<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20459

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

                                   FORM 10-Q

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

                 For the quarterly period ended March 31, 2001
                            Commission file number:

                                   333-39646

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

                                 VELOCITA CORP.
                     (Formerly PF.Net Communications, Inc.)
             (Exact name of Registrant as specified in its charter)

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

            Delaware                                    52-2197932
   (State or other jurisdiction               (IRS Employer Identification No.)
 of incorporation or organization)

                       1800 Alexander Bell Dr., Suite 400
                             Reston, Virginia 20191
                    (Address of principle executive offices)

                                 (703) 262-7200
               (Company's telephone number, including area code)

      Indicate by check mark whether Registrant (1) has filed all reports 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 Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES |X| NO |_|

      The Company had 80,000,000 shares of common stock, $.01 par value,
outstanding at May 15, 2001.
<PAGE>

                                 VELOCITA CORP.
                                   FORM 10-Q
                                 MARCH 31, 2001
                                     INDEX

                         PART I - FINANCIAL INFORMATION

   ITEM 1. FINANCIAL STATEMENTS................................................1
           CONDENSED CONSOLIDATED BALANCE SHEETS...............................1
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS.....................2
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS.....................3
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS................5

   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS...........................................9

   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.........15

                          PART II - OTHER INFORMATION

   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................17

   ITEM 6. EXHIBITS AND CURRENT REPORTS ON FORM 8-K...........................17

      All references in this Report to "we", "us", "our" or the "Company" are to
Velocita Corp. and its subsidiaries.

      This report contains forward-looking statements and information that are
based on the beliefs of management as well as assumptions made by and
information currently available to us. Forward-looking statements can be
identified by such words as "anticipates," "believes," "plans," "estimates,"
"scheduled" and "expects" or similar expressions. Such statements reflect our
current views with respect to future events and are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this document.


                                      (i)
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                        VELOCITA CORP. AND SUBSIDIARIES
                         (A Development Stage Company)

                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                   MARCH 31,           DECEMBER 31,
                                                                                     2001                  2000
                                                                                ---------------     ---------------
                                                                                  (Unaudited)
                                   ASSETS

<S>                                                                             <C>                 <C>
CURRENT ASSETS:
 Cash and cash equivalents...............................................       $   121,115,832     $    76,324,530
 Accounts receivable, net of allowance of $175,000 and $0................            24,683,221          31,887,849
 Prepaid expenses and other current assets...............................             7,590,229           5,148,379
                                                                                ---------------     ---------------
    Total current assets.................................................           153,389,282         113,360,758

Property and equipment, net..............................................           453,942,836         331,924,961
Other assets, net........................................................            63,374,375          31,455,435
                                                                                ---------------     ---------------

                                                                                $   670,706,493     $   476,741,154
                                                                                ===============     ===============

                    LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
 Accounts payable............................................................   $    19,477,840     $    37,065,100
 Accrued liabilities.........................................................        59,603,679          36,611,960
 Accrued interest payable....................................................        13,789,802           5,208,854
 Fiber-optic network obligation..............................................         7,279,494           7,279,494
 Contract liability..........................................................                            11,153,216
 Current portion of deferred revenue.........................................        30,206,896          14,220,789
 Current portion of construction retainage and other.........................         5,825,842           5,693,182
                                                                                ---------------     ---------------

    Total current liabilities.................................................      136,183,553         117,232,595

Construction retainage and other liabilities..................................        9,631,276           8,957,378
Deferred revenue..............................................................       30,036,626
Borrowings under credit facility..............................................      150,000,000
Long-term debt, net of debt discount of $48,380,000 and $49,707,500...........      176,620,000         175,292,500
Note payable to affiliate.....................................................       12,146,933          11,748,607
Commitments and contingencies.................................................
Redeemable convertible senior preferred stock: 1,250,000 shares authorized;
 10% cumulative convertible; stated value $100 per share; 1,250,000 shares
 issued and outstanding; stated at liquidation preference of $143,829,942
 and $140,319,552, net of financing costs of $7,804,157 and $8,031,461........      136,025,785         132,288,091
Put warrants..................................................................       73,700,000          71,300,000
Stockholders' deficit:
 Common stock $.01 par value, 400,000,000 shares authorized;
  80,000,000 shares issued and outstanding....................................          800,000             800,000
 Additional paid-in capital...................................................       53,414,474          57,076,946
 Unearned compensation........................................................       (2,737,720)         (2,991,536)
 Deficit accumulated during development stage.................................     (105,114,434)        (94,963,427)
                                                                                ---------------     ---------------
    Total stockholders' deficit...............................................      (53,637,680)        (40,078,017)
                                                                                ---------------     ---------------
                                                                                $   670,706,493     $   476,741,154
                                                                                ===============     ===============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       1
<PAGE>

                        VELOCITA CORP. AND SUBSIDIARIES
                         (A Development Stage Company)

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                  Inception
                                                                 (November 30,               Three Months Ended
                                                                   1998) to                       March 31,
                                                                   March 31,        ------------------------------------
                                                                    2001                  2001                 2000
                                                              ---------------       ---------------       --------------

<S>                                                           <C>                   <C>                   <C>
Revenue...............................................        $       702,766       $       373,053       $       28,425

Operating expenses:
 Access and network operations .......................              3,519,468             1,318,863               21,789
 Selling, general and administrative expenses ........             42,234,589             7,835,642            2,035,955
 Depreciation and amortization........................              1,323,815               338,195               71,314
                                                              ---------------       ---------------       --------------
    Total operating expenses..........................             47,077,872             9,492,700            2,129,058
                                                              ---------------       ---------------       --------------

Loss from operations..................................           (46,375,106)           (9,119,647)          (2,100,633)

Increase in fair value of put warrants................           (47,936,000)           (2,400,000)         (42,236,000)
Interest income.......................................             13,175,444             1,368,640            1,429,053
Interest expense......................................           (23,966,772)                                  (775,391)
                                                              ---------------       ---------------       --------------
Loss before income taxes..............................          (105,102,434)          (10,151,007)         (43,682,971)
Provision for income taxes............................               (12,000)
                                                              ---------------       ---------------       --------------
Net loss..............................................          (105,114,434)          (10,151,007)         (43,682,971)

