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



                                   FORM 10-QSB





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

                For the quarterly period ended September 30, 1999
                         Commission File No. 33-19139-NY


                           NETAMERICA.COM CORPORATION
                           --------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


            Delaware                                     11-2936371
            --------                                     ----------
 (State or Other Jurisdiction of                     (IRS Employer ID Number)
Incorporation or Organization)

       2 Embarcedero Center, Suite 200, San Francisco, CA         94111
            (Address of Principal Executive Offices)           (Zip Code)


         Issuer's telephone number, including area code: (415) 646-8033



Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by  Section 13 or 15(d) of the  Exchange  Act during the past 12 months
(or for such shorter  period that the issuer was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
     YES  X      NO
        ----        ----

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common equity, as of the latest practicable date.


              12,773,266 shares common stock as of November 1, 1999
                                (Title of Class)

<PAGE>

<TABLE>
<CAPTION>

                                     Page 2
                           NETAMERICA.COM CORPORATION
                    ----------------------------------------
                                   FORM 10-QSB
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1999


PART I - FINANCIAL INFORMATION                                                                            Page

     Item 1 -

         Financial Statements

<S>                                                                                                         <C>
              Consolidated Balance Sheet for September 30, 1999 (unaudited) and December 31, 1998           3

              Consolidated Statements of Income (unaudited) for the three months and nine months
                  ended September 30, 1999 and 1998                                                         4

              Consolidated Statements of Cash Flows (unaudited) for the nine months
                  ended September 30, 1999 and 1998                                                         5

              Notes to Consolidated Financial Statements                                                    6

     Item 2 -

         Management's Discussion and Analysis of Financial Condition and
              Results of Operations                                                                        11

PART II - OTHER INFORMATION

     Item 1 - Legal Proceedings                                                                            22

     Item 2 - Changes in Securities                                                                        22

     Item 3 - Defaults Upon Senior Securities                                                              22

     Item 4 - Submission of Matters to a Vote of Security Holders                                          22

     Item 5 - Other Information                                                                            22

     Item 6 - Exhibits and Reports on Form 8-K                                                             23

SIGNATURES                                                                                                 24
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                 See Notes to Consolidated Financial Statements


                         Part I - Financial Information

Item 1.       Financial Statements

NETAMERICA.COM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

                                                       September 30,              December 31,
                                                       -----------                -----------
                                                          1999                        1998
                                   (unaudited)
Assets
------

Current assets
<S>                                                    <C>                        <C>
         Cash                                          $   154,684                $   528,516
         Interest Receivable                                95,077                      1,638
         Accounts Receivable                                   600                       --
                                                       -----------                -----------
                  Total Current Assets                     250,361                    530,154
                                                       -----------                -----------

Property, Plant & Equipment (Note 4)                       484,480                      6,875
Other assets
         Goodwill                                        1,465,487                     41,117
         Deposits                                          137,721                       --
         Deferred Offering Costs                            94,782                       --
                                                       -----------                -----------
Total Assets                                           $ 2,432,832                    578,146
                                                       ===========                ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current Liabilities
         Accounts Payable and Accrued Expenses             607,146                $    68,200
         Short Term Debt                                 1,000,000                       --
                                                       -----------                -----------
                  Total Current Liabilities              1,607,146                     68,200
                                                       -----------                -----------

Stockholders' Equity
         Common Stock, $.0001 par value; 300,000,000
         shares authorized; issued and outstanding
         12,773,266 shares and 7,243,023 shares,
         respectively                                        1,277                        724
         Capital in Excess of Par Value                  8,145,838                  2,147,518
         Retained (Deficit) Accumulated During
         Development Stage                              (5,044,430)                (1,338,296)
         Less Subscriptions Receivable                  (2,276,999)                  (300,000)
         Total stockholders' equity                        825,686                    509,946
                                                       -----------                -----------
Total Liabilities and Stockholders' Equity             $ 2,432,832                $   578,146
                                                       ===========                ===========
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       3
<PAGE>

NETAMERICA.COM CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>


                                                                                                           Beginning of
                                                                                                         Development Stage
                                                   Three Months ended             Nine Months ended     May 6, 1987 through
                                                      September 30                 September 30           September 30
                                                   1999           1998          1999            1998           1999
                                              ---------------------------------------------------------------------
REVENUE
<S>                                          <C>                           <C>                             <C>
Interest Income                              $    43,782           --      $    94,590           --        $   139,196
EXPENSES
Selling, General & Administrative              1,415,377          8,137      2,947,961          8,137        3,380,442
Bad Debt                                            --             --          746,188           --          1,631,188
Depreciation and Amortization                     88,866           --           98,859           --            108,652
Interest                                          10,132           --           10,132           --             20,905
Loss from write down of Goodwill (Note 7)           --             --             --             --             44,855
                                              ------------------------------------------------------------------------

         Total Expenses                        1,514,375          8,137      3,803,140          8,137        5,186,042
Other Income                                       2,416           --            2,416           --              2,416
Income (Loss) Before Taxes                    (1,468,177)        (8,137)    (3,706,134)        (8,137)      (5,044,430)
Taxes (Note 3)                                      --             --             --             --             --
INCOME (LOSS)                                 (1,468,177)        (8,137)    (3,706,134)        (8,137)      (5,044,430)
                                              ========================================================================
Loss Per Common Share (Note 2)                     (0.11)          --            (0.33)          --
                                              =======================================================
Weighted Average Number of Shares
(Note 2)                                      12,773,266        200,000     11,326,388        200,000
                                              =======================================================


</TABLE>


                 See Notes to Consolidated Financial Statements

<PAGE>

<TABLE>

NETAMERICA.COM CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>


                                                                                           From the
                                                                                       Beginning of
                                                                                         Development
                                                              For the Nine Months      Stage on May 6
                                                                    Ended                 1987 to
                                                                 September 30            September 30

                                                               1999          1998          1999
                                                          ----------    ----------    ----------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                       <C>               <C>       <C>
  Net Income (Loss)                                       (3,706,134)       (8,137)   (5,044,430)
  Adjustments to Reconcile Net Income to Net Cash
     Provided by Operating Activities:
         Depreciation and Amortization                        98,859          --         108,417
         Bad Debt (Note 7)                                   746,188          --       1,631,188
         Write Off of Goodwill (Note 6)                         --            --          44,855
         Stock for Services/Expenses                         451,447         8,100       540,573
         Stock for Interest                                     --            --          10,773
         (Increase) Decrease in Interest Receivable and
          Other Advances                                    (357,478)         --      (1,278,617)
         Increase (Decrease) in Accounts Payable and
          Accrued Expenses                                   530,278          --         534,278
                                                          ----------    ----------    ----------

                  TOTAL                                   (2,236,841)          (37)   (3,452,963)

CASH FLOWS FROM INVESTING ACTIVITIES
         Payment for Purchase of Equipment                  (482,319)         --        (486,814)
         Payment for Purchase of Organizational Cost            --            --            (700)
         Cash Purchased by Stock Acquisition of               82,240         3,690        85,930
         Loans to Affiliates                                    --        (253,500)         --
                                                          ----------    ----------    ----------
                  TOTAL                                     (400,079)     (249,810)     (401,584)

CASH FLOWS FROM FINANCING ACTIVITIES
         Loans and Other Debt (Net)                          350,000       255,000       813,000
         Paid-In Capital Contributions                          --            --           7,650
         Proceeds from Stock Sales                         1,997,588          --       3,455,483
         Less: Private Offering Costs                        (84,500)         --        (266,902)
                                                          ----------    ----------    ----------
                  TOTAL                                    2,263,088       255,000     4,009,231
INCREASE (DECREASE) IN CASH                                 (373,832)        5,153       154,684
CASH BEGINNING OF PERIOD                                     528,516          --            --
                                                          ----------    ----------    ----------
CASH END OF PERIOD                                           154,684         5,153       154,684
                                                          ==========    ==========    ==========
Supplementary Cash Flow Information
Cash Paid For:
         Interest                                               --            --            --
         Taxes                                                  --            --            --
</TABLE>

                                       5
<PAGE>



                   NETAMERICA.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Interim Financial Statements and Background and History

Interim financial statements:
-----------------------------

The interim  financial  statements  presented herein are unaudited and have been
prepared in accordance with the  instructions to Form 10-QSB.  These  statements
should be read in  conjunction  with  financial  statements  and  notes  thereto
included  in our annual  report on Form 10-KSB for the year ended  December  31,
1998.  The  accompanying   financial   statements  have  not  been  examined  by
independent   accountants  in  accordance  with  generally   accepted   auditing
standards,  but in the opinion of management such financial  statements  include
all adjustments  (consisting only of normal recurring  adjustments) necessary to
summarize fairly our financial position,  results of operations, and cash flows.
The results of operations and cash flows for the nine months ended September 30,
1999 may not be  indicative  of the results  that may be  expected  for the year
ending December 31, 1999.

Background And History
----------------------

NetAmerica.com  Corporation is a consolidated  group of companies  including the
parent  corporation,  NetAmerica.com,  and  its  subsidiaries,  PolarCap,  Inc.,
Telenisus Corporation and Rate Exchange, Inc.  NetAmerica.com  (formerly Venture
World, Ltd.) is a Delaware Corporation  organized on May 6, 1987 for the purpose
of seeking out and developing general business opportunities.

PolarCap is a California  corporation organized in April 1997 for the purpose of
investing in and developing rights to a variety of software technologies related
to multimedia,  development tools, and applications  technologies.  PolarCap was
100% acquired by NetAmerica.com on September 30, 1998.

Telenisus  is a Delaware  corporation  and as of  September  30, 1999 was a 100%
owned  subsidiary  of the  Company,  organized  in May 1999 for the  purpose  of
becoming  a  single  source  provider  of  secure  and  reliable  Internet-based
business-to-business services.

During the third quarter,  the Company acquired Rate Exchange,  Inc., a Colorado
corporation,   for   stock   and  a  note   (Note  6).   Rate   Exchange   is  a
business-to-business  e-commerce  company  seeking  to develop  new  transaction
services  for the  telecommunications  market.  As of September  30, 1999,  Rate
Exchange operated as a wholly-owned subsidiary of the Company.

Note 2 - Summary Of Significant Accounting Policies

Principles of Consolidation
----------------------------

The consolidated financial statements include the accounts of NetAmerica.com and
its subsidiaries.  Collectively,  these entities are referred to as the Company.
All significant intercompany transactions and accounts have been eliminated.

Cash and Cash Equivalents
-------------------------

For purposes of the statements of cash flows,  the Company  considers all highly
liquid  debt  instruments  with  a  maturity  of  three  months  or  less  to be
equivalents.

 Nonmonetary Transactions
 ------------------------

Nonmonetary  transactions  are  transactions for which no cash was exchanged and
for which shares of common  stock were  exchanged  for goods or services.  These
transactions  are  recorded at fair market value as  determined  by the board of
directors.

Earnings Per Share and Average Shares Outstanding
-------------------------------------------------

The Company has adopted FASB Statement #128 which requires the  presentation  of
earnings  per  share by all  entities  that  have  outstanding  common  stock or
potential common stock,  such as options,  warrants and convertible  securities,
that  trade in a public  market.  Those  entities  that have only  common  stock
outstanding are required to present basic earnings per share amounts. Basic per

                                        6
<PAGE>
                   NETAMERICA.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


share  amounts  are  computed  by dividing  net income  (the  numerator)  by the
weighted-average  number of common shares  outstanding  (the  denominator).  All
other  entities  are  required to present  basic and diluted per share  amounts.
Diluted per share  amounts  assume the  conversion,  exercise or issuance of all
potential  common stock  instruments  unless the effect is to reduce the loss or
increase the income per common share from continuing operations.

For the nine months ended September 30, 1999,  basic and fully diluted  earnings
per share are the same since all of the  outstanding  common  stock  equivalents
(options)  would be  antidilutive  and  would  result  in lower  loss per  share
calculations. The total outstanding options at September 30, 1999 is 2,280,000.

Note 3 - Income Taxes

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No.  109
"Accounting for Income Taxes" in the fiscal year ended December 31, 1997 and has
applied  the  provisions  of the  statement  on a  retroactive  basis to all the
previous years which resulted in no significant adjustment.

Statement  of Financial  Accounting  Standards  No. 109 " Accounting  for Income
Taxes"  requires an asset and liability  approach for financial  accounting  and
reporting for income tax purposes.  This statement  recognizes (a) the amount of
taxes  payable  or  refundable  for  the  current  year  and  (b)  deferred  tax
liabilities  and assets for future  tax  consequences  of events  that have been
recognized in the financial statements or tax returns.

Deferred  income taxes result from temporary  differences in the  recognition of
accounting transactions for tax and financial reporting purposes.  There were no
temporary differences at September 30, 1999 and earlier years;  accordingly,  no
deferred tax liabilities have been recognized for all years.

The Company has  cumulative net operating loss  carryforwards  of  approximately
$1,860,000  at  September  30, 1999.  No effect has been shown in the  financial
statements for the net operating loss  carryforwards as the likelihood of future
tax  benefit  from  such  net  operating  loss  carryforwards  is not  presently
determinable.  Accordingly, the potential tax benefits of the net operating loss
carryforwards, estimated based upon current tax rates at September 30, 1999 have
been offset by valuation  reserves in the same amount.  The net operating losses
begin to expire in 2007.

Note 4 - Property And Equipment

Property and Equipment consists of the following:

                                         September 30, 1999
                                         ------------------
Fixed Assets                             $499,487
Less:  Accumulated depreciation          (15,007)
                                         ------------------
                                         $484,480
                                         ==================

Fixed assets are being  depreciated on a straight line method over the estimated
useful  life of 3 to 5  years.  Depreciation  expense  for the  nine  months  is
$12,095.

Note 5 - Use Of Estimates In The Preparation Of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  reported  amounts of assets and  liabilities,  disclosure  of contingent
assets and liabilities at the date of the financial  statements and revenues and
expenses during the reporting  period.  In these financial  statements,  assets,
liabilities and earnings involve extensive reliance on management's estimates.
Actual results could differ from those estimates.

Note 6 - Acquisition Of Subsidiary / Goodwill

On September 30, 1998,  the Company  purchased all of the  outstanding  stock of
PolarCap,  Inc.  for  2,400,000  shares of stock.  The  equity  of  PolarCap  at
September 30, 1998 was $(87,310). The value of the stock was issued at $.001 for
a total purchase price of $2,400. All of the assets of PolarCap were established
at estimated fair market value leaving a value of $89,710 for goodwill that was


                                       7
<PAGE>
                   NETAMERICA.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to be written off over three years.  At the end of 1998, the Company  determined
that  $44,855 of the value of goodwill  would be expensed in the current  period
based on the  estimated  continued  value and use of PolarCap and its  corporate
image,  operations,  and  personnel  talent.  Amortization  expense for the nine
months is $11,214.

In the third quarter, 1999, the Company acquired Rate Exchange,  Inc. a Colorado
corporation,  a  business-to-business  e-commerce company seeking to develop new
transaction services for the telecommunications market. The Company paid 575,000
shares of common stock and  $450,000 in a note.  The  transaction  was valued at
$1,395,000 ($920,000 in stock and $450,000 in a note plus out of pocket expenses
of $25,000).  The fair value of the Rate Exchange  assets was $(116,134)  before
the  acquisition,  creating  goodwill in the amount of $1,435,584 which is being
amortized over five years.  Amortization  of this goodwill for third quarter was
$41,134.

Note 7 - Advances To Affiliate / Bad Debt

At the same time that the Company negotiated the purchase of PolarCap. (See Note
6),  the  Company  negotiated,  and later  rescinded  by mutual  agreement,  the
purchase of 100% of the  ownership of A1 Internet,  Inc.,  an Internet  services
provider  company  based in  Seattle,  Washington.  Between the time the Company
agreed to purchase and the time the recision agreement was reached (March 1999),
the Company  advanced  $1,631,188.  In September  1999,  the Company  ultimately
agreed to a settlement with A1 Internet. As part of the settlement,  the Company
received 100,000 restricted shares of Halo Holdings of Nevada, Inc. (now renamed
A1  Internet.com  Inc.) stock.  The value of the stock is uncertain at this time
and any recovery of the advances made to A1 Internet will be determined when the
stock is sold at a later date.

Note 8 - Common Stock Transactions

All  stock  transactions  conducted  during  the  period  for  which no cash was
exchanged  and for which shares of stock were  exchanged for assets or goods and
services were  recorded at fair market value of the stock as best  determined by
the board of directors.

Common stock transactions during the nine months ended September 30, 1999 are as
follows:

o    666,574  shares of stock  issued for  $66,657  in notes to related  parties
     ($0.10) (January).  The board has placed restrictions on this stock so that
     the stock cannot be sold,  traded,  assigned,  transferred or pledged until
     the  Company  reaches  $10,000,000  in gross  revenues  in a one year  time
     period.

o.     711,563 shares of stock were issued for $758,288 cash ($1.06) (February).

o      2,557,500  shares of stock  issued  for  $2,728,000  in notes to  related
       parties and other investors ($1.06) (March).

o      30,000  shares of stock  issued in lieu of a  $30,000  outstanding  notes
       payable ($1.00) (March).

o      179,418  shares of stock  issued for  $179,418 of debt to creditors of A1
       Internet ($1.00) (March).

o      250,000 shares of stock issued for $250,000 of legal fees ($1.00) (March)

o      496,188  shares of stock issued for $1.60 per share or $794,300  (May and
       June).

o      13,768  shares of stock  issued for  $22,029 of debt to  creditors  of A1
       Internet ($1.60) (May).

o      575,000  shares of stock  issued  for $1.60 per share for Rate  Exchange,
       Inc. (July).

o      50,000  shares of stock  issued  for  $1.60 per share for cash  (July and
       August).

Note 9 - Note Receivable - Related Party

In January 1999,  the Company sold 666,574 shares for $66,574 at a price of $.10
per share. (See Note 8 for restrictions placed on stock).


                                       8
<PAGE>

                   NETAMERICA.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In March 1999,  the Company sold  2,557,500  shares to a related party and other
investors  in exchange  for  $2,728,000  in notes  payable at a price of $1.06 a
share.

Note 10 - Commitments And Contingencies

The Company has entered into a 12 month, renewable lease for office space in San
Francisco for $1,000 per month.

The Company,  through its subsidiary  Telenisus,  entered into a lease agreement
for office space that calls for an irrevocable letter of credit in the amount of
$136,650 to be used as collateral for the rent. The Company deposited funds with
a local bank to secure the letter of credit. The lease extends to May 31, 2004.

Telenisus  has also  entered  into  several  consulting  contracts  with various
entities for various services that will be performed over a period of two years.
The minimum  commitments  on these  contracts call for payments of $549,000 over
the next twelve months.  Stock options have also been granted to participants of
these  contracts to purchase  625,000  shares of  Telenisus  stock for $1.00 per
share.

The Company,  through its  subsidiary  Rate  Exchange,  has entered into a lease
agreement  for  office  space  that  calls  for a  standby  letter  of credit of
$102,165.30  to be used as collateral  for rent. The lease extends to August 25,
2002.

Rate Exchange has entered into various agreements as well:

o    On July 23, 1999, Rate Exchange entered into an agreement with a consultant
     for market  development  expertise  as  applied  to the  telecommunications
     market.  In exchange for these services,  Rate Exchange has agreed to issue
     up to 10% of its common stock over a 24 month period.

o    On September  15, 1999,  Rate  Exchange and Donald  Sledge  entered into an
     employment  agreement  under which Rate Exchange agreed to grant Mr. Sledge
     an  equity  position  of up to 10% of  Rate  Exchange's  outstanding  stock
     through a stock purchase right.

When,  and if,  common  stock is issued  under  the  consultant  and  employment
agreements,  it will reduce the Company's  percentage ownership interest in Rate
Exchange to approximately 80%.

Note 11 - Options For Purchase Of Common Stock

As of September 30, 1999, the Company has outstanding  2,280,000 options for the
purchase of shares of the Company's  common stock with exercise  prices  ranging
from $.05 per share to $2.75 per share.  The options can be exercised at various
dates ranging from immediately to 3 years.

To date, no options have been exercised.

Note 12 - Short Term Debt

The Company issued a note for $450,000 for the purchase of Rate  Exchange,  Inc.
The note is due and  payable on July 6, 2000 and bears  interest at a rate of 6%
per annum.  The note is also  convertible into the Company's stock at a price of
$4.00 per share.

The Company, through its subsidiary,  Telenisus, acquired short-term bridge note
financing  in the amount of  $550,000  in  anticipation  of a private  placement
memorandum. The notes are from private individuals and carry an interest rate of
10% per annum and are due any time after six months  from the date of the notes.
The notes are convertible into equity of Telenisus. (See Note 13). The notes are
secured by a security  interest in all goods,  inventory,  accounts,  equipment,
general  intangibles  and other  property  of  Telenisus  and the  products  and
proceeds of Telenisus.

Note 13 - Subsequent Event; Private Financing of Telenisus

In order to obtain the  substantial  capital  needed to  implement  its business
plan,  Telenisus,  a wholly owned subsidiary of the Company (as of September 30,
1999), sought equity funding through a private placement  memorandum.  Telenisus
attempted  to raise  $7,000,000  through the issuance of 7 million of its common
shares for $1.00 per share.

                                       9
<PAGE>
                   NETAMERICA.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On or about November 3, 1999, Telenisus announced the first closing of its first
independent  private  placement  financing.  The  common  stock  issued  in this
financing,  together  with stock issued in a  Telenisus-subsidiary  acquisition,
reduced  the   Company's   percentage   ownership   interest  in   Telenisus  to
approximately 15%.

Telenisus  intends to use the proceeds of the financing to expand its management
team and to accelerate development of its four service families: virtual private
networks, managed firewall/security  services, Web site and application hosting,
and  e-commerce.   Telenisus  is  also   negotiating   partnerships   and  other
acquisitions as a means to deliver its business Internet  solutions to large and
mid-sized corporate customers.

Before the private placement  memorandum became  effective,  Telenisus  obtained
bridge  financing in the amount of $550,000 as of September 30, 1999 and another
$200,000  after the end of the quarter.  The bridge notes are  convertible  into
common shares of Telenisus at a price of $1.00 per share (see below for terms).

In addition to the conversion feature, a total of 2,950,000 warrants to purchase
common  stock of  Telenisus  at $1 per  share  were  issued  to four of the note
holders. The warrants are to be exercised in full within a three day time period
after the delivery of the memorandum. The notes are convertible at the same time
at a rate of $1.00 per common share and must be exercised  within the same three
day time period.

