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<SEC-DOCUMENT>0001015402-01-502342.txt : 20010815
<SEC-HEADER>0001015402-01-502342.hdr.sgml : 20010815
ACCESSION NUMBER:		0001015402-01-502342
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20010630
FILED AS OF DATE:		20010814

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			YP NET INC
		CENTRAL INDEX KEY:			0001045742
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				85026668
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24217
		FILM NUMBER:		1710984

	BUSINESS ADDRESS:	
		STREET 1:		4840 E JASMINE ST
		STREET 2:		STE 110
		CITY:			MESA
		STATE:			AZ
		ZIP:			85020
		BUSINESS PHONE:		4806549646

	MAIL ADDRESS:	
		STREET 1:		4840 EAST JASMINE STREET
		STREET 2:		SUITE 105
		CITY:			MESA
		STATE:			AZ
		ZIP:			85020

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RENAISSANCE INTERNATIONAL GROUP LTD
		DATE OF NAME CHANGE:	19980115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RIGL CORP
		DATE OF NAME CHANGE:	19980707
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>
                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                              ____________________
                                   FORM 10-QSB
                              ____________________

(Mark  One)
[X]  Quarterly  Report  Pursuant  to  Section  13  or  15(d)  of
          the  Securities  Exchange  Act  of  1934

For  the  quarterly  period  ended  June  30,  2001

[ ]  Transition  Report  Pursuant  to  Section  13  or  15(d)
          of  the  Securities  Exchange  Act

For  the  transition  period  from  _____________  to  _______________

                              ____________________

                         Commission File Number 0-24217
                              ____________________

                                  YP.NET, INC.
        (Exact name of small business issuer as specified in its charter)

                   Nevada                            85-0206668
       (State or other jurisdiction of              (IRS Employer
       incorporation  or  organization)           Identification No.)

                         4840 East Jasmine St. Suite 105
                               Mesa, Arizona 85205
                    (Address of principal executive offices)

                                 (480) 654-9646
                           (Issuer's telephone number)

         Check whether the issuer (1) 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 registrant was required to file such reports), and (2)
       has been subject to such filing requirements for the past 90 days.

Yes   X          No
     ---             ---

     The number of shares of the issuer's common equity outstanding as of August
1,  2001  was  40,615,464  shares  of  common  stock,  par  value  $.001.

     Transitional  Small  Business  Disclosure  Format  (check  one):

Yes              No   X
     ---             ---


<PAGE>
                                  YP.NET, INC.
                           INDEX TO FORM 10-QSB FILING
                       FOR THE QUARTER ENDED JUNE 30, 2001

     TABLE  OF  CONTENTS

     PART  I
                               FINANCIAL  INFORMATION                       PAGE

Item  1.  Financial  Statements
  Consolidated Comparative  Balance  Sheets
    as  of  June  30,  2001                                                    2
  Consolidated  Statements  of  Operations
    for  the  Three  Months  and  Nine  Months  Ended  June  30, 2001
    (unaudited) and 2000 (unaudited)                                           3
  Consolidated  Statements  of  Cash  Flows
    for  the  Three  Months  and  Nine  Months  Ended  June  30, 2001
    (unaudited)  and  2000  (unaudited)                                        4

  Notes  to  the  Consolidated  Financial  Statements                        5-7

Item  2.  Management's Discussion and Analysis of Financial Condition and
          Results  of  Operations                                           8-11

                                     PART II
                                OTHER INFORMATION

Item  1.  Legal  Proceedings                                               11-12
Item  2.  Changes  in  Securities                                             13
Item  6.  Exhibits  and  Reports  on  Form  8-K                               13


                                   SIGNATURES


<PAGE>
                         PART I - FINANCIAL INFORMATION
ITEM  1.  FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>
                                  YP.NET, INC.
                                  CONSOLIDATED
                                  BALANCE SHEETS
                               AS OF JUNE 30, 2001
                                     ASSETS
                                                     JUNE 30, 2001
                                                      (unaudited)
<S>                                                   <C>
CURRENT ASSETS:
  Cash and Cash Equivalents                           $    51,087
  Accounts Receivable                                   2,951,804
  Prepaid Expenses                                        114,478
  Direct Response Marketing - Net                         210,166
  Deferred income taxes                                 1,018,291
                                                      ------------
     TOTAL CURRENT ASSETS                               4,345,826
                                                      ------------
PROPERTY AND EQUIPMENT:
  Furniture and Fixtures                                  197,260
  Equipment & Computer Equipment                          261,981
  Leasehold Improvements                                  319,150
LESS: Accumulated Depreciation and Amortization          (377,214)
                                                      ------------
     TOTAL PROPERTY AND EQUIPMENT                         401,177
                                                      ------------
OTHER ASSETS:
  Notes Receivables                                       129,273
  Intangible Assets                                     5,010,000
  Deposits                                                 40,064
LESS: Accumulated Amortization                           (970,416)
                                                      ------------
     TOTAL OTHER ASSETS                                 4,208,921
                                                      ------------
     TOTAL ASSETS                                       8,955,924
                                                      ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Trade Accounts Payable                                  118,525
  Income Taxes Payable                                  1,212,681
  Short-Term Notes Payable - Note 1                       524,726
  Short-Term Notes Payables - Note 2                      708,781
                                                      ------------
     TOTAL CURRENT LIABILITIES                          2,564,713
                                                      ------------
LONG-TERM LIABILITIES:

  Deferred income taxes                                   105,868
                                                      ------------
     TOTAL LONG-TERM LIABILITIES                          105,868
                                                      ------------
     TOTAL LIABILITIES                                  2,670,581
                                                      ------------
STOCKHOLDER' EQUITY:
  Common Stock $.001 par value, 50,000,000 shares          40,836
    40,615,464 and 40,560,464 issued and outstanding
    For June 30, 2001.
  Additional Paid In Capital                            5,445,587
  Treasury Stock                                         (179,822)
  Retained Earnings                                       978,742
                                                      ------------
     TOTAL STOCKHOLDERS' EQUITY                         6,285,343
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 8,955,924
                                                      ------------
</TABLE>

       See the accompanying notes to these unaudited financial statements


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                                 YP.NET, INC.
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 2001 AND JUNE 30, 2000


                                             THREE MONTH      NINE MONTH       THREE MONTH      NINE MONTH
                                                ENDED            ENDED            ENDED            ENDED
                                            JUNE 30, 2001    JUNE 30, 2001    JUNE 30, 2000    JUNE 30, 2000
                                           ------------------------------------------------------------------
                                                                      (unaudited)
<S>                                        <C>              <C>              <C>              <C>
INCOME
  Revenue                                  $    4,033,088   $   13,098,596   $    4,247,263   $   10,370,820

COST OF SALES                                   2,484,985        7,811,691        2,238,838        4,967,439
                                           ---------------  ---------------  ---------------  ---------------
GROSS PROFIT                                    1,548,103        5,286,905        2,008,425        5,403,382
                                           ---------------  ---------------  ---------------  ---------------

  SELLING EXPENSES                                 14,623           50,095            2,149           22,932

  GENERAL AND ADMINISTRATIVE                      667,216        2,188,773          629,267        2,941,367

  DEPRECIATION AND AMORTIZATION                   151,536          456,251          154,930          466,185
                                           ---------------  ---------------  ---------------  ---------------
    TOTAL EXPENSES                                833,375        2,695,119          786,346        3,430,483
                                           ---------------  ---------------  ---------------  ---------------

    EARNINGS (LOSS) FROM OPERATIONS               714,729        2,591,786        1,222,080        1,972,898
                                           ---------------  ---------------  ---------------  ---------------

OTHER INCOME (EXPENSE)
  Other Income                                         57              121           10,270           45,518
  Interest Income/(Expense)                       (96,418)        (364,880)        (199,541)        (571,695)
                                           ---------------  ---------------  ---------------  ---------------
    TOTAL OTHER INCOME (EXPENSE)                  (96,361)        (364,759)        (189,271)        (526,178)
                                           ---------------  ---------------  ---------------  ---------------

  Net Income (Loss) Before Income Taxes           618,367        2,227,027        1,032,809        1,446,721

  Provisions for Income Taxes                     189,515          705,345              -0-         (100,494)
                                           ---------------  ---------------  ---------------  ---------------

NET INCOME (LOSS)                          $      428,852   $    1,521,682   $    1,032,809   $    1,547,215
                                           ===============  ===============  ===============  ===============

    EARNINGS (LOSS) PER SHARE:

     Basic Earnings (Loss) Per Share       $         0.01   $         0.04   $         0.03   $         0.04
                                           ===============  ===============  ===============  ===============

WEIGHTED AVERAGE NUMBER OF COMMON              40,615,464       40,362,083       40,986,354       40,516,876
                                           ===============  ===============  ===============  ===============
  SHARES OUTSTANDING

     Diluted Earnings (Loss) Per Share     $         0.01   $         0.04   $         0.03   $         0.04
                                           ===============  ===============  ===============  ===============

WEIGHTED AVERAGE NUMBER OF COMMON              40,615,464       40,362,083       40,986,354       40,516,876
                                           ===============  ===============  ===============  ===============
AND COMMON SHARE EQUIVALENTS OUTSTANDING
</TABLE>

       See the accompanying notes to these unaudited financial statements


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                                        YP.NET, INC.
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                          FOR THE THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 2001 AND JUNE 30, 2000

                                                            THREE MONTHS      NINE MONTHS     THREE MONTHS      NINE MONTHS
                                                                ENDED            ENDED            ENDED            ENDED
                                                            JUNE 30, 2001    JUNE 30, 2001    JUNE 30, 2000    JUNE 30, 2000
                                                           ------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES                                                 (unaudited)
<S>                                                        <C>              <C>              <C>              <C>
  Net Income                                               $      428,852   $    1,521,682   $    1,032,809   $    1,547,215
  Adjustments to reconcile net income to net cash used by
  operating activities.
    Depreciation and amortization                                  39,452          121,211           37,014          108,268
    Officers & Consultants paid with common stock                     -0-           59,700          115,500          878,669
    Common stock surrendered                                          -0-         (494,310)             -0-              -0-
    Amortization of intellectual property                         107,402          334,902          117,917          357,917
    Income tax benefit                                            189,515          705,345              -0-         (100,494)

  (Increase) decrease in assets
    Trade accounts receivable                                    (134,021)         754,078         (373,548)      (2,079,905)
    Customer acquisition costs                                   (210,166)         (71,320)         (79,569)          68,019
    Other Receivables                                            (129,273)        (129,273)             -0-           77,182
    Prepaid and other current assets                              155,556           98,053           30,550          (85,681)
    Other assets                                                  (16,777)         (26,777)             -0-           31,368

  Increase (decrease) in liabilities
    Trade accounts payable                                         54,947           15,508           18,444           34,913
    Accrued liabilities                                           (46,494)        (328,201)        (339,402)        (534,628)
    Deferred revenue                                                  -0-              -0-              -0-          (81,190)
                                                           ------------------------------------------------------------------
        NET CASH PROVIDED (USED) IN
        OPERATING ACTIVITIES                                      438,993        2,560,598          559,715          221,654

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                              (5,441)         (15,138)         (30,037)        (186,631)
                                                           ------------------------------------------------------------------
        NET CASH USED BY INVESTING
        ACTIVITIES                                                 (5,441)         (15,138)         (30,037)        (186,631)

CASH FLOWS FROM FINANCING ACTIVITIES
  Advances from line of credit                                        -0-              -0-           87,275          984,923
  Principal repayments on notes payable                          (654,427)      (2,713,986)        (600,512)      (1,151,178)
                                                           ------------------------------------------------------------------
        NET CASH PROVIDED (USED) BY
        FINANCING ACTIVITIES                                     (654,427)      (2,713,986)        (513,237)        (166,255)

      NET INCREASE (DECREASE) IN CASH                            (220,875)        (168,526)          16,441         (131,232)

        CASH AT BEGINNING OF PERIOD                               271,962          219,613          107,650          255,323
                                                           ------------------------------------------------------------------
        CASH AT END OF PERIOD                              $       51,087   $       51,087   $      124,091   $      124,091
                                                           ==================================================================
</TABLE>

              See the accompanying notes to these unaudited financial statements


                                        4
<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
FOR  THE  THREE  AND  NINE  MONTHS  ENDED  JUNE  30,  2001  AND  JUNE  30,  2000

1.  Basis  of  Presentation

The  accompanying  unaudited  financial  statements  represent  the consolidated
financial position of YP.Net, Inc. ("the Company") for the three and nine months
ended  June  30,  2001 and 2000 include results of operations of the Company and
Telco  Billing,  Inc. ("Telco"), its wholly owned subsidiary, and cash flows for
the  three  and nine months ended June 30, 2001 and 2000.  These statements have
been  prepared  in  accordance  with  generally  accepted  accounting principles
("GAAP") for interim financial information and the instructions for Form 10-QSB.
Accordingly,  they  do not include all the information and footnotes required by
generally  accepted accounting principles for complete financial statements.  In
the  opinion  of  management,  all  adjustments  to  these  unaudited  financial
statements  necessary  for  a  fair  presentation of the results for the interim
period  presented  have  been  made.  The  results for the three and nine months
period  ended June 30, 2001 may not necessarily be indicative of the results for
the  entire  fiscal  year.  These  financial  statements  should  be  read  in
conjunction  with  the  Company's  Form  10-KSB for the year ended September 30,
2000,  and  Form  10-KSB/A  for  the  year  ended  September  30, 2000 including
specifically  the  financial  statements  and notes to such financial statements
contained  therein.

2.  Summary  of  Significant  Accounting  Policies

The  accounting  policies  followed  by the Company, and the methods of applying
those  policies,  which  affect  the  determination  of  its financial position,
results  of  operations  and  cash  flows  are  summarized  below:

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

Cash  and  cash  equivalents  include all short-term liquid investments that are
readily  convertible  to  known  amounts of cash and have original maturities of
three  months  or  less.  At  times  cash deposits may exceed government insured
limits.

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

The  consolidated  financial statements include the Company and its wholly owned
subsidiary,  Telco.  All  intercompany  accounts  in  consolidation  have  been
eliminated.

Revenue  Recognition
- --------------------

The  Company's  revenue  is  generated by customer subscription of directory and
advertising  services.  Revenue is recognized monthly for services subscribed in
that specific month.  The Company utilizes outside billing companies to transmit
billing  data  that  is  forwarded to Local Exchange Carriers ("LECs").  Monthly
subscription fees are included on the telephone bills of the LEC customers.  The
Company  recognizes  revenue  based  on  net billings accepted by the LECs.  Net
billings result from gross submittals reduced by billing records rejected by the
LEC's  and adjusted for resubmittals.  Revenue is reported gross of fees charged
by  the  billing  company  and  the  LEC's.


                                        5
<PAGE>
Fair  Value  of  Financial  Instruments
- ---------------------------------------

The  carrying  amounts  for investments in marketable securities, trade accounts
receivable,  trade  accounts  payable,  accrued  liabilities  and notes payable,
approximate  their  fair  value  due to the short maturity of these instruments.
The  Company  has  determined  that the recorded amounts approximate fair value.

Net  Earnings  Per  Share
- -------------------------

Net  earnings  per  share  are  calculated  using the weighted average number of
shares of common stock outstanding during the year.  The Company has adopted the
provisions  of Statement of Financial Accounting Standards No. 128, Earnings Per
Share.

Use  of  Estimates
- ------------------

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

Stock-Based  Compensation
- -------------------------

Statements of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation  ("SFAS  123"),  established accounting and disclosure requirements
using  a  fair-value  based  method  of  accounting  for  stock-based  employee
compensation.  In  accordance with SFAS 123, the Company has elected to continue
accounting  for  stock  based  compensation  using  the  intrinsic  value method
prescribed  by  Accounting  Principles  Board  Opinion  No.  25.

3.  Business  Combination

On  June  16,  1999, the Company exchanged 17,000,000 shares of its common stock
for  all  of  the  common  stock  of  Telco,  which  were  2,000  shares.

4.  Intangible  Asset

In  connection  with the Company's acquisition of Telco, the Company is required
to  provide payment of licensing fees for the use of the Internet domain name or
Universal  Resource Locator ("URL") Yellow-Page.Net.  The URL is recorded at its
                                    ---------------
cost  net  of  accumulated amortization.  The Company's management believes that
the Company's business is dependent on its ability to utilize this URL given the
recognition  of  the "yellow page" term.  The Company's management believes that
the  current  revenue  and  cash  flow  generated  using the URL Yellow-Page.Net
                                                                 ---------------
substantiates  the  net  book value of the asset.  The Company will periodically
analyze  the  net  book  value  of  this  asset  and determine if impairment has
incurred.  The  URL  is  amortized  on an accelerated basis over the twenty-year
term  of  the  licensing  agreement.


                                        6
<PAGE>
5.  Notes  Payable  and  Line  of  Credit

Notes  payables  are  recorded  and  interest  is accrued in accordance with the
individual  terms of each note.  Notes payable at June 30, 2001 were as follows:

Note  1:  The  Company  entered into a loan agreement with Mr. Joseph Van Sickle
- -------
during  the  acquisition  of Telco under which Mr. Van Sickle lent $2,000,000 to
the  Company.  At  June 30, 2001 this note payable had an outstanding balance of
$524,726.  Mr. Van Sickle is a shareholder of the Company and owns approximately
one  percent of the Company's outstanding stock.  Mr. Van Sickle is not a member
of  management  and  currently  has no position on the Board of Directors of the
Company.

Note  2:  The Company entered into an agreement with Matthew & Markson, Ltd., an
- -------
Antigua  corporation  ("M&M"),  in conjunction with the acquisition of Telco for
the  license  of  the  URL  Yellow-Page.Net.  The  Company  agreed  to  pay  M&M
                            ---------------
$5,000,000  to  license  URL  Yellow-Page.Net.   At  June  30, 2001 the M&M note
                              ---------------
payable  had  an outstanding balance of $708,781.  M&M owns approximately 23% of
the  Company's  outstanding  stock.

6.  Common  Stock

Transactions in the Company's common stock issued for the acquisition of assets,
products,  or  services  are  accounted for at 90% of fair value.  Fair value is
determined  based on the closing price of the Company's common stock on the date
of  the  transaction,  or  the  fair  value  of  the  asset, product, or service
received.

7.  Income  Taxes

The  Company  provides  for income taxes based on the provisions of Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes, which among
other  things, requires that recognition of deferred income taxes be measured by
the  provisions  of  enacted  tax  laws  in  effect  at  the  date  of financial
statements.  The provision for income taxes for interim periods is calculated on
the  basis  of  the  expected  effective  rate  for  the  full  year.


                                        7
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF  OPERATIONS

     Except  for  historical  information  contained  herein,  the  following
discussion  contains  forward-looking  statements  that  involve  risks  and
uncertainties.  Such forward-looking statements include, but are not limited to,
statements  regarding  future events and our plans and expectations.  Our actual
results could differ materially from those discussed herein.  Factors that could
cause  or  contribute to such differences include, but are not limited to, those
discussed  elsewhere  in  this  Form 10-QSB or incorporated herein by reference.
See  "Forward-Looking  Statements"  below.

OVERVIEW

     YP.Net,  Inc.  ("we"  or  "our"  refers  to  the  "Company") was originally
incorporated  in  Nevada in 1996 as Renaissance Center, Inc.  Renaissance Center
and  Nuclear  Corporation  merged  in  1997.  Our articles of incorporation were
restated  in  July  1997  and  our name was changed to Renaissance International
Group,  Ltd.  Our name was later changed to RIGL Corporation in July 1998.  With
the  acquisition of Telco Billing, Inc. ("Telco"), the Company shifted its focus
of  business  and  changed  its name to YP.Net, Inc., effective October 1, 1999.
The  new  name was chosen to reflect our focus on our Internet-based yellow page
services.

     We  provide  Internet-based  yellow  page  listing  services  on  our
Yellow-Page.Net  and YP.Net Web sites.  We acquired Telco in June 1999, changing
- ---------------      ------
our  primary  business  focus  to  become  an Internet-based yellow page listing
service.  Our  websites serve as a search engine for yellow page listings in the
United  States  and  Canada.  We charge our customers for a preferred listing of
their  businesses  on  our  websites.

     We  have  experienced  continued  increases  in competition in the Internet
yellow  page  market,  and  continue  to  seek  joint  venture  and  investment
acquisition  opportunities  to  potentially lessen the effects of competition in
the  electronic  yellow  page  markets.

     We  utilized  direct  mailings  as  our  primary marketing program. We have
experienced  some  attrition in our customer base since September 2000. However,
we  have  implemented a customer contact programs with the goals of assisting us
in  maintaining  our  customer base and growing our customer base without direct
mail  marketing  efforts. We resumed our direct mailing program in February 2001
on  a  limited  basis.  As  of  September  30,  2000,  we  had 130,592 customers
subscribing  to  our  services. As of June 30, 2001, we had 99,862 customers. We
believe  the  decrease  in our customer base for these periods was primarily the
result  of natural attrition we have not sent a direct mailer to customers since
June  2000  due  to our election to close any open issues with the Federal Trade
Commission.  We  have  continued  our  customer  contact  program  to attempt to
increase  our  customer  satisfaction and limit customer attrition. This program
has  and  will  continue  to  provide  decrease in attrition and better customer
satisfaction.


                                        8
<PAGE>
     On  July  30,  2001 the Company received a signed Stipulated Final Judgment
and  Order  for Permanent Injunction and other Equitable Relief. The Company and
the Federal Trade Commission agreed to this stipulation and the complaint states
a claim upon which relief may be granted against the Company. There have been no
findings  or  admissions  of any wrongdoing by the Company. The Company has been
restrained  from  using  the  word "rebate" on their solicitation and must state
that the mailer is a solicitation of goods and services. The Company is also not
allowed  to  use  the "walking fingers" logo and we are also required to allow a
refund  to  our customers from 90 days to 120 days. The Company has begun a test
solicitation  of  250,000  mail  pieces  incorporating  all of the Federal Trade
Commission  changes in different formats. The Company will evaluate the results.
Before resuming a regular mail solicitation program over 3000 new customers have
responded  to  our  test  mailers.  The  above  four items, and others have been
adhered  to  by the Company in all of its future direct mailers. The Company has
replace  all  direct  mailers  with  the  required stipulations set forth by the
Federal  Trade  Commission.  All parties have been exonerated of the preliminary
injunction  filed  on  June  26,  2000.

     Expenditures  related  to consulting fees were significant in the three and
nine months period ended June 30, 2001 and 2000.  Management believes that these
expenditures  will not be as significant in future periods.  The consulting fees
expended  were  to implement policy and procedures to comply with the stipulated
order  from  the  Federal  Trade  Commission  and  these expenses have adversely
affected  our  current  earnings for the three months and nine months ended June
30,  2001.

     Management  is  actively  pursuing  rescission  and cancellation of certain
common  and  preferred  stock  that  was  previously  issued  for  services. The
preferred  shares that were issued by prior management of 1,500,000 of preferred
shares  have  been  cancelled and will not be converted and any person or entity
holding  the  preferred  shares  should  contact  current  management.

     Management  has  presently  entered  into a written agreement to settle and
return  of  1,425,334 shares of common stock that was issued by prior management
to  Hudson  Consulting  Group,  Inc.  The parties had prior offers to settle the
dispute  over  the  issuance of common stock to Hudson Consulting Group, Inc. by
prior  management  however  the  Company later settled the matter at a mediation
hearing  on July 16, 2001 for $85,000. The current management of the Company was
informed  that  the  owners  of Hudson Consulting Group Inc., Allen Wolfson, was
barred  from  working  in  the  securities  industry  by the Securities Exchange
Commission.  Current  management has also assured the NASD Regulation that prior
management  is  no  longer  an  employee,  officer,  or  director of YP.Net. The
cancellation  of  these shares will decrease our total outstanding shares, which
will  affect  our  earners  per  share.

     Our  co-branded  syndication  with  I411.com  has  provided  our  preferred
customers and those using our site to find goods and services easier and faster.
This  arrangement  has  allowed  us  to have additional advertising space on our
website  which  Management  believes  will  bring  in  additional  revenue. With
I411.com  powering  our  sites we will have more pages with our "Look and Feel".
Management  believes this syndication will help attract more people to our site.
The company now has the ability to sell syndicate yellow page sites. The company
is  already  able  to  offer  our  client  visible  storefronts. Through visible
storefronts  our clients will be able to set up "Web Stores" easily and cheaply;
complete  with  the  ability  to  utilitized  credit  cards  to  process orders.
Management  is  currently testing these products and believes that they have the
potential  to  add  income.  Management  is also in the process of expanding its
syndication  revenue  by  offering web page designs and maps for Internet yellow
page customers.  We presently have approximately 3 million hits per month, which
we  believe  will  expend  our  customer  base.


                                        9
<PAGE>
     Management  believes  that  our  Direct  Response Program if partnered with
other  reputable companies could be an additional source of revenue. The Company
has  embarked  on  a  program  to  find and solicit promotional partners for its
Direct  Response  Program  on  a  test  basis.

RESULTS  OF  OPERATIONS

     Our  Internet  yellow  page  service  is  currently  the sole source of our
revenue.  Revenues were $4,033,088 and $13,098,596 for the three and nine months
period ended June 30, 2001, compared to $4,247,263 and $10,370,820 for three and
nine  months  period  ended June 30, 2000, respectively.  Until other sources of
revenue  are  developed,  our total revenues will be directly dependent upon the
number  of  customers  subscribing  to  our  preferred  listing service.  We are
presently,  seeking other revenue sources from advertising media through our new
co-branding  agreement  with  I411.com and syndication programs being developed.

     Cost  of  Sales  were  $2,484,985  and $7,811,691 for three and nine months
period  ended June 30, 2001, compared to $2,238,838 and $4,967,439 for three and
nine  months  period  ended  June  30,  2000,  respectively.  Cost  of  sales is
comprised of dilution expenses, allowances for bad debt, direct mailer marketing
costs,  and  our  billing costs.  Dilution expenses include customer credits and
any  other  receivable  write-downs.  Dilution  expenses  were  approximately
$1,171,935  for  the three months ended June 30, 2001 compared to $1,216,829 for
June  30,  2000.  Cost  of  sales  inclusive  of dilution expenses has primarily
increased  because the expenses are directly related to the increase in revenue.
Our  cost  of sales has increased also because an increase in dilution primarily
due to the increase in competitive local exchange carriers (CLEC) that cannot be
billed  through  the  LEC's.  Our dilution costs have also increased and we have
reconciled  the  dilution  expense to our data provided by the billing companies
and  have  found  unanswered  and  irreconcilable differences.  We are presently
requesting  and audit of these differences and are awaiting the results.  In our
financial  statements for the period ending we have recorded a more conservative
amount of dilution.  Therefore, any offsets will affect our net income.  We have
also  made  corrective  steps  to  counter  the increase in CLEC's by billing on
credit  cards  and  ACH.

     Selling  expenses were $14,623 and $50,095 for three and nine months period
ended  June  30,  2001, compared to $2,149 and $22,932 for three and nine months
period  ended  June  30,  2000,  respectively.  Selling  costs  are  primarily
associated  with  general  advertising  and  marketing of other revenue sources.

     General  and administrative expenses were $667,216 and $2,188,773 for three
and  nine months period ended June 30, 2001, compared to $629,297 and $2,941,367
for  three  and  nine  months period ended June 30, 2000, respectively.    These
costs  are  primarily  related  to  staffing,  which  we believe provides better
service  to  our  customers.  For  the  three  months  ended  June  30, 2001 our
professional  fees  were  93,432  compared  to  $121,724  for June 30, 2000, the
decrease  is  primarily due to the final settlement of defending and negotiating
with  the  Federal  Trade Commission related to the allegations that the Company
engaged  in deceptive advertising.  We settled with the Federal Trade Commission
and  entered  into  a  final  stipulated order for permanent injunction or other
equitable  relief on July 30, 2001.  There were not finding or admissions of any
wrongdoing.

     Interest  expense net of interest income was $96,418 and $364,880 for three
and  nine  months  period ended June 30, 2001, compared to $199,541 and $571,695
for  three  and  nine months period ended June 30, 2000, respectively.  Interest
expense  was  a  result of our outstanding debt.  This outstanding debt included
debt incurred in connection with the acquisition of the URL Yellow-Page.Net. The
                                                            ----------------
reduction  in  interest expense is due to the payoff of our credit facility with
Finova Capital Corporation, and the reduction of Matthew Markson Ltd, and Joseph
and  Helen  Van  Sickle.


                                       10
<PAGE>
     Net  Income before income taxes was $618,367 and net income was $428,852 or
$.01  per  diluted  share,  and  $2,227,027 net income before income tax and net
income  was  $1,521,682  or $.04 per diluted share, for the three and nine month
periods  ended  June  30,  2001, compared to $1,032,809 net income before income
taxes  and  $1,032,809 net income, or $.03 per diluted share, and $1,446,721 net
income before income taxes and $1,547,215 net income, or $.04 per diluted share,
for  the  three  and nine month periods ended June 30, 2000. The decrease in Net
income is primarily due to the attrition of our customers from reduced marketing
efforts  due to the Federal Trade Commission's requirements.  We have received a
final  settlement  with  the  Federal  Trade Commission we have received a final
stipulation order for permanent injunction of other equitable relief on July 30,
2001.  We  have made now resumed our marketing efforts and have incorporated the
corrective changes to our direct mailer to comply with the changes required.  We
have  reconciled  the  dilution  expense  to  our  data  provided by the billing
companies  and  have  found  unanswered  and irreconcilable differences.  We are
presently  requesting  and  audit  of  these  differences  and  are awaiting the
results.  In  our  financial statements for the period ending we have recorded a
more  conservative  amount  of dilution.  Therefore, any offsets will affect our
net  income.  We  anticipate  increasing marketing efforts in our fourth quarter
ended  September  30,  2001.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Cash  provided  by  operating activities was $2,560,598 for the nine months
period ended June 30, 2001, compared to cash provided by operating activities of
221,654  for  the  nine months period ended June 30, 2000. Revenue was generated
solely  from  providing  electronic  yellow page listing advertising.  Cash from
operating  activities for the nine months period ended June 30, 2001 was used to
increase  our  customer  acquisition costs ($71,320), other accounts receivables
($129,273),  and  security  deposits  ($26,777),  and to decrease trade accounts
receivables  by  $754,078,  prepaid  expenses  $98,053,  and accrued liabilities
($328,201).  Cash in the nine months period ended June 30, 2000 was generated by
an  increase  in  our  accounts  receivables  ($2,079,905),  in  prepaid  assets
($85,681),  and by decreases in accrued liabilities ($534,628), deferred revenue
($81,190)  and  customer  acquisition  costs  $68,019.


                                       11
<PAGE>
     Cash  used  by  investing activities was $15,138 for the nine months period
ended  June  30,  2001,  compared to $186,631 for the nine months ended June 30,
2000.  We  purchased  additional computer equipment of $15,138 for June 30, 2001
compared  to  $186,631  for  June  30,  2000.

     Cash  used  by  financing  activities was $2,713,986 for nine months period
ended  June  30, 2001, compared to cash used by financing activities of $166,255
for  the nine months ended June 30, 2000.  The cash used by financing activities
of $2,713,986 represents total payments made to reduce the principle balances of
the  outstanding notes for June 30, 2001.  Cash used by financing activities was
$166,255  for  the  nine  months period ended June 30, 2000; we realized cash of
$984,923  from  advances  on  our  line of credit and utilized $1,151,178 to pay
notes  payable.

     We  have  paid  off  our credit facility with Finova Corporation on June 8,
2001.  Management  is  seeking  other  potential  lenders  that  specialize  in
financing businesses utilizing LEC billings.  We do not anticipate these changes
to  have  an  adverse affect on our ability to continue operating at our current
levels.

OTHER  CONSIDERATIONS

     There are numerous factors that affect the Company business and the results
of  its  operations.  Sources  of  these  factors  include  general economic and
business  conditions,  federal  and state regulation of our business activities,
the  level of demand for our services, the level and intensity of competition in
the  Internet-based  yellow  page  industry  and  the pricing pressures that may
result,  our ability to develop new services based on new or evolving technology
and  the  market's  acceptance  of those new services, our ability to timely and
effectively  manage  periodic  product  transitions,  the services, customer and
geographic  sales  mix  of any particular period, and our ability to continue to
improve  our  infrastructure (including personnel and systems) to keep pace with
the  growth  in  its  overall  business  activities.

FORWARD-LOOKING  STATEMENTS

     Except  for  historical  information  contained  herein,  this  Form 10-QSB
contains  express  or  implied  forward-looking statements within the meaning of
Section  27A  of the Securities Act of 1933 and Section 21E of the Exchange Act.
We  intend  that  such forward-looking statements be subject to the safe harbors
created  thereby.  We  may  make written or oral forward-looking statements from
time  to  time  in filings with the SEC, in press releases, quarterly conference
calls  or otherwise.  The words "believes," "expects," "anticipates," "intends,"
"forecasts,"  "project,"  "plans,"  "estimates" and similar expressions identify
forward-looking  statements.  Such  statements  reflect  our  current views with
respect  to future events and financial performance or operations and speak only
as  of  the  date  the  statements  are  made.

     Forward-looking  statements involve risks and uncertainties and readers are
cautioned not to place undue reliance on forward-looking statements.  Our actual
results  may  differ  materially  from  such  statements.  Factors that cause or
contribute  to such differences include, but are not limited to, those discussed
elsewhere in this Form 10-QSB, as well as those discussed in our Form 10-KSB and
Form  10-KSB/A  which  is  incorporated  by  reference  in  this  Form  10-QSB.


                                       12
<PAGE>
     Although  we  believe  that  the assumptions underlying the forward-looking
statements  are  reasonable,  any of the assumptions could prove inaccurate with
the  result  that  there  can  be  no assurance the results contemplated in such
forward-looking  statements  will  be  realized.  The  inclusion  of  such
forward-looking information should not be regarded, as a representation that the
future  events,  plans,  or  expectations  contemplated  will  be  achieved.  We
undertake  no  obligation  to  publicly  update,  review,  or  revise  any
forward-looking  statements  to  reflect  any  change in our expectations or any
change  in  events,  conditions,  or  circumstances on which any such statements
based.  Our filings with the SEC, including the Form 10-KSB and 10-KSB/A, may be
accessed  at  the  SEC's  Web  site,  www.sec.gov.
                                      ------------


                           PART II - OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

     YP.Net  is involved in various legal proceedings and claims as described in
our  Form  10-KSB  and  Form  10-KSB/A  for  the  year ended September 30, 2000.

     We  have  settled through a mediation hearing with Hudson Consulting Group,
Inc.  on July 16, 2001. Prior management issued 1,425,334 shares of common stock
to  Hudson  Consulting  Group, Inc. for service to include but not be limited to
advise  the  Company  on  the availability of potential lenders in the Company's
market  niche, assist in evaluating potential Public Relation firms and Investor
Relations  firms,  and  contact  market  makers  and  to provide other financial
services.  These services were never rendered, since Allen Wolfson, the owner of
Hudson  Consulting  Group,  Inc.,  and was barred from working in the securities
industry  by  the  Securities  Exchange  Commission.  The  Company agreed to pay
$85,000  for  the return of 1,425,334 shares of its common stock. The results of
these  proceedings  will  reduce  the  number  of  common  stock outstanding and
increase  our  earning  per  share.

     On  June  26,  2000  the Federal Trade Commission ("FTC") filed a complaint
against  the  Company  and  other defendants alleging that the Company and other
defendants  were  engaged  in  deceptive  advertising  practices  and  sought  a
preliminary  injunctive and the appointment of a receiver business and to freeze
all  our  assets.  The  alleged  deceptive  practices  related to a check mailer
solicitation  utilized in our marketing activities. On July 13, 2000, YP.Net and
all other defendants entered into a global settlement with the FTC, resulting in
dismissal  of  the  receiver and termination of the asset freeze. The legal fees
and  litigation  related  to  the  FTC  allegation  have  adversely affected our
profitability  and caused our marketing efforts to be greatly curtailed. We have
entered into a Stipulated Final Judgement and Order For Permanent Injunction and
other  Equitable  Relief  with  the  FTC  on  July 30, 2001. Which Judge Stephen
Macnamee has now signed. The company has never admitted liability. In this order
we  are  required  to modify our direct mailer that are mailed to our customers.
There  have been no findings or admissions of any wrongdoing by YP.Net, Inc. The
order,  in  the  opinion  of  management,  should not and has not materially and
adversely  affect  the  Company's  business.

     ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K


                                       13
<PAGE>
EXHIBITS

10.1     Federal  Trade  Commission  Settlement  Agreement

10.2     Hudson  Consulting  Group,  Inc.  Settlement  Agreement

REPORTS  ON  FORM  8-K

     No  reports  on  Form 8-K were filed during the three months ended June 30,
2001.


                                   SIGNATURES


Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the undersigned
thereunto  duly  authorized.

                                              YP.NET,  INC.


Dated:  August 14, 2001                  By /s/ Angelo Tullo
                                            ------------------------
                                            Angelo Tullo, Chairman of the Board


                                       14
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>doc2.txt
<TEXT>
Exhibit  10.1  Federal  Trade  Commission  Settlement  Agreement

                                        |---------------------------|
                                        | X FILED        LODGED     |
                                        | -            -            |
                                        |   RECEIVED     COPY       |
                                        | -            -            |
                                        |          JUL 30 2001      |
                                        |                           |
                                        |  CLERK US DISTRICT COURT  |
                                        |    DISTRICT OF ARIZONA    |
                                        | BY /s/           DEPUTY   |
                                        |    -------------          |
                                        |---------------------------|

                          UNITED STATES DISTRICT COURT
                      DISTRICT OF ARIZONA, PHOENIX DIVISION

______________________________________
                                      )
Federal  Trade Commission,            )     CV- No. 00-1210 PHX  SMM
                                      )
              Plaintiff,              )     STIPULATED  FINAL  JUDGMENT
                                      )     AND  ORDER  FOR  PERMANENT
         v.                           )     INJUNCTION  AND  OTHER
                                      )     EQUITABLE  RELIEF
                                      )     AS  TO  DEFENDANTS  YP.NET,
YP.Net,  Inc., et al.,                )     TELCO BILLING,  PUBLICATION
                                      )     MANAGEMENT,  WILLIAM
              Defendants.             )     O'NEAL,  AND  GREGORY  CRANE
______________________________________)

     Plaintiff,  Federal  Trade Commission ("FTC" or "Commission"), having filed
its Complaint for permanent injunction and other relief in this matter, pursuant
to  Sections  5(a) and 13(b) of the Federal Trade Commission Act ("FTC Act"), 15
U.S.C.  Sec.Sec.  45(a)  and 53(b), and the parties having agreed to settle this
action without adjudication or admission of any issue of fact or law, therefore,
pursuant  to  stipulation  of  the  parties, it is hereby ORDERED, ADJUDGED, AND
DECREED  as  follows:

                                    FINDINGS
                                    --------

     1.   This  Court has jurisdiction of the subject matter of this case and of
          the  parties  hereto.
     2.   Venue  is proper as to all parties in the District of Arizona under 15
          U.S.C.  Sec.  53(b),  and  28  U.S.C.  Sec.Sec.  1391(b)  and  (c).
     3.   The  alleged  activities  of  Defendants  (as "Defendants" are defined
          below)  are  in  or  affecting commerce, as defined in the FTC Act, 15
          U.S.C.  Sec.  44.


<PAGE>
     4.   The  Complaint states a claim upon which relief may be granted against
          Defendants  under  Sections  5(a)  and  13(b)  of  the  Federal  Trade
          Commission Act, 15 U.S.C. Sec.Sec. 45(a) and 53(b). There have been no
          findings  or  admissions  of  any  wrongdoing  by  the  Defendants.
     5.   The  Commission  and  Defendants,  by  and through their counsel, have
          agreed  that the entry of this Order resolves all matters arising from
          the allegations of the Complaint in this action. This Order supersedes
          all  prior  Orders  in  this  matter.
     6.   Defendants  waive  all  rights  to  seek  judicial review or otherwise
          challenge  or  contest  the  validity  of  this  Order.
     7.   Entry  of  this  Order  is  in  the  public  interest.

                                      ORDER
                                      -----

                                   DEFINITIONS

1.   "DEFENDANTS" means Gregory B. Crane, William D. O'Neal, YP.Net, Inc., Telco
     Billing,  Inc.,  d/b/a  Yellow-Page.Net,  and  Publication Management, Inc.
2.   "DOCUMENT"  is equal in scope and synonymous in meaning to the usage of the
     term  in  Federal  Rule  of  Civil  Procedure 34(a), and includes writings,
     drawings, graphs, charts, photographs, audio and video recordings, computer
     records,  and  any  other  data  compilations from which information can be
     obtained.
3.   "INTERNET"  means a worldwide system of linked computer networks that use a
     common protocol (TCP/IP) to deliver and receive information. The "Internet"
     includes,  but  is  not  limited  to,  the  following  forms  of electronic
     communication:  file  transfers,  electronic  mail,  the  World  Wide  Web,
     newsgroups,  Internet  Relay  Chat,  audio,  and  video.


<PAGE>
4.   "LEC"  OR  "LOCAL  EXCHANGE CARRIER" means the local telephone company from
     which  a  consumer  or  entity  receives  its  telephone  bill.
5.   "SOLICITATION  CHECK"  means  any check that, if deposited or cashed by the
     consumer, signs the consumer up for any Internet-related goods or services,
     sold  by  Defendants.
6.   "WEB  SITE"  is  a  set  of  electronic  documents, usually a home page and
     subordinate  pages,  readily  viewable on computer by anyone with access to
     the  Internet,  standard software, and knowledge of the web site's location
     or  address.
7.   "WEB  PAGE"  is a single electronic file or document displayed on the World
     Wide  Web  that  includes  at least the following elements: copy, graphics,
     layout,  and  internal  technical  design.
8.   "INTERNET-RELATED  SERVICES"  means  any  product  or  service that assists
     persons  to  access,  use, browse, advertise on, communicate through, or do
     business  on  the  Internet, including, but not limited to: design, hosting
     and  maintenance  of  web pages and web sites, providing Internet access or
     e-mail  accounts,  and  establishing domain names and virtual domain names.
9.   "RECEIVER  FEES"  means  fees  and  costs  incurred by the former Temporary
     Receiver,  Lawrence  J.  Warfield,  and  his  representatives,  including
     attorneys  and  consultants.


<PAGE>
                               PROHIBITED CONDUCT
                               ------------------
                                       I.
                      INJUNCTION AGAINST MISREPRESENTATIONS
                      -------------------------------------

     IT IS THEREFORE ORDERED that in connection with the advertising, promotion,
offering  for  sale,  sale  or provision of any goods or service, Defendants are
hereby  permanently  restrained  and  enjoined  from  making or assisting in the
making  of,  expressly  or  by  implication,  orally or in writing, any false or
misleading  statement  or  representation  of  material fact, including, but not
limited  to,  representations  that:
A.       Consumers  can  obtain  a  monetary  rebate  from  Defendants  without
incurring  any  obligations  to  Defendants;  and
B.       Defendants  have  a  prior  or  ongoing  business  relationship  with
consumers.

                                       II.
           INJUNCTION AGAINST USING REBATE CHECKS TO SOLICIT CUSTOMERS
           -----------------------------------------------------------

     IT IS FURTHER ORDERED that Defendants are hereby permanently restrained and
enjoined  from  sending  consumers  any  solicitation  check  that uses the term
"rebate,"  or  any  term that represents that Defendants have a prior or ongoing
relationship  with  consumers,  if  that  is  not  the  case.

                                      III.

                              REQUIRED DISCLOSURES
                              --------------------
     IT  IS  FURTHER ORDERED that in connection with the advertising, promotion,
offering  for  sale,  sale  or provision of any goods or service, Defendants are
permanently  restrained  and  enjoined  from  failing  to  disclose, clearly and
conspicuously:


<PAGE>
A.       On  the  front  of  any solicitation check, or on the front of any stub
attached  to  the  check,  a statement that notifies the payee that the check is
part  of  a  "solicitation"  or that by cashing the check, the payee will become
obligated  to  pay  for  a  good  or  service;
B.       On  the back of the solicitation check, and above the endorsement line,
a  statement  that  notifies the payee of the amount and frequency of the charge
that  Defendants  will  impose  if  the  payee  deposits  or endorses the check;
C.       In connection with any solicitation check that uses a "walking fingers"
logo, the statement in close proximity to the logo, in each place where the logo
appears: "Not affiliated with any local or long distance phone company", or "Not
affiliated  with any phone company".  Provided however, that if Defendants do in
fact become affiliated with any telephone company, in such statement, Defendants
may indicate the specific company affiliation as follows: "Affiliated with [name
of  telephone company], but may not be affiliated with your phone company" ; and
D.       In  a letter or statement attached to or enclosed with the solicitation
check,  all  the  material  terms  associated  with  depositing or endorsing the
solicitation  check,  including:  1)  a  statement that Defendants will impose a
charge  if  the  payee  deposits  or  endorses the check; 2) the amount, billing
method,  and  frequency of the charge; 3) a description of the goods or services
provided  for  the  charge;  and 4) an explanation of how to cancel and obtain a
full  refund  within  one  hundred  twenty  (120)  days of depositing the check,
including  a  customer  service  telephone  number  for  inquiries  and/or
cancellations.


<PAGE>
                                       IV.
                    REQUIRED CONFIRMATIONS AND CANCELLATIONS
                    ----------------------------------------

     IT  IS FURTHER ORDERED that Defendants shall send all consumers who deposit
solicitation  checks  from  Defendants  after  the date of this Order, a written
communication,  sent by mail, confirming their agreement to purchase Defendants'
services.  Defendants  shall  send  this  communication  within eighty (80) days
after  the  date  that  a  consumer  deposited  the  solicitation  check.  The
communication  shall  clearly  and  conspicuously  state: 1) the good or service
purchased;  2) the billing method and price; 3) the procedures for canceling and
obtaining  a  full refund within one hundred twenty (120) days of depositing the
solicitation  check;  and  4)  the name, address, and telephone number that will
appear  on  the  consumer's  Internet  yellow  page  listing.

                                       V.
                                CONSUMER NOTICES
                                ----------------

     IT  IS  FURTHER  ORDERED  that:
A.       YP.Net  shall, within thirty (30) days of the entry of this Order, mail
a  written notice and Refund Application, in the forms appended as Attachments A
and  B  to  this  Order,  to  all  YP.Net's current customers that signed up for
YP.Net's  services  after  April  1,  2000  by cashing a solicitation check sent
before  July  14,  2000.
B.       Consumers shall have forty-five (45) days from the date YP.Net sent the
notice  to  mail  back  a  completed Refund Application, in the form appended as
Attachment  B to this Order.  YP.Net shall provide a pre-addressed envelope with
the  notice  and  Refund  Application.
C.      Within  sixty (60) days of receiving refund requests, YP.Net shall issue
to  each  consumer the $25.00 refund referenced in Attachments A and B, provided
that  the  consumer  has  not  already  received  a  refund.


<PAGE>
D.      Within  fifteen  (15)  days  after  they have mailed the notices, YP.Net
shall  submit  an  affidavit  to  the FTC, which shall, at a minimum, affirm the
following:  1)  the  means  used by Defendants to generate the list of consumers
eligible  to  receive  a  notice; 2) the means used by Defendants to ensure that
consumers'  addresses  are  accurate;  and 3) the number of notices sent and the
dates  on  which  they  were  sent.
E.        Within  thirty (30) days after it has mailed the notices, YP.Net shall
submit  an affidavit to the FTC, which shall affirm the following: 1) the number
of  notices returned by the Post Office as undeliverable; and 2) with respect to
any  such  returned  notices,  the  reasonable  efforts  made by YP.Net, such as
calling  the  telephone  number that was billed or obtaining updated information
through  the  U.S.  Post  Office  or  other  national databases, to obtain valid
addresses  for  those  consumers  and  mail  notices  to  such  addresses.
F.       Within  sixty  (60)  days  of  the issuance of the refunds YP.Net shall
provide a report to the FTC describing the actions taken by YP.Net in compliance
with  this  Section  of  the  Order; the report shall also include a list of the
names  of  consumers  who  received  refunds, their addresses, and the amount of
refunds  they  received,  as  well  as  the  list  of consumers who could not be
contacted  by  mail  or telephone.  This report shall also contain a list of any
customers  whose  refund  request  was  denied,  and  the reason for the denial.


<PAGE>
                              GENERAL REQUIREMENTS
                              --------------------
                                      VI.

                ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS

     IT  IS FURTHER ORDERED that, within five (5) business days after receipt by
Defendants of this Order as entered by the Court, each Defendant shall submit to
the  Commission a truthful sworn statement, in the form shown on Attachment C to
this  Order,  that  shall  acknowledge  receipt  of  this  Final  Order.

                                      VII.

                      DISTRIBUTION OF ORDER BY DEFENDANTS

     IT  IS  FURTHER ORDERED that, for a period of three (3) years from the date
of  entry  of  this  Order,  each  Defendant  shall:
A.       Provide  a  copy  of  this  Order  to,  and  obtain  a signed and dated
acknowledgment of receipt, or proof of service, from each officer, director, and
each  individual  serving  in  a  management  capacity,  whether  designated  as
employees,  consultants, independent contractors, or otherwise, immediately upon
employing  or  retaining  any  such  persons,  for  any  business  where:
     (1)  A  Defendant  is  the  majority  owner  of the business or directly or
          indirectly  manages  or  controls  the  business,  and  where
     (2)  The  business  uses  solicitation  checks;  and
B.       Maintain  and upon reasonable notice, make available to representatives
of the Commission, the original signed and dated acknowledgments of the receipt,
or  proof  of service, of copies of this Order, as required in Subsection (A) of
this  Paragraph.

                                      VIII.

                            RECORD KEEPING PROVISIONS

     IT  IS  FURTHER ORDERED that, for a period of three (3) years from the date
of  entry  of  this  Order,  Defendants,  in connection with any business where:


<PAGE>
     (1)  A  Defendant  is  the  majority  owner  of the business or directly or
          indirectly  manages  or  controls  the  business,  and  where
     (2)  The  business  uses  solicitation  checks  are  hereby  restrained and
          enjoined  from  failing  to  create,  and from failing to retain for a
          period  of three (3) years following the date of such creation, unless
          otherwise  specified:
A.       Books, records, and accounts that, in reasonable detail, accurately and
fairly  reflect  the cost of goods or services sold, revenues generated, and the
disbursement  of  such  revenues;
B.       Records accurately reflecting:  the name, address, and telephone number
of  each  person  employed  by such business, including independent contractors;
that  person's  job  title or position; the date upon which the person commenced
work;  and the date and reason for the person's termination, if applicable.  The
businesses  subject  to  this  Paragraph  shall  retain  such  records  for  any
terminated  employee  for  a  period  of  two  (2)  years  following the date of
termination;
C.       Records  containing the names, addresses, phone numbers, dollar amounts
paid, quantity of items and services purchased, and description of the items and
services  purchased,  for all consumers to whom such business sold, invoiced, or
shipped  any  goods  and  services;
D.       Records  that  reflect, for every consumer complaint or refund request,
received:
     1.   The  consumer's  name,  street  address,  telephone number, and dollar
          amount  paid  by  the  consumer;
     2.   The complaint or refund request, if any, and the date of the complaint
          or  refund  request;


<PAGE>
     3.   The  basis  of  the  complaint,  if  any,  including  the  name of any
          salesperson  complained  against,  and  the  nature  and result of any
          investigation  conducted  concerning  the  complaint;
     4.   Each  response  by  Defendant  and  the  date  of  the  response;
     5.   Any  final  resolution  and  the  date  of  the  resolution;  and
     6.   In  the  event  of  a  denial  of a refund request, the reason for the
          denial;  and
E.       Copies  of  all  sales  scripts, training materials, advertisements, or
other  marketing materials used by Defendants; provided that copies of all sales
scripts,  training  materials,  advertisements,  or  other  marketing  materials
utilized  shall  be  retained  for  three  (3)  years  after  the  last  date of
dissemination  of  any  such  materials.

                                       IX.

