<PAGE>

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

 |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: 000-28063

                                DELTATHREE, INC.
               (Exact name of registrant as specified in charter)

            DELAWARE                                          13-4006766
            --------                                          ----------
   (State or other jurisdiction of                         (I.R.S. employer
   incorporation of organization)                          identification no.)

     75 BROAD STREET, 31ST FLOOR                               10004
       NEW YORK, NEW YORK 10004                              (Zip code)
       ------------------------
(Address of principal executive offices)

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

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 500-4850

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

         None.

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

<TABLE>
<S>                                                         <C>
                                                             NAME OF EACH EXCHANGE ON WHICH THE
          TITLE OF EACH CLASS                                    SECURITIES ARE REGISTERED
          -------------------                                    -------------------------
Class A Common Stock, par value $0.001 per share                 Nasdaq National Market
</TABLE>

      Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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. Yes |X| No |_|

      The aggregate market value of the Registrant's Class A common stock held
by non-affiliates of the Registrant on March 22, 2001 was approximately
$11,863,299. On such date, the last sale price of the Registrant's Class A
common stock was $1.25 per share. Solely for purposes of this calculation,
shares beneficially owned by directors and officers of the Registrant and
persons owning 5% or more of the Registrant's Class A common stock have been
excluded, in that such persons may be deemed to be affiliates of the Registrant.
Such exclusion should not be deemed a determination or admission by the
Registrant that such individuals or entities are, in fact, affiliates of the
Registrant.

      The number of shares outstanding of the Registrant's capital stock as of
March 22, 2001 is as follows:

                                              NUMBER OF SHARES OUTSTANDING
        TITLE OF EACH CLASS                         AT MARCH 22, 2001
        -------------------                         -----------------
Class A Common Stock, $0.001 par value                  9,490,639
Class B Common Stock, $0.001 par value                 19,569,459

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

<PAGE>

                                EXPLANATORY NOTE

      deltathree, Inc. (the "Company") hereby amends the following items of its
Annual Report on Form 10-K for the year ended December 31, 2000 (the "Original
Filing") filed with the Securities and Exchange Commission on March 30, 2001.
Each of the below referenced Items in Part III and Part IV are hereby amended by
deleting the Items in their entirety and replacing them with the Items set forth
herein. Any Item in the Original Filing not expressly changed hereby shall be as
set forth in the Original Filing.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      On April 26, 2001, RSL Communications, Ltd. ("RSL COM"), the Company's
controlling stockholder and sole owner of the Company's Class B Common Stock,
took action by written consent in lieu of an annual meeting to remove the
Company's existing directors without cause. RSL COM also acted to amend the
Company's By-laws to fix the number of directors on the Board of Directors to
consist of five. The Company's existing directors were replaced with the
following individuals:

DIRECTORS

      NOAM BARDIN, 29 - Chief Executive Officer and President. A co-founder of
deltathree, Mr. Bardin is the visionary behind the Company and chief architect
of its global strategy. Mr. Bardin discovered Internet telephony while working
in the smartcard industry in Israel, communicating with his colleagues overseas
via PC-to-PC calling technology. He founded deltathree as a reaction to the poor
call quality available at the time and in response to the reality that
telephones are more universally accessible than PCs. Mr. Bardin served as Vice
President of Technology and Chief Technology Officer of deltathree since June
1997 before being named President and Chief Executive Officer in April 2000. He
served as Global Network Director from November 1996 to May 1997. Prior to
founding deltathree, he worked with Ambient Corporation and served as an officer
in the Israeli Special Forces. Mr. Bardin graduated from Hebrew University with
a degree in Economics.

      HILARY KRAMER, 36 - Director. Ms. Kramer became a director of deltathree
in April 2001. Ms. Kramer is Senior Managing Director and Chief Investment
Strategist for the Cisneros Group of Companies, a privately-owned global
broadcast, media and telecommunications company. Ms. Kramer was a founder of the
America Online joint venture, AOL Latin America, to bring Internet services into
Latin America. Ms. Kramer leads AOL Latin America's management's business
development and planning process. Ms. Kramer was also a founder of DIRECTV Latin
America, a partnership with Hughes Electronics, and assists in managing the
DIRECTV partnership. Ms. Kramer has worked in Lehman Brothers Inc.'s Investment
Banking Division, as well as Morgan Stanley's Corporate Finance and Treasury
Departments. Ms. Kramer graduated magna cum laude in 1986 from Wellesley College
and holds an MBA from the Wharton School at the University of Pennsylvania.

      KEITH MAIB, 42 - Director. Mr. Maib became a director of deltathree in
April 2001. Mr. Maib is a nationally recognized crisis and turnaround manager
and the founder and managing partner of Canterbury Court Associates, LLC a
crisis and turnaround management firm. He is currently serving as the Chief
Restructuring Officer of RSL Communications Ltd. Previously, Mr. Maib was the
President, Chief Executive Officer and a Director of PennCorp Financial Group, a
life insurance holding company and the parent company of Southwestern Life
Insurance Company and Security Life and Trust Insurance Company, Chief Financial
Officer of Acordia, Inc., a property and casualty insurance broker, a partner at
Coopers & Lybrand, the Chief Operating Officer of Borland, Inc., a software
manufacturer and a partner at Price Waterhouse. Mr. Maib graduated in 1981 from
the University of Kansas with a B.S. in Accounting. He is also a director of
Sagent Technology, Inc., a software manufacturer and a number of privately held
companies affiliated with RSL COM.



                                       2
<PAGE>

      JAMES MCDERMOTT, 39 - Director. Mr. McDermott became a director of
deltathree in April 2001. Mr. McDermott is currently a Principal of Eagle Rock
Group. From June 1998 to June 2000, Mr. McDermott was the Executive Vice
President and Chief Financial Officer of PennCorp Financial Group, Inc. and
affiliates, and held other positions with PennCorp from November 1992 through
June 1998, including serving as Principal of Knightsbridge Capital Fund I, L.P.,
an investment fund specializing in leveraged-equity acquisitions of insurance
and insurance-related businesses, from December 1994 through June 1998, Senior
Vice President from May 1995 through June 1998, Chairman of the Board of
Kivex.com, an Internet service provider, from December 1994 through July 1999,
and Vice President and Controller--Insurance Operations from November 1992
through December 1994. Mr. McDermott graduated with a Bachelor of Business
Administration from the University of Wisconsin--Madison in 1984.

      SHIMMY ZIMELS, 35 - Chief Operating Officer. Mr. Zimels joined deltathree
in July 1997. Mr. Zimels is responsible for overseeing all operations, including
network operations and customer accounts. Prior to joining deltathree, Mr.
Zimels was the Controller and Vice President of Finance at Net Media Ltd., a
leading Israel-based Internet Service Provider, from June 1995 to June 1997.
From April 1991 to May 1995, Mr. Zimels was a senior tax auditor for the Income
Tax Bureau of the State of Israel. Mr. Zimels graduated with distinction from
Hebrew University with a degree in Economics and Accounting and holds a Masters
in Economics from Hebrew University.

OTHER EXECUTIVE OFFICERS AND KEY EMPLOYEES

      Set forth below is a brief description of the present and past business
experience of each of the persons who serve as executive officers or key
employees of the Company who are not also serving as directors.

      ANDREW A. FINK -General Counsel. Mr. Fink joined the Company in September
2000. Mr. Fink is responsible for overseeing the Company's strategic partnering
and mergers and acquisitions activity as well as the Company's legal policy and
public reporting obligations. Prior to joining the deltathree, Mr. Fink was an
associate with the law firm of Paul, Weiss, Rifkind, Wharton & Garrison in New
York, New York where he worked in mergers and acquisitions, securities and
general corporate counseling. Mr. Fink graduated from Columbia College, where he
was elected to Phi Beta Kappa with an A.B. in European History and holds a J.D.
from Columbia Law School.

      MARK GAZIT - Executive Vice President, Technology. Mr. Gazit joined the
Company in May 2000. Mr. Gazit is responsible for overseeing, maintaining, and
improving all technological aspects of the Company's operations and for
spearheading the Company's research and development activities. Prior to joining
the Company Mr. Gazit was Vice President, Technology and Infrastructure at
NetVision Ltd. in Israel, where he was responsible for all aspects of the
company's communications systems including design, deployment, and management of
communications solutions via international fiber and satellite transmission.
Before joining NetVision, Mr. Gazit co-founded NetMedia Ltd., where he served as
Vice President, Technology and Research & Development from 1995 to 1997. From
1993 to 1995, Mr. Gazit served as Senior Systems Analyst and a computer engineer
for WideCom Ltd., where he provided communications consulting services to
companies such as Intel, Microsoft, National Bank of Israel and the Israeli
Electricity Company. Mr. Gazit began his career in high-tech and communications
in the Israeli Air Force, where he was a Senior Project Manager in an
engineering unit, responsible for developing software and hardware solutions as
well as managing the entire project cycle.

      LISA J. INDOVINO - Executive Vice President, Sales & Marketing. Ms.
Indovino joined the Company in September 2000. Ms. Indovino is responsible for
overseeing all sales, marketing, communications and business development
activities within the Company and implementing the Company's strategy in those
departments. Before joining the Company, Ms. Indovino worked for Lucent
Technologies, where she was Director of Business Development. Ms. Indovino
brings a wealth of experience in marketing, sales, strategy and business
development, as well as a strong knowledge of business models within the
telecommunications field. While at Lucent, Ms. Indovino led the effort to invest
in pre-IPO technology companies for the Access Networks business unit and also
led the ASP and ISV partner program. Prior to Lucent, Ms. Indovino was Executive
Vice President at Customer



                                       3
<PAGE>

Information, Inc., a high technology research and consulting start-up where she
was a founding partner. Ms. Indovino has also held senior-level positions in
sales and business development with Mercedes-Benz of North America and Northern
Business Information, Inc. Ms. Indovino graduated from Smith College with an
A.B. in Economics.

      JOSE RUIZ-MARTINEZ - Managing Director of Europe. Mr. Ruiz-Martinez joined
the Company in October 1999. Mr. Ruiz-Martinez is responsible for the Company's
European operations, with a specific emphasis on European sales & marketing.
Prior to joining the Company, Mr. Ruiz-Martinez worked for Ericsson A.B. in
Spain (with management positions in the areas of operations, technical training
and service sales), Sweden (as Senior Business Development Director for new
markets and business segments) and the United States (as Global Accounts
Director for global telecom operators). Mr. Ruiz-Martinez graduated from the
Polytechnic University, Madrid (Spain) with a degree in Telecommunications
Engineering and holds a Masters in Business Administration from the University
of Economics of Stockholm (Sweden).

      PAUL C. WHITE -Chief Financial Officer. Mr. White joined the Company in
September 2000 and is responsible for corporate finance and all financial
aspects of the Company's operations, including accounting, tax, treasury,
financial analysis, billing, internal audit, investor relations, real estate and
procurement functions. Mr. White brings a vast array of experience in both the
telecommunications and Internet industries having served as President and Chief
Executive Officer of TelecomRFQ, Inc., a business-to-business start-up designed
to facilitate telecommunications procurement between business buyers and major
suppliers. Mr. White cultivated his expertise in both telecommunications and the
Internet with senior-level positions at Buyersedge.com, where he served as Vice
President of Operations & Finance, and at Southern New England
Telecommunications (SNET), the SBC Communications, Inc. subsidiary, where he
served as Director of IT Strategy & Finance, Director of Corporate Development
and Director of Finance & Business Development between 1995 and 1999. Mr. White
has also worked in senior-level positions at Ernst & Young, LLP and Arthur
Andersen, LLP. Mr. White has a BBA and an MBA from Hofstra University, as well
as a CPA.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

      The Company's certificate of incorporation, as amended and restated,
provides that the number of members of the Company's board of directors shall be
not less than three and not more than thirteen. The current number of directors
on the board of directors is five. At each annual meeting of stockholders,
directors will be elected to hold office for a term of one year and until their
respective successors are elected and qualified. All of the officers identified
above serve at the discretion of the board of directors.

      The Board had 4 regular and no special meetings during the fiscal year
ended December 31, 2000. During the fiscal year ended December 31, 2000, each
member of the Board participated in at least 75% of all Board and applicable
committee meetings held during the period for which he was a director. The Board
has established an executive committee, a compensation committee and an audit
committee to devote attention to specific subjects and to assist the Board in
the discharge of its responsibilities. The functions of these committees and
their current members are set forth below.

      The Executive Committee is empowered to act on any matter except those
matters specifically reserved to the full Board by applicable law. Prior to
April 26, 2001, Itzhak Fisher, Nir Tarlovsky and Noam Bardin served as the
members of the Executive Committee. The Board will appoint new members to the
Executive Committee.

      The Compensation Committee is responsible for evaluating the Company's
compensation policies, determining the Company's executive compensation policies
and guidelines and administering the Company's stock option and compensation
plans. Prior to April 26, 2001, Jacbob Z. Schuster and Yadin Kaufmann served as
the members of the Compensation Committee. The Board will appoint new members to
the Compensation Committee.



                                       4
<PAGE>

      In June 2000, the Board adopted a new charter for the Audit Committee. The
charter contains the Audit Committee's mandate, membership requirements and
duties and obligations. The Audit Committee reviewed the charter in March 2001
to determine its adequacy and will review the charter annually and, if
appropriate, recommend revisions to the Board. Under the charter, the Audit
Committee recommends to the Board the appointment of the firm selected to serve
as the independent auditors for the Company and its subsidiaries and monitors
the performance of such firm; reviews and approves the scope of the annual audit
and evaluates with the independent auditors the Company's annual audit and
annual financial statements; reviews with management the status of internal
accounting controls; evaluates issues having a potential financial impact on the
Company which may be brought to the Audit Committee's attention by management,
the independent auditors or the Board; evaluates the Company's public financial
reporting documents; reviews the non-audit services to be performed by the
independent auditors, if any; and considers the effect of such performance on
the auditor's independence. Prior to April 26, 2001, Jacob Z. Schuster, Eric
Zinterhofer and Robert R. Grusky served as the members of the Audit Committee.
The Board will appoint new members to the Audit Committee.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than 10% of
a registered class of the Company's equity securities to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in beneficial ownership of Common Stock and other equity securities of
the Company. Directors, officers and greater than 10% stockholders are required
by SEC regulations to furnish the Company with all Section 16(a) forms they
file.

      To the Company's knowledge, based solely upon review of the copies of such
reports furnished to the Company, the Company believes that all of the Company's
directors, officers and greater than 10% stockholders have complied with the
applicable Section 16(a) reporting requirements during the fiscal year ended
December 31, 2000.