Accretion of preferred stock dividends
 and offering costs...................................           (20,117,963)           (3,737,694)          (1,591,268)
                                                              ---------------       ---------------       --------------

Net loss applicable to common stock...................        $ (125,232,397)       $  (13,888,701)       $ (45,274,239)
                                                              ===============       ===============       ==============

Basic and diluted loss per share......................        $        (2.07)       $        (0.17)       $       (0.57)
                                                              ===============       ===============       ==============

Basic and diluted weighted
 average shares outstanding...........................             60,587,916            80,000,000           80,000,000
                                                              ===============       ===============       ==============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       2
<PAGE>

                        VELOCITA CORP. AND SUBSIDIARIES
                         (A DEVELOPMENT STAGE COMPANY)

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                  Inception
                                                                (November 30,              Three Months Ended
                                                                  1998) to                      March 31,
                                                                  March 31,        -----------------------------------
                                                                    2001                2001                2000
                                                                ---------------    ---------------     ---------------

<S>                                                             <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net cash provided by operating activities..............        $    9,161,385     $     6,052,881     $     1,761,656

CASH FLOWS USED IN INVESTING ACTIVITIES:
 Purchase of property, plant and equipment..............          (461,863,070)      (145,920,333)        (21,934,357)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Cash paid for deferred financing fees..................           (24,652,220)           (67,298)           (824,265)
 Contribution of capital................................              1,490,000
 Proceeds from bridge loan obligation and warrants......             66,700,000
 Payment of bridge loan obligation......................           (66,700,000)
 Proceeds from units offering and warrants..............            225,000,000
 Proceeds from issuance of preferred stock, net.........            115,907,822                              7,506,332
 Proceeds from revolving loan...........................             75,000,000         75,000,000
 Proceeds from term loan................................             75,000,000         75,000,000
 Proceeds received under network obligation.............            106,071,915         34,726,052
                                                                ---------------    ---------------     ---------------

    Net cash provided by financing activities...........            573,817,517        184,658,754           6,682,067
                                                                ---------------    ---------------     ---------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........            121,115,832         44,791,302        (13,490,634)
CASH AND CASH EQUIVALENTS,
 beginning of period....................................                                76,324,530         107,597,674
                                                                ---------------    ---------------     ---------------

CASH AND CASH EQUIVALENTS, end of period................        $   121,115,832    $   121,115,832     $    94,107,040
                                                                ===============    ===============     ===============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>

                        VELOCITA CORP. AND SUBSIDIARIES
                         (A DEVELOPMENT STAGE COMPANY)

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                 Inception
                                                               (November 30,             Three Months Ended
                                                                  1998) to                    March 31,
                                                                  March 31,      -----------------------------------
                                                                    2001              2001                  2000
                                                               -------------     -------------         -------------

<S>                                                            <C>               <C>                   <C>
SUPPLEMENTAL DISCLOSURES OF CASH
 FLOW INFORMATION:

Cash paid for interest...................................      $  28,363,942     $   1,760,070         $   4,789,464
                                                               =============     =============         =============

SCHEDULE OF NONCASH INVESTING AND
 FINANCING TRANSACTIONS:

Increase in network construction-in-progress paid for
  by affiliate...........................................      $  5,109,123      $                     $
                                                               =============     =============         =============

Issuance of warrants in connection with construction
  of network.............................................      $  25,764,000     $                     $
                                                               =============     =============         =============

Contractual obligation incurred for network
  construction-in-progress...............................      $  10,000,000     $                     $
                                                               =============     =============         =============

Reduction in property and equipment from the
   decrease in the fiber-optic obligation................      $  22,752,982     $                     $   4,290,000
                                                               =============     =============         =============

Net increase in property and equipment reflected in
  accounts payable and other liabilities.................      $  78,068,932     $   2,481,382         $  12,137,556
                                                               =============     =============         =============

Increase in accounts receivable and reduction in
  property, plant and equipment..........................      $  47,710,282     $  23,895,505         $
                                                               =============     =============         =============

Increase in deferred financing costs and accrued
  liabilities............................................      $   1,780,000     $     580,000         $
                                                               =============     =============         =============

Increase in other current assets and decrease in
  property, plant and equipment..........................      $   5,255,292     $   2,150,142         $
                                                               =============     =============         =============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

                        VELOCITA CORP. AND SUBSIDIARIES
                         (A Development Stage Company)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of Presentation - The accompanying unaudited condensed consolidated
      financial statements have been prepared in accordance with generally
      accepted accounting principles for interim financial information and with
      the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
      Accordingly, they do not include all of the information and footnotes
      required for complete financial statement presentation by accounting
      principles generally accepted in the United States of America.

      The interim financial data as of March 31, 2001, for the three-month
      periods ended March 31, 2001 and 2000 and for the period from November 30,
      1998 (date of inception) through March 31, 2001, is unaudited. The
      information reflects all adjustments, consisting of only normal recurring
      adjustments that, in the opinion of management, are necessary to present
      fairly the financial position and results of operations of the Company for
      the periods indicated.

      The condensed consolidated financial statements and notes thereto should
      be read in conjunction with the audited financial statements and notes for
      the year ended December 31, 2000 included in the Annual Report on Form
      10-K filed with the Securities and Exchange Commission on March 30, 2001.
      Results of operations for the interim periods are not necessarily
      indicative of the results of operations expected for the full year. Where
      appropriate, items within the condensed consolidated financial statements
      have been reclassified from the previous period to conform to the current
      period presentation.

      Other Assets - The Company records leases related to wavelength, dark
      fiber and conduit IRUs and other related services as prepaid network
      assets. The Company generally pays for the services in advance and will
      record the cost of the lease in earnings over the lease term.
      Wavelength IRUs will be recorded over the lease term as a charge to
      network access and operations. Dark fiber and conduit IRUs and related
      services will be amortized over the term of the lease. Deferred
      financing costs are amortized to interest expense over the life of the
      respective financing agreement utilizing the effective interest method.

      Revenue Recognition - The Company's revenue to date relates to the resale
      of private line communications services. The Company records revenue from
      communications services as the services are provided. Amounts billed in
      advance of the service period, including relevant setup fees, are
      deferred.

      Dark Fiber Sales/IRU Revenue - In June 1999, the Financial Accounting
      Standards Board issued Interpretation No. 43, Real Estate Sales, an
      Interpretation of FASB Statement No. 66, which is effective for
      transactions entered into after June 30, 1999. The interpretation
      considers dark fiber as integral equipment, and to obtain sales-type lease
      accounting on fiber sale or lease transactions, title must transfer to the
      purchaser or lessee. Transactions in which title does not transfer must be
      accounted for as operating leases and revenue will be recognized over the
      term of the agreement. The interpretation does not affect the cash flows
      from dark fiber sales, leases or IRUs; however, it could result in a
      substantial amount of deferred revenue being recorded. Authoritative
      accounting guidance is evolving and any changes in the authoritative
      guidance could affect the accounting for revenue and expenses associated
      with future transactions.


                                       5
<PAGE>

      Net Loss Per Common Share - The Company calculates basic and diluted
      earnings per share (EPS) pursuant to SFAS No. 128. The Company had a net
      loss during the three-month periods ended March 31, 2001 and 2000 and
      therefore, common stock equivalents consisting of warrants, stock options
      and convertible preferred stock totaling approximately 81 million shares
      and 43 million shares as of March 31, 2001 and 2000, respectively, have
      been excluded from the calculation of diluted EPS, as their impact is
      anti-dilutive.

      Comprehensive Loss - In 1997, the Financial Accounting Standards Board
      (FASB) issued SFAS No. 130, Reporting Comprehensive Income, which
      established standards for the reporting and displaying of comprehensive
      income and its components. For the periods presented, there was no
      difference between the Company's net loss applicable to common stock and
      comprehensive loss.

      Segment Reporting - The Company has adopted SFAS No. 131, Disclosures
      About Segments of an Enterprise and Related Information, which defines how
      operating segments are determined and requires disclosures about products,
      services, major customers and geographic areas. The Company currently
      intends to be a facilities-based provider of fiber-optic network
      infrastructure that the Company believes to be one business segment with
      an anticipated group of similar products.

2.    PROPERTY AND EQUIPMENT

      The Company is currently constructing 6,900 miles of its total network.
      Costs associated directly with the uncompleted routes on the network are
      capitalized and interest expense incurred during construction is
      capitalized based on the weighted average accumulated construction
      expenditures and the interest rates related to borrowings associated with
      the construction. Upon completion of routes on the network, these assets
      will be placed in service and depreciated over their estimated useful
      lives ranging from four to twenty years.

      Property and equipment consists of the following:

                                                March 31,       December 31,
                                                  2001              2000
                                            ---------------   ---------------
      Land                                  $     2,756,755   $     2,108,192
      Office equipment                            6,210,126         4,037,894
      Network construction-in-progress          445,880,892       326,345,617
                                            ---------------   ---------------
                                                454,847,773       332,491,703
      Less accumulated depreciation                (904,937)         (566,742)
                                            ---------------   ---------------
                                            $   453,942,836   $   331,924,961
                                            ===============   ===============

3.    OTHER ASSETS

      Other assets consist of the following:

<TABLE>
<CAPTION>
                                               March 31,    December 31,
                                                 2001          2000
                                              -----------   -----------
<S>                                           <C>           <C>
         Prepaid network and leases           $40,612,498   $11,153,216
         Deferred financing costs, net         19,909,360    19,940,575
         Deposits                               2,852,517       361,644
                                              -----------   -----------
                                              $63,374,375   $31,455,435
                                              ===========   ===========
</TABLE>

      Prepaid network and leases as of March 31, 2001 consist primarily of
      prepayments for the acquisition of dark fiber IRUs and lit capacity
      services provided by certain other telecommunications providers. During
      the quarter ended March 31, 2001, we entered into agreements to lease
      wavelength capacity for an aggregate price of $28 million pursuant to
      agreements ranging from six to ten years. These leases are scheduled to
      commence on or near May 31, 2001.

      Deposits as of March 31, 2001 include long term security deposits related
      to leases entered into for the Company's POP locations.


                                       6
<PAGE>

4.    COMMITMENTS AND CONTINGENCIES

      Litigation - The Company is a party to various claims involving employee
      matters. Management believes that the claims are without merit and the
      Company intends to vigorously defend against them. Resolution of these
      matters is not expected to have a material adverse effect on the Company.

      From time to time, the Company has been party to various other legal
      proceedings arising in the ordinary course of business, including issues
      related to obtaining rights of way. In addition, the Company has also
      been a party to bankruptcy proceedings involving select customers and
      vendors. Although a number of uncertainties exist in any bankruptcy and
      the rights and obligations of the counter party and its creditors will
      be determined over time in the bankruptcy court, the Company does not
      believe these proceedings will have a material adverse effect on the
      Company's financial condition or results of operations.

5.    PUT WARRANTS

      In connection with a network development agreement with AT&T, in October
      1999 the Company issued warrants to AT&T (the Put Warrants) to purchase
      14,141,414 shares of the Company's common stock at a price of $2.8125 per
      share, the estimated fair value of the Company's common stock at the date
      of grant. The number of warrants to be issued is subject to adjustment
      based on the occurrence of certain future events. In the event that the
      Company does not complete an initial public offering by October 29, 2004,
      the holder of the warrants shall have the right to require the Company to
      repurchase the unexercised shares at the difference between the warrant
      exercise price and the fair market price of the Company's common stock on
      the date of repurchase. The Put Warrants expire October 29, 2004 or, in
      the event the Company has not completed an initial public offering by
      October 29, 2004, they will expire on October 29, 2006.

      The Company recorded the initial fair value of these warrants upon
      issuance, approximately $25.8 million, as network construction-in-process
      and a corresponding liability. The Company recognizes changes to the fair
      market value of the Put Warrants in earnings. The Company recorded a
      non-cash charge of $45.5 million during 2000, including $42.2 million
      during the quarter ended March 31, 2000 and $3.3 million during the
      quarter ended December 31, 2000, to reflect the increase in the fair value
      of the Put Warrants. The charge recorded for the quarter ended March 31,
      2001 aggregated $2.4 million.