                       COMPLIANCE REPORTING BY DEFENDANTS

     IT IS FURTHER ORDERED that, in order that compliance with the provisions of
this  Order  may  be  monitored:
A.       For  a  period of three (3) years from the date of entry of this Order,
each  Defendant  shall  notify  the  Commission  of  the  following:
     1.   Any  changes  in  Defendant's business address, mailing addresses, and
          telephone numbers, within twenty (20) days of the date of such change;
     2.   Any  changes  in  the employment status (including self-employment) of
          any  individual  Defendant,  within ten (10) days of such change. Such
          notice  shall  include  the name and address of each business that the
          individual  Defendant  is employed by, or operates, a statement of the
          nature  of the business, and a statement of the individual Defendant's
          duties  and  responsibilities  in  connection  with  the  business  or
          employment;


<PAGE>
     3.   Any  change  in  the  structure  of  each Defendant, such as creation,
          incorporation,  dissolution,  assignment, sale, merger, dissolution of
          subsidiaries,  filing  of  a  bankruptcy  petition,  or  change in the
          corporate  name  or  address,  or  any  other  change  that may affect
          compliance  obligations  arising out of this Order, within thirty (30)
          days  of  the  effective  date  of  any  change;
B.       Within  one  hundred  eighty (180) days after the date of entry of this
Order,  each Defendant shall provide a written report to the FTC, sworn to under
penalty  of perjury, setting forth in detail the manner and form in which it has
complied  and  is complying with this Order.  This report shall include, but not
be  limited  to:
     1.   Each  individual  Defendant's  then  current  employment  and business
          address,  mailing  addresses,  and  telephone  numbers; the individual
          Defendant's  title  and  responsibilities  for  each  such employer or
          business;
     2.   Each  corporate  Defendant's  then  current  business  addresses  and
          telephone  numbers,  a  description of the business activities of each
          such  employer  or  business, including a description of its marketing
          methods  and  goods  and services sold, and a list of the names of all
          current  officers  and  managers;


<PAGE>
     3.   A  copy  of  each  acknowledgment of receipt of this Order obtained by
          each  Defendant  pursuant  to  Section  VII  of  this  Order;
     4.   A statement describing the manner in which each Defendant has complied
          and  is  complying  with  this  Order;
C.       Upon  written reasonable request by a representative of the Commission,
each  Defendant  shall  submit  additional  written  reports  (under  oath,  if
requested) and produce documents on fifteen (15) days notice with respect to any
conduct  subject  to  this  Order;
D.       For  the purposes of this Order, each Defendant shall, unless otherwise
directed  by  the  Commission's  authorized  representatives,  mail  all written
notifications  to  the  Commission  to:

          Associate  Director
          Division  of  Marketing  Practices
          Federal  Trade  Commission,  Room  238
          600  Pennsylvania  Avenue,  N.W.
          Washington,  D.C.  20580
          Re: FTC  v.  YP.Net,  Inc.,  et  al.,  CV-  No.  00-1210  PHX  SMM
              --------------------------------

E.       For  purposes  of  the compliance reporting required by this Paragraph,
the  Commission  is authorized to communicate directly with Defendants unless or
until  a  Defendant  informs the Commission that the Defendant is represented by
counsel  and  would  prefer  that  the  Commission communicate directly with the
Defendant's  counsel.


<PAGE>
                                       X.

                  COMMISSION'S AUTHORITY TO MONITOR COMPLIANCE

     IT  IS  FURTHER  ORDERED  that  the  Commission  is  authorized  to monitor
Defendants'  compliance  with this Order by all lawful means, including, but not
limited  to,  the  following:
A.       For  a  period of three (3) years from the date of entry of this Order,
the  Commission  is  authorized,  without  further  leave  of  court,  to obtain
discovery  from  any  person  in the manner provided by Chapter V of the Federal
Rules  of  Civil  Procedure,  Fed. R. Civ. P. 26-37, and the Local Rules of this
Court,  including  the use of compulsory process pursuant to Fed. R. Civ. P. 45,
for  the purpose of monitoring Defendants' compliance with any provision of this
Order;
B.     The  Commission  is authorized to use representatives posing as consumers
or  suppliers  to Defendants, Defendants' employees, or any other entity managed
or  controlled  in  whole  or  in  part  by Defendants, without the necessity of
identification  or  prior  notice,  as  allowed  by  federal  law;  and
C.     Nothing  in  this  Order  shall  limit  the  Commission's  lawful  use of
compulsory  process,  pursuant  to  Sections  9 and 20 of the FTC Act, 15 U.S.C.
Sec.Sec.  49  and  57b-1,  to  determine  whether  Defendants  have violated any
provision  of  this  Order  or  Section  5  of  the  FTC Act, 15 U.S.C. Sec. 45.


<PAGE>
                                       XI.

                          ACCESS TO BUSINESS PREMISES

     IT  IS  FURTHER ORDERED that, for a period of three (3) years from the date
of  entry  of this Order, for the purpose of further determining compliance with
this  Order,  Defendants  shall permit representatives of the Commission, within
four  (4)  business  days  of  receipt  of  written  notice from the Commission:
A.     Access  during  normal  business hours to any office, or facility storing
documents,  of  any  business  where:
     (1)  A  Defendant  is  the  majority  owner  of the business or directly or
          indirectly  manages  or  controls  the  business,  and  where
     (2)  The  business  uses  solicitation  checks.  In  providing such access,
          Defendants  shall  permit representatives of the Commission to inspect
          and  copy  all unprivileged documents relevant to any matter contained
          in  this  Order; and shall permit Commission representatives to remove
          such  documents  relevant  to any matter contained in this Order for a
          period  not  to exceed two (2) business days so that the documents may
          be  inspected,  inventoried,  and  copied;  and
B.       To  interview the owners, officers, directors, and employees, including
all  personnel  involved  in responding to consumer complaints or inquiries, and
all  sales  personnel, whether designated as employees, consultants, independent
contractors  or  otherwise,  of  any  business  to  which Subsection (A) of this
Paragraph  applies,  concerning matters relating to compliance with the terms of
this  Order.  The  person  interviewed may have counsel present, and counsel for
Defendants  may  be  present  as  well.


<PAGE>
                                      XII.

                  COMPENSATION OF RECEIVER; RETURN OF DOCUMENTS
                  ---------------------------------------------

     IT  IS  FURTHER  ORDERED  that:
A.       All  Receiver  fees,  allowed  by the Court, shall be paid by Defendant
YP.Net.
B.      The  Receiver  shall  return  to  Defendants  all documents removed from
Defendants'  premises,  and  any  copies  thereof.

                                      XIII.

                               EXONERATION OF BOND
                               -------------------

     IT  IS  FURTHER ORDERED that the bond posted by Defendant Crane pursuant to
the  Preliminary  Injunction  is  hereby  exonerated.

                                      XIV.

                                      COSTS
                                      -----

      IT  IS  FURTHER  ORDERED  that  each  party  shall  bear its own costs and
attorneys'  fees  incurred  in  connection  with  this  action.

                                       XV.

                            RETENTION OF JURISDICTION
                          ---------------------------


<PAGE>
     IT  IS  FURTHER  ORDERED  that this Court shall retain jurisdiction of this
matter for the purpose of enabling the parties to apply to the Court at any time
for  such  further  orders and directives as may be necessary or appropriate for
the  interpretation  or  modification  of  this  Order,  for  the enforcement of
compliance  therewith,  or  for  the  punishment  of  violations  thereof.

                                      XVI.

                              COMPLETE SETTLEMENT
                              --------------------

     The  parties  hereby  consent  to  entry of the foregoing Order which shall
constitute  a  final  judgment  and  order  in this matter.  The parties further
stipulate  and  agree  that  the entry of the foregoing Order shall constitute a
full,  complete  and  final  settlement  of  this action.   Defendants waive any
rights they may have under the Equal Access to Justice Act, 28 U.S.C. Sec. 2412.

SO  ORDERED,  this  26th  day  of  July,  2001,  at  10:40 A.M., Phoenix, AZ.

Stephen McNaee
- ----------------------------
United  States  District  Judge

FOR  DEFENDANTS                            FOR  THE  COMMISSION


/s/ Angelo Tullo                           /s/ Tracey  L.  Brown
- ----------------------------               ------------------------------
Angelo Tullo                               Tracey  L.  Brown
Chairman  of  the  Board                   Michael  P.  Mora
for  Defendant  YP.Net, Inc                Attorneys  for  the  Plaintiff
Federal  Trade  Commission


<PAGE>
/s/ Randy  Papetti
- ----------------------------
George  L.  Paul
Randy  Papetti
Counsel  for  Defendant  YP.Net


/s/ Daniel  Madero
- ----------------------------
Daniel  Madero
Director  of  Operations
for  Defendant  Telco  Billing,  Inc.


/s/ George  L.  Paul
- ----------------------------
George  L.  Paul
Randy  Papetti
Counsel  for  Defendant  Telco  Billing,  Inc.


/s/ Allen  B.  Bickart
- ----------------------------
Allen  B.  Bickart
for  Defendant  Publication  Management,  Inc.


/s/ William  D.  O'Neal
- ----------------------------
Defendant  William  D.  O'Neal


/s/ Tyrell  Taber
- ----------------------------
Tyrell  Taber
Counsel  for  William  D.  O'Neal


/s/ Gregory  B.  Crane
- ----------------------------
Defendant  Gregory  B.  Crane


/s/ Burton  M.  Bentley
- ----------------------------
Burton  M.  Bentley
Counsel  for  Gregory  B.  Crane


<PAGE>
                                  ATTACHMENT A

                         YELLOW-PAGE.NET CUSTOMER NOTICE


Re:     Billing  for  Yellow-Page.Net  Internet  yellow  page  services.

Date:

Dear  Advertiser:

     As  a  Yellow-Page.Net  customer,  you  are currently being billed $12.50 a
month  by Yellow-Page.Net for your Internet yellow page preferred listing either
on  your  telephone  bill or by direct invoice.  Concerns have been raised about
whether  customers  intended to sign up for our services or were signed up by an
unauthorized  representative  of  your  company.  We  are, therefore, writing to
ensure that you (or a representative of your company or organization) previously
authorized  charges  for  our  services.

     According  to  our records, we mailed you a promotional Instant Cash Rebate
Sign  Up  Check.  When  the  check  was  deposited,  we  began to bill you.  If,
however, your company or organization did not knowingly authorize these charges,
you  may  be eligible for a $25.00 refund.  If you would like to submit a refund
request,  please  complete the Refund Application and Declaration.  Submitting a
Refund Application and Declaration will cancel your Yellow-Page.Net listing, and
prevent  future  charges  from  appearing  on  your  telephone  bill.

     We  apologize  for  this notice, but want to ensure that you are one of our
satisfied  customers.  If you have any questions about this notice or would like
to  discuss  our  many  services,  please  call  our  Customer Service Center at
1-800-300-3209  or  visit  our  Web  site  at  www.YP.Net.
                                               -----------

     Thanks.


____________________
Yellow-Page.Net
4840  East  Jasmine  Street
Mesa,  Arizona  85205


<PAGE>
                                  ATTACHMENT B

                   CUSTOMER REFUND APPLICATION AND DECLARATION

     In  order  to  obtain  any  refund  for  Yellow-Page.Net's  services please
complete  the  declaration  below:

I,________________________,  hereby  state  and  affirm  as  follows:
     [Name]

1.   My  name  is  (please  print).  I hold the title of_________________ at the
     company  or  organization  of  _____________,  which  has  been charged for
     Yellow-Page.Net  services.

2.   The  charges  to  date  total  $__________.

3.   The  charges  date  from________  to  _______.

4.   The  charges  appeared  on  bills  for  phone  number:(  )_____-______.

5.   My  company  or  organization  has  not  been  issued  a  refund  from
Yellow-Page.Net,  or  its  telephone  company.

6.   My  company  or  organization  would like to terminate any relationship
with  Yellow-Page.Net,  stop  any future billing, and obtain a refund of $25.00.

7.   The individual  at  my  company or organization  who cashed the promotional
Instant Cash Rebate - Sign Up Check from Yellow-Page.Net did not know that doing
so  signed  the company up for Yellow-Page.Net's services or was unauthorized to
act  on  behalf  of  my  company  or  organization.

     I declare under penalty of perjury under the laws of the United States that
the  foregoing  is  true  and  correct.

____________________________       DATED  this  ___ day  of  ____________, 2001.
  [Signature]


Address:____________________          Contact  Phone  No.:  (   )____-______
        ____________________          Contact  Fax  No.:    (   )____-______
        ____________________          Contact  E-mail:       _______________


<PAGE>
                                  ATTACHMENT C

                          UNITED STATES DISTRICT COURT
                      DISTRICT OF ARIZONA, PHOENIX DIVISION
______________________________________
                                      )
Federal  Trade  Commission,           )      CV-  No.  00-1210  PHX  SMM
                                      )
                Plaintiff,            )     DECLARATION  OF
                                      )     DEFENDANT
      v.                              )
                                      )
                                      )
YP.Net,  Inc.,  et  al.,              )
                                      )
                Defendants.           )
______________________________________)


I,_______________,  hereby  state  and  affirm  as  follows:
     [Name]

1.     My  name  is______________, and I am a defendant in  FTC v. YP.Net, Inc.,
et al., which has  been  filed  in  the  District  of  Arizona.
2.     On ____________ , I received a copy of the Order, which was signed by the
Honorable ______________________ and entered by the Court on _____________ 2001.
A true and correct copy of the Order I received is appended to this Declaration.
     I declare under penalty of perjury under the laws of the United States that
the  foregoing  is  true  and  correct.


                                       _________________________
                                       Signature


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>doc3.txt
<TEXT>
Exhibit  10.2  Hudson  Consulting  Settlement  Agreement

                        SETTLEMENT AND RELEASE AGREEMENT

This  Settlement And Release agreement ("Agreement") effective as of the ___ day
of  July,  2001,  is  made  and  entered  into by and among American Registrar &
Transfer  Company,  a  Utah  Corporation  ("ARTCO");  YP.Net,  Inc.,  a  Nevada
Corporation,  formerly known as RIGL Corporation ("YPNT"); and Hudson Consulting
Group,  Inc.,  a Nevada corporation ("Hudson").  YPNT and Hudson may hereinafter
collectively  be  referred to as "Defendants" and all entities, who execute this
Agreement  shall  be  referred  to  collectively  as  the  "Parties."

                                    RECITALS

A.   There  is  currently  pending in the Third Judicial District Court For Salt
     Lake County, State of Utah ("Court") an action in Interpleader commenced by
     ARTCO,  as  Plaintiff,  naming YPNT, Hudson and others as defendants, being
     Civil  No.  000902312  ("Pending  Action").
B.   The  Parties  desire  to terminate the Pending Action pursuant to the terms
     and  conditions  of this Agreement without further incursion or expense and
     to  settle  all  disputes  existing  between  or  among them alleged in the
     pleadings  filed  in  the  Pending  Action.
C.   Certain  other  defendants  named  in  the  Pending  Action,  namely  Bruce
     Pritchett  ("Pritchett"),  Montana  Capital International, Inc. ("Montana")
     and  Moore  & Elrod, Inc. ("M&E") have failed to answer or otherwise file a
     response  to  the Complaint filed in the Pending Action. Montana & M&R have
     been duly served with the Complaint and may therefore be defaulted pursuant
     to  Utah  law.  The Complaint against Pritchett may be dismissed, as he has
     not  yet  been  served.
D.   The  Parties  have  voluntarily  submitted the mediation of their claims to
     Paul S. Felt, as Mediator in this matter, and met with the Mediator on July
     16,  2001 in Salt Lake City, Utah, and agreed to settle all of their claims
     arising  out of or in connection with the allegations of the Complaint; and
     this  Agreement  is the embodiment of their settlement verbally agreed upon
     and  accepted  by  the  Mediator.

     In  the context of these Recitals (which are hereby incorporated as part of
this  Agreement), and in consideration of the mutual promises of the parties and
other  valuable  consideration,  IT  IS  AGREED  AS  FOLLOWS:

     1.  STIPULATION  TO  DISMISS.  Upon  execution  of  this  Agreement and the
fulfillment  of  all  Contingencies  hereinafter  enumerated,  the Parties shall
execute and file with the Court a Stipulation Of Dismissal With Prejudice of the
Pending  Action,  substantially  in  the  form attached hereto as Exhibit A, and
shall  lodge a proposed Order to that effect, substantially in the form attached
hereto  as  Exhibit  B.

     2.  SETTLEMENT  OF  CLAIMS.

     (a)  In  full  and  final  settlement of all claims of Hudson against YPNT,
          arising  out  of or in connection with the Pending Action, YPNT agrees
          to pay Hudson the sum of Eighty-Five Thousand Dollars ($85,000) in the
          manner  set  forth  in  Paragraph  3  below.
     (b)  In  full  and  final  settlement of all claims of YPNT against Hudson,
          arising  out of or in connection with the Pending Action, Hudson shall
          transfer to YPNT an aggregate of One Million, Four Hundred Twenty Five
          Thousand  Three  Hundred  and  Thirty  Four (1,425,334) shares of YPNT
          Common  Stock  previously  issued  to  Hudson  by  YPNT  to  wit:

                      CERTIFICATE NO.     NUMBER OF SHARES
                                2634               50,000.
                                2635               50,000.
                                2636               50,000.
                                2637               50,000.
                                2638               50,000.
                                2639               50,000.
                                2640               50,000.
                                2641               50,000.
                                2642               50,000.
                                2643               50,000.
                                2644               40,000.
                                2789               56,951.
                                2834              385,716.
                                2851              442,667.
                                          ----------------
                              TOTAL:      1,425,334 SHARES


<PAGE>
     3.  PAYMENT.

     (a)  Payment  shall  be made by Cashier's Check drawn on a State of Arizona
          or  federally  chartered  bank  in  the sum of $85,000 made payable to
          Hudson  Consulting  Group,  Inc.
     (b)  Payment  by  YPNT shall be made not later than ten (10) days following
          performance  of  all  Contingencies  enumerated in Paragraph 10 below.

     4.  HUDSON  RELEASE. Hudson, on behalf of itself and on behalf of its past,
present  and  future  parent  and subsidiary corporations, (if any), affiliates,
stockholders,  officers,  directors,  partners,  joint  ventures,  employees,
insurers,  predecessors,  successors,  assigns, agents and representatives, does
hereby  release  and forever discharge YPNT and ARTCO and its past, present, and
future  parent  and subsidiary corporations, affiliates, stockholders, officers,
directors,  partners,  joint  ventures,  employees,  insurers,  predecessors,
successors,  assigns,  agents,  representatives  and  attorneys from any and all
claims,  demands,  obligations,  losses,  causes  of action, damages, penalties,
costs,  expenses,  attorneys'  fees,  liabilities, and indemnities of any nature
whatsoever,  known  or  unknown,  asserted or as yet undiscovered or unasserted,
that arise out of or relate to the issues and claims in the Pending Action. This
paragraph  does  not  apply  to any rights, duties or obligations arising out of
this  Agreement.

     5.  YPNT  RELEASE.  YPNT,  on  behalf  of itself and on behalf of its past,
present  and  future  parent  and subsidiary corporations, (if any), affiliates,
stockholders,  officers,  directors,  partners,  joint  venturers,  employees,
insurers,  predecessors,  successors,  assigns, agents and representatives, does
hereby  release  and forever discharge Hudson and ARTCO and their past, present,
and  future  parent  and  subsidiary  corporations,  (if  any),  affiliates,
stockholders,  officers,  directors,  partners,  joint  venturers,  employees,
insurers,  predecessors,  successors,  assigns,  agents,  representatives  and
attorneys  from  any  and  all  claims,  demands, obligations, losses, causes of
action,  damages,  penalties, costs, expenses, attorneys' fees, liabilities, and
indemnities  of  any  nature  whatsoever,  known  or unknown, asserted or as yet
undiscovered or unasserted, that arise out of or relate to the issues and claims
in  the  Pending  Action. This paragraph does not apply to any rights, duties or
obligations  arising  out  of  this  Agreement.

     6.  ARTCO  RELEASE.  ARTCO,  on behalf of itself and on behalf of its past,
present  and  future  parent  and subsidiary corporations, (if any), affiliates,
stockholders,  officers,  directors,  partners,  joint  venturers,  employees,
insurers,  predecessors,  successors,  assigns, agents and representatives, does
hereby  release  and  forever discharge Hudson and YPNT and their past, present,
and  future  parent  and  subsidiary  corporations,  (if  any),  affiliates,
stockholders,  officers,  directors,  partners,  joint  venturers,  employees,
insurers,  predecessors,  successors,  assigns,  agents,  representatives  and
attorneys  from  any  and  all  claims,  demands, obligations, losses, causes of
action,  damages,  penalties, costs, expenses, attorneys' fees, liabilities, and
indemnities  of  any  nature  whatsoever,  known  or unknown, asserted or as yet
undiscovered or unasserted, that arise out of or relate to the issues and claims
in  the  Pending  Action. This paragraph does not apply to any rights, duties or
obligations  arising  out  of  this  Agreement.


<PAGE>
     7.  INDEMNIFICATION.  YPNT  and Hudson agree to indemnify and save harmless
ARTCO  against  all  costs,  damages, attorney's fees, expenses and liabilities,
which  it  may  incur  or  sustain in connection with its performance as "Escrow
Holder"  under this Agreement or any court action arising therefrom and will pay
same  on  demand.