ITEM 11.  EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

      The following table sets forth certain summary information concerning the
compensation paid or awarded for services rendered during each of the Company's
last three fiscal years to the chief executive officer of the Company and each
of the four other most highly compensated executive officers of the Company in
1998, 1999 and 2000 whose total salary and bonus exceeded $100,000.

<TABLE>
<CAPTION>
                                             ANNUAL COMPENSATION                    LONG-TERM
                                             --------------------------------------------------
                                                                                  COMPENSATION
                                                                                   SECURITIES
                                                                      OTHER        UNDERLYING     ALL OTHER
NAME AND PRINCIPAL POSITION           YEAR    SALARY ($)  BONUS ($)   COMPENSATION  OPTIONS (#)  COMPENSATION
--------------------------------------------------------------------------------------------------------------
<S>                                  <C>      <C>         <C>        <C>          <C>           <C>
Noam Bardin                           2000     229,167     142,000     --            250,000         --
  President and Chief Executive       1999     170,000     136,000     --            173,938         --
  Officer...........................  1998     120,000      10,000     --              --            --
Amos Sela
  Former President and Chief          2000      57,500          --     --              --            --
  Executive Officer.................  1999     230,000     115,000     --            273,332         --
                                      1998          --          --     --              --            --
                                      2000     187,500     112,000     --            130,000         --
Shimmy Zimels                         1999     170,000     136,000     --            173,938         --
  Chief Operating Officer...........  1998          --          --     --              --            --
                                      2000     108,333          --     --              --            --
Mark J. Hirschorn                     1999     200,000     160,000     --            173,938         --
  Former Chief Financial Officer....  1998          --          --     --              --            --
Mark Gazit                            2000      83,333      54,000     --            303,938         --
  Executive Vice President,           1999          --          --     --              --            --
  Technology .......................  1998          --          --     --              --            --
</TABLE>


                                       5
<PAGE>

OPTION GRANTS DURING FISCAL 2000

      The following table sets forth information regarding options to purchase
shares of Class A Common Stock granted to the named executive officers during
2000.

<TABLE>
<CAPTION>
                                                INDIVIDUAL GRANTS
                                                -----------------
                          SHARES OF      % OF TOTAL    EXERCISE       FAIR
                        COMMON STOCK       OPTIONS      PRICE        MARKET                   POTENTIAL REALIZABLE VALUE AT
                         UNDERLYING       GRANTED TO     PER        VALUE ON                  ASSUMED RATES OF STOCK PRICE
                           OPTIONS       EMPLOYEES IN   SHARE      GRANT DATE  EXPIRATION     APPRECIATION FOR OPTION TERM
NAME                     GRANTED (#)    FISCAL YEAR (%)  ($/SH)     ($/SH)        DATE            5%              10%
                        -------------- --------------- ---------  ----------  ------------    -----------     ------------
<S>                          <C>               <C>       <C>         <C>        <C>           <C>              <C>
Noam Bardin ...........       250,000           15.32     1.375       1.375      12/31/07      139,941          326,122
Amos Sela..............            --              --        --          --            --           --               --
Shimmy Zimels.........        130,000            7.97     1.375       1.375      12/31/07       72,769          169,583
Mark J.  Hirschhorn....            --              --        --          --            --           --               --
                              173,938           10.66    6.9375      6.9375        8/1/07      491,246        1,144,812
Mark Gazit.............       130,000            7.97     1.375       1.375      12/31/07       72,769          169,583
</TABLE>

OPTION EXERCISES IN FISCAL 2000 AND YEAR-END OPTION VALUES

      The following table sets forth information for the named executive offices
with respect to option exercises during 2000 and the value as of December 31,
2000 of unexercised in-the-money options held by each of the named executive
officers.

<TABLE>
<CAPTION>
                                                                                NUMBER OF
                                                                               SECURITIES             VALUE OF
                                                                               UNDERLYING           UNEXERCISED
                                                                               UNEXERCISED          IN-THE-MONEY
                                                                               OPTIONS AT            OPTIONS AT
                                  SHARES                                      YEAR END (#)            YEAR-END
                                 ACQUIRED                   VALUE            EXERCISABLE ($)        EXERCISABLE
NAME                          ON EXERCISE (#)             REALIZED           /UNEXERCISABLE        /UNEXERCISABLE
                        ---------------------------- -------------------- ---------------------- -------------------
<S>                              <C>                     <C>                <C>                     <C>
Noam Bardin ...........             --                       --              135,514/423,938          $186,332
Amos Sela..............           108,400                 $791,307                 --                   --
Shimmy Zimels..........             --                       --              95,514/303,938           $131,332
Mark J. Hirschorn......           57,979                  $312,657                 --                   --
Mark Gazit.............             --                       --                 0/303,938               --
</TABLE>



                                       6
<PAGE>


DIRECTOR COMPENSATION

      The Company does not pay its directors cash compensation. Directors are
reimbursed for the expenses they incur in attending meetings of the Board or
Board committees. Each director who is not an employee of the Company receives
options to purchase 24,848 shares of Class A Common Stock on the date such
director is elected to the Board. Under the Company's 1999 Directors' Plan, each
non-employee director will be eligible to receive on an annual basis options to
purchase 10,000 shares of Class A Common Stock with an exercise price equal to
the fair market value on the date of grant.

1999 DIRECTORS' PLAN

      The purposes of the 1999 Directors' Plan are to enable the Company to
attract, maintain and motivate qualified directors and to enhance a long-term
mutuality of interest between the Company's directors and stockholders of the
Company's Common Stock by granting the Company's directors options to purchase
the Company's shares.

      Under the Directors' Plan, on the first business day following each annual
meeting of the Company's stockholders during the term of the Directors' Plan,
each director who is not an employee of the Company will be granted options to
acquire 10,000 shares of the Company's Class A Common Stock with an exercise
price per share equal to the fair market value of a share of the Company's Class
A Common Stock on the date of grant. These options will have a seven-year term
and will become exercisable on the first anniversary of the date of grant. In
addition, each director who was not an employee of the Company on the date of
the completion of the Company's initial public offering was granted options to
acquire 24,848 shares of the Company's Class A Common Stock with an exercise
price per share equal to the initial public offering price. Each individual who
becomes a director and was not an employee of the Company following completion
of the initial public offering will be granted options to acquire 24,848 shares
of the Company's Class A Common Stock with an exercise price per share equal to
the fair market value on the date of grant. These options will have a seven-year
term and will be immediately exercisable, but if exercised, subject to the
180-day lock-up to be imposed on the Company's officers and directors. The
maximum number of shares that may be issued under the Directors' Plan is 600,000
shares of Class A Common Stock. The plan will terminate December 31, 2009,
unless sooner terminated by the Company's stockholders.

EMPLOYMENT AGREEMENTS

      The Company has entered into employment agreements with Messrs. Bardin and
Zimels, each with the following principal terms:

      o     The agreement is effective for a period of three years from the
            effective date.

      o     The employee is entitled to receive a base salary as stated below,
            increased on each January 1, commencing January 1, 2001, by an
            amount equal to his base salary then in effect, multiplied by the
            applicable cost of living index during the prior year. The
            employee's base salary, as adjusted for cost of living increases,
            may be further increased at the option and in the discretion of the
            Board.

      o     The employee shall be granted options to purchase shares of the
            Company's Class A Common Stock as set forth below, under the
            Company's 1999 Stock Incentive Plan. The employee's options are
            exercisable in installments, as long as the employee is employed by
            the Company on the applicable vesting date, and after an option is
            exercisable, that option remains exercisable until the expiration of
            seven years from the date of the agreement. If the employee is
            terminated for cause, following such date, all options will expire.
            The options are exercisable in three equal installments on each of
            the first, second and third anniversary of the effective date.



                                       7
<PAGE>

      o     The employee's options are immediately exercisable in full upon a
            change of control. The employee's options, following any termination
            of the employee's employment, other than for cause, remain
            exercisable for the lesser of two years and the remaining term of
            his options.

      o     If the employee's employment is terminated by the Company without
            cause or by the employee for good reason, the employee is entitled
            to receive previously earned but unpaid salary, vested benefits and
            a payment equal to his base salary as in effect immediately prior to
            the termination date.

      o     If the employee dies or is unable to perform his duties, he or his
            representative or estate or beneficiary will be paid, in addition to
            any previously earned but unpaid salary and vested benefits, 12
            months' total base salary reduced, in the case of disability, by any
            disability benefits he receives.

      The following table sets forth the position, base salary and number of
shares of Class A Common Stock represented by the options granted for each of
Messrs. Bardin and Zimels pursuant to their respective employment agreements:


<TABLE>
<CAPTION>
                                                                                               OPTIONS TO PURCHASE
                                                                                                SHARES OF CLASS A
NAME                                               POSITION                     BASE SALARY       COMMON STOCK
<S>                                  <C>                                          <C>               <C>
Noam Bardin.................          President and Chief Executive Officer        $250,000          250,000
Shimmy Zimels...............          Chief  Operating Officer                     $200,000          130,000
</TABLE>

1999 STOCK INCENTIVE PLAN

      The purpose of the Company's 1999 Stock Incentive Plan is to foster and
promote the long-term financial success of the Company and materially increase
stockholder value by (a) motivating superior performance by means of
performance-related incentives, (b) encouraging and providing for the
acquisition of an ownership interest in the Company by executive officers, other
employees and consultants and (c) enabling the Company to attract and retain the
services of an outstanding management team upon whose judgment, interest and
effort the successful conduct of the Company's operations is largely dependent.

      GENERAL. The plan provides for the grant of (i) incentive stock options
and non-incentive stock options to purchase our common stock; (ii) stock
appreciation rights, which may be granted in tandem with or independently of
stock options; (iii) restricted stock and restricted units; (iv) incentive stock
and incentive units; (v) deferred stock units; and (vi) stock in lieu of cash.
The Company reserved 4,000,000 shares of Class A Common Stock for issuance upon
exercise of awards to be granted under the plan.

      ADMINISTRATION. The plan will be administered by the Compensation
Committee or such other committee as designated by the Board. This committee
will be made up of at least two directors who are not employees of the Company
and whose membership on the committee (i) does not adversely impact the
Company's ability to deduct compensation payments made under the plan and (ii)
will permit recipients of awards to avail themselves of exemptions under federal
securities laws.

      ELIGIBILITY AND EXTENT OF PARTICIPATION. The plan provides for
discretionary grants of awards to officers of the Company within the meaning of
Rule 16a-1(f) of the Exchange Act and to other employees and consultants of the
Company. Directors who are non-employees are prohibited from participating in
the plan. The maximum number of shares for which options or stock appreciation
rights may be granted to any one participant in a calendar year is 600,000 of
the shares of common stock available under the plan.

      STOCK OPTIONS. Under the plan, the committee may grant both incentive and
non-incentive stock options for common stock of the company. The options
generally will have a term of seven years and will become exercisable in three
equal installments commencing on the first anniversary of the date of grant. The
purchase price per share payable upon exercise of an option will be established
by the committee; provided, however, that such option exercise price may be no
less than the fair market value of a share of



                                       8
<PAGE>

our common stock on the date of grant (or 110% of the fair market value, in the
case of incentive stock option grants to persons holding more than 10% of voting
power of all classes of our capital stock). The option exercise price is payable
by one of the following methods or a combination of methods to the extent
permitted by the committee: (i) in cash or its equivalent, or (ii) subject to
the approval of the committee, in shares of common stock owned by the
participant for at least six months prior to the date of exercise. The committee
may provide that a participant who delivers shares of common stock to exercise
an option when the market value of the common stock exceeds the exercise price
of the option will be automatically granted reload options for the number of
shares delivered to exercise the option. Reload options will be subject to the
same terms and conditions as the related option except that the exercise price
will be the fair market value on the date the reload option is granted and such
reload option will not be exercisable for six months.

      STOCK APPRECIATION RIGHTS. The committee may grant stock appreciation
rights in tandem with or independently of a stock option. Stock appreciation
rights entitle the participant to receive the excess of the fair market value of
a stated number of shares of common stock on the date of exercise over the base
price of the stock appreciation right. The base price may not be less than 100%
of the fair market value of the common stock on the date the stock appreciation
right is granted. The committee will determine when a stock appreciation right
is exercisable, the method of exercise, and whether settlement of the stock
appreciation right is to be made in cash, shares of common stock or a
combination of cash and shares.

      RESTRICTED STOCK AND RESTRICTED UNITS. The committee may grant awards in
the form of restricted stock and restricted units. For purposes of the plan,
restricted stock is an award of common stock and a restricted unit is a
contractual right to receive common stock (or cash based on the fair market
value of common stock). Such awards are subject to such terms and conditions, if
any, as the committee deems appropriate. Unless otherwise determined by the
committee, participants are entitled to receive either currently or at a future
date, dividends or other distributions paid with respect to restricted stock
and, if and to the extent determined by the committee, either to be credited
with or receive currently an amount equal to dividends paid with respect to the
corresponding number of shares covered by restricted units. Restricted stock and
restricted units become vested and nonforfeitable and the restricted period
shall lapse upon the third anniversary of the date of grant unless the committee
determines otherwise.

      INCENTIVE STOCK AND INCENTIVE UNITS. The plan allows for the grant of
awards in the form of incentive stock and incentive units. For purposes of the
plan, incentive stock is an award of common stock and an incentive unit is a
contractual right to receive common stock. Such awards will be contingent upon
the attainment, in whole or in part, of certain performance objectives over a
period to be determined by the committee. With regard to a particular
performance period, the committee has the discretion, subject to the plan's
terms, to determine the terms and conditions of such awards, including the
performance objectives to be achieved during such period and the determination
of whether and to what degree such objectives have been attained. Unless
otherwise determined by the committee, participants are entitled to receive,
either currently or at a future date, all dividends and other distributions paid
with respect to the incentive stock and, if and to the extent determined by the
committee, either to be credited with or receive currently an amount equal to
dividends paid with respect to the corresponding number of shares covered by the
incentive units.

      ELECTIVE UNITS. On such date or dates established by the committee and
subject to such terms and conditions as the committee will determine, a
participant may be permitted to defer receipt of all or a portion of his annual
compensation and/or annual incentive bonus ("deferred annual amount") and
receive the equivalent amount in elective stock units based on the fair market
value of the common stock on the date of grant. To the extent determined by the
committee, a participant may also receive supplemental stock units for a
percentage of the deferred annual amount. On the date of a participant's
termination of employment, the participant will receive a number of shares of
common stock equal to the number of elective units and supplemental units held
on that date. Elective units carry no voting rights until the shares have been
issued. The committee will determine whether any dividend equivalents
attributable to elective units are paid currently or credited to the
participant's account and deemed reinvested in common stock. Elective units and
dividend equivalents with respect to the elective units are fully vested at all
times. Unless the committee provides otherwise, supplemental units and dividend
equivalents with respect to the



                                       9
<PAGE>

supplemental units will become fully vested on the third anniversary of the date
the corresponding deferred amount would have been paid.