6.    STOCK COMPENSATION

      The Company granted approximately 1.4 million and 2.8 million nonqualified
      stock options (NQSO) to employees during the three-month periods ended
      March 31, 2001 and March 31, 2000. The Company did not grant any warrants
      during the three-month periods ended March 31, 2001 and March 31, 2000.
      The expense recognized in accordance with Accounting Principles Board
      Opinion No. 25 was approximately $329,000 and $74,000 for the three-month
      periods ended March 31, 2001 and March 31, 2000, respectively. As of
      March 31, 2001, the Company has approximately $2.7 million of unamortized
      compensation


                                       7
<PAGE>

      expense within stockholders' equity that will be recorded as compensation
      expense through approximately April 2004.

7.    BORROWINGS UNDER CREDIT FACILITY

      During the quarter ended March 31, 2001, the Company borrowed $75 million
      under the Tranche A facility of its Credit Agreement with First Union
      National Bank, as agent (the "First Union Credit Agreement") and an
      additional $75 million was borrowed under the revolving credit facility.
      Proceeds from the borrowings will be used to finance the construction of
      the Company's network and for working capital needs. The borrowings under
      the facilities bear interest at rates ranging from the one-month LIBOR
      plus a spread of 4.25 percent to the three-month LIBOR plus a spread of
      4.25 percent. The weighted average interest rate for the borrowings as of
      March 31, 2001 is approximately 9.5%.

      As of March 31, 2001, the Company had two letters of credit outstanding
      totaling approximately $3.9 million.

8.    BUSINESS SEGMENT INFORMATION

      The Company and its subsidiaries operate in one reportable segment as a
      facilities-based provider of fiber-optic network infrastructure.

      The Company is currently in the development stage with three customers
      accounting for revenue of approximately $306,000 during the quarter ended
      March 31, 2001. These customers did not account for any revenue during the
      same period in the preceding year. The Company had only one customer
      during the quarter ended March 31, 2000, accounting for the entire revenue
      amount of approximately $28,000. During April 2001, one customer filed for
      protection under Chapter 11 of the U.S. bankruptcy code and the Company
      recorded bad debt expense in connection with the uncertainty of the
      collection of the receivable amount from this customer. Given the
      relatively small amounts involved, we do not believe the bankruptcy of
      this customer will have a material effect on the Company's financial
      position or results of operations.

9.    SUBSEQUENT EVENTS

      On April 12, 2001, the Company entered into an agreement (the "Supply
      Agreement") with Cisco Systems, Inc. ("Cisco") pursuant to which Cisco
      will supply optronics and data internetworking equipment for Velocita's
      18,500 mile fiber-optic network. Under the Supply Agreement, the Company
      has also committed to purchase at least $225 million of equipment from
      Cisco during the next two years, and expects to spend significantly more
      on such equipment to complete the network.

      The Company has also proposed to amend the First Union Credit Agreement to
      provide for additional vendor financing to be provided by Cisco's
      affiliate, Cisco Systems Capital Corporation. In addition, Cisco has
      committed to purchase shares of a new series of the Company's senior
      cumulative convertible preferred stock. The issuance of the preferred
      stock may relieve Velocita of its contingent obligation to issue
      additional warrants under the terms of its high yield debt offering
      in 2000. The terms of the proposed $485 million in debt and equity
      financing also provide for the issuance of certain contingent warrants
      to Cisco that may be exercised for shares of the Company's common stock
      upon the occurrence of certain future events.


                                       8
<PAGE>

      Under the terms of the proposed financing, the principal and cumulative
      interest on the Note Payable to Affiliate would be repaid pursuant to its
      terms. Subsequent to this repayment, the affiliate would provide an amount
      of funding equal to the principal and accumulated interest on the original
      note payable in the form of a tranche under our current credit facility,
      as amended.

      The effectiveness of the Supply Agreement and the financing commitment are
      subject to various conditions, including the approval of the lenders under
      the First Union Credit Agreement. Accordingly the Company cannot provide
      any assurance that these agreements will become effective on the terms
      described above, or at all.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

      Except as otherwise indicated, references in this section to the
"company," "us" or "we" refer to Velocita Corp. and its subsidiaries.

      This Report on Form 10-Q contains forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995, Rule 175 under the Securities Act, Rule 3b-6 under the Exchange Act and
Securities Act Release No. 6084 (June 25, 1979). These forward-looking
statements may be affected by risks and uncertainties, including without
limitation, our ability to (i) remain in compliance with our current debt
agreements and indenture covenants; (ii) obtain additional capital and
financing, as required, at reasonable costs and on satisfactory terms and
conditions; (iii) effectively and efficiently manage the completion of the route
segments of our fiber network by construction and swapping; and (iv) access
markets and enter into contracts to sell or swap dark fiber or lease high-volume
capacity on our fiber network. These forward-looking statements also depend on
the timely performance by third-party contractors and our swap partners of their
obligations. There can be no assurance that we will remain in compliance with
our current debt agreements or indenture covenants, obtain additional capital
and financing as required, successfully manage construction or sell fiber and
capacity to additional customers. A failure of any of the foregoing may
significantly delay or prevent completion of our fiber network, which would have
a material adverse effect on our financial condition and results of operations
and our ability to continue as a going concern. In light of such risks and
uncertainties, our actual results could differ materially from such
forward-looking statements. We do not undertake any obligation to publicly
release any revisions to any forward-looking statements contained herein to
reflect events and circumstances occurring after the date hereof or to reflect
the occurrence of unanticipated events.

Overview

      Our goal is to become a leading facilities-based provider of
technologically advanced, high-capacity fiber-optic network infrastructure,
private networks and communications services throughout the continental
United States. We intend to pursue a broadband carrier strategy by connecting
many of the highest volume telecommunications markets and customers in the
United States to each other and to the Internet. Our services will include
data, video and voice transmission to Internet service providers,
telecommunications carriers, corporate and governmental entities and other
datacentric buyers of network capacity. Through joint construction
arrangements and fiber and conduit swaps, sales and purchases, we intend to
assemble a low-cost, upgradable nationwide fiber-optic network consisting of
approximately 11,300 miles with the capability to expand to up to
approximately 18,500 miles. Through our own constructed and partner provided
POPs, our network will have access to over 175 metropolitan areas in the
continental United States, including at least 40 of the top 50 MSAs and all
of the top 20 MSAs. We are constructing approximately 6,900 miles of our
network and acquiring 11,600 miles of our network through a swap agreement
with Touch America and a fiber acquisition agreement with AT&T Corp.
("AT&T"). The constructed portion of our network will include substantial
fiber and empty conduit. We may expand our network over time through swaps
and sales of fiber and conduit, fiber and conduit purchases and additional
joint construction arrangements.


                                       9
<PAGE>

      On October 29, 1999, we entered into an agreement with AT&T to build
approximately one-half of the outsourced portion of AT&T's state-of-the-art
fiber optic network. The construction contemplated by the AT&T network
development agreement, as amended on December 9, 2000, now represents
approximately 6,200 miles of the total 6,900-mile constructed portion of our
network, connecting major metropolitan areas along AT&T's network. We believe
that this agreement will provide us with many business, operational and
marketing advantages. AT&T is paying us an aggregate of approximately $300
million for our construction services, thus reducing our overall network
construction costs. In addition, we will design and construct this portion of
the network to AT&T's specifications, which will ensure network quality and
reliability and provide us with a key marketing advantage in offering our
services. AT&T has also agreed to provide its private rights of way for use
on the AT&T portion of our network. We and AT&T intend to jointly dispose of
up to 96 dark fibers along these 6,200 route miles, which will further reduce
our overall network construction costs. We will each contribute up to 48
fibers to these joint dispositions.

      On February 25, 2000, we entered into a conduit and fiber swap agreement
with Touch America, a subsidiary of Montana Power, that will provide us with a
combination of fiber and conduit over an additional 4,400 route miles of its
network and approximately $48.5 million in cash (subject to adjustment) in
exchange for a combination of fiber and conduit over approximately 5,900 route
miles of our network. Touch America is constructing most of these route miles
pursuant to a joint construction agreement with AT&T similar to our agreement
with AT&T and is currently scheduled to complete this project during 2001.

      On December 9, 2000, we entered into an agreement with AT&T to acquire
approximately 7,200 miles of fiber-optic cable. The agreement also allows us to
increase our fiber count along substantially all of the purchased routes at the
incremental cost of such assets. The total cost for this acquisition will be
approximately $111.5 million payable through December 31, 2002 as each link of
the network is completed. We made an initial payment pursuant to this fiber
acquisition agreement of approximately $11.2 million in January 2001. The
acquisition of this dark fiber adds eight of the top 30 metropolitan areas in
the continental United States, including the cities of San Francisco, Seattle,
Portland, Pittsburgh, Cleveland, Boston, Miami and Tampa to our network.

      During April 2001, we entered into an agreement pursuant to which Cisco
Systems, Inc. ("Cisco") and its affiliate, Cisco Systems Capital Corporation,
have agreed to provide us with $485 million of debt and equity financings, of
which at least $225 million would be used to purchase optical, data and
internetworking equipment from Cisco. Certain amounts could be used for other
purposes, including funding the 7,200-mile fiber acquisition from AT&T. These
commitments are subject to approval of our senior secured bank lenders, which
we expect to receive during the second quarter of 2001. If such approval is
not obtained or if alternate additional financing is not obtained, we may
choose to cancel the AT&T fiber acquisition agreement. In the event of
cancellation, we will owe a $10.0 million cancellation penalty; however, the
initial deposit could be used to acquire assets of our choosing at
predetermined prices.

      We are a development stage company and, accordingly, we have a limited
operating history. The development, construction and expansion of our network
will require substantial amounts of capital to be invested before any
significant recurring revenue is generated. We expect to continue to incur
significant and increasing operating losses and negative EBITDA while we
construct our network and develop our customer base. We expect to generate
substantial cash proceeds from dispositions of dark fiber rights in order to
help finance our network construction costs. However, we do not anticipate
significant revenues


                                       10
<PAGE>

from sales of broadband services until late 2001 or early 2002. In order for us
to meet our strategic objectives, we must complete the initial 6,900 miles of
our network according to our build schedule and generate a substantial volume of
traffic on our network. In addition, we will rely upon Touch America and AT&T
for timely completion of the segments of our network we will receive from them.

Business Update

      We are continuing to increase the number of our employees and our
construction expenditures as we continue the build-out of our nationwide
network. As of April 30, 2001, we had 274 full time employees, 104 percent more
than the number of employees we had at the end of December 2000. Construction
expenditures approximated $145.9 million during the quarter ended March 31,
2001, and we anticipate construction spending in the near term will increase
from the first quarter level as we continue our network build, pull fiber on our
first phase network routes and begin lighting our network. We began pulling
fiber through conduit in August 2000 and, following final acceptance by our
current bank creditors of the vendor financing agreement signed on April 12,
2001, we anticipate that we will light our first route (Houston to Jacksonville)
in the late second quarter or early third quarter of 2001. We have experienced
some permitting and construction delays on certain routes; however, our network
build plan remains on track to be substantially completed during 2002.

      As of March 31, 2001, we had approximately 3,500 route miles of conduit in
the ground and approximately 1,950 route miles of fiber-optic cable installed.

      AT&T is making payments to us for our progressive construction of its
portion of our network. Touch America is also making payments to us for our
progressive construction of network links that will be swapped pursuant to our
swap agreement with them. Through March 31, 2001, we have received an aggregate
of approximately $158.6 million pursuant to our network development agreement
with AT&T and from proceeds related to dark fiber and conduit dispositions.
During the three months ended March 31, 2001, we received proceeds related to
our network development agreement and dark fiber and conduit dispositions
totaling approximately $73.7 million.

      As of March 31, 2001, we had eight primary communications services
customers to whom we resell capacity that we purchase from AT&T. We are pursuing
additional resale customers and we plan to selectively migrate these customers
to our network upon its completion on a segment-by-segment basis.

Results of Operations

      Three months ended March 31, 2001 compared to the three months ended March
31, 2000

      We are a development stage company without a significant history of
operating revenues. During the three months ended March 31, 2001, revenue
totaled approximately $373,000, all of which consisted of revenue from resale
activities, compared to approximately $28,000 during the same period in the
preceding year. This increase was due to the increase in the number of resale
customers from one as of March 31, 2000 to eight as of March 31, 2001.

      During the three months ended March 31, 2001, network operations and
access costs were $1.3 million compared to total costs of approximately $22,000
for the same period in the preceding year. This increase was due primarily to
higher payroll costs due to the increase in headcount within our network
operations and engineering departments and higher access costs related to our
resale customers.

      Selling, general and administrative expenses increased approximately 285%
from approximately $2 million for the three months ended March 31, 2000 to
$7.8 million for the three months ended


                                       11
<PAGE>

March 31, 2001. The increase was due primarily to an increase in the selling,
general and administrative headcount from 19 to 155 and higher general costs
associated with the growth in the supporting infrastructure and facilities
costs.

      Depreciation and amortization expenses increased 374% to approximately
$338,000 for the three months ended March 31, 2001 compared to approximately
$71,000 for the three months ended March 31, 2000. The increase was due
primarily to purchases of office and data processing equipment to support
additional operational and sales staff.

      Interest expense decreased from $775,000 for the three months ended
March 31, 2000 to zero for the three months ended March 31, 2001. Interest
expense was net of capitalized interest of approximately $4.2 million and
$12.7 million (including approximately $2.4 million of non-cash interest) for
the quarter ended March 31, 2000 and the quarter ended March 31, 2001,
respectively. We expect our interest cost to increase during the second half
of 2001 compared to the first half as we borrow additional funds due to the
growth in anticipated amounts of construction expenditures. The increase of
approximately $7.7 million in interest cost from the prior period was due to
incremental interest incurred on the high yield debt and the borrowings under
our credit facility. These amounts were partially offset by decreases related
to the repayment of the bridge loan and lower commitment fees paid with
respect to availability under our credit facility.

      Interest income did not change significantly during the quarter ended
March 31, 2001 compared to the amount earned during the quarter ended March 31,
2000. We expect interest income to decrease during the year as we lower our
average cash balance in connection with higher anticipated construction
spending.

      Our net losses continue to reflect our development stage status and future
recovery of tax losses remain uncertain. If we are able to carry these losses
forward, future tax amounts owed will be lower due to these loss carry forwards.

Liquidity and Capital Resources

      Our current assets of $153.4 million as of March 31, 2001, including cash
and cash equivalents of $121.1 million exceeded our current liabilities of
$136.2 million, providing a working capital surplus of $17.2 million. During the
three months ended March 31, 2001, our cash levels increased approximately $44.8
million. The significant elements consisted of (i) cash proceeds from borrowings
under our credit facility of $150 million, (ii) proceeds related to our network
development agreement, dark fiber and conduit dispositions and colocation space
in our POP sites totaling approximately $76.7 million and (iii) changes in
working capital providing approximately $11.3 million. These cash increases
were offset by (i) construction expenditures of $145.9 million, (ii)
acquisition of bandwidth and lit capacity of approximately $39.1 million,
(iii) cash paid for interest of approximately $1.8 million and (iv) cash
operating losses of approximately $6.4 million incurred during the quarter
for operations as well as selling, general and administrative costs.

      The development of our business model will require significant capital
expenditures, a substantial portion of which will be incurred before any
significant related revenues are realized. These expenditures, along with the
associated early operating expenses, will result in substantial negative
operating cash flow and substantial net operating losses for us for the
foreseeable future. Although we believe that our cost estimates and network
build-out schedule are reasonable, the actual construction costs or the timing
of the capital expenditures may deviate from current estimates.

      Total capital expenditures from January 1, 2001 through December 31, 2002
are expected to be in excess of $1.1 billion. Cash on hand and the undrawn
commitments under the credit facility provided us


                                       12
<PAGE>

with approximately $317.2 million of funds available as of March 31, 2001 and we
expect to receive proceeds from our network development agreement and asset
sales in excess of $400 million. We expect that additional financing totaling
$485 million will also be available in the event that the senior secured bank
lenders approve our vendor financing agreement announced on April 13, 2001.

      Our total primary funding sources currently include the following:

      o     Preferred Stock and Equity Investment. Upon the completion of the
            units offering in 2000, we received all of the preferred stock funds
            committed by Odyssey and the other co-investors of approximately
            $125 million. In addition, we had previously received approximately
            $8.6 million from PF Telecom Holdings LLC and Koch Telecom Ventures,
            Inc. in cash, service and materials as an equity contribution.

      o     The Credit Facility. Our wholly-owned subsidiary, PF.Net Corp., will
            borrow funds under its $350 million credit facility with First Union
            National Bank as and when needed. The credit facility consists of
            $200 million in term loans and a $150 million revolving credit
            facility. The term loans are available for borrowing by PF.Net Corp.
            until April 29, 2002 in amounts not greater than 125% of the
            aggregate purchase price of products and services purchased from
            vendors for use in connection with the network. Any amount of the
            term loan that is above 100% but less than or equal to 125% of that
            aggregate purchase price and the $150 million revolving credit
            facility may be used for capital expenditures associated with our
            network development, for operating expenses related to the network
            and other working capital expenses and for payment of interest on
            our indebtedness, all in accordance with our annual business plan.
            PF.Net Corp. currently has $150 million of outstanding borrowings
            under the credit facility. Based on our cumulative network
            construction expenditures, we have approximately $196.1 million
            available under the credit facility as of March 31, 2001. The credit
            facility matures on December 31, 2006.

      o     The Units Offering. On May 10, 2000, we completed the private
            placement of 225,000 units consisting of 13.75% senior notes with a
            stated principal amount of $225 million and warrants to purchase
            an aggregate of 8,926,296 shares of our common stock for $0.01 per
            share. We received $225 million in gross proceeds from the sale of
            the units.

      o     Joint Construction. We plan to use joint construction contracts to
            decrease our construction costs. Under the AT&T agreement, as
            amended in December 2000, we expect to receive approximately $300
            million of payments from AT&T for construction of the 6,200 miles
            contemplated by the amended AT&T agreement. We may seek to enter
            into similar arrangements with other telecommunications providers
            for the remaining 600 miles of our constructed network. We received
            approximately $106.1 million pursuant to the network development
            agreement through March 31, 2001.

      o     Proceeds from Asset Sales, Including Swaps, Leases and IRUs of Dark
            Fiber and Conduit. We expect to generate substantial cash proceeds
            from dispositions of dark fiber rights and conduit through the end
            of 2002. The majority of these proceeds will be applied to the
            construction and operation of our network. We plan to sell, grant
            IRUs or lease potentially up to 48 fibers in each mile of our
            constructed network. We have agreed with AT&T to jointly sell, grant
            IRUs, lease or swap up to 96 fibers on the portion of our network to
            be built pursuant to the AT&T network development agreement. We will
            each contribute 48 fibers to these joint dispositions. In addition,
            conduit or other assets may also be sold or leased.


                                       13
<PAGE>

      o     Vendor Financing. We plan to finance the cost of certain fiber-optic
            and related data equipment through vendor financing arrangements.
            During April 2001, we entered into an agreement with Cisco pursuant
            to which we have committed to purchase at least $225 million of
            optical, data and internetworking equipment from Cisco over the next
            two years. In connection with this supply agreement, Cisco and its
            affiliate, Cisco Systems Capital Corporation, agreed to provide us
            with an aggregate of $485 million of debt and equity financing. The
            supply agreement and the vendor financing agreement are subject to
            the acceptance of the financing agreement by our senior secured bank
            lenders, which we expect to occur during the second quarter of 2001.

      We expect that the total sources of funding described above from January
      1, 2001 through December 31, 2002 will be approximately $1.3 billion.
      During the quarter ended March 31, 2001, we borrowed an aggregate $150
      million under the First Union credit facility and received approximately
      $73.7 million in connection with our network development agreement, dark
      fiber and conduit dispositions.

      We expect that our primary cash uses over the next two years will include
      the following:

      o     Network Build Costs. Our primary anticipated cash need is funding
            capital expenditures for network build costs. We estimate that
            during the period from January 1, 2001 through December 31, 2002, we
            will spend a total of approximately $1.1 billion to construct and
            light substantially all of the 18,500 miles of our network, assuming
            the constructed portion consists of an average of 132 fibers per
            route mile. We spent approximately $145.9 million under our network
            capital plan during the quarter ended March 31, 2001. This cost
            increase from our 11,300-mile network plan is due primarily to
            increased construction, optical-electronic, data communications and
            internetworking equipment on the additional 7,200-mile planned fiber
            acquisition as well as an increase in the average fiber count on our
            constructed network from 96 fibers to 132 fibers. Our construction
            is being performed under construction contracts with third parties
            that include liquidated damage provisions and penalties if such
            construction is not completed within specified timeframes.

      o     Debt Service Payments. We estimate that during the period from
            January 1, 2001 through December 31, 2002, we will pay approximately
            $150 million in interest. We paid approximately $1.8 million in
            interest during the quarter ended March 31, 2001. The amount of
            interest expense is expected to increase from the levels experienced
            during the first quarter due to the timing and amount of our
            anticipated construction expenditures.

      o     Operating Losses. Over the next two years we expect to generate
            substantial operating losses as we increase our headcount in
            accordance with our current business plan.


                                       14
<PAGE>

Summary

      We believe that the net proceeds from the units offering and the Odyssey
preferred stock investment, borrowings and additional availability under the
credit facility, proceeds received under joint construction contracts, proceeds
from dispositions of dark fiber, our recently announced vendor financing with
Cisco and cash on hand will be sufficient to satisfy our anticipated cash
requirements from January 1, 2001 through December 31, 2002 for substantially
all of our 18,500-mile build and initial light plan. We have scaled our
anticipated operations and expenditures in line with the 18,500-mile network
described above. In the event that we do not secure the consent of the senior
secured bank lenders to the Cisco vendor financing or otherwise obtain
additional financing, we may cancel our 7,200-mile expansion plan, and would
accordingly reduce planned expenditures (equipment, fiber, other infrastructure
and operating costs).

      We cannot, however, assure you that our capital needs will not exceed the
amounts we have estimated, that our construction costs or operating losses will
not be larger than we currently anticipate, that cash received from dark fiber
dispositions will be at the levels we currently expect, that we will be able to
obtain the consent of our senior secured bank lenders to the vendor financing
described above or finance changes to our construction plan, or that we will be
able to obtain the necessary funds under the credit facility or from the sources
described above or at all. The vendor financing described above or any
additional debt financing will increase our interest expense and may result in
other modifications to our lending conditions, including more restrictive
covenants. If we issue additional equity, the ownership interest represented by
our existing equity interests, including the warrants issued in the units
offering, may be diluted. If we are unable to obtain the necessary funds, we
will be required to decrease or defer our planned capital expenditures and,
depending on the cash flow from our then-existing businesses, reduce the scope
of our planned operations.

      Continued increases in interest rates could have a material impact on our
ability to pay interest on variable rate debt that we may obtain under our
credit facilities. In addition, our ability to expand our business and enter
into new customer relationships will depend on our ability to obtain additional
financing for these projects. To the extent that we expand the scope of our
network beyond 18,500 miles, we will need additional capital. Continued weakness
in the capital markets for telecommunications companies, including the
increasing bankruptcy filings among competitors and potential customers, could
also materially affect our ability to obtain additional financing or sell dark
fibers or conduits.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

      We have interest rate exposure related to the credit facility. Borrowings
under that facility bear interest at rates that fluctuate with changes in
short-term interest rates. The credit facility requires us to hedge the risks
related to interest rate movements through the use of interest rate protection
agreements or other derivative instruments and as necessary to ensure that at
least 50% of our consolidated indebtedness either bears interest at a fixed rate
or is protected against interest rate fluctuations by a hedging agreement that
fixes or limits our interest cost. As all of the interest on the senior notes is
at a fixed rate and our borrowings under the credit facility are not greater
than 50% of our consolidated indebtedness, no interest rate hedging is currently
required. We may choose to manage our risk associated with interest rate
movements through an appropriate balance of fixed and variable rate obligations
as described above. To maintain an effective balance of fixed and variable
obligations, we may elect to enter into specific interest rate swaps or other
derivative instruments, as we deem necessary. The Company has borrowed $150
million under the credit facility as of March 31, 2001 bearing interest at a
weighted average interest rate


                                       15
<PAGE>

of approximately 9.5%. As of March 31, 2001, the Company is not a party to any
interest rate swap agreements or other derivative instruments.

Market Risk

      We have market risk exposure related to put warrants. We issued warrants
to purchase 14,141,414 shares (subject to adjustment upon the occurrence of
certain events) of the Company's common stock at $2.8125 per share. In the event
that the Company does not complete an initial public offering by October 29,
2004, the holder of the warrants shall have the right to require us to
repurchase the unexercised shares at the difference between the warrant exercise
price and the fair market price of our common stock on the date of repurchase.
If the Company is unable to pay cash or if debt terms prohibit payment of cash
for the repurchase, the Company will use commercially reasonable efforts to
provide substitute consideration, including subordinated indebtedness or
preferred equity. We recognize changes to the fair market value of the put
warrants in earnings. Changes in the fair value of our common stock affect the
fair value of the put warrants. Such changes could have a material effect on our
financial position and results of operations. At March 31, 2001, the fair value
of the put warrants was $73.7 million, determined using the Black-Scholes
option-pricing model.

New Accounting Pronouncements

      In June 1998, the FASB issued Statement of Financial Accounting Standard
("SFAS") No. 133, Accounting for Derivatives and Hedging Activities. This
statement, as amended by SFAS Nos. 137 and 138, establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. We were required to adopt SFAS No. 133 on January 1, 2001 and its
adoption did not have a significant impact on our financial position or results
of operations.

      In June 1999, the FASB issued Interpretation No. 43, "Real Estate Sales,
an Interpretation of FASB Statement No. 66," which is effective for transactions
entered into after June 30, 1999. This interpretation considers dark fiber as
integral equipment, and to obtain sales-type lease accounting on fiber sale or
lease transactions, title must transfer to the purchaser or lessee. Transactions
in which title does not transfer must be accounted for as operating leases and
revenue will be recognized over the term of the agreement. The Interpretation
does not affect cash flows from dark fiber sales, leases, or IRU's, however; it
could result in a substantial amount of deferred revenue being recorded.
Authoritative accounting guidance is evolving and any changes in the
authoritative guidance could affect accounting for revenue and expenses
associated with future transactions.

      On March 31, 2000, the FASB issued Interpretation No. 44, Accounting for
Certain Transactions Involving Stock Compensation, an interpretation of
Accounting Principles Board Opinion No. 25. This interpretation modifies the
current practice of accounting for certain stock award agreements and is
generally effective beginning July 1, 2000. The initial impact of this
interpretation on our results of operations and financial position was not
material, but its application may have a material impact on future accounting
for stock compensation transactions.


                                       16
<PAGE>

                          PART II - OTHER INFORMATION

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

      (a)   Effective January 1, 2001, Mr. David Duncan was elected as a member
            of the Board of Directors of the Company via unanimous written
            consent of the stockholders. Mr. Duncan replaced Mr. George Damiris
            as a Koch Telecom Ventures, Inc. designee on our Board of Directors.

      (b)   Effective January 18, 2001, the stockholders of the Company
            approved, via unanimous written consent, the change of the Company's
            name from PF.Net Communications, Inc. to Velocita Corp.

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

      (a)   Exhibits

            Exhibit No.   Description of Exhibit

            10.1          Service Provider Agreement dated April 6, 2001 by
                          and between PF.Net Corp. and Cisco Systems, Inc.,
                          portions of which have been deleted herein and
                          replaced with the symbol "**" pursuant to a request
                          by the Company to the SEC for confidential treatment
                          of these portions.

            10.2          Series B Senior Cumulative Convertible Preferred
                          Stock Purchase Agreement dated April 12, 2001 by
                          and between Cisco Systems, Inc. and Velocita Corp.,
                          portions of which have been deleted herein and
                          replaced with the symbol "**" pursuant to a request
                          by the Company to the SEC for confidential treatment
                          of these portions.

            10.3          Debt Commitment Letter dated April 12, 2001 by
                          and between PF.Net Corp. and Cisco Systems Capital
                          Corporation, portions of which have been deleted
                          herein and replaced with the symbol "**" pursuant to
                          a request by the Company to the SEC for confidential
                          treatment of these portions.

      (b)   Reports on Form 8-K:

            Current Report on Form 8-K (Item 5) filed on January 25, 2001,
            regarding the changing of the Company's name from PF.Net
            Communications, Inc. to Velocita Corp. and the naming of Bob Collet
            as President, Velocita Corp.

            Current Report on Form 8-K (Item 5) filed on February 15, 2001,
            regarding the expanded joint build agreement between Velocita Corp.
            and AT&T which increased the miles constructed pursuant to our
            original contract from approximately 5,000 to approximately 6,200.

            Current Report on Form 8-K (Item 5) filed on April 13, 2001,
            regarding the supply agreement with Cisco Systems, Inc. and the
            additional committed financing to be received from Cisco Systems
            Capital Corporation aggregating $485 million.

            Current Report on Form 8-K (Item 5) filed on May 10, 2001, regarding
            the extension of the deadline for the issuance of equity securities
            that would prevent the vesting of additional warrants under the
            Company's Warrant Agreement with U.S. Trust Company.


                                       17
<PAGE>

                                   SIGNATURES

Pursuant to the requirements 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.

                                       VELOCITA CORP.
                                       (Registrant)

                                       By:  /s/ DAVID L. TAYLOR
                                           -------------------------------------
                                           Name: David L. Taylor
                                           Title: Chief Financial Officer

                                       Dated: May 15, 2001


                                       18