     8.  ESCROW  HOLDER  DUTIES.

     (a)  YPNT and Hudson agree that unless otherwise herein expressly provided,
          ARTCO  shall  not be held liable for any action taken or omitted under
          this  Agreement,  so  long  as  it  shall have acted in good faith and
          without  negligence,  and  shall  be  deemed  to  be acting under this
          Agreement  as  an  "Escrow  Holder"  only.  ARTCO  shall  have  no
          responsibility  to  inquire  into  or  determine  the  genuineness,
          authenticity  or sufficiency of any documents or instruments submitted
          to it in connection with its duties hereunder. ARTCO shall be entitled
          to  deem the signatories of any document or instrument submitted to it
          hereunder as being authorized to sign such documents or instruments on
          behalf  of  the  party  submitting  such documents or instruments, and
          shall  be  entitled to rely upon the genuineness of signatures or such
          signatories  without  inquiry  and  without  requiring  substantiating
          evidence.
     (b)  This Agreement may be altered or amended only with the consent of YPNT
          and  Hudson  and  ARTCO.
     (c)  In  the event of any disagreement between YPNT and Hudson resulting in
          adverse  claims  and  demands  being  made  by  them or any of them in
          connection  with  or  for  the  shares involved in or affected by this
          Agreement,  ARTCO  shall  refuse to comply with the demands of YPNT or
          Hudson  so  long  as  such  disagreement  shall  continue.
     (d)  In  so  refusing, ARTCO shall make no delivery or other disposition of
          the  shares  or  funds  involved  in  or  collected  pursuant  to this
          Agreement,  nor  shall ARTCO become liable to YPNT or Hudson or either
          of  them  for  the  failure of ARTCO to comply with the conflicting or
          adverse  demands  of YPNT or Hudson, but may interplead the shares and
          funds  in  a  court  having  jurisdiction.


<PAGE>
     9.  COSTS  AND  EXPENSES.

     (a)  YPNT  and  Hudson  shall  pay its own expenses, including court costs,
          legal and expert witness fees, incurred in the prosecution and defense
          of  the  Pending  Action, and incurred in the negotiation, preparation
          and  execution  of  this  Agreement.
     (b)  YPNT  and Hudson shall each pay the Mediator one-half (50%) of any and
          all fees or costs assessed by the Mediator forthwith upon presentation
          of  his  Statement.

     10.  REPRESENTATIONS.

     (a)  Except  for  the  obligations of Hudson and YPNT arising out of and in
          connection  with  their  respective  obligations  pursuant  to  this
          Agreement,  there  are  no  other outstanding contracts or agreements,
          verbal  or  written,  between  them  in  connection with any matter or
          thing,  and more particularly relating to the business of YPNT, or the
          issuance  of  YPNT  shares  to  any  person  or  legal  entity.
     (b)  YPNT  has  at no time solicited Hudson to violate any provision of the
          Securities  Act  of  1933  or the Exchange Act of 1934, nor has Hudson
          sold,  assigned or otherwise disposed of any of the shares represented
          by  Certificates  identified  in  Paragraph  2  above, in violation of
          either  of  said  acts.
     (c)  In  the  event  that  any  third  party  shall bring an action against
          Hudson,  to compel Hudson to transfer any of the shares represented by
          Certificates identified in Paragraph 2 above, and in the further event
          that  any  such  third  party  shall join YPNT in such action or shall
          bring  an  independent action against YPNT, based upon the same claims
          set  forth in the Pending Action, then Hudson agrees to indemnify YPNT
          against all damages recovered by way of judgment against YPNT directly
          resulting  from  the  acts  or  omissions  of  Hudson, including YPNTs
          reasonable  court  costs  and attorney fees, unless the claims of such
          third  party  directly  result  from  any  act  or  omission  of YPNT.


<PAGE>
     11. CONTINGENCIES. Upon execution of this Agreement by all Parties, each of
the  Parties shall be required to perform in accordance with the requirements of
this  Paragraph  11  ("Contingencies")  as  follows:

     (a)  YPNT  shall  deliver an $85,000 cashier's check to ARTCO, made payable
          to  Hudson,  for  delivery by ARTCO to Hudson or its attorneys, within
          ten  (10)  days  after  completion  of  each  and all of the following
          events:

          (1)  Hudson  shall  forthwith deliver to ARTCO, in good form, each and
          all of the YPNT Common Stock Certificates identified in paragraph 2(b)
          above,  all  Certificates to be duly endorsed by Hudson with signature
          guaranteed by a member of a national exchange, none of which shares or
          Certificates  shall  be subject to Hudson's prior transfer orders, and
          none  of  which  shall be subject to claims of any third parties other
          than  those  of  YPNT.
          (2) Forthwith upon execution of this Agreement, ARTCO, shall cause the
          Pending Action to be dismissed as against Pritchett, and shall further
          cause  its  legal counsel to petition the Court in the Pending Action,
          to  pursue securing default judgments (with prejudice) against Montana
          and  M&E,  and shall further secure such Orders signed by the Judge as
          may  be  appropriate  to  give  effect  to  the  foregoing;  or in the
          alternative, Hudson shall secure formal written releases of all claims
          against  Hudson,  YPNT  and  ARTCO  signed  by Montana and M&E in form
          satisfactory  to  YPNT's  legal  counsel;  and shall further cause all
          interpleaded  YPNT  shares  to be redelivered to ARTCO by Court Order;
          and  Hudson's attorney shall provide YPNT and ARTCO with copies of all
          documents  filed  with  the  Court.
          (3) Forthwith upon execution of this Agreement, Hudson shall tender to
          ARTCO, subject to the terms and conditions of this Agreement, each and
          all  YPNT Common Stock Certificates identified above in paragraph 2(b)
          as  have  not  as  yet  been  delivered  to ARTCO for transfer, in the
          aggregate  1,425,334  shares  of  YPNT standing in its name, including
          shares  interpleaded  with  the  Court.


<PAGE>
     12.  NON-PERFORMANCE.  In  the  event  that:

     (a)  YPNT  shall  fail or refuse to deliver to ARTCO the cashier's check in
          the  sum  of  $85,000  identified  above;  and/or,
     (b)  Hudson  shall  fail  or  refuse to deliver to ARTCO, in good form, all
          Certificates  aggregating  1,425,334  shares  of  YPNT  Common  Stock
          identified  above;  and/or,
     (c)  ARTCO  shall  be  unsuccessful  in  obtaining  default  judgments with
          prejudice against Montana and M&E, or in the alternative, Hudson shall
          be  unsuccessful  in  obtaining  written releases from Montana and M&E
          against  Hudson,  YPNT  and ARTCO in form satisfactory to YPNT's legal
          counsel,  and
     (d)  if  the  dismissal  of  the  Pending  Action  against Pritchett is not
          secured,  then, and in that event: (I) ARTCO shall redeliver to Hudson
          all  additional  YPNT  Certificates  delivered  to  ARTCO  under  this
          Agreement  (but  not  those Certificates previously delivered to ARTCO
          and  interpleaded  with the Court); (II) ARTCO shall redeliver to YPNT
          the  $85,000  cashier's  check  received  by  ARTCO; (III) the Pending
          Action shall not be dismissed; and, (IV) the Parties may proceed under
          the  law  in  any  manner  they  deem  appropriate  including, without
          limitation,  the  bringing  of one or more separate actions to enforce
          the  verbal  agreement  of  the  Parties  reached  before the Mediator
          evidenced  by  this  Agreement.

     13.  ADVICE OF COUNSEL. Each Party acknowledges that it and its independent
counsel  have  reviewed  this  Agreement  and,  accordingly,  the normal rule of
construction  that any ambiguities are to be resolved against the drafting party
shall  not  be  employed  in  the  interpretation  of  this  Agreement.

     14.  AUTHORIZATION.  The  Parties hereby warrant and represent that each of
its  respective  corporate  representative  has full authority to sign and enter
into  this  Agreement.

     15.  ATTORNEY'S  FEES. In the event that any Party shall bring an action to
enforce the terms and conditions of this Agreement, the prevailing party in that
action  shall  receive reimbursement of all reasonable attorneys' fees and costs
incurred  in  connection  with  such  action.

     16. UTAH LAW. This Agreement shall be construed in accordance with the laws
of  the  State  of  Utah  without  regard  to  its  choice  of  law  principles.

     17.  VENUE.  The  Parties  agree that any action to enforce or construe the
terms and conditions of this Agreement shall be brought exclusively in a federal
or  state  court  located  in  Salt  Lake  County,  Utah,  and each Party hereby
irrevocably  consents  to  jurisdiction  and  venue  in  each  such  court.


<PAGE>
     18.  BINDING EFFECT. The provisions of this Agreement shall be binding upon
and  inure  to  the benefit of the Parties and their successors, assigns, heirs,
indemnitors,  executors  and  administrators.

     19.  COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each  of  which  shall  be  deemed  an  original.

     20.  PRIOR  UNDERSTANDINGS  AND  AMENDMENT.  This Agreement constitutes the
entire  agreement  of  the  Parties  and  supersedes  any and all prior oral and
written  agreements  and  understandings  as  to  the subject matter hereof. The
Parties  have not relied upon any other representations, warranties, conditions,
understandings or agreements except as specifically set forth in this Agreement,
or  implied  by law, and this Agreement may not be amended or modified except by
an  agreement  in  writing  signed  by  all  Parties.

     21.  NOTICES.  Any  Notice  to the Parties under this Agreement shall be in
writing,  and  shall be deemed to have been received on the date when personally
delivered, or on the date which is three days after mailing (postage prepaid) by
certified mail, return receipt requested, to the address of such party set forth
as  follows, provided that if such date is a weekend or legal holiday (meaning a
date  when  the  courts are closed) then the third day shall be deemed to be the
next  succeeding  day  that  is  neither  a  weekend  or  a  holiday;

     To  ARTCO:
                            Richard Day
                            American Registrar & Transfer Co.
                            342 East 900 South
                            Salt Lake City, UT 84111
     With  a  copy  to:
                            David R. King, Esq.
                            Kruse, Lada & Maycock, LLC
                            Post Office Box 45561
                            Salt Lake City, Utah 84145-0561
     To  YPNT:
                            Angelo Tullo, CEO
                            YP.Net.Inc.
                            4840 E. Jasmine Street, Suite 105
                            Mesa, Arizona 85205


<PAGE>
     With  a  copy  to:
                            Burton M. Bentley, Esq.
                            Burton M. Bentley, PC
                            7878 N. 16th Street, Suite 110
                            Phoenix, Arizona 85020
     To  Hudson:
                            Richard D. Surber, President
                            Hudson Consulting Group, Inc.
                            268 West 400 South
                            Salt Lake City, Utah 84101
     With  a  copy  to:
                            Michael Golightly, Esq.
                            268 West 400 South, Suite 84101
                            Salt Lake City, Utah 84101

     This  Agreement  is hereby entered into and deemed to have been signed, and
is  effective  as  of  the  date  first  above  written.


YP.NET.INC.                          HUDSON  CONSULTING  GROUP,  INC.


By:  /s/ Angelo Tullo, pres.         By:  /s/ Richard Surber
     ---------------------------          ---------------------------
     Angelo Tullo, President              Richard  Surber,  President


AMERICAN  REGISTRAR  &  TRANSFER  COMPANY


By:  /s/  Richard  Day
   -------------------------------
     Richard  Day,  President


<PAGE>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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