      STOCK IN LIEU OF CASH. The plan authorizes the committee to grant awards
of common stock to executive officers in lieu of all or a portion of an award
otherwise payable in cash pursuant to any bonus or incentive compensation plan
of the company, based on the fair market value of the common stock.

      AMENDMENT AND TERMINATION. No awards may be granted under the plan after
the expiration of ten years from the date of the plan's adoption. The board of
directors or the committee may amend, suspend or terminate the plan or any
portion of it at any time. However, no amendment may be made to the plan without
shareholder approval if such amendment would (1) increase the number of shares
of common stock subject to the plan, (2) change the price at which options may
be granted, or (3) remove the administration of the plan from the committee.

1999 PERFORMANCE INCENTIVE PLAN

      The purpose of the Company's 1999 Performance Incentive Plan is to assist
the Company and its subsidiaries to attract, retain, motivate and reward the
best qualified executive officers and key employees by providing them with the
opportunity to earn competitive compensation directly linked to the Company's
performance.

      GENERAL. Under the plan, bonuses are payable if the Company meets any one
or more of several performance criteria, which are to be set annually by the
committee, after receipt of the proposed annual budget for the coming year from
management. It is expected that proposed performance criteria for the coming
year will be presented by management in the fourth quarter of the current year
and approved not later than March 31 of the next year. It is expected that the
period over which performance is to be measured will be one year.

      The committee shall determine whether bonuses payable under the plan will
be paid in cash, shares of common stock or in any combination thereof, provided
that not less than 50% of any bonus shall be in cash. No more than 400,000
shares common stock may be issued under the plan.

      ADMINISTRATION. The plan will be administered by the Compensation
Committee or such other committee as designated by our board of directors. This
committee will be made up of directors who are not our employees and whose
membership on the committee (i) does not adversely impact our ability to deduct
compensation payments made under the plan and (ii) will permit recipients of
awards to avail themselves of exemptions under federal securities laws. The
committee will establish the performance targets and certify whether such
performance targets have been achieved.

      BONUS. Bonus amounts are determined as follows: if 100% of the
pre-established targets are achieved, participants will generally be eligible to
receive a bonus equal to their base salary for such year. If 120% of such
targets are achieved, the bonus potentially payable to participants will
generally equal twice their base salary for such year and, if 80% of such
targets are achieved, the bonus potentially payable to participants will
generally equal 25% of their base salary for such year. To the extent our
results exceed 80% of the targets but is less than 120% of the targets, the
amount of the bonus payable to participants will be adjusted proportionately
based on where such results fall within the ranges set forth above.

      Once eligibility has been determined, a bonus, if applicable, will consist
of two components. Fifty percent of the amount determined pursuant to the
formula described above will be payable if the targets are achieved. Up to an
additional 50% of such amount will be payable in the discretion of the
committee. In addition, the plan permits the committee to grant discretionary
bonuses to participants, notwithstanding that a bonus would not otherwise be
payable under the plan, to recognize extraordinary individual performance.

      ELIGIBILITY. Each executive officer of the company and each key employee
who is recommended by the chief executive officer and selected by the committee
and approved by the board of directors is eligible to receive a bonus under the
plan.



                                       10
<PAGE>

      OTHER TERMS. No plan participant may receive a bonus with respect to any
plan year in excess of $1,000,000. The committee may impose conditions with
respect to an award of common stock, including conditioning the vesting of
shares on the performance of additional service. The committee may permit a
participant to receive all or a portion of his bonus payable in common stock. If
a participant's employment terminates prior to the completion of performance
period, the committee shall determine whether a prorated bonus may be paid to
such a participant. In addition, the plan permits a participant to elect to
defer payment of his or her bonus on terms and conditions established by the
committee.

      AMENDMENT AND TERMINATION. Either the board of directors or the committee
may amend, suspend, discontinue or terminate the plan, provided that, unless the
board determines otherwise, any amendment or termination of the plan that
requires stockholder approval will not be effective until stockholder approval
is obtained.

1999 EMPLOYEE STOCK PURCHASE PLAN

      The purpose of the Company's 1999 Employee Stock Purchase Plan is to align
employee and stockholder long-term interests by facilitating the purchase of
common stock by employees and to enable employees to develop and maintain
significant ownership of common stock.

      GENERAL. The employee stock purchase plan is intended to comply with the
requirements of Section 423 of the Internal Revenue Code, and to assure the
participants of the tax advantages provided thereby. The number of shares of our
common stock available for issuance under the employee stock purchase plan is
limited to 1,350,000 shares of common stock.

      ADMINISTRATION. The employee stock purchase plan will be administered by a
committee established by the board of directors. The committee may make such
rules and regulations and establish such procedures for the administration of
the employee stock purchase plan as it deems appropriate.

      ELIGIBILITY. All employees of the Company and its designated subsidiaries
who have at least one year of service and work more than 20 hours per week and
five months in a calendar year will be eligible to participate in the employee
stock purchase plan, except that employees who are "highly compensated" within
the meaning of Section 414(q) of the Code and employees who are five percent or
more stockholders of the Company or any parent or subsidiary of the Company will
not be eligible to participate.

      GRANTS. Pursuant to the employee stock purchase plan, each eligible
employee will be permitted to purchase shares of common stock up to two times
per calendar year through regular payroll deductions in an aggregate amount
equal to 1% to 10% of the employee's base pay, as elected by the employee, for
each payroll period. Under the employee stock purchase plan, a participant's
right to purchase shares of common stock may not accrue at a rate that exceeds
$25,000 of fair market value of common stock during any calendar year.

      OFFERING PERIOD; PURCHASE PERIOD. The initial offering period will
commence on the first trading day on or after the effective date of the employee
stock purchase plan and end on the last trading day on or prior to the second
anniversary of the commencement date. Each subsequent offering period will have
a duration of approximately one year, commencing on the first trading day and
ending on the last trading day of each calendar year (commencing with calendar
year 2001). Each "purchase period" will have a duration of approximately six
months.

      EXERCISE PRICE. As of the last day of each "purchase period" ending within
an "offering period," participating employees will be able to purchase shares of
common stock with payroll deductions for a purchase price equal to the lesser
of:

      o     85% of the fair market value of common stock on the date the
            offering period begins and
      o     85% of the fair market value of common stock on the last day of the
            purchase period.



                                       11
<PAGE>

      A right to purchase shares which is granted to a participant under the
employee stock purchase plan is not transferable otherwise than by will or the
laws of descent and distribution.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      Executive compensation decisions in 2000 were made by the Compensation
Committee. During 2000, no interlocking relationship existed between the
Company's Board of Directors and the board of directors or compensation
committee of any other company.

ITEM 12.  SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS

      The following table sets forth information with respect to the beneficial
ownership of shares of the Company's Class A Common Stock and the Company's
Class B Common Stock as of April 27, 2001 and the beneficial ownership of shares
of the capital stock of RSL COM as of March 22, 2001 by:

      o     each person who the Company knows owns beneficially more than 5% of
            the Company's Common Stock

      o     each of the Company's directors individually

      o     each of the Company's named executive officers individually

      o     all of the Company's executive officers and directors as a group

      Unless otherwise indicated, to the Company's knowledge, all persons listed
below have sole voting and investment power with respect to their shares of
Common Stock. Each person listed below disclaims beneficial ownership of their
shares, except to the extent of their pecuniary interests therein. Shares of
Common Stock that an individual or group has the right to acquire within 60 days
of April 27, 2001 pursuant to the exercise of options are deemed to be
outstanding for the purpose of computing the percentage ownership of such person
or group, but are not deemed outstanding for the purpose of calculating the
percentage owned by any other person listed.



                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                              SHARES OF                  SHARES OF
                                                             DELTATHREE                   RSL COM
                                                            CAPITAL STOCK               CAPITAL STOCK
                                                         BENEFICIALLY OWNED           BENEFICIALLY OWNED
                                                      NUMBER      PERCENTAGE(1)     NUMBER     PERCENTAGE(2)
                                                      ------      -------------     ------     -------------
<S>                                                 <C>              <C>            <C>             <C>
PRINCIPAL STOCKHOLDERS:
RSL Communications, Ltd.
810 Seventh Avenue, 39th Floor
New York, NY 10019 (2) .........................     19,569,459        67.3%          --              -- %
Ronald S. Lauder
c/o RSL Communications, Ltd (2)(3) .............     19,574,459        67.3             (2)             (2)
CNET Investments, Inc.
150 Chestnut Street
San Francisco, California 94111 ................      1,551,971(4)      5.3           --              --

EXECUTIVE OFFICERS, KEY EMPLOYEES AND DIRECTORS:
Noam Bardin (5)(6) .............................        757,421         2.6           --              --
Shimmy Zimels (5)(7) ...........................        473,407         1.6           --              --
Mark Gazit (5)(8) ..............................        303,938        *              --              --
Paul C. White (5)(8) ...........................        160,000        *              --              --
Lisa J. Indovino (5)(8) ........................        160,000        *              --              --
Andrew A. Fink (5)(8)...........................         70,000        *              --              --
Jose Ruiz-Martinez (5)(9) ......................         67,000        *              --              --
Hilary Kramer (8)(10) ..........................         34,848        *              --              --
Keith Maib (8)(11) .............................         34,848        *              --              --
James McDermott (8)(12) ........................         34,848        *              --              --
All Directors and Executive
Officers as a group (10 persons) (13) ..........      2,096,310         7.2             (2)             (2)
</TABLE>

* Less than 1%.

(1) Percentage of beneficial ownership is based on (a) 19,569,459 shares of
Class B Common Stock issued to RSL COM and (b) 9,490,639 shares of Class A
Common Stock outstanding as of March 22, 2001.

(2) In March 2001, RSL COM commenced insolvency proceedings in Bermuda. The
outcome of these proceedings may result in either a restructuring of RSL COM's
obligations or the sale of RSL COM's assets. The effect of the outcome of these
proceedings on the existing capital stock of RSL COM remains uncertain.

(3) Ronald S. Lauder, together with a number of entities, including entities
formed for the benefit of charities and members of his family, own shares of RSL
COM's capital stock that enable him to vote more than 50% of RSL COM's capital
stock. As a result, he may be deemed to be the beneficial owner of the Company's
capital stock owned by RSL COM. Mr. Lauder disclaims beneficial ownership of
these shares.

(4) Includes a warrant to purchase 466,028 shares of Class A Common Stock.

(5) The address for the director or executive officer listed is c/o the Company.

(6) Includes options to purchase 503,938 shares of Class A Common Stock.

(7) Includes options to purchase 383,938 shares of Class A Common Stock.

(8) Represents options to purchase shares of Class A Common Stock.

(9) Includes (a) 3,000 shares of Class A Common Stock and (b) options to
purchase 64,000 shares of Class A Common Stock.

(10) The address for Ms. Kramer is c/o Cisneros Group of Companies, 36 East 61st
Street, New York, New York.



                                       13
<PAGE>

(11) The address for Mr. Maib is c/o RSL Communications Ltd.

(12) The address for Mr. McDermott is c/o Eagle Rock Group, 7918 Jones Beach
Drive, Suite 600, McLean, Virginia 22102.

(13) Includes options to purchase 1,750,358 shares of Class A Common Stock.



                                       14
<PAGE>


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The Company believes that all of the transactions set forth below were
made on an arms-length basis. All future transactions between the Company and
its officers, directors, principal stockholders and affiliates will be approved
by a majority of the Board of Directors, including a majority of the outside
directors, and will continue to be on terms no less favorable to the Company
than could be obtained from unaffiliated third parties.

RSL COM

      On July 23, 1997, RSL COM acquired 51% of the Company's outstanding share
capital. From that date through March 31, 1998, RSL COM continued to purchase
additional shares from the Company's other stockholders. On March 31, 1998, the
Company entered into a merger agreement with RSL COM and the Company's remaining
minority stockholders. Pursuant to the agreement, the Company merged with and
into a newly formed wholly-owned subsidiary of RSL COM. Since RSL COM's
acquisition of a controlling interest in the Company, RSL COM has funded the
Company's cash requirements through inter-company loans bearing interest at the
rate of 14% per annum. In November 2000, the Company paid in full $13.0 million
in principal and accrued interest owed to RSL COM under inter-company loans.
Prior to the closing of the Company's initial public offering, RSL COM made
available an additional $10 million line of credit bearing interest at the rate
of 14% per annum. The Company did not draw on the RSL COM line of credit, which
terminated on November 1, 2000. The Company has agreed with RSL COM that it will
not incur any debt other than inter-company debt without RSL COM's written
consent so long as the Company is a restricted subsidiary under RSL COM's
indentures.

      Since the Company's initial public offering, RSL COM has been the
Company's controlling stockholder and owns 100% of the outstanding Class B
Common Stock, which represents approximately 95.5% of the combined voting power
of all of the Company's outstanding capital stock and approximately 67.4% of the
economic interest in the Company.

      For so long as RSL COM continues to beneficially own shares of capital
stock representing more than 50% of the combined voting power of the Company's
outstanding capital stock, it will be able to approve any matter submitted to a
vote of the Company's stockholders, including, among other things, the election
of all members of the Board of Directors. In addition, the non-competition
provision in the services agreement with RSL COM terminates on September 3,
2001. See "--Services Agreement." Therefore, various conflicts of interest could
arise between the Company and RSL COM.

      RSL COM has no contractual obligation to retain its shares of Class B
Common Stock. As a result, there can be no assurance concerning the period of
time during which RSL COM will retain its ownership of the Class B Common Stock.
See "--Registration Rights Agreement."

      In March 2001, RSL COM commenced insolvency proceedings in Bermuda. The
outcome of this proceeding may result in either a restructuring of RSL COM's
obligations or the sale of RSL COM's assets. A wholly-owned, non-operating
subsidiary of RSL COM and an indirect subsidiary of RSL COM also initiated
insolvency proceedings in the United Kingdom. In addition, RSL COM's principal
operating subsidiary in the United States and another of its subsidiaries filed
to reorganize under Chapter 11 of the U.S. Bankruptcy Code. The outcomes of
these insolvency and reorganization proceedings may have an adverse effect on
the Company's business, including the termination of or default under the
Company's intercompany agreements with RSL COM. Both of the Company's services
agreement and management agreement with RSL COM may be terminated in the event
of bankruptcy or insolvency of RSL COM. If, in connection with the outcome of
its insolvency proceedings, RSL COM's sale of its assets includes the sale of
its ownership interest in the Company, both of the Company's management
agreement and intercompany compliance agreement with RSL COM terminate, and RSL
COM will have the right to terminate the services agreement if it holds less
than 50% of the Company's capital stock. In addition, the effect of the outcome
of these proceedings on RSL COM's and the Company's obligations under RSL COM's
indentures remains uncertain.