Note holders  which  exercised  both the  conversion  of the bridge loan and the
purchase of warrants for common stock,  were offered another warrant to purchase
common stock of  Telenisus  representing  a total of 2,620,000  shares of common
stock for a price of $.05.  The  warrant is for a period of twelve  (12)  months
beyond the date of the original bridge note.


                                       10
<PAGE>

                   NETAMERICA.COM CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

         The  following  discussions  should  be read in  conjunction  with  our
Consolidated  Financial  Statements  and the notes thereto  presented in "Item 1
Financial   Statements."  The  information  set  forth  in  this   "Management's
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations"
includes forward-looking  statements that involve risks and uncertainties.  Many
factors could cause actual results to differ  materially from those contained in
the forward-looking statements below. See "Outlook."

Company Overview

         The Company was originally  incorporated as Venture World,  Ltd. on May
6, 1987 under the laws of the State of Delaware for the purpose of developing or
acquiring  general  business  opportunities.  In 1999 we changed the name of the
Company to NetAmerica.com  Corporation.  We did not have any material operations
from 1992 to 1998.

         On September 30, 1998, we acquired  PolarCap,  Inc. As a result of this
acquisition,  PolarCap  became  our  wholly  owned  subsidiary.  PolarCap  is  a
California  corporation  that was  organized  in April  1997 for the  purpose of
investing in and developing rights to a variety of software technologies related
to multimedia, development tools, and applications technologies.

         In  September  1998,  in  connection  with our  strategy to acquire and
consolidate  Internet  service  providers,  we also entered into an  acquisition
agreement  pursuant to which we agreed to purchase the outstanding  stock of Net
America, Inc., a Washington corporation, in exchange for 4,770,426 shares of our
common  stock and our  assumption  of certain  liabilities.  Net  America,  Inc.
subsequently  agreed to be renamed A1  Internet,  Inc.  and agreed to assign and
transfer to us all of its right,  title and interest in the name "Net  America."
A1  Internet  was   organized  in  April  1997  for  the  purpose  of  providing
Internet-based   products  and  services  to  small  and  medium-sized  Internet
providers.

         We  determined  in March 1999 that it was not in our best  interest  to
complete the purchase of A1 Internet's stock after A1 Internet acknowledged that
certain representations made to us in the acquisition agreement were inaccurate.
Consequently,  on March 16, 1999, we entered into an agreement  with A1 Internet
to abandon the stock purchase.  Nevertheless,  in pursuing the proposed purchase
between August 1998 and the end of March 1999, we incurred the following costs:

o             We made cash  advances  to A1 Internet  for working  capital in an
              aggregate principal amount of $1,631,188;

o             We  issued  179,418  shares  of our  common  stock to  settle  and
              discharge obligations owed by A1 Internet to creditors;

o             We issued 13,768 shares of our common stock and/or paid $10,534 to
              certain private investors of A1 Internet who had invested and paid
              $32,563  to A1  Internet  before  we  terminated  our  acquisition
              agreement with A1 Internet; and

o             We issued or agreed to issue certain shares of our common stock to
              compensate individuals and entities for ongoing services performed
              for our benefit and the benefit of A1 Internet.

         Therefore,  as an additional  provision in the recision  agreement,  A1
Internet agreed to repay certain of the costs we incurred prior to the recision.
As part of its plan to repay the  costs,  A1  Internet  informed  us that it had
entered into an agreement with another  prospective  acquiror,  Halo Holdings of
Nevada,  Inc., to sell substantially all of its assets in exchange for shares of
common stock and  assumption  of certain  liabilities,  including A1  Internet's
obligations to us. In September 1999, after further negotiations,  we ultimately
agreed with A1 Internet to the following settlement of A1 Internet's obligations
to us:

o             We retained the rights to the name "Net  America,"  including  all
              rights to the internet domain name "netamerica.com;"

                                       11
<PAGE>

o             NetAmerica  assigned  to us  100,000  shares of Halo (now named A1
              Internet.com  Inc.)  restricted  common  stock  (at  the  time  of
              transfer,   the  shares  had  a  market  value  of   approximately
              $631,250);

o

              We  agreed to pay  $85,016  to the  Internal  Revenue  Service  in
              satisfaction of A1 Internet's  obligations for unpaid 1998 payroll
              taxes;

o             We agreed to deliver  23,305  shares of our common stock to settle
              certain A1 Internet obligations; and

o             All parties  agreed that all of our further  obligations  to issue
              stock or options were cancelled.

         In  May  1999,  we  incorporated  Telenisus  Corporation,   a  Delaware
corporation, as one of our wholly owned subsidiaries. Telenisus is a development
stage company that is seeking to become a single  source  provider of secure and
reliable  Internet-based  business-to-business  services to corporate customers,
carriers,   Internet  service  providers  and  marketers  of  telecommunications
services.  Through  acquisitions and internal  business  development,  Telenisus
seeks to develop a full suite of Internet and data network management tools that
will enable customers to increase productivity,  to reduce costs and to access a
wide range of Internet, e-commerce, security and communication applications from
a one-stop network service delivery provider.

         On July 6, 1999,  we  acquired  100% of the  outstanding  stock of Rate
Exchange,  Inc.,  a Colorado  corporation,  through a merger into Rate  Exchange
(Delaware),  Inc.,  dba  RateXchange,  Inc.,  one of our wholly  owned  Delaware
subsidiaries.  The Delaware subsidiary was the surviving entity. We paid 575,000
shares of common stock and $450,000 in a note that is due one year from the date
of closing.  On July 23, 1999,  RateXchange  entered  into an  agreement  with a
consultant for market development expertise as applied to the telecommunications
market.  In exchange for these  services,  RateXchange has agreed to issue up to
10% of its common stock.  On September 15, 1999,  RateXchange  and Donald Sledge
entered into an employment agreement under which RateXchange agreed to grant Mr.
Sledge  an  equity  position  of up to 10% of  RateXchange's  outstanding  stock
through a stock purchase  right.  When, and if, common stock is issued under the
consultant and employment  agreements,  it will reduce our percentage  ownership
interest in RateXchange to approximately 80%.

         RateXchange  is a development  stage  business-to-business,  e-commerce
company  seeking  to develop  new  transaction  services  for the  estimated  $1
trillion international market for telecommunications  services.  RateXchange has
operated an Internet-based  lead generation service for trading in international
long-distance minutes, IP telephony minutes and IP bandwidth since January 1998.
The  lead  generation  service  has  registered  more  than  2,000  members  and
facilitated  more  than  400  offline  transactions  for  500  million  minutes.
RateXchange   historically   has   generated   minimal   revenues   from   these
lead-generation   services  and  from  the  collection  and   dissemination   of
telecommunications market data.

Results of  Operations  for Three Months Ended  September  30, 1999  Compared to
September 30, 1998

         The  following  table   summarizes  our  results  of  operations  as  a
percentage of net sales for the three months ended September 30, 1999 and 1998.

<TABLE>
<CAPTION>

                                                                               Three Months Ended
                                                                                    September
                                                                      --------------------------------------
                                                                         1999                     1998
                                                                      -----------               ------------
<S>                                                                       <C>                        <C>
Revenue                                                                   $43,782                    $ 0
Expenses (including Selling, General & Administrative)                 $1,514,375                 $8,137
Net Income (Loss)                                                     $(1,468,177)               $(8,137)
</TABLE>

         Revenue:

         Revenues  (interest  income) for the three months ended  September  30,
         1999 were $43,782  compared to $0 for the three months ended  September
         30, 1998.

         Selling, General and Administrative Expenses:

                                       12
<PAGE>

         Selling,  general and  administrative  expenses increased to $1,415,377
         from $8,137 for the three  months  ended  September  30, 1999 and 1998,
         respectively. The increase was due primarily to:

o        increased business development and acquisition activity,

o        the  expansion  of our  executive  management  team and the addition of
         certain advisors, and

o        the addition of two  operating  subsidiaries  this year  compared to no
         operating subsidiaries for the same period last year.

         Net Income (Loss):

         During the three months ended September 30, 1999, we incurred losses of
         $(1,468,177)  compared to losses of $(8,137)  during the same period in
         1998. Of the $(1,468,177) loss for the period were:

o        $184,776 in legal and professional fees,

o        $187,011 in outside services,

o        $673,289 in officer/director/consulting fees and salaries,

o        $75,000 in development costs,

o        $100,241 in travel expenses, and

o        $49,570 in recruiting expenses.

         Because we are in the early growth stage,  we  anticipate  that we will
         continue to incur operating  losses and cash flow  deficiencies for the
         foreseeable future.

         Results of Operations for Nine Months Ended September 30, 1999 Compared
         to September 30, 1998

         The  following  table   summarizes  our  results  of  operations  as  a
percentage of net sales for the nine months ended September 30, 1999 and 1998.
<TABLE>
<CAPTION>

                                                                                Nine Months Ended
                                                                                 September 30
                                                                     -----------------------------------
                                                                          1999                   1998
                                                                     ------------             ----------
<S>                                                                      <C>                        <C>
Revenue                                                                  $94,590                    $ 0
Expenses (including Selling, General & Administrative)                $3,803,140                 $8,137
Net Income (Loss)                                                    $(3,706,134)               $(8,137)
</TABLE>

         Revenue:

         Revenues (interest income) for the nine months ended September 30, 1999
         were  $94,590  compared to $0 for the nine months ended  September  30,
         1998.

         Expenses:

         Selling,  general and  administrative  expenses increased to $2,947,961
         from  $8,137 for the nine  months  ended  September  30, 1999 and 1998,
         respectively. The increase was due primarily to:

o        increased business development and acquisition activity,

o.       the  expansion  of our  executive  management  team and the addition of
         certain advisors, and

                                       13
<PAGE>

o        the addition of two  operating  subsidiaries  this year  compared to no
         operating subsidiaries for the same period last year.

         Net Income (Loss):

         During the nine months ended  September 30, 1999, we incurred losses of
         $(3,706,134)  compared to losses of $(8,137)  during the same period in
         1998. Of the $(3,706,134) loss for the period were:

o        $618,122 in legal and professional fees,

o.       $796,474 in outside services,

o        $708,543 in officer/director/consulting fees and salaries,

o        $184,746 in development costs,

o        $244,186 in travel expenses,

o        $49,570 in recruiting expenses,

o        746,188 in bad debt, and

o        98,859 in depreciation and amortization.

         Because we are in the early growth stage,  we  anticipate  that we will
         continue to incur operating  losses and cash flow  deficiencies for the
         foreseeable future.

Liquidity and Capital Resources

         We have financed our operations to date  primarily  through the sale of
equity  securities.  We  have  been  unprofitable  since  inception  and we have
incurred net losses in each year.

         We had negative  working  capital of $(1,356,785) at September 30, 1999
compared to $461,954  on December  31,  1998.  We  currently  have  subscription
receivables  in the amount of $2,276,999  which we expect to collect in the next
twelve  (12)  months.  These  receivables  should  be  sufficient  to cover  our
operations  and working  capital  requirements  for the next twelve (12) months.
Nevertheless,  we may  be  forced  to  seek  additional  financing  sooner  than
expected.

         Our operating  activities used $2,236,841  during the nine months ended
September 30, 1999 due primarily to our:

o         operating losses,

o         increased business development, and

o         expansion of our executive management team.

         Our investing activities consumed $400,079 during the nine months ended
September 30, 1998,  primarily to purchase equipment and for the identification,
acquisition and integration of acquisition targets.

         Financing  activities generated $2,263,088 during the nine months ended
September 30, 1999.  Financing activities during the nine months ended September
30,  1999  consisted  primarily  of  proceeds  from sales of common  stock.  The
proceeds  of the sales of common  stock were and will be used for  acquisitions,
business  development,  accounts payable,  equipment purchases,  and for general
working capital. The various sales of common stock are as follows:

o             Between November 1998 and March 1999, we sold a total of 1,817,813
              shares of our restricted common shares to twenty-one accredited

                                       14
<PAGE>

              investors.  The shares were sold at a subscription  price of $1.60
              per  share  (see  discussion  below  on 50%  bonus  stock).  After
              deducting  the  offering  expenses  related  to the  offering,  we
              received $1,745,000 in cash, of which approximately $1,631,188 was
              advanced to A1 Internet as working capital and for debt repayment.

o             In January 1999, we sold 666,574 shares of common stock to certain
              related  parties at a price per share of $.10 for notes.  In March
              1999,  we sold  2,557,500  additional  common  shares in a private
              placement  offering  at a price per share of $1.60 for notes  (see
              discussion below on 50% bonus stock). As of September 30, 1999, we
              have  collected  a  total  of  approximately  $750,000  from  note
              repayments from both the January and March offerings.

o             In the second  quarter 1999,  we sold 496,188  shares of stock for
              $1.60 in a private  placement (see  discussion  below on 50% bonus
              stock) and received a total of $794,300 net proceeds.

o             In the third  quarter  1999,  we sold  50,000  shares of stock for
              $1.60 in a private  placement  and received a total of $80,000 net
              proceeds.

         After the A1 Internet recision  agreement was reached,  we authorized a
stock  adjustment  bonus of 50% to all the investors who had purchased or loaned
us money between  August 1, 1998 and June 30, 1999.  The stock bonus was awarded
retroactively  and made the effective  purchase  price of the private  placement
memorandum stock holders from $1.60 to $1.06.

         Through  our  operating   subsidiaries,   we  are  developing   various
Internet-based  services  and we are  executing  an overall  business  plan that
requires significant additional capital for among other uses:

o         acquisitions,

o         additional equipment and facilities,

o         expansion into new domestic and international markets,

o         additional management and personnel, and

o         development of additional products and services.

        Furthermore,  our  funding of working  capital  and  current  and future
operating losses will require additional capital investment. We do not currently
possess a bank  source of  financing  and we have not had any  revenues.  We are
currently seeking financing,  but there is no guarantee that such financing will
be available. Should we not be able to arrange such financing in the next twelve
(12) months we may be forced to curtail or cease operations.

        Our  business  and  operations  have not  been  materially  affected  by
inflation during the periods for which financial information is presented.

Outlook

We  have  not  had  any  long-term  successful  business  operations  and we are
currently  seeking  additional  funding to concentrate our efforts in developing
Internet-based  business-to-business e-commerce products and services. We are in
an early stage of  development  and we are subject to all the risks  inherent in
the establishment of a new business enterprise. To address these risks, we must:

o         establish market acceptance for our products and services,

o         implement and successfully execute our business and marketing strategy

o         respond to competitive developments,

o         continue to develop and upgrade our technology,

                                       15
<PAGE>

o         continue to attract, retain and motivate qualified personnel, and

o         obtain  substantial  additional  capital to support  the  expenses  of
          developing and marketing new products and services.

         We are also seeking to identify acquisition opportunities in the United
States,  Europe and other  international  markets where we can acquire  majority
interests   in   operating    companies    already    offering   one   or   more
business-to-business    e-commerce    applications    or   services   or   other
subscriber-based Internet or telecommunications  services.  Furthermore,  we are
interested  in  acquisition  opportunities  that would  complement or expand our
existing  business.  In addition to acquisitions of operating  companies and the
startup of new  companies,  we intend to  identify  companies  with which we may
enter into strategic  relationships  that may include a combination of exclusive
and non-exclusive licensing agreements, marketing or co-marketing agreements and
strategic  minority  investments.  As of November 15,  1999,  we do not have any
binding   agreements   with   respect  to  future   acquisitions   or  strategic
relationships;   however,   we   are   continuing   to   investigate   potential
opportunities.

Telenisus Focus

         We believe that most mid-sized companies lack the internal resources to
effectively  combine advances in applications and bandwidth.  We believe a large
and growing  market has  emerged for an  outsourced  network  services  provider
focused on delivering  cohesive,  cost-effective  Internet  services to small to
mid-sized corporations and telecommunications  service providers.  Consequently,
Telenisus  is seeking to  position  itself to be a  one-stop  data and  Internet
network service provider to meet increasing demand for secure hosting,  Internet
provider network management and value-added network services.

         Based on the market  opportunity for Telenisus's  proposed products and
services in North America, Europe and other international markets, we anticipate
that  Telenisus's  business  plan will  require  significant  capital  and human
resources  over the next 24 to 36 months.  Because the capital  requirements  to
fully  execute  the  Telenisus  business  plan  are  greater  than  what  we can
contribute, Telenisus is currently seeking additional funding, which will result
in dilution of our 100% ownership of Telenisus.

RateXchange Focus

         To better  facilitate  telecommunications  transactions and to generate
increased  revenues,  RateXchange  has  developed  and  intends  to  launch  the
Real-Time  Bandwidth  eXchange through strategic  relationships with one or more
telecommunications   carriers.   The  Real   Time   Bandwidth   eXchange   is  a
fully-transactional  online bandwidth exchange with immediate  fulfillment.  The
Real-Time  Bandwidth  eXchange  will seek to manage  transaction  standards  and
create a switched  delivery  mechanism with on demand transit between  switching
hubs.  RateXchange  is thus  seeking to become one of the first  Internet  based
electronic  marketplaces  to automate  end-to-end  all aspects of a  transaction
between  buyers and  sellers  of  telecommunication  commodities.  Over the next
twelve (12) months,  RateXchange  plans to focus its  research  and  development
efforts on applying the Real-Time  Bandwidth eXhange and technology model to new
commodities  such as  bandwidth,  domestic  long-distance  minutes and  Internet
interconnectivity.

         The current  environment  for trading  telecommunications  bandwidth is
marked  by high  search  costs,  high  transaction  failure  rates  and  overall
inefficiency.  We estimate  that 90% of all  bilateral  transactions  fail,  and
fulfillment  cycles average  between 60 and 90 days. We believe there is a large
and growing market opportunity for our automated bandwidth  exchange,  fueled by
the growth of  packet-switched  networks,  global  deregulation  and  technology
advances.

         Based on the market opportunity for RateXchange's  proposed  electronic
exchange for telecommunications  products and services in North America,  Europe
and other  international  markets,  we anticipate that the RateXchange  business
plan may require  significant capital and human resources over the next 24 to 36
months.   In  the  event  that  the  capital   requirements   to  fully  execute
RateXchange's business plan are greater than what we can contribute, RateXchange
may seek additional  capital or other financial  resources,  which may result in
dilution of our ownership of RateXchange.

                                       16
<PAGE>

Forward-Looking Statements

        This  Outlook  section,  and other  sections of this  document,  include
certain "forward-looking  statements" within the meaning of that term in Section
27A of the  Securities  Act of 1933,  and Section 21E of the  Securities  Act of
1934,  including,  among  others,  those  statements  preceded by,  following or
including  the words  "believe,"  "expect,"  "intend,"  "anticipate"  or similar
expressions.  These forward-looking  statements are based largely on the current
expectations   of  management   and  are  subject  to  a  number  of  risks  and
uncertainties.   Our  actual   results  could  differ   materially   from  these
forward-looking  statements.  Important  factors to consider in evaluating  such
forward-looking statements include:

o         changes in our  business  strategy  or an  inability  to  execute  our
          strategy due to unanticipated changes in the market,

o         our   ability  to  raise   sufficient   capital   to  meet   operating
          requirements,

o         various  competitive  factors  that  may  prevent  us  from  competing
          successfully in the marketplace,

o         changes in  external  competitive  market  factors or in our  internal
          budgeting  process  which  might  impact  trends  in  our  results  of
          operations, and

o         other  risks  described  below  in  "Factors  That May  Affect  Future
          Results."

In light of these risks and  uncertainties,  there can be no assurance  that the
events  contemplated by the  forward-looking  statements  contained in this Form
10-QSB will in fact occur.

Subsequent Events

Telenisus Financing

        On or about November 3, 1999, Telenisus announced a first closing of its
first independent private placement  financing.  The common stock issued in this
financing,  together  with stock issued in a  Telenisus-subsidiary  acquisition,
reduced our percentage  ownership  interest in Telenisus to  approximately  15%.
Telenisus  intends to use the proceeds of the financing to expand its management
team and to accelerate development of its four service families: virtual private
networks, managed firewall/security  services, Web site and application hosting,
and  e-commerce.   Telenisus  is  also   negotiating   partnerships   and  other
acquisitions as a means to deliver its business Internet  solutions to large and
mid-sized corporate customers.

Collections of Private Placement Notes

         Between  September  30, 1999 and November 15, 1999 we collected a total
of  approximately  $275,000 from investor  repayments of the notes issued by the
investors in our January and March 1999 private placements.

Factors That May Affect Future Results

We Have No Significant Operating History.

         As a  development  stage  company  commencing  business  in  the  newly
emerging and rapidly changing Internet and e-commerce industries, we are subject
to all the  substantial  risks  inherent in the  commencement  of a new business
enterprise.  We can provide no  assurance  that we will be able to  successfully
generate revenues,  operate profitably, or make any distributions to the holders
of our securities.  Additionally,  we have no significant  business history. Our
prospects  must be considered in light of the risks,  expenses and  difficulties
encountered by companies in the early stages of development. Such risks include,
but are not limited to, an evolving  and  unpredictable  business  model and the
management of growth.  We can provide no assurance that we will be successful in
addressing  such risks,  and the failure to do so could have a material  adverse
effect on our business.

                                       17
<PAGE>

We Have Incurred Substantial Operating Losses and May Never Become Profitable.

         At September 30, 1999,  our  accumulated  deficit  since  inception was
$5,044,430. For the nine months ended September 30, 1999, we incurred net losses
of $3,706,134.  We have incurred a net loss in each year of our  existence,  and
have financed our operations  primarily through sales of equity securities.  Our
expense  levels are high and our  revenues  nonexistent.  We expect to incur net
losses for the foreseeable  future. We may never achieve or sustain  significant
revenues or profitability on a quarterly or annual basis in the future.

We Currently Have Limited Funds and Limited Sources of Liquidity.

         We require  substantial  capital to pursue our  operating  strategy and
currently  have  limited  cash  for  operations.  Until we can  obtain  revenues
sufficient to fund working  capital  needs,  we will be dependent  upon external
sources of financing  including,  at times,  direct external  investments in our
operating subsidiaries.  We have no assurance that any additional financing will
be available to us or our  subsidiaries on favorable  terms, or at all. To date,
we have no internal  sources of  liquidity  and we do not expect to generate any
significant  internal cash flow for the foreseeable future, if at all. We expect
our  current  source of working  capital to be from  proceeds  from our  various
private  placement  offerings.  However,  we can provide no  assurance  that the
proceeds from the offerings  will be sufficient to cover our cash  requirements.
If adequate funds are unavailable, we may delay, curtail, reduce the scope of or
eliminate the expansion of our operations and/or our marketing and sales efforts
which  could have a  material  adverse  effect on our  financial  condition  and
business operations.

As a Start-Up Company, Our Quarterly Operating Results May Fluctuate.

     Based on our business and industry and as a start-up company,  we expect to
experience  significant  fluctuations in our future quarterly  operating results
due to a variety of factors, many of which are outside our control. Factors that
may adversely affect our quarterly operating results include:

o         our ability to attract  new  customers  at a steady rate and  maintain
          customer satisfaction,

o         the demand for the products and services we intend to market,

o         the amount and timing of capital expenditures and other costs relating
          to the expansion of our operations,

o         the introduction of new or enhanced services by us or our competitors,
          and

o         economic conditions  specific to the Internet,  e-commerce or all or a
          portion of the technology market.

As an Internet Company, We are in an Intensely Competitive Industry.

         The Internet and e-commerce industries are highly competitive, and have
few barriers to entry.  Although there are few competitors who offer the same or
similar  services  of the  type we  offer,  we can  provide  no  assurance  that
additional competitors will not enter markets that we intend to serve.

         We believe  that our ability to compete  depends on many  factors  both
within and beyond our control, including the following:

o         the timing and market acceptance of our business model,

o         our competitors' ability to gain market control, and

o         the success of our marketing efforts.

The Future Success of Our Business  Depends on Our Ability to Attract and Retain
Qualified Personnel.

         Our  success  depends  in large part upon our  ability  to attract  and
retain  qualified  management   professionals  and  operations  personnel.   The
inability to attract or retain personnel could have a material adverse impact on
our results of operations.  It is difficult to locate  consulting  professionals
and technical and sales  personnel with the combination of skills and attributes
required to execute our strategy. Additionally, our consulting professionals and


                                       18
<PAGE>


employees can terminate  their  employment at any time.  Accordingly,  we may be
unable to continue to retain and attract qualified consulting  professionals and
employees.

Our  Business  is  Dependent  on  the   Maintenance   of  the  Public   Internet
Infrastructure.

         Our success will depend,  in large part,  upon the  maintenance  of the
public Internet infrastructure as a reliable network backbone with the necessary
speed, data capacity, and security. To the extent that the Internet continues to
experience   increased  numbers  of  users,   frequency  of  use,  or  increased
requirements   of  users,   we  can  provide  no  assurance  that  the  Internet
infrastructure  will continue to be able to support the demands  placed on it or
that the  performance  or  reliability  of the  Internet  will not be  adversely
affected. In addition,  the Internet could lose its viability as a form of media
due to delays in the development or adoption of new standards and protocols that
can handle increased levels of activity.

We Are Dependent on the Continued Growth of Online Commerce.

         Our success is substantially  dependent upon the widespread  acceptance
and use of the  Internet and other  online  services as an  effective  medium of
commerce.  Rapid  growth in the use of and  interest in the  Internet  and other
online  services is a recent  phenomenon,  and we can provide no assurance  that
acceptance and use will continue to develop or that a sufficiently broad base of
consumers  will  adopt,  and  continue to use,  the  Internet  and other  online
services as a medium of  commerce.  Demand and market  acceptance  for  recently
introduced services over the Internet are subject to a high level of uncertainty
and there exist few proven services or business models.

We Must  Develop,  Produce and  Establish New Products and Services That Keep Up
With Rapid Technological Change.

         The market for Internet professional services and  business-to-business
e-commerce is characterized by rapid  technological  changes,  frequent software
changes,  frequent new products and service  introductions and evolving industry
standards. The introduction of services embodying new processes and technologies
and the emergence of new industry standards can rapidly render existing services
obsolete  and  unmarketable.  Our success in  adjusting  to rapid  technological
change will depend on our ability to:

o         develop and introduce  new services that keep pace with  technological
          developments and emerging industry standards; and

o         address the increasingly sophisticated and varied needs of customers.

         Due to inadequate technical expertise,  insufficient  finances or other
reasons,  we may be unable to accomplish these tasks.  Such failure would have a
material adverse effect on our operating results and financial condition.

Our Operations May be Significantly Impaired by Changes in or Developments under
Domestic   or   Foreign   Laws,    Regulations,    Licensing   Requirements   or
Telecommunications Standards.

         We are not currently  subject to direct  regulation by any governmental
agency, other than regulations applicable to businesses generally.  However, due
to the  increasing  popularity  and use of the  Internet,  it is possible that a
number of laws and  regulations  may be adopted  with  respect  to the  Internet
covering   issues  such  as  user   privacy,   pricing,   content,   copyrights,
distribution,  and  characteristics  and quality of products and  services.  The
adoption of such laws or  regulations  may decrease the growth of the  Internet,
which could, in turn, decrease the demand for our services and increase our cost
of doing business.  Moreover, the applicability to the Internet of existing laws
in various jurisdictions governing issues such as property ownership,  sales and
other  taxes,  libel and  personal  privacy is  uncertain  and may take years to
resolve. Any such new legislation,  the application of laws and regulations from
jurisdictions  whose  laws  do  not  currently  apply  to our  business,  or the
application  of  existing  laws to the  Internet  could have a material  adverse
affect on our business.

The Volatility of Our Securities Prices May Increase.

                                       19
<PAGE>

         The market price of our common  stock has in the past been,  and may in
the future  continue to be,  volatile.  A variety of events may cause the market
price of our common stock to fluctuate significantly, including:

o         quarter to quarter variations in operating results,

o         adverse news announcements,

o         the introduction of new products and services, and

o         market  conditions  in  the  Internet-based   professional   services,
          business, and business-to-business e-commerce.

         In  addition,   the  stock  market  in  recent  years  has  experienced
significant price and volume  fluctuations  that have particularly  affected the
market prices of equity  securities  of many  companies in our business and that
often have been unrelated to the operating performance of such companies.  These
market fluctuations may adversely affect the price of our common stock.

We May be  Required  to Issue  Stock in the Future That Will Dilute the Value of
Our Existing Stock.

         We have a number of  outstanding  options.  The  exercise of all of the
outstanding  options  would dilute the  then-existing  shareholders'  percentage
ownership  of our  common  stock,  and any  sales  in the  public  market  could
adversely affect  prevailing market prices for our common stock.  Moreover,  our
ability to obtain  additional  equity capital could be adversely  affected since
the holders of  outstanding  options  will likely  exercise  the options when we
probably  could  obtain any needed  capital on terms more  favorable  than those
provided by these securities. We lack control over the timing of any exercise or
the number of shares issued or sold if exercises occur.

We May Have to Discontinue Use of the NetAmerica Name.

         A1 Internet agreed to assign and transfer to us all of its right, title
and interest in and to the name "Net  America." A search of the U.S.  Patent and
Trademark  Office's registry revealed,  however,  that one or more other parties
may have registered  trademarks  sufficiently  similar to "Net America" and that
those  registrations  could be a  significant  obstacle  our  registration,  and
continued  use,  of the name "Net  America"  and related  tradenames.  If we are
forced to change our name at a time when we have established  name  recognition,
our business may suffer.

Our Failure to Manage Future Growth Could  Adversely  Impact Our Business Due to
the Strain on Our Management, Financial and Other Resources.

         Because our  business is in an early  development  stage,  our ultimate
success depends on our ability to manage growth.  In the future,  we may have to
increase staff rapidly and integrate new personnel  into our operations  without
affecting  productivity.  We will have to ensure that our administrative systems
and  procedures  are adequate to handle such growth.  It is unclear  whether our
systems,  procedures or controls  will be adequate to support our  operations or
that our  management  will be able to achieve the rapid  execution  necessary to
exploit  our  business  plan.  If  our  systems,   procedures  or  controls  are
inadequate, our operations and financial condition will suffer.

