the current economic prosperity
and  high  cost of living in Silicon Valley and expects this condition to have a
continuous  impact  on  the ability of the Company to retain and hire additional
technical  personnel.

     GENERAL  AND  ADMINISTRATIVE  EXPENSES. General and administrative expenses
were $5.0 million and $3.5 million for the twelve months ended December 31, 2000
and  1999, respectively. General and administrative costs consisted primarily of
salaries  and  related  costs  for  executives,  administrative,  and  finance
personnel,  as  well  as  legal, accounting and other professional service fees.
Approximately  $0.6  million  of  the  increase  in  general  and administrative
expenses  were  primarily  attributable to amortization of deferred compensation
expense  related  to  stock,  warrants  and  options  granted during the year to
various consultants for the services. Approximately $0.4 million of the increase
was  the  result of additional salaries and personnel costs.  Approximately $0.4
million  of  the  increase  is related to higher insurance costs associated with
being  a  public company. Also, the increase is the result of legal fees related
to  the  settlement  agreement  with  the  holder of convertible debentures. The
Company  also  recorded  approximately  $500,000  provision  for  uncollectible
accounts  receivable. The Company expects that due to the highly volatile market
conditions  for  internet related and other advertising companies, the provision
for  bad debt may be higher in the future. The above increase were offset by the
decrease  in  expenditures  related  to  the  merger  with  Plus  Net.

     INTEREST  EXPENSE.  Net  interest expense was $4.0 million and $0.4 million
for the years ended December 31, 2000 and 1999, respectively.  For the year 1999
period  the net interest expense was primarily due to the convertible promissory
note  that was issued on March 31, 1999 and to amortization of deferred interest
related  to warrants issued in conjunction with the convertible promissory note,
offset  by  interest income.  For the year 2000 period, the net interest expense
was  primarily  the result of deemed interest expense related to the convertible
debenture  issued  on  March 31, 1999.  We recognized deemed interest expense of
approximately  $3.9  million  in  the  second  quarter  of  2000.  This non-cash
interest expense resulted from the implied beneficial conversion feature and the
value  of  warrants  issued  in connection with the settlement agreement that we
reached  with  the  holder  of  the  convertible  debenture.

     INCOME  TAXES.  At  December  31,  2000,  we  had  net  operating  loss
carryforwards  available  to  reduce  future  taxable  income  that  aggregate
approximately  $25.1  million  for  Federal income tax purposes.  These benefits
begin to expire  in 2017.   The Company also had a California net operation loss
carryforwards  in  the  amount  of  $13.4 million which may be applied to future
taxable  income  until  these  benefits begin to expire in 2002.  Our ability to
utilize  the  net operating loss carryforwards are dependent upon our ability to
generate taxable income in future periods and may be limited due to restrictions
imposed under Federal and state laws upon change in ownership. The provision for
income  taxes  for  the  year ended December 31, 2000 consisted of minimum state
taxes.  For  the  year ended December 31, 1999 we recorded a tax provision which
related  to  earnings  made by PlusNet, Inc. during its fiscal period before our
merger.


                                       45
<PAGE>
RESULTS  OF  OPERATIONS; COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 1999
AND  1998

     NET  REVENUES.  Net revenues for the year ended December 31, 1999 increased
1,851%  to  approximately $5.03 million from $258,000 in the year ended December
31,  1998.  The  absolute  dollar  increase is the result of the increase in the
number of advertisers and the average contract duration and value (the result of
higher  web site traffic to nettaxi.com web pages), an increase in revenues from
the  corporate  web hosting, transaction processing fee revenue, and to a lesser
extent,  increases  in  our royalties and customization fees associated with the
distribution of our CD ROM product.  Barter revenues accounted for approximately
7%  of  total  revenues  for  the  twelve  months  ended December 31, 1999.  One
customer, WhiteSand Communications, Inc., accounted for approximately 17% of the
total  revenues  in the twelve months ended December 13, 1999, no other customer
accounted  for  greater than 10% of total revenues.  For the year ended December
31,  1998,  four  customers each accounted accounted for greater than 10% of net
revenues,  these  customers  @dventure,  Unique  Media  (Go4Media),  Pioneer
Technologies,  and  Flycast Communications, accounted for 28%, 21%, 13%, and 12%
of  net  revenues,  respectively.

     ADVERTISING REVENUES.  Advertising revenues for the year ended December 31,
1999  and  1998  were  approximately  $2.67  million and approximately $177,000,
respectively,  which  represented  53%  and  69%,  respectively,  of  total  net
revenues.  The  year  over  year  increase  in absolute dollars resulted from an
increase  in  the  number  of  advertisers  as  well  as the increase in average
contract  commitments  of these advertisers as a result of increased web traffic
to  our  web  site.

     TRANSACTION  PROCESSING  FEES.  Transaction  processing  fees  were
approximately  $1.29  million  for  the  year  ended  December  31,  1999, which
represented  26%,  of  total net revenues.  There were no transaction processing
fees  in  1998.  Transactions  fees  consist of revenue derived from credit card
evaluations  and  from  the processing of on-line credit card transactions.  The
1999  revenue  is  attributable  to the merger with Plus Net, Inc.  in May 1999.
The  contract  through which these fees have been derived terminated in December
1999  and  we  do  not  expect revenues of this type to be significant in future
periods.

     HOSTING REVENUES.  Our hosting revenues were approximately $945,000 for the
year  ended  December  31,  1999,  which represented 19%, of total net revenues.
There  were  no  hosting  revenues  in  1998.  In the third quarter of 1999, the
Company began providing internet hosting and connectivity services for corporate
customers.  Our  services are delivered through a state-of-the-art Internet data
center located in Southern California using a high-performance Internet backbone
network.  Customers  pay  monthly  fees  for the professional services utilized,
one-time  installation  fees, and monthly connectivity charges.  These "hosting"
revenues  were  recognized  in  the  period  the  services  were  provided.

     COST  OF OPERATIONS. Cost of operations were approximately $4.0 million and
$240,000  for  the  years  ended  December  31,  1999  and  1998,  respectively.
Approximately 93% of the increases for the twelve month period in 1999 over 1998
is  the  result of increased costs for co-location expenses (Internet connection
charges).  Equipment  costs  and  depreciation  of  equipment,  amortization  of
intangible  assets,  and  expenses  for  third  party  content  and  development
accounted  for  the  balance  of  the increase. In the third quarter of 1999, we
began  providing  Internet  connectivity  services  to  corporate  customers and
required  purchases  of  additional  bandwidth to service these customers. These
costs  are expected to continue to increase as our web traffic increases and our
corporate  customer  require  additional  bandwidth  for  our  "citizens".


                                       46
<PAGE>
     SALES  AND  MARKETING  EXPENSES.  Sales  and  marketing  expenses consisted
primarily  of  salaries  of  our  sales  and  marketing  personnel,  marketing,
promotion,  advertising  and  related  costs.  Sales and marketing expenses were
approximately  $4.79  million  and  $746,000  for the twelve month periods ended
December  31,  1999  and  1998,  respectively. Approximately $2.8 million of the
increase  was  related  to expansion of our online and print advertising, public
relation  and  other promotional expenditures, and approximately $0.5 million of
the  increase  was  related  to  the hiring of 10 additional sales and marketing
personnel  and related expenses required to implement our marketing strategy. In
the  third  quarter of 1999, the Company began to implement aggressive marketing
campaigns  online  and in traditional media to promote the Nettaxi.com brand and
attract  an  increasing  number  of  visitors  to  our  web  site.

     We  expect sales and marketing expenses to increase significantly in future
periods.  These increases will be principally related to hiring additional sales
and  marketing  personnel  and increased spending on advertising in a variety of
media  to  increase  brand  awareness and attract additional visitors to our web
site.  There  can  be no assurance that these increased expenditures will result
in  increased  visitors  to  our  web  site  or  additional  revenues.

     RESEARCH  AND  DEVELOPMENT EXPENSES. Research and development expenses were
approximately  $2.19  million  and  $635,000  for the twelve month periods ended
December 31, 1999 and 1998, respectively. The absolute dollar increases for both
the  twelve  month  period  in  1999 over 1998 primarily attributable to ongoing
updating  of  the  infrastructure and technological development of our web site.
Approximately  $0.6  million  of  the  increase  includes increased salaries and
associated  hiring  costs  that are a result of the highly competitive nature of
hiring  in  the  internet  software  marketplace  and the hiring of 7 additional
personnel.  We experienced substantial costs for engineer consultants during the
twelve month period ended December 31, 1999 and expects these increased costs to
continue as we continue to recruit and retain personnel to meet the research and
development  requirements.  These costs accounted for approximately $0.7 million
of  the  net  increase.

     GENERAL  AND  ADMINISTRATIVE  EXPENSES. General and administrative expenses
consisted  primarily  of  salaries  and  related  costs  for  our  executive,
administrative,  and  finance  personnel, as well as legal, accounting and other
professional  service  fees.  General  and  administrative  expenses  were
approximately  $3.46  million  and $1.05 million for the respective twelve month
periods  ended  December  31,  1999  and  1998, respectively. Approximately $0.6
million  of  the increase is related to increases in the salaries of general and
administrative  personnel  and  related costs as the result of the hiring of key
financial personnel in the second quarter of 1999. Approximately $0.6 million of
the  increase  is  the  costs  associated  with  the  amortization  of  deferred
compensation  expenses,  related  to the issuance of common stock and options to
consultants.  Approximately $0.7 million of the increase is the result of higher
legal  and  accounting  fees  associated  with  cost  of being a public company.
Approximately  $0.5  million  of  the increase is the result of costs associated
with  the  merger  with  Plus  Net,  Inc.  in  1999.  We  expect  general  and
administrative  expenses  to  grow  as  we  hire  additional personnel and incur
additional expenses related to the growth of our business and our operation as a
public  company.

     ASSET  IMPAIRMENT.  For the year ended December 31, 1998 operating expenses
includes  a  one  time  adjustment  of  $667,000  for  asset  impairment.  Asset
impairment  write  down  was  to  adjust  the carrying amount of portions of the
purchased technology, namely the web to database software application to its net
realizable  value.  For  the period ended December 31, 1999, no asset impairment
write-down  was  recorded.


                                       47
<PAGE>
     INTEREST  EXPENSE.  Net  interest  expense  was  approximately $351,100 and
$59,000 for the respective twelve month period ended December 31, 1999 and 1998.
The  net  interest  expense for the twelve month periods ended December 31, 1999
and 1998 related to the convertible promissory note that was issued on March 31,
1999  and  to  amortization  of  deferred interest related to warrants issued in
conjunction  with  the  convertible  promissory  note.

     OTHER  INCOME.  In  the twelve months ended December 31, 1998 we realized a
gain  of  $28,500, from the disposal of capital equipment.  No gain was realized
in  1999.

     INCOME  TAXES.  At  December  31,  1999,  we  had  net operating loss carry
forwards  available to reduce future taxable income that aggregate approximately
$11,200,000  for  Federal  income  tax  purposes.  These benefits expire through
2019.  Pursuant  to  a "change in ownership" as defined by the provisions of the
Tax Reform Act of 1986, utilization of our net operating loss carry forwards may
be  limited  if  a cumulative change of ownership of more than 50% occurs over a
three-year  period.

     In  the  twelve  months ended December 31, 1999 we recorded a tax provision
which  relates  to  earnings  made  by  Plus Net, Inc.  during its fiscal period
before  our  merger.

RESULTS  OF  OPERATIONS;  COMPARISON  OF  THE  PERIOD  OCTOBER 23, 1997, DATE OF
INCORPORATION,  TO  DECEMBER  31,  1997 AND THE TWELVE MONTHS ENDED DECEMBER 31,
1998

     NET  REVENUES.  Net  revenues  for  the  twelve  months  ended December 31,
1998  were  approximately  $258,000  and  for the period ended December 31, 1997
approximately  $144,900.   The  revenues  for  the  1997 period were principally
derived  from  royalties  from  the distribution of our CD-ROM tutorial product.
Revenues  for  the  twelve months ended December 31, 1998 reflect the shift from
the  initial  start-up  phase  of the Company to the current business model that
derives  a  majority  of  its  revenue  from  the sale of banner advertisements.

     ADVERTISING  REVENUES.  Advertising  revenues  for  the twelve months ended
December  31,  1998  were  approximately  $177,000 or approximately 69% of total
revenues.  There  were no advertising revenues for the period ended December 31,
1997.   The  Company began the sale of banner advertising on the Internet in the
third  quarter  of  1998.

     ROYALTY  REVENUES.  Our royalty revenues were approximately $61,700 for the
twelve  months  ended  December 31, 1998, which represented approximately 24% of
total  revenues,  and  approximately  $132,300 for the period ended December 31,
1997,  which  represented  approximately  51%  of  total  revenues.  The Company
initially  derived  its  revenues  from  the distribution of the CD-ROM tutorial
product.

     COST OF OPERATIONS.  Cost of operations were approximately $239,800 for the
twelve  months ended December 31, 1998 and $87,400 for the period ended December
31,  1997.  The substantial absolute dollar is the result of increased costs for
co-location  expenses  (Internet  connection  charges),  software  and equipment
costs,  and  depreciation of equipment as a result of build-out of our web site.


                                       48
<PAGE>
     SALES  AND  MARKETING  EXPENSES.  Sales  and  marketing  expenses consisted
primarily of salaries of our sales and marketing personnel.  Sales and marketing
expenses  were  approximately  $745,600  and  $3,100 for the twelve month period
ended  December  31,  1998 and the period ended December 31, 1997, respectively.
The  absolute  dollar  increase represents the shift from the early research and
development  stages  of  the  Company to the current business model as an online
community  generating  revenues  from the sales of advertising that required the
shift  in  resources  to focus on the sales and marketing efforts to promote the
brand  awareness  of  the  Company  and  increased  traffic  on  our  web  site.

     We  expect sales and marketing expenses to increase significantly in future
periods.  These increases will be principally related to hiring additional sales
and  marketing  personnel  and increased spending on advertising in a variety of
media  to  increase  brand  awareness and attract additional visitors to our web
site.  There  can  be no assurance that these increased expenditures will result
in  increased  visitors  to  our  web  site  or  additional  revenues.

     RESEARCH  AND DEVELOPMENT EXPENSES.  Research and development expenses were
approximately  $634,700  and  $36,500 for the twelve month period ended December
31,  1998  and  the  period ended December 31, 1997, respectively.  The absolute
dollar  increases  in  research  and  development  expenses  were  primarily
attributable  to  ongoing  updating  of  the  infrastructure  and  technological
development  of our web site, increased salaries that are a result of the highly
competitive  nature  of  hiring in the Internet software marketplace.  We expect
these increased costs to continue as we continue to recruit and retain personnel
to  meet  the  research  and  development  requirements  of  the  Company.

     GENERAL  AND  ADMINISTRATIVE EXPENSES.  General and administrative expenses
consisted  primarily  of  salaries  and  related  costs  for  our  executive,
administrative,  and  finance  personnel, as well as legal, accounting and other
professional  service  fees.  General  and  administrative  expenses  were
approximately  $1.05  million  and  $160,000  for  the twelve month period ended
December  31,  1998  and  the period ended December 31, 1997, respectively.  The
increase  in  absolute  dollars  in  general  and  administrative  expenses  was
primarily due to increases in the number of general and administrative personnel
and  the  increase  in  fees  for  professional services.  We expect general and
administrative  expenses  to  grow  as  we  hire  additional personnel and incur
additional expenses related to the growth of our business and our operation as a
public  company.

     ASSET  IMPAIRMENT.  For the twelve months ended December 31, 1998 operating
expenses includes a one time adjustment of $667,000 for asset impairment.  Asset
impairment  write  down  was  to  adjust  the carrying amount of portions of the
purchased technology, namely the web to database software application to its net
realizable  value.  For  the period ended December 31, 1997, no asset impairment
write-down  was  recorded.

     INTEREST  INCOME/EXPENSE.  Net interest expense for the twelve months ended
December  31,  1998  was  approximately $59,000 and $17,000 for the period ended
December 31, 1997.  The net interest expense for both periods was related to the
convertible  promissory  note  that  was  issued  on  November 1, 1997 which was
converted  into  shares  of  common  stock  in  September  1998.


                                       49
<PAGE>
     INCOME  TAXES.  The  provision for income taxes for the year ended December
31,  1998  and  the  period  ended  December 31, 1997 consisted of minimum state
taxes.  At December 31, 1998, we had net operating loss carry forwards available
to  reduce  future  taxable  income that aggregate approximately $ 1,227,000 for
Federal  income  tax  purposes.

LIQUIDITY  AND  CAPITAL  RESOURCES

     As  of  December  31,  2000,  the  Company had cash and cash equivalents of
approximately  $13,900,000,  compared  to approximately $988,000 at December 31,
1999.  Net  cash used in operating activities equaled approximately $8.4 million
and $5.37 million for the twelve-month periods ended December 31, 2000 and 1999,
respectively.  We  had significant negative cash flows from operating activities
for  both  of  the twelve month periods primarily from our net operating losses,
adjusted  for  non-cash  items,  and  in 1999 an increase in accounts receivable
balances  due  to  the  time  lag between revenue recognition and the receipt of
payments  from  advertisers.  In  1999, these factors were offset by significant
increases  in  accounts  payable  and  accrued  expenses.  Non  cash adjustments
included issuance of common stock for services of $1,019,400 and $34,200 for the
years  ended  December  31,2000  and 1999, respectively and compensation expense
related  to options and warrants granted for $615,700 and $211,300 for the years
ended December 31, 2000 and 1999, respectively. Non cash adjustments in the year
ended  December  31,  2000  included  interest expense related to the settlement
agreement  and  issuance  of  warrants related to the convertible note issued in
1999.  The  total  expense  in  2000  was approximately $4.6 million compared to
approximately  $200,000  in  1999.  Non  cash adjustments also included bad debt
write-offs  of  $350,000  and  $52,400 for the years ended December 31, 2000 and
1999,  respectively.

     Net  cash used in investing activities was approximately $744,000 and $2.16
million  for  the  twelve  month  periods  ended  December  31,  2000  and 1999,
respectively.  Substantially  all  of  the cash used in investing activities for
both  periods  was  primarily  related  to  the purchase of capital equipment in
connection  with  the build out of our web site and infrastructure.  The Company
does not have any outstanding orders for capital equipment and believes that the
current  capital equipment will sustain the needs for the forthcoming year.  The
Company  does  not  plan  to  spend  any  significant amount in 2001 for capital
equipment.

     Net  cash  provided by financing activities was approximately $22.0 million
and $8.04 million for the twelve month periods ended December 31, 2000 and 1999,
respectively.  Net  cash  provided  by  financing  activities  in 2000 consisted
primarily  of  net  proceeds  from the issuance of our common stock in a private
placement offering.  Net cash provided by financing activities in 1999 consisted
of both net proceeds from issuance of common stock and issuance of a convertible
promissory  note.


                                       50
<PAGE>
     We incurred net losses of approximately $14.4 million and $9.88 million for
the  year ended December 31, 2000, and 1999, respectively. At December 31, 2000,
we had an accumulated deficit of approximately $27.7 million. The net losses and
accumulated  deficit  resulted  from the significant operational, infrastructure
and  other  costs  incurred in the development and marketing of our services and
the  fact  that revenues failed to keep pace with such costs. As a result of our
expansion  plans  and our expectation that our operating expenses, especially in
the  areas  of  sales and marketing, will continue to increase significantly, we
expect to incur additional losses from operations for the foreseeable future. To
the  extent  that  increases  in  our  operating  expenses  precede  or  are not
subsequently  followed  by  commensurate  increases  in revenues, or that we are
unable  to adjust operating expense levels accordingly, our business, results of
operations  and  financial condition would be materially and adversely affected.
There  can be no assurance that we will ever achieve or sustain profitability or
that  our  operating  losses  will  not  increase  in  the  future.

     In February 2000, we completed a private placement of our common stock.  As
a result, we raised approximately $23 million in exchange for approximately 15.4
million shares of common stock issued to investors.  The investors also received
warrants  to  purchase  up  to  an  equal  number  of shares of our common stock
exercisable  at  an  exercise  price  of  $4.00  per  share.

     We  currently  believe  that  we  have  sufficient cash to fund our current
operations through December 2002.   However, given our limited resources and our
history  of  losses  from  operations, we will need to raise additional funds in
order  to  fully  execute  our business plan and fund expansion of our business,
develop  new  or enhanced services or products, respond to competitive pressures
or to acquire complementary products, businesses or technologies.  No assurances
can be given, however, that we will be able to obtain such additional resources.
If  we  are unsuccessful in generating anticipated resources from one or more of
the anticipated sources, and unable to replace the shortfall with resources from
another  source,  we  may  be  able  to  extend  the  period for which available
resources would be adequate by deferring the creation or satisfaction of various
commitments,  deferring  the  introduction  of  various  services  or entry into
various  markets,  and  otherwise  scaling back operations.  If we are unable to
generate  the  required  resources,  our  ability to meet our obligations and to
continue  our  operations  would  be  adversely  affected.

RECENT  ACCOUNTING  PRONOUNCEMENTS


     In  December  1999,  the  staff  of  the Securities and Exchange Commission
issued  its  Staff  Accounting  Bulletin  No.  101, "Revenue Recognition". Staff
Accounting Bulletin No. 101 provides the SEC staff's views in applying generally
accepted  accounting  principles  to selected revenue recognition issues.  Staff
Accounting Bulletin No. 101 is effective for the fourth fiscal quarter of fiscal
years  beginning  after  December  15,  1999.  We  believe  our  current revenue
recognition policies comply with the provisions of Staff Accounting Bulletin No.
101.

     In  March  2000,  the  Financial  Accounting  Standards  Board  issued
Interpretation  (Interpretation)  No.  44,  "Accounting for Certain Transactions
involving  Stock  Compensation,  an Interpretation of ABP Opinion No. 25", which
became  effective  July  1,  2000.  Interpretation  No.  44  clarifies  (a)  the
definition of employee for purposes of applying Opinion 25, (b) the criteria for
determining  whether  a  stock  compensation plan qualifies as a noncompensatory
plan, (c) the accounting consequences of various modifications to the terms of a
previously  fixed  stock option or award, and (d) the accounting for an exchange
of  stock  compensation  awards  in  a  business  combination.  Adoption  of the
provisions  of  the  Interpretation  had  no significant impact on our financial
statements.


                                       51
<PAGE>
     In  June 1998, the Financial Accounting Standards Board issued Statement of
Financial  Accounting Standards No.  133, "Accounting for Derivative Instruments
and  Hedging Activities." Statement of Financial Accounting Standards No.133, as
amended  by  Statement  of  Financial Accounting Standards No.  138, establishes
accounting and reporting standards requiring that every derivative instrument be
recorded  in  the  balance sheet as either an asset or liability measured at its
fair  value.  Statement of Financial Accounting Standards No.  133 requires that
changes  in  the  derivative's  fair  value  be recognized currently in earnings
unless  specific  hedge  accounting  criteria  are  met.  In June 1999, The FASB
Issued  SFAS  No.  137,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities  -  Deferral  of the effective date of FASB Statement No.  133" which
amends SFAS No.  133 to be effective for all fiscal quarters or all fiscal years
beginning  after  June  15,  2000.

     Historically,  we  have  not  entered  into derivatives contracts either to
hedge existing risks or for speculative purposes.  Accordingly, we do not expect
adoption  of  the  new  standard  to  have a material impact on our results from
operations,  financial  position  or  cash  flows.


ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

MARKET  RISK

     As  of  December  31, 2000, we did not have any long term debt obligations.
Therefore,  an  immediate 10% increase in market interest rates would not have a
material  adverse effect on our financial position. We currently do not have any
material  market  rate  risks. We could be exposed to market risk related to any
debt  obligations  for  financing  working  capital  and  capital  equipment
requirements  in  the  future.  Historically, we have financed such requirements
from  the  issuance  of both preferred and common stock. We continue to consider
financing  alternatives,  which  may  include  the  incurrence  of  long  term
indebtedness.  Actual  capital  requirements  may vary based upon the timing and
success  of  the expansion of our operations. We believe that based on the terms
and  maturities  of  any  future  debt obligations that the market risk would be
minimal.

EFFECTS  OF  INFLATION

     Due  to  relatively  low  levels of inflation in 1997, 1998, 1999 and 2000,
inflation
has  not  had  a  significant  effect  on  our  results  of  operations.

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     Our financial statements, schedules and supplementary data, as listed under
Item  14,  appear  in  a  separate section of this report beginning on page F-1.


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

NONE.


                                       52
<PAGE>
                                    PART III

ITEM  10.   DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT


DIRECTORS,  EXECUTIVE  OFFICERS  AND  KEY  EMPLOYEES

     Our  directors, executive officers and other key employees, and their ages,
as  of  March  31,  2001  are  as  follows:

<TABLE>
<CAPTION>
NAME                        AGE                      POSITION
--------------------------  ---  -------------------------------------------------
<S>                         <C>  <C>

Robert A. Rositano, Jr.(1)   32  Chief Executive Officer, Secretary and Director
--------------------------  ---  -------------------------------------------------
Dean Rositano (1)            29  President, Chief Operating Officer, Interim Chief
                                 Financial Officer and Director
                                 -------------------------------------------------
Robert Speicher              48  Vice President of Sales and Marketing
--------------------------  ---  -------------------------------------------------
Andrew Garroni (2)           45  Director
--------------------------  ---  -------------------------------------------------
<FN>
(1)     Messrs.  Robert  A.  Rositano,  Jr.  and  Dean  Rositano  are  brothers.

(2)     Mr.  Andrew  Garroni  is  currently  the  sole  member of our Compensation
Committee  and  our  Audit  Committee  and  is  not  an  employee  of Nettaxi.com.
</TABLE>

     Each  director  holds  office  until  the  next  annual  meeting  on  the
stockholders  and  until  his  successor  is  elected  and  qualified. Executive
officers  are  appointed by and serve at the pleasure of our board of directors.

     Set  forth  below  is certain information regarding the business experience
during  the  last  five  years  of  each  of  the  above  named  persons.

     ROBERT  A.  ROSITANO,  JR.  Mr.  Rositano  Jr.  co-founded  Nettaxi  Online
Communities,  Inc.,  a Delaware corporation , in October, 1997. He has served as
Chief  Executive  Officer and Secretary of Nettaxi since the reorganization with
Swan  Valley and prior to that served in the same capacities with Nettaxi Online
Communities  from  its  inception.  He has over seven years of experience in the
Internet service provider and Internet industry. In February 1995, he co-founded
Simply  Interactive, Inc. , an Internet/intranet software company, and served as
Executive  Vice  President  in  the  areas of Inside Sales, Customer Service and
Product  Development  until he co-founded Nettaxi Online Communities. In January
1994,  he  co-founded  Digital Data Express, a company focused on beginner level
Internet  users,  and served as Chief Executive Officer until February 1995 when
Digital  Data Express was acquired by Simply Interactive. From 1992 to 1994, Mr.
Rositano  was hired on as the third employee at Netcom On-line Communications in
1992  and  served  as  a  senior  sales  and  account  manager  until  1993.

     DEAN  ROSITANO.  Mr.  Rositano  co-founded  Nettaxi  Online  Communities in
October,  1997.  He  has served as President of Nettaxi since the reorganization
with  Swan  Valley  and prior to that served in the same capacities with Nettaxi
Online  Communities.  He  has  over  seven  years  of  experience in the ISP and
Internet  industry. In February 1995, he co-founded Simply Interactive, Inc., an
Internet/intranet  software  company, and served as Vice President of Technology
until  he co-founded Nettaxi Online Communities. While at Simply Interactive, he
assembled  a digital production studio and produced the Internet the City CD-ROM
in  a  three  month  time frame on three platforms, Windows 3.1, Windows 95, and
Macintosh.  In  January  1994,  he co-founded Digital Data Express and served as
President  and  Chief  Executive  Officer  until February 1995 when Digital Data
Express  was  acquired  by  Simply  Interactive.  At  Digital  Data Express, Mr.
Rositano  co-produced  and  directed  the  world's first Internet training video
"Introduction  to  the  Internet."


                                       53
<PAGE>
     ROBERT  SPEICHER.  Robert Speicher joined Nettaxi in October, 1999 to serve
as  our  Vice  President  of  Sales  and  Marketing. From November, 1994 through
October, 1999; Speicher was Executive Vice President and General Manager at Wood
Associates,  a  marketing  and  promotions  company. Prior to that, he served as
President  of  Plastech Marketing, Inc., a company that introduced biodegradable
polymer technologies to the promotional merchandise industry. He has also served
as  Vice  President  of  Sales  at Multidate Corporation, a company dedicated to
providing  automation  solutions  for the financial services industry. He earned
his  Bachelor's  degree  from  San  Diego  State  University  and  his  MBA from
Pepperdine  University.

     ANDREW  GARRONI.  Mr.  Garroni has served as a director since completion of
our  merger  with  Plus Net in May 1999. Under the terms of our merger agreement
with  Plus Net, Mr. Garroni was appointed as a member of the board of directors.
Mr.  Garroni  has  over 20 years experience in the development and management of
start-up  entertainment  companies. He currently serves as Executive Producer of
Showtime's  movie  series  "Naked  City,"  a position he has held since January,
1998.  From  1990  to  September,  1998  he  served  as  President of Axis Films
International,  Inc.  supplying  films to cable television networks such as Home
Box  Office,  Showtime  Networks  and DBS providers like Direct TV. He began his
career  in  New  York  as  a  principal partner in the motion picture Production
Company  Cinerex  Associates,  Inc. whose clients included Twentieth Century Fox
and  Orion  Pictures. While in New York, he helped create Magnum Motion Pictures
and  Magnum Entertainment. Mr. Garroni has a Bachelor's degree in Marketing from
Fairleigh  Dickinson  University.

EMPLOYMENT  AGREEMENTS  AND  TERMINATION  OF  EMPLOYMENT  AND  CHANGE OF CONTROL
ARRANGEMENTS

          EXECUTIVE  EMPLOYMENT  AGREEMENTS.  On  August  1, 1998 Nettaxi Online
     Communities,  Inc. entered into executive employment agreements with Robert
     A.  Rositano,  Jr.  and  Dean  Rositano,  and these agreements continued in
     effect after the reorganization with Swan Valley Snowmobiles, Inc. Pursuant
     to the terms of their individual executive employment agreements, Robert A.
     Rositano, Jr. is to perform the duties Chief Executive Officer and serve as
     a  member  of  the  board of directors, and Dean Rositano is to perform the
     duties  of  President and serve as a member of the board of directors. Each
     executive employment agreement provides for an annual base salary which may
     be  increased by the board of directors, in its discretion. The base salary
     also  is  to  increase  by  ten  percent per annum, which increase shall be
     cumulative  for  each  year.  In  August  2000,  the base salaries for each
     executive  were  increased  to  $220,000.  Under  the  executive employment
     agreements,  each  executive is also eligible for annual bonus compensation
     in  the  minimum amount of $50,000 up to a maximum amount equal to the base
     salary  then  payable. The board of directors is to determine the amount of
     the annual bonus based upon performance targets established by the board of
     directors.  In  August  2000, each executive received bonus compensation of
     $50,000.


                                       54
<PAGE>
     Under the executive employment agreements, Robert A. Rositano, Jr. and Dean
Rositano  each  received warrants to purchase up to 883,952 shares of the common
stock  of Nettaxi Online Communities. The warrants were to vest over three years
and  vesting was accelerated upon the reorganization with Swan Valley. Robert A.
Rositano,  Jr.  and  Dean  Rositano  each exercised their warrants in September,
1998.  They have each been granted registration rights with respect to shares of
common  stock issued upon exercise of the warrants and they have each waived any
such  rights  with  respect  to  this  registration statement. Each executive is
eligible  to  receive three weeks paid vacation for the first year of employment
and four weeks per year thereafter. They are also eligible to participate in the
health,  life insurance, medical, retirement and other benefit programs which we
may  offer  from  time  to  time.  Each executive receives a car allowance in an
amount  not  to exceed $600 per month plus insurance and costs of repair and may
be  reimbursed  for  other  reasonable  expenses  incurred  during the course of
performing  their  duties.

     The  term of the executive employment agreements is four years and they are
automatically renewed for successive periods of one year unless terminated prior
to  such  renewal. We may terminate either executive at any time with or without
cause.  The  term  "cause" is defined in the executive employment agreements. If
any  executive is terminated without cause, he is to receive severance pay equal
to  the  base  salary  for the remainder of the term, minimum bonus plus any pro
rata  bonus  in  excess  of the minimum bonus,     pre payment of all automobile
allowance  for the remaining period of the term and continued coverage for life,
health  and  disability  insurance  for the remainder of the term. These amounts
shall be due in one lump sum payment three days following the termination of his
employment  without  cause.  If  there  is a "change in control" with respect to
Nettaxi,  the executives may terminate their executive employment agreements and
be  entitled  to severance in the amount of three years of annual benefits to be
realized  in  accordance  with the terms of the executive employment agreements,
payable  in  one  lump  sum.  "Change  in  control"  is defined in the executive
employment  agreements  as  any  change of equity such that more than 50% of the
outstanding  shares  of our outstanding shares are transferred to a third party,
debt ownership such that more than 50% of our outstanding shares are transferred
to  a  third  party,  or  a  sale  of  70%  or  more  of  our  assets.

     The  executive employment agreements also contain covenants restricting the
disclosure of our confidential information, the solicitation of our employees or
agents  and the ability of the executives to engage in competing activities with
us.

     In  the  course  of  the  previous  year,  as a result of our limited human
resources, both executives have performed other responsibilities not necessarily
within  the  scope  of  the  definition  of  their positions under the executive
employment  agreements.


                                       55
<PAGE>
     OTHER  EXECUTIVE  EMPLOYMENT  AGREEMENTS.  We  have  also  entered  into an
employment  agreement  with  Robert  Speicher. The agreement has a term of three
years  and  automatically  renews  for  successive  periods  of  one year unless
terminated  prior  to  such  renewal. We may terminate the executive at any time
with  or  without cause. The term "cause" is defined in the executive employment
agreement.  Mr.  Speicher  is  eligible  to  receive severance pay if terminated
without  cause  or  if Nettaxi experiences a change in control and the executive
elects  to terminate the agreement or is terminated. The severance payment would
be  equal  to  the base salary for the remainder of the term, minimum bonus plus
any  pro  rata  bonus  in excess of the minimum bonus and continued coverage for
health  and  other  benefits  for  the  remainder of the term. Additionally, the
vesting  of  all  options  to  purchase  our  common  stock would be accelerated
immediately.  The  severance  payment  would  be  due in one lump sum three days
following  the  termination of employment. "Change in control" is defined in the
employment agreements as     any change of equity such that more than 50% of our
outstanding  shares  are  transferred to a third party, debt ownership such that
more  than  50% of our outstanding shares are transferred to a third party, or a
sale  of  substantially  all  of  our  assets.

     The  employment  agreements also contain covenants regarding the assignment
of  inventions,  restricting the disclosure of our confidential information, the
solicitation  of  our  employees  or  agents and the ability of the executive to
engage  in  competing  activities.

     Our  agreement  with  Mr.  Speicher  was entered into as of September 1999.
Under the agreement, he is employed as Vice President of Sales and Marketing and
is  expected  to  perform  the duties consistent with the position including the
management  and supervision of our sales and marketing operations and duties and
the  hiring  of  personnel.  Mr.  Speicher  receives  an  annual  base salary of
$175,000.  He  is  also  eligible  for  annual bonus compensation in the minimum
amount  of $50,000 up to a maximum amount equal to the base salary then payable.
The board of directors is to determine the amount of the annual bonus based upon
performance targets established by the board of directors. He also is to receive
options  to  purchase  up to 250,000 shares of our common stock, which vest over
three  years,  under  our  1998  Stock Option Plan. He receives three weeks paid
vacation for the first year of employment and four weeks per year thereafter. He
is also eligible to participate in the health and other benefit program which we
may  offer  from  time  to  time.

BOARD  COMMITTEES

     The  Compensation  Committee  of  the  board  of  directors  determines the
salaries and incentive compensation of our officers and provides recommendations
for  the  salaries  and  incentive  compensation  of  our  other  employees. The
compensation  committee  also  administers  our 1998 Stock Option Plan. There is
currently  one  member  of  the  Compensation  Committee,  Mr.  Garroni.  We are
currently seeking qualified individuals to join our board of directors and serve
on  our  audit  committee.

     The  Audit Committee of the board of directors reviews, acts on and reports
to  the  board  of  directors  with  respect  to various auditing and accounting
matters,  including  the selection of our independent auditors, the scope of the
annual  audits,  fees  to  be  paid  to  the  auditors,  the  performance of our
independent  auditors and our accounting practices. Mr. Garroni is currently the
only  member  of  the  audit  committee.  We  are  currently  seeking  qualified
individuals  to  join  our  board of directors and serve on our audit committee.


                                       56
<PAGE>
     The  board  of  directors  does  not  have  a  nominating  committee.

DIRECTORS'  COMPENSATION

     Directors who are also our employees receive no compensation for serving on
the  board  of  directors.  With  respect to directors who are not employees, we
intend to reimburse such directors for all travel and other expenses incurred in
connection  with attending meetings of the board of directors and any committees
of  the  board of directors. Non-employee directors are also eligible to receive
grants  of non-qualified stock options under our 1998 Stock Option Plan and 1999
Stock  Option  Plan.  We  intend to grant our non-employee directors, subject to
shareholder  ratification,  options  to  purchase  common  stock under our stock
option plans to provide us with an effective way to recruit and retain qualified
individuals  to  serve  as  members  of  the  board  of  directors.

COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION

     We did not have a Compensation Committee or other committee of the board of
directors  performing  similar functions during the fiscal years ending December
31,  1997  and  1998.  Messrs.  Robert A. and Dean Rositano are each officers of
Nettaxi and, as members of the board of directors, participated in deliberations
of  the  board  of  directors  relating  to  the  compensation  of our executive
officers.  As indicated above, the board of directors established a Compensation
Committee  as  of  May  3,  1999.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934

     Section  16(a) of the Securities Exchange Act of 1934, as amended, requires
our officers and directors, and persons who own more than ten percent of a class
of  our  capital  stock,  to  file  reports  of  ownership  and changes in their
ownership  with  the Securities and Exchange Commission. Officers, directors and
greater  than ten-percent shareholders are required to furnish us with copies of
all  Section  16(a)  forms  they  file.

     Based  solely  on  a  review of the copies of such forms received by us, or
written  representations  from  certain  reporting  persons that no Forms 5 were
required  for  such  persons,  we believe that, during the last fiscal year, all
filing  requirements  applicable to our officers, directors and greater than ten
percent  beneficial owners were complied with except that reports on Form 4 were
filed  late  by  Messrs.  Robert  A.  Rositano,  Jr.  and  Dean  Rositano.

ITEM  11.   EXECUTIVE  COMPENSATION

   The  following  table  sets  forth  information  concerning  compensation for
services  in all capacities awarded to, earned by or paid to our Chief Executive
Officer  and  President,  collectively,  the "named executives" during the years
ended  December  31,  1998,  1999  and  2000:


                                       57
<PAGE>
<TABLE>
<CAPTION>
                             SUMMARY COMPENSATION TABLE (1)

-------------------------------  ------------------------------  ---------------------
                                                                 LONG-TERM
                                 ANNUAL  COMPENSATION            COMPENSATION
-------------------------------  ------------------------------  ---------------------
NAME AND PRINCIPAL                YEAR    SALARY ($)  BONUS ($)  NUMBER OF SECURITIES
POSITION                                                         UNDERLYING
                                                                 WARRANTS/ OPTIONS (#)
-------------------------------  -------  ----------  ---------  ---------------------
<S>                              <C>      <C>         <C>        <C>
-------------------------------  -------  ----------  ---------  ---------------------
Robert A. Rositano, Jr.          1998(2)      95,917          -              1,012,347
Chief Executive Officer          -------  ----------  ---------  ---------------------
                                   1999      156,550    132,500                600,000
                                 -------  ----------  ---------  ---------------------
                                   2000      214,933    150,000                640,000
-------------------------------  -------  ----------  ---------  ---------------------
Dean Rositano,                   1998(2)      95,917          -              1,012,347
President                        -------  ----------  ---------  ---------------------
                                   1999      156,550    132,500                600,000
                                 -------  ----------  ---------  ---------------------
                                   2000      214,933    150,000                640,000
-------------------------------  -------  ----------  ---------  ---------------------
Glenn Goelz, Chief Financial       2000       60,230    150,000                280,000
Officer (3)
-------------------------------  -------  ----------  ---------  ---------------------
Robert Speicher, Vice              2000      179,229     50,000                250,000
President of Sales and
Marketing (4)
-------------------------------  -------  ----------  ---------  ---------------------
Brian Stroh, Vice President of     2000      106,746     75,000                136,000
Information Services (5)
-------------------------------  -------  ----------  ---------  ---------------------
<FN>
(1)     The  columns  for  "Other  Annual Compensation" "Restricted Stock Awards" "LTP
Payouts"  and  "All  Other  Compensation"  have  been  omitted  because  there  is  no
compensation required to be reported. No other executive officer received compensation
in  excess  of  $100,000  during  this  period.

(2)     Information  regarding the compensation of Messrs. Robert A. and Dean Rositano
earned during 1998 includes services rendered by them while employed by Nettaxi Online
Communities,  Inc.  prior to the reorganization with Swan Valley Snowmobiles, Inc. and
by Nettaxi following the reorganization with Swan Valley. The salary earned by each of
Messrs.  Robert A. and Dean Rositano during 1998 includes $93,000 in cash compensation
and  16,574 shares of common stock issued to each of them in February, 1998 in lieu of
salary earned in 1998 having an ascribed value of $2,198 as determined by the board of
directors.

(3)     Mr.  Glenn  Goelz was hired in 1999, but did not earn in excess of $100,000 in
1999.  Mr.  Goelz  resigned  as  the  Chief  Financial  Officer  and as an employee of
Nettaxi.com  on  April  28, 2000. The options to purchase our common stock held by Mr.
Goelz  expired  on  July  28,  2000.

(4)     Mr.  Robert Speicher was hired in 1999, but did not earn in excess of $100,000
in  1999.

(5)     Mr.  Brian  Stroh was hired in 1999, but did not earn in excess of $100,000 in
1999.  Mr.  Stroh  resigned  as  the  Vice President of Information Services and as an
employee  of  Nettaxi.com  on  November  9,  2000. Mr. Stroh's options to purchase our
common  stock  expired  on  February  9,  2001.
</TABLE>


                                       58
<PAGE>
WARRANT  AND  OPTION  GRANTS  IN  LAST  YEAR

     The  following table sets forth information concerning warrants and options
granted  to  the  named  executives  during  2000.

<TABLE>
<CAPTION>
                WARRANT AND OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 2000(1)

------------------------------------------------------------------------------------------------
Name             NUMBER OF      % OF TOTAL      Exercise   EXPIRATION  Potential Realizable Value at
                SECURITIES      WARRANTS/      Price Per      DATE     Assumed Annual Rates of Stock
                UNDERLYING   OPTIONS GRANTED     Share                 Price Appreciation for Option
                 WARRANTS/   TO EMPLOYEES IN     ($/Sh)                Term (7)
                  OPTIONS          2000                                -------------------------
                GRANTED (#)                                                 5%           10%
--------------  -----------  ----------------  ----------  ----------  -----------  ------------
<S>             <C>          <C>               <C>         <C>         <C>          <C>
Robert A.            64,000              1.4%        2.44      1/2006  $53,109.34   $120,486.97
Rositano, Jr.
(2)
                -----------  ----------------  ----------  ----------  -----------  ------------
                     64,000              1.4%        2.44      1/2007  $63,572.80   $148,151.66
                -----------  ----------------  ----------  ----------  -----------  ------------
                     64,000              1.4%        2.44      1/2008  $74,559.44   $178,582.83
                -----------  ----------------  ----------  ----------  -----------  ------------
                     64,000              1.4%        2.44      1/2009  $86,095.41   $212,057.11
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2006  $47,014.82   $106,660.59
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2007  $56,277.56   $131,150.65
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2008  $66,003.44   $158,089.72
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2009  $76,215.61   $187,722.69
--------------  -----------  ----------------  ----------  ----------  -----------  ------------
Dean                 64,000              1.4%        2.44      1/2006  $53,109.34   $120,486.97
Rositano (3)
                -----------  ----------------  ----------  ----------  -----------  ------------
                     64,000              1.4%        2.44      1/2007  $63,572.80   $148,151.66
                -----------  ----------------  ----------  ----------  -----------  ------------
                     64,000              1.4%        2.44      1/2008  $74,559.44   $178,582.83
                -----------  ----------------  ----------  ----------  -----------  ------------
                     64,000              1.4%        2.44      1/2009  $86,095.41   $212,057.11
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2006  $47,014.82   $106,660.59
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2007  $56,277.56   $131,150.65
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2008  $66,003.44   $158,089.72
                -----------  ----------------  ----------  ----------  -----------  ------------
                     96,000              2.1%        1.44      1/2009  $76,215.61   $187,722.69
--------------  -----------  ----------------  ----------  ----------  -----------  ------------
Glenn Goelz         112,000              2.4%        2.44      7/2000  $     0.00   $      0.00
(4)
--------------  -----------  ----------------  ----------  ----------  -----------  ------------
                    168,000              3.6%        1.44      7/2000  $     0.00   $      0.00
--------------  -----------  ----------------  ----------  ----------  -----------  ------------
Robert               25,000              0.5%        2.44      1/2006  $20,745.83   $ 47,065.22
Speicher (5)
                     25,000              0.5%        2.44      1/2007  $24,833.13   $ 57,871.74
                -----------  ----------------  ----------  ----------  -----------  ------------
                     25,000              0.5%        2.44      1/2008  $29,124.78   $ 69,758.92
                -----------  ----------------  ----------  ----------  -----------  ------------
                     25,000              0.5%        2.44      1/2009  $33,631.02   $ 82,834.81
                -----------  ----------------  ----------  ----------  -----------  ------------
                     37,500              0.8%        1.44      1/2006  $18,365.16   $ 41,664.29
                -----------  ----------------  ----------  ----------  -----------  ------------
                     37,500              0.8%        1.44      1/2007  $21,983.42   $ 51,230.72
                -----------  ----------------  ----------  ----------  -----------  ------------
                     37,500              0.8%        1.44      1/2008  $25,782.59   $ 61,753.80
                -----------  ----------------  ----------  ----------  -----------  ------------
                     37,500              0.8%        1.44      1/2009  $29,771.72   $ 73,329.18
--------------  -----------  ----------------  ----------  ----------  -----------  ------------
Brian Stroh           3,000              0.1%        2.44      1/2006  $ 2,489.50   $  5,647.83
(6)
                      3,000              0.1%        2.44      1/2007  $ 2,979.98   $  6,944.61
                -----------  ----------------  ----------  ----------  -----------  ------------
                      3,000              0.1%        2.44      1/2008  $ 3,494.97   $  8,371.07
                -----------  ----------------  ----------  ----------  -----------  ------------
                      3,000              0.1%        2.44      1/2009  $ 4,035.72   $  9,940.18
                -----------  ----------------  ----------  ----------  -----------  ------------
                     31,000              0.7%        1.44      1/2006  $15,181.87   $ 34,442.48
                -----------  ----------------  ----------  ----------  -----------  ------------
                     31,000              0.7%        1.44      1/2007  $18,172.96   $ 42,350.73
                -----------  ----------------  ----------  ----------  -----------  ------------
                     31,000              0.7%        1.44      1/2008  $21,313.61   $ 51,049.80
                -----------  ----------------  ----------  ----------  -----------  ------------
                     31,000              0.7%        1.44      1/2009  $24,611.29   $ 60,618.78
--------------  -----------  ----------------  ----------  ----------  -----------  ------------


                                       59
<PAGE>
<FN>
(1)     No  SARs  were  granted  to either of the named executives during 2000. Each warrant and
option  represents  the  right  to  purchase  one share of our common stock. In 2000, we granted
employees  options to purchase an aggregate of 4,551,200 shares of our common stock. The options
shown  may  terminate  before  their expiration dates if the optionee's status as an employee is
terminated  or  upon  the  optionee's  death  or  disability.

(2)     Robert  A.  Rositano,  Jr. was granted options to purchase 256,000 and 384,000 shares of
our  common  stock, respectively, under two option agreements. Under each agreement, the options
expire  in  four equal installments on the sixth, seventh, eighth and ninth anniversary's of the
grant  date  of  the option.  Under the agreements, options to purchase 40,000 shares vest in 12
equal  quarterly  installments,  options  to  purchase  100,000  shares vest in 12 equal monthly
installments  and the remaining shares vest upon our achievement of specific business objectives
which  have  been  established  by  the  board  of  directors.

(3)     Dean  Rositano  was granted options to purchase 256,000 and 384,000 shares of our common
stock,  respectively,  under  two option agreements. Under each agreement, the options expire in
four  equal installments on the sixth, seventh, eighth and ninth anniversary's of the grant date
of  the  option.  Under  the  agreements,  options  to  purchase  40,000 shares vest in 12 equal
quarterly installments, options to purchase 100,000 shares vest in 12 equal monthly installments
and  the  remaining  shares vest upon our achievement of specific business objectives which have
been  established  by  the  board  of  directors.

(4)     Mr. Glenn Goelz was granted options to purchase 112,000 and 168,000 shares of our common
stock,  respectively,  under  two option agreements during 2000. Mr. Goelz resigned as the Chief
Financial Officer and as an employee of Nettaxi.com on April 28, 2000. Therefore, the options to
purchase  our  common  stock  held  by  Mr.  Goelz  expired  on  July  28,  2000.

(5)     Mr. Robert Speicher was granted options to purchase 100,000 and 150,000 shares of common
stock,  respectively,  under  two option agreements. Under each agreement, the options expire in
four  equal installments on the sixth, seventh, eighth and ninth anniversary's of the grant date
of  the  option.  Under  the  agreements,  the  options  vest in 12 equal quarterly installments
following  the  date  of  grant.

(6)     Mr.  Brian  Stroh  was  granted  options to purchase 12,000 and 124,000 shares of common
stock,  respectively,  under  two  option  agreements. Under each agreement, the options were to
expire  in  four equal installments on the sixth, seventh, eighth and ninth anniversary's of the
grant  date  of the option. Mr. Stroh resigned as the Vice President of Information Services and
as  an  employee  of Nettaxi.com on November 9, 2000. Therefore, Mr. Stroh's options to purchase
our  common  stock  expired  on  February  9,  2001.

(7)     The  amounts  indicated  in the columns under the heading "Potential Realizable Value at
Assumed Annual Rates of Stock Price Appreciation for Option Term" Amounts represent hypothetical
gains  that  could be achieved for the respective warrants and options if exercised at their end
of  their  respective  terms.  The  5%  and  10%  assumed annual rates of compounded stock price
appreciation  are  mandated  by  rules  of  the  Securities  and  Exchange Commission and do not
represent  our estimate or projection of the future prices of the common stock. Actual gains, if
any,  on  any exercises of warrants and options are dependent upon the future performance of our
common  stock  and  overall  stock market conditions. The amounts reflected in the table may not
necessarily  be  achieved.
</TABLE>


                                       60
<PAGE>
WARRANT  AND  OPTION  EXERCISES  AND  YEAR-END  OPTION  VALUES

     The  following  table  sets  forth  information  with  respect to the Named
Executives concerning their exercise of warrants during 2000 and exercisable and
unexercisable  stock  options  held  by  them  as  of  December  31,  2000.

<TABLE>
<CAPTION>
                 AGGREGATE WARRANT AND OPTION EXERCISES IN 2000 AND YEAR END OPTION VALUES



-----------------------  ------------  ---------  -----------  -------------  ------------  --------------
                            Shares       Value    Number of Unexercised       Value of Unexercised In-the-Money
NAME                     Acquired On   Realized   Options at Year  End(#)     Options at Year End($)  (1)
                         Exercise (#)     ($)     Exercisable  Unexercisable  Exercisable   Unexercisable
-----------------------  ------------  ---------  -----------  -------------  ------------  --------------
<S>                      <C>           <C>        <C>          <C>            <C>           <C>

Robert A. Rositano, Jr.             0       0.00      231,000      1,049,000  $       0.00  $         0.00
-----------------------  ------------  ---------  -----------  -------------  ------------  --------------
Dean Rositano                       0       0.00      231,000      1,049,000  $       0.00  $         0.00
-----------------------  ------------  ---------  -----------  -------------  ------------  --------------
Glenn Goelz                         0       0.00            0              0  $       0.00  $         0.00
-----------------------  ------------  ---------  -----------  -------------  ------------  --------------
Robert Speicher                     0       0.00      150,462        517,537  $       0.00  $         0.00
-----------------------  ------------  ---------  -----------  -------------  ------------  --------------
Brian Stroh                         0       0.00            0              0  $       0.00  $         0.00
-----------------------  ------------  ---------  -----------  -------------  ------------  --------------
<FN>
(1)     The  amounts  shown in the columns under the heading "Value of Unexercised In-the-Money Options at
Year  End"  are based on a per share fair market value of our common stock equal to $0.140 at December 29,
1999,  the  closing  price  for our common stock on that date as reported by various market makers for our
common  stock  on  the  NASD  O-T-C Market Bulletin Board. Neither of the Named Executives have options to
purchase  shares  of  common  stock  which  were  in  the  money  at  year  end.
</TABLE>

EMPLOYEE  BENEFIT  PLANS

     1999 STOCK OPTION PLAN. Our 1999 Stock Option Plan was adopted by the board
of  directors  in  January  2000, and amended the plan to increase the number of
shares reserved for issuance under the plan in April, 2000. It will be presented
to our stockholders for ratification at our annual meeting of stockholders to be
held  in  the summer of 2001. The following description of our 1999 Stock Option
Plan  is  a summary and qualified in its entirety by the text of the plan, which
is filed as an exhibit to the registration statement of which this prospectus is
a  part.  The  purpose  of  the  1999  Stock  Option  Plan  is  to  enhance  our
profitability  and  stockholder  value  by  enabling  us  to  offer  stock based
incentives  to  employees, directors and consultants. The 1999 Stock Option Plan
authorizes the grant of options to purchase shares of common stock to employees,
directors  and  consultants  of Nettaxi and its affiliates. Under the 1999 Stock
Option  Plan, we may grant incentive stock options within the meaning of Section
422  of  the  Internal  Revenue  Code  of  1986 and non-qualified stock options.
Incentive  stock  options  may  only  be  granted  our  employees.


                                       61
<PAGE>
     The number of shares available for options under the 1999 Stock Option Plan
was  initially  3,300,000.  The  board of directors recently amended the plan to
increase the number of shares available for options to 8,900,000. As of December
31,  2000,  8,333  shares had been issued as a result of the exercise of options
previously  granted  under the 1999 Stock Option Plan, options to purchase up to
3,931,600  shares  of  common  stock  had  been granted, and options to purchase
4,968,400  shares  were  available for future grants. The exercise prices of the
outstanding  options  ranged from $0.37 to $6.812. We have registered the shares
subject  to  issuance  under  our  1999  Stock  Option  Plan,  pursuant  to  our
registration  statement  filed  on  Form  S-8  (File  No.  333-32678).

     The 1999 Stock Option Plan is administered by the Compensation Committee of
the  board.  Subject  to  the  provisions  of  the  1999  Stock Option Plan, the
Compensation  Committee  has authority to determine the employees, directors and
consultants  of  Nettaxi  who  are  to  be awarded options and the terms of such
awards,  including  the number of shares subject to such option, the fair market
value  of  the  common  stock  subject  to  options,  the  exercise  price  per
share  and  other  terms.

     Incentive  stock options must have an exercise price equal to at least 100%
of  the  fair  market  value  of  a share on the date of the award and generally
cannot  have  a duration of more than 10 years. If the grant is to a stockholder
holding  more  than 10% of our voting stock, the exercise price must be at least
110%  of  the  fair  market  value on the date of grant. Terms and conditions of
awards  are  set  forth in written agreements between Nettaxi and the respective
option  holders.  Awards  under the 1999 Stock Option Plan may not be made after
the tenth anniversary of the date of its adoption but awards granted before that
date  may  extend  beyond  that  date.

     If  the  employment with Nettaxi of the holder of an incentive stock option
is  terminated  for  any  reason other than as a result of the holder's death or
disability  or  for "cause" as defined in the 1999 Stock Option Plan, the holder
may exercise the option, to the extent exercisable on the date of termination of
employment,  until  the earlier of the option's specified expiration date and 90
days  after  the  date  of  termination.  If  an  option  holder dies or becomes
disabled,  both  incentive  and  non-qualified  stock  options  may generally be
exercised,  to the extent exercisable on the date of death or disability, by the
option holder or the option holder's survivors until the earlier of the option's
specified  termination  date and one year after the date of death or disability.

     Optionees  have no rights as stockholders with respect to shares subject to
option prior to the issuance of shares pursuant to the exercise thereof. Options
issued  to employees under the 1999 Stock Option Plan shall expire no later than
ten  years  after  the date of grant. An option becomes exercisable at such time
and  for  such amounts as determined at the discretion of the board of directors
or  the  Compensation  Committee  at  the  time  of  the grant of the option. An
optionee may exercise a part of the option from the date that part first becomes
exercisable until the option expires. The purchase price for shares to be issued
to  an  employee  upon  his  exercise of an option is determined by the board of
directors  or  the Compensation Committee on the date the option is granted. The
purchase  price  is payable in full in cash, by promissory note, by net exercise
or  by  delivery of shares of our common stock when the option is exercised. The
1999  Stock  Option  Plan  provides for adjustment as to the number and kinds of
shares  covered by the outstanding options and the option price therefor to give
effect  to  any  stock  dividend,  stock  split,  stock  combination  or  other
reorganization  of  or  by  Nettaxi.


                                       62
<PAGE>
     1998  STOCK  OPTION  PLAN.  Our  1998  Stock Option Plan was adopted by the
board  of  directors,  and  ratified  and  approved  by  our stockholders, as of
September 29, 1998. The following description of our 1998 Stock Option Plan is a
summary and qualified in its entirety by the text of the plan, which is filed as
an exhibit to the registration statement of which this prospectus is a part. The
purpose  of  the  1998  Stock  Option  Plan  is to enhance our profitability and
stockholder  value  by enabling us to offer stock based incentives to employees,
directors  and  consultants.  The 1998 Stock Option Plan authorizes the grant of
options  to  purchase  shares  of  common  stock  to  employees,  directors  and
consultants  of Nettaxi and its affiliates. Under the 1998 Stock Option Plan, we
may  grant  incentive  stock  options  within  the meaning of Section 422 of the
Internal  Revenue  Code of 1986 and non-qualified stock options. Incentive stock
options  may  only  be  granted  our  employees.

     The number of shares available for options under the 1998 Stock Option Plan
is  3,000,000.  As  of  December  31,  2000, 4,998 shares had been issued as the
result of the exercise of options previously granted under the 1998 Stock Option
Plan,  2,055,000  shares  were subject to outstanding options and 940,002 shares
were available for future grants. The exercise prices of the outstanding options
ranged  from  $0.80  to  approximately  $44.00. The options under the 1998 Stock
Option  Plan  vest  over  varying  lengths  of  time  pursuant to various option
agreements  that we have entered into with the grantees of such options. We have
registered  the  shares  subject  to  issuance under our 1998 Stock Option Plan,
pursuant  to  the Securities Act of 1933, pursuant to our registration statement
on  Form  S-8  (File  No.  333-32678).

     The 1998 Stock Option Plan is administered by the Compensation Committee of
the  board.  Subject  to  the  provisions  of  the  1998  Stock Option Plan, the
Compensation  Committee  has authority to determine the employees, directors and
consultants  of  Nettaxi  who  are  to  be awarded options and the terms of such
awards,  including  the number of shares subject to such option, the fair market
value  of  the common stock subject to options, the exercise price per share and
other  terms.

     Incentive  stock options must have an exercise price equal to at least 100%
of  the  fair  market  value  of  a share on the date of the award and generally
cannot  have  a duration of more than 10 years. If the grant is to a stockholder
holding  more  than 10% of our voting stock, the exercise price must be at least
110%  of  the  fair  market  value on the date of grant. Terms and conditions of
awards  are  set  forth in written agreements between Nettaxi and the respective
option  holders.  Awards  under the 1998 Stock Option Plan may not be made after
the tenth anniversary of the date of its adoption but awards granted before that
date  may  extend  beyond  that  date.

     If  the  employment with Nettaxi of the holder of an incentive stock option
is  terminated  for  any  reason other than as a result of the holder's death or
disability  or  for "cause" as defined in the 1998 Stock Option Plan, the holder
may exercise the option, to the extent exercisable on the date of termination of
employment,  until  the earlier of the option's specified expiration date and 90
days  after  the  date  of  termination.  If  an  option  holder dies or becomes
disabled,  both  incentive  and  non-qualified  stock  options  may generally be
exercised,  to the extent exercisable on the date of death or disability, by the
option holder or the option holder's survivors until the earlier of the option's
specified  termination  date and one year after the date of death or disability.


                                       63
<PAGE>
     Optionees  have no rights as stockholders with respect to shares subject to
option prior to the issuance of shares pursuant to the exercise thereof. Options
issued  to employees under the 1998 Stock Option Plan shall expire no later than
ten  years  after  the date of grant. An option becomes exercisable at such time
and  for  such amounts as determined at the discretion of the board of directors
or  the  Compensation  Committee  at  the  time  of  the grant of the option. An
optionee may exercise a part of the option from the date that part first becomes
exercisable until the option expires. The purchase price for shares to be issued
to  an  employee  upon  his  exercise of an option is determined by the board of
directors  or  the Compensation Committee on the date the option is granted. The
purchase  price  is payable in full in cash, by promissory note, by net exercise
or  by  delivery of shares of our common stock when the option is exercised. The
1998  Stock  Option  Plan  provides for adjustment as to the number and kinds of
shares  covered by the outstanding options and the option price therefor to give
effect  to  any  stock  dividend,  stock  split,  stock  combination  or  other
reorganization  of  or  by  Nettaxi.

     401(K)  SAVINGS  PLAN.  Effective  June  1,  1999 we instituted the Nettaxi
401(k)  Savings  Plan.  Eligible  employees may begin making deferrals under the
401(k)  Savings Plan. The 401(k) Savings Plan is intended to be a qualified plan
under  Internal  Revenue  Code  Section  401(a),  with a cash or deferred option
governed  by  Section 401(k) Savings of the Internal Revenue Code. Employees may
elect  to  defer  their  eligible current compensation up to the statutorily and
401(k)  Savings  Plan  prescribed  limits  and  have the amount of such deferral
contributed to the 401(k) Savings Plan. Contributions to the 401(k) Savings Plan
are  invested  in the investment funds described in the 401(k) Savings Plan.

INDEMNIFICATION  AGREEMENTS

     We  have  entered  into  indemnification  agreements with our directors and
officers. These agreements provide, in general, that we shall indemnify and hold
harmless  such  directors  and  officers  to the fullest extent permitted by law
against  any judgments, fines, amounts paid in settlement, and expenses incurred
in  connection  with,  or  in  any  way  arising  out  of,  any claim, action or
proceeding  against,  or  affecting, such directors and officers resulting from,
relating  to  or  in  any way arising out of, the service of such persons as our
directors  and officers. Our directors and officers are entitled to the benefits
of the limitation of liability provided under our charter documents and the laws
of  the  State  of  Nevada.


ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     The  following  table sets forth information with respect to the beneficial
ownership of our common stock as of February 28, 2001 and as adjusted to reflect
the  sale  of  the  shares  of  common stock offered by this prospectus, by each
person, or group of affiliated persons, who we know beneficially owns 5% or more
of  our  common  stock, each of our directors and executive officers, and all of
our  directors  and  executive  officers  as  a  group.


                                       64
<PAGE>
     The percentages of total shares of common stock set forth below assume that
only  the indicated person or group has exercised options and warrants which are
exercisable  within  60  days  of  February  28,  2001  and  do  not reflect the
percentage  of  common  stock  which would be calculated if all other holders of
currently  exercisable  options  or  warrants  had  exercised  their securities.

     Unless  otherwise  indicated  in  the  paragraphs  following the table, the
following individuals have sole vesting and sole investment control with respect
to  the shares they beneficially own. Unless otherwise indicated, the address of
each  beneficial  owner  listed  below is care of Nettaxi.com, 1696 Dell Avenue,
Campbell,  California.

<TABLE>
<CAPTION>
----------------------------------------  -------------------  -----------------
NAME OF BENEFICIAL OWNER
----------------------------------------  -------------------  -----------------
EXECUTIVE OFFICERS AND DIRECTORS:          NUMBER OF SHARES    PERCENT OF CLASS
                                          BENEFICIALLY OWNED(1)
----------------------------------------  -------------------  -----------------
<S>                                       <C>                  <C>

Robert A. Rositano, Jr. (2)                         1,772,265               4.1%
----------------------------------------  -------------------  -----------------
Dean Rositano (3)                                   2,130,134               4.9%
----------------------------------------  -------------------  -----------------
Robert Speicher (4)                                   232,639                 *
----------------------------------------  -------------------  -----------------
Andrew Garroni (5)                                    225,000                 *
----------------------------------------  -------------------  -----------------
All directors and executive officers as             4,360,038               9.1%
                                          -------------------  -----------------
a group (4 Persons)
----------------------------------------  -------------------  -----------------
OTHER 5% STOCKHOLDERS:
----------------------------------------  -------------------  -----------------
Michael Gardner (6)                                 2,914,600               6.6%
----------------------------------------  -------------------  -----------------
HBK Investments L. P. (7)                           3,000,000               6.6%
----------------------------------------  -------------------  -----------------
<FN>
*   Less  than  one  percent.

(1)     Beneficial  ownership  is  determined  in  accordance  with rules of the
Securities  and  Exchange  Commission.  In  computing  the  number  of  shares
beneficially  owned  by  a  person  and the percentage ownership of that person,
shares of common stock and options on exercisable within 60 days of February 28,
2001  are  deemed  outstanding. Such shares, however, are not deemed outstanding
for  the  purposes  of  computing the percentage ownership of each other person.

(2)     The  number of shares shown for Robert A. Rositano, Jr. includes 348,000
shares  of common stock subject to options that are currently exercisable within
60 days of February 28, 2001. Excludes 932,000 shares of common stock subject to
options that will not be exercisable within 60 days of February 28, 2001. Robert
A.  and  Dean  Rositano  are  brothers.

(3)     The  number of shares shown for Dean Rositano includes 348,000 shares of
common  stock subject to options that are exercisable within 60 days of February
28,  2001.  Excludes 932,000 shares of common stock subject to options that will
not  be  exercisable  within  60  days  of February 28, 2001. Robert A. and Dean
Rositano  are  brothers.


                                       65
<PAGE>
(4)     The  number  of shares shown for Robert Speicher includes 232,639 shares
of  common  stock  subject  to  options  that  are exercisable within 60 days of
February  28,  2001.  Excludes 435,361 shares of common stock subject to options
that  will  not  be  exercisable  within  60  days  of  February 28,  2001.

(5)     The number of shares shown for Andrew Garroni includes 150,000 shares of
common  stock  subject  to  options  that  are  currently  exercisable.

(6)     The  shares  shown  for  Mr. Michael Gardner include 1,429,800 shares of
common  stock  subject to warrants that are currently exercisable. Mr. Gardner's
address  is  care of Baytree Capital Associates, LLC, 40 Wall Street, 58th floor
New  York,  NY  10005.  We  obtained  this information from Mr. Gardner's public
filings  on  Form  13D.

(7)     The  number  of shares shown for HBK Investments L.P. includes 3,000,000
shares  of  common  stock  subject  to warrants that are exercisable. The shares
shown  for  HBK  Investments  L.P. are held in the name of Montrose Investments,
Ltd.  HBK  Investments  L.P.  has  sole  voting and dispositive power over these
shares pursuant to an Investment Management Agreement with Montrose Investments,
Ltd.  Accordingly,  Montrose  has  no  beneficial  ownership of such shares. The
address  for  HBK  Investments  L.P.  is 300 Crescent Ct. Ste 700, Dallas, Texas
75201.  We obtained this information from HBK Investments L.P. public filings on
Form  13G.
</TABLE>

ITEM  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The following describes transactions to which we were or are a party and in
which any of our directors, officers, or significant stockholders, or members of
the  immediate  family  of  any of the foregoing persons, had or has a direct or
indirect  material  interest.

STOCK  TRANSACTIONS  BY  NETTAXI  ONLINE  COMMUNITIES,  INC.

     On  February  12, 1998, Robert A. and Dean Rositano each were issued 66,297
shares of Nettaxi Online Communities common stock in lieu of salary compensation
earned  by  them between October 1997 and January 1998 in the amount of $11,667.

     In  March  1998,  Robert  A. and Dean Rositano each were issued warrants to
purchase  88,395 shares of Nettaxi Online Communities common stock. On August 1,
1998,  they  were  each  issued  warrants  to purchase 883,952 shares of Nettaxi
Online Communities common stock pursuant to the executive employment agreements.
All  the  warrants  issued to Robert A. and Dean Rositano each were exercised in
September  1998.

     During  1998,  Robert  A. and Dean Rositano transferred 129,435 and 137,012
shares,  respectively,  of  Nettaxi  Online  Communities common stock by gift to
individuals.

     All the shares of Nettaxi Online Communities common stock held by Robert A.
and  Dean  Rositano  and  their  donees were converted into shares of our common
stock  in the reorganization with Swan Valley Snowmobiles, Inc. described below.


                                       66
<PAGE>
     SSN  PROPERTIES, LLC. In October 1997, Nettaxi Online Communities purchased
the  assets  of  Simply Interactive, Inc. from SSN Properties LLC pursuant to an
asset  purchase  agreement.  The  purchase  price for the assets was $2,000,000.
$1,020,000  was  paid pursuant to a convertible interest bearing promissory note
and  the  remainder  of the purchase price was paid by the issuance of 2,475,066
shares  of  Nettaxi  Online  Communities  common  stock.  In September 1998, SSN
Properties  converted  its promissory note with accrued interest in exchange for
2,792,763  shares of Nettaxi Online Communities common stock. In September, 1998
Nettaxi  Online  Communities  also  issued  176,790 shares of its Nettaxi Online
Communities common stock to SSN Properties in exchange for the cancellation of a
$70,000  accounts  payable  to  SSN Properties. All the shares of Nettaxi Online
Communities  common  stock  held by SSN Properties were converted into shares of
our  common  stock  in  the  reorganization  with  Swan Valley Snowmobiles, Inc.
described  below. In April, 1999 a pro rata distribution of the shares of common
stock  held  by  SSN Properties was made to all of its members. Robert Rositano,
Sr.,  father  of  Robert  A,  and  Dean  Rositano,  is  a managing member of SSN
Properties.

REORGANIZATION  WITH  SWAN  VALLEY  SNOWMOBILES,  INC.

     In  September  1998,  Nettaxi  Online  Communities  entered  into  the
reorganization with Swan Valley with a non-operating public company, Swan Valley
Snowmobiles,  Inc.,  a Nevada corporation incorporated in October 1995. From its
incorporation,  Swan Valley engaged in the business of snowmobile repair. During
the first half of 1997, Swan Valley determined that this line of business was no
longer  feasible  and  discontinued  its  operations.  Under  the  terms  of the
reorganization,  the  Nettaxi  Online  Communities  stockholders  received
approximately 2.53 shares of common stock of Swan Valley in exchange for each of
their  shares  of  Nettaxi  Online  Communities common stock, and Nettaxi Online
Communities  became  a  wholly-owned  subsidiary of Swan Valley. An aggregate of
12,000,000  shares  were  issued  to  the  former  Nettaxi  Online  Communities
stockholders  in  the  reorganization  with  Swan  Valley and the Nettaxi Online
Communities  stockholders  owned  approximately  85%  of Swan Valley immediately
after  the  reorganization.  As part of the reorganization, all of the executive
officers  and  directors  of Swan Valley resigned and the executive officers and
directors  of  Nettaxi  Online  Communities  became  the  executive officers and
directors  of  Swan  Valley  which  changed its name to Nettaxi, Inc. (and later
changed  its  name to Nettaxi.com) Immediately prior to the reorganization, Swan
Valley  completed  a  limited  public offering of its common stock which yielded
gross  proceeds  of  $1,000,000  that  was  available  to  Nettaxi  once  the
reorganization  was  completed.

OTHER  AGREEMENTS

     In  October 1998, each of Robert A. Rositano and Dean Rositano were granted
options to purchase up to 40,000 shares of our common stock under the 1998 Stock
Option  Plan. As described above, we have entered into employment agreements and
other  compensation  arrangements  with  our  officers.


                                       67
<PAGE>
     As  described above, in September 1999, we granted Mr. Robert Speicher, our
Vice  President  of Sales and Marketing options to purchase up to 250,000 shares
of  common  stock  in  accordance  with our 1998 Stock Option Plan. The exercise
price  for the options is equal to their fair market value on the date of grant.
Options  to  purchase  up to 6,944 shares were immediately vested on the date of
grant  and  the  remaining  options  vest  in  12  equal quarterly installments.

     As described above, in August 1999 each of Robert A. Rositano, Jr. and Dean
Rositano  were  granted  options  to purchase up to 600,000 shares of our common
stock  under  the  1998 Stock Option Plan. The exercise price for the options is
equal  to  110%  of  their  fair  market  value on the date of grant. Options to
purchase  100,000 shares vest in 12 monthly installments and options to purchase
the  remaining  500,000  shares  vest  upon our achievement of specific business
objectives  which  have  been  established  by  the  board  of  directors.

     In  January 2000, each of Robert A. Rositano and Dean Rositano were granted
options  to  purchase  up  to  256,000 shares of our common stock under our 1999
Stock  Option  Plan. The exercise price for these options was not less than 100%
of  the  fair market value on the date of grant. The right to purchase 40,000 of
these  shares  vests  in  12 equal quarterly installments. The right to exercise
16,000  of  the  shares  vests  in  12  equal monthly installments. The right to
purchase  the  remaining  shares  vests upon our achievement of certain business
objectives.

     In  January  2000,  we  granted  Robert  Speicher options to purchase up to
100,000  shares  of  common stock under our 1999 Stock Option Plan. The exercise
price  for  these options was not less than the fair market value on the date of
grant.  The  right  to  purchase  the  shares  vests  in  12  equal  quarterly
installments.

     In  January  2000,  we  granted  each of our non employee directors at that
time,  Andy  Garonni, Ron R. Goldie and Steven Antebi, options to purchase up to
150,000  shares  of  common stock under our 1999 Stock Option Plan. The exercise
price  for  these options was not less than the fair market value on the date of
grant.  The  right  to  purchase  these  shares  was  immediately  vested.

     In  February  2000,  each of Robert A. Rositano, Jr. and Dean Rositano were
granted  options  to purchase up to 384,000 shares of our common stock under our
1999  stock  option plan. The exercise price for these options was not less than
100%  of the fair market value on the date of grant. The right to puchase 24,000
of  these shares vests in 12 equal quarterly installments. The right to purchase
60,000  of  these  shares  vests  in 12 equal monthly installments. The right to
purchase  the  remaining  shares  vests upon our achievement of certain business
objectives.

     In  February  2000,  we  granted  Robert Speicher options to purchase up to
150,000  shares  of  common stock under our 1999 Stock Option Plan. The exercise
price  for  these options was not less than the fair market value on the date of
grant.  The  right  to  purchase  the  shares  accrues  in  12  equal  quarterly
installments.


                                       68
<PAGE>
     In  October  1999,  we  granted  Glenn  Goelz,  our  former chief financial
officer, options to purchase up to 250,000 shares of common stock under the 1998
Stock  Option  Plan. In January 2000, we granted Mr. Goelz additional options to
purchase  up to 112,000 shares of common stock under our 1999 Stock Option Plan.
The  exercise price for these options was not less than the fair market value on
the  date  of  grant.  The  right  to purchase 12,000 of the options issued were
vested  on  the  date  of  grant  and the right to purchase the remaining shares
vested  in  12  equal  quarterly  installments. In February 2000, we granted Mr.
Goelz, additional options to purchase up to 168,000 shares of common stock under
our  1999  Stock  Option Plan. The exercise price for these options was not less
than  the fair market value on the date of grant and the remainder accrued in 12
quarterly  installments. As of April 30, 2000, Mr. Goelz resigned and any shares
not  vested  on  the  date  of  his  resignation  terminated  automatically.

     Mr.  Brian  Stroh,  our former Vice President of Information Services,  was
granted  options  to  purchase  12,000  and  124,000  shares  of  common  stock,
respectively,  under  two  option  agreements. Under each agreement, the options
were  to vest in 12 equal quarterly installments beginning on the date of grant.
Mr.  Stroh  resigned  as  the  Vice  President of Information Services and as an
employee  of  Nettaxi.com on November 9, 2000. Therefore, Mr. Stroh's options to
purchase  our  common  stock  expired  on  February  9,  2001.

     As  previously described, we have an agreement with Alchemy Communications,
pursuant  to which Alchemy Communications hosts the servers that support our web
site.  Mr.  Andrew Garroni, a member of our board of directors, Mr. Garroni is a
member  of  the  board  of  directors  of Alchemy Communications and is also the
Secretary  of  Alchemy  Communications.

     On  October  30,  2000,  we  entered  into  a consulting agreement with Mr.
Michael  Gardner,  the beneficial owner of 6.6% of our outstanding common stock.
Under  the  agreement,  Mr.  Gardner  was to perform certain consulting services
specified  in  the  agreement.  As  compensation  for  his services, Mr. Gardner
received  warrants  to  purchase  350,000  shares of our common stock, having an
exercise  price  of  $0.35  per  share.

     We  believe that all of the transactions set forth above were made on terms
no  less  favorable  to us than could have been obtained from unaffiliated third
parties. We intend that all future transactions, including loans, between us and
our  officers,  directors,  principal  stockholders and their affiliates will be
approved  by  a  majority of the board of directors, including a majority of the
independent  and  disinterested outside directors on the board of directors, and
be  on  terms  no  less favorable to us than could be obtained from unaffiliated
third  parties.


                                     PART IV

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

(A)  DOCUMENTS  FILED  AS  PART  OF  THIS  REPORT:

     1.     Financial  Statements.  The  following  financial  statements  of
Nettaxi.com  are  included  in  a separate section of this Annual Report on Form
10-K  commencing  on  the  pages  referenced  below:


                                       69
<PAGE>
     2.     Financial  Statement Schedules. The financial statement schedules of
Nettaxi.com  have been omitted because they are not applicable, not required, or
the  information  is  included in the consolidated financial statements or notes
thereto.

     3.     Exhibits.  The  following  Exhibits  are  attached  hereto  and
incorporated  herein  by  reference:

Exhibit  Number     Description  of  Exhibit
---------------     ------------------------

2.1                 Agreement  and  Plan  of  Reorganization dated September 24,
                    1998  by  and  among  Nettaxi  Online Communities, Inc., the
                    owners  of  all  the  outstanding  shares of common stock of
                    Nettaxi  Online  Communities,  Inc.  and  the  Company.
                    (Incorporated  by  reference  to  exhibit 2.1 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129)  which was declared effective on August 13, 1999)

2.2                 Merger  Agreement  and Plan of Reorganization dated April 1,
                    1999  by  and  between  Plus  Net,  Inc.  and  the  Company.
                    (Incorporated  by  reference  to  exhibit 2.2 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

3.1                 Articles  of  Incorporation of the Company. (Incorporated by
                    reference  to  exhibit  3.1  filed  with  the  Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

3.2                 Certificate of Amendment to the Articles of Incorporation of
                    the Company. (Incorporated by reference to exhibit 3.2 filed
                    with  the  Registrant's  Registration  Statement on Form S-1
                    (File  No.  333-78129))

3.3                 By-Laws of the Company (Incorporated by reference to exhibit
                    3.3  filed  with  the Registrant's Registration Statement on
                    Form  S-1  (File  No.  333-78129))

3.4                 Certificate of Amendment to the Articles of Incorporation of
                    the Company. (Incorporated by reference to Exhibit 3.4 filed
                    with  the Registrant's Quarterly Report on Form 10-Q for the
                    quarter  ended  September  30,  1999)

3.5                 Certificate of Amendment to the Articles of Incorporation of
                    the  Company.  (Previously  filed  with  this  registration
                    statement)


                                       70
<PAGE>
4.1                 Specimen  Common  Stock  Certificate  of  the  Company.
                    (Incorporated  by  reference  to  exhibit 4.1 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

4.2                 See Exhibits 3.1, 3.2 and 3.3 for provisions of the Articles
                    of  Incorporation  and  By-Laws  of the Company defining the
                    rights  of  holders  of  Common  Stock  of  the  Company.

4.3                 Convertible  Debenture  dated March 31, 1999 in favor of RGC
                    International  Investors, LDC. (Incorporated by reference to
                    exhibit  4.3  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

4.4                 1999  Stock  Option  Plan  of  the Company. (Incorporated by
                    reference  to  exhibit  4.4  filed  with  the  Registrant's
                    Registration  Statement  on  Form  S-8  (File No. 333-32678)
                    which  was  filed  on  March  17  2000)

4.5                 Form  of  Stock Option Agreement for options issued pursuant
                    to  199  Stock  Option Plan of the Company. (Incorporated by
                    reference  to  exhibit  4.5  filed  with  the  Registrant's
                    Registration  Statement  on  Form  S-8 (File No. 333-32678))

10.1                Asset  Purchase  and Sale Agreement dated October 1, 1997 by
                    and  between  SSN  Properties,  LLC  and  the  Company.
                    (Incorporated  by  reference  to exhibit 10.1 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.2                Sub  Lease dated September 3, 1997 by and between Execustaff
                    and  the Company. (Incorporated by reference to exhibit 10.2
                    filed  with  the Registrant's Registration Statement on Form
                    S-1  (File  No.  333-78129))


10.3                Stock  Option  Agreement dated March 20, 1998 by and between
                    Robert  A.  Rositano,  Jr. and the Company. (Incorporated by
                    reference  to  exhibit  10.5  filed  with  the  Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.4                Stock  Option  Agreement dated March 20, 1998 by and between
                    Dean Rositano and the Company. (Incorporated by reference to
                    exhibit  10.6  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

10.5                Employment  Agreement  dated  August  1,  1998  between Dean
                    Rositano  and  the  Company.  (Incorporated  by reference to
                    exhibit  10.9  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

10.6                Employment  Agreement dated August 1, 1998 between Robert A.
                    Rositano, Jr. and the Company. (Incorporated by reference to
                    exhibit  10.10  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))


                                       71
<PAGE>
10.7                Stock  Option  Agreement dated August 1, 1998 by and between
                    Robert  A.  Rositano,  Jr. and the Company. (Incorporated by
                    reference  to  exhibit  10.11  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.8                Stock  Option  Agreement dated August 1, 1998 by and between
                    Dean Rositano and the Company. (Incorporated by reference to
                    exhibit  10.12  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

10.9                Letter  Agreement  dated  September 3, 1998 between Bay Tree
                    Capital  Associates,  LLC  and the Company. (Incorporated by
                    reference  to  exhibit  10.14  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.10               1998  Stock  Option  Plan of the Company. (Incorporated by
                    reference  to  exhibit  10.17  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.11               Form of Stock Option Agreement for options issued pursuant
                    to  1998  Stock Option Plan of the Company. (Incorporated by
                    reference  to  exhibit  10.18  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.12               Stock Option Agreement under the 1998 Stock Option Plan by
                    and  between Dean Rositano and the Company. (Incorporated by
                    reference  to  exhibit  10.19  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.13               Stock Option Agreement under the 1998 Stock Option Plan by
                    and  between  Robert  A.  Rositano,  Jr.  and  the  Company.
                    (Incorporated  by  reference to exhibit 10.20 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.14               Technology  Licensing  Agreement dated February 3, 1999 by
                    and  between  Go Hip, Inc. and the Company. (Incorporated by
                    reference  to  exhibit  10.22  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.15               First Amendment to Technology Licensing Agreement dated as
                    of  April  1,  1999  by  and  between  Go  Hip, Inc. and the
                    Company.  (Incorporated  by reference to exhibit 10.23 filed
                    with  the  Registrant's  Registration  Statement on Form S-1
                    (File  No.  333-78129))


                                       72
<PAGE>
10.16               Settlement  Agreement  dated  March  2,  1999 by and among
                    Michael  Gardner,  Bay  Tree  Capital  Associates, LLP, Wall
                    Street  Trading Group, Bruce K. Dorfman, Robert A. Rositano,
                    Jr.,  Dean  Rositano  and  the  Company.  (Incorporated  by
                    reference  to  exhibit  10.28  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.17               Common  Stock Purchase Option to Purchase Common Shares of
                    Nettaxi,  Inc.  dated  March  4,  1999  between  Wall Street
                    Trading Group and the Company. (Incorporated by reference to
                    exhibit  10.29  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

10.18               Securities  Purchase Agreement dated March 31, 1999 by and
                    among  RGC  International  Investors,  LDC  and the Company.
                    (Incorporated  by  reference to exhibit 10.30 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.19               Stock  Purchase  Warrant dated March 31, 1999 by and among
                    RGC  International  Investors,  LDC  and  the  Company.
                    (Incorporated  by  reference to exhibit 10.31 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.20               Registration  Rights Agreement dated March 31, 1999 by and
                    among  RGC  International  Investors,  LDC  and the Company.
                    (Incorporated  by  reference to exhibit 10.32 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.21               Oppenheimer Funds 401K Plan. (Incorporated by reference to
                    exhibit  10.33  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

10.22               Standard  Office  Lease-  Gross  dated  March  1999 by and
                    between  South  Bay  Construction  and Development Co. III &
                    South  Bay  Construction  and  Development  Co.  VII and the
                    Company.  (Incorporated  by reference to exhibit 10.34 filed
                    with  the  Registrant's  Registration  Statement on Form S-1
                    (File  No.  333-78129))

10.23               Form  of Indemnification Agreement between the Company and
                    each  of its Directors and Executive Officers. (Incorporated
                    by  reference  to  exhibit 10.35 filed with the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.24               Employment Agreement dated April 1, 1999 by and between Mr.
                    Glenn  Goelz  and the Company. (Incorporated by reference to
                    exhibit  10.37  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

10.25               Consulting  Agreement  dated  May  10, 1999 by and between
                    Fontenelle  LLC  and the Company. (Incorporated by reference
                    to  exhibit  10.38  filed with the Registrant's Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))


                                       73
<PAGE>
10.26               Lease Agreement dated as of May 27, 1999 by and between H&L
                    Realty  and  Management  Company,  Agent for owners Flamingo
                    Fountains  and the Registrant. (Incorporated by reference to
                    exhibit  10.41  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

10.27               Master Software License Bundling and Distribution Agreement
                    dated November 13, 1997 between Apple Computer, Inc. and the
                    Company.  (Incorporated  by reference to exhibit 10.42 filed
                    with  the  Registrant's  Registration  Statement on Form S-1
                    (File  No.  333-78129))

10.28               Master  Software  License,  Bundling  and  Distribution
                    Agreement  dated  March  14,  1997  between  Fountain
                    Technologies,  Inc.  and  the  Company.  (Incorporated  by
                    reference  to  exhibit  10.43  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.29               Web  Advertising  Services  Agreement  dated  June 3, 1998
                    between Fly Cast Communications Corporation and the Company.
                    (Incorporated  by  reference to exhibit 10.44 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.30               Sales  and  Representation  Contract  dated  July  7, 1998
                    between  Michael  Weiner  dba  Unique Media Services and the
                    Company.  (Incorporated  by reference to exhibit 10.45 filed
                    with  the  Registrant's  Registration  Statement on Form S-1
                    (File  No.  333-78129))

10.31                Merchant  Services  Agreement  dated August 3, 1998 by and
                    between  eCharge  Corporation and the Company. (Incorporated
                    by  reference  to  exhibit 40.46 filed with the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.32               Conversion Agreement dated September 4, 1998 by and between
                    SSN  Properties,  LLC  and  the  Company.  (Incorporated  by
                    reference  to  exhibit  10.47  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.33               Internet  Infospace  Content  (World  Wide  Web  Site)
                    Distribution  Agreement dated October 8, 1998 by and between
                    InfoSpace.com, Inc., a Delaware corporation and the Company.
                    (Incorporated  by  reference to exhibit 10.48 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.34               Agreement  for  Terminal  Facility Co-Location Space dated
                    January  18,  1999  between Alchemy Communications, Inc. and
                    the  Company.  (Incorporated  by  reference to exhibit 10.49
                    filed  with  the Registrant's Registration Statement on Form
                    S-1  (File  No.  333-78129))


                                       74
<PAGE>
10.35               Letter  Agreement  dated January 15, 1999 between Babenet,
                    Ltd.  and the Company. (Incorporated by reference to exhibit
                    10.50  filed with the Registrant's Registration Statement on
                    Form  S-1  (File  No.  333-78129))

10.36               License and Distribution Agreement dated March 30, 1999 by
                    and  between Netopia, Inc. and the Company. (Incorporated by
                    reference  to  exhibit  10.51  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.37               Website Linking and Promotion Agreement dated March 5, 1999
                    between  PI  Graphix, Inc. and the Company. (Incorporated by
                    reference  to  exhibit  10.52  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.38               Development Agreement dated as of December 16, 1998 between
                    the  Big  Network  Inc.  and  the  Company. (Incorporated by
                    reference  to  exhibit  10.53  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.39               Development  and  License Agreement dated May, 1999 by and
                    between  eBay,  Inc.  and  the  Company.  (Incorporated  by
                    reference  to  exhibit  10.54  filed  with  the Registrant's
                    Registration  Statement  on  Form  S-1 (File No. 333-78129))

10.40               Internet Services Suite Agreement dated May 5, 1999 by and
                    between  Wired  Digital,  Inc., Lycos, Inc. and the Company.
                    (Incorporated  by  reference to exhibit 10.55 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.41               Financial  Consulting Agreement dated June 29, 1999 by and
                    between  The  Phoenix  Group  International,  LLC  and  the
                    Company.  (Incorporated  by reference to exhibit 10.56 filed
                    with  the  Registrant's  Registration  Statement on Form S-1
                    (File  No.  333-78129))

10.42               Co-Branded  Free  ISP Agreement dated November 30, 1999 by
                    and  between  Spin  Media  Network,  Inc.  and  the Company.
                    (Incorporated  by  reference to exhibit 10.57 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.43               Internet Content Distribution Agreement dated December 30,
                    1999  by  and  between  InfoSpace.com  and  the  Company.
                    (Incorporated  by  reference to exhibit 10.58 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))


                                       75
<PAGE>
10.44               Advertising Impression Network Contract dated July 1, 1999
                    by  and  between  White  Sand  Communications,  Inc. and the
                    Company.  (Incorporated  by reference to exhibit 10.59 filed
                    with  the Registrant's Quarterly Report on Form 10-Q for the
                    period  ending  September  30,  1999)

10.45               Advertising Impression Network Contract dated July 1, 1999
                    by and between Multinet Communications Worldwide Limited and
                    the Company(Incorporated by reference to exhibit 10.60 filed
                    with  the Registrant's Quarterly Report on Form 10-Q for the
                    period  ending  September  30,  1999)

10.46               Data  Center  Service Agreement dated July 15, 1999 by and
                    between  Babenet,  LTD  and  the  Company.  (Incorporated by
                    reference  to  exhibit  10.61  filed  with  the Registrant's
                    Quarterly  Report  on  Form  10-Q  for  the  period  ending
                    September  30,  1999)

10.47               Data  Center  Service Agreement dated July 15, 1999 by and
                    between  Whitehorn  Ventures  Limited  and  the  Company.
                    (Incorporated  by  reference to exhibit 10.62 filed with the
                    Registrant's  Quarterly  Report  on Form 10-Q for the period
                    ending  September  30,  1999)

10.48               Data Center Service Agreement dated August 15, 1999 by and
                    between  White  Sand  Communications,  Inc. and the Company.
                    (Incorporated  by  reference to exhibit 10.63 filed with the
                    Registrant's  Quarterly  Report  on Form 10-Q for the period
                    ending  September  30,  1999)

10.49               Co-Branded  Free  ISP Agreement dated November 30, 1999 by
                    and  between  Spin  Media  Network,  Inc.  and  the  Company
                    (Incorporated  by  reference to exhibit 10.64 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.50               Internet Content Distribution Agreement dated December 30,
                    1999  by  and  between  InfoSpace.com  and  the  Company.
                    (Incorporated  by  reference to exhibit 10.65 filed with the
                    Registrant's  Registration  Statement  on Form S-1 (File No.
                    333-78129))

10.51               Sinclair Davis Trading Group Agreement dated as of December
                    8,  1999 by and between Sinclair Davis Trading Corp. and the
                    Company.  (Incorporated  by reference to exhibit 10.66 filed
                    with  the  Registrant's  Annual  Report on Form 10-K for the
                    period  ending  December  31,  1999)

10.52               Form  of  Subscription  Agreement  of  the  Company.
                    (Incorporated  by  reference  to exhibit10.67 filed with the
                    Registrant's  Annual  Report  on  Form  10-K  for the period
                    ending  December  31,  1999)


                                       76
<PAGE>
10.53               Letter  Of  Intent Agreement dated as of February 29, 2000
                    between  PPC  Racing and the Company. (Previously filed with
                    this  registration  statement)

10.54               Registration Rights Agreement dated as of April 28, 2000 by
                    and  between  RGC  International  Investors,  LDC  and  the
                    Company.  (Incorporated  by reference to Exhibit 10.54 filed
                    with  the  Registrant's  registration  statement on Form S-1
                    filed  on  June  2,  2000)

10.55               Warrant Agreement dated as of April 28, 2000 by and between
                    RGC  International  Investors,  LDC  and  the  Company.
                    (Incorporated  by  reference to Exhibit 10.54 filed with the
                    Registrant's  registration  statement  on  Form S-1 filed on
                    June  2,  2000)

10.56               Settlement Agreement and Mutual General Release dated as of
                    April  28,  2000  by and between RGC International Investors
                    LDC, Rose Glen Capital Management, L.P., RGC General Partner
                    Corporation,  Steve  Katznelson,  Gerald  Stahlecker,  Chris
                    Hinkel  and  the  Company.  (Incorporated  by  reference  to
                    Exhibit  10.54  filed  with  the  Registrant's  registration
                    statement  on  Form  S-1  filed  on  June  2,  2000)

10.57               Consulting  Agreement  dated as of October 29, 2000 by and
                    between  the  Company  and  Michael  Gardner.

10.58               Online Advertising Insertion Order dated as of April 3, 2000
                    by  and  between  the  Company  and  Hearme.com.

10.59               Content  License  Agreement  dated  April  27,  2000  by and
                    between  the  Company  and  ScreamingMedia.

10.60               Development  and  Revenue Sharing Agreement dated August 23,
                    2000  by  and between the Company and Activeworlds.com, Inc.

10.61               GoTo.com Search Services Order dated as of September 1, 2000
                    by  and  between  the  Company  and  GoTo.com

10.62               WebMall  Co-Branded Web Page Agreement dated as of September
                    7,  2000 by and between the Company and StoreRunner Network,
                    Inc.

10.63               Software License Agreement dated as of September 29, 2000 by
                    and  between  the  Company  and  Annuncio  Software,  Inc.

10.64               Consulting  Services  Agreement dated as of October 11, 2000
                    by  and  between  the  Company  and  Annuncio Software, Inc.

10.65               Online Advertising Services Contract dated as of February 1,
                    2001  by  and  between  the  Company  Fastclick.com,  Inc.

10.66               Gigabit  Data  Services  Agreement dated as of March 2001 by
                    and  between  the  Company  and Alchemy Communications, Inc.

10.67               Exit  Traffic  Agreement  dated as of January 1, 2000 by and
                    between the Company  and  Internet  Fuel.com,  Inc.

21.1                Subsidiaries  of  the Company. (Incorporated by reference to
                    exhibit  10.57  filed  with  the  Registrant's  Registration
                    Statement  on  Form  S-1  (File  No.  333-78129))

23.1                Consent  of  BDO  Seidman,  LLP

(b)     Reports  on  Form  8-K.

     None.


                                       77
<PAGE>
                                   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.

                         NETTAXI.COM

Date:  April  3,  2001                         By:  /s/  Dean  Rositano
                                                    -------------------
                                                         Dean  Rositano,
                                               Chief  Financial  Officer
                                               (Principal  Accounting  and
                                               Financial  Officer)

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
Report  has  been  signed  by the following persons in the capacities and on the
dates  indicated:



SIGNATURE                       TITLE                              DATE
------------------------------  ---------------------------------  -------------

/S/  Robert A. Rositano, Jr.    Chief Executive Officer,           April 3, 2001
-----------------------------   Secretary and Director
  Robert A. Rositano, Jr.       (principal executive officer)


/S/   Dean Rositano             President Chief Financial Officer  April 3, 2001
-----------------------------   and Director
  Dean Rositano                 (principal accounting officer)

/S/  Andrew Garroni             Director                           April 3, 2001
-----------------------------
  Andrew Garroni


                                       78
<PAGE>






                                                                     NETTAXI.COM






================================================================================

                                               CONSOLIDATED FINANCIAL STATEMENTS
                                                AS OF DECEMBER 31, 2000 AND 1999






<PAGE>







                                                                     NETTAXI.COM






================================================================================

                                               CONSOLIDATED FINANCIAL STATEMENTS
                                                AS OF DECEMBER 31, 2000 AND 1999













<PAGE>
<TABLE>
<CAPTION>
                                                                     NETTAXI.COM



                                                                        CONTENTS
================================================================================





REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                 3
<S>                                                           <C>
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets                                        4
Consolidated statements of operations                              5
Consolidated statements of shareholders' equity (deficiency)       6
Consolidated statements of cash flows                              7
Notes to consolidated financial statements                    8 - 33
</TABLE>




<PAGE>
REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS


To  The  Board  of  Directors  and  Shareholders  of
Nettaxi.com

We  have  audited the accompanying consolidated balance sheets of Nettaxi.com as
of  December  31,  2000  and  1999,  and  the related consolidated statements of
operations,  shareholders'  equity  (deficiency)  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 our audits provide a reasonable basis for our opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material respects, the financial position of Nettaxi.com as of
December 31, 2000 and 1999, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2000, in conformity
with  accounting  principles generally  accepted in the United States.


/s/  BDO Seidman LLP

San  Jose,  California
March  8,  2001

                                                                               3
<PAGE>

                                                                     NETTAXI.COM



                                                     Consolidated Balance Sheets
================================================================================


<TABLE>
<CAPTION>
December 31,                                                            2000           1999
------------------------------------------------------------------------------------------------
<S>                                                                 <C>            <C>
ASSETS

Current Assets:
  Cash and cash equivalents (Note 9)                                $ 13,894,700   $    987,700
  Accounts receivable, net of allowance for doubtful accounts
    of $433,000 and $83,600, respectively (Note 9)                       775,100      1,181,600
  Prepaid expenses and other assets (Note 7)                           1,035,000        609,200
------------------------------------------------------------------------------------------------

TOTAL CURRENT ASSETS                                                  15,704,800      2,778,500
------------------------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT, net (Note 2)                                   1,748,300      1,968,600

PURCHASED TECHNOLOGY, net (Note 3)                                       319,000        493,000

OTHER INTANGIBLES, net (Note 3)                                           55,000         85,000

DEFERRED EXPENSE (Note 7)                                                272,500        655,200

DEPOSITS                                                                  24,000         50,900
------------------------------------------------------------------  -------------  -------------

                                                                    $ 18,123,600   $  6,031,200
                                                                    =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
  Accounts payable                                                  $  1,162,400   $  4,041,400
  Accrued expenses (Note 4)                                              397,900        659,100
  Income taxes payable (Note 8)                                                         125,600
  Current portion of capital lease obligations                                            5,400
------------------------------------------------------------------------------------------------

TOTAL CURRENT LIABILITIES                                              1,560,300      4,831,500
------------------------------------------------------------------------------------------------

LONG-TERM LIABILITIES
  Convertible notes payable, related party (Note 6)                                   3,200,000
------------------------------------------------------------------------------------------------

TOTAL LIABILITIES                                                      1,560,300      8,031,500
------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Notes 5, 9, and 12)

STOCKHOLDERS' EQUITY (DEFICIENCY) (Notes 6, 7, and 13):
  Preferred stock, $0.001 par value; 1,000,000 shares authorized;
    no shares issued and outstanding
  Common stock subscribed                                                (95,000)       (95,000)
  Common stock, $0.001 par value; 200,000,000 shares authorized;
    43,124,586 and 23,214,446 shares issued and outstanding,
    respectively                                                          43,100         23,200
  Additional paid-in capital                                          44,732,900     11,899,300
  Deferred compensation                                                 (429,900)      (491,400)
  Accumulated deficit                                                (27,687,800)   (13,336,400)
------------------------------------------------------------------------------------------------

TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY)                               16,563,300     (2,000,300)
------------------------------------------------------------------------------------------------

                                                                    $ 18,123,600   $  6,031,200
================================================================================================
</TABLE>

           See accompanying notes to consolidated financial statements.

                                                                               4
<PAGE>
                                                                     NETTAXI.COM



                                           Consolidated Statements of Operations
================================================================================

<TABLE>
<CAPTION>
Years ended December 31,                        2000           1999          1998
=====================================================================================
<S>                                         <C>            <C>           <C>
NET REVENUES (Notes 9 and 10)               $  9,418,400   $ 5,032,800   $   258,000

OPERATING EXPENSES:
  Cost of operations                           7,307,700     4,003,800       239,800
  Sales and marketing                          5,908,300     4,788,800       745,600
  Research and development                     1,563,000     2,186,700       634,700
  General and administrative                   5,007,300     3,456,000     1,053,200
  Asset impairment (Note 3)                            -             -       667,000
-------------------------------------------------------------------------------------

TOTAL OPERATING EXPENSES                      19,786,300    14,435,300     3,340,300
-------------------------------------------------------------------------------------

LOSS FROM OPERATIONS                         (10,367,900)   (9,402,500)   (3,082,300)

OTHER INCOME (EXPENSE):
  Interest income                                703,800        75,100         9,800
  Interest expense (Notes 6 and 7)            (4,685,700)     (426,200)      (68,800)
  Other income                                                                28,500
-------------------------------------------------------------------------------------

LOSS BEFORE INCOME TAXES                     (14,349,800)   (9,753,600)   (3,112,800)

INCOME TAXES (Note 8)                             (1,600)     (126,800)         (800)
-------------------------------------------------------------------------------------

NET LOSS                                    $(14,351,400)  $(9,880,400)  $(3,113,600)
=====================================================================================

PREFERRED STOCK DIVIDEND                    $              $             $   (14,300)
=====================================================================================

NET LOSS AVAILABLE TO COMMON SHAREHOLDERS    (14,351,400)   (9,880,400)   (3,127,900)
=====================================================================================

BASIC AND DILUTED LOSS PER COMMON SHARE     $      (0.36)  $     (0.46)  $     (0.32)
=====================================================================================

WEIGHTED-AVERAGE COMMON SHARES
  OUTSTANDING                                 39,381,211    21,274,203     9,724,781
=====================================================================================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                                                               5
<PAGE>
                                                                     NETTAXI.COM


                    Consolidated Statements of Shareholders' Equity (Deficiency)
                                                                 (Notes 6 and 7)
================================================================================

<TABLE>
<CAPTION>
                                                      Preferred Stock       Common Stock        Common       Additional
                                                    ===================  ===================     Stock        Paid-in
                                                     Shares     Amount     Shares    Amount    Subscribed     Capital
========================================================================================================================
<S>                                                 <C>        <C>       <C>         <C>      <C>           <C>
Balances, December 31, 1997                          134,000   $   100    5,238,991  $ 5,200  $         -   $ 1,295,300

Net proceeds from sale of preferred stock             11,400         -            -        -            -        22,900
Net proceeds from sale of common stock                     -         -    1,756,378    1,800            -     1,198,300
Issuance of common stock for services
  and salaries                                             -         -      328,132      300            -       142,500
Exchange of convertible notes payable and
  accrued interest                                         -         -    2,792,763    2,800            -     1,103,000
Exchange of preferred stock for common stock        (145,400)     (100)     734,438      700            -          (600)
Compensation expense related to warrants granted           -         -            -        -            -       855,000
Warrants exchanged for common stock                        -         -    2,399,298    2,400      (95,000)       92,600
Issuance of common stock to Placement Agent                -         -      200,000      200            -       159,800
Common stock issued in connection with
  Reorganization                                           -         -      660,000      700            -             -
Net loss available to common shareholders                  -         -            -        -            -             -
------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 1998                                -         -   14,110,000   14,100      (95,000)    4,868,800

Issuance of common stock in connection
  with pooling (Note 1)                                    -         -    7,000,000    7,000            -             -
Deferred compensation related to stock options             -         -            -        -            -       702,700
Amortization of deferred compensation                      -         -            -        -            -             -
Interest related to issuance of warrants                   -         -            -        -            -       361,200
Warrants exercised for common stock                        -         -      150,000      100            -     1,181,200
Exchange of convertible notes payable and
  accrued interest                                         -         -      802,223      800            -     1,862,500
Proceeds from the issuance of common stock                 -         -      802,223      800            -     1,862,500
Issuance of common stock for services                      -         -      350,000      400            -     1,060,400
Net loss available to common shareholders                  -         -            -        -            -             -
------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 1999                                -         -   23,214,446   23,200      (95,000)   11,899,300

Exchange of convertible notes payable and
  accrued interest                                         -         -    2,382,472    2,400            -     3,317,500
Proceeds from the issuance of common stock                 -         -      632,472      600            -       834,300
Deemed interest on settlement agreement                    -         -            -        -            -     3,896,000
Deferred compensation related to stock options             -         -            -        -            -       512,200
Amortization of deferred compensation                      -         -            -        -            -             -
Conversion of trade payables to common stock               -         -      778,982      800            -     1,557,200
Warrants issued in conjunction with conversion of
  trade payables                                           -         -            -        -            -       541,400
Issuance of common stock for services                      -         -      686,250      700            -       947,800
Warrants issued for services                               -         -            -        -            -        84,000
Proceeds from sale of common stock, net of costs
  of $1,831,600                                            -         -   15,416,633   15,400            -    21,127,200
Issuance of common stock due to the exercise
  of stock options                                         -         -       13,331        -            -        16,000
Net loss available to common shareholders                  -         -            -        -            -             -
------------------------------------------------------------------------------------------------------------------------
Balances, December 31, 2000                                -   $     -   43,124,586  $43,100  $   (95,000)  $44,732,900
========================================================================================================================


                                                       Deferred     Accumulated
                                                     Compensation      Deficit         Total
================================================================================================
<S>                                                 <C>             <C>            <C>
Balances, December 31, 1997                         $           -   $   (327,200)  $    973,400

Net proceeds from sale of preferred stock                       -              -         22,900
Net proceeds from sale of common stock                          -              -      1,200,100
Issuance of common stock for services
  and salaries                                                  -              -        142,800
Exchange of convertible notes payable and
  accrued interest                                              -              -      1,105,800
Exchange of preferred stock for common stock                    -              -              -
Compensation expense related to warrants granted                -              -        855,000
Warrants exchanged for common stock                             -              -              -
Issuance of common stock to Placement Agent                     -              -        160,000
Common stock issued in connection with
  Reorganization                                                -           (700)             -
Net loss available to common shareholders                       -     (3,127,900)    (3,127,900)
------------------------------------------------------------------------------------------------
Balances, December 31, 1998                                     -     (3,455,800)     1,332,100

Issuance of common stock in connection
  with pooling (Note 1)                                         -           (200)         6,800
Deferred compensation related to stock options           (702,700)             -              -
Amortization of deferred compensation                     211,300              -        211,300
Interest related to issuance of warrants                        -              -        361,200
Warrants exercised for common stock                             -              -      1,181,300
Exchange of convertible notes payable and
  accrued interest                                              -              -      1,863,300
Proceeds from the issuance of common stock                      -              -      1,863,300
Issuance of common stock for services                           -              -      1,060,800
Net loss available to common shareholders                       -     (9,880,400)    (9,880,400)
------------------------------------------------------------------------------------------------
Balances, December 31, 1999                              (491,400)   (13,336,400)    (2,000,300)

Exchange of convertible notes payable and
  accrued interest                                              -              -      3,319,900
Proceeds from the issuance of common stock                      -              -        834,900
Deemed interest on settlement agreement                         -              -      3,896,000
Deferred compensation related to stock options           (512,200)             -              -
Amortization of deferred compensation                     573,700              -        573,700
Conversion of trade payables to common stock                    -              -      1,558,000
Warrants issued in conjunction with conversion of
  trade payables                                                -              -        541,400
Issuance of common stock for services                           -              -        948,500
Warrants issued for services                                    -              -         84,000
Proceeds from sale of common stock, net of costs
  of $1,831,600                                                 -              -     21,142,600
Issuance of common stock due to the exercise
  of stock options                                              -              -         16,000
Net loss available to common shareholders                       -    (14,351,400)   (14,351,400)

Balances, December 31, 2000                         $    (429,900)  $(27,687,800)  $ 16,563,300
================================================================================================
</TABLE>

           See accompanying notes to consolidated financial statements.

                                                                               6
<PAGE>
                                                                     NETTAXI.COM


                                           Consolidated Statements of Cash Flows
                                                                       (Note 11)
================================================================================

<TABLE>
<CAPTION>
Years Ended December 31,                                        2000           1999          1998
=====================================================================================================
<S>                                                         <C>            <C>           <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                                  $(14,351,400)  $(9,880,400)  $(3,113,600)
    Adjustments to reconcile net loss to net cash used in
      operating activities:
        Gain on disposal of equipment                                                        (28,500)
        Depreciation and amortization                          1,195,300       595,900       433,500
        Allowance for doubtful accounts                          349,400        52,400        31,200
        Issuance of common stock for interest on
          convertible notes                                      119,900        63,300        68,800
        Issuance of common stock for services (Note 7)         1,019,400        34,200       302,800
        Asset impairment (Note 3)                                                            667,000
        Compensation expense related to options
          and warrans granted                                    615,700       211,300       855,000
        Interest expense related to settlement agreement       2,400,000
        Interest expense related to issuance of warrants                     2,196,400       202,200
        Changes in operating assets and liabilities:
          Accounts receivable                                     57,100    (1,100,300)     (104,800)
          Prepaid expenses and other assets                     (231,000)      (62,700)      (13,200)
          Accounts payable                                    (1,321,000)    3,854,500       175,900
          Accrued expenses                                      (261,200)      585,100        13,700
          Deferred revenue                                                     (47,000)       47,000
          Income taxes payable                                  (125,600)      125,600          (600)
-----------------------------------------------------------------------------------------------------

NET CASH USED IN OPERATING ACTIVITIES                         (8,337,000)   (5,365,900)     (665,800)
-----------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from disposal of equipment                                                         34,600
  Deposits                                                        26,900       (50,900)
  Capital expenditures                                          (771,000)   (2,105,400)     (159,200)
-----------------------------------------------------------------------------------------------------

NET CASH USED IN INVESTING ACTIVITIES                           (744,100)   (2,156,300)     (124,600)
-----------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payment on obligations under capital lease                      (5,400)       (7,300)       (2,000)
  Proceeds from convertible notes payable                                    5,000,000
  Net proceeds from issuance of preferred stock                                                8,600
  Net proceeds from issuance of common stock                  21,993,500     3,051,400     1,200,100
-----------------------------------------------------------------------------------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                     21,988,100     8,044,100     1,206,700
-----------------------------------------------------------------------------------------------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                     12,907,000       521,900       416,300

CASH AND CASH EQUIVALENTS, beginning of year                     987,700       465,800        49,500
-----------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, end of year                      $ 13,894,700   $   987,700   $   465,800
=====================================================================================================
</TABLE>

           See accompanying notes to consolidated financial statements.

                                                                               7
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

1.  SUMMARY OF      The Company
    ACCOUNTING
    POLICIES        Nettaxi.com  (formerly Nettaxi, Inc and formerly Swan Valley
                    Snowmobiles,  Inc.),  the  Company, is a Nevada Corporation,
                    which  was  incorporated  on  October  26,  1995.

                    On  September 29, 1998 the Company completed the acquisition
                    of  100%  of  the outstanding common stock of Nettaxi OnLine
                    Communities,  Inc.,  a Delaware corporation, and changed its
                    name  to  Nettaxi,  Inc.  (now  Nettaxi.com). For accounting
                    purposes,  the  acquisition  has  been  treated  as  the
                    acquisition  of  the  Company by Nettaxi OnLine Communities,
                    Inc.  with Nettaxi OnLine Communities, Inc. as the acquiror.
                    All  shares and per share data prior to the acquisition have
                    been  restated  to  reflect  the  stock issuance and related
                    stock  split  (Note  7).

                    As  the  former  shareholders of Nettaxi OnLine Communities,
                    Inc.  received  85% of the shares in the Company immediately
                    after  the acquisition, the financial statements for periods
                    prior  to  the  reorganization  are  those of Nettaxi OnLine
                    Communities,  Inc.

                    Effective  May  7, 1999, the Company completed a merger in a
                    single  transaction  with  Plus  Net,  Inc.  by exchanging 7
                    million  shares  of  its  common stock for all of the common
                    stock of Plus Net, Inc. Each share of Plus Net was exchanged
                    for  1,000  shares  of  Nettaxi  common  stock.

                    The  merger  constituted  a  tax-free reorganization and has
                    been accounted for as a pooling of interest under Accounting
                    Principles  Board  Opinion  No.  16.

                    For  periods  proceeding  the  merger,  there  were  no
                    intercompany  transactions that require elimination from the
                    combined  consolidated  results of operations and there were
                    no adjustments necessary to conform the accounting practices
                    of  the  two  companies.

                    The  merger  with  Plus  Net,  Inc.  allowed  the Company to
                    provide  its customers with a web based e-mail program and a
                    robust  meta  search  engine.  Plus  Net,  Inc.  also had an
                    e-commerce processing engine that enabled the acceptance and
                    processing  of  online  credit  card  transactions.

                                                                               8
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    Plus  Net,  Inc. reported no revenues and a net loss of $200
                    for  the period ended December 31, 1998. For the period from
                    January  1  to  May  7,  1999 Plus Net, Inc. had revenues of
                    approximately  $700,000  and  net  income  of  approximately
                    $413,600.  Subsequent  to  the merger the Company ceased its
                    evaluation and processing of online credit card transactions
                    business.  In  1999,  this  line  of  business accounted for
                    approximately  $1,285,000  of  the  Company's  revenues.

                    Nettaxi  OnLine  Communities,  Inc.,  was  incorporated  on
                    October  23, 1997 to capitalize on a significant opportunity
                    that  exists  today through the convergence of the media and
                    entertainment  industries with the vast communications power
                    of  the  Internet.  The  Company's  Web  site,
                    http://www.nettaxi.com,  is  an online community designed to
                    seamlessly  integrate  content  with e-commerce services for
                    the  Company's  subscribers,  providing  comprehensive
                    information  about  news,  sports,  entertainment,  health,
                    politics,  finances, lifestyle, and areas of interest to the
                    growing  number  of Internet users. The Company's mission is
                    to  establish  nettaxi.com  as an entry point, or portal, to
                    the  Internet  by  continuing  to  develop  premium  online
                    communities,  which are both content-rich to its subscribers
                    and  provide  easy-to-use  e-commerce services to businesses
                    which  reside  in  these  online  communities.

                    The  Company's  principal  executive  offices are located in
                    Campbell,  California.

                    Consolidation

                    The  accompanying  consolidated financial statements include
                    the  accounts  of  Nettaxi.com  (formerly  Nettaxi, Inc. and
                    formerly  Swan Valley Snowmobile, Inc.) and its wholly-owned
                    subsidiary,  Nettaxi  OnLine  Communities,  Inc.  All
                    intercompany  accounts and transactions have been eliminated
                    in  the  consolidated  financial  statements.

                                                                               9
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    Use  of  Estimates

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

                    Cash  and  Cash  Equivalents

                    The  Company  considers all highly liquid investments having
                    original  maturities  of  90  days  or  less  to  be  cash
                    equivalents.

                    Accounts  Receivable  and  Allowances  For Doubtful Accounts

                    The Company grants credit to its customers after undertaking
                    an investigation of credit risk for all significant amounts.
                    An allowance for doubtful accounts is provided for estimated
                    credit  losses  at  a level deemed appropriate to adequately
                    provide  for  known  and  inherent  risks  related  to  such
                    amounts.  The  allowance  is  based  on  reviews  of losses,
                    adjustment  history,  current  economic conditions and other
                    factors  that  deserve  recognition  in estimating potential
                    losses. While management uses the best information available
                    in  making  its  determination,  the  ultimate  recovery  of
                    recorded  accounts  receivable is also dependent upon future
                    economic  and  other  conditions  that  may  be  beyond
                    management's  control.

                    Property  and  Equipment

                    Property  and  equipment are stated at cost. Depreciation is
                    provided  using  the straight-line method over the estimated
                    economic  useful  lives  of  the  assets,  as  follows:

                                                    Estimated useful lives
                     Furniture and fixtures                 5 years
                     Office equipment                       5 years
                     Computers and equipment                3 years
                     ===========================================================

                                                                              10
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    Assets  held  under  capital  leases  are  amortized  on  a
                    straight-line  basis  over  the shorter of the lease term or
                    the  estimated  useful  lives  of  the  related  assets.

                    Purchased  Technology  and  Other  Intangibles

                    The Company amortizes, on a straight-line basis, the cost of
                    purchased  technology and other intangibles over the shorter
                    of  five  (5)  years  or  the  useful  life  of  the related
                    technology  or  underlying  asset.

                    Revenue  Recognition  and  Deferred  Revenue

                    The Company's revenues are derived principally from the sale
                    of  banner  advertisements,  web  hosting  services and from
                    products  from  its  online  malls. Advertising revenues are
                    recognized  in  the  period  in  which  the advertisement is
                    delivered,  provided  that  collection  of  the  resulting
                    receivable  is  probable.  Advertisers  are charged on a per
                    impression or delivery basis up to a maximum as specified in
                    the  contract.  To  date,  the  duration  of  the  Company's
                    advertising  commitments has not exceeded one year. When the
                    Company  guarantees  a  minimum  number  of  impressions  or
                    deliveries,  revenue  is recognized ratably in proportion to
                    the  number  of  impressions  or  deliveries recorded to the
                    minimum number of impressions and deliveries guaranteed. Web
                    hosting  revenues  are recognized in the period in which the
                    services  are  provided.  Product revenue is recognized upon
                    shipment,  provided  no  significant  obligations remain and
                    collectability  is  probable.

                    Advertising  revenue  include barter revenues, which are the
                    exchange  by  Nettaxi.com  of  advertising  space  on
                    Nettaxi.com's  web sites for reciprocal advertising space on
                    other web sites. Revenues from these barter transactions are
                    recorded  as  advertising  revenues  at  the  lower  of  the
                    estimated  fair  value  of  the  advertisements  received or
                    delivered and are recognized when the advertisements are run
                    on  Nettaxi.com's  web  sites.  Barter expenses are recorded
                    when  Nettaxi.com's advertisements are run on the reciprocal
                    web  sites,  which  is  typically in the same period as when
                    advertisements  are  run  on Nettaxi.com's web sites. Barter
                    revenues  and  related expenses for the years ended December
                    31,  2000,  1999,  and  1998  were approximately $2,224,800,
                    $343,400, and $0, respectively, representing 28%, 7%, and 0%
                    of  net  revenues,  respectively.

                                                                              11
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    In  November  1999, the Financial Accounting Standards Board
                    (FASB)  issued Emerging Issues Task Force (EITF) Issue 99-17
                    Accounting  for  Advertising Barter Transactions. Under EITF
                    99-17,  revenues  and  expenses  should  be  recognized from
                    advertising  barter  transactions  at  the fair value of the
                    advertising  surrendered  or  received only when the company
                    has  a  historical  practice of receiving or paying cash for
                    such  transactions.

                    In  December  1999, the staff of the Securities and Exchange
                    Commission  (SEC) issued its Staff Accounting Bulletin (SAB)
                    No.  101,  Revenue Recognition. SAB No. 101 provides the SEC
                    staff's  views  in  applying  generally  accepted accounting
                    principles  to  selected revenue recognition issues. SAB No.
                    101  is  effective  for  the fourth fiscal quarter of fiscal
                    years  beginning  after  December  15,  1999.  The  Company
                    believes  that  its  current  revenue  recognition  policies
                    comply  with  the  provisions  of  SAB  No.  101.

                    Income  Taxes

                    The  Company  accounts  for  income taxes in accordance with
                    Statement  of Financial Accounting Standards (SFAS) No. 109,
                    Accounting  for  Income  Taxes,  which requires an asset and
                    liability approach. This approach results in the recognition
                    of deferred tax assets (future tax benefits) and liabilities
                    for  the  expected  future  tax  consequences  of  temporary
                    differences  between  the  book carrying amounts and the tax
                    basis of assets and liabilities. The deferred tax assets and
                    liabilities  represent the future tax return consequences of
                    those  differences,  which  will  either  be  deductible  or
                    taxable  when  the  assets  and liabilities are recovered or
                    settled.  Future  tax  benefits  are  subject to a valuation
                    allowance  when  management  believes it is more likely than
                    not  that  the  deferred  tax  assets  will not be realized.

                    Advertising  Costs

                    The cost of advertising is expensed as incurred. Advertising
                    costs for the years ended December 31, 2000, 1999, and 1998,
                    were  approximately  $2,365,600,  $2,831,300,  and  $3,100,
                    respectively.

                                                                              12
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    Long-Lived  Assets

                    The  Company  periodically reviews its long-lived assets for
                    impairment. When events or changes in circumstances indicate
                    that the carrying amount of an asset may not be recoverable,
                    the  Company  writes  the  asset  down  to  its  fair value.

                    Fair  Values  of  Financial  Instruments

                    The  following  methods  and  assumptions  were  used by the
                    Company  in  estimating  its  fair  value  disclosures  for
                    financial  instruments:

                    Cash  and  cash  equivalents:

                    The  carrying  amount  reported  in the consolidated balance
                    sheets  for  cash  and  cash  equivalents  approximates fair
                    value.

                    Short-term  debt:

                    The  fair value of short-term debt approximates cost because
                    of  the  short  period  of  time  to  maturity.

                    Long-term  debt:

                    The  fair  value  of  long-term  debt  is estimated based on
                    current  interest  rates  available  to the Company for debt
                    instruments  with  similar  terms  and remaining maturities.

                    Related  party  notes  receivable  and  payable:

                    The  fair value of the notes receivable and notes payable to
                    shareholders  is  based on arms-length transactions and bear
                    interest  at  rates  comparable to similar debt obligations.

                                                                              13
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    At  December  31,  2000  and  1999,  the  fair values of the
                    Company's  debt  instruments  approximate  their  historical
                    carrying  amounts.

                    Stock-Based  Incentive  Program

                    SFAS  No.  123,  Accounting  for  Stock-Based  Compensation,
                    encourages  entities  to  recognize  compensation  costs for
                    stock-based employee compensation plans using the fair value
                    based  method  of  accounting  defined  in SFAS No. 123, but
                    allows  for  the  continued use of the intrinsic value based
                    method  of  accounting  prescribed  by Accounting Principles
                    Board  (APB)  Opinion No. 25, Accounting for Stock Issued to
                    Employees.  The  Company  continues  to  use  the accounting
                    prescribed  by  APB  Opinion  No.  25  for  stock-based
                    compensation  to  its  employees  and as such is required to
                    disclose pro forma net income (loss) and earnings (loss) per
                    share  as  if  the fair value based method of accounting had
                    been  applied (Note 7). The Company accounts for stock-based
                    compensation  to  non-employees  under  SFAS  No.  123.

                    In  March  2000,  the  Financial  Accounting Standards Board
                    issued  Interpretation  (Interpretation)  No. 44, Accounting
                    for  Certain  Transactions  involving Stock Compensation, an
                    Interpretation of ABP Opinion No. 25, which became effective
                    July  1,  2000.  Interpretation  No.  44  clarifies  (a) the
                    definition  of employee for purposes of applying Opinion 25,
                    (b)  the  criteria  for  determining  whether  a  stock
                    compensation  plan  qualifies as a noncompensatory plan, (c)
                    the  accounting consequences of various modifications to the
                    terms  of  a previously fixed stock option or award, and (d)
                    the  accounting for an exchange of stock compensation awards
                    in a business combination. Adoption of the provisions of the
                    Interpretation  had  no  significant impact on the Company's
                    financial  statements.

                                                                              14
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    Basic  and  Diluted  Loss  Per  Common  Share

                    In February 1997, the FASB issued SFAS No. 128, Earnings Per
                    Share,  which was effective December 28, 1997. Conforming to
                    SFAS  No.  128,  the Company changed its method of computing
                    earnings  per  share and restated all prior periods included
                    in  the  consolidated  financial  statements. Basic loss per
                    common  share  is  determined  by dividing loss available to
                    common shareholders by the weighted average number of common
                    shares  outstanding. Diluted per-common-share amounts assume
                    the  issuance  of  common stock for all potentially dilutive
                    equivalent  shares  outstanding. Anti-dilution provisions of
                    SFAS  128  require  consistency  between  diluted
                    per-common-share  amounts and basic per-common-share amounts
                    in  loss  periods.  For  the periods reported, there were no
                    differences  between  basic  and diluted earnings per share.
                    The  number  of  potential  common  shares  not  included in
                    diluted  earnings  per  share,  due  to  their  being
                    anti-dilutive,  are  23,994,732, 3,838,679, and 280,000, for
                    the  years  ended  December  31,  2000,  1999,  and  1998,
                    respectively.  All  share and per share information has been
                    adjusted  for  the  shares exchanged for the common stock of
                    Plus  Net,  Inc.

                    Adoption  of  New  Accounting  Pronouncements

                    In  June  1998, the FASB issued SFAS No. 133, Accounting for
                    Derivative Instruments and Hedging Activities. SFAS No. 133,
                    as  amended by SFAS No. 138, requires companies to recognize
                    all derivatives contracts as either assets or liabilities in
                    the  balance  sheet  and  to  measure them at fair value. If
                    certain conditions are met, a derivative may be specifically
                    designated  as  a  hedge, the objective of which is to match
                    the  timing  of  gain  or  loss  recognition  on the hedging
                    derivative  with  the  recognition of (i) the changes in the
                    fair  value  of  the  hedged  asset  or  liability  that are
                    attributable  to the hedged risk or (ii) the earnings effect
                    of  the  hedged forecasted transaction. For a derivative not
                    designated  as  a  hedging  instrument,  the gain or loss is
                    recognized  in income in the period of change. In June 1999,
                    the  FASB  issued  SFAS  No.  137, Accounting for Derivative
                    Instruments  and  Hedging  Activities  -  Deferral  of  the
                    Effective  Date of FASB Statement No. 133, which amends SFAS
                    No.  133  to  be  effective  for  all fiscal quarters of all
                    fiscal  years  beginning  after June 15, 2000. Historically,
                    the Company has not entered into derivative contracts either
                    to  hedge  existing  risks  or  for  speculative  purposes.
                    Accordingly, the Company does not expect adoption of the new
                    standard  to have a material impact on the Company's results
                    from  operations,  financial  position  or  cash  flows.

                                                                              15
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

2.  PROPERTY AND    Property  and  equipment  consisted  of  the  following:
    EQUIPMENT
                    December 31,                      2000        1999
                    ============================================================
                    Furniture and fixtures         $  203,600  $  196,200
                    Office equipment                   55,100      59,700
                    Computers and equipment         2,721,100   2,134,400
                    ------------------------------------------------------------

                                                    2,979,800   2,390,300
                    Less accumulated depreciation   1,231,500     421,700
                    ------------------------------------------------------------

                                                   $1,748,300  $1,968,600
                    ============================================================

                    Depreciation  expense  amounted  to  $903,400,  $361,800 and
                    $59,800 for the years ended December 31, 200, 1999, and 1998
                    respectively.

3.  PURCHASED       In  November  1997, the Company issued a convertible secured
    TECHNOLOGY      promissory  note  in  the  amount of $1,020,000 (Note 6) and
    AND OTHER       2,475,066  shares  of common stock, valued at $980,000, to a
    INTANGIBLES     related  party  in  exchange  for  certain  fixed  assets,
                    liabilities  and technology. Core to the technology acquired
                    was  a  web  to  database  software  application  and  the
                    underlying  technology  to  the  Company's Internet The City
                    products.  Based  on  the  fair  market  value  of  the
                    consideration  exchanged,  as  determined  by an independent
                    appraisal  service,  the  aggregate  purchase  price  was
                    $2,000,000,  and  was  allocated to the following respective
                    assets  and  liabilities based on their fair market value at
                    the  time  of  the  transaction:

                    ============================================================
                    Purchased technology                    $1,740,000
                    Other intangibles                          150,000
                    Computers and equipment                    100,000
                    Office equipment                            45,000
                    Furniture and fixtures                       5,000
                    Contracts payable and accrued expenses     (40,000)
                    ------------------------------------------------------------

                                                            $2,000,000
                    ============================================================

                                                                              16
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    In 1998, the Company experienced several functional problems
                    with portions of the purchased technology, namely the web to
                    database  software  application,  due  to  those  components
                    incompatibility  with  subsequent  releases  of  upgraded
                    versions of its operating system. Following attempts to make
                    these  components  compatible,  the  Company  decided,  in
                    December  1998,  not  to  spend  additional  monies on these
                    components  but to replace them. As approximately 50% of the
                    components  of  the  acquired  technology  were  no  longer
                    technically  viable  with  the  upgraded  versions  of  the
                    Company's  operating  system  and  provided  no  alternative
                    future use, the Company wrote off the unamortized portion of
                    the impaired technology, resulting in a charge to expense of
                    $667,000.

                    Purchased  technology and other intangibles consisted of the
                    following:

                    December 31,                     2000      1999
                    ============================================================
                    Purchased technology           $870,000  $870,000
                    Less accumulated amortization   551,000   377,000
                    ------------------------------------------------------------

                                                   $319,000  $493,000
                    ============================================================

                    Other intangibles              $150,000  $150,000
                    Less accumulated amortization    95,000    65,000
                    ------------------------------------------------------------

                                                   $ 55,000  $ 85,000
                    ============================================================
4.  ACCRUED
    EXPENSES        Accrued  expenses  consisted  of  the  following:

                    December 31,                       2000      1999
                    ============================================================
                    Payroll and related expenses     $ 97,800  $216,200
                    Professional fees                 157,300   135,000
                    Marketing                          83,800    93,000
                    Accrued interest, related party             125,500
                    Other                              59,000    89,400
                    ------------------------------------------------------------

                                                     $397,900  $659,100
                    ============================================================

                                                                              17
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

5.  LEASE           The  Company  leases  its facility under an operating lease,
    COMMITMENTS     which  expires  on  May 1, 2002. The facility lease requires
                    the  Company  to  pay  certain  maintenance  and  operating
                    expenses,  such  as  taxes,  insurance,  and utilities. Rent
                    expense  for  the  years  ended December 31, 2000, 1999, and
                    1998,  was  $281,600,  $178,000,  and $35,500, respectively.

                    In  1999,  the  Company  entered  into  operating  leases on
                    certain  vehicles. For the years ended December 31, 2000 and
                    1999,  rent expense related to the vehicle leases aggregated
                    $5,300  and  $2,600.

                    A  summary  of  the  future  minimum payments required under
                    noncancelable  operating  leases with terms in excess of one
                    year  follows:

                                               Operating
                    Years Ending December 31,    Leases
                    ============================================================
                    2001                       $  284,400
                    2002                           98,400
                    ------------------------------------------------------------

                                               $  382,800
                    ============================================================

6.  CONVERTIBLE     On  November  1,  1997,  the  Company issued a 10% five-year
    NOTES PAYABLE,  convertible  secured  promissory  note  in  the  amount  of
    RELATED PARTY   $1,020,000.  In  September  1998,  this  note,  with accrued
                    interest  of $85,800, was converted into 2,792,763 shares of
                    common  stock.  Interest  expense  on  the  note  aggregated
                    $68,800  in  1998.

                                                                              18
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    On  March  31,  1999  the  Company entered into a $5,000,000
                    Convertible  Debt  Financing  Agreement (the Agreement) with
                    RGC  International  Investors,  LDC  (RGC).  The convertible
                    debenture  bears  interest  at  5%  and matures on March 31,
                    2004.  The  debentures  are convertible at the option of the
                    holder  into  that number of shares of common stock equal to
                    the  principal  amount  of  the  debentures  to be converted
                    including  all  accrued  interest, divided by the conversion
                    price  specified  in the debentures. The conversion price is
                    the  lesser  of  a  variable  or fixed conversion price. The
                    variable  conversion  price is based on the trading price of
                    the Company's common stock over a fixed period to conversion
                    of the debentures, and the fixed conversion price is $11.88.
                    The fixed conversion price represents 120% of the average of
                    the three lowest trades ten days prior to the effective date
                    of  the  Agreement.

                    In  accordance  with  the  terms  of the debt agreement, RGC
                    converted,  in November and December 1999, $1,800,000 of the
                    debentures,  with  accrued interest of $63,300, into 802,223
                    shares  of  common  stock and, in January and February 2000,
                    $800,000 of the debentures, with accrued interest of $34,900
                    into  632,472  shares  of  common  stock.

                    On  April  28,  2000,  the  Company  reached  a  settlement
                    agreement  with  RGC  for the $2,400,000 remaining principal
                    amount  of the convertible debentures, plus accrued interest
                    thereon of approximately $85,000, whereby the Company agreed
                    to  issue  an  aggregate of 1,750,000 shares of common stock
                    "settlement shares" and warrants to purchase an aggregate of
                    2,200,000  shares of common stock, with an exercise price of
                    $1.50 per share, as discussed further in Note 7. It was also
                    agreed that beginning on the date of the agreement and prior
                    to  the  delivery  of  the settlement shares, the debentures
                    would  be  convertible  at a fixed conversion price of $1.42
                    per  share.  As the fair market value of the Company's stock
                    on April 28, 2000 was $3.00, the Company recognized a deemed
                    noncash  interest  expense  of $2,400,000 resulting from the
                    implied  beneficial  conversion  feature.

7.  SHAREHOLDERS'   In October 1997, the Company offered shares of its preferred
    EQUITY          stock  through  a  private placement offering. This offering
    PREFERRED       established  a  maximum  of  150,000  shares  of  Series  A
    STOCK           preferred  stock  at $0.75 per share, each share convertible
                    into  5.05 shares of the Company's common stock at any time.

                                                                              19
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    During the year ended December 31, 1998 and the period ended
                    December  31,  1997,  the  Company issued 11,400 and 134,000
                    shares  of Series A preferred stock in this offering for net
                    cash proceeds of $8,600 and $100,500, respectively. As these
                    shares  were  issued at a discount from the then fair market
                    value  of  the  stock  the Company recorded deemed preferred
                    stock  dividends  of  $14,300 and $167,500 in the year ended
                    December  31,  1998  and  for  the period ended December 31,
                    1997,  respectively.

                    In  September  1998, all of the shares of Series A preferred
                    stock  were  converted  into 734,438 shares of the Company's
                    common  stock.

                    COMMON  STOCK

                    In  October  1997,  the Company offered shares of its common
                    stock  through  a  private placement offering. This offering
                    established a maximum of 1,262,650 shares of common stock at
                    $0.40  per  share.  During  1998, the Company issued 506,378
                    shares  of common stock in this offering for net proceeds of
                    $200,500.

                    During  the year ended December 31, 1998, the Company issued
                    252,045  shares  of  common  stock with an ascribed value of
                    $120,000  as  payment  for  services.  The shares issued for
                    services performed were valued at the then fair market value
                    of  the  share  issued in the October 1997 private placement
                    offering.

                    During  the year ended December 31, 1998, the Company issued
                    76,087  shares  of  common  stock  with an ascribed value of
                    $22,800  to officers and employees of the Company in lieu of
                    salaries.

                    In September 1998, the Company's Board of Directors declared
                    a  2.53 to 1 stock split, in connection with the Acquisition
                    as  discussed  in Note 1. All references to number of shares
                    of  common  stock  and  per  share  data in the consolidated
                    financial statements have been adjusted to reflect the stock
                    split  on  a  retroactive  basis.

                                                                              20
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    In  September  1998, in connection with the Acquisition, the
                    Company offered shares of its common stock through a private
                    placement  offering (the Offering). The Offering established
                    a  maximum  of 1,250,000 shares of common stock at $0.80 per
                    share. The Placement Agent received 200,000 shares of common
                    stock  with  a  fair  market  value of $160,000. The Company
                    issued  1,250,000 shares of common stock in the Offering for
                    net  proceeds  of  $999,600.

                    In  May  1999,  the  Company  completed a merger in a single
                    transaction  with Plus Net, Inc. (as discussed in Note 1) by
                    exchanging  7,000,000  shares of its common stock for all of
                    the  common  stock  of Plus Net, Inc. Each share of Plus Net
                    was  exchanged  for  1,000  shares  of Nettaxi common stock.

                    In accordance with the Convertible Debt Financing Agreement,
                    entered  into  between  the  Company  and  RGC International
                    Investors,  LDC  on  March  31,  1999, RGC had the option to
                    purchase  one  additional  share  of  common stock for every
                    share  of  common stock issuable as a result of a conversion
                    of  the  debenture,  at  a  price  equal  to  the applicable
                    conversion  price.

                    In November and December 1999, RGC exercised this investment
                    option  right  and purchased 802,223 shares of the Company's
                    common  stock for proceeds of $1,863,300 and, in January and
                    February  2000, an additional 632,472 shares of common stock
                    for  proceeds  of  $834,900.

                    In  December  1999,  the  Company  issued  350,000 shares of
                    common  stock  to  a  consulting  group  in  exchange  for a
                    two-year  agreement  to  provide the Company with consulting
                    services.  Based on the then fair market value of the shares
                    issued  the  price  of  these  services was determined to be
                    $1,060,800.  In  February  2000,  the  Company  issued  an
                    additional  175,000  shares  of  common  stock,  with a fair
                    market value of $574,200, in consideration for extending the
                    agreement  for  an  additional  six  months.

                    The Company amortizes the aggregate consideration given over
                    the  30  months  term  of the agreement. Included in prepaid
                    expenses  and deferred expenses are, as of December 31, 2000
                    and  1999,  $926,500  and  $1,026,600,  respectively,
                    representing  the  unamortized  portion of the consideration
                    given  for  these  consulting  services.

                                                                              21
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    In  September  2000,  the  Company  issued 75,000 additional
                    shares  of  common  stock  to  the  consulting  group  in
                    consideration  of failure to execute the demand registration
                    rights  in a timely manner pursuant to the agreements. Based
                    on  the  fair market value of the shares issued, the Company
                    recognized  $37,500  in  consulting  expense  for  this
                    transaction.

                    In  February  2000, the Company offered shares of its common
                    stock,  valued  at  $1.50  per  share,  and  warrants,  each
                    expiring  on  January  31, 2003 and entitling the holder the
                    right  to  purchase one share of common stock at an exercise
                    price  of  $4.00  per  share,  through  a  private placement
                    offering.  The  Company  issued  15,416,633 shares of common
                    stock  and  warrants to purchase 15,416,633 shares of common
                    stock  in  the  offering  for  net  proceeds of $21,142,600.

                    In  February 2000, the Company issued 6,250 shares of common
                    stock, with a fair market value of $9,700, in settlement for
                    the  cancellation  of  a  letter  of  intent  to  provide
                    sponsorship.

                    In  March  and April 2000, the Company issued 778,982 shares
                    of  common  stock and warrants to purchase 389,491 shares of
                    common  stock  at  an  exercise price of $2.76 per share, as
                    discussed  further  below, in exchange for the conversion of
                    $1,558,000  in  trade  payables.

                    In  July and August 2000, the Company issued an aggregate of
                    430,000  shares of common stock, with a fair market value of
                    $327,100,  in  consideration  for  consulting  services. The
                    Company amortizes the aggregate consideration given over the
                    term  of  the  underlying  agreements.  Included  in prepaid
                    expenses  is,  as of December 31, 2000, $29,200 representing
                    the unamortized portion of the consideration given for these
                    consulting  services.

                    In  May 2000, the Company's Certificate of Incorporation was
                    amended  to  increase  the  number  of  shares of authorized
                    common  stock  to  200,000,000.

                                                                              22
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    WARRANTS

                    In  1998,  prior to the adoption of the Stock Option Plan as
                    discussed  below,  the Company granted warrants to directors
                    and  employees  of the Company, to purchase 2,399,298 shares
                    of  common  stock  at $0.04. As the exercise price for those
                    warrants  was less than the market price of the common stock
                    on  the  grant date, the Company recorded in accordance with
                    APB  Opinion  No.  25,  Accounting  for  Stock  Issued  to
                    Employees,  $855,000  of  compensation costs associated with
                    these  warrants.

                    In  September  1998,  these  warrants  were  exchanged  for
                    2,399,298  shares  of  common  stock  via  the  issuance  of
                    promissory  notes  for  $95,000,  concurrent  with  the
                    reorganization  of  the  Company.  The promissory notes have
                    been  accounted  for  as  common stock subscribed and are an
                    offset  to  shareholders'  equity  until  such  notes  are
                    collected.

                    During  the  years  ended  December  31,  2000 and 1999, the
                    Company  issued  warrants  in  connection  with  financing,
                    consulting  services,  and  conversion  of trade payables to
                    purchase  3,139,491  and  475,000  shares  of  common stock,
                    respectively.

                    The  Company  estimates  the  fair  value of warrants at the
                    grant  date  by using the Black-Scholes valuation model with
                    the  following  weighted-average assumptions used for grants
                    in  2000 and 1999: dividend yield of 0%; expected volatility
                    of  138%  and 69%; risk-free interest rate of 6.2% and 6.2%;
                    and  the  expected  contractual  lives  of  the warrant. The
                    computed value is charged to operations or interest over the
                    term  of  the  related  agreements.

                    In  March  1999,  the  Company issued warrants, which vested
                    immediately  to  purchase  125,000 shares of common stock at
                    $8.00  per  share.  These warrants were Issued in connection
                    with  a  dispute  settlement  and  expire  in  March  2001.

                    In  conjunction with the Agreement, entered into between the
                    Company  and  RGC  on  March  31,  1999,  the Company issued
                    warrants,  which  vested  immediately,  to  purchase 150,000
                    shares of common stock at $12.375. The Company recognized an
                    additional  $115,500  of  interest  expense  associated with
                    these  warrants. In August 1999, the Company entered into an
                    agreement  with  RGC  pursuant  to  which it exercised these
                    warrants.

                                                                              23
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    In consideration for the early exercise of the warrants, the
                    exercise  price  for the warrants was decreased from $12.375
                    to $7.875 and the Company issued RGC warrants to purchase an
                    additional  150,000  shares of common stock at $7.875. These
                    warrants were subsequently, due to anti-dilution provisions,
                    issued  at an execise price of $4.38 per share, resulting in
                    an  increase  in the number of shares issuable upon exercise
                    of  the  warrants  to  269,692.  The  Company  recognized an
                    additional  $245,700  of  interest  expense  associated with
                    these  warrants.  In  2000  and 1999, the Company recognized
                    $159,000  and  $86,700  of  this  amount as interest expense
                    respectively.

                    In  June  2000,  the  Company  issued warrants, which vested
                    immediately, to purchase 2,200,000 shares of common stock at
                    $1.50  per share, exercisable over five years, in accordance
                    with  the  settlement  agreement  entered  into  between the
                    Company and RGC or April 28, 2000. The Company recognized an
                    additional  $1,496,000 of deemed interest expense associated
                    with  these  warrants.

                    In  February 2000, the Company issued warrants, which vested
                    immediately,  to  purchase 200,000 shares of common stock at
                    an exercise price of $4.00, in addition to previously issued
                    warrants  to  purchase  50,000  shares of common stock at an
                    exercise price of $12.375 for finders fee in connection with
                    the  private  placement.

                    In  March  and  April  2000,  the Company issued warrants to
                    purchase 389,491 shares of common stock at an exercise price
                    of  $2.76  in  conjunction  with  the  conversion  of  trade
                    payables.  The  Company  recognized  $541,400  in  interest
                    expense  associated  with  these  warrants.

                    In  October 2000, the Company issued warrants for consulting
                    services,  which  vested  immediately  to  purchase  350,000
                    shares  of  common  stock  at an exercise price of $0.35 per
                    share.  The  aggregate  value of these warrants, $84,000, is
                    amortized  over  a  four  months period. Included in prepaid
                    expenses  is,  as of December 31, 2000, $42,000 representing
                    the unamortized portion of the consideration given for these
                    consulting  services.

                                                                              24
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    STOCK  OPTION  PROGRAM

                    In September 1998, the Company adopted the 1998 Stock Option
                    Plan  and,  in  January 2000, the Board of Directors adopted
                    the 1999 Stock Option Plan (collectively "the Plans"), which
                    is  subject  to  its  ratification  by  the  stockholders.

                    The Plans authorizes the grant of options to purchase shares
                    of  common stock to employees, directors, and consultants of
                    the  Company  and  its  affiliates.  The  options  are  a
                    combination  of  both  incentive  and  nonstatutory options.

                    Incentive  options  may  be granted at not less than 100% of
                    the  fair  market  value per share, and nonstatutory options
                    may be granted at not less than 85% of the fair market value
                    per share at the date of grant as determined by the Board of
                    Directors  or  committee thereof, except for options granted
                    to  a  person  owning  greater  than  10% of the outstanding
                    stock,  for  which  the exercise price must not be less than
                    110%  of  the  fair  market value. Options granted under the
                    Plans  generally  vest  over three years and are exercisable
                    over  ten  years.

                    The  Company  has  reserved 3,000,000 shares of common stock
                    for  issuance under the 1998 Stock Option Plan and 8,900,000
                    shares  of  common  stock  for issuance under the 1999 Stock
                    Option  Plan.

                                                                              25
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    A  summary  of the status of the Company's stock option plan
                    as  of December 31, 2000, 1999, and 1998, and changes during
                    the  years  then  ended is presented in the following table:
<TABLE>
<CAPTION>
                                                     Options Outstanding
                               -----------------------------------------------------------
                                December 31, 2000    December 31, 1999   December 31, 1998
                               -------------------  -------------------- ----------------
                                          Weighted-            Weighted-         Weighted-
                                           Average              Average           Average
                                           Exercise             Exercise          Exercise
                                 Shares     Price     Shares     Price    Shares   Price
                    ----------------------------------------------------------------------
<S>                            <C>          <C>     <C>         <C>       <C>      <C>
                    Beginning   2,580,166   $ 9.47    280,000   $   0.80        -  $     -
                    Granted     3,931,600   $ 1.88  2,614,000   $  10.40  280,000  $  0.80
                    Exercised     (13,331)  $ 1.20          -   $      -        -  $     -
                    Forfeited  (1,504,519)  $ 4.64   (313,834)  $   9.45        -  $     -
                               -----------          ----------            -------

                    Ending      4,993,916   $ 4.97  2,580,166   $   9.47  280,000  $  0.80
                    ======================================================================

                    Exercisable at
                     year-end   2,068,750             640,499              23,333
                               ===========          ==========            =======

                    Weighted-average fair value of options granted during the period:
                                            $ 1.34              $   5.71           $  0.71
                                            ======              ========           =======
</TABLE>

                                                                              26
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

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

<TABLE>
<CAPTION>
                                                 Options Outstanding
                                               ----------------------    Options Exercisable
                                                Weighted               ----------------------
                                                 Average    Weighted-              Weighted-
                     Range of                   Remaining   Average                 Average
                     Exercise       Number     Contractual  Exercise     Number     Exercise
                      Prices      Outstanding     Life       Prices    Exercisable   Prices
                    =========================================================================
<S>                               <C>          <C>          <C>        <C>          <C>
                      0.01-0.75       154,250         9.67  $    0.47       14,250  $    0.49
                      0.76-1.00       265,000         7.76  $    0.80      202,500  $    0.80
                      1.01-2.00     1,530,533         8.44  $    1.48      539,900  $    1.47
                      2.01-5.00     1,240,133         8.07  $    2.44      690,266  $    2.44
                     5.01-10.00     1,464,000         8.63  $    8.74      309,334  $    8.42
                    10.01-15.00       250,000         5.67  $   13.96      222,500  $   14.27
                    15.01-30.00        45,000         0.50  $   25.60       45,000  $   25.60
                    30.01-45.00        45,000         0.50  $   40.22       45,000  $   40.22
                    --------------------------------------             -----------

                                    4,993,916               $    4.97    2,068,750  $    5.51
                                  ===========               =========  ===========  =========
</TABLE>

                    During  the  years  ended  December  31,  2000 and 1999, the
                    Company  recorded  deferred  compensation  of  approximately
                    $512,200  and  $702,700,  respectively,  relating  to  the
                    issuance  of  380,000  and  285,000  consultant  options,
                    respectively,  for  administrative  and  sales and marketing
                    services.  These  amounts  were  computed  using  the
                    Black-Scholes  option  valuation  model.  The  related
                    amortization  will be charged to operations over the term of
                    the  related  consulting  agreements. In 2000 and 1999, such
                    amortization  amounted  to  approximately  $573,700  and
                    $211,300,  respectively.  The  weighted-average  assumptions
                    used to compute the value of the options granted in 2000 and
                    1999  were  as  follows:  dividend  yield  of  0%;  expected
                    volatility  of 110% and 82%; risk-free interest rate of 6.2%
                    and  6.2%;  and  expected  lives  of  two  years.

                                                                              27
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    SFAS  No.  123,  Accounting  for  Stock-Based  Compensation,
                    requires  the  Company  to  provide  pro  forma  information
                    regarding net (loss) income and (loss) earnings per share as
                    if compensation cost for the Company's stock option plan had
                    been  determined  in  accordance  with  the fair value based
                    method  prescribed in SFAS No.123. The Company estimates the
                    fair  value  of stock options at the grant date by using the
                    Black-Scholes  option  valuation  model  with  the following
                    weighted  average assumptions used for grants in 2000, 1999,
                    and 1998: dividend yield of 0%; expected volatility of 124%,
                    112%,  and  180%; risk-free interest rate of 6.2%, 6.2%, and
                    5.7%;  and  expected  lives  of  three  years  for  all plan
                    options.

                    Under  the  accounting  provisions  of  SFAS  No.  123,  the
                    Company's  net  loss  and the basic and diluted net loss per
                    common  share  would  have  been  adjusted  to the pro forma
                    amounts  below:

<TABLE>
<CAPTION>
                                             2000           1999           1998
                    ==============================================================
<S>                                     <C>            <C>            <C>
                    Net income (loss):
                      As reported       $(14,351,400)  $ (9,880,400)  $(3,127,900)
                      Pro forma         $(19,426,800)  $(11,516,600)  $(3,144,500)

                    Basic and diluted earnings (loss) per share:
                      As reported       $      (0.36)  $      (0.46)  $     (0.32)
                      Pro forma         $      (0.49)  $      (0.54)  $     (0.32)
</TABLE>

8.  INCOME          The  provision  for income taxes for the year ended December
    TAXES           31,  1999 relates to the earnings of Plus Net, Inc. prior to
                    the  merger.  The  provision  for income taxes for the years
                    ended December 31, 2000, and 1998 consisted of minimum state
                    taxes.
                                                                              28
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    The  following summarizes the differences between income tax
                    expense  and the amount computed applying the Federal income
                    tax rate of 34% for the years ended December 31, 2000, 1999,
                    and  1998:

<TABLE>
<CAPTION>
                                                     2000          1999          1998
                    =====================================================================
<S>                                              <C>           <C>           <C>
                    Federal income tax
                      benefit at statutory rate  $(4,675,000)  $(3,316,200)  $(1,058,400)
                    State income taxes, net
                      of federal benefit            (799,000)     (566,500)     (180,800)
                    Tax benefit not currently
                      recognizable                 4,985,900     3,884,100       835,400
                    Other                            489,700       125,400       404,600
                    ---------------------------------------------------------------------

                    Provision for income taxes   $     1,600   $   126,800   $       800
                    =====================================================================
</TABLE>

                    The  Company's effective tax rate differs from the statutory
                    federal  income  tax  principally as a result of federal and
                    state  net operating losses for which no deferred benefit is
                    recognized due to a full valuation allowance provided on the
                    resulting  deferred  tax  asset.

                    Temporary  differences  and carryforwards which gave rise to
                    significant  portions of deferred tax assets and liabilities
                    as  of  December  31,  2000,  1999, and 1998 are as follows:

<TABLE>
<CAPTION>
                    December 31,                     2000          1999         1998
                    ===================================================================
<S>                                              <C>           <C>           <C>
                    Net operating loss
                      carryforward               $ 9,368,000   $ 4,558,900   $ 473,900
                    Depreciation and
                      amortization                   (36,000)     (216,800)    (90,300)
                    Accrued compensation
                      and benefits                    37,000       562,700       4,000
                    Reserves not currently
                      deductible                     555,000        33,300     316,200
                    -------------------------------------------------------------------

                    Net deferred tax asset         9,924,000     4,938,100     703,800
                    Valuation allowance           (9,924,000)   (4,938,100)   (703,800)
                    -------------------------------------------------------------------

                    Reported deferred tax asset  $         -   $         -   $       -
                    ===================================================================
</TABLE>

                                                                              29
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    As  of  December  31,  2000,  the  Company had a federal net
                    operating  loss  (NOL)  carryforward  in  the  amount  of
                    $25,143,000  which  may  be applied to future taxable income
                    until  these  benefits  begin to expire in 2017. The Company
                    also  had  a  California  NOL  carryforward in the amount of
                    $13,395,000  which  may  be applied to future taxable income
                    until  these  benefits  begin  to  expire  in  2002.

                    The  Company's  ability to utilize the NOL carryforwards are
                    dependent  upon  the  Company's  ability to generate taxable
                    income  in  future  periods  and  may  be  limited  due  to
                    restrictions  imposed  under  Federal  and state laws upon a
                    change  in  ownership.

9.  CONCENTRATION   Financial instruments, which potentially subject the Company
    OF CREDIT RISK  to concentration of credit risk, consist principally of cash
                    and  cash  equivalents  and  trade  receivables. The Company
                    places  its  cash  and  cash  equivalents  with high quality
                    financial institutions and, by policy, limits the amounts of
                    credit  exposure  to  any  one  financial  institution.

                    The  Company's  accounts  receivable  are  derived from many
                    customers  in  various  industries. The Company believes any
                    risk  of accounting loss is significantly reduced due to the
                    diversity  of  its end-customers and geographic sales areas.
                    The  Company  performs  credit  evaluation of its customers'
                    financial  condition  whenever necessary, and generally does
                    not  require  cash  collateral  or other security to support
                    customer  receivables.

10.  MAJOR          In  2000,  four  customers  accounted for approximately 20%,
     CUSTOMERS      13%,  11%,  and  10% of revenues, respectively, with related
                    account  receivable as of December 31, 2000 of $294,000, $0,
                    $95,200,  and  $0,  respectively.

                    In  1999,  one  customer  accounted for approximately 17% of
                    revenues, with related account receivable as of December 31,
                    1999  of  $250,000.

                    In  1998,  four  customers  accounted for approximately 28%,
                    21%,  13%  and  12%  of revenues, respectively, with related
                    accounts  receivable  as  of  December  31, 1998 of $52,100,
                    $38,100,  $0  and  $23,800,  respectively.

                                                                              30
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

11.  SUPPLEMENTAL   The  following is supplemental disclosure for the statements
     DISCLOSURE     of  cash  flows.
     OF CASH
     FLOW
     INFORMATION

<TABLE>
<CAPTION>
                    Years Ended December 31,                 2000        1999        1998
                    ========================================================================
<S>                                                       <C>         <C>         <C>
                    CASH PAID:
                      Income taxes                        $  127,200  $    1,600  $    1,400
                      Interest                            $           $    3,000  $      100

                    NONCASH INVESTING AND
                      FINANCING ACTIVITIES:
                        Purchase of equipment under
                          capital lease                   $           $           $   14,700
                        Issuance of common stock for
                          convertible notes payable plus
                          accrued interest                $3,319,900  $1,863,300  $1,020,000
                        Issuance of common stock
                          for consulting services         $  948,500  $1,060,800  $
                        Issuance of common stock
                          for trade payables              $1,558,000  $           $
                        Warrants issued in conjunction
                          with debt financing             $           $  361,200  $
                        Conversion of preferred stock
                          to common stock                 $           $           $  109,100
                        Promissory notes received for
                          common stock subscribed         $           $           $   95,000
                    ========================================================================
</TABLE>

12.  CONTINGENCIES  Nettaxi.com  acquired  certain  technology  from  SSN
                    Properties, which in turn, acquired these assets through the
                    foreclosure  of  convertible  notes  issued  by  Simply
                    Interactive,  Inc.  Certain minority  shareholders of Simply
                    Interactive, Inc. are disputing the transfer of these assets
                    to,  ultimately,  Nettaxi.com.  Management believes that the
                    group's  claims  are  without  merit  and therefore that any
                    settlement relating to these claims will not have a material
                    adverse  effect  on  the  financial position of the Company.

                                                                              31
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

                    From time to time, in the normal course of business, various
                    claims  are  made  against the Company. At this time, in the
                    opinion  of  management,  there  are  no pending claims, the
                    outcome of which is expected to result in a material adverse
                    effect  on  the  financial  position  of  the  Company.

13.  SUBSEQUENT     On  March  1,  2001,  the  Company  signed an Asset Purchase
     EVENTS         Agreement  under  which it via its newly formed wholly owned
                    subsidiary,  Lookup  Guide  Acquisition  Corporation,  a
                    California  corporation,  will  issue  2,200,000  shares  of
                    common  stock  in  exchange  for substantially all assets of
                    LookupGuide.com,  a  California  corporation.

14.  VALUATION
     AND
     QUALIFYING
     ACCOUNTS

<TABLE>
<CAPTION>
                                              Balance    Additions
                                               as of     Charged to                Balance
                                             Beginning    Costs and               as of End
                      Description            of Period    Expenses   Deductions   of Period
                    =======================================================================
<S>                                        <C>           <C>         <C>         <C>
                    2000:
                      Allowance for
                        doubtful accounts  $     83,600  $  504,900  $(155,500)  $  433,000

                    1999:
                      Allowance for
                        doubtful accounts  $     31,200  $   52,400  $           $   83,600
                    1998:
                      Allowance for
                        doubtful accounts  $             $   31,200  $           $   31,200
                    =======================================================================
</TABLE>

                                                                              32
<PAGE>
                                                                     NETTAXI.COM



                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

15.  QUARTERLY      The  summarized  quarterly  financial  data  presented below
     INFORMATION    reflect  all  adjustments,  which,  in  the  opinion  of
     (UNAUDITED)    management,  are  of a normal and recurring nature necessary
                    to  present fairly the results of operations for the periods
                    presented.

<TABLE>
<CAPTION>
Year Ended             First        Second        Third         Fourth
  December 31,        Quarter      Quarter       Quarter       Quarter         2000
----------------------------------------------------------------------------------------
<S>                 <C>          <C>           <C>           <C>           <C>
Net revenues        $ 2,764,900  $ 2,984,900   $ 2,254,000   $ 1,414,600   $  9,418,400
Gross profit            991,400    1,063,100       600,600      (544,400)     2,110,700
  (loss)
Operating (loss)     (2,696,500)  (2,605,400)   (2,360,500)   (2,705,500)   (10,367,900)
Net (loss)           (2,769,000)  (6,461,600)   (2,132,200)   (2,988,600)   (14,351,400)
Basic and diluted
  (loss) per
  common share            (0.09)       (0.15)        (0.05)        (0.07)         (0.36)
========================================================================================
</TABLE>

<TABLE>
<CAPTION>
Year Ended             First       Second         Third        Fourth
  December 31,        Quarter      Quarter       Quarter       Quarter        1999
--------------------------------------------------------------------------------------
<S>                 <C>         <C>           <C>           <C>           <C>
Net revenues        $ 689,300   $ 1,189,100   $ 1,102,500   $ 2,051,900   $ 5,032,800
Gross profit          365,900       780,300       (79,900)      (37,300)    1,029,000
  (loss)
Operating (loss)     (410,400)   (2,022,700)   (3,975,200)   (2,994,200)   (9,402,500)
Net (loss)           (509,100)   (2,137,900)   (4,089,100)   (3,144,300)   (9,880,400)
Basic and diluted
  (loss) per
  common share          (0.02)        (0.10)        (0.19)        (0.14)        (0.46)
======================================================================================
</TABLE>

                                                                              33
<PAGE>