                                       15
<PAGE>

INTERCOMPANY COMPLIANCE AGREEMENT

      The Company has entered into an agreement with RSL COM under which the
Company has agreed not to take any action which would cause RSL COM to default
under its indentures. In order to help RSL COM comply with its indentures, the
Company has have also agreed to obtain RSL COM's written consent before
incurring any debt and to provide RSL COM with information that it requires for
its reporting obligation under its indentures and under the securities laws.

SERVICES AGREEMENT

      The Company entered into a services agreement with RSL COM on July 23,
1997, which was subsequently amended and restated as of September 3, 1999. As
amended and restated, the agreement extends to September 2, 2004, and is
automatically extended for additional one-year terms unless terminated by RSL
COM or the Company. The services agreement may be terminated by the Company or
RSL COM for cause, by the non-bankrupt party in the event of bankruptcy of the
other party or by RSL COM should RSL COM and/or its affiliates hold less than
50% of the voting control of the Company's outstanding Common Stock.

SERVICES AND FACILITIES

      Under the agreement, if the Company requires equipment space or limited
office space at any location where RSL COM maintains an office or equipment, RSL
COM is required to use its reasonable best efforts to provide the Company such
space. However, RSL COM is not obligated to provide the Company with office
space for more than that required by two full-time employees, and RSL COM is
entitled to vacate space without it being deemed a breach of the agreement. The
Company is required to pay RSL COM its proportionate share of all lease payments
associated with such office or equipment space. In addition, RSL COM is required
to make reasonable efforts to assist the Company in obtaining Internet, frame
relay and dedicated lines from third parties in countries where RSL COM has
communication switches co-located with our network servers at the same price
that RSL COM pays such third parties. As of December 31, 2000, the Company
co-located offices in five locations and equipment in five locations. RSL COM is
also required to use its reasonable efforts to purchase dedicated bandwidth
connectivity on the Company's behalf from third party bandwidth suppliers at the
same price as RSL COM pays such third party suppliers. As a result, the Company
realizes certain bulk pricing benefits received by RSL COM.

     Under the services agreement, RSL COM is also required to provide the
Company with the following services:

         o    domestic inbound traffic termination--RSL COM is required to
              terminate the Company's domestic inbound traffic through RSL COM's
              switches in countries where the Company's servers and RSL COM's
              switches are co-located. This termination service is provided to
              the Company at the then prevailing fair market rates for such
              service.

         o    international outbound termination--RSL COM is required to
              terminate the Company's international outbound telephone traffic
              in each country where the Company's servers and RSL COM's switches
              are co-located and RSL COM has contracted to receive such services
              in the ordinary course. This termination service is provided to
              the Company at the then prevailing fair market rates for such
              service.

         o    traffic origination--RSL COM is required to use its best efforts
              to assist the Company in obtaining services, including toll-free
              services, from local third parties which will provide the
              Company's users with the ability to access the Company's network
              at the same rates offered by such third parties to RSL COM in
              countries where the Company's servers and RSL COM's switches are
              colocated.

         o    use of RSL COM switches--RSL COM is required to provide the
              Company with use of RSL's switches to connect the Company's
              carrier customers in each location where the



                                       16
<PAGE>

              Company's servers and RSL COM's switches are colocated. The
              termination rate is $0.01 per minute. The Company is charged for a
              minimum usage of 100,000 minutes per month per switch per
              connection, whether or not such minutes are used. In addition, RSL
              COM provides the Company's carrier customers billing and other
              similar customer-related services at a charge of $0.01 per minute
              of carrier traffic usage. Based on switches currently used, RSL
              COM charges the Company a minimum of $7,000 per month.

         o    use of prepaid calling platform--RSL COM is required to provide
              the Company with access to, and use of, RSL COM's prepaid calling
              platform in each location where the Company's servers and RSL
              COM's switches are co-located. If the Company elects to use RSL
              COM's prepaid calling platform, the Company will be charged for a
              minimum of 100,000 minutes per month. The fee for using RSL COM's
              prepaid calling platform is $0.01 per minute of traffic usage. In
              addition, RSL COM is required to provide the Company with
              additional customer-related services for the Company's prepaid
              calling services at a rate of $0.015 per minute of traffic usage.
              To date, the Company has not elected to purchase such services.

In the event any of RSL COM's current or future strategic partner objects to RSL
COM providing the Company with any of the foregoing services, RSL COM can cease
providing the service to the Company. A strategic partner is a minority
shareholder in RSL COM or any RSL COM subsidiary owning more than 10% of the
common stock of such entity. However, RSL COM is required to use reasonable
efforts to encourage its strategic partners not to object. To date, no strategic
partner has objected to RSL COM providing the Company with these services.

      Under the services agreement, the Company is required to provide Internet
telephony services and facilities to RSL COM necessary to route RSL COM's
international telecommunications traffic between all originations and
destinations the Company services. The agreement provides that the Company is
required to use, at RSL COM's request, up to 50% of the Company's network
capacity to route RSL COM's international telecommunications traffic between the
Company's origination and termination points. Through November 22, 2001, RSL COM
has committed to purchase a minimum of 50 million minutes per annum of voice and
fax transmission services from the Company. If RSL COM fails in this commitment
RSL COM will be required to pay the Company a shortfall charge of 10% of the
average daily weighted coverage price per minute charged by the Company to RSL
COM in the last three months of each annual period. If the Company is no longer
a subsidiary of RSL COM, RSL COM's minimum purchase obligation will cease. These
services are provided to RSL COM at the then prevailing fair market rates.
However, the services agreement does not specify procedures for establishing
such rates.

MARKETING

      Under the services agreement, the Company and RSL COM will engage in joint
marketing. Each of the Company and RSL COM is required to place, in a prominent
location, a link on its home page Web site to the other's home page Web site.
The Company and RSL COM will also cross-sell each other's products and services,
including through promotional materials and customer service representatives and
other additional promotional efforts. However, neither the Company nor RSL COM
are required to market or promote a product or service of the other if such
product or service competes with the other party's product or service.

NON-COMPETITION

      Under the services agreement, RSL COM is prohibited from competing with
the Company in providing Internet telephony services as described in the
services agreement, provided that the Company provides RSL COM with any
requested Internet telephony services promptly and with quality assurance.
However, this non-competition provision terminates on September 3, 2001 and the
scope of such provision is subject to the following limitations:

      o     RSL COM and its subsidiaries may acquire up to 20% in an entity
            providing Internet telephony services;



                                       17
<PAGE>

      o     RSL COM and its subsidiaries may be stockholders in entities
            providing Internet telephony services, provided that Internet
            telephony services are ancillary to the business of that entity;

      o     the non-competition provision does not apply to RSL COM's
            subsidiaries that become publicly traded companies; and

      o     Internet telephony services under the non-competition provision are
limited to (1) phone to phone services marketed as IP to the general public,
including both individuals and businesses and (2) the following enhanced IP
communication services: PC-to-Phone, In Box, Click IT, Global Roaming,
IP-initiated conference calls, Phone-to-PC, information services and white
boarding.