Our  Operations  Will be  Significantly  Impaired if Our Systems Fail to be Year
2000 Compliant.

     The Year 2000 poses  certain  issues for business  and consumer  computing,
particularly the  functionality of software for two-digit  storage of dates. The
problem  exists for many kinds of  software,  including  software  for  personal
computers and embedded systems.

     In assessing the effect of the Year 2000 problem, we have verified that all
of our personal  computers and software are Year 2000 compliant.  At the time of
selection of our critical applications  software, we have requested and continue
to request written  confirmation  from our software  vendors that their products
are Year 2000  compliant.  The costs  related to these efforts have not been and
are not expected to be material to our business.

     We rely on outside vendors for utilities and  telecommunications  services.
We do not  intend to  independently  evaluate  the Year 2000  compliance  of the
systems  utilized to supply  these  services.  We have  received no assurance of
compliance from the providers of these services. We can provide no assurance

                                       20
<PAGE>


that these  suppliers  will  resolve  any or all Year 2000  problems  with these
systems  before the  occurrence of a material  disruption  to our business.  Any
failure of these  third-parties to resolve Year 2000 problems with their systems
in a timely manner could have a material adverse effect on our business.

     We have not currently developed a formal contingency plan to be implemented
as part of our efforts to identify and correct Year 2000 problems  affecting our
internal systems.  However,  if we deem it necessary,  we may take the following
actions:

o         accelerated replacement of affected equipment or software,

o         short to medium-term use of back-up equipment and software,

o         increased work hours for our personnel, and

o         other similar approaches.

If we are required to implement any of these contingency plans, such plans could
have a material adverse effect on our business.

     Based on the actions taken to date as discussed  above,  we are  reasonably
certain that we have or will  identify and resolve all Year 2000  problems  that
could materially adversely affect our business and operations.

                                       21
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.       Legal Proceedings.

         We  previously  reported in our June 30, 1999 Form 10-QSB that  Gregory
         Martin, a former officer and director of A1 Internet, had named us in a
         lawsuit  filed in the Superior  Court of  Washington  (Civil Action No.
         99-2-09171-0 SEA). In May 1999, we entered into a settlement  agreement
         with Mr. Martin in which Mr. Martin agreed to dismiss the lawsuit if we
         agreed to (1) pay  severance  payments,  (2) issue 50,000 shares of our
         common  stock,  and (3) issue stock  options to  purchase  our stock in
         certain  circumstances.  The  total  cash paid in this  settlement  was
         approximately  $25,000, with stock options issuable to Mr. Martin based
         on the successful ongoing contract  negotiations with customer vendors.
         As of  September  30,  1999,  we  have  fulfilled  all of  our  current
         obligations under the settlement agreement.

         We  previously  reported in our March 31, 1999 Form 10-QSB that we were
         involved in a dispute over a lease agreement signed for office space in
         Seattle,  Washington related to the business of A1 Internet. As part of
         the settlement agreement with A1 Internet, A1 Internet agreed to assume
         all obligations related to the lease dispute.

         Other than  those  matters  disclosed  herein,  there were no  material
         additions  to, or  changes in status of,  any  ongoing,  threatened  or
         pending legal  proceedings  during the nine months ended  September 30,
         1999.  From time to time, we are a party to various  legal  proceedings
         incidental to our business.  None of these  proceedings  is material to
         the conduct of our business, operations or financial condition.

Item 2.       Changes in Securities.

         On July 6, 1999,  we issued  575,000  shares of our  restricted  common
         stock to the shareholders of Rate Exchange,  Inc. to acquire all of the
         outstanding  stock of Rate  Exchange,  Inc.  We  issued  the  shares to
         accredited  investors  only in reliance  upon  Section 4(2) of the 1933
         Act.

         In July and August  1999,  we issued  50,000  shares of our  restricted
         common stock to certain private placement investors at a price of $1.60
         per  share.  We issued  the  shares  to  accredited  investors  only in
         reliance upon Rule 506 of Regulation D of the 1933 Act.

Item 3.       Defaults Upon Senior Securities - None.

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

         The date of our 1999 annual shareholders  meeting has been postponed to
         December  16,  1999.  Since the 1999  annual  shareholders  meeting  is
         scheduled for a date that is more than thirty days from the anniversary
         of our 1998 annual shareholders meeting, pursuant to Rules 14a-5(f) and
         14a-8(c),  shareholder  proposals  that are to be included in the proxy
         materials  related  to our 1999  annual  shareholders  meeting  must be
         received at our principal  executive  offices on or before November 20,
         1999.

Item 5.       Other Information

         On September 27, 1999,  Gordon Reichard resigned as President and Chief
         Executive  Officer  of   NetAmerica.com  to  become  President,   Chief
         Executive Officer and Director of Telenisus. Mr. Reichard will continue
         to serve as an advisor  to the  Company  concerning  our  Internet  and
         e-commerce operations.

         On September  27, 1999,  our Board of Directors  (1)  appointed  Donald
         Sledge  to fill the  directorship  vacancy  created  by Mr.  Reichard's
         resignation,  (2) increased the authorized number of directors to five,
         and (3) appointed  John Dixon to fill the newly  created  directorship.
         Mr. Sledge will also serve as the Chief Executive  Officer and Chairman
         of the Board of RateXchange.

                                       22
<PAGE>

Item 6.       Exhibits and Reports on Form 8-K

                  (a)      Exhibits

       Exhibit No.                          Description
       -----------                          -----------

         3.1      Certificate of Incorporation for  NetAmerica.com  Corporation,
         as amended.
         3.2      Amended and Restated Bylaws of NetAmerica.com Corporation.
        10.1      Agreement   and   Plan  of   Merger   between   NetAmerica.com
        Corporation and Rate Exchange, Inc., dated June 1, 1999.
        10.2      Acquisition Agreement between  NetAmerica.com  Corporation and
        PolarCap,  Inc.,  filed  with the Form 8-K dated  September   22,  1998,
        incorporated herein by reference.
        10.3      Employment  Agreement between  NetAmerica.com  Corporation and
        Edward Mooney.
        10.4      Employment  Agreement between  NetAmerica.com  Corporation and
        Douglas Cole.
        10.5      Employment  Agreement  between  RateXchange,  Inc.  and Donald
        Sledge.
        27.1      Financial Data Schedule.
                  (b)  Reports on Form 8-K.
                      None.



                                       23
<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.

Dated this 15th day of November,1999.
-------------------------------------

                           NETAMERICA.COM CORPORATION




                                  By:/s/Douglas Cole
                                     ---------------
                                  Douglas Cole,
                                  Chief Executive Officer and
                                  Principal Accounting Officer

                                       24
<PAGE>

106320.10
                                  Exhibit Index

       Exhibit No.                Description
       -----------                -----------

         3.1      Certificate of Incorporation for  NetAmerica.com  Corporation,
                  as amended.

        3.2       Amended and Restated Bylaws of NetAmerica.com Corporation.

        10.1      Agreement   and   Plan  of   Merger   between   NetAmerica.com
                  Corporation and Rate Exchange, Inc., dated June 1, 1999.

        10.2      Acquisition Agreement between  NetAmerica.com  Corporation and
                  PolarCap,  Inc.,  filed with the Form 8-K dated  September 22,
                  1998, incorporated herein by reference.

        10.3      Employment  Agreement between  NetAmerica.com  Corporation and
                  Edward Mooney.

        10.4      Employment  Agreement between  NetAmerica.com  Corporation and
                  Douglas Cole.

        10.5     Employment  Agreement  between  RateXchange,  Inc.  and  Donald
                 Sledge.

        27.1     Financial Data Schedule.