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<SEC-DOCUMENT>0001015402-04-002044.txt : 20040513
<SEC-HEADER>0001015402-04-002044.hdr.sgml : 20040513
<ACCEPTANCE-DATETIME>20040513164105
ACCESSION NUMBER:		0001015402-04-002044
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20040331
FILED AS OF DATE:		20040513

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			YP CORP
		CENTRAL INDEX KEY:			0001045742
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				850206668
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24217
		FILM NUMBER:		04803461

	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:	YP NET INC
		DATE OF NAME CHANGE:	19991112

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RIGL CORP
		DATE OF NAME CHANGE:	19980707

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RENAISSANCE INTERNATIONAL GROUP LTD
		DATE OF NAME CHANGE:	19980115
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>
                UNITED STATES 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 March 31, 2004

[ ]  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 CORP.
        (Exact name of small business issuer as specified in its charter)

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

                         4840 EAST JASMINE ST. SUITE 105
                               MESA, ARIZONA 85205
                    (Address of principal executive offices)

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

                                  YP.NET, INC.
                                  (Former Name)

     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
    ---       ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     The number of shares of the issuer's common equity outstanding as of May
11, 2004 was 48,874,302 shares of common stock, par value $.001.

     Transitional Small Business Disclosure Format (check one):

     Yes        No  X
         ---       ---


<PAGE>
<TABLE>
<CAPTION>
                           INDEX TO FORM 10-QSB FILING
                      FOR THE QUARTER ENDED MARCH 31, 2004

                                TABLE OF CONTENTS

                                     PART I.
                              FINANCIAL INFORMATION

                                                                       Page
<S>                                                                    <C>
Item 1.  Financial  Statements

         Consolidated Balance Sheet
           as of March 31, 2004 . . . . . . . . . . . . . . . . . . .     3
         Consolidated Statements of Operations
           for the Three and Six Month Periods
           Ended March 31, 2004 and March 31, 2003. . . . . . . . . .     4
         Consolidated  Statements  of  Cash  Flows
           for the Six month periods ended March 31,
           2004 and March 31, 2003. . . . . . . . . . . . . . . . . .     5
         Notes to the Consolidated Financial Statements . . . . . . .     7

Item 2.  Management's Discussion and Analysis . . . . . . . . . . . .    19

Item 3.  Controls  and  Procedures. . . . . . . . . . . . . . . . . .    43

                                     PART II
                                OTHER INFORMATION

Item  6.  Exhibits  and  Reports  on  Form  8-K . . . . . . . . . . .    44

SIGNATURES
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                           YP CORP.
                             UNAUDITED CONSOLIDATED BALANCE SHEET
                                      AS OF MARCH 31, 2004
ASSETS:

CURRENT ASSETS
<S>                                                                                   <C>
   Cash and equivalents                                                               $ 2,242,002
   Accounts receivable, net of allowance for doubtful accounts of $5,193,394           13,231,132
   Prepaid expenses and other current assets                                              306,815
   Deferred tax asset                                                                   1,375,329
                                                                                      ------------
      Total current assets                                                             17,155,278

ACCOUNTS RECEIVABLE, long term portion, net of allowance
      for doubtful accounts of $359,203                                                 1,022,348

CUSTOMER ACQUISITION COSTS, net of accumulated amortization of $2,297,854               3,745,788

PROPERTY AND EQUIPMENT, net                                                               763,603

DEPOSITS AND OTHER ASSETS                                                                 113,310

INTELLECTUAL PROPERTY- URL, net of accumulated amortization of $2,100,460               3,432,638

ADVANCES TO AFFILIATES                                                                  5,003,962
                                                                                      ------------
    TOTAL ASSETS                                                                      $31,236,927
                                                                                      ============

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts payable                                                                   $   822,474
   Accrued liabilities                                                                  1,994,232
   Notes payable- current portion                                                         115,868
   Income taxes payable                                                                 4,155,425
                                                                                      ------------
      Total current liabilities                                                         7,087,999

DEFERRED INCOME TAXES                                                                      40,518
                                                                                      ------------
      Total liabilities                                                                 7,128,517
                                                                                      ------------

STOCKHOLDERS' EQUITY:
   Series E convertible preferred stock, $.001 par value, 200,000 shares authorized,
        131,840 issued and outstanding, liquidation preference $39,552                     11,206
   Common stock, $.001 par value, 100,000,000 shares authorized,
        55,580,136 issued, 48,874,302 outstanding                                          48,874
   Paid in capital                                                                      9,751,126
   Deferred stock compensation                                                         (4,032,024)
   Treasury stock at cost                                                                (690,306)
   Retained earnings                                                                   19,019,534
                                                                                      ------------
      Total stockholders' equity                                                       24,108,410
                                                                                      ------------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $31,236,927
                                                                                      ============
<FN>
               See the accompanying notes to these unaudited financial statements
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>

                                                   YP CORP.
                                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE THREE AND SIX MONTH PERIODS  ENDED MARCH 31, 2004 AND MARCH 31, 2003

                                             Three Months       Six Months       Three Months       Six Months
                                                Ended             Ended             Ended             Ended
                                            March 31, 2004    March 31, 2004    March 31, 2003    March 31, 2003
                                           ----------------  ----------------  ----------------  ----------------
<S>                                        <C>               <C>               <C>               <C>

NET REVENUES                               $    16,394,853   $    30,261,820   $     6,849,044   $    12,590,499
                                           ----------------  ----------------  ----------------  ----------------

OPERATING EXPENSES:
     Cost of services                            6,618,537        11,500,939         1,848,966         3,671,116
     General and administrative expenses         3,134,522         5,925,265         1,666,108         3,042,186
     Sales and marketing expenses                1,428,210         2,718,390           862,939         1,495,374
     Depreciation and amortization                 199,719           395,912           159,306           298,238
                                                                                                 ----------------
         Total operating expenses               11,380,988        20,540,506         4,537,319         8,506,914
                                           ----------------  ----------------  ----------------  ----------------

OPERATING INCOME                                 5,013,865         9,721,314         2,311,725         4,083,585
                                           ----------------  ----------------  ----------------  ----------------

OTHER (INCOME) AND EXPENSES
     Interest (income) expense                     (78,545)         (149,698)          (12,069)          (12,789)
     Other (income) expense                        (71,395)         (346,153)         (180,980)         (229,886)
                                           ----------------  ----------------  ----------------  ----------------

     Total other (income)expense                  (149,940)         (495,851)         (193,049)         (242,675)
                                           ----------------  ----------------  ----------------  ----------------

INCOME BEFORE INCOME TAXES                       5,163,805        10,217,165         2,504,774         4,326,260

INCOME TAX  PROVISION (BENEFIT)                  1,815,206         3,583,881           999,853         1,728,447
                                           ----------------  ----------------  ----------------  ----------------

NET INCOME                                 $     3,348,599   $     6,633,284   $     1,504,921   $     2,597,813
                                           ================  ================  ================  ================

NET INCOME PER SHARE:
  Basic                                    $          0.07   $          0.14   $          0.03   $          0.06
                                           ================  ================  ================  ================

  Diluted                                  $          0.07   $          0.14   $          0.03   $          0.06
                                           ================  ================  ================  ================

WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING:
  Basic                                         46,946,458        46,904,402        43,271,333        42,011,711
                                           ================  ================  ================  ================

  Diluted                                       48,145,140        47,640,118        43,271,333        42,011,711
                                           ================  ================  ================  ================
<FN>
                       See the accompanying notes to these unaudited financial statements
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                           YP CORP.
                        UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTH PERIODS ENDED MARCH 31, 2004 AND MARCH 31, 2003

                                                               SIX MONTHS        SIX MONTHS
                                                                 ENDED             ENDED
CASH FLOWS FROM OPERATING ACTIVITIES:                        MARCH 31, 2004    MARCH 31, 2003
                                                            ----------------  ----------------
<S>                                                         <C>               <C>
  Net income                                                $     6,633,284   $     2,597,813
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
  Depreciation and amortization                                     395,912           298,238
  Income recognized on forgiveness of debt                                -           (45,362)
  Loss on disposal of fixed assets                                   36,932                 -
  Amortization of deferred stock compensation                       503,071                 -
  Deferred income taxes                                              37,962           155,176
  Officers & consultants paid common stock                                -           453,750
  Common stock surrendered                                                -          (160,979)
  Changes in assets and liabilities:
    Trade and other accounts receivable                          (5,801,351)       (2,283,431)
    Customer acquisition costs                                     (502,547)       (1,218,660)
    Prepaid and other current assets                               (152,539)         (113,628)
    Other assets                                                     35,000            52,096
    Receivable from affiliate                                             -          (110,121)
    Accounts payable                                                394,051           148,684
    Accrued liabilities                                             (72,743)         (105,603)
    Due to affiliates                                                     -            14,017
    Income taxes payable                                          1,466,113         1,573,273
                                                            ----------------  ----------------
          Net cash  provided by operating activities              2,973,145         1,255,263
                                                            ----------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Advances made to affiliates and related parties                (2,725,000)         (400,000)
  Purchases of  intellectual property                              (151,863)           (6,761)
  Purchases of  equipment                                          (233,128)         (469,548)
                                                            ----------------  ----------------
          Net cash (used in)  investing activities               (3,109,991)         (876,309)
                                                            ----------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt                                                      -           147,000
  Principal repayments on notes payable                                   -          (454,000)
                                                            ----------------  ----------------
          Net cash (used)/provided by financing activities                -          (307,000)
                                                            ----------------  ----------------

(DECREASE) INCREASE IN CASH                                        (136,846)           71,954

CASH, BEGINNING OF PERIOD                                         2,378,848           767,108
                                                            ----------------  ----------------

CASH, END OF PERIOD                                         $     2,242,002   $       839,062
                                                            ================  ================
<FN>
               See the accompanying notes to these unaudited financial statements
</TABLE>


                                        5
<PAGE>
                                    YP CORP.
                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE SIX MONTH PERIODS ENDED MARCH 31, 2004 AND MARCH 31, 2003, continued

SUPPLEMENTAL CASH FLOW INFORMATION:

<TABLE>
<CAPTION>
                                 Six month        Six month
                               period ended     period ended
                              March 31, 2004   March 31, 2003
                              ---------------  ---------------
<S>                           <C>              <C>
Interest Paid                 $             -  $         9,545
                              ===============  ===============
<FN>
       See the accompanying notes to these unaudited financial statements
</TABLE>


                                        6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS  ENDED MARCH 31, 2004 AND MARCH 31, 2003

1.   Basis of Presentation

The accompanying unaudited financial statements represent the consolidated
financial position of YP Corp. f/k/a YP.Net, Inc. ("the Company") for the three
and six month periods ended March 31, 2004, and March 31, 2003, which includes
results of operations of the Company, Telco Billing, Inc. ("Telco") and Telco of
Canada, Inc, its wholly owned subsidiaries, and statement of cash flows for the
six month periods ended March 31, 2004 and March 31, 2003.  These statements
have been prepared in accordance with generally accepted accounting principles
("GAAP") for interim financial information.  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.

2.   Company Organization and Operations

YP Corp. f/k/a YP.Net, Inc., a Nevada corporation (the "Company," "we," "us," or
"our"), is in the business of providing Internet-based Yellow Page advertising
space on or through www.Yellow-Page.Net, www.YP.Net  and www.YP.com.  Subsequent
                    -------------------  ----------
to March 31, 2004, the Company changed its name from "YP. Net, Inc." to "YP
Corp."

The Company's  "yellow page" database lists approximately 18 million businesses
throughout the United States.  Our website enables internet users to search
through these "yellow page" listings and is used by businesses and consumers
attempting to locate a business and/or service provider in response to a user's
specific search criteria.

As our primary source of revenue, we offer a Mini-Webpage(TM) to businesses for
a monthly fee.  The Mini-Webpage(TM) provides a business with a priority
placement listing over non-paying listings and is displayed in a bigger and
bolder font at the beginning of, or in the first section of the user's search
results - thus featuring our paying customers more prominently to user's of our
website. In addition, our paying customers get a Mini-Webpage(TM) which includes
a 40-word description of their business, their hours of operation and other
useful information, a direct link to the paying customers website, (if they have
one and it is provided by the advertiser), map, driving directions to the paying
customers location and more. We market for advertisers for this Internet
Advertising Package ("IAP"), under the name "Yellow-Page.Net, exclusively to
businesses through a direct mail solicitation program.  The solicitation
includes a promotional incentive (i.e. generally  a $3.25 check) which, if
cashed by the business, automatically signs the business up for the IAP service
for an initial twelve month period with automatic renewals thereafter. This easy
subscription process provides a written confirmation (i.e., the check) of the
subscription by the newly subscribing business, which is verified by an
independent third party (i.e., the paying customers depositing bank). To
additionally insure the intention of sign-up, the Company then mails a written
confirmation card to the newly subscribing business generally within 30 days
from activation. The Company also provides a 120-day cancellation period whereby
the subscribing business may cancel and receive a full refund of any amounts
paid to the Company.

Each paying customer is billed monthly for that month's service, the vast
majority of such monthly billings appear on the subscribing business's local
phone bill.  Management believes this ability to bill the paying customer
through the paying customers phone bill is a significant competitive advantage
for the


                                        7
<PAGE>
Company as few independent (not owned by a telephone company) yellow page
companies are authorized to bill directly on the phone bill for services
rendered.

We were originally incorporated as a New Mexico company in 1969 and the Company
was re-incorporated in Nevada in 1996 as Renaissance Center, Inc. Our Articles
of Incorporation were restated in July 1997 and our name was changed to
Renaissance International Group, Ltd. Effective July 1998, we changed our name
to RIGL Corporation. In June 1999, we acquired Telco Billing, Inc. ("Telco") and
commenced our current operations through this entity. In October 1999, we
amended our Articles of Incorporation to change our corporate name to YP.Net,
Inc. to better identify our company with our business focus.

From August through March 1999, we abandoned all subsidiaries previously
involved in the multi-media software and medical billing and practice management
areas. With the acquisition of Telco, our business focus shifted to the Internet
yellow page services business and this business is currently our main source of
revenue. Telco is operated as our wholly owned subsidiary.

In April 2004, we again amended our Articles of Incorporation to change our name
to YP Corp.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents:  This includes all short-term highly 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.  At March 31, 2004, cash deposits exceeded those
insured limits by $1,964,000.

Principles of Consolidation: The consolidated financial statements include the
- ----------------------------
accounts of the Company and its wholly owned subsidiaries, Telco Billing, Inc.
and Telco of Canada, Inc.  All significant intercompany accounts and
transactions are eliminated.

Customer Acquisition Costs:  These costs represent the direct response marketing
- ---------------------------
costs that are incurred as the primary method by which customers subscribe to
the Company's services.  The Company purchases mailing lists and sends
advertising materials to prospective subscribers from those lists.  Customers
subscribe to the services by positively responding to those advertising
materials which serve as the contract for the subscription.  The Company
capitalizes and amortizes the costs of direct-response advertising on a
straight-line basis over eighteen months, the estimated average period of
retention for new customers.  The Company capitalized costs of $1,437,093 and
$2,721,862  and $1,358,902 and $2,342,712 during the three and six months ended
March 31, 2004 and March 31, 2003, respectively.  The Company amortized
$1,214,236 and $2,280,100 and $640,996 and 1,124,049 of total capitalized costs
during the three and six months ended March 31, 2004 and March 31, 2003,
respectively.

The Company also incurs advertising costs that are not considered
direct-response advertising.  These other advertising costs are expensed when
incurred.  These advertising expenses were $213,975 and $438,291 and $221,941
and $377,322 for the three and six months ended March 31, 2004 and March 31,
2003, respectively.

Revenue Recognition: The Company's revenue is generated by customer
- -------------------
subscriptions of directory and advertising services.  Revenue is billed and
recognized monthly for services subscribed in that specific month.  The Company
utilizes outside billing companies to transmit billing data, much of which is
forwarded to Local Exchange Carriers ("LEC's") that provide local telephone
service.  Monthly subscription fees are generally included on the telephone
bills of the customers.  The Company recognizes revenue based on net billings
accepted by the LEC's.  Due to the periods of time for which adjustments


                                        8
<PAGE>
may be reported by the LEC's and the billing companies, the Company estimates
and accrues for dilution and fees reported subsequent to year-end for initial
billings related to services provided for periods within the fiscal year.

Revenue for billings to certain customers whom are billed directly by the
Company and not through the LEC's, is recognized based on estimated future
collections. The Company continuously reviews this estimate for reasonableness
based on its collection experience.

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.

Financial Instruments: Financial instruments consist primarily of cash, accounts
- ---------------------
receivable, advances to affiliates,  and obligations under accounts payable,
accrued expenses and notes payable.  The carrying amounts of cash, accounts
receivable, accounts payable, accrued expenses and notes payable approximate
fair value because of the short maturity of those instruments. The Company has
applied certain assumptions in estimating these fair values. The use of
different assumptions or methodologies may have a material effect on the
estimates of fair values.

Net  Income  Per  Share:  Net  income per share is calculated using the weighted
- ------------------------
average  number  of  shares  of  common  stock outstanding during the year.  The
Company  has  adopted  the  provisions  of  SFAS  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  that affect the reported amounts of assets and liabilities and
disclosure  of  contingent  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.

Significant  estimates  made  in  connection  with  the  accompanying  financial
statements  include  the  estimate  of  dilution  and  fees  associated with LEC
billings  and  the  estimated  reserve  for  doubtful  accounts  receivable.

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,
"Accounting for Stock Issued to Employees."

Impairment of Long-lived Assets: The Company assesses long-lived assets for
- --------------------------------
impairment in accordance with the provisions of SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of.
SFAS 121 requires that the Company assess the value of a long-lived asset
whenever there is an indication that its carrying amount may not be recoverable.
Recoverability of the asset is determined by comparing the forecasted
undiscounted cash flows generated by said asset to its carrying value.  The
amount of impairment loss, if any, is measured as the difference between the net
book value of the asset and its estimated fair value.


                                        9
<PAGE>
Recently Issued Accounting Pronouncements:  In July 2002, the FASB issued SFAS
- -----------------------------------------
No. 146, "Accounting for Costs Associated With Exit or Disposal Activities".
This Standard requires costs associated with exit or disposal activities to be
recognized when they are incurred.  The Company estimates the impact of adopting
these new rules will not be material.

In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial Institutions." SFAS No. 147 is effective October 1, 2002. The adoption
of SFAS No. 147 did not have a material effect on the Company's financial
statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," effective for contracts entered
into or modified after June 30, 2003. This amendment clarifies when a contract
meets the characteristics of a derivative, clarifies when a derivate contains a
financing component and amends certain other existing pronouncements. The
Company believes the adoption of SFAS No. 149 will not have a material effect on
the Company's financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. SFAS No. 150 requires the classification as a
liability of any financial instruments with a mandatory redemption feature, an
obligation to repurchase equity shares, or a conditional obligation based on the
issuance of a variable number of its equity shares. The Company does not have
any financial instruments with a mandatory redemption feature. The Company
believes the adoption of SFAS No. 150 will not have a material effect on the
Company's financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45).  FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure of certain
guarantees issued and outstanding. The initial recognition and initial
measurement provisions of FIN 45 are applicable to guarantees issued or modified
after March 31, 2003.  The disclosure requirements of FIN 45 are effective for
financial statements for periods ending after December 15, 2002. The adoption of
FIN 45 did not have a significant impact on the Company's financial statements.
See Note 10.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities" (FIN 46). FIN No. 46 states that companies that have exposure to the
economic risks and potential rewards from another entity's assets and activities
have a controlling financial interest in a variable interest entity and should
consolidate the entity, despite the absence of clear control through a voting
equity interest. The consolidation requirements apply to all variable interest
entities created after January 31, 2003. For variable interest entities that
existed prior to February 1, 2003, the consolidation requirements are effective
for annual or interim periods beginning after June 15, 2003. Disclosure of
significant variable interest entities is required in all financial statements
issued after January 31, 2003, regardless of when the variable interest was
created. The Company is presently reviewing arrangements to determine if any
variable interest entities exist but does not anticipate the adoption of FIN 46
will have a significant impact on the Company's financial statements.

4.   ACCOUNTS RECEIVABLE

The Company provides billing information to third party billing companies for
the majority of its monthly billings.  Billings submitted are "filtered" by
these billing companies and the LEC's.  Net accepted billings are recognized as
revenue and accounts receivable.  The billing companies remit payments to the
Company on the basis of cash ultimately received from the LEC's by those billing
companies.  The


                                       10
<PAGE>
billing companies and LEC's charge fees for their services, which are netted
against the gross accounts receivable balance.  The billing companies also apply
holdbacks to the remittances for potentially uncollectible accounts.  These
dilution amounts will vary due to numerous factors and the Company may not be
certain as to the actual amounts of dilution on any specific billing submittal
until several months after that submittal.  The Company estimates the amount of
these charges and holdbacks based on historical experience and subsequent
information received from the billing companies.  The Company also estimates
uncollectible account balances and provides an allowance for such estimates.
The billing companies retain certain holdbacks that may not be collected by the
Company for a period extending beyond one year.  These balances have been
classified as long-term assets in the accompanying balance sheet.

The Company experiences significant dilution of its gross billings by the
billing companies.  The Company negotiates collections with the billing
companies on the basis of the contracted terms and historical experience.
Holdbacks, fees, and other matters, which are determined by the LEC's and the
billing companies, may affect the Company's cash flow.  The Company processes
its billings through two primary billing companies.

PaymentOne, Inc. f/k/a eBillit, Inc. ("PaymentOne") provides the majority of the
Company's billings, collections, and related services. The net receivable due
from PaymentOne at March 31, 2004 was $10,265,000, net of an allowance for
doubtful accounts of $3,998,000.  The net receivable from PaymentOne at March
31, 2004, represents approximately 72% of the Company's total net accounts
receivable at March 31, 2004.

Subscription receivables that are directly billed by the Company are valued and
reported at the estimated future collection amount.  Determining the expected
collections requires an estimation of both uncollectible accounts and refunds.
Subscriptions receivable at March 31, 2004 was $133,451, net of allowance for
doubtful accounts of $46,820.

Accounts receivable at March 31, 2004 is summarized as follows:

<TABLE>
<CAPTION>
                                        Current    Long-Term      Total
                                      -----------  ----------  -----------
<S>                                   <C>          <C>         <C>
     Gross accounts receivable        $18,424,526  $1,381,551  $19,806,077
     Allowance for doubtful accounts    5,193,394     359,203    5,552,597
                                      -----------  ----------  -----------
                                      $13,231,132  $1,022,348  $14,253,480
                                      ===========  ==========  ===========
</TABLE>

Certain receivables have been classified as long-term because the Company's
collection experience with those receivables has historically extended beyond
one year.

5.   INTELLECTUAL PROPERTY AND OTHER INTANGIBLE ASSETS

The URL is recorded at its cost net of accumulated amortization.  Management
believes that the Company's business is dependent on its ability to utilize this
URL given the recognition of the Yellow page term.  Also, its current customer
                                 -----------
base relies on the recognition of this term and URL as a basis for maintaining
the subscriptions to the Company's service.  Management believes that the
current revenue and cash flow generated through use of Yellow-page.net supports
                                                       ---------------
the carrying of the asset.  The Company


                                       11
<PAGE>
periodically analyzes the carrying value of this asset to determine if
impairment has occurred.  No such impairments were identified during the year
ended September 30, 2003 or the six months ended March 31, 2004.  The URL is
amortized on an accelerated basis over the twenty-year term of the licensing
agreement.  Amortization expense on the URL was $82,000 and $164,000 for the
three and six months ended March 31, 2004, respectively.

Additionally, the Company has capitalized costs of other intangible assets such
as web site development costs and other URL's.  These assets are recorded at
cost net of accumulated amortization.  At March 31, 2004, the net recorded
balance was approximately $414,000, net of accumulated amortization of
approximately $110,000.  Amortization expense on these assets was approximately
$39,000 and $68,000 for the three and six months ended March 31, 2004.

6.   PROVISION FOR INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

Income  taxes  for three and six months ended March 31 is summarized as follows:

<TABLE>
<CAPTION>
                                  Three                    Three
                                  Months    Six Months     Months    Six Months
                                  Ended        Ended       Ended        Ended
                                March 31,    March 31,   March 31,    March 31,
                                   2004        2004         2003        2003
                                ----------  -----------  ----------  -----------
<S>                             <C>         <C>          <C>         <C>
     Current Provision          $1,563,074  $ 3,015,316  $  888,889  $ 1,576,233
     Deferred (Benefit)
     Provision                     252,132      568,565     110,964      152,214
                                ----------  -----------  ----------  -----------
     Net income tax provision   $1,815,206  $ 3,583,881  $  999,853  $ 1,728,447
                                ==========  ===========  ==========  ===========
</TABLE>

During the year ended September 30, 2003, the Company expanded certain
operations and revenue generating assets in Nevada where there are no corporate
income taxes thereby reducing the statutory rate used for state income taxes.

At March 31, 2004, deferred income tax assets related to differences in book and
tax bases of accounts receivable, direct marketing costs and intangible assets.

At March 31, 2004 deferred tax liabilities were comprised of differences in book
and tax bases of customer acquisition costs and property and equipment
respectively.

7.   NET INCOME PER SHARE

Net income per share is calculated using the weighted average number of shares
of common stock outstanding during the three and six months ended March 31, 2004
and March 31, 2003, respectively.  Preferred stock dividends are subtracted from
the net income to determine the amount available to common shareholders.  There
were $494 and $989 in preferred stock dividends the three and six months ended
March 31, 2004.  Warrants to purchase 500,000 shares of common stock were
included in the calculation for the three and six months ended and March 31,
2003.  The exercise price of those warrants


                                       12
<PAGE>
was greater than the trading value of the common stock and therefore inclusion
of such would be anti-dilutive.  Also excluded from the calculation for the
three and six months ended March 31, 2004 and 2003 were 131,840 shares of Series
E Convertible Preferred Stock issued during the year ended September 30, 2002,
which are considered anti-dilutive due to the cash payment required by the
holders of the securities at the time of conversion.  The dilutive effect of
unvested restricted stock awards and certain warrants are included in the
calculation of diluted earnings per share for the three and six month periods
ended March 31, 2004.  Excluded from the calculation of diluted earnings per
share for the six month period ended March 31, 2004 are warrants to purchase
125,000 shares of common stock and unvested restricted stock awards totaling
240,000 shares.  The securities are excluded from the calculation because their
inclusion would be anti-dilutive.

The following presents the computation of basic and diluted loss per share from
continuing operations for the three months and six months ended March 31, 2004:

<TABLE>
<CAPTION>
                                           Three
                                           Months                          Six Months
                                           Ended                              Ended
                                          March 31,                        March 31,
                                            2004                              2004

                                                                   Per                               Per
                                           Income       Shares    Share      Income       Shares    share
                                         -----------  ----------  ------  ------------  ----------  ------
<S>                                      <C>          <C>         <C>     <C>           <C>         <C>
Net  Income                              $3,348,599                       $ 6,633,284
Preferred stock dividends                      (494)                             (989)
                                         -----------                      ------------
Income available to common
  Stockholders                           $3,348,105                       $ 6,632,295
                                         ===========                      ============
BASIC EARNINGS PER SHARE:

Income available to common stockholders
                                         $3,348,105   46,946,458  $ 0.07  $ 6,632,295   46,904,402  $ 0.14
                                         -----------  ----------  ------  ------------  ----------  ------
Effect of dilutive securities

  Warrants                                               207,796       -                   126,977
  Unvested restricted stock awards                       990,886       -                   608,739
  Preferred stock dividend                      494                               989
                                         -----------  ----------  ------  ------------  ----------  ------
DILUTED EARNINGS PER SHARE               $3,348,599   48,145,140  $ 0.07  $ 6,633,284   47,640,118  $ 0.14
                                         ===========  ==========  ======  ============  ==========  ======
</TABLE>

8.   COMMITMENTS AND CONTINGENCIES

Telco Billing

The acquisition of Telco by the Company called for the issuance of 17,000,000
new shares of stock in exchange of the existing shares of Telco.  As part of
that agreement, the Company gave the former shareholders the right to "Put" back
to the Company certain shares of stock at a minimum stock price of 80% of the
current trading price with a minimum strike price of $1.00.  The net effect of
which was that the former Telco shareholders could require the Company to
repurchase shares of stock of the Company at a minimum cost of $10,000,000.  The
agreement required the Company to attain certain market share levels.


                                       13
<PAGE>
The "Put" feature has been renegotiated and retired. As part of the renegotiated
settlement, the Company provided a credit facility of up to $20,000,000 to the
former Telco shareholders, collateralized by the stock held by these
shareholders, with interest at least 0.25 points higher than the Company's
average cost of borrowing.  Additional covenants warrant that no more that
$1,000,000 can be advanced at any point in time and no advances can be made in
excess without allowing at least 30 days operating cash reserves or if the
Company is in an uncured default with any of its lenders.  At March 31, 2004,
the Company had advanced approximately $4,851,000 under this agreement.   The
former Telco shareholders have not made any interest or principal payments in
the three months ended March 31, 2004.

In the three month period ended December 31, 2003, the Company and the former
Telco shareholders agreed to amend the arrangement whereby the Company will be
required to advance only an additional $1,300,000 through April 2004 and the
ability to draw on that facility will cease at that time.  However, the Company
made a commitment in connection with that amendment to begin paying dividends to
all of its common stockholders in the fiscal year ended September 30, 2004.

Billing Service Agreements
- --------------------------

The Company has entered into a customer billing service agreement with
PaymentOne, Inc. f/k/a eBillit, Inc. ("PaymentOne").  PaymentOne provides
billing and collection and related services associated to the telecommunications
industry.  The agreement term is for two years, automatically renewable in
two-year increments unless appropriate notice to terminate is given by either
party.  The agreement will automatically renew on September 1, 2005, unless
either party gives notice of termination 90 days prior to that renewal date.
Under the agreement, PaymentOne bills, collects and remits the proceeds to Telco
net of reserves for bad debts, billing adjustments, telephone company fees and
PaymentOne fees.  If either the Company's transaction volume decreases by 25%
from the preceding month, or less than 75% of the traffic is billable to major
telephone companies, PaymentOne may at its own discretion increase the reserves
and holdbacks under this agreement.    PaymentOne handles all billing
information and collection of receivables.  The Company's cash receipts on trade
accounts receivable are dependent upon estimates pertaining to holdbacks and
other factors as determined by PaymentOne.  PaymentOne may at its own discretion
increase the reserves and holdbacks under this agreement.

The Company has also entered into an agreement with ACI Communications, Inc.
ACI provides billing and collection and related services associated to the
telecommunications industry.

These agreements with the billing companies provide significant control to the
billing companies over cash receipts and ultimate remittances to the Company.
The Company estimates the net realizable value of its accounts receivable on
historical experience and information provided by the billing companies
reflecting holdbacks and reserves taken by the billing companies and LEC's.

Other
- -----

The Company's Board of Directors has committed the Company to pay for the costs
of defending a civil action filed against its CEO and Chairman.  The action
involved a business that the CEO was formerly involved in. The Company and at
least one officer had received subpoenas in connection with this matter and the
Board believes that it is important to help resolve this matter as soon as
possible. The Board action included the payment of legal and other fees for any
other officers and directors that may have become involved in this civil action.
During the three and six months ended March 31, 2004, the Company paid costs of
approximately $32,000 and $56,000, respectively, on behalf of its CEO relative
to this matter.  The amounts expensed in the current period are presented as
compensation expense within general and administrative expenses in the
accompanying statement of operations for the three and six months ended March
31, 2004.  The Company believes that all civil actions against the CEO related
to


                                       14
<PAGE>
this matter have been dismissed or are being dismissed.  However, additional
legal costs will be incurred to address all matters in finalizing this issue
and, at this time, the Company cannot estimate what additional costs may be
incurred to continue covering the costs related to this matter, but all such
costs shall be deemed to be additional compensation to the CEO.

The Company has entered into "Executive Consulting Agreements" with four
entities controlled by four of the Company's officers individually.  These
agreements call for fees to be paid for the services provided by these
individuals as officers of the Company as well as their respective staffs.
These agreements are not personal service contracts of these officers
individually.  The agreements extend through 2007 and require annual performance
bonuses that aggregate up to approximately $320,000 depending upon available
cash and meeting of certain performance criteria.

Subsequent to March 31, 2004, the Company entered into a $1 million one year
renewable revolving credit facility agreement with a lending institution.  The
terms of the agreement require interest only payments on the outstanding balance
at the per annum rate of the one month LIBOR plus 3%.  Outstanding advances are
secured by all existing and acquired tangible and intangible assets of the
Company located in the United States.

9.   RELATED PARTY TRANSACTIONS

During the three and six month periods ended March 31, 2004 and 2003, the
Company entered into the related party transactions with Board members, officers
and affiliated entities as described below:

Directors & Officers
- --------------------

Board of Director fees for the three and six month periods ended March 31, 2004
were $40,000 and $60,000, respectively.  These amounts are included in the
amounts discussed below.

The CEO, a Subsidiary Officer, a Subsidiary Officer and Corporate Secretary as
well as the CFO are paid for their services and those of their respective staffs
through separate entities controlled by these individuals who pre-date their
association with the Company.  The following describes the compensation paid to
these entities.

Sunbelt Financial Concepts, Inc.
- --------------------------------

Sunbelt Financial Concepts, Inc. ("Sunbelt") provides the services of the
Chairman and CEO and his staff to the Company.

Sunbelt provides the strategic and overall planning as well as the operations
management to the Company.  Sunbelt's team is experienced in all areas of
management and administration.

During the three and six month periods ended March 31, 2004, the Company paid a
total of approximately $133,000 and $289,000 to Sunbelt.  In addition, during
the three and six month periods ended March 31, 2004, the Company paid
approximately $32,000 and $86,000 on behalf of the CEO to attorneys for legal
fees incurred by  Sunbelt  related to the personal legal matters discussed in
Note 8. Approximately $625,000 of total amounts due Sunbelt remain accrued at
March 31, 2004.


                                       15
<PAGE>
Advertising Management & Consulting Services, Inc.
- --------------------------------------------------

Advertising Management & Consulting Services, Inc. ("AMCS") provides the
services of a Subsidiary Officer, a Director of the Company, and his staff to
the Company. AMCS is a marketing and advertising company experienced in
designing Direct Marketing Pieces, insuring compliance with regulatory
authorities for those pieces and designing new products that can be mass
marketed through the mail.  AMCS' president is a director of the Company.

The Company outsources the design and testing of its many direct mail pieces to
AMCS for a fee. AMCS is also responsible for new products that have been added
to the Company's website and is working on new mass-market products to offer the
Company's customers.

Total amount paid to this director and AMCS during the three and six month
periods ended March 31, 2004 was approximately $110,000 and $297,000,
respectively.  At March 31, 2004, the total amount accrued to AMCS was
approximately $119,000.

Advanced Internet Marketing, Inc.
- ---------------------------------

Advanced Internet Marketing, Inc. ("AIM") provides the services of a Subsidiary
Officer, Corporate Secretary and a Director of the Company, and his staff to the
Company.

The Company outsources the design and marketing of it's website on the World
Wide Web to AIM.  AIM's team of designers is experienced in all areas of web
design and has created all of the Company's logos and images for branding.

The total amount paid to AIM during the three and six month periods ended March
31, 2004 was approximately $67,000 and $164,000, respectively.  At March 31,
2004, the total amount accrued to AIM is approximately $96,000.

MAR & Associates
- ----------------

The compensation for services of the Company's Chief Financial Officer are paid
to MAR & Associates ("MAR").  The total amount paid to MAR and the CFO during
the three and six month periods ended March 31, 2004 was approximately $66,000
and $147,000, respectively.  At March 31, 2004, the total amount accrued to MAR
was approximately $29,000.

Other
- -----

The Company made additional advances to former Telco shareholders of $2,725,000
and $4,725,000 during the three and six month periods ended March 31, 2004.
Interest earned on these advances was approximately $82,000 and $153,000 for the
three and six month periods ended March 31, 2004.

Advances to affiliates are summarized as follows at March 31, 2004:

<TABLE>
<CAPTION>
<S>                                   <C>
            Morris & Miller           $3,511,108

           Mathew & Markson            1,492,854
                                      ----------
Total                                 $5,003,962
                                      ==========
</TABLE>


                                       16
<PAGE>
On December 22, 2003, the Company entered into an agreement with the former
Telco shareholders that terminated the line of credit agreement effective April
9, 2004 (Note 8).

Simple.Net, Inc. ("SN")
- -----------------------

The Company had contracted with Simple.Net, Inc. ("SN"), an internet service
provider owned by a director of the Company, to provide internet dial-up and
other services to its customers.   SN had sold said services to the Company at
below market rate prices from time to time. During the three and six month
periods ended March 31, 2004, the Company recorded expense of approximately
$107,000 and $422,000, respectively for said services.  At March 31, 2004,
$37,000 net due to SN was accrued in accounts payable.

In addition, SN paid a monthly fee to the Company for technical support and
customer service provided to SN's customers by the Company's employees. The
Company charged SN for these services according to a per customer pricing
formula:

Customer Service & Management Agreement fees are calculated by number of
customer records of SN multiplied by a base cost of $1.02.

Technical Support fees are calculated by number of customer records of SN
multiplied by a base cost of 60 cents.

For the three and six month periods ended March 31, 2004, the Company recorded
other income of approximately $66,000 and $288,000, respectively, from SN for
these services.

On December 29, 2003, we entered into a separation agreement with Simple.Net
which becomes effective January 31, 2004. Under this agreement, Simple.Net will
no longer provide any services to us, although the Separation Agreement provided
for a 30-day extension until March 2, 2004.

10.  CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at banks in Arizona.  Accounts are insured
by the Federal Deposit Insurance Corporation up to $100,000.  At March 31, 2004,
the Company had bank balances exceeding those insured limits of $899,000.
Financial instruments that potentially subject the Company to concentrations of
credit risk are primarily trade accounts receivable.  The trade accounts
receivable are due primarily from business customers over widespread
geographical locations within the LEC billing areas across the United States.
The Company historically has experienced significant dilution and customer
credits due to billing difficulties and uncollectible trade accounts receivable.
The Company estimates and provides an allowance for uncollectible accounts
receivable.  The handling and processing of cash receipts pertaining to trade
accounts receivable is maintained primarily by two third party billing
companies.  The Company is dependent upon these billing companies for collection
of its accounts receivable.  As discussed in Note 4, the net receivable due from
a single billing services provider at March 31, 2004 was $10,265,000, net of an
allowance for doubtful accounts of $3,998,000.  The net receivable from that
billing services provider at March 31, 2004, represents approximately 72% of the
Company's total net accounts receivable at March 31, 2004.

As discussed in Note 9, the Company has advanced a net amount of $5,003,962 to
an affiliate.  That amount is receivable from the affiliate at March 31, 2004.
The Company has a receivable for that amount


                                       17
<PAGE>
which earns interest at 8% and is payable in April 2007.  The receivable is
collateralized by shares of the Company's common stock held by the affiliate.

                         *     *     *     *     *     *


                                       18
<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS

     For a description of our significant accounting policies and an
understanding of the significant factors that influenced our performance during
the three and six months ended March 31, 2004, this "Management's Discussion and
Analysis" should be read in conjunction with the Consolidated Financial
Statements, including the related notes, appearing in Item 1 of this Quarterly
Report.

Forward-Looking  Statements

     This portion of this Quarterly Report on Form 10-QSB, includes statements
that constitute "forward-looking statements."  These forward-looking statements
are often characterized by the terms "may," "believes," "projects," "expects,"
or "anticipates," and do not reflect historical facts.  Specific forward-looking
statements contained in this portion of the Annual Report include, but are not
limited to the Company's:  (i) belief that the increase in ACH billing will
continue and escalate; (ii) expectation that the recent increase in dilution
will be reduced to more normal levels over the next few quarters; and (iii)
anticipation that capital expenditures will not grow at the same rate in future
fiscal periods compared to the prior fiscal year.

     Forward-looking statements involve risks, uncertainties and other factors,
which may cause our actual results, performance or achievements to be materially
different from those expressed  or implied by such forward-looking statements.
Factors and risks that could affect our results and achievements and cause them
to materially differ from those contained in the forward-looking statements
include those identified in the section below titled "Certain Risk Factors
Affecting Our Business," as well as other factors that we are currently unable
to identify or quantify, but may exist in the future.

     In addition, the foregoing factors may affect generally our business,
results of operations and financial position.  Forward-looking statements speak
only as of the date the statement was made.  We do not undertake and
specifically decline any obligation to update any forward-looking statements.

Executive  Overview

     Business Summary

     We use a business model similar to print Yellow Page publishers.  We
publish basic directory listings, free of charge, exclusively on the Internet.
Like Yellow Page publishers, we generate virtually all of our revenues from
those advertisers that desire increased exposure for their businesses by
purchasing our Internet Advertising Package(TM), or IAP. Our basic listings
contain the business name, address and phone number for almost 18 million U.S.
businesses.  We strive to maintain a listing for almost every business in
America in this format.

     To generate revenues, certain advertisers pay us a monthly fee for our IAP
in the same manner that advertisers pay additional fees to traditional print
Yellow Page providers for enhanced advertisement font, location or display.  The
IAP includes, Mini-Webpage(TM), map


                                       19
<PAGE>
directions, a toll-free calling feature, a link to the advertiser's own webpage
and, at no additional charge, a priority or preferred placement on our website.
The users of our website(s) are prospective IAP advertisers for our advertisers.

     We also offer other ancillary services and products that currently account
for less than 5% of our revenue.  These ancillary services and products include
website design and hosting, and dial-up Internet access.

     Sales and Marketing

     We employ a direct mail marketing program to solicit our IAP advertisers.
Currently, our direct mail marketing program includes a promotional incentive in
the form of a $3.25 activation check that a solicited business simply deposits
with its bank to activate the service and become an IAP advertiser on a monthly
basis.  As a method of third-party verification, the potential IAP advertiser's
bank verifies that the depositing party is in fact the solicited business.  Upon
notice of activation by the IAP advertiser's bank, we contact the business to
confirm the order.  Within 30 days of activation, we also send a confirmation
card to the business.  We offer a cancellation period of 120 days with a full
refund.  Our direct mail marketing program complies with and, in many instances,
exceeds the United States Federal Trade Commission, or "FTC," requirements as
established by an agreement between our company and the FTC.

     IAP advertisers

     In September 2003, we revised the method by which we count our IAP
advertisers.  We now differentiate between "paying IAP advertisers" and
"activated IAP advertisers."  Paying IAP advertisers, as the name implies, are
those advertisers that are actually currently paying for the IAP service.  The
terms activated IAP advertisers or activated advertisers are broader and more
inclusive terms.  They include those advertisers that are currently paying for
the IAP service, as well as those advertisers that either have signed-up for the
IAP service but have not yet been billed or have been billed but have not yet
remitted to us their fees.

     We believe that the new methodology is more accurate and can be more
consistently applied to each period.  We also believe that tracking and
disclosing the numbers of our activated IAP advertisers, in addition to our
paying IAP advertisers, provides greater clarity into our business by providing
an indication or forecast of how many activated IAP advertisers may eventually
become paying IAP advertisers.  Our average retention rate for paying IAP
advertisers is approximately 29 months, which, in turn, approaches the average
operating life expectancy of 36 months for a small business in the U.S.,
according to the U.S. Small Business Administration.

     Methods of Billing

     We bill most of our IAP advertisers on their local telephone bill through
their Local Exchange Carrier, or "LEC."  We are one of only a few independent
Internet advertisers that are permitted to utilize this unique and
cost-efficient method of billing.  By billing our IAP advertisers on their local
telephone bill, we believe we are able to realize a greater average rate of
collection than direct invoice-billing.  The amount and frequency of collections
on invoice-billed IAP advertisers historically has been significantly lower than
for IAP advertisers billed on


                                       20
<PAGE>
their monthly telephone bill.  Accordingly, our revenues can be negatively
impacted if the billing method used to bill a IAP advertiser converts from
monthly telephone bill invoicing to direct invoicing.

     We are not permitted to bill our IAP advertisers through Competitive Local
Exchange Carriers, or CLECs.  Recently, the CLEC's have been participating in
providing local telephone services to IAP advertisers at an increasing rate.  We
have begun to address this problem and we are implementing data filters to
reduce the effects of the CLEC's.  We have also sought other billing methods to
reduce the adverse effects of the CLEC billings, including Automated Clearing
House, or ACH, which is direct debit from the IAP advertiser's bank account. and
credit cards.  ACH billing now accounts for approximately 12% of our total
billings and has reduced our dependency on LEC billing.  We expect this trend to
continue and escalate.

     Accounting Policies and Procedures

     We bill our services monthly and recognize revenue for services billed in
that month.  We utilize outside billing companies, or billing aggregators, to
transmit billing data, much of which is forwarded to the LECs for inclusion on
the IAP advertiser's monthly local telephone bill.  Because we have a 120-day
cancellation policy on new advertiser sign-ups, we accrue for such refunds as a
liability and net such anticipated refunds against revenue to report a net
revenue number in our financial statements.

     The billing aggregators and, subsequently, the LECs, filter all billings
that we submit to them.  We recognize as revenue and accounts receivable the net
billings accepted by the LECs.  The billing aggregators remit payments to us on
the basis of cash that the billing aggregators ultimately receive from the LECs.
The billing aggregators and LECs charge fees for their services, which generally
are 3% to 7% each on a monthly basis.  These fees, in turn, are netted against
the gross accounts receivable balance.  The billing aggregators and LECs also
apply holdbacks to the remittances for potentially uncollectible accounts.
These holdbacks and fees result in significant dilution to our gross billings
and, therefore, may significantly affect our cash flow.

     Due to the periods of time for which adjustments may be reported by the
LECs and the billing aggregators, we estimate and accrue for dilution and fees
reported subsequent to year-end for initial billings related to services
provided for periods within the fiscal year.  Dilution amounts will vary due to
numerous factors.  Accordingly, we may not be certain as to the actual amounts
of dilution on any specific billing submittal until several months after that
submittal.  We estimate the amount of these fees and holdbacks based on
historical experience and subsequent information received from the billing
aggregators.  We also estimate uncollectible account balances and provide an
allowance for such estimates.

     We process our billings through two primary billing aggregators-PaymentOne,
Inc.and ACI Communications, Inc. PaymentOne provides the majority of our
billings, collections, and related services. The receivable due from PaymentOne
at March 31, 2004 was $10,265,000, net of an allowance for doubtful accounts of
$3,998,000. The net receivable from PaymentOne at March 31, 2004 represented
approximately 72% of our total net accounts receivable.


                                       21
<PAGE>
     With respect to our alternative billing methods, we recognize revenue for
ACH billings when they are accepted.  We recognize revenue for direct-invoice
billings based on estimated future collections on such billings.  We
continuously review these estimates for reasonableness based on our collection
experience.

     Subscription receivables that result from direct-invoice billing are valued
and reported at the estimated future collection amount.  Determining the
expected collections requires an estimation of both uncollectible accounts and
refunds.  The net subscriptions receivable at March 31, 2004 was $133,451.

     Our cost of services is comprised, primarily, of variable costs, including
the following:

     -    allowances for bad debt, which are based upon historical experience
          and reevaluated monthly;

     -    billing fees, such as the fees charged by our billing aggregators and
          the Local Exchange Carriers;

     -    billing aggregator inquiry fees, which generally are 1% on a monthly
          basis;

     -    dilution resulting from fees and holdbacks due to items such as wrong
          telephone numbers and other indications of uncollectibility;

     -    Internet expenses, such as dial-up expenses; and

     -    direct mailer marketing costs and the amortization of such costs.

     Our general and administrative expenses are comprised, primarily, of fixed
costs, including compensation expenses, which generally equate to 5% to 10% of
net We recognize revenue for direct-invoice billings based on estimated future
collections on such billings.  We continuously review these estimates for
reasonableness based on our collection experience. revenue, as well as other
expenses, such as lease payments, telephone, professional fees, and office
supplies.

     We expect to make progress on a number of initiative over the next six to
twelve months, including the following:

     -    attempt to get listed on a national exchange or quotation system;

     -    add additional independent directors to our Board of Directors;

     -    establish of an audit committee that fully complies with the
          requirements of Sarbanes-Oxley and the exchanges;

     -    engage a national auditing firm;

     -    obtain broader, more sophisticated and more reliable research
          coverage;

     -    negotiate with our two largest shareholders, Morris & Miller, Ltd. and
          Mathew and Markson, Ltd. for an accelerated payment schedule on their
          existing outstanding


                                       22
<PAGE>
          loans that have a balloon maturity April 2007. On April 29, 2004, we
          received their first negotiated accelerated payment on these
          outstanding loans in the amount of $500,000; and

     -    roll out our national branding campaign through various mediums of
          advertisement, including, Internet, billboard, radio and cable
          television in select markets to be determined. We have recently
          engaged a marketing firm. We expect to use approximately $2,000,000 on
          this campaign over the next twelve months. This may have a negative
          impact on our margins. However, to mitigate any adverse impact,
          management intends to attempt to incur these expenses gradually to be
          commensurate with anticipated increases in revenues resulting from the
          branding campaign.

Results  Of  Operations

     Net revenue for the three-month period ended March 31, 2004, was
$16,394,853 compared to $6,849,044 for the three-month period ended March 31,
2003, an increase of approximately 139%.  For the six-month period ended March
31, 2004, net revenue was $30,261,820 compared to $12,590,499 for the six-month
period ended March 31, 2003, an increase of approximately 140%.  This increase
in net revenue is primarily the result of two factors: (1) an increase in the
number of our IAP advertisers and (2) an increase in our monthly pricing.  These
two factors are discussed further below.

     Our activated IAP advertiser count increased to approximately 305,000 at
March 31, 2004 compared to approximately 222,000 at March 31, 2003, an increase
of approximately 37%.  Our paying IAP advertiser count increased to
approximately 265,000 at March 31, 2004 compared to approximately 151,000 at
March 31, 2003, an increase of approximately 75%.

     The increase in activated IAP advertisers described above equates to
average monthly growth of 7,000 activated IAP advertisers for the three-month
period ended March 31, 2004.  This remains within our targeted net growth of
5,000 to 10,000 new activated IAP advertisers per month.

     Relating to our price increases, in March 2003 we increased our monthly
fees for the IAP product  from $17.95 to $21.95 for new customers.  At the same
time, for existing customers, the monthly fee for the IAP product was increased
to $24.95 upon their first twelve-month anniversary of paying the $17.95 service
fee.  In January 2004, we began charging new customers monthly fees of $29.95
for the IAP product.  In addition, in March 2004, the monthly fee on the IAP
product for existing customers was increased to $29.95 upon their first
six-month anniversary of paying the previous fee.

     Regarding our cost of services, between August 2003 and March 31, 2004, we
converted 45,000 direct-invoice IAP advertisers, out of an approximate target of
70,000, to telephone billing.  However, in the fiscal quarter ended March 31,
2004, we continue to experience short-term dilution and chargebacks resulting
from those direct-invoice IAP advertisers that we were unable to convert to LEC
billing.  Dilution is generally attributable to IAP advertiser credits and other
receivable write-downs, such as unbillable telephone numbers.  It does not
necessarily mean that we have lost a customer.  We merely seek alternative
billing methods for these


                                       23
<PAGE>
customers.  This level of dilution has been higher in the quarter ended March
31, 2004 than in the prior quarter ended December 31, 2003 resulting in higher
cost of services.  However, we expect the dilution to be reduced to more normal
levels over the next few quarters as this dilution runs its course through the
billing system.

     Cost of services for the three-month periods ended March 31, 2004 and March
31, 2003 were $6,618,537 and $1,848,966, respectively, an increase of
approximately 258%.  Cost of services for the six-month periods ended March 31,
2004 and March 31, 2003 were $11,500,939 and $3,671,116, respectively, an
increase of approximately 213%.

     Our cost of services as a percentage of net revenue was approximately 40%
for the three months ended March 31, 2004 compared to approximately 27% for the
same period in the prior fiscal year.  Our cost of services as a percentage of
net revenue was approximately 38% for the six months ended March 31, 2004
compared to approximately 29% for the same period in the prior fiscal year.

     These increased costs of services resulted from the previously mentioned
increased IAP advertiser counts, as well as increased dilution discussed above.

     Amortization of direct marketing costs included in cost of sales is
$1,214,236 for the three months ended March 31, 2004 and $640,996 for the
prior-year period. Amortization of direct marketing costs included in cost of
sales is $2,280,100 for the six months ended March 31, 2004 and $1,124,049 for
the prior-year period.

     Gross profits increased to $9,776,316 for the three months ended March 31,
2004 from $5,000,078 for the prior-year period, an increase of 96%.  Gross
margins decreased to approximately 60% of net revenues in the three months ended
March 31, 2004 compared to approximately 73% of net revenues in the prior-year
period.  Gross profits increased to $18,760,881 for the six months ended March
31, 2004 from $8,919,383 for the prior-year period, an increase of 110%.  Gross
margins decreased to approximately 62% of net revenues in the six months ended
March 31, 2004 compared to approximately 71% of net revenues in the prior-year
period.  The increase in our gross profits was due to increased revenues
resulting from the previously mentioned increased IAP advertiser counts and
price increases, offset by increased dilution discussed above.

     Our general and administrative expense for the three-month periods ended
March 31, 2004 and March 31, 2003 were $3,134,522 and $1,666,108, respectively,
an increase of approximately 88%.  Our general and administrative expense for
the six-month periods ended March 31, 2004 and March 31, 2003 were $5,925,265
and $3,042,186, respectively, an increase of approximately 95%.  These general
and administrative expenses increased due to an increase in costs and employees
relating to our growth in IAP advertisers, our Quality Assurance and Outbound
marketing initiatives, as well as an increase in certain officers' compensation
relating to employment contracts with such officers.

     As a percentage of net revenue, general and administrative expenses were
approximately 19% for the three months ended March 31, 2004 compared to 24% for
the same period in 2003.  As a percentage of net revenue, general and
administrative expenses were approximately 20%


                                       24
<PAGE>
for the six months ended March 31, 2004 compared to 24% for the same period in
2003.  The reduction in general and administrative expenses as a percentage of
net revenue is the result of the leveraging of our fixed cost infrastructure
over a larger IAP advertiser base.

     Sales and marketing expenses for the three-month periods ended March 31,
2004 and March 31, 2003 were $1,428,210 and $862,939, respectively, an increase
of approximately 66%.  Sales and marketing expenses for the six-month periods
ended March 31, 2004 and March 31, 2003 were $2,718,390 and $1,495,374,
respectively, an increase of approximately 82%.  The primary reason for the
increase in sales and marketing is due to the re-institution of our marketing
solicitation program and the implementation of new market strategies and
modification of direct mail marketing pieces.  Such marketing has resulted in
the increase in IAP advertisers cited previously.  We expect these sales and
marketing costs to continue to increase as our marketing efforts increase and as
we continue to roll out our branding campaign.  We capitalize certain direct
marketing expenses and amortize those costs over an 18-month period based on the
analyzed IAP advertiser attrition rates.

     As a percentage of net revenues, sales and marketing expenses were
approximately 9% and 13% for the three-month periods ended March 31, 2004 and
2003, respectively.  As a percentage of net revenues, sales and marketing
expenses were approximately 9% and 12% for the six-month periods ended March 31,
2004 and 2003, respectively.

     Depreciation and amortization primarily relates to the amortization of our
intellectual property and depreciation of equipment.  Amortization relating to
the capitalization of our direct mail marketing costs is included in cost of
sales, as discussed previously.

     Our depreciation and amortization expense was $199,719 in the three months
ended March 31, 2004 compared to $159,306 for the three months ended March 31,
2003.  Our depreciation and amortization expense was $395,912 in the six months
ended March 31, 2004 compared to $298,238 for the six months ended March 31,
2003.  Depreciation and amortization increased slightly in the current periods
compared to the comparable periods in 2003 due to additional purchases of
equipment relating to our upgrade in infrastructure in the information
technology department, hardware purchased relating to our Quality Assurance and
Outbound Marketing initiatives, and a result of our agreement to license the
"YP.Com" Uniform Resource Locator ("URL") from OnRamp Access, Inc.

     Regarding our other intellectual property, the cost of our
"Yellow-Page.net" URL license was capitalized at $5,000,000.  This URL is
amortized on an accelerated basis over the twenty-year term of the agreement.
Amortization expense on this URL was $82,000 and $93,032 for the three-month
periods ended March 31, 2004 and March 31, 2003, respectively.  Amortization
expense on this URL was $164,000 and $186,440 for the six-month periods ended
March 31, 2004 and March 31, 2003, respectively.  Annual amortization expense in
future years related to the "Yellow-Page.net" URL is anticipated to be
approximately $250,000 to $350,000.  As a result of the significant equipment
purchases relating to the previously-mentioned infrastructure additions,
depreciation expense is expected to be greater in the third and fourth quarters
of fiscal 2004 compared to the prior-year periods.  However, we do not
anticipate capital expenditures to grow at the same rate in future fiscal
periods compared to the prior fiscal year.


                                       25
<PAGE>
     Operating income for the three-month period ended March 31, 2004 was
$5,013,865 compared to $2,311,725 in the prior-year period, an increase of
approximately 117% of net revenue.  Operating margins decreased to approximately
31% of net revenue from approximately 34% in the prior-year period.  Operating
income for the six-month period ended March 31, 2004 was $9,721,314 compared to
$4,083,585 in the prior-year period, an increase of approximately 138%.
Operating margins were approximately 32% of net revenue in both the current- and
prior-year period.  The increase in operating income is the result of the
increased revenue discussed above.  Operating margins remained steady in the
comparative periods due to the leveraging of certain fixed expenses over a
larger IAP advertiser base, offset by the short-term increase in dilution.

     Interest income, net of interest expense, for the three-month periods ended
March 31, 2004 was $78,545.  This compares to interest income, net of interest
expense, of $12,069 for the three months ended March 31, 2003.  Interest income,
net of interest expense, for the six-month periods ended March 31, 2004 was
$149,698.  This compares to interest income, net of interest expense, of $12,789
for the six months ended March 31, 2003.  The increase in interest income, net
of interest expense, primarily results from our increased average cash position
resulting, in turn, from our increased profitability, as well as increased
interest income resulting from the increase in advances to affiliates.

     We recorded other income of $71,395 and $180,980, for the three-month
periods ended March 31, 2004 and March 31, 2003, respectively.  We recorded
other income of $346,153 and $229,886, for the six-month periods ended March 31,
2004 and March 31, 2003, respectively.  The primary components of other income
in the three- and six-month periods ended March 31, 2004 is revenue of $65,549
and $287,326, respectively, received from Simple.Net, a related party, for IAP
advertiser and technical services provided by the Company to Simple.Net.  The
primary component of other income in the three- and six-month periods ended
March 31, 2003 was $276,155 and $0, respectively, received from Simple.Net,
offset by a $90,000 legal settlement in the three-month period ended March 31,
2003.  Our agreement with Simple.Net was terminated as of January 2004, with an
extension of payment and services through March 2004.

     Net income before taxes for the three-month periods ended March 31, 2004
and March 31, 2003 was $5,163,805 and $2,504,774, respectively, an increase of
approximately 106%.  Pre-tax margins decreased to approximately 32% of net
revenue in the current period compared to approximately 37% of net revenue in
the prior-year period.  The increase in pre-tax income is a result of those
factors that resulted in the increase in operating income, offset by the
decrease in total other income discussed above.  Net income before taxes for the
six-month periods ended March 31, 2004 and March 31, 2003 were $10,217,165 and
$4,326,260, respectively, an increase of approximately 136%.  Pre-tax margins
were approximately 34% of net revenue in both the current- and prior-year
period.  The increase in pre-tax income is a result of those factors that
resulted in the increase in operating income in addition to the increased
interest income and other income discussed above.

     The income tax provision was $1,815,206 in the three months ended March 31,
2004 compared to $999,853 in the prior-year period.  The income tax provision
was $3,583,881 in the six months ended March 31, 2004 compared to $1,728,447 in
the prior-year period.  The increase


                                       26
<PAGE>
in the income tax provision is the result of our increased profitability in
current-year periods compared to the previous year periods, as well as the fact
that we were able to utilize our net operating loss carryforwards for the
prior-year periods that were unavailable in the three- and six-month periods
ended March 31, 2004.

     Net income for the three-month periods ended March 31, 2004 and March 31,
2003 was $3,348,599, or $0.07 per diluted share, and $1,504,921, or $0.03 per
diluted share, respectively, an increase in net income of approximately 123%.
Net income as a percentage of net revenues for the three months ended March 31,
2004 was approximately 20%, compared to approximately 22% for the same
prior-year period.  Net income for the six-month periods ended March 31, 2004
and March 31, 2003 was $6,633,284, or $0.14 per diluted share, and $2,597,813,
or $0.06 per diluted share, respectively, an increase in net income of over
155%.  Net income as a percentage of net revenues for the six months ended March
31, 2004 was approximately 22% compared to approximately 21% for the same
prior-year period.

Liquidity And Capital Resources

     Net cash provided by operating activities for the six-month period ended
March 31, 2004, was $2,973,145 compared to $1,255,263 for the six-month period
ended March 31, 2003.  The increase in cash generated from operations is
primarily due to a significant increase in net income resulting from an increase
in IAP advertisers, as well as an increase in income tax payable, offset by an
increase in the accounts receivable balance from such growth and funds expended
for mailings related to our direct marketing efforts.

     Cash used in investing activities was $3,109,991 for the six-month period
ended March 31, 2004.  The primary component of cash used in investing
activities was advances to affiliates of $2,725,000.  All advances to affiliates
have ceased as of April 9, 2004.  In the six-month period ended March 31, 2003,
cash used in investing activities was $876,309, which consisted primarily of
purchases of equipment of $469,548 and lower advances to affiliates of $400,000.

     There was no cash used or provided by financing activities for the
six-month period ended March 31, 2004, compared to cash used in financing
activities of $307,000 for the six-month period ended March 31, 2003.  The cash
used in financing activities represents total payments of $454,000 to reduce the
principal balances of our outstanding debt, offset by financing of $147,000
under our trade acceptance draft program with AcTrade Financial Technologies,
Ltd. ("AcTrade").

     We had working capital of $10,067,279 as of March 31, 2004, compared to
$4,035,589 as of March 31, 2003.  The increase is due primarily to increases in
cash of $1,402,940, accounts receivable of $7,567,420 offset by increases in
accrued liabilities of $1,916,048 and income taxes payable of $2,095,909.

     In the past, we borrowed under two credit facilities.  These credit
facilities are maintained primarily for safety and security back-up purposes as
our cash flow generally is more than sufficient to maintain and grow our
business.  In April, 2004, we established a $1,000,000 credit facility with
Merrill Lynch Business Financial Services, Inc.  This facility is for one year
and is renewable.  The applicable interest rate on borrowings, if any, will be a
variable rate of 3%, plus


                                       27
<PAGE>
one-month LIBOR (as published in the Wall Street Journal).  The facility
required an annual line fee of $10,000, payable whether or not we have drawn any
funds on the line.  We intend to terminate our existing credit facilities with
Bank of the Southwest and AcTrade Financial Technologies, Ltd.

     We still owe $115,866 to Mathew & Markson Ltd. on a note related to the
original acquisition of the "Yellow Page.net" URL.

     As previously described, collections on accounts receivable are received
primarily through the billing service aggregators under contract to administer
this billing and collection process.  The billing service aggregators generally
do not remit funds until they are collected.  The billing companies maintain
holdbacks for refunds and other uncertainties.  Generally, cash is collected and
remitted to us over a 60 to 120 day period subsequent to the billing dates.
Under our current agreement with our primary billing service provider,
PaymentOne, cash is remitted to us on a sixty day timetable.

     As of April 9, 2004, we terminated certain loan obligations that we owed to
Morris & Miller, Ltd. and Mathew and Markson, Ltd., our two largest
shareholders.  Under this termination agreement, we were to make final
advancements to these shareholders of approximately $1,300,000.  The aggregate
of all advances made by the Company to these shareholders is to be repaid to the
Company at the end of three years, along with accrued interest.  Subsequently,
the shareholders have agreed to forego the final advancement of $250,000 under
this termination agreement.  Additionally, on April 29, 2004, we received their
first negotiated accelerated payment on these outstanding loans in the amount of
$500,000.

     In connection with our termination of those loan obligations, we have begun
paying a $0.01 per share dividend each quarter, subject to available cash and
compliance with applicable laws.  The first dividend was paid on April 30, 2004
to holders of record on March 20, 2004.

Certain Risk Factors Affecting Our Business

     Our business is subject to numerous risks, including those discussed below.
If  any  of  the events described in these risks occurs, our business, financial
condition  and  results  of  operations  could  be  seriously  harmed.

                          Risks Related to Our Business

WE HAVE A RELATIVELY LIMITED OPERATING HISTORY UPON WHICH INVESTORS CAN EVALUATE
THE LIKELIHOOD OF OUR SUCCESS.

     We have been engaged in the Internet-based Yellow Pages industry through
our subsidiary, Telco Billing, since 1997.  As a result, an investor in our
securities must consider the uncertainties, expenses, and difficulties
frequently encountered by companies such as ours that are in the early stages of
development.  Investors should consider the likelihood of our future success to
be highly speculative in light of our relatively limited operating history, as
well as the challenges, limited resources, expenses, risks, and complications
frequently encountered by similarly situated companies in the early stages of
development, particularly companies in new


                                       28
<PAGE>
and rapidly evolving markets such as Internet Yellow Pages.  To address these
risks and to sustain profitability, we must, among other things:

     -    maintain and increase our base of advertisers;

     -    increase the number of users who visit our web sites for online
          directory services;

     -    implement and successfully execute our business and marketing
          strategy;

     -    continue to develop and upgrade our technology;

     -    continually update and improve our service offerings and features;

     -    provide superior IAP advertiser service;

     -    respond to industry and competitive developments;

     -    successfully manage our growth while controlling expenses; and

     -    attract, retain, and motivate qualified personnel.

We may not be successful in addressing these risks.  If we are unable to do so,
our business, prospects, financial condition, and results of operations would be
materially and adversely affected.

OUR SUCCESS DEPENDS UPON OUR ABILITY TO ESTABLISH AND MAINTAIN RELATIONSHIPS
WITH OUR ADVERTISERS.

     Our ability to generate revenue depends upon our ability to maintain
relationships with our existing advertisers, to attract new advertisers to sign
up for revenue-generating services, and to generate traffic to our advertisers'
websites.  We primarily use direct marketing efforts to attract new advertisers.
These direct marketing efforts may not produce satisfactory results in the
future.  We attempt to maintain relationships with our advertisers through IAP
advertiser service and delivery of traffic to their businesses.  An inability to
either attract additional advertisers to use our service or to maintain
relationships with our advertisers could have a material adverse effect on our
business, prospects, financial condition, and results of operations.

IF WE DO NOT INTRODUCE NEW OR ENHANCED OFFERINGS TO OUR ADVERTISERS AND USERS,
WE MAY BE UNABLE TO ATTRACT AND RETAIN THOSE ADVERTISERS AND USERS, WHICH WOULD
SIGNIFICANTLY IMPEDE OUR ABILITY TO GENERATE REVENUE.

     We will need to introduce new or enhanced products and services in order to
attract and retain advertisers and users and remain competitive.  Our industry
has been characterized by rapid technological change, changes in advertiser and
user requirements and preferences, and frequent new product and service
introductions embodying new technologies.  These changes could render our
technology, systems, and website obsolete.  We may experience difficulties that
could delay or prevent us from introducing new products and services.  If we do
not periodically enhance our existing products and services, develop new
technologies that address our advertisers' and users' needs and preferences, or
respond to emerging technological advances and industry standards and practices
on a timely and cost-effective basis, our products and services may not be
attractive to advertisers and users, which would significantly impede our


                                       29
<PAGE>
revenue growth. In addition, our reputation and our brand could be damaged if
any new product or service introduction is not favorably received.

OUR REVENUE MAY DECLINE OVER TIME.

     We have experienced a decrease in revenue from the Local Exchange Carriers
(LEC) from the effects of the Competitive Local Exchange Carriers (CLEC) that
are participating in providing local telephone services to IAP advertisers.  We
have begun to address this problem and we are implementing data filters to
reduce the effects of the CLECs.  We have also sought other billing methods to
reduce the adverse effects of the CLEC billings.  These other billing methods
may be cheaper or more expensive than our current LEC billing and we have not
yet determined if they will be less or more effective.  We cannot provide any
assurances that our efforts will be successful and may experience future
decreases in revenue.

OUR QUARTERLY RESULTS OF OPERATIONS COULD FLUCTUATE DUE TO FACTORS OUTSIDE OF
OUR CONTROL, WHICH MAY CAUSE CORRESPONDING FLUCTUATIONS IN THE PRICE OF OUR
SECURITIES.

     Our net sales may grow at a slower rate on a quarter-to-quarter basis than
we have experienced in recent periods.  Factors that could cause our results of
operations to fluctuate in the future include the following:

     -    fluctuating demand for our services, which may depend on a number of
          factors including:

          o    changes in economic conditions and our IAP advertisers'
               profitability,

          o    varying IAP advertiser response rates to our direct marketing
               efforts,

          o    our ability to complete direct mailing solicitations on a timely
               basis each month,

          o    changes in our direct marketing efforts,

          o    IAP advertiser refunds or cancellations, and

          o    our ability to continue to bill IAP advertisers on their monthly
               telephone bills, ACH or credit card rather than through direct
               invoicing;

     -    timing of new service or product introductions and market acceptance
          of new or enhanced versions of our services or products;

     -    our ability to develop and implement new services and technologies in
          a timely fashion to meet market demand;

     -    price competition or pricing changes by us or our competitors;

     -    new product offerings or other actions by our competitors;

     -    month-to-month variations in the billing and receipt of amounts from
          Local Exchange Carriers (LEC), such that billing and revenues may fall
          into the subsequent fiscal quarter;

     -    the ability of our check processing service providers to continue to
          process and provide billing information regarding our solicitation
          checks;


                                       30
<PAGE>
     -    the amount and timing of expenditures for expansion of our operations,
          including the hiring of new employees, capital expenditures, and
          related costs;

     -    technical difficulties or failures affecting our systems or the
          Internet in general;

     -    a decline in Internet traffic at our website;

     -    the cost of acquiring, and the availability of, information for our
          database of potential advertisers; and

     -    the fact that our expenses are only partially based on our
          expectations regarding future revenue and are largely fixed in nature,
          particularly in the short term.

     The fluctuation of our quarterly operating results, as well as other
factors, could cause the market price of our securities to fluctuate
significantly in the future. Some of these factors include:

     -    the announcement of new IAP advertisers or strategic alliances or the
          loss of significant IAP advertisers or strategic alliances;

     -    announcements by our competitors;

     -    sales or purchases of our securities by officers, directors and
          insiders;

     -    government regulation;

     -    announcements regarding restructuring, borrowing arrangements,
          technological innovations, departures of key officers, directors or
          employees, or the introduction of new products;

     -    political or economic events and governmental actions affecting
          Internet operations or businesses; and

     -    general market conditions and other factors, including factors
          unrelated to our operating performance or that of our competitors.

     Investors in our securities should be willing to incur the risk of such
price fluctuations.

OUR ABILITY TO EFFICIENTLY PROCESS NEW ADVERTISER SIGN-UPS AND TO BILL OUR
ADVERTISERS MONTHLY DEPENDS UPON OUR CHECK PROCESSING SERVICE PROVIDERS AND
BILLING AGGREGATORS, RESPECTIVELY.

     We currently use three check processing companies to provide us with
advertiser information at the point of sign-up for our Internet Advertising
Package.  One of these processors has indicated that it will be outsourcing this
function in the future.  Therefore, we have refrained from sending new business
to this check processor.  Our ability to gather information to bill our
advertisers at the point of sign-up could be adversely affected if one or more
of these providers experiences a disruption in its operations or ceases to do
business with us.

     We also depend upon our billing aggregators to efficiently bill and collect
monies from the Local Exchange Carriers (LEC) relating to the LEC's billing and
collection of our monthly charges from advertisers.  We currently have
agreements with two billing aggregators.  Any


                                       31
<PAGE>
disruption in our billing aggregators' ability to perform these functions could
adversely affect our financial condition and results of operations.

THE LOSS OF OUR ABILITY TO BILL IAP ADVERTISERS THROUGH LOCAL EXCHANGE CARRIERS
ON THE IAP ADVERTISERS' TELEPHONE BILLS WOULD ADVERSELY IMPACT OUR RESULTS OF
OPERATIONS.

     Our business model depends heavily upon our ability to bill advertisers on
their telephone bills through their respective Local Exchange Carriers (LEC).
The existence of the LECs is the result of Federal legislation.  In the same
manner, Congress could pass future legislation that obviates the existence of or
the need for the LECs.  Additionally, regulatory agencies could limit or prevent
our ability to use the LECs to bill our advertisers.  Finally, the introduction
of and advancement of new technologies, such as WiFi technology or other
wireless-related technologies, could render unnecessary the existence of fixed
telecommunication lines, which, accordingly, would again obviate the need for
and access to the LECs.  Our inability to use the LECs to bill our advertisers
through their monthly telephone bills would have a material adverse impact on
our results of operations.

WE DEPEND UPON THIRD PARTIES TO PROVIDE CERTAIN SERVICES AND SOFTWARE, AND OUR
BUSINESS MAY SUFFER IF THE RELATIONSHIPS UPON WHICH WE DEPEND FAIL TO PRODUCE
THE EXPECTED BENEFITS OR ARE TERMINATED.

     We currently outsource to third parties certain of the services that we
provide, including the work of producing usable templates for and hosting of the
QuickSites, website templates known as Ezsites, and wholesale Internet access.
These relationships may not provide us benefits that outweigh the costs of the
relationships.  If any strategic supplier demands a greater portion of revenue
derived from the services it provides or increases charges for its services, we
may decide to terminate or refuse to renew that relationship, even if it
previously had been profitable or otherwise beneficial.  If we lose a
significant strategic supplier, we may be unable to replace that relationship
with other strategic relationships with comparable revenue potential.  The loss
or termination of any strategic relationship with one of these third-party
suppliers could significantly impair our ability to provide services to our
advertisers and users.

     We depend upon third-party software to operate certain of our services.
The failure of this software to perform as expected would have a material
adverse effect on our business.  Additionally, although we believe that several
alternative sources for this software are available, any failure to obtain and
maintain the rights to use such software would have a material adverse effect on
our business, prospects, financial condition and results of operations.  We also
depend upon third parties to provide services that allow us to connect to the
Internet with sufficient capacity and bandwidth so that our business can
function properly and our websites can handle current and anticipated traffic.
Any restrictions or interruption in our connection to the Internet would have a
material adverse effect on our business, prospects, financial condition, and
results of operations.


                                       32
<PAGE>
THE MARKET FOR OUR SERVICES IS UNCERTAIN AND IS STILL EVOLVING.

     Internet Yellow Pages services are evolving rapidly and are characterized
by an increasing number of market entrants. Our future revenues and profits will
depend substantially upon the widespread acceptance and the use of the Internet
and other online services as an effective medium of commerce by merchants and
consumers.  Rapid growth in the use of and interest in the Internet may not
continue on a lasting basis, which may negatively impact Internet-based
businesses such as ours. In addition, advertisers and users may not adopt or
continue to use Internet-base Yellow Pages services and other online services
that we may offer in the future.  The demand and market acceptance for recently
introduced services generally is subject to a high level of uncertainty.

     Most potential advertisers have only limited, if any, experience
advertising on the Internet and have not devoted a significant portion of their
advertising expenditures to Internet advertising.  Advertisers may find Internet
Yellow Pages advertising to be less effective for meeting their business needs
than traditional methods of Yellow Pages or other advertising and marketing.
Our business, prospects, financial condition or results of operations will be
materially and adversely affected if potential advertisers do not adopt Internet
Yellow Pages as an important component of their advertising expenditures.

WE MAY NOT BE ABLE TO SECURE ADDITIONAL CAPITAL TO EXPAND OUR OPERATIONS.

     Although we currently have no material long-term needs for capital
expenditures, we will likely be required to make increased capital expenditures
to fund our anticipated growth of operations, infrastructure, and personnel.  We
currently anticipate that our cash on hand as of May 1, 2004, together with cash
flows from operations, will be sufficient to meet our anticipated liquidity
needs for working capital and capital expenditures over the next 12 months.  In
the future, however, we may seek additional capital through the issuance of debt
or equity depending upon our results of operations, market conditions or
unforeseen needs or opportunities.  Our future liquidity and capital
requirements will depend on numerous factors, including the following:

     -    the pace of expansion of our operations;

     -    our need to respond to competitive pressures; and

     -    future acquisitions of complementary products, technologies or
          businesses.

     Our forecast of the period of time through which our financial resources
will be adequate to support our operations is a forward-looking statement that
involves risks and uncertainties and actual results could vary materially as a
result of the factors described above.  As we require additional capital
resources, we may seek to sell additional equity or debt securities or draw on
our existing bank line of credit.  Debt financing must be repaid at maturity,
regardless of whether or not we have sufficient cash resources available at that
time to repay the debt.  The sale of additional equity or convertible debt
securities could result in additional dilution to existing stockholders. We
cannot provide assurance that any financing arrangements will be available in
amounts or on terms acceptable to us, if at all.


                                       33
<PAGE>
WE MUST MANAGE OUR GROWTH AND MAINTAIN PROCEDURES AND CONTROLS ON OUR BUSINESS.

     We have rapidly and significantly expanded our operations and we anticipate
further significant expansion to accommodate the expected growth in our IAP
advertiser base and market opportunities.  We have increased the number of our
personnel from the inception of our operations to the present.  This expansion
has placed, and is expected to continue to place, a significant strain on our
management and operational resources.  As a result, we may not be able to
effectively manage our resources, coordinate our efforts, supervise our
personnel or otherwise successfully manage our resources.  We have recently
added a number of key managerial, technical, and operations personnel and we
expect to add additional key personnel in the future.  We also plan to continue
to increase our personnel base.  These additional personnel may further strain
our management resources.

     The rapid growth of our business could in the future strain our ability to
meet IAP advertiser demands and manage our IAP advertiser relationships.  This
could result in the loss of IAP advertisers and harm our business reputation.

     In order to manage the expected growth of our operations and personnel, we
must continue maintaining and improving or replacing existing operational,
accounting, and information systems, procedures, and controls.  Further, we must
manage effectively our relationships with our IAP advertisers, as well as other
third parties necessary to our business.  Our business could be adversely
affected if we are unable to manage growth effectively.

WE DEPEND UPON OUR EXECUTIVE OFFICERS AND KEY PERSONNEL.

     Our performance depends substantially on the performance of our executive
officers and other key personnel.  The success of our business in the future
will depend on our ability to attract, train, retain and motivate high quality
personnel, especially highly qualified technical and managerial personnel.  The
loss of services of any executive officers or key personnel could have a
material adverse effect on our business, results of operations or financial
condition.  We do not maintain key person life insurance on the lives of any of
our executive officers or key personnel.

     Competition for talented personnel is intense, and there is no assurance
that we will be able to continue to attract, train, retain or motivate other
highly qualified technical and managerial personnel in the future.  In addition,
market conditions may require us to pay higher compensation to qualified
management and technical personnel than we currently anticipate.  Any inability
to attract and retain qualified management and technical personnel in the future
could have a material adverse effect on our business, prospects, financial
condition, and results of operations.

OUR BUSINESS IS SUBJECT TO A STRICT REGULATORY ENVIRONMENT.

     Existing laws and regulations and any future regulation may have a material
adverse effect on our business.  For example, we believe that our direct
marketing programs meet or exceed existing requirements of the United States
Federal Trade Commission (FTC).  Any


                                       34
<PAGE>
changes to FTC requirements or changes in our direct or other marketing
practices, however, could result in our marketing practices failing to comply
with FTC regulations.  As a result, we could be subject to substantial liability
in the future, including fines and criminal penalties, preclusion from offering
certain products or services, and the prevention or limitation of certain
marketing practices.

WE FACE INTENSE COMPETITION, INCLUDING FROM COMPANIES WITH GREATER RESOURCES,
WHICH COULD ADVERSELY AFFECT OUR GROWTH AND COULD LEAD TO DECREASED REVENUES.

     Several companies, including Verizon, Yahoo and Microsoft, currently market
Internet Yellow Pages services that directly compete with our services and
products.  We may not compete effectively with existing and potential
competitors for several reasons, including the following:

     -    some competitors have longer operating histories and greater financial
          and other resources than we have and are in better financial condition
          than we are;

     -    some competitors have better name recognition, as well as larger, more
          established, and more extensive marketing, IAP advertiser service, and
          IAP advertiser support capabilities than we have;

     -    some competitors may supply a broader range of services, enabling them
          to serve more or all of their IAP advertisers' needs. This could limit
          our sales and strengthen our competitors' existing relationships with
          their IAP advertisers, including our current and potential IAP
          advertisers;

     -    some competitors may be able to better adapt to changing market
          conditions and IAP advertiser demand; and

     -    barriers to entry are not significant. As a result, other companies
          that are not currently involved in the Internet-based Yellow Pages
          advertising business may enter the market or develop technology that
          reduces the need for our services.

     Increased competitive pressure could lead to reduced market share, as well
as lower prices and reduced margins for our services.  If we experience
reductions in our revenue for any reason, our margins may continue to decline,
which would adversely affect our results of operations.  We cannot assure you
that we will be able to compete successfully in the future.

WE MAY FACE RISKS AS WE EXPAND OUR BUSINESS INTO INTERNATIONAL MARKETS.

     We currently are exploring opportunities to offer our services in other
English-speaking countries.  We have limited experience in developing and
marketing our services internationally, and we may not be able to successfully
execute our business model in markets outside the United States. We will face a
number of risks inherent in doing business in international markets, including
the following:


                                       35
<PAGE>
     -    international markets typically experience lower levels of Internet
          usage and Internet advertising than the United States, which could
          result in lower-than-expected demand for our services;

     -    unexpected changes in regulatory requirements;

     -    potentially adverse tax consequences;

     -    difficulties in staffing and managing foreign operations;

     -    changing economic conditions;

     -    exposures to different legal standards, particularly with respect to
          intellectual property and distribution of information over the
          Internet;

     -    burdens of complying with a variety of foreign laws; and

     -    fluctuations in currency exchange rates.

     To the extent that international operations represent a significant portion
of our business in the future, our business could suffer if any of these risks
occur.

WE MAY BE UNABLE TO PROMOTE AND MAINTAIN OUR BRANDS.

     We believe that establishing and maintaining the brand identities of our
Internet Yellow Pages services is a critical aspect of attracting and expanding
a base of advertisers and users.  Promotion and enhancement of our brands will
depend largely on our success in continuing to provide high quality service.  If
advertisers and users do not perceive our existing services to be of high
quality, or if we introduce new services or enter into new business ventures
that are not favorably received by advertisers and users, we will risk diluting
our brand identities and decreasing their attractiveness to existing and
potential IAP advertisers.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS.

     Our success depends both on our internally developed technology and our
third party technology. We rely on a variety of trademarks, service marks, and
designs to promote our brand names and identity.  We also rely on a combination
of contractual provisions, confidentiality procedures, and trademark, copyright,
trade secrecy, unfair competition, and other intellectual property laws to
protect the proprietary aspects of our products and services.  Legal standards
relating to the validity, enforceability, and scope of the protection of certain
intellectual property rights in Internet-related industries are uncertain and
still evolving. The steps we take to protect our intellectual property rights
may not be adequate to protect our intellectual property and may not prevent our
competitors from gaining access to our intellectual property and proprietary
information.  In addition, we cannot provide assurance that courts will always
uphold our intellectual property rights or enforce the contractual arrangements
that we have entered into to protect our proprietary technology.

     Third parties may infringe or misappropriate our copyrights, trademarks,
service marks, trade dress, and other proprietary rights.  Any such infringement
or misappropriation could have a material adverse effect on our business,
prospects, financial condition, and results of operations.  In addition, the
relationship between regulations governing domain names and laws


                                       36
<PAGE>
protecting trademarks and similar proprietary rights is unclear.  We may be
unable to prevent third parties from acquiring domain names that are similar to,
infringe upon or otherwise decrease the value of our trademarks and other
proprietary rights, which may result in the dilution of the brand identity of
our services.

     We may decide to initiate litigation in order to enforce our intellectual
property rights, to protect our trade secrets, or to determine the validity and
scope of our proprietary rights.  Any such litigation could result in
substantial expense, may reduce our profits, and may not adequately protect our
intellectual property rights.  In addition, we may be exposed to future
litigation by third parties based on claims that our products or services
infringe their intellectual property rights.  Any such claim or litigation
against us, whether or not successful, could result in substantial costs and
harm our reputation.  In addition, such claims or litigation could force us to
do one or more of the following:

     -    cease selling or using any of our products that incorporate the
          challenged intellectual property, which would adversely affect our
          revenue;

     -    obtain a license from the holder of the intellectual property right
          alleged to have been infringed, which license may not be available on
          reasonable terms, if at all; and

     -    redesign or, in the case of trademark claims, rename our products or
          services to avoid infringing the intellectual property rights of third
          parties, which may not be possible and in any event could be costly
          and time-consuming.

     Even if we were to prevail, such claims or litigation could be
time-consuming and expensive to prosecute or defend, and could result in the
diversion of our management's time and attention.  These expenses and diversion
of managerial resources could have a material adverse effect on our business,
prospects, financial condition, and results of operations.

CURRENT CAPACITY CONSTRAINTS MAY REQUIRE US TO EXPAND OUR INFRASTRUCTURE AND IAP
ADVERTISER SUPPORT CAPABILITIES.

     Our ability to provide high-quality Internet Yellow Pages services largely
depends upon the efficient and uninterrupted operation of our computer and
communications systems.  We may be required to expand our technology,
infrastructure, and IAP advertiser support capabilities in order to accommodate
any significant increases in the numbers of advertisers and users of our web
sites.  We may not be able to project accurately the rate or timing of
increases, if any, in the use of our services or expand and upgrade our systems
and infrastructure to accommodate these increases in a timely manner.  If we do
not expand and upgrade our infrastructure in a timely manner, we could
experience temporary capacity constraints that may cause unanticipated system
disruptions, slower response times, and lower levels of IAP advertiser service.
Our inability to upgrade and expand our infrastructure and IAP advertiser
support capabilities as required could impair the reputation of our brand and
our services, reduce the volume of users able to access our website, and
diminish the attractiveness of our service offerings to our advertisers.

     Any expansion of our infrastructure may require us to make significant
upfront expenditures for servers, routers, computer equipment, and additional
Internet and intranet


                                       37
<PAGE>
equipment, as well as to increase bandwidth for Internet connectivity.  Any such
expansion or enhancement will need to be completed and integrated without system
disruptions.  An inability to expand our infrastructure or IAP advertiser
service capabilities either internally or through third parties, if and when
necessary, would materially adversely affect our business, prospects, financial
condition, and results of operations.

                          Risks Related to the Internet

WE MAY NOT BE ABLE TO ADAPT AS THE INTERNET, INTERNET YELLOW PAGES SERVICES, AND
IAP ADVERTISER DEMANDS CONTINUE TO EVOLVE.

     Our failure to respond in a timely manner to changing market conditions or
client requirements could have a material adverse effect on our business,
prospects, financial condition, and results of operations. The Internet,
e-commerce, and the Internet Yellow Pages industry are characterized by:

     -    rapid technological change;

     -    changes in advertiser and user requirements and preferences;

     -    frequent new product and service introductions embodying new
          technologies; and

     -    the emergence of new industry standards and practices that could
          render our existing service offerings, technology, and hardware and
          software infrastructure obsolete.

     In order to compete successfully in the future, we must

     -    enhance our existing services and develop new services and technology
          that address the increasingly sophisticated and varied needs of our
          prospective or current IAP advertisers;

     -    license, develop or acquire technologies useful in our business on a
          timely basis; and

     -    respond to technological advances and emerging industry standards and
          practices on a cost-effective and timely basis.

OUR FUTURE SUCCESS WILL DEPEND ON CONTINUED GROWTH IN THE USE OF THE INTERNET.

     Because Internet Yellow Pages is a new and rapidly evolving industry, the
ultimate demand and market acceptance for our services will be subject to a high
level of uncertainty.  Significant issues concerning the commercial use of the
Internet and online service technologies, including security, reliability, cost,
ease of use, and quality of service, remain unresolved and may inhibit the
growth of Internet business solutions that use these technologies.  In addition,
the Internet or other online services could lose their viability due to delays
in the development or adoption of new standards and protocols required to handle
increased levels of Internet activity, or due to increased governmental
regulation.  Our business, prospects, financial condition, and results of
operations would be materially and adversely affected if the use of Internet
Yellow Pages and other online services does not continue to grow or grows more
slowly than we expect.


                                       38
<PAGE>
WE WILL BE REQUIRED TO KEEP PACE WITH RAPID TECHNOLOGICAL CHANGE IN THE INTERNET
INDUSTRY.

     In order to remain competitive, we will be required continually to enhance
and improve the functionality and features of our existing services, which could
require us to invest significant capital.  If our competitors introduce new
products and services embodying new technologies, or if new industry standards
and practices emerge, our existing services, technologies, and systems may
become obsolete.  We may not have the funds or technical know-how to upgrade our
services, technology, and systems.  If we face material delays in introducing
new services, products, and enhancements, our advertisers and users, may forego
the use of our services and select those of our competitors, in which event our
business, prospects, financial condition and results of operations could be
materially and adversely affected.

REGULATION OF THE INTERNET MAY ADVERSELY AFFECT OUR BUSINESS.

     Due to the increasing popularity and use of the Internet and online
services such as online Yellow Pages, federal, state, local, and foreign
governments may adopt laws and regulations, or amend existing laws and
regulations, with respect to the Internet and other online services.  These laws
and regulations may affect issues such as user privacy, pricing, content,
taxation, copyrights, distribution, and quality of products and services.  The
laws governing the Internet remain largely unsettled, even in areas where
legislation has been enacted.  It may take years to determine whether and how
existing laws, such as those governing intellectual property, privacy, libel,
and taxation, apply to the Internet and Internet advertising and directory
services. In addition, the growth and development of the market for electronic
commerce may prompt calls for more stringent consumer protection laws, both in
the United States and abroad, that may impose additional burdens on companies
conducting business over the Internet.  Any new legislation could hinder the
growth in use of the Internet generally or in our industry and could impose
additional burdens on companies conducting business online, which could, in
turn, decrease the demand for our services, increase our cost of doing business,
or otherwise have a material adverse effect on our business, prospects,
financial condition, and results of operations.

WE MAY NOT BE ABLE TO OBTAIN INTERNET DOMAIN NAMES THAT WE WOULD LIKE TO HAVE.

     We believe that our existing Internet domain names are an extremely
important part of our business.  We may desire, or it may be necessary in the
future, to use these or other domain names in the United States and abroad.
Various Internet regulatory bodies regulate the acquisition and maintenance of
domain names in the United States and other countries.  These regulations are
subject to change. Governing bodies may establish additional top-level domains,
appoint additional domain name registrars or modify the requirements for holding
domain names.  As a result, we may be unable to acquire or maintain relevant
domain names in all countries in which we plan to conduct business in the
future.

     The extent to which laws protecting trademarks and similar proprietary
rights will be extended to protect domain names currently is not clear.  We
therefore may be unable to prevent competitors from acquiring domain names that
are similar to, infringe upon or otherwise decrease the value of our domain
names, trademarks, trade names, and other proprietary rights.  We cannot provide
assurance that potential users and advertisers will not confuse our domain


                                       39
<PAGE>
names, trademarks, and trade names with other similar names and marks.  If that
confusion occurs, we may lose business to a competitor and some advertisers and
users may have negative experiences with other companies that those advertisers
and users erroneously associate with us.  The inability to acquire and maintain
domain names that we desire to use in our business, and the use of confusingly
similar domain names by our competitors, could have a material adverse affect on
our business, prospects, financial conditions, and results of operations in the
future.

OUR BUSINESS COULD BE NEGATIVELY IMPACTED IF THE SECURITY OF THE INTERNET
BECOMES COMPROMISED.

     To the extent that our activities involve the storage and transmission of
proprietary information about our advertisers or users, security breaches could
damage our reputation and expose us to a risk of loss or litigation and possible
liability.  We may be required to expend significant capital and other resources
to protect against security breaches or to minimize problems caused by security
breaches.  Our security measures may not prevent security breaches. Our failure
to prevent these security breaches or a misappropriation of proprietary
information may have a material adverse effect on our business, prospects,
financial condition, and results of operations.

OUR TECHNICAL SYSTEMS COULD BE VULNERABLE TO ONLINE SECURITY RISKS, SERVICE
INTERRUPTIONS OR DAMAGE TO OUR SYSTEMS.

     Our systems and operations may be vulnerable to damage or interruption from
fire, floods, power loss, telecommunications failures, break-ins, sabotage,
computer viruses, penetration of our network by unauthorized computer users and
"hackers," natural disaster, and similar events.  Preventing, alleviating, or
eliminating computer viruses and other service-related or security problems may
require interruptions, delays or cessation of service.  We may need to expend
significant resources protecting against the threat of security breaches or
alleviating potential or actual service interruptions.  The occurrence of such
unanticipated problems or security breaches could cause material interruptions
or delays in our business, loss of data, or misappropriation of proprietary or
IAP advertiser-related information or could render us unable to provide services
to our IAP advertisers for an indeterminate length of time.  The occurrence of
any or all of these events could materially and adversely affect our business,
prospects, financial condition, and results of operations.

IF WE ARE SUED FOR CONTENT DISTRIBUTED THROUGH, OR LINKED TO BY, OUR WEBSITE OR
THOSE OF OUR ADVERTISERS, WE MAY BE REQUIRED TO SPEND SUBSTANTIAL RESOURCES TO
DEFEND OURSELVES AND COULD BE REQUIRED TO PAY MONETARY DAMAGES.

     We aggregate and distribute third-party data and other content over the
Internet.  In addition, third-party websites are accessible through our website
or those of our advertisers. As a result, we could be subject to legal claims
for defamation, negligence, intellectual property infringement, and product or
service liability.  Other claims may be based on errors or false or misleading
information provided on or through our website or websites of our directory
licensees.  Other claims may be based on links to sexually explicit websites and
sexually explicit advertisements.  We may need to expend substantial resources
to investigate and defend these


                                       40
<PAGE>
claims, regardless of whether we successfully defend against them.  While we
carry general business insurance, the amount of coverage we maintain may not be
adequate.  In addition, implementing measures to reduce our exposure to this
liability may require us to spend substantial resources and limit the
attractiveness of our content to users.

                         Risks Related to Our Securities

STOCK PRICES OF TECHNOLOGY COMPANIES HAVE DECLINED PRECIPITOUSLY AT TIMES IN THE
PAST AND THE TRADING PRICE OF OUR COMMON STOCK IS LIKELY TO BE VOLATILE, WHICH
COULD RESULT IN SUBSTANTIAL LOSSES TO INVESTORS.

     The trading price of our common stock has risen significantly over the past
twelve months and could continue to be volatile in response to factors including
the following, many of which are beyond our control:

     -    decreased demand in the Internet services sector;

     -    variations in our operating results;

     -    announcements of technological innovations or new services by us or
          our competitors;

     -    changes in expectations of our future financial performance, including
          financial estimates by securities analysts and investors;

     -    our failure to meet analysts' expectations;

     -    changes in operating and stock price performance of other technology
          companies similar to us;

     -    conditions or trends in the technology industry;

     -    additions or departures of key personnel; and

     -    future sales of our common stock.

     Domestic and international stock markets often experience significant price
and volume fluctuations that are unrelated to the operating performance of
companies with securities trading in those markets.  These fluctuations, as well
as political events, terrorist attacks, threatened or actual war, and general
economic conditions unrelated to our performance, may adversely affect the price
of our common stock.  In the past, securities holders of other companies often
have initiated securities class action litigation against those companies
following periods of volatility in the market price of those companies'
securities.  If the market price of our stock fluctuates and our stockholders
initiate this type of litigation, we could incur substantial costs and
experience a diversion of our management's attention and resources, regardless
of the outcome.  This could materially and adversely affect our business,
prospects, financial condition, and results of operations.


                                       41
<PAGE>
CERTAIN PROVISIONS OF NEVADA LAW AND IN OUR CHARTER MAY PREVENT OR DELAY A
CHANGE OF CONTROL OF OUR COMPANY.

     We are subject to the Nevada anti-takeover laws regulating corporate
takeovers. These anti-takeover laws prevent Nevada corporations from engaging in
a merger, consolidation, sales of its stock or assets, and certain other
transactions with any stockholder, including all affiliates and associates of
the stockholder, who owns 10% or more of the corporation's outstanding voting
stock, for three years following the date that the stockholder acquired 10% or
more of the corporation's voting stock except in certain situations.  In
addition, our amended and restated articles of incorporation and bylaws include
a number of provisions that may deter or impede hostile takeovers or changes of
control or management.  These provisions include the following:

     -    our board is classified into three classes of directors as nearly
          equal in size as possible, with staggered three year-terms;

     -    the authority of our board to issue up to 5,000,000 shares of serial
          preferred stock and to determine the price, rights, preferences, and
          privileges of these shares, without stockholder approval;

     -    all stockholder actions must be effected at a duly called meeting of
          stockholders and not by written consent unless such action or proposal
          is first approved by our board of directors;

     -    special meetings of the stockholders may be called only by the
          Chairman of the Board, the Chief Executive Officer, or the President
          of our company; and

     -    cumulative voting is not allowed in the election of our directors.

     These provisions of Nevada law and our articles and bylaws could prohibit
or delay mergers or other takeover or change of control of our company and may
discourage attempts by other companies to acquire us, even if such a transaction
would be beneficial to our stockholders.

OUR COMMON STOCK MAY BE SUBJECT TO THE "PENNY STOCK" RULES AS PROMULGATED UNDER
THE EXCHANGE ACT.

     In the event that no exclusion from the definition of "penny stock" under
the Exchange Act is available, then any broker engaging in a transaction in our
common stock will be required to provide its IAP advertisers with a risk
disclosure document, disclosure of market quotations, if any, disclosure of the
compensation of the broker-dealer and its sales person in the transaction, and
monthly account statements showing the market values of our securities held in
the IAP advertiser's accounts.  The bid and offer quotation and compensation
information must be provided prior to effecting the transaction and must be
contained on the IAP advertiser's confirmation of sale.  Certain brokers are
less willing to engage in transactions involving "penny stocks" as a result of
the additional disclosure requirements described above, which may make it more
difficult for holders of our common stock to dispose of their shares.


                                       42
<PAGE>
ITEM 3     CONTROLS AND PROCEDURES

     Disclosure controls and procedures are designed with an objective of
ensuring that information required to be disclosed in our periodic reports filed
with the Securities and Exchange Commission, such as this Quarterly Report on
Form 10-QSB, is recorded, processed, summarized and reported within the time
periods specified by the Securities and Exchange Commission.  Disclosure
controls are also designed with an objective of ensuring that such information
is accumulated and communicated to our management, including our chief executive
officer and chief financial officer, in order to allow timely consideration
regarding required disclosures.

     The evaluation of our disclosure controls by our principal executive
officer and principal financial officer included a review of the controls'
objectives and design, the operation of the controls, and the effect of the
controls on the information presented in this Quarterly Report.  Our management,
including our chief executive officer and chief financial officer, does not
expect that disclosure controls can or will prevent or detect all errors and all
fraud, if any.  A control system, no matter how well designed and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met.  Also, projections of any evaluation of the disclosure
controls and procedures to future periods are subject to the risk that the
disclosure controls and procedures may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

     Based on their review and evaluation as of a date within 45 days of the
filing of this Form 10-QSB, and subject to the inherent limitations all as
described above, our principal executive officer and principal financial officer
have concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective
as of the end of the period covered by this report.  They are not aware of any
significant changes in our disclosure controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.


                                       43
<PAGE>
                           PART II - OTHER INFORMATION

Items 1-5 are not applicable and have been omitted.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K UPDATE

(a)  The following exhibits are either attached hereto or incorporated herein by
reference as indicated:

<TABLE>
<CAPTION>
Exhibit
Number   Description
- -------  -----------
<S>      <C>
3.1      Amended and Restated Articles of Incorporation

3.2      Amended and Restated Bylaws

14       Code of Ethics

31       Certification pursuant to SEC Release No. 33-8238, as adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>

(b)  The Registrant filed the following Current Reports on Form 8-K during the
three-month period covered by this Quarterly Report:

     -    On January 8, 2004, the Company filed a Current Report on Form 8-K
          attaching a letter from the Company's Chief Executive Officer to the
          Company's shareholders concerning the status of the Company.

     -    On January 9, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release concerning possible manipulation of its
          stock price.

     -    On January 12, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release concerning a lawsuit filed by the Company
          against Stocklemon.com.

     -    On January 14, 2004, the Company filed a Current Report on Form 8-K
          announcing an increase in its IAP advertiser counts.

     -    On February 9, 2004, the Company filed a Current Report on Form 8-K to
          disclose an Investor Fact Sheet.

     -    On March 3, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing the establishment of a Rule
          10b5-1 purchase plan program.


                                       44
<PAGE>
     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching the presentation by the Company at the Red Chip Investor
          Conference.

     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing the initiation of a $.01 per
          share dividend on its common stock to be paid on April 30, 2004.

     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing the termination of its agreement
          with Simple.Net.

     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing that it would be hosting a
          meeting with research analysts and investors on April 23, 2004.


                                       45
<PAGE>
                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

YP.CORP.

Dated:  May 13, 2004                     /s/  Angelo Tullo
                                         ---------------------------------------
                                         Angelo Tullo, Chairman of the Board and
                                         Chief Executive Officer (Principal
                                         Executive Officer)

Dated:  May 13, 2004                     /s/  David Iannini
                                         --------------------------------------
                                         David Iannini, Chief Financial Officer
                                         (Principal Accounting Officer)


                                       46
<PAGE>
<TABLE>
<CAPTION>
                                  EXHIBIT INDEX

Exhibit
Number   Description
- -------  -----------
<S>      <C>
3.1      Amended and Restated Articles of Incorporation

3.2      Amended and Restated Bylaws

14       Code of Ethics

31       Certification pursuant to SEC Release No. 33-8238, as adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>doc2.txt
<DESCRIPTION>EXHIBIT 3.1
<TEXT>
                                                                     Exhibit 3.1

                              AMENDED AND RESTATED
                            ARTICLES OF INCORPORATION
                                       OF
                                  YP.NET, INC.

YP.NET, INC. (the "Corporation"), a corporation organized and existing under the
Nevada  Revised  Statues  ("NRS")  of  the  State of Nevada does hereby certify:

I.   The  Corporation,  pursuant  to the provisions of NRS 78.403, hereby adopts
     these  Amended  and  Restated  Articles  of  Incorporation  (the  "Restated
     Articles"), which accurately restate and integrate the Restated Articles of
     Incorporation  filed  on  January  11,  1999  and all amendments thereto or
     Certificates  of Designation filed thereafter that are in effect to date as
     permitted  by  NRS  78.385.

II.  Each  amendment  made  by  these  Restated  Articles  has  been effected in
     conformity  with  the provisions of the NRS. The Restated Articles and each
     amendment  thereto  were  duly  approved  and  adopted by unanimous written
     consent of the Corporation's Board of Directors on December 31, 2003. These
     Restated  Articles  and  each  amendment  made  hereunder were approved and
     adopted  by  the holders of at least a majority of the Corporation's issued
     and  outstanding  capital  stock entitled to vote on such amendments at the
     Corporation's  Annual  Meeting  of  Stockholders held on April 2, 2004. The
     number  of  shares  outstanding at the time of such adoption was 55,567,636
     and  the  number  of  shares  entitled  to vote thereon was 49,985,802. The
     number  of  shares  that voted to approve the amendments and these Restated
     Articles  was  35,131,880,  which  was  sufficient  for  approval.

III. The original Articles of Incorporation and all amendments, restatements and
     supplements thereto are hereby superseded by these Restated Articles, which
     are  as  follows:

     1.   Name.  The  name  of  the corporation is YP Corp. (the "Corporation").
          ----

     2.   Capital  Stock.  The Corporation is authorized to issue two classes of
          --------------
stock.  One class of stock shall be Common Stock, par value, $0.001.  The second
class  of stock shall be Preferred Stock, par value $0.001.  This Corporation is
authorized  to  issue 100,000,000 shares of Common Stock and 5,000,000 shares of
Preferred  Stock.

          2.1. Common Stock.  Each  share of Common Stock issued and outstanding
               ------------
shall  be  entitled to one vote on all matters.  Shares of such Common Stock may
be issued for such consideration and for such corporate purposes as the Board of
Directors may from time to time determine.  Fully paid shares of Common Stock of
this  Corporation  shall  not  be  liable  to  any  further  call or assessment.
Dividends may be declared and paid on the Common Stock only out of funds legally
available  therefore.  Upon the sale of substantially all of the stock or assets
of  the  Corporation in a non-public transaction or dissolution, liquidation, or
winding  up  of  the  Corporation,  whether  voluntary or involuntary, after all
liquidation  preferences  payable  to  any  series  of  Preferred Stock entitled
thereto  have  been  satisfied,  the  remaining  net  assets  of  the


<PAGE>
Corporation  shall  be  distributed  to  the  holders  of  Common  Stock and any
similarly  situated  stockholders  who  are  not  entitled  to  any  liquidation
preference (or, if there be an insufficient amount to pay all such stockholders,
then  ratably  among  such  holders).

          2.2. Preferred  Stock.
               ----------------

               (a)  The  Preferred  Stock  not so specifically designated may be
designated  in the future by action of the Board of Directors of the Corporation
and  otherwise  in  accordance  with  the applicable provisions of the NRS.  The
designated  series  of  Preferred  Stock  shall  have such powers, designations,
preferences  and relative, participating or optional or other special rights and
qualifications, limitations or restrictions thereof as shall be expressed in the
resolution  or  resolutions providing for the issue of such stock adopted by the
Corporation's  Board  of  Directors  and  may  be  made  dependent  upon  facts
ascertainable  outside such resolution or resolutions of the Board of Directors,
provided  that  the  manner  in which such facts shall operate upon such powers,
designations,  preferences,  rights  and  qualifications,  limitations  or
restrictions of such class or series of stock is clearly and expressly set forth
in the resolution or resolutions providing for the issuance of such stock by the
Board  of  Directors.

               (b)  The  shares  of  each class or series of the Preferred Stock
may  vary  from  the shares of any other class or series thereof in any respect.
The  Board of Directors may increase the number of shares of the Preferred Stock
designated for any existing class or series by a resolution adding to such class
or  series  authorized and unissued shares of the Preferred Stock not designated
for  any  other class or series.  The Board of Directors may decrease the number
of  shares of the Preferred Stock designated for any existing class of series of
the  Preferred  Stock  and  the  shares  so  subtracted shall become authorized,
unissued  and  undesignated  shares  of  the  Preferred  Stock.

     3.   Designation  and  Amount  of Series E Convertible Preferred Stock.  In
          -----------------------------------------------------------------
accordance  with  the  foregoing  Section  2.2, the Corporation has authorized a
                                  ------------
series  of  Preferred  Stock,  which shall be designated as Series E Convertible
Preferred  Stock  (the  "Series  E Preferred Convertible Stock").  The number of
shares  constituting  the  Series  E Preferred Stock shall be 200,000, par value
$0.001.  The  Series  E  Preferred  Stock  has  the  voting powers, preferences,
relative, participating, limitations, qualifications, optional and other special
rights and the qualifications, limitations and restrictions thereof that are set
forth  below.

          3.1. Dividends.
               ---------

               (a)  The  holders  of  outstanding shares of Series E Convertible
Preferred  Stock  shall be equally entitled to receive preferential dividends in
cash  out  of  any  funds  of  the Corporation legally available at the time for
declaration  of dividends, at the dividend rates applicable to each such series,
as  set  forth herein, before any dividend or other distribution will be paid or
declared  and  set apart for payment on any shares of any Common Stock, or other
class  of  stock presently authorized or to be authorized (the Common Stock, and
such  other stock being hereinafter collectively the "Junior Stock") as follows:
Series  E  Convertible Preferred Stock shall receive dividends at the rate of 5%
per  annum on the liquidation preference per shares, payable each March 31, June
30,  September 30 and December 31, commencing with the first such date following
the  issuance  of  such  stock.  Dividends  shall  accumulate  from  the date of


<PAGE>
issuance,  until the first payment date, at which time all accumulated dividends
and  dividends  from  the  date  of  issuance shall be paid if funds are legally
available  at  such  time.  If  funds  are  not  legally available at such time,
dividends  shall  continue  to  accumulate  until  they can be paid from legally
available  funds.

               (b)  The dividends on the Series E Convertible Preferred Stock at
the rate provided above shall be cumulative whether or not earned so that, if at
any  time  full  cumulative dividends at the rate aforesaid on all shares of the
Series  E  Convertible  Preferred  Stock then outstanding from the date from and
after  which  dividends  thereon  are  cumulative  to  the  end of the quarterly
dividend  period  next  preceding such time shall not have been paid or declared
and  set  apart  for  payment,  or  if the full dividend on all such outstanding
Series  E Convertible Preferred Stock for the then current dividend period shall
not  have  been paid or declared and set apart for payment (but without interest
thereon)  before any sum shall be set apart for or applied by the Corporation or
a subsidiary of the Corporation to the purchase, redemption or other acquisition
of  any shares of any other class of stock ranking on a parity with the Series E
Convertible  Preferred  Stock  ("Parity Stock") and before any dividend or other
distribution  shall  be paid or declared and set apart for payment on any Junior
Stock  and  before  any  sum  shall be set aside for or applied to the purchase,
redemption  or  other  acquisition  of  Junior  Stock.

               (c)  Dividends  on  all  shares  of  the  Series  E  Convertible
Preferred  Stock shall begin to accrue and be cumulative from and after the date
of  issuance  thereof.  A dividend period shall be deemed to commence on the day
following  a  quarterly dividend payment date herein specified and to end on the
next  succeeding  quarterly  dividend  payment  date  herein  specified.

          3.2. Liquidation  Preference.  Upon  the  sale of substantially all of
               -----------------------
the  stock  or  assets  of  the  Corporation  in  a  non-public  transaction  or
dissolution, liquidation, or winding up of the Corporation, whether voluntary or
involuntary,  the  holders  of the Series E Convertible Preferred Stock shall be
entitled  to  receive  out  of  the  assets  of  the  Corporation,  before  any
distribution  or  payment  is  made upon the Common Stock or any other series or
Preferred Stock, an amount in cash equal to $.30 per share, plus any accrued but
unpaid  dividends  (or,  if  there be an insufficient amount to pay all Series E
Convertible  Preferred  Stockholders,  then  ratably  among  such  holders).

          3.3. Voting  Rights.  The  holders  of  shares of Series E Convertible
               --------------
Preferred  Stock  shall  have  no  voting  rights,  except  as  required by law.

          3.4. Conversion  of  Series  E  Convertible  Preferred  Stock.
               ---------------------------------------------------------

               (a)  Holder's  Right  to  Convert.

                    (i)  Conversion.  The  record  Holder  of  the  Series  E
Convertible  Preferred Stock shall be entitled, after two years from the initial
issuance  of  the  Series  E  Convertible  Preferred Stock and from time to time
thereafter,  at  the  office  of  the  Corporation or any transfer agent for the
Series  E  Convertible  Preferred  Stock,  to  convert  all  or  portions of the


<PAGE>
Series E Convertible Preferred Stock held by such Holder, on a one for one basis
into  shares  of  the Common Stock, together with payment by the holder of $.045
per  converted  share.

                    (ii) Mechanics  of  Conversion.

                         (1)  In order to convert Series E Convertible Preferred
Stock  into  full  shares  of  Common  Stock,  the  holder  shall (i) transmit a
facsimile  copy  of the fully executed notice of conversion in the form provided
by  the  Corporation  ("Notice  of Conversion") to the Corporation, which notice
shall specify the number of shares of Series E Convertible Preferred Stock to be
converted,  prior  to  midnight,  New  York  City  time  (the "Conversion Notice
Deadline"), on the date of conversion specified on the Notice of Conversion, and
(ii)  promptly surrender the original certificate or certificates therefor, duly
endorsed,  and  deliver  the  original  Notice of Conversion by either overnight
courier  or  2-day  courier, to the office of the Corporation or of any transfer
agent  for  the  Series  E Convertible Preferred Stock, together with payment by
certified  or  bank check for $.045 per converted share; provided, however, that
the  Corporation  shall  not  be obligated to issue certificates evidencing such
Series  E  Convertible Preferred Stock unless either the certificates evidencing
such  Series  E. Convertible Preferred Stock are delivered to the Corporation or
its  transfer  agent as provided above or the Holder notifies the Corporation or
its  transfer  agent that such certificates have been lost, stolen or destroyed.
Upon  receipt  by the Corporation of evidence of the loss, theft, destruction or
mutilation  of  the  certificate  or  certificates  ("Stock  Certificates")
representing  shares of Series E Convertible Preferred Stock and (in the case of
loss,  theft or destruction) of indemnity or security reasonably satisfactory to
the  Corporation,  and  upon  surrender  and  cancellation  of  the  Stock
Certificate(s),  if  mutilated,  the  Corporation  shall execute and deliver new
Stock  Certificate(s)  of  like  tenor and date.  No fractional shares of Common
Stock  shall  be  issued  upon  conversion of the Series E Convertible Preferred
Stock.  In  lieu  of any fractional share to which the Holder would otherwise be
entitled,  the  Corporation  shall pay cash to such Holder in an amount equal to
such  fraction multiplied by the value of the Common Stock as determined in good
faith  by  the Corporation's Board of Directors.  In the case of a dispute as to
the  calculation of the Conversion Price, the Corporation's calculation shall be
deemed  conclusive  absent  manifest  error.

                         (2)  The  Corporation  shall  issue  and deliver at the
address  of  the  Holder  on  the  books of the Corporation (i) a certificate or
certificates  for  the  number of shares of Common Stock equal to the Conversion
Number for the shares of Series E Convertible Preferred Stock being so converted
and  (ii)  a  certificate  representing  the  balance  of the shares of Series E
Convertible  Preferred  Stock  not  so  converted,  if  any.  The  date on which
conversion  occurs (the "Date of Conversion") shall be deemed to be the date set
forth  in  such  Notice  of  Conversion, provided that the copy of the Notice of
Conversion  is  faxed to the Corporation before midnight, New York City time, on
the Date of Conversion.  The person or persons entitled to receive the shares of
Common  Stock issuable upon such conversion shall be treated for all purposes as
the  record  holder  or  holders  of  such  shares of Common Stock on such date.

               (b)  Adjustment  to  Conversion.

                    (i)  If, prior to the conversion of all Series E Convertible
Preferred  Stock,  there shall be any merger, consolidation, exchange of shares,
recapitalization,


<PAGE>
reorganization  or  other  similar  event, as a result of which shares of Common
Stock of the Corporation shall be changed into the same or a different number of
shares  of  the  same  or another class or classes of stock or securities of the
Corporation  or  another  entity,  then  the  holders  of  Series  E Convertible
Preferred  Stock  shall  thereafter  have the right to purchase and receive upon
conversion  of Series E Convertible Preferred Stock, upon the basis and upon the
terms  and conditions specified herein and in lieu of the shares of Common Stock
immediately  theretofore  issuable  upon conversion, such shares of stock and/or
securities  as  may  be issued or payable with respect to or in exchange for the
number  of  shares  of  Common  Stock  immediately  theretofore  purchasable and
receivable  upon  the conversion of Series E Convertible Preferred Stock held by
such  holders  had  such  merger,  consolidation,  exchange  of  shares,
recapitalization  or  reorganization  not  taken  place,  and  in any such case,
appropriate provisions shall be made with respect to the rights and interests of
the  Holders  of  the  Series  E Convertible Preferred Stock to the end that the
provisions  hereof  (including, without limitation, provisions for adjustment of
the  number  of  shares  issuable  upon  conversion  of the Series E Convertible
Preferred  Stock  otherwise  set  forth in this Section (b)) shall thereafter be
applicable,  as nearly as may be practicable, in relation to any shares of stock
or  securities thereafter deliverable upon the exercise hereof.  The Corporation
shall not effect any transaction described herein unless the resulting successor
or  acquiring  entity (if not the Corporation) assumes by written instrument the
obligation to deliver to the holders of the Series E Convertible Preferred Stock
such  shares  of  stock  and/or  securities as, in accordance with the foregoing
provisions,  the  holders  of  the  Series  E Convertible Preferred Stock may be
entitled  to  purchase.

                    (ii) If  any  adjustment  under  this section would create a
fractional  share  of  Common  Stock or a right to acquire a fractional share of
Common  Stock,  such  fractional  shares shall be disregarded, and the number of
shares  of Common Stock issuable upon conversion shall be the next higher number
of  shares.

     4.   Perpetual  Existence.  The  existence  of  the  Corporation  will  be
          --------------------
perpetual.

     5.   Board  of Directors.  The affairs of the Corporation shall be governed
          -------------------
by  a  Board of Directors.  Subject to any rights to elect directors ("Preferred
Stock Directors") granted to the holders of any series of Preferred Stock as set
forth  in  the  Certificate of Designation for such series or class of Preferred
Stock,  the number of persons to serve on the Board of Directors, and the number
of  directors  in  each  class  of directors, shall be fixed as set forth in the
Bylaws  and  such number may be increased or decreased from time to time in such
manner  as  provided  by  the Bylaws, but the number of directors shall never be
less  than  three.  Directors  of  the  Corporation need not be residents of the
State  of  Nevada  and  need  not  own  shares  of  the  Corporation's  stock.

          5.1. Classified  Board.
               ------------------

               (a)  Other  than  with  respect to any Preferred Stock Directors,
the  Board  of  Directors shall be divided into three classes as nearly equal in
number  as possible (each, a "Class"), known as Class I, Class II and Class III.
Directors  of Class I first chosen at the annual meeting of stockholders held in
2004  shall  hold  office  until  the  third  annual meeting of the stockholders
following  their election, such annual meeting of the stockholders to be held in
2007;  directors  of Class II first chosen at the annual meeting of stockholders
held  in  2004 shall hold office until the second annual meeting following their
election,  such  annual  meeting  of  the


<PAGE>
stockholders  to be held in 2006; and directors of Class III first chosen at the
annual  meeting  of  stockholders held in 2004 shall hold office until the first
annual meeting following their election, such annual meeting of the stockholders
to  be  held  in 2005. At each annual meeting of stockholders beginning with the
annual  meeting  of stockholders held in 2005, directors chosen to succeed those
whose  terms  then  expire shall be elected for a term of office expiring at the
third succeeding annual meeting of stockholders after their election. Other than
with  respect  to any Preferred Stock Directors, when the number of directors is
changed, any newly created directorships or any decreases in directorships shall
be  so  apportioned  among the classes as to make all classes as nearly equal in
number  as  possible.  When the number of directors is increased by the Board of
Directors  (other  than  as a result of the establishment of any Preferred Stock
Directors)  and  the  resultant  vacancies are filled by the Board of Directors,
such  additional  directors  shall  serve  only until the next annual meeting of
stockholders, at which time they shall be subject to election and classification
by  the  stockholders. In the event that any director is elected by the Board of
Directors  to  fill a vacancy that occurs as a result of the death, resignation,
or removal of another director, such director shall hold office until the annual
meeting of stockholders at which the director who died, resigned, or was removed
would  have  been  required,  in  the  regular  order  of business, to stand for
re-election,  even  though  such  term may thereby extend beyond the next annual
meeting  of  stockholders.  Each  director  who  is  elected as provided in this
Section  5 shall serve until his or her successor is duly elected and qualifies.
- ----------

               (b)  Notwithstanding  any  other  provision  of these Amended and
Restated  Articles  of  Incorporation  or  the  Bylaws  of  the Corporation, any
director  or  all  the  directors of a single class (but not the entire Board of
Directors)  of  the  Corporation may be removed, at any time, but only for cause
and  only  by  the  affirmative  vote  of the holders of at least 66 2/3% of the
voting  power  of  the  outstanding  shares  of capital stock of the Corporation
entitled  to  vote  generally  in the election of directors (considered for this
purpose  as  one  class)  cast  at a meeting of the stockholders called for that
purpose.  Notwithstanding the foregoing, whenever the holders of any one or more
series  of  preferred  stock  of  the  Corporation  shall have the right, voting
separately  as  a  class, to elect one or more directors of the Corporation, the
preceding  provisions  of  this  Article  5  shall not apply with respect to the
director  or  directors  elected  by  such  holders  of  preferred  stock.

     6.   Action by Written Consent.  No action that is required or permitted to
          -------------------------
be taken by the stockholders of the Corporation at any annual or special meeting
of  stockholders may be effected by written consent of stockholders in lieu of a
meeting  of stockholders, unless the action to be effected by written consent of
stockholders  and  the  taking  of  such  action  by  such  written consent have
expressly been approved in advance by the Board of Directors of the Corporation.

     7.   Cumulative  Voting.  There  shall  be  no  cumulative  voting  by
          ------------------
stockholders  of  any  class  or  series  in  the  election  of directors of the
Corporation.

     8.   Distributions  to  Stockholders.  Except as set forth in these Amended
          -------------------------------
and Restated Articles or the Certificate of Designations for any series or class
of  Preferred Stock, the Board of Directors of the Corporation may, from time to
time,  distribute  to  its  stockholders  a  portion  of  its  assets in cash or
property,  whether  or not the distribution, after giving it effect, would cause
the  Corporation's total assets to be less than the sum of the total liabilities
plus  the  amount that would be needed, if dissolution were to occur at the time
of  distribution,  to  satisfy  the


<PAGE>
preferential  rights  upon dissolution of stockholders whose preferential rights
are  superior  to  those receiving the distribution.  The Board of Directors may
base a determination that a distribution is permitted hereunder on (i) financial
statements  prepared  on  the  basis of accounting practices that are reasonable
under  the  circumstances; (ii) a fair valuation, including, but not limited to,
unrealized  appreciation  and  depreciation;  or  (iii) any other method that is
reasonable  in  the  circumstances.

     9.   Director  and  Officer  Liability.  A  director  and  officer  of  the
          ---------------------------------
Corporation  shall  not  be  personally  liable  to  the  Corporation  or  its
stockholders  for damages for breach of fiduciary duty as a director or officer,
except  for  liability  (i)  for  acts  or  omissions  that  involve intentional
misconduct,  fraud  or  a  knowing violation of law, or (ii) for authorizing any
distribution  in  violation of Section 78.300 of the NRS.  If the NRS is amended
after approval by the stockholders of this Article to authorize corporate action
further  eliminating  the  personal liability of directors or officers, then the
liability  of  a  director  or officer of the Corporation shall be eliminated or
limited  to  the fullest extent permitted by the NRS, as so amended.  Any repeal
or  modification  of  the  foregoing  paragraph  by  the  stockholders  of  the
Corporation  shall not adversely affect any right or protection of a director or
officer  of the Corporation existing at the time of such repeal or modification.
No  amendment to the NRS that further limits the acts, omissions or transactions
for  which  elimination or limitation of liability is permitted shall affect the
liability  of  a  director or officer for any act, omission or transaction which
occurs  prior  to  the  effective  date  of  such  amendment.

     10.  Indemnification.  The  Corporation  shall,  to  the  fullest  extent
          ---------------
permitted  by Section 78.75 of the NRS, as the same may be amended, supplemented
or  replaced from time to time, indemnify any and all persons whom it shall have
power  to  indemnify  under  said  section  from  and against any and all of the
expenses,  liabilities  or  other  matters  referred  to  in  or covered by said
section,  and  the  indemnification  provided  for  herein  shall  not be deemed
exclusive  of  any other rights to which those indemnified may be entitled under
any  Bylaw,  agreement,  vote  of  stockholders  or  disinterested  directors or
otherwise,  both  as  to  action  in  his  official capacity and as to action in
another  capacity  while  holding such office, and shall continue as to a person
who  has  ceased to be a director, officer, employee or agent and shall inure to
the  benefit  of  the  heirs,  executors  and  administrators  of such a person.
Pursuant  to  said  Section  78.751  of  the  NRS,  the expenses of officers and
directors  incurred  in defending a civil or criminal action, suit or proceeding
must be paid by the Corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or  on behalf of the director or officer to repay the amount if it is ultimately
determined  by  a  court of competent jurisdiction that he is not entitled to be
indemnified  by  the  Corporation.

     11.  Amendment  of  Articles  of  Incorporation.  Subject to the provisions
          ------------------------------------------
hereof,  the  Corporation  reserves the right to repeal, alter, amend or rescind
any  provision  contained  in  these  Restated  Articles  in  the  manner now or
hereafter prescribed by law, and all rights conferred on stockholders herein are
granted  subject to this reservation.  Notwithstanding the foregoing at any time
and  from time to time, the provisions set forth in Article 5 (Classified Board)
and  Article  6 (Action by Written Consent) may be repealed, altered, amended or
rescinded in any respect only if the same is approved by the affirmative vote of
the  holders  of  not  less  than 66 2/3% of the voting power of the outstanding
shares  of  capital  stock  of the Corporation entitled to vote generally in the
election  of directors (considered for this purpose as a single class) cast at a


<PAGE>
meeting  of  the  stockholders  called for that purpose (provided that notice of
such  proposed adoption, repeal, alteration, amendment or rescission is included
in  the  notice  of  such  meeting).

     IN  WITNESS  WHEREOF, the undersigned President and Chief Executive Officer
has  executed  these  Restated  Articles  as  of  April  7,  2004.

                                   YP.NET, INC., a Nevada corporation

                                   /s/  Angelo  Tullo
                                   ----------------------------------------
                                   Angelo  Tullo
                                   President  and  Chief  Executive  Office


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>doc3.txt
<DESCRIPTION>EXHIBIT 3.2
<TEXT>
                                                                     Exhibit 3.2

                         AMENDED AND RESTATED BYLAWS OF
                                    YP CORP.
                              a Nevada Corporation


                                    ARTICLE I

                                     OFFICES

1.1. REGISTERED  OFFICE.  The  registered office of the Corporation in the State
of Nevada shall be in a county and city of the State of Nevada designated by the
Board  of  Directors  in  accordance  with  applicable  law.

1.2. OTHER  OFFICES.  The Corporation also may have offices at such other places
both  within  and without the State of Nevada as the Board of Directors may from
time  to  time  determine  or  the  business  of  the  Corporation  may require.

                                   ARTICLE II

                                  STOCKHOLDERS

2.1  STOCKHOLDER  MEETINGS.

     (a)  TIME  AND  PLACE  OF  MEETINGS.  Meetings of the stockholders shall be
held  at such times and places, either within or without the State of Nevada, as
may  from  time  to  time  be  fixed by the Board of Directors and stated in the
notices  or  waivers  of  notice  of  such  meetings.

     (b)  ANNUAL MEETING.  Annual meetings of stockholders shall be held at such
date  and time as the Board of Directors shall determine. At the annual meeting,
stockholders  shall  elect  a  board of directors by plurality vote and transact
such  other  business  as  properly  may be brought before the annual meeting in
accordance  with  Section  2.7  of  this  Article  II.
                  ------------

     (c)  SPECIAL  MEETINGS.  Special  meetings  of  the  stockholders  of  the
Corporation  may  be  called for any purpose or purposes at any time only by the
Chairman  of  the Board, the Chief Executive Officer or the President.  Business
transacted  at  any  special meeting of the stockholders shall be limited to the
purposes  stated  in  the  notice  of  such  meeting.

     (d)  NOTICE OF MEETINGS.  Except as otherwise provided by law, the Articles
of  Incorporation  or  these  Bylaws,  written  notice  of  each  meeting of the
stockholders  shall  be  given  not  less than ten days nor more than sixty days
before  the  date  of such meeting to each stockholder entitled to vote thereat,
directed  to  such  stockholder's address as it appears upon the stock ledger of
the  Corporation,  such  notice  to specify the place, date, hour and purpose or
purposes  of  such  meeting.  If mailed, such notice shall be deemed to be given
when  deposited  in


<PAGE>
the  United  States  mail,  postage prepaid, addressed to the stockholder at his
address  as it appears on the stock ledger of the Corporation. When a meeting of
the  stockholders  is adjourned to another time and/or place, notice need not be
given  of  such  adjourned  meeting  if  the time and place are announced at the
meeting  of  the  stockholders  at  which  the  adjournment is taken, unless the
adjournment  is  for more than thirty days or unless after the adjournment a new
record date is fixed for such adjourned meeting, in which event a notice of such
adjourned  meeting shall be given to each stockholder of record entitled to vote
thereat.  Notice  of  the  time,  place  and  purpose  of  any  meeting  of  the
stockholders  may  be  waived in writing either before or after such meeting and
will  be  waived  by any stockholder by such stockholder's attendance thereat in
person or by proxy. Any stockholder so waiving notice of such a meeting shall be
bound  by  the  proceedings of any such meeting in all respects as if due notice
thereof  had  been  given.

     (e)  QUORUM.  Except  as  otherwise  required  by  law,  the  Articles  of
Incorporation  or  these  Bylaws, the holders of not less than a majority of the
shares entitled to vote at any meeting of the stockholders, present in person or
by  proxy, shall constitute a quorum and the affirmative vote of the majority of
such  quorum shall be deemed the act of the stockholders. If a quorum shall fail
to attend any meeting of the stockholders, the presiding officer of such meeting
may  adjourn  such  meeting  from  time  to time to another place, date or time,
without  notice  other  than  announcement  at  such  meeting, until a quorum is
present  or  represented. At such adjourned meeting at which a quorum is present
or  represented,  any business may be transacted that might have been transacted
at  the  meeting  of  the  stockholders  as  originally  noticed.  The foregoing
notwithstanding,  if  a  notice  of  any  adjourned  special  meeting  of  the
stockholders  is sent to all stockholders entitled to vote thereat, which states
that such adjourned special meeting will be held with those present in person or
by proxy constituting a quorum, then, except as otherwise required by law, those
present at such adjourned special meeting of the stockholders shall constitute a
quorum  and  all  matters shall be determined by a majority of the votes cast at
such  special  meeting.

2.2. DETERMINATION OF STOCKHOLDERS ENTITLED TO NOTICE AND TO VOTE.  To determine
the  stockholders  entitled  to  notice of any meeting of the stockholders or to
vote  thereat,  the  Board  of  Directors  may  fix  in advance a record date as
provided  in  Article  II,  Section 2.8 of these Bylaws, or if no record date is
                            -----------
fixed  by  the Board of Directors, a record date shall be determined as provided
by  law.

2.3. VOTING.

     (a)  Except  as otherwise required by law, the Articles of Incorporation or
these Bylaws, each stockholder present in person or by proxy at a meeting of the
stockholders  shall  be  entitled  to  one  vote  for  each  full share of stock
registered  in  the  name  of such stockholder at the time fixed by the Board of
Directors  or  by  law  at  the record date of the determination of stockholders
entitled  to  vote  at  such  meeting.

(b)  Every  stockholder entitled to vote at a meeting of the stockholders may do
so  either  (i)  in person or (ii) by one or more agents authorized by a written
proxy  executed  by  the  person  or  such  stockholder's duly authorized agent,
whether  by manual signature, typewriting, telegraphic transmission or otherwise
as permitted by law. No proxy shall be voted on after three years from its date,
unless  the  proxy  provides  for  a  longer  period.


<PAGE>
     (c)  Voting  may  be  by voice or by ballot as the presiding officer of the
meeting  of  the  stockholders shall determine. On a vote by ballot, each ballot
shall  be  signed by the stockholder voting, or by such stockholder's proxy, and
shall  state  the  number  of  shares  voted.

     (d)  Shares  of the Corporation held by another corporation may be voted by
such  corporation's  officer,  agent or proxy as its bylaws may prescribe, or in
absence of such bylaw provision, by any other person designated by resolution of
its  Board  of  Directors, and such officer, agent or other person so designated
may  vote  such  corporation's  shares in this Corporation in person or by proxy
appointed  by  him.

     (e)  Shares held by an administrator, executor, guardian or conservator may
be  voted  by  such  representative,  either  in  person  or by proxy, without a
transfer of such shares into his name. Shares standing in the name of a trustee,
other  than a trustee in bankruptcy, may be voted by such representative, either
in person or by proxy, but no such trustee shall be entitled to vote shares held
by  him  without  a  transfer  of  such  shares  into  his  name.

     (f)  Shares  standing  in the name of a receiver, trustee in bankruptcy, or
assignee  for  the  benefit  of  creditors  may be voted by such representative,
either  in  person  or  by  proxy. Shares held by or under the control of such a
receiver  or  trustee may be voted by such receiver or trustee, either in person
or by proxy, without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver or trustee
was  appointed.

     (g)  A  stockholder whose shares are pledged shall be entitled to vote such
shares  until the shares have been transferred into the name of the pledgee, and
thereafter  the  pledgee  shall  be  entitled to vote the shares so transferred.

     (h)  If  shares  stand  in  the  names  of  two  or  more  persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by  community  property  or  otherwise,  or if two or more persons have the same
fiduciary  relationship  respecting  the  same shares, unless the Corporation is
given  written  notice  to  the  contrary  and  is  furnished with a copy of the
instrument  or  order appointing them or creating the relationship wherein it is
so  provided, their acts with respect to voting shall have the following effect:
(1) If only one votes, his act binds; (2) If more than one votes, the act of the
majority  so  voting  binds all; and (3) If more than one votes, but the vote is
evenly  split  on  any  particular  matter, each fraction may vote the shares in
question  proportionally.

     (i)  Shares  standing  in the name of a married woman but not also standing
in the name of her husband with such a designation of mutual relationship on the
certificate,  may  be  voted and all rights incident thereto may be exercised in
the  same  manner  as  if  she  were  unmarried.

     (j)  Shares  of  its  own  stock belonging to the Corporation or to another
corporation,  if  a  majority of the shares entitled to vote in the elections of
directors  of  such  other  corporation  is held, directly or indirectly, by the
Corporation,  shall neither be entitled to vote nor counted for quorum purposes.
Nothing  in  this  Section  shall  be  construed  as  limiting  the right of the
Corporation  to  vote  its  own  stock  held  by  it  in  a  fiduciary capacity.


<PAGE>
     (k)  In  advance  of or at any meeting of the stockholders, the Chairman of
the  Board  may  appoint  one  or  more  persons  as inspectors of election (the
"Inspectors")  to  act at such meeting. Such Inspectors shall take charge of the
ballots  at  such  meeting.  After the balloting on any question, the Inspectors
shall  count the ballots cast and make a written report to the secretary of such
meeting  of  the results. Subject to the direction of the Chairman of the Board,
the  duties  of  such  Inspectors  may  further  include  without  limitation:
determining  the  number of shares outstanding and the voting power of each; the
shares  represented at the meeting; the existence of a quorum; the authenticity,
validity,  and effect of proxies; receiving votes, ballots, or consents; hearing
and  determining  all  challenges and questions in any way arising in connection
with  the  right  to  vote;  counting  and  tabulating all votes of consents and
determining  when  the polls shall close; determining the result; and doing such
acts  as  may  be  proper  to  conduct the election or vote with fairness to all
stockholders.  An Inspector need not be a stockholder of the Corporation and any
officer of the Corporation may be an Inspector on any question other than a vote
for  or  against such officer's election to any position with the Corporation or
any  other  questions in which such officer may be directly interested. If there
are  three  or  more  Inspectors,  the determination, report or certificate of a
majority  of  such  Inspectors  shall be effective as if unanimously made by all
Inspectors.

2.4. LIST  OF  STOCKHOLDERS.  The  officer who has charge of the stock ledger of
the Corporation shall prepare and make available, at least 10 days or such other
period of time as may be required by Federal, State or other jurisdictional body
whose  rules  and  regulations  govern the allotted time before every meeting of
stockholders,  a  complete  list  of  the stockholders entitled to vote thereat,
arranged in either alphabetical order or by zip code, showing the address of and
the number of shares registered in the names of each such stockholder. Such list
shall  be open to the examination of any stockholder, for any purpose germane to
such meeting, either at a place within the city where such meeting is to be held
and  which place shall be specified in the notice of such meeting, or, if not so
specified, at the place where such meeting is to be held. The list also shall be
produced  and  kept  at  the  time  and place of the meeting of the stockholders
during  the  whole  time thereof, and may be inspected by any stockholder who is
present.

2.5. ACTION  BY  WRITTEN  CONSENT  OF  STOCKHOLDERS.

     (a)  Subject  to  restrictions  imposed  by  the  Corporation's Articles of
Incorporation or by applicable law, any action required or permitted to be taken
at  any  annual  or  special  meeting of the stockholders may be taken without a
meeting,  without  prior  notice and without a vote, if a consent or consents in
writing,  setting  forth  the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary  to  authorize  or  take  such action at a meeting at which all shares
entitled  to  vote  thereon were present and voted and shall be delivered to the
Corporation's  Secretary.  Prompt  notice  of the taking of the Corporate action
without  a  meeting  by less than unanimous written consent shall, to the extent
required  by  law,  be  given  to  those  stockholders who have not consented in
writing  and  who,  if  the  action had been taken at a meeting, would have been
entitled  to  notice of the meeting if the record date for such meeting had been
the  date that written consents signed by a sufficient number of holders to take
the  action  were  delivered  to  the  Corporation.

     (b)  The  Board of Directors may fix a record date for the determination of
stockholders  entitled  to  consent  to  corporate  action  in writing without a
meeting,  which  record


<PAGE>
date shall not precede the date upon which the resolution fixing the record date
is  adopted  by the Board of Directors, and which date shall not be more than 10
days  after the date upon which the resolution fixing the record date is adopted
by  the  Board  of Directors. If no record date is set, the record date shall be
the  first date on which a signed written consent setting forth the action taken
or  proposed  to  be  taken  is  delivered  to the Secretary of the Corporation.

2.6. CONDUCT  OF  MEETINGS.  The  Chairman  of  the  Board  shall  have full and
complete  authority to determine the agenda, to set the procedures and order the
conduct  of  meetings,  all  as  deemed  appropriate  by such person in his sole
discretion  with  due  regard  to  the  orderly  conduct  of  business.

2.7. ACTION  AT  MEETINGS  OF  STOCKHOLDERS.

     (a)  No  business  may  be transacted at an annual meeting of stockholders,
other than business that is either (i) specified  in  the  notice of meeting (or
any  supplement thereto) given by or at the direction of the Board of Directors,
(ii) otherwise properly brought before the annual meeting by or at the direction
of  the  Board  of  Directors  or  (iii) otherwise  properly  brought before the
annual meeting by any stockholder of the Corporation (A) who is a stockholder of
record  on the date of the giving of the notice provided  for  in  this  Section
                                                                         -------
2.7  and  on  the  record date for the determination of stockholders entitled to
- ---
vote  at such annual meeting and (B) who complies with the notice procedures set
forth  in  this  Section  2.7.
                 ------------

     (b)  In  addition  to  any  other  applicable  requirements,  for  business
properly  to  be  brought  before  an  annual  meeting  by  a  stockholder, such
stockholder  must have given timely notice thereof in proper written form to the
Chairman  of  the Board, if any, the Chief Executive Officer, President,  or the
Secretary  of  the  Corporation.

     (c)  To  be timely, a stockholder's notice that includes a proposal for the
Corporation's annual meeting must be received at the principal executive offices
of  the  Corporation not less than 120 days before the date of the Corporation's
proxy  statement  released  to  stockholders  in  connection  with  the previous
year's  annual meeting; provided, however, that in the event the Corporation did
                        --------  -------
not  hold  an  annual  meeting  the  previous year or if the date of this year's
annual  meeting  has  been  changed  by  more  than 30 days from the date of the
previous  year's  meeting,  then  the  deadline  is a reasonable time before the
Corporation  begins  to  print and mail its proxy materials. For a stockholder's
notice  that  includes  a  proposal  for  a meeting of stockholders other than a
regularly scheduled annual meeting, the deadline is a reasonable time before the
Corporation begins to print and mail its proxy materials. Notwithstanding any of
the  provisions contained herein, any notice that includes a proposal that seeks
action  by  the  Corporation's  stockholders at any meeting will comply with the
guidelines established by Regulation 14A of the Securities Exchange Act of 1934,
as amended; to the extent such regulation is then applicable to the Corporation.

     (d)  To  be  in proper written form, a stockholder's notice must set forth,
as  to each matter such stockholder proposes to bring before the annual meeting,
(i)  a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (ii)
the  name  and record address of such stockholder, (iii) the class or series and
number  of  shares  of  capital  stock  of  the  Corporation  that  are  owned


<PAGE>
beneficially  or  of  record  by  such  stockholder,  (iv)  a description of all
arrangements  or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by  such  stockholder  and  any  material  interest  of such stockholder in such
business  and  (v)  a  representation that such stockholder intends to appear in
person  or  by  proxy  at  the  annual meeting to bring such business before the
meeting.

     (e)  No  business  shall be conducted at the annual meeting of stockholders
except  business  brought  before  the  annual  meeting  in  accordance with the
procedures set forth in this Section 2.7; provided, however, that, once business
                             -----------  --------  -------
has  been  brought  properly  before  the annual meeting in accordance with such
procedures,  nothing in this Section 2.7 may be deemed to preclude discussion by
                             -----------
any  stockholder  of  any  such  business.  If the Chairman of an annual meeting
determines  that  business was not brought properly before the annual meeting in
accordance  with  the  foregoing  procedures,  the  chairman will declare to the
meeting  that  the business was not brought properly before the meeting and such
business  will  not  be  transacted.

     (f)  Whenever all parties entitled to vote at any meeting consent either by
a  writing  on  the  records  of  the meeting or filed with the Secretary, or by
presence  at  such meeting and oral consent entered on the minutes, or by taking
part  in the deliberations at such meeting without objection, the doings of such
meetings  shall be as valid as if had at a meeting regularly called and noticed,
and  at such  meeting any business may be transacted, which is not excepted from
the  written  consent  or to the consideration of which no objection for want of
notice  is made at  the time, and if any meeting be irregular for want of notice
or  of  such  consent,  provided  a  quorum  was  present  at  such meeting, the
proceedings  of  said meeting may be ratified and approved and rendered likewise
valid  and  the irregularity or defect therein waived by a writing signed by all
parties  having  the right to vote at such meeting; and such consent or approval
of  stockholders may be by proxy or attorney, but all such proxies and powers of
attorney  must  be  in  writing.

     (g)  Whenever  any  notice  whatever  is  required  to  be  given under the
provisions of Nevada law, of the Articles of Incorporation or of these Bylaws, a
waiver  thereof  in  writing,  signed  by the person or persons entitled to said
notice,  whether  before  or  after  the  time  stated  therein, shall be deemed
equivalent  thereto.

2.8. RECORD  DATE.

     (a)  In  order that the Corporation may determine the stockholders entitled
to  notice  of  or to vote at any meeting of the stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution or
allotment  of any rights or entitlement to exercise any rights in respect of any
change,  conversion  or exchange of stock or for the purpose of any other lawful
action,  the  Board of Directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days prior to the date of such meeting.
If  not  fixed by the Board of Directors, the record date shall be determined as
provided  by  law.

     (b)  A  determination of stockholders of record entitled to notice of or to
vote  at  a  meeting  of the stockholders shall apply to any adjournments of the
meeting, unless the Board of Directors fixes a new record date for the adjourned
meeting.


<PAGE>
     (c)  Holders of stock on the record date are entitled to notice and to vote
or  to  receive the dividend, distribution or allotment of rights or to exercise
the  rights,  as the case may be, notwithstanding any transfer of the shares set
forth  in  the  stock ledger of the Corporation after the record date, except as
otherwise  provided  by  agreement  or  by law, the Articles of Incorporation or
these  Bylaws.

2.9. INFORMALITIES  AND  IRREGULARITIES.  All informalities or irregularities in
any  call  or  notice  of  a  meeting  of  the  stockholders  or in the areas of
credentials, proxies, quorums, voting and similar matters, will be deemed waived
if  no  objection  is  made  at  the  meeting.

                                   ARTICLE III

                               BOARD OF DIRECTORS

3.1. GENERAL  POWERS.  Unless  otherwise  restricted  by  law,  the  Articles of
Incorporation or these Bylaws as to action which shall be authorized or approved
by  the  stockholders,  and  subject to the duties of directors as prescribed by
these  Bylaws, all corporate powers shall be exercised by or under the authority
of,  and the business and affairs of the Corporation shall be controlled by, the
Board  of  Directors.  The Board of Directors may delegate the management of the
day-to-day  operation of the business of the Corporation to a management company
or  other person, provided that the business and affairs of the Corporation will
be  managed,  and  all  corporate  powers shall be exercised, under the ultimate
direction  and  responsibility  of  the  Board  of  Directors.

3.2. ELECTION  OF  DIRECTORS.

     (a)  NUMBER,  QUALIFICATION  AND  TERM  OF  OFFICE.  The  exact  number  of
directors of the Corporation shall not be less than three or more than nine. The
authorized  number  of directors may from time to time be increased or decreased
by resolution of the directors of the Corporation amending this provision of the
Bylaws  in  compliance  with  Section  8.5  of Article VIII. No reduction of the
                              ------------
authorized  number  of  directors shall have the effect of removing any director
prior  to  the  expiration  of  his  or  her term in office. Except as otherwise
provided  in this Section 3.2, each director elected shall hold office until his
                  -----------
successor  is  elected  and  qualified.  The  Board of Directors shall be and is
divided  into  three  classes:  Class  I,  Class II and Class III. The number of
directors  in  any  class  shall not exceed the number of directors in any other
class  by  more  than  one.

     (b)  RESIGNATION.  Any  director  may resign from the Board of Directors at
any  time by giving written notice to the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein, or if the time when
such  resignation  shall  become  effective shall not be so specified, then such
resignation  shall  take  effect  immediately upon its receipt by the Secretary;
and,  unless  otherwise  specified  therein,  the acceptance of such resignation
shall  not  be  necessary  to  make  it  effective.

     (c)  VACANCIES.  Vacancies and new directorships resulting from an increase
in  the  authorized  number  of  directors  may  be  filled by a majority of the
directors  then  in  office, though less than a quorum, or by the sole remaining
director.  If  no  directors  are  in  office,  an  election


<PAGE>
may  be held as provided by statute.  A director elected to fill a vacancy shall
be  elected  for  the  unexpired  term  of  his or her predecessor in office.  A
directorship  to  be  filled by reason of an increase in the number of directors
may  be  filled  by  the Board of Directors for a term of office continuing only
until  the  next annual meeting or the next election of one or more directors by
the  stockholders  at a special meeting of stockholders called for that purpose.
Any  director may be removed from office only in accordance with the Articles of
Incorporation.

3.3 MEETINGS  OF  THE  BOARD  OF  DIRECTORS.

     (a)  REGULAR MEETINGS.  Regular meetings of the Board of Directors shall be
held  without  notice  at  such  time  and  place  as shall from time to time be
determined  by  the  Board  of  Directors:

          (i)  at  such  times as the Board of Directors shall from time to time
     by  resolution  determine;  and

          (ii) one  half-hour  prior  to any special meeting of the stockholders
     and  immediately following the adjournment of any annual or special meeting
     of  the  stockholders.

     (b)  SPECIAL  MEETINGS.

          (i)  Special  meetings  of the Board of Directors may be called by the
     Chairman  of  the  Board, the Chief Executive Officer or the President, and
     will  be  called  by  the  Secretary  at the written request of two or more
     directors. Notice of the time and place of special meetings of the Board of
     Directors  shall be given by the Secretary or an Assistant Secretary of the
     Corporation,  or by any other officer authorized by the Board of Directors.
     Such  notice  shall  be  given  to  each  director  personally  or by mail,
     messenger,  telephone,  telegraph  or  electronic  mail  at such director's
     business,  residence  or  electronic  address.  Notice  by  mail  shall  be
     deposited  in  the  United States mail, postage prepaid, not later than the
     fifth  day  prior  to  the  date  fixed for such special meeting. Notice by
     telephone,  telegraph  or  electronic  mail shall be sent, and notice given
     personally  or  by messenger shall be delivered, at least twenty-four hours
     prior to the time set for such special meeting. Notice of a special meeting
     of  the  Board  of Directors need not contain a statement of the purpose of
     such  special  meeting.

          (ii) Whenever  all  parties  entitled  to  vote at any meeting consent
     either  by  a  writing  on  the  records  of  the meeting or filed with the
     Secretary,  or  by presence at such meeting and oral consent entered on the
     minutes,  or  by  taking  part in the deliberations at such meeting without
     objection,  the  doings  of  such meetings shall be as valid as if they had
     occurred at a meeting regularly called and noticed, and at such meeting any
     business  may be transacted, which is not excepted from the written consent
     or to the consideration of which no objection for want of notice is made at
     the  time,  and  if  any meeting be irregular for want of notice or of such
     consent,  provided a quorum was present at such meeting, the proceedings of
     said  meeting  may be ratified and approved and rendered likewise valid and
     the  irregularity  or  defect  therein  waived  by  a writing signed by all


<PAGE>
     parties  having  the  right  to  vote  at such meeting; and such consent or
     approval of directors may be by proxy or attorney, but all such proxies and
     powers  of  attorney  must  be  in  writing.

          (iii) Whenever any notice whatsoever is required to be given under the
     provisions  of  Nevada  law,  of  the Articles of Incorporation or of these
     Bylaws,  a  waiver  thereof  in  writing,  signed  by the person or persons
     entitled  to  said notice, whether before or after the time stated therein,
     shall  be  deemed  equivalent  thereto.

     (c)  ADJOURNED MEETINGS.  A majority of directors present at any regular or
special  meeting  of the Board of Directors or any committee thereof, whether or
not  constituting  a  quorum,  may adjourn any meeting from time to time until a
quorum is present or otherwise, however, notice of the time and place of holding
any  adjourned  meeting shall be required as provided in Section 3.3(b) of these
                                                         --------------
Bylaws.

     (d)  PLACE  OF  MEETINGS.  Meetings of the Board of Directors, both regular
and  special,  may  be  held  either  within  or  without  the  State of Nevada.

     (e)  PARTICIPATION  BY TELEPHONE.  Members of the Board of Directors or any
committee  may participate in any meeting of the Board of Directors or committee
through  the use of conference telephone or similar communications equipment, so
long as all members participating in such meeting can hear one another, and such
participation  shall  constitute  presence  in  person  at  such  meeting.

     (f)  QUORUM.  At  all  meetings  of the Board of Directors or any committee
thereof,  a  majority  of  the  total  number  of  directors  of the entire then
authorized  Board  of  Directors or such committee shall constitute a quorum for
the  transaction  of business and the act of a majority of the directors present
at  any such meeting at which there is a quorum shall be the act of the Board of
Directors  or  any committee, except as may be otherwise specifically prohibited
by law, the Articles of Incorporation or these Bylaws. A meeting of the Board of
Directors  or  any committee at which a quorum initially is present may continue
to  transact business notwithstanding the withdrawal of directors so long as any
action  is  approved  by  at  least  a  majority of the required quorum for such
meeting.  Any  action of a majority, although not at a regularly called meeting,
and  the record thereof, if assented to in writing by all of the other member of
the  Board  of  Directors, shall be as valid and effective in all respects as if
passed  by  the  Board  of  Directors  in  a  regular  meeting.

     (g)  WAIVER  OF  NOTICE.  The  transactions  of any meeting of the Board of
Directors  or  any committee, however called and noticed or wherever held, shall
be  as valid as though had at a meeting duly held after regular call and notice,
if  a  quorum be present and if, either before or after the meeting, each of the
directors  not  present  signs  a written waiver of notice, or a consent to hold
such  meeting, or an approval of the minutes thereof. All such waivers, consents
or  approvals  shall  be  filed with the corporate records or made a part of the
minutes  of  the  meeting.

3.5. ACTION  WITHOUT  MEETING.  Any  action required or permitted to be taken by
the  Board  of  Directors at any meeting or at any meeting of a committee may be
taken  without  a


<PAGE>
meeting  if  all  members of the Board of Directors or such committee consent in
writing  and  the  writing  or  writings  are  filed  with  the  minutes  of the
proceedings  of  the  Board  of  Directors  or  such  committee.

3.6. COMPENSATION OF DIRECTOR.  Unless otherwise restricted by law, the Articles
of  Incorporation  or  these  Bylaws,  the  Board  of  Directors  shall have the
authority  to fix the compensation of directors. The directors may be paid their
expenses,  if  any,  of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or  a  stated  salary as a director. No such payment shall preclude any director
from  serving  the  Corporation in any other capacity and receiving compensation
therefor.  Members  of  committees of the Board of Directors may be allowed like
compensation  for  attending  committee  meetings.

3.7. COMMITTEES  OF  THE  BOARD.

     (a)  EXECUTIVE  COMMITTEE.  The  Board  of  Directors  may,  by  resolution
adopted  by  a  majority of the whole Board, name two or more of its members and
General  Counsel,  or  such  other  legal advisor as it deems appropriate, as an
Executive  Committee.  Such  Executive  Committee will have and may exercise the
powers  of  the Board of Directors in the management of the business and affairs
of  the  Corporation  while  the  Board  is  not  in  session,  subject  to such
limitations  as  may  be  included in the Board's resolution; provided, however,
that  such  Executive  Committee  shall  not  have the authority of the Board of
Directors  in  reference  to  the  following  matters:  (1)  the  submission  to
stockholders  of  any  action  that requires the authorization or approval under
applicable law; (2) the filling of vacancies on the Board of Directors or in any
committee  of  the  Board  of  Directors;  (3)  the amendment or repeal of these
Bylaws,  or  the  adoption  of new bylaws; and (4) the fixing of compensation of
Directors  for  serving  on  the  Board  or  on  any  Committee  of the Board of
Directors.  A majority of those named to the Executive Committee will constitute
a  quorum  and  the  Committee  may  at any time act by the written consent of a
quorum  thereof,  although  not  formally  convened.

     (b)  OTHER  COMMITTEES.  The  Board  of Directors may from time to time, by
resolution  adopted  by a majority of the whole Board, appoint other standing or
temporary  Committees  consisting of at least one current member of the Board of
Directors,  and  such other individuals as the Board of Directors may determine.
These Committees will be vested with such powers as the Board may include in its
resolution; provided, however, that such Committees shall be restricted in their
            --------  -------
authority  that  all actions taken are subject to review and ratification by the
Executive Committee and the Board of Directors. A majority of those named to any
such  Committees  will constitute a quorum and the Committee may at any time act
by  the  written  consent  of  a quorum thereof, although not formally convened.

     (c)  MINUTES OF MEETINGS.  Each committee shall keep regular minutes of its
meetings  and  report  the  same  to  the  Board  of  Directors  when  required.

3.8. INTERESTED  DIRECTORS.  In  addition  to the statutory and corporate common
law  of  Nevada,  no  contract or transaction between the Corporation and one or
more  of  its  directors  or  officers, or between the Corporation and any other
corporation,  partnership,  association,  or  other organization in which one or
more  of  its  directors  or  officers  are  directors  or  officers,  or have a


<PAGE>
financial  interest, shall be void or voidable solely for this reason, or solely
because  the director or officer is present at or participates in the meeting of
the  Board  of  Directors or committee thereof, which authorizes the contract or
transaction,  or  solely  because  his,  her or their votes are counted for such
purpose  if  (i)  the  material  facts  as  to his, her or their relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board  of  Directors in good faith authorizes the contract or transaction by the
affirmative  votes of a majority of the disinterested directors, even though the
disinterested  directors be less than a quorum; or (ii) the material facts as to
his, her or their relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote thereon, and the
contract  or  transaction  is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as  of  the  time  it  is  authorized,  approved  or  ratified,  by the Board of
Directors,  a committee thereof or the stockholders. Interested directors may be
counted  in  determining  the  presence of a quorum at a meeting of the Board of
Directors  or  of  the  duly appointed Executive Committee, which authorizes the
contract  or  transaction.

                                   ARTICLE IV

                                    OFFICERS

4.1. OFFICERS.

     (a)  NUMBER.  The  officers of the Corporation shall be chosen by the Board
of  Directors and will include a Chairman of the Board of Directors (who must be
a  director  as  chosen by the Board of Directors), a President, Secretary and a
Treasurer  and may include Chief Officers and any number of Vice-Presidents. The
Board  of  Directors  also  may  appoint  one  or  more Assistant Secretaries or
Assistant  Treasurers  and  such  other officers and agents with such powers and
duties as it shall deem necessary. Any Vice President may be given such specific
designation  as  may  be determined from time to time by the Board of Directors.
Any  number  of  offices  may  be  held  by  the  same  person, unless otherwise
restricted  by  law, the Articles of Incorporation or these Bylaws. The Board of
Directors  may  delegate  to  any  other officer of the Corporation the power to
choose  such other officers and to prescribe their respective duties and powers.

     (b)  ELECTION  AND  TERM OF OFFICE.  The officers shall be elected annually
by the Board of Directors at its regular meeting following the annual meeting of
the  stockholders  and  each  officer  shall  hold  office until the next annual
election  of  officers  and  until  such  officer's  successor  is  elected  and
qualified,  or  until  such officer's death, resignation or removal. Any officer
may  be removed at any time, with or without cause, by a vote of the majority of
the  whole  Board  of Directors or by an officer upon whom such power of removal
may  be conferred by the Board of Directors. Any vacancy occurring in any office
may  be  filled  by  the  Board  of  Directors.

     (c)  SALARIES.  The  salaries  of  all officers of the Corporation shall be
fixed  by  the  Board  of  Directors  or  a committee thereof from time to time.

4.2. CHAIRMAN  OF  THE  BOARD OF DIRECTORS.  The Board of Directors will elect a
Chairman  to  serve  as a Non-Executive Officer of the Corporation. The Chairman
will  preside  at


<PAGE>
all  meetings of the Board of Directors and be vested with such other powers and
duties  as  the  Board  may  from  time  to  time  delegate  to  him.

4.3. CHIEF  OFFICERS.  The  Board  of  Directors  may  elect  a  Chief Executive
Officer,  a  Chief  Financial  Officer  and a Chief Operating Officer. The Chief
Executive  Officer  shall  be the presiding officer over all business affairs of
the  Corporation,  subject  only to the direction of the Board of Directors. The
Chief  Financial  Officer of the Corporation shall be the presiding officer over
the  financial  affairs of the Corporation, subject only to the direction of the
Board  of Directors and the Chief Executive Officer. The Chief Operating Officer
of  the  Corporation shall be the presiding officer over the operational affairs
of  the Corporation, subject only to the direction of the Board of Directors and
the Chief Executive Officer. Except as may otherwise be specifically provided in
a  resolution  of  the  Board  of  Directors,  the Chief Officers will be proper
officers  to  sign  on  behalf  of  the  Corporation  any  deed,  bill  of sale,
assignment,  option,  mortgage,  pledge,  note,  bond, evidence of indebtedness,
application,  consent (to service of process or otherwise), agreement, indenture
or  other  instrument  of  any  significant  importance  to  the  Corporation.

4.4. PRESIDENT. The President, absent the election of a Chief Executive Officer,
will  supervise  the business and affairs of the Corporation and the performance
by  all  of  its  other  officers, excluding Chief Officers, of their respective
duties, subject to the control of the Board of Directors. Absent the election of
a  Chief  Executive Officer by the Board of Directors, the President will be the
Chief  Executive  Officer  of  the  Corporation.  Except  as  may  otherwise  be
specifically  provided  in a resolution of the Board of Directors, the President
will  be a proper officer to sign on behalf of the Corporation any deed, bill of
sale,  assignment,  option,  mortgage,  pledge,  note,  bond,  evidence  of
indebtedness,  application,  consent  (to  service  of  process  or  otherwise),
agreement,  indenture  or  other instrument of any significant importance to the
Corporation.  The  President may represent the Corporation at any meeting of the
stockholders  of  any  other  Corporation  in  which this Corporation then holds
shares,  and  may  vote  this  Corporation's shares in such other corporation in
person  or  by  proxy appointed by him, provided that the Board of Directors may
from  time  to  time  confer  the  foregoing  authority upon any other person or
persons.  The President may designate any Vice President to perform any acts, on
behalf  of  the  Corporation,  in  his  place.

4.5. VICE  PRESIDENTS.  One  or more Vice Presidents may be elected by the Board
of  Directors each of whom (in the order designated by the Board) will be vested
with  all  of  the  powers  and  charged with all of the duties (including those
herein  before  specifically  set  forth)  of  the President in the event of his
absence or disability. Each Vice President will perform such other duties as may
from time to time be delegated or assigned to him/her by the Board of Directors,
Chief  Executive  Officer,  Chief  Operating  Officer  or the President, in that
order.

4.6. SECRETARY  AND  ASSISTANT SECRETARIES.  The Secretary will keep the minutes
of  meetings  of the stockholders, Board of Directors and any Committee, and all
unanimous  written  consents  of  the  stockholders,  Board of Directors and any
Committee  of the Corporation, see that all notices are duly given in accordance
with  the  provisions  of  these  Bylaws  or  as  required by applicable law, be
custodian  of the corporate seal and corporate records, and, in general, perform
all  duties  incident  to  his  office.  Except as may otherwise be specifically
provided  in  a  resolution  of  the  Board of Directors, the Secretary and each
Assistant  Secretary


<PAGE>
will  be  a proper officer to take charge of the Corporation's stock ledger, and
to  compile  the  voting  record,  and  to impress the Corporation's Seal on any
instrument  signed  by  a duly authorized or empowered officer, and to attest to
the  same.

4.7. TREASURER  AND ASSISTANT TREASURERS.  The Treasurer, absent the election of
a  Chief  Financial Officer, shall serve as the Chief Financial Officer and will
maintain  the  financial  records of the Corporation and supervise all Corporate
reporting with any and all government agencies. The Treasurer will keep full and
accurate  accounts  of  receipts  and  disbursements  in  books belonging to the
Corporation, and will cause all money and other valuable effects to be deposited
in  the  name and to the credit of the Corporation in such depositories, subject
to  withdrawal in such manner as may be designated by the Board of Directors and
the  Chief  Executive  Officer. The Treasurer will render to the Chief Executive
Officer, President and to the Directors (at the regular meetings of the Board or
whenever  they  may  require), an account of all his transactions, as Treasurer,
and  of  the  financial  condition  of  the  Corporation.

                                    ARTICLE V

                          INDEMNIFICATION AND INSURANCE

5.1. RIGHT  TO  INDEMNIFICATION.  Subject  to  the  terms and conditions of this
Article  V,  each  officer  or  director of the Corporation who was or is made a
party  or  witness  or  is  threatened  to  be  made a party or witness to or is
otherwise  involved  in  any  threatened,  pending  or completed action, suit or
proceeding,  whether  civil,  criminal,  administrative  or  investigative
(hereinafter a "proceeding"), by reason of the fact that he is or was a director
or  officer  of  the  Corporation  or  is  or  was serving at the request of the
Corporation  as a director, officer, employee or agent of another corporation or
of  a  partnership,  joint venture, trust or other enterprise, including service
with  respect  to  employee benefit plans (hereinafter an "indemnitee"), whether
the  basis  of  such  proceeding  is  alleged  action or inaction in an official
capacity  while  serving  as  a  director,  officer, employee or agent, shall be
indemnified  and  held  harmless  by  the  Corporation  to  the  fullest  extent
authorized by the general corporate law of Nevada as set forth in Section 78 et.
seq. of the Nevada Revised Statutes ("GCL"), as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
such  law permitted the Corporation to provide prior to such amendment), against
all  expense,  liability  and loss (including attorney's fees, judgments, fines,
ERISA  excise  taxes  or  penalties  and  amounts paid in settlement) reasonably
incurred  or  suffered  by  such  indemnitee  who  has  ceased to be a director,
officer,  employee  or  agent and shall inure to the benefit of the indemnitee's
heirs, executors and administrators; provided, however, that, except as provided
in  Article  V  hereof  with  respect  to  proceedings  to  enforce  rights  to
indemnification,  the  Corporation  shall  indemnify  any  such  indemnitee  in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the  Corporation.  The  right to indemnification conferred in this Section shall
include  the  right  to  be  paid  by  the  Corporation the expenses incurred in
defending  any  such proceeding in advance of its final disposition (hereinafter
an  "advancement  of  expenses"); provided, however, that if the GCL requires an
                                  --------  -------
advancement  of expenses incurred by an indemnitee, such advancement of expenses
shall  be  made  only  upon delivery to the Corporation of an undertaking in the
form  then  required  by  the  GCL  (if  any),  by


<PAGE>
or  on  behalf  of  such indemnitee, with respect to the repayment of amounts so
advanced  (hereinafter  an  "undertaking").

5.2. RIGHT  TO  INDEMNITEE  TO BRING SUIT.  If a claim under Section 5.1 of this
                                                             -----------
Article  V  is  not  paid  in  full by the Corporation within sixty days after a
written  claim  has  been  received  by the Corporation, except in the case of a
claim  for an advancement of expenses, in which case the applicable period shall
be twenty days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole or
in  part  in any such suit or in a suit brought by the Corporation to recover an
advancement  of expenses pursuant to the terms of an undertaking, the indemnitee
shall  be entitled to be paid also the expenses of prosecuting or defending such
suit.  In  (i)  any  suit  brought  by  the  indemnitee  to  enforce  a right to
indemnification  hereunder  (but  not  in  a  suit  brought by the indemnitee to
enforce  a  right to an advancement of expenses) it shall be a defense that, and
(ii)  any suit by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking the Corporation shall be entitled to recover such
expenses  upon  a  final  adjudication  that,  the  indemnitee  has  not met the
applicable  standard of conduct set forth in the GCL. Neither the failure of the
Corporation (including the Board of Directors, independent legal counsel, or its
stockholders)  to  have  made  a determination prior to the commencement of such
suit  that  indemnification  of  the  indemnitee  is proper in the circumstances
because  the  indemnitee has met the applicable standard of conduct set forth in
the  GCL, nor an actual determination by the Corporation (including its Board of
Directors,  independent  legal  counsel or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case of
such  suit  brought  by  the  indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right hereunder, or by the Corporation to
recover  an  advancement of expenses pursuