<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>
                            SCHEDULE 14A INFORMATION

           PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

     Filed  by  the  Registrant  [X]

     Filed  by  a  Party  other  than  the  Registrant  [ ]

     Check  the  appropriate  box:  [ ]

          [ ]  Preliminary  Proxy  Statement

          [ ]  Confidential, for Use of the Commission Only (as permitted by
                Rule  14a-6(e)(2))

          [X]  Definitive  Proxy  Statement

          [ ]  Definitive  Additional  Materials

          [ ]  Soliciting Material Pursuant to Rule  14a-11(c)  or  Rule  14a-12

                                  YP.NET, INC.

              (Name of the Registrant as Specified in its Charter)

     Payment  of  Filing  Fee  (Check  the  appropriate  box):

          [X]  No  fee  required.

          [ ]  Fee  computed  on  table below per Exchange Act Rules 14a-6(i)(4)
               and  0-11.

               1.     Title  of  each  class  of securities to which transaction
                      applies:

               2.     Aggregate  number  of  securities  to  which  transaction
                      applies:

               3.     Per  unit  price  or other underlying value of transaction
                      computed  pursuant  to Exchange Act Rule 0-11 (Set forth
                      the  amount  on  which  the filing fee is calculated and
                      state  how  it  was  determined):

               4.     Proposed  maximum  aggregate  value  of  transaction:

               5.     Total  fee  paid:

          [ ]  Fee  paid  previously  with  preliminary  materials.

          [ ]  Check  box  if  any  part  of  the  fee  is offset as provided by
               Exchange  Act  Rule 0- 11(a)(2) and identify the filing for which
               the  offsetting  fee  was  paid previously. Identify the previous
               filing  by registration statement number, or the Form or Schedule
               and  the  date  of  its  filing.
               1.     Amount  Previously  Paid:
               2.     Forms,  Schedule  or  Registration  Statement  No.:
               3.     Filing  Party:
               4.     Date  Filed:


<PAGE>
                                  YP.NET, INC.


July  24,  2001


Dear  Shareholder:

You are cordially invited to the annual meeting of shareholders of YP.Net, Inc.,
which  will  be  held  at  the  Chaparral  Suites,  5001  North Scottsdale Road,
Scottsdale,  Arizona  85250, on September 25, 2001, at 10:00 a.m. local time.  I
look  forward  to  greeting  as  many  of  our shareholders present as possible.

Details of the business to be conducted at the meeting are given in the attached
Notice  of  Annual  Meeting  and  Proxy  Statement.

It is important that your shares be voted at our meeting.  If you do not plan to
attend  the  annual meeting, please complete, sign, date and return the enclosed
Proxy  promptly in the accompanying reply envelope.  If you decide to attend the
meeting,  you  will  of  course  be  able  to  vote  in person, even if you have
previously  submitted  your  Proxy.

On  behalf  of  the Board of Directors, I would like to express our appreciation
for  your  continued  interest  in  and  support  of  YP.Net.


Sincerely,




Angelo  Tullo
Chairman


<PAGE>
                                  YP.NET, INC.
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                               SEPTEMBER 25, 2001



To  the  Shareholders:

     The annual meeting of the shareholders of YP.Net, Inc. (the "Company") will
be held at the Chaparral Suites, 5001 North Scottsdale Road, Scottsdale, Arizona
85250,  on  September  25,  2001,  at  10:00  a.m.  local time for the following
purposes:

          1.   To  elect  seven  directors  to the Company's Board of Directors.

          2.   To  ratify the selection of Weber & Company, P.C. (Formerly King,
               Weber  &  Associates,  P.C.) as the Company's independent auditor
               for  the  fiscal  year  ended  September  30,  2001.

          3.   To  transact  such other business as may properly come before the
               meeting.

     Only  shareholders of record at the close of business on July 24, 2001, are
entitled  to  notice  of,  and  to  vote  at,  this  meeting.

                                             By Order of the Board of Directors,



                                             Angelo  Tullo,  Chairman


Mesa,  Arizona
July  24,  2001


-------------------------------------------------------------------------------
|                                   IMPORTANT                                 |
|                                                                             |
| WHETHER  OR  NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO |
| SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE. THIS |
| WILL  ENSURE  THE  PRESENCE  OF  A  QUORUM  AT  THE MEETING. A PREADDRESSED |
| ENVELOPE  IS  ENCLOSED FOR YOUR CONVENIENCE. SENDING IN YOUR PROXY WILL NOT |
| PREVENT  YOU FROM VOTING YOUR SHARES AT THE MEETING IF YOU DESIRE TO DO SO, |
| AS  YOUR  PROXY  IS  REVOCABLE  AT  YOUR  OPTION.                           |
-------------------------------------------------------------------------------


<PAGE>
                                  YP.NET, INC.
                            4840 EAST JASMINE STREET
                                    SUITE 105
                               MESA, ARIZONA 85205

               PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
                          TO BE HELD SEPTEMBER 25, 2001

     This Proxy Statement, which was first mailed to shareholders after July 24,
2001,  and furnished in connection with the solicitation of proxies by the Board
of  Directors of YP.Net, Inc. (the "Company" or "YP.Net"), a Nevada corporation,
to  be voted at the Annual Meeting of Shareholders (the "Annual Meeting"), which
will  be  held  at 10:00 a.m. local time on September 25, 2001, at the Chaparral
Suites,  5001 North Scottsdale Road, Scottsdale, Arizona 85250, for the purposes
set  forth  in  this  Proxy  Statement  for this Annual Meeting of Shareholders.

                                VOTING PROCEDURES

     YOUR  VOTE  IS VERY IMPORTANT.  Your shares can only be voted at the Annual
Meeting  if you are present or represented by proxy.  Whether or not you plan to
attend the Annual Meeting, we encourage you to vote by proxy to assure that your
shares  will be represented.  You may revoke your proxy at any time before it is
voted,  by delivering written notice to the Company's Secretary, by submitting a
proxy  bearing  a  later date, or by appearing in person and casting a ballot at
the  Annual  Meeting.  Properly  executed  proxies  that are received before the
Annual  Meeting's  adjournment  will  be voted in accordance with the directions
provided.  If  you  do  not  indicate how your shares are to be voted, the Proxy
holders nominated by the Board of Directors will vote your shares as recommended
by  the  Board  of Directors.  If you wish to give a proxy to someone other than
the  Proxy holders named on the proxy card, you should cross out those names and
insert  the  name(s)  of  the  person(s)  to  whom  you wish to give your proxy.

     WHO  CAN  VOTE?  Shareholders  as of the close of business on July 24, 2001
are  entitled  to  vote.  On that day, approximately 43,072,798 shares of common
stock were outstanding and eligible to vote.  Each share is entitled to one vote
on each matter presented at the Annual Meeting.  A list of shareholders eligible
to  vote will be available at the Company's Corporate Headquarters, beginning on
July  24, 2001.  Shareholders may examine this list during normal business hours
for  any  purpose  relating  to  the  Annual  Meeting.

     HOW  DO I VOTE?  You may attend the Annual Meeting and vote in person.  Or,
as a registered shareholder, you may vote your shares by proxy by mail.  To vote
by  mail,  simply  mark,  sign  and  date  your  proxy card and return it in the
envelope  provided.  If  you  hold  your  shares through a broker, bank or other
nominee,  that  institution  will  send you separate instructions describing the
procedure  for  voting  your  shares.

     WHAT  SHARES  ARE REPRESENTED BY THE PROXY CARD?  The proxy card represents
all  the  shares  registered  in  your  name.

     HOW  ARE  VOTES  COUNTED?  The proxies will be tabulated by an Inspector of
Elections.  If  you return a signed and dated proxy card but do not indicate how
the  shares are to be voted, those shares represented by your proxy card will be
voted  as  recommended  by the Board of Directors.  A valid proxy also gives the
individuals  named  as proxy's authority to vote in their discretion when voting
the  shares  on  any other matters that are properly presented for action at the
Annual  Meeting.  A  properly  executed  proxy card marked "abstain" will not be
voted.  However,  it  may  be  counted  to  determine  whether there is a quorum
present.  Abstentions  are not counted in determining the number of shares voted
for  or against any nominee for Director, the ratification of the appointment of
the  Company's  independent  auditor  or  any  other  management  or shareholder
proposal.

     Shares  represented  by  "broker non-votes" will be counted for purposes of
determining  whether  a  quorum  has  been reached.  Broker non-votes occur when
nominees, such as brokers who hold shares on behalf of beneficial owners, do not
receive  voting  instructions  from  the  beneficial  owners  before  the Annual
Meeting.  The  nominees  may  then vote those shares only on matters such as the


                                        1
<PAGE>
election  of  Directors  and  ratification  of  the appointment of the Company's
independent auditor.  If the nominees do not receive instructions on how to vote
on  non-routine matters, the nominees cannot vote and there is a broker non-vote
on  those  matters.

     WHAT VOTE IS REQUIRED?  In order to have a quorum, a majority of the shares
of  YP.Net  common stock that are outstanding and entitled to vote at the Annual
Meeting  must be represented in person or by proxy.  If a quorum is not present,
a  majority  of  shares  that are represented may adjourn or postpone the Annual
Meeting.

     Generally,  proposals  must  be  approved  by a majority of the votes cast.
Accordingly, broker non-votes and abstentions will have no effect on the outcome
of  those proposals.  However, since Directors are elected by a plurality of the
votes  cast,  votes  withheld from nominees for Director could have an effect on
the  outcome  of  the  election.

     Following  are  descriptions  of the three (3) items being submitted to the
shareholders  for approval.  THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
APPROVE  EACH  ITEM.

________________________________________________________________________________
  ELECTION OF DIRECTORS (AND MANAGEMENT INFORMATION):  ITEM 1 ON THE PROXY CARD

     Seven  directors are to be elected at the Meeting to serve on the Company's
Board of Directors and hold office until the next annual meeting of shareholders
or  until  their  successors  are elected and qualified.  The proxy holders will
vote  in  favor  of  the nominees listed below, unless the shareholder otherwise
directs  on  the  Proxy.

     The election of each of the Company's directors requires a plurality of the
votes cast in person or by proxy at the Meeting.  All nominees have consented to
serve  as  a  director  for  the  term  indicated.

     Management  expects  that  each  of  the  nominees  will  be  available for
election,  but  if  any  of  them is unable or declines to serve at the time the
election  occurs,  it is intended that such Proxy will be voted for the election
of  another  nominee  to  be  designated  by  the  Board  of  Directors.

     THE BOARD OF DIRECTORS RECOMMENDS THAT THE NOMINEES LISTED BELOW BE ELECTED
TO  SERVE  AS  DIRECTORS  OF  THE  COMPANY  UNTIL  THE  NEXT  ANNUAL  MEETING OF
SHAREHOLDERS  OR  UNTIL  THEIR  SUCCESSORS  ARE  ELECTED  AND  QUALIFIED.

NOMINEES
     Angelo  Tullo  has  served  as  the  Chairman  of the Board of YP.Net since
February  2000.  Mr. Tullo was hired as Chief Executive Officer and President on
September  10,  2000. Mr. Tullo is the president of Sunbelt Financial Solutions,
Inc., an investment banking and consultant firm in Scottsdale, Arizona. For over
twenty  years, Mr. Tullo has been active as a business consultant. Mr. Tullo has
actively  worked with commercial financing and factoring for the past ten years.
He  has  owned  and  operated factoring companies, leasing companies, consulting
companies, wholesale companies, professional employment organizations, insurance
agencies,  heating  and air-conditioning contractors, retail oil companies, real
estate  companies  and restaurants. He is a former member of the CEO Club in New
York.

     In  February  2000,  American  Business  Funding Corp. filed for protection
under  Chapter  11  of  the  Bankruptcy  Code  in  the Federal District Court of
Arizona.  Mr.  Tullo  had previously been a director, officer and shareholder of
American Business Funding prior to the time of its bankruptcy filing.  Mr. Tullo
and  his  former  fellow  shareholders  have been involved in intense litigation
regarding  certain activities of one of the directors and a group of individuals
that  worked  directly for that director.  Mr. Tullo has been active during that
entire  time  to  protect  the  interests  of  all creditors in that case.  That
particular  director's  designees  are  still  in  control  of  the  company and
counterclaims  have  been  filed.


     Walter  Vogel.  Mr. Vogel has been a director of YP.Net since February 2000
and  was previously a member of its board from March to October 1998.  Mr. Vogel
has  been  involved  extensively in international business for many years.  From


                                        2
<PAGE>
1996  to  present,  Mr.  Vogel has been the owner and president of MC Management
GmbH, a business-consulting firm in Ottenfing, Germany.  Mr. Vogel has served as
a  director  of  several  companies  both  in  the  United  States  and  Europe.

     Gregory  B. Crane.  Mr. Crane has been a director of YP.Net since February,
2000  and  also  served  as  its  Director  of  Operations from February 2000 to
September  2000.  From  September  1998  to June 1999, Mr. Crane was the General
Manager  of Telco Billing, Inc. ("Telco").  Mr. Crane owned and operated several
businesses,  including  residential  and  commercial  builders, multi-state mail
order,  and  document-preparation  companies,  and  was  also the creator of the
Yellow-Page.Net  concept.  Mr.  Crane  is  a  former  member  of  the  Young
---------------
Entrepreneur's  Organization  ("YEO").

     In connection with providing homestead declaration document preparation and
filing  services, Mr. Crane and certain of these businesses have been subject to
injunctive  actions  brought  by  the  states  of  Arizona,  Florida,  Texas and
Washington.  These  actions  generally  raised legal questions concerning mailer
solicitations  for  document preparation services.  Mr. Crane and various of the
state  plaintiffs  have  entered  into  consent  orders in connection with these
actions  that  required  the  modification  of  mailers and the payment of civil
penalties,  restitution,  and attorneys' fees.  The use of the mail solicitation
for  document  preparation  services  was prohibited in the State of Washington.
Mr.  Crane  voluntarily  entered  into an agreement with the State of Florida in
connection  with  these  matters  and  due  to an error in type size made by the
printing company; Mr. Crane technically violated that order.  In connection with
that  violation  of the Florida order, Mr. Crane is subject to a judgment in the
amount  of  approximately  $1.4  million,  plus  accrued interest.  Mr. Crane is
attempting  to  resolve  the  Florida  judgment.

     Mr.  Crane  was  also  named  in  the  action  filed  by  the Federal Trade
Commission  ("FTC")  against  YP.Net  and  has  been  included in the stipulated
preliminary  order  entered  into by YP.Net and the FTC and approved by the FTC.
The  Stipulated  Final  Judgment  and  Order  for Permanent Injunction and Other
Equitable  Relief by and between the FTC, Mr. Crane, Telco and YP.Net and others
(the  "Order")  places  certain  restrictions on the way mail solicitations will
appear.  The  Order  has  been approved by the U.S. District Court Judge and the
matter is closed with no findings of wrong doing on the part of the company, its
officers  and  directors  or  Mr. Crane.  The Company believes that the Judgment
will  not  adversely  affect  its  operations.  See  "Legal  Proceedings" in the
Company's  Form  10-KSB,  filed with the SEC on January 14, 2001, for additional
information.

     Daniel  L.  Coury.  Mr.  Coury  has  served  as  a director of YP.Net since
February  2000.  For the last ten years, Mr. Coury's principal business has been
Mesa  Cold  Storage,  Inc.,  which  owns  and  operates the largest cold storage
facilities  in  Arizona.  He  is also involved in the ownership and operation of
various  real  estate  interests  and  business  ventures.

     Harold  Roberts.  Mr.  Roberts  has  served  as  a director of YP.Net since
February,  2000 and previously served as a director of its predecessor from 1994
to  1998.  Mr.  Roberts has practiced law in Santa Fe, New Mexico since 1955 and
since  1975  has  engaged  primarily  in matters regulated by various regulatory
agencies,  including the Securities and Exchange Commission.  He has served as a
director  and  president  of  SunRay Oil Company, a company engaged in drilling,
exploration and distribution, from 1996 to present, as a director and officer of
Candu,  Inc.,  a  company  engaged  in  electronic  marketing,  from 1985 to the
present,  and  as  a  director and president of Verilite Aircraft Corporation, a
company  engaged in aircraft development, from 1994 to the present.  Mr. Roberts
is  a  graduate  of  the  University  of  Colorado  Law  School.

     Wallace  Olsen, Jr.  Mr. Olsen is currently President of Venture 32 L.L.C.,
of Phoenix, AZ., a real estate development and operation company specializing in
commercial  real estate and office buildings. Since 1995, he has also been chief
executive  officer  of  ITCOB,  L.L.C.,  of  Boston, MA., a large distributor of
International  parts and trucks in New England.  Mr. Olsen is also President and
Treasurer  of  Alternative Senior Care, L.L.C., "ASO" in Sanford, FL., a company
providing  health  care  services  to people who have dementia or are in need of
extended  congregate  care.  ASO  also  provides  for Assisted Living residents.
Since  1995 Mr. Olsen has served as President of Kenilworth Capital Corporation,
in  Kenilworth,  NJ.,  which owns and operates hotels and restaurants.  Over the
last  20  years,  Mr.  Olsen  has  been  associated  either as an owner or in an


                                        3
<PAGE>
executive  capacity  with  the  following  industries,  Architectural  Millwork,
Glass-Mirror,  Motion  Pictures,  Printing,  and  Transportation.

     DeVal  Johnson.  Mr.  Johnson  has served as a director since October 1999.
Mr.  Johnson  was  the  graphics  designer  and  director  of Telco Billing from
September  1998  until  June 1999 when the Company acquired it.  Mr. Johnson was
responsible  for  the  design of the in-house sales presentation and creation of
the  corporate  logo and image for YP. Net.  From 1995 through 1998, Mr. Johnson
was  a  graphics  designer  for Print Pro, Inc. Mr. Johnson is actively involved
with  Website  promotion,  interactive  design  and  Internet  advertising.  Mr.
Johnson  also  serves  as  an  officer and board member of Simple.Net a national
Internet  service  provider.

INFORMATION  REGARDING  BOARD  MEETINGS  AND  COMMITTEES

     The  Company's  Board  of  Directors  has two standing committees, an Audit
Committee  and  a Compensation Committee.  Outside Directors Messrs. Roberts and
Coury  comprise  and  serve  on  the  Compensation  Committee, which reviews the
compensation  of  the  executive  and  other  officers  of  the Company, reviews
executive bonus plan allocations, and approves stock grants and stock options to
officers  and  employees  of  the Company under the Company's Stock Option Plan.
Messrs.  Tullo  and Vogel comprise and serve on the Audit Committee, which meets
with  financial  management  and  the  independent  auditors  to review internal
accounting  controls  and  accounting, auditing and financial reporting matters.

     Effective as of July 24, 2001, the Board of Directors has adopted a charter
for  the  Audit  Committee detailing its duties and powers.  A copy of the Audit
Committee  charter  is  included  as  Appendix  A  to  this  Proxy  Statement.
                                      -----------

     The  Audit  Committee  is  comprised  of  two directors.  Under the listing
standards  of the National Association of Securities Dealers ("NASD"), Mr. Vogel
would  be  classified  as  an independent director and Mr. Tullo would not.  The
Board  believes  that Mr. Tullo's membership on the Audit Committee benefits the
Company  due  to his knowledge of Company operations.  The Board may add a third
director  to  the  Audit  Committee  who  will be independent under NASD listing
standards,  at  some  undetermined  future  date.

     During  the  fiscal  year  ended September 30, 2000, the Board of Directors
held  six  meetings;  the Compensation Committee held six meetings and the Audit
Committee  held  two  meetings.  All  Board  members attended 75% or more of the
Board  meetings  and  all  of  the  meetings  of  the  Audit  Committee  and the
Compensation  Committee  on  which  they  serve.

Audit  Committee  Report

          The  following  is  the  report of the Audit Committee of the Board of
     Directors:

          The  Audit  Committee oversees the financial reporting process for the
     Company  on  behalf  of the Board of Directors. In fulfilling its oversight
     responsibilities,  the  Committee  reviews  the annual financial statements
     included  in  the  annual report and filed with the Securities and Exchange
     Commission,  as  well  as the unaudited financial statements filed with the
     Company's  quarterly  reports  on  Form  10-QSB.

          In  accordance  with  Statements on Accounting Standards (SAS) No. 61,
     the  Committee  conducted  discussions  with management and the independent
     auditor  regarding  the  acceptability  and  the  quality of the accounting
     principles  used  in the reports. These discussions included the clarity of
     the disclosures made therein, the underlying estimates and assumptions used
     in  the  financial  reporting  and  the  reasonableness  of the significant
     judgments  and  management  decisions  made  in  developing  the  financial
     statements.  In  addition, the Committee has discussed with the independent
     auditor its independence from the Company and its management, including the


                                        4
<PAGE>
     matters in the written disclosures required by Independence Standards Board
     Standard  No.  1.

          The  Committee  has  also  met  and  discussed with management and its
     independent  auditors issues related to the overall scope and objectives of
     the  audits  conducted,  the internal controls used by the Company, and the
     selection  of  the  Company's independent auditor. Additional meetings were
     held  with  the  independent auditor, with financial management present, to
     discuss  the  specific results of audit investigations and examinations and
     the  auditor's  judgments  regarding  any  and  all  of  the  above issues.

          Pursuant to the reviews and discussions described above, the Committee
     recommended to the Board of Directors that the audited financial statements
     be  included  in the Annual Report on Form 10-KSB for the fiscal year ended
     September  30,  1999  and  2000 for filing with the Securities and Exchange
     Commission.

          Signed and adopted by the Audit Committee this 24th day of July, 2001.

     /s/  Angelo  Tullo                         /s/  Walter  Vogel


Information  Regarding  Beneficial  Ownership  of  Principal  Shareholders,
Directors  and  Management

     The  following table sets forth, as of July 24, 2001, the ownership of each
person  known  by the Company to be the beneficial owner of five percent or more
of  the  Company's Common Stock, each officer and director individually, and all
officers  and  directors  as  a  group.  The  Company has been advised that each
person  has sole voting and investment power over the shares listed below unless
otherwise  indicated.


                                        5
<PAGE>
NAME AND ADDRESS                      AMOUNT AND NATURE   PERCENT
OF BENEFICIAL OWNER                   OF OWNERSHIP        OF CLASS(1)
------------------------------------  ------------------  -----------

Angelo Tullo                                  300,000(2)         .74%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Walter Vogel                                  195,000(2)         .48%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Gregory B. Crane                               75,500(2)         .18%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Daniel L. Coury, Sr.                          180,000(2)         .44%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Harold A. Roberts                             258,000(2)         .63%
P.O. Box 101
Santa Fe, NM 87504

Wallace Olsen, Jr.                            547,500(2)        1.34%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

DeVal Johnson                                 125,000(2)         .31%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Matthew & Markson Ltd. (3)                    7,600,000         18.7%
Woods Centre, Frair's Road
P.O. Box 1407
St. John's
Antigua, West Indies

Morris & Miller Ltd.                          9,325,000           23%
Woods Centre, Frair's Road
P.O. Box 1407
St. John's
Antigua, West Indies

All Directors as a Group (7 persons)          1,656,000         4.07%


                                        6
<PAGE>
(1)  Based  on  40,615,464  shares outstanding as of July 24, 2001.  This amount
excludes  litigation  & Collateral shares as well as returned shares held by the
treasury.  Collateral  shares  had  been issued as collateral for obligations of
YP.Net  under  two promissory notes.  Upon payment of the notes, the shares will
be  returned  to  YP  .Net.
(2)     Less  than  0.01%.
(3)     The  number of shares held by Matthew & Markson, Ltd. excludes 2,000,000
shares  issued  as collateral for a note payable issued by YP.Net see (1) above.
These  shares  will  be  returned  to  YP.Net  upon  payment  of  the  note.



INFORMATION  REGARDING  MANAGEMENT,  EXECUTIVE  AND  DIRECTOR  COMPENSATION

DIRECTORS  AND  EXECUTIVE  OFFICERS

     The  directors  and  executive officers of YP.Net, their ages and positions
are  as  follows:

NAME                     AGE  POSITIONS HELD(1)
-----------------------  ---  ----------------------------------------------
Angelo Tullo              44  Chairman of the Board, Director, Chief
                              Executive Officer and President
Walter Vogel              61  Director, Vice Chairman of
                              the Board
Gregory B. Crane          36  Director
Daniel L. Coury, Sr.      47  Director
Harold A. Roberts         75  Director
Wallace Olsen             59  Director
DeVal Johnson             35  Director
Daniel Madero             36  Director of Operations
Pamela J. Thompson, CPA   38  Chief Financial Officer, Treasurer, Secretary

(1)  All  current  directors serve until the next annual shareholders meeting or
their  earlier  resignation  or  removal.

OFFICER  COMPENSATION

     The following table reflects all forms of compensation for the fiscal years
ended September 30, 2000, and September 30, 1999 for the Chief Executive Officer
and  the  other  two most highly compensated executive officers of YP.Net, whose
salaries  exceed  $100,000  annually,  for  the  years  stated.


                     SUMMARY  COMPENSATION  TABLE
----------------------------------------------------------------------
                                          ANNUAL COMPENSATION
                                      --------------------------------
                                      FISCAL             OTHER ANNUAL
NAME AND PRINCIPAL POSITION            YEAR    SALARY    COMPENSATION
------------------------------------  ------  --------  --------------

Angelo Tullo (1)                        2001  $210,000  $   44,000 (1)
Chairman, Chief Executive Officer,      2000            $   21,000 (2)
President

Daniel Madero                           2001  $100,000  $   16,500 (3)
Director of Operations

Pamela Thompson                         2001  $125,000              -
Chief Financial Officer, Secretary,
Treasurer

(1)     Includes  a  bonus  of 200,000 shares of YP.Net stock valued at $.22 per
        share.
(2)     Includes  100,000  shares  of  YP.Net  stock  valued  at $.21 per share.
(3)     Includes  75,000  shares  of  YP.Net  stock  valued  at  $.22 per share.


                                        7
<PAGE>
COMPENSATION  PURSUANT  TO  STOCK  OPTIONS

     No  options were granted to executive officers during the fiscal year ended
September  30,  2000,  and  through  the  nine-month period ended July 24, 2001.

DIRECTOR  COMPENSATION

     Upon  appointment  to  the  Board,  Mr. Tullo was awarded 100,000 shares of
YP.Net  common  stock  and  Mr.  Vogel  was  awarded  75,000  shares.  All other
directors  were  awarded 50,000 shares.  The 425,000 shares of common stock paid
to  the  directors  as  compensation  for their services were valued at $.22 per
share  for a total value of $93,500.  Additionally, the directors receive $2,000
per  meeting  or per quarter for their service on the Board and may receive $250
per  hour  for  services  related  to  any  Board Committee on which they serve.

1998  STOCK  OPTION  PLAN

     YP.Net's  Board of Directors adopted and its shareholders approved in June,
1998  the  1998  Stock Option Plan (the "Plan").  The purpose of the Plan was to
provide  incentives to employees, directors and service providers to promote the
success  of  YP.Net.  The  Plan  provided  for  the  grant of both qualified and
non-qualified  options to purchase up to 1,500,000 shares of its common stock at
prices  determined  but,  in  the case of incentive options, at a price not less
than  the  fair market value of the stock on the date of the grant.  The Plan is
administered by the Board of Directors or by a committee appointed by the Board.
As  of  July  24,  2001,  all  outstanding options to purchase YP.Net stock have
expired  and  no  options  are  currently  outstanding  under  the  Plan.

SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     Based  solely  on  review  of reports under Section 16(a) of the Securities
Exchange  Act  of  1934,  as  amended, that were filed by executive officers and
directors  and  beneficial owners of 10% or more of YP.Net's common stock during
the  fiscal  year  ended September 2000, to the best of the Company's knowledge,
all  16(a)  filing  requirements  have  been  made through the fiscal year ended
September  30,  2000.  This  information  is  based on a review of Section 16(a)
reports  furnished  to  YP.Net  and  other  information.

TRANSACTIONS  WITH  DIRECTORS,  OFFICERS  AND  OTHERS

     Note  Conversion.  YP.Net  borrowed  $500,000  from  Mr.  Wallace  Olsen, a
shareholder  who  later  became  a  member  of  the Board of Directors effective
February  4,  2000.  In September 1999, YP.Net repaid $250,000 of the balance in
cash  and  Mr.  Wallace Olsen converted the remaining $250,000, plus $100,000 in
accrued  interest.  into  400,000  shares  of YP.Net's common stock with a total
value  of  $200,000;  the  stock  was  issued  at  a price of 50 cents per share

     Acquisition  of  Telco.  In June 1999, YP.Net's predecessor acquired all of
the  outstanding  stock of Telco Billing, Inc. in exchange for 17,000,000 shares
of YP.Net.'s common stock.  Matthew & Markson, Ltd. and Morrison & Miller, Ltd.,
as  the  shareholders  of  Telco,  were  issued  7,650,000 and 9,350,000 shares,
respectively.  As  to  these shares, the original acquisition agreement provided
for certain Put rights that were later terminated.  In exchange for cancellation
of the Put rights, YP.Net agreed to provide the former Telco shareholders with a
$5,000,000  credit  facility.  Any  loans  made to these shareholders under this
facility are to be secured by a pledge of YP.Net stock.  Interest for borrowings
under  this  facility  is  to  be  at  least  0.25% higher than YP.Net's average
borrowing  costs.  No  advances  in  excess of $1,000,000 may be made at any one
time  and  no  advances in excess of $1,000,000 are to be made unless YP.Net has
available  at  least 30 days operating capital plus other reserves.  No advances
are  permitted  to  be  made  if YP.Net is in default with respect to any of its
lender obligations.  The credit facility has not been formally documented and no
advances  have  been  made  or  are  expected  until documentation is completed.

     Gregory B. Crane and DeVal Johnson were employees of and primarily involved
in  the  start-up of Telco.  Mr. Crane continues to serve as one of the Liaisons
for  Matthew  &  Markson,  Ltd.  and  Morris  &  Miller, Ltd. and negotiated the


                                        8
<PAGE>
acquisition  of  Telco  by  YP.Net's  predecessor  on behalf of the former Telco
shareholders.

     License  of  URL.  In  connection  with  the acquisition of Telco, YP.Net's
predecessor  also  agreed  to  pay  Matthew  &  Markson,  Ltd.  $5,000,000  as a
discounted  accelerated  royalty  payment  for  a  20-year  license  of  the URL
Yellow-Page.Net.  The  accelerated  payment  was  made  under  the  terms  of an
---------------
Exclusive  Licensing  Agreement  dated  September  21,  1998,  between Telco and
Matthew  & Markson, Ltd.  The payment was originally to be paid in full upon the
acquisition  of  Telco.  The Company paid $3,000,000 as a down payment; however,
the  Company  defaulted on payment of the $2,000,000 balance on August 15, 1999.
To  extend the payment obligations, YP.Net agreed to provide, for the benefit of
Mathew  & Markson, $250,000 in tenant improvements for approximately one-half of
its Mesa facility.  The premises were leased to Matthew & Markson's designee for
$1.00  per year throughout the term of the 5-year lease.  The annual fair rental
value  of  the  lease  premises  is  $4,500  per  month.  A  one million dollars
($1,000,000.00)  extension  fee  may  also be due.  On November 15, 1999, YP.Net
paid  an  extension  fee  of  $200,000.  The  $200,000 extension fee was applied
against  the $5,000,000 accelerated royalty payment and an additional $2,000,000
was  paid  on  the  royalty  payment in July 1999.  Matthew & Markson, Ltd. also
agreed  to  take  a  $2,000,000  note  for  the balance due that remains due and
outstanding.

     After  defaulting  on  the November 1999 property extension, on January 15,
2000,  the  note  was renegotiated to a demand note with monthly installments of
$100,000  per  month.  The  payments  may  be  suspended if YP.Net does not have
certain  cash  reserves or is otherwise in default under other obligations.  The
note is secured by 2,000,000 shares of YP.Net common stock held in escrow, to be
returned  upon  payment  of  the  note.

     Business  Executive Services, Inc. ("BESI"), as the nominal rent sublessee,
leases  portions of the facility to other businesses associated with other third
parties.  Mr.  Crane  is employed by BESI and receives a salary of approximately
$2,000  per  month  from  BESI  and  bonuses  in  an  undetermined  amount.

     Related  Party  Transaction  Policy.  The Company's general policy requires
adherence  to  Nevada  corporate  law  regarding  transactions between YP.Net, a
Nevada  corporation,  and  a  director, officer or affiliate of the corporation.
Transactions  in  which  such  persons have a financial interest are not void or
voidable if the interest is disclosed and approved by disinterested directors or
shareholders  or if the transaction is otherwise fair to the corporation.  It is
the  policy  of the Company that transactions with related parties are conducted
on  terms  no  less  favorable  to  the Company than if they were conducted with
unaffiliated third parties. During fiscal year ended September 30, 2000, through
July  24,  2001,  there  have  been  no  related  party  transactions.

--------------------------------------------------------------------------------
                 INDEPENDENT AUDITORS:  ITEM 2 ON THE PROXY CARD
--------------------------------------------------------------------------------

INDEPENDENT  AUDITORS

     For  the  fiscal year ended September 30, 2001, the Company engaged Weber &
Company  P.C.  ("Weber")  formerly King, Weber & Associates of Phoenix, Arizona,
to  audit  its  financial statements.  The Board of Directors proposes to retain
Weber  as  the  independent  public  auditor  for  the  current  fiscal  year.
Representatives  of Weber will be present at the Annual Meeting of Shareholders,
will have an opportunity to make a statement and will be available to respond to
appropriate  questions.

     During  the fiscal year ended September 30, 2000, King, Weber & Associates,
P.C.  billed  an  aggregate of $35,000 for professional services rendered to the
Company.  Of  this  amount, $35,000 related to the audit of our fiscal year 2000
financial  statements  and review of the quarterly financial statements included
in  our  Forms 10-QSB for that fiscal year.   King, Weber & Associates, P.C. did
not  provide  any related services and have only provided  audit services to the
Company.


                                        9
<PAGE>
     Ratification  of  the  retention  of  YP.Net's  independent  public auditor
requires an affirmative vote of a majority of the shares entitled to vote at the
Meeting, in person or by proxy.  It is intended that the accompanying Proxy will
be  voted  in  favor  of ratification of the retention of Weber & Company, P.C.,
unless  the  shareholders'  Proxy  indicates  to  the  contrary.

     THE  BOARD  OF  DIRECTORS  RECOMMENDS  THAT SHAREHOLDERS VOTE TO RATIFY THE
RETENTION OF WEBER & COMPANY, P.C.  (FORMERLY KING, WEBER & ASSOCIATES, P.C.) AS
THE  COMPANY'S  INDEPENDENT  PUBLIC  AUDITOR.

CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND FINANCIAL
DISCLOSURES

     In November, 1999, the Company replaced Singer Lewak Greenbaum & Goldstein,
LLP  ("Singer  Lewak")  as the Company's independent public accountants.  Singer
Lewak  had  been the Company's principal independent accountant for the audit of
its  1998  and  1997  fiscal  year  financial  statements.  Except  for a "going
concern"  qualification,  Singer  Lewak's  reports  on  the  Company's financial
statements  contained  no  adverse opinion or disclaimer of opinion.  Neither of
the  Company's  reports  on the Company's financial statements were qualified or
modified as to uncertainty, audit scope, or accounting principles.  The decision
to  replace Singer Lewak was recommended and approved by our Board of Directors,
as  Singer  Lewak  maintains  no  presence  in  Arizona, and use of the firm was
impracticable  for  the  Company.  During  the  two  past  fiscal  years and the
subsequent  interim  periods, the Company had no disagreements with Singer Lewak
regarding  any matter of accounting principles or practices, financial statement
disclosure,  or  auditing  scope  or  procedure.

     On  March  14,  1999,  the  Company  reported that it replaced McGladry and
Pullen  LLP  as its principal certified public accountants.  McGladry and Pullen
LLP  had  been  engaged as the independent auditors to replace Singer Lewak, but
had  not  issued  any  audited  reports.

     On March 30, 2000, the Company appointed King, Weber & Associates, P.C., as
its  independent auditors to conduct the audit of the September 30, 1999, fiscal
year financial statements.  On December 31, 2000, King, Weber & Associates, P.C.
changed  its  corporate  name  to  Weber  &  Company,  PC.

--------------------------------------------------------------------------------
                    OTHER MATTERS:  ITEM 3 ON THE PROXY CARD
--------------------------------------------------------------------------------

     The  Board  of Directors does not intend to bring any other business before
the  Meeting  and, as far as is known to the Board, no matters are to be brought
before  the  Meeting  except  as  specified in the accompanying Notice of Annual
Meeting  of  Shareholders.  In  addition to the scheduled items of business, the
Meeting may consider other matters that properly come before the Meeting.  As to
any  other  business  that  may properly come before the Meeting, it is intended
that  Proxies,  in  the  form  enclosed,  will  be  voted  in respect thereof in
accordance  with  the  judgment  of  the  person(s)  voting  such  Proxies.

--------------------------------------------------------------------------------
                              SHAREHOLDER PROPOSALS
--------------------------------------------------------------------------------

     Shareholders  may  submit proposals to be considered for shareholder action
at  the  Company's  2002  annual  meeting  of  shareholders and inclusion in the
Company's  Proxy  Statement  and  Proxy  if  they  do  so in accordance with the
appropriate  regulations  of  the  Securities and Exchange Commission.  For such
proposals  to  be  considered  for inclusion in the Proxy Statement for the next
annual  meeting,  the  Company  must receive proposals no later than December 1,
2001.  Such  proposals  should  be  directed  to YP.Net, Inc., 4840 East Jasmine
Street,  Suite  105,  Mesa,  Arizona  85205,  Attention:  Chairman.  The Company
received  no  shareholder  proposals  for  this  year's  Meeting.


                                       10
<PAGE>
--------------------------------------------------------------------------------
                              SOLICATION OF PROXIES
--------------------------------------------------------------------------------

     The  Proxy  accompanying  this Proxy Statement is solicited by the Board of
Directors  of  the  Company.  Officers,  directors  and  regular supervisory and
executive  employees  of  the  Company, none of whom will receive any additional
compensation for their services, may solicit proxies.  Such solicitations may be
made  personally  or  by mail, facsimile, telephone, telegraph, messenger or via
the  Internet.  The  Company  will  pay  all  costs  of solicitation of proxies.

--------------------------------------------------------------------------------
                                VOTING PROCEDURES
--------------------------------------------------------------------------------

     Votes  cast  by  proxy  or in person at the Meeting will be tabulated by an
Inspector  of  Elections.  A shareholder that abstains from voting on any or all
proposals  will be included in the number of shareholders present at the Meeting
for  purposes  of  determining the presence of a quorum.  Abstentions and broker
non-votes  will not be counted either in favor of or against the election of the
nominees  or  other  proposals.  See  "Voting  Procedures,"  above.

     A  copy  of the Company's Annual Report on Form 10-KSB and 10-KSB/A for the
fiscal  year  ended  September, 2000, and the amendment thereto, which have been
filed  with  the  Securities  and  Exchange  Commission on January 14, 2001, and
AUGUST 8, 2001, respectively, can be obtained at no charge by any person to whom
this  Proxy  Statement  is  delivered upon request to the Company.  You also may
obtain  a  copy  of  the  Form  10-KSB  and 10-KSB/A and the Company's other SEC
filings  via  the  Internet  at  www.sec.gov.
                                 -----------
Dated:  July  24,  2001
Mesa,  Arizona

                                     By  Order  of  the  Board  of  Directors,



                                     /s/________________________________________
                                     Angelo  Tullo,  Chairman


                                       11
<PAGE>
                                  YP.NET, INC.
                            4840 EAST JASMINE STREET
                                    SUITE 105
                                 MESA, AZ  85205

--------------------------------------------------------------------------------
                                      PROXY
--------------------------------------------------------------------------------

     THIS  PROXY  IS  SOLICITED  ON  BEHALF OF YP.NET'S BOARD OF DIRECTORS.  THE
FOLLOWING  PROSALS  ARE  PROPOSED  BY  THE  BOARD  OF  DIRECTORS.

     The  undersigned  shareholder  of  YP.Net,  Inc., a Nevada corporation (the
"Company"),  hereby  appoints  the following individual(s), and each of them, as
proxy,  each  with power of substitution, acting jointly or alone, to attend and
act  on  behalf  of the undersigned at the Annual Meeting of Shareholders of the
Company,  to  be  held  on  September  25,  2001,  at 10:00 a.m. local time (the
"Meeting"),  at  the  Chaparral  Suites, 5001 North Scottsdale Road, Scottsdale,
Arizona  85250  and  at  any  adjournment thereof, and there to vote any and all
shares of common stock of the Company standing in the name of the undersigned as
indicated  below.

Proxy  designation  for  meeting:
              FOR
(Check  One) [ ]      Angelo  Tullo, and Daniel L. Coury, Sr., and each of them,


     or      [ ]       _____________________________ (Print  Name)

-------------------------------------------------------------------------------
| THE  BOARD  OF  DIRECTORS  RECOMMENDS  A  VOTE  "FOR" EACH OF THE FOLLOWING |
| PROPOSALS  AND  DIRECTORS.  THIS PROXY WILL BE VOTED AS DIRECTED, PROVIDED, |
| HOWEVER,  THAT  IF  YOU  SIGN AND RETURN THIS PROXY WITHOUT INDICATING YOUR |
| DIRECTIONS,  IT  WILL  BE  VOTED  IN THE DISCRETION OF THE PROXYHOLDER (S). |
-------------------------------------------------------------------------------
                                    PROPOSALS
--------------------------------------------------------------------------------

     1.     Regarding  the  reelection of the following individuals as Directors
of the Company, to serve until the next annual meeting of shareholders and until
their  successors  are  elected  and  qualified:

                                      FOR       AGAINST      ABSTAIN

               Angelo  Tullo          [ ]         [ ]          [ ]

               Walter  Vogel          [ ]         [ ]          [ ]

               Gregory  B.  Crane     [ ]         [ ]          [ ]

               Daniel  L.  Coury      [ ]         [ ]          [ ]

               Harold  Roberts        [ ]         [ ]          [ ]

               Wallace  Olsen,  Jr.   [ ]         [ ]          [ ]

               DeVal  Johnson         [ ]         [ ]          [ ]

          For  all  nominees  listed  above  (check  box  to  approve).
          YOU  MAY  WITHHOLD  AUTHORITY  TO  VOTE FOR ANY OR ALL OF THE NOMINEES
LISTED ABOVE TO DO SO SIMPLY BLACK THE BOX IN THE ROW LABELED "ABSTAIN.   IF YOU
WISH  TO  VOTE  "AGAINST"  A NOMINEE, PLEASE MARK THE BOX UNDER THAT COLUMN.  TO
VOTE  FOR  A  NOMINEE,  PLEASE MARK THE BOX NEXT TO THE NOMINEE'S NAME UNDER THE
"FOR"  COLUMN.  IF  THERE  IS  NO  MARK IN ANY BOX ACROSS FROM NOMINEE'S NAME, A
"FOR"  VOTE  WILL  BE  CAST  FOR  THAT  NOMINEE.


<PAGE>
     2.     The  ratification  of the retention of Weber & Company, P.C., as the
Company's  independent public auditor for the fiscal year(s) ended September 30,
2001,  September  30,  2000  and  September  30,  1999:


       [ ]  For        [ ]  Against       [ ]  Abstain     (check  one)

     3.     In accordance with their best judgment, the Proxy Holder(s) may vote
upon  such  business  as  may  properly come before such meeting or adjournments
thereof.

       [ ]  For        [ ]  Withhold  Authority     (check  one)

     The  undersigned  hereby ratifies and confirms all that each named proxy or
his,  her  or  their  substitutes  may lawfully do or cause to be done by virtue
hereof,  represents  and  warrants that he has full power to execute this proxy,
and  agrees  that  this  proxy shall be specifically enforceable in any court of
competent  jurisdiction.  If  any  provision  of this proxy is unenforceable, it
shall  be  severed  and  the  remaining  provisions  shall  be  effective.

     Please  sign  exactly  as your name appears on your stock certificates.  If
shares  are  held  by  more  than  one  owner, each owner must sign.  Executors,
administrators,  trustees,  guardians  and  others  signing  in a representative
capacity  should  give their full titles.  A corporation should sign in its name
by  an  officer  or  any  other  person  duly  authorized  to  do  so.

     WHETHER  OR  NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO
SIGN,  DATE  AND  RETURN  THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.  THIS
WILL ENSURE THE PRESENCE OF A QUORUM AT THE MEETING.  A PREADDRESSED ENVELOPE IS
ENCLOSED  FOR YOUR CONVENIENCE.  SENDING IN YOUR PROXY WILL NOT PREVENT YOU FROM
VOTING  YOUR  SHARES  AT  THE  MEETING  IF YOU DESIRE TO DO SO, AS YOUR PROXY IS
REVOCABLE  AT  YOUR  OPTION.

                                        ________________________________________
                                        Shareholder  Name  (please  print)

                                        ________________________________________
                                        Authorized  Signature

                                        ________________________________________
                                        Title  (if  applicable)

                                        ________________________________________
                                        Number of Shares of  Common  Stock  Held

                                        ________________________________________
                                        Date


                                        2
<PAGE>
                                   APPENDIX A
                                   ----------
                            SCHEDULE 14A INFORMATION
                                OF  YP. NET, INC.
                   TO PROXY STATEMENT PURSUANT TO SCHEDULE 14A
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                              FILED AUGUST 13, 2001



                         CHARTER OF THE AUDIT COMMITTEE

                                       OF

                             THE BOARD OF DIRECTORS

                                       OF

                                  YP.NET, INC.

                                 JULY 24TH, 2001


                                        3
<PAGE>
                                TABLE OF CONTENTS
                              -------------------


                                                                      Page
                                                                      ----
1.     Purpose of Audit Committee. . . . . . . . . . . . . . . . . .     1

2.     Qualifications of Audit Committee . . . . . . . . . . . . . .     1

3.     Duties of the Audit Committee . . . . . . . . . . . . . . . .     1

4.     Access to Information . . . . . . . . . . . . . . . . . . . .     4

5.     Employee Access to Audit Committee. . . . . . . . . . . . . .     4

6.     Frequency of Meetings . . . . . . . . . . . . . . . . . . . .     4

7.     Access to Legal Counsel . . . . . . . . . . . . . . . . . . .     4

8.     Meeting Procedures. . . . . . . . . . . . . . . . . . . . . .     4

9.     Other Duties. . . . . . . . . . . . . . . . . . . . . . . . .     5

10.     Limitation of Audit Committee Duties . . . . . . . . . . . .     5


                                        4
<PAGE>
                         CHARTER OF THE AUDIT COMMITTEE
                                       OF
                             THE BOARD OF DIRECTORS
                                       OF
                                  YP.NET, INC.

                                 JULY 24TH, 2001


                                    RECITALS
                                    --------

          In  July, 2001, the Board of Directors of YP.NET, INC. (the "Company")
decided,  by  a  majority  of  the  Board  of  Directors  to  clarify an earlier
resolution  of  the  Board  which  appointed  an  Audit Committee (See The Board
meetings held from February 4th to February 8th 2000), by  maintaining a written
Charter  specifying  its  duties.

          The  Board  of Directors of the Company (the "Board") believes that it
is  appropriate  to  maintain  a  Charter of the Audit Committee of the Board of
Directors  of  YP.NET,  INC.  (the  "Charter")  to reflect the directives of the
Company's  Board.  The  currently  serving  Audit  Committee  members, appointed
February 4-8 2000 shall continue to serve until replaced or removed by the Board
of  Directors  pursuant  to  provisions  of  this  Charter.

CHARTER
-------

          1.     Purpose of Audit Committee.  The purpose of the Audit Committee
                 --------------------------
is  to  provide  independent and skilled guidance to the Board in fulfilling its
responsibility  to  ensure  the fairness and accuracy of the Company's financial
statements  and  to  ensure  the  existence  of  appropriate  internal financial
controls, and the independence of the independent public accounting firm engaged
to  audit  the  Company's financial statements (the "external auditors"), and to
render  the  reports  required  of  the  Audit Committee pursuant to Item 306 of
Regulation  S-B,  and  to  allow the Company to make the disclosures required by
Item  7(e)(3)  of  Schedule  14(A)  and  related  Commission  regulations.

          2.     Qualifications  of  Audit Committee.  The Audit Committee shall
                 -----------------------------------
consist  of  not  less  than  two (2) directors nor more than five directors, at
least  50%  or more of whom qualify as an "independent director" under Rule 4200
of  the  NASDAQ  Stock  Market,  Inc.'s listing requirements, unless exceptional
circumstances  exist  that  NASDAQ  listing  requirements  would allow the Audit
Committee  to include one non-independent director member, who may not be either
a  current  employee  or  immediate  family  member of a current employee.  Each
member  of  the Audit Committee shall be able to read and understand fundamental
financial  statements,  including the Company's balance sheet, income statement,
and  cash  flow  statement.

          3.     Duties  of the Audit Committee.  Subject to the second sentence
                 ------------------------------
of Paragraph 10, below, the Audit Committee will perform the following duties in
the manner and priority the Audit Committee determines, in its discretion, to be
appropriate  under  the  circumstances:

               (a)     Review  the  Company's earnings statements and forecasts,
if  any,  with  management and with the Company's external auditors prior to the
release  of  such  statements  to  the  public;


                                        5
<PAGE>
               (b)     Assure  that  the  Company's interim financial statements
are  reviewed  by  the  Company's  external auditors, as required by Item 306 of
Regulation S-B prior to the filing of such interim financial statements with the
Commission  as  part  of  the  Company's  report  on  Form  10-KSB;

               (c)     Review  and  discuss  the  Company's  audited  financial
statements  with  management;

               (d)     Review  and  discuss  the  Company's  audited  financial
statements  with  the  Company's  external  auditors  and  review  those matters
required  to  be  discussed  by SAS-61, as modified or supplemented from time to
time;

               (e)     Receive  from  the  Company's  external  auditors, formal
written  statements  and  disclosures and the letter from the Company's external
auditors  required  by Independent Standards Board's Standard No. 1, as modified
or  supplemented, and discuss with the external auditors their independence, and
review  all  audit and other services performed by the external auditors for the
Company  to  assure  that such services do not compromise the external auditors'
independence;

               (f)     Review  and consider and, to the extent necessary, engage
in direct dialogue with the external auditors, with respect to any relationships
or  services  provided  by  the  external  auditors  to the Company or any other
affiliate  of  the  Company  or  any  party  that  may affect the objectivity or
independence  of  the  external  auditors  and take, or recommend that the Board
take,  appropriate  action  to ensure the independence of the external auditors;

               (g)     Review annually the scope of the external auditors' work,
including  any  non-auditing  or  consulting  services;

               (h)     Review  with  the  Company's  external  auditors  all
adjustments  made  to  the  Company's  audited financial statements, including a
reconciliation  of any adjustments made in the audited financial statements from
the  Company's  quarterly  interim  financial  statements;

               (i)     Review  with  management  and  the  Company's  external
auditors  any  significant financial reporting issues or judgments called for in
connection with the preparation of the Company's financial statements, including
the  adequacy  and  appropriateness  of  any  reserves, policies relating to the
recognition  of  revenue,  the  quality  and  appropriateness  of  the Company's
accounting  principles,  and  any  other  matters  which, in the judgment of the
Committee  or  the  Company's external auditors, could have a material impact on
the  Company's  financial  statements;

               (j)     Meet  with  the  Company's  external  auditors  and  with
management  to  review  and  assess  any material financial risk exposure to the
Company  and  the  steps  management has or plans to take to monitor and control
financial  risk;

               (k)     Review  with  the  Company's  external  auditors  and
management  the  adequacy  of  the  Company's  internal  financial  controls and
reporting  systems;

               (l)     Confer  with  the Company's external auditors whether any
matters described in Section 10A of the Securities and Exchange Act of 1934 have
come  to  the  attention  of  the  external  auditors;

               (m)     Review  any  major  changes to the Company's auditing and
accounting  policies  and practices suggested by the Company's external auditors
or  by  management.  (In  undertaking  the  duties  specified  herein,  in
communications  with  the Company's external auditors, the Audit Committee will,
in  accordance  with SAS-61, communicate with the external auditors with respect


                                        6
<PAGE>
to  (1) methods used to account for significant or unusual transactions; (2) the
effect of significant accounting policies in controversial or emerging areas for
which  there  is  a lack of authoritative guidance or consensus; (3) the process
used  by  management in formulating particularly sensitive accounting estimates,
and the basis for the auditors conclusions regarding the reasonableness of those
estimates;  and  (4) disagreements with management, if any, over the application
of  accounting  principles, the basis for management's accounting estimates, and
the  disclosures  in  the  Company's  financial  statements);

               (n)     Recommend  annually  the  selection and engagement of the
Company's  external  auditors  and  review their fees and the proposed scope and
plan  of  the  annual  audit;

               (o)     Review  the  external  auditors'  management  letter  and
consider any comments made by the external auditors with respect to improvements
in  the  internal  accounting  controls  of the Company, consider any corrective
action  recommended  by  the external auditors, and review any corrective action
taken  by  management;

               (p)     Review  and  devote  attention  to  any  areas  in  which
management  and  the  Company's  external  auditors  disagree  and determine the
reasons  for  such  disagreement;

               (q)     Review  the  performance of the external auditors and, if
appropriate,  recommend  that  the Board replace any external auditor failing to
perform  satisfactorily;

               (r)     Review  the  performance of the Company's Chief Financial
Officer  and  Controller;

               (s)     Review  any  difficulties  any  external auditor may have
encountered  with  respect  to  performance  of  an  audit,  including,  without
limitation,  any  restrictions  placed  upon the scope of the audit on access to
information,  or  any  changes  in  the  proposed  scope  of  the  audit;

               (t)     Provide, as part of the Company's proxy filed pursuant to
Regulation  14A  or  14C,  as  applicable,  the  report  required by Item 306 of
Regulation  S-B,  and cause a copy of that report to be included annually in the
Company's  proxy  solicitation  materials;  and

               (u)     Periodically review the adequacy of this Charter and make
recommendations  to  the  Board  with  respect  to  any  changes in the Charter.

          4.     Access  to  Information.  In  order to perform its obligations,
                 -----------------------
the  Audit Committee shall have unrestricted access to all relevant internal and
external  Company  information  and  to any officer, director or employee of the
Company.

          5.     Employee Access to Audit Committee.  Any person employed by the
                 ----------------------------------
Company and any of the Company's independent contractors will have access to the
Audit  Committee  to  report  any  matter which such person believes would be of
interest  to the Audit Committee or of general concern to the Audit Committee or
the  Board.  Contacting  a  member  of  the  Audit  Committee  to  report  any
irregularity,  questionable  activity,  or  other  matter  will  not subject the
person  making  the  report  to  discipline.


                                        7
<PAGE>
          6.     Frequency  of  Meetings.  The  Audit  Committee  will meet each
                 -----------------------
quarter  prior to the release of the Company's earnings statements to review the
earnings release.  In addition, the Audit Committee will convene if a meeting is
noticed  by  its  Chairman, any member of the Audit Committee, any member of the
Board,  the  Chief  Financial  Officer,  or  the  Chief  Executive  Officer.

          7.     Access  to Legal Counsel.  The Audit Committee, at its request,
                 ------------------------
shall  have access to the Company's outside legal counsel, and, if requested, to
its  own  independent  legal counsel.  The Company  will pay for the cost of any
such  legal  counsel.

          8.     Meeting  Procedures.
                 -------------------

               (a)     Members  of  the Audit Committee shall endeavor to attend
all  meetings  of the Committee.  The Audit Committee may meet telephonically or
in  person  and  may  take  action,  with the written consent of all members.  A
majority  of  the  Audit  Committee  will  constitute  quorum  for all purposes.

               (b)     Written  minutes  will  be maintained for each meeting of
the  Audit  Committee.

               (c)     The  Audit  Committee,  at  least  once a year, will meet
privately  with  the  Company's  external auditors, and no representative of the
Company's  management  shall  attend  such  meetings.

          9.     Other  Duties.  The  Audit  Committee  will  perform such other
                 -------------
duties  as  the  Board  may  assign  to  it.

          10.     Limitation  of Audit Committee Duties.  The Audit Committee is
                  -------------------------------------
not  an  investigative  committee  of  the Board and shall have no investigative
duties,  unless  expressly  assigned  to  the Audit Committee by the Board.  The
Audit  Committee  will  exercise  its business judgment in performing its duties
under  this  Charter,  including  the  duties  outlined  in Paragraph 3, and may
emphasize and prioritize those duties and responsibilities set forth above which
the  Committee, in its discretion and judgment, believes are the most important,
given  the  particular  circumstances.  The  external  auditors  shall  remain
ultimately  accountable  to  the Company's Board and the Audit Committee, as the
designated  representatives  of  the Company's shareholders.  Accordingly, it is
not  the  duty  of  the  Audit  Committee  to undertake the audit of the Company
itself,  to  plan  the audit, or to undertake any of the responsibilities of the
Company's internal or external auditors.  The Audit Committee is not required to
follow  the  procedures  required  of  auditors in performing reviews of interim
financial  statements  of  audited  financial  statements.  In  performing  its
functions,  the  Audit  Committee  may  rely  upon information provided to it by
management,  by  the  Company's  internal  and  external  auditors,  or by legal
counsel.  This  Charter  imposes no duties on the Audit Committee or its members
that  are greater than those duties imposed by law upon a director of an Arizona
corporation  under Section 10-830 of the Arizona Revised Statutes.  If any claim
is  asserted  against  the Audit Committee, any of its members or the Company by
shareholder  or  any other person, nothing in this Charter shall be construed to
limit  or  restrict  any  defense  available  to the Audit Committee, any of its
members,  or  to  the  Company.


Signed  by  Order  of  the  Board  of  Directors  this  24th  Day  of  July 2001
                    Signed  by:  /s/  Angelo  Tullo
                                 ------------------
                                  The Chairman of the Board of Directors


                                        8
<PAGE>

</TEXT>
</DOCUMENT>