MANAGEMENT AGREEMENT

      The Company entered into an agreement with RSL COM pursuant to which RSL
COM has agreed from the time the Company completed its initial public offering
until such time as the Company is no longer a subsidiary of RSL COM, RSL COM
will provide to the Company the following services:

      o     international legal services

      o     financial services, including assistance in accounting, financial
            reporting, budgeting, business controls, tax and treasury related
            matters

      o     corporate finance and mergers and acquisition advisory services

      o     assistance with network planning

      o     product development

      o     assistance with strategic planning

      o     availability of RSL COM management

      The Company has agreed to pay to RSL COM $20,000 per month for these
services, subject to adjustments for inflation.

RELEASE AND INDEMNIFICATION AGREEMENT

      The Company has entered into an agreement with RSL COM, pursuant to which
the Company and RSL COM have agreed to release each other from any claims
existing or arising from acts or events occurring or failing to occur prior to
the date of the agreement, other than those arising from the agreement, the
services agreement, the management agreement, the intercompany credit agreement,
the compliance agreement and other commercial transactions between the Company
and RSL COM. Further, the Company and RSL COM have agreed to indemnify each
other for breaches of the existing agreements described above.

CNET INVESTMENTS, INC.

      In October 1999, the Company entered into a marketing and promotion
agreement with CNET. Under this agreement, merchants on CNET's shopping sites
are able to integrate the Company's PC-to-phone software to enable users to make
a PC-to-phone call directly to such merchant from the CNET shopping site using
the Company's Click IT service. In addition, CNET has agreed to display banners
and other promotions on its Web sites that will link to the Company's Web site.
The initial term of the contract is two years. The Company paid CNET
approximately $4.8 million under this agreement during 2000 and will pay an
additional $146,677 per quarter for the services provided through June 30, 2004.



                                       18
<PAGE>

      On October 20, 1999, the Company issued to CNET for approximately $11
million 1,085,943 shares of the Company's Class A Common Stock and warrants to
purchase 466,028 shares of the Company's Common Stock at an exercise price of
$19.31 per share exercisable for the term of the promotion agreement with CNET.
CNET is entitled to request that the Company register their shares under the
Securities Act and to include their shares in the Company's future registered
equity offerings.


                                       19
<PAGE>


                                     PART IV

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

                  (a)(1)   Financial Statements.

                  The Consolidated Financial Statements filed as part of this
Annual Report on Form 10-K are identified in the Index to Consolidated Financial
Statements on page F-1 hereto.

                  (a)(2)   Financial Statement Schedules.

                  Financial Statement Schedules have been omitted because the
information required to be set forth therein is not applicable or is shown on
the financial statements or notes thereto.

                  (a)(3)   Exhibits.

                  The following exhibits are filed herewith or are incorporated
by reference to exhibits previously filed with the Securities and Exchange
Commission.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER            DESCRIPTION

<S>              <C>
3.1.1*            Form of Restated Certificate of Incorporation of deltathree, Inc.
3.1.2             Form of Amendment to Restated Certificate of Incorporation of deltathree, Inc.
3.2*              Form of Amended and Restated By-laws of deltathree, Inc.
4.1*              Specimen Certificate of Common Stock.
4.2*              Specimen Certificate of Class B Common Stock.
4.3*              Registration Rights Agreement, dated September 1, 1999, between RSL Communications, Ltd.
                  and deltathree, Inc.
10.1*             Amended and Restated Services Agreement, dated September 3, 1999, between RSL
                  Communications, Ltd. and deltathree, Inc.
10.2*             Form of deltathree, Inc. 1999 Stock Incentive Plan.
10.3*             Form of deltathree, Inc. 1999 Employee Stock Purchase Plan.
10.4*             Form of deltathree, Inc. 1999 Performance Incentive Plan.
10.5*             Form of deltathree, Inc. 1999 Directors' Plan.
10.6*             Employment Agreement, effective as of April 1, 1999, between Noam Bardin and deltathree, Inc.
10.7***           Amendment No. 1 to Employment Agreement, effective as of June 1, 2000, between Noam Bardin
                  and deltathree, Inc.
10.8*             Employment Agreement, effective as of April 1, 1999, between Shimmy Zimels and deltathree, Inc.
10.9***           Amendment No. 1 to Employment Agreement, effective as of June 1, 2000, between Shimmy Zimels
                  and deltathree, Inc.
10.10***          Employment Agreement, effective as of May 2000, between Mark Gazit and deltathree, Inc.
10.11             Amendment No. 1 to Employment Agreement, effective as of June 1, 2000, between Mark Gazit and
                  deltathree, Inc.
10.12             Amendment No. 2 to Employment Agreement, effective as of March 26, 2001, between Mark Gazit and
                  deltathree, Inc.
10.13***          Employment Agreement, effective as of August 28, 2000, between Paul White and deltathree, Inc.
10.14***          Employment Agreement, effective as of August 30, 2000, between Lisa J. Indovino and deltathree, Inc.
10.15*            Investor Rights Agreement, dated as of September 29, 1999, between Yahoo! Inc. and deltathree, Inc.
</TABLE>


                                       20
<PAGE>

<TABLE>
<S>              <C>
10.16*            Form of Warrant issued to Yahoo! Inc on October 18, 1999.
10.17*            Management Agreement, dated as of November 1, 1999, between deltathree, Inc. and RSL
                  Communications, Ltd.
10.18*            Amendment to Services Agreement by and between RSL Communications, Ltd.  and deltathree,
                  Inc., dated November 1, 1999.
10.19*            Investor Rights Agreement dated as of October 20, 1999 between CNET Investments, Inc. and
                  deltathree, Inc.
10.20*            Form of Warrant issued to CNET Investments, Inc. on October 20, 1999.
10.21*            Intercompany Compliance Agreement, dated as of November 1, 1999, between RSL
                  Communications, Ltd., RSL Communications PLC and deltathree, Inc.
10.22*            Development and Promotion Agreement, effective as of September 22, 1999, between CNET, Inc.
                  and deltathree, Inc.
10.23*            Form of Proposed Release and Indemnification Agreement between RSL Communications, Ltd.
                  and deltathree, Inc.
10.24**           Agreement and Plan of Merger, dated as of February 3, 2000, between deltathree, Inc.,
                  YourDay Acquisition Corp., YourDay.com, Inc. and SenseNet Inc.
23.1****          Consent of Brightman Almagor & Co.
24.1****          Power of Attorney (included on Signature Page)
</TABLE>
--------------

*     Incorporated by reference to the Company's registration statement on Form
      S-1 (Registration No. 333-86503).
**    Incorporated by reference to the Company's quarterly report on Form 10-Q
      filed on May 15, 2000.
***   Incorporated by reference to the Company's quarterly report on Form 10-Q
      filed on November 14, 2000.
****  Incorporated by reference to the Company's Annual Report on Form 10-K
      filed on March 30, 2001.

                 (b)  Reports on Form 8-K.

                 During fiscal 2000, we did not file any reports on Form 8-K.



                                       21
<PAGE>


                                   SIGNATURES

      Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly cause this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, New York on the 30th day of April, 2001.

                           DELTATHREE, INC.

                           By:  /s/ PAUL C. WHITE
                                --------------------------------
                                   Paul C. White
                                   Chief Financial Officer



                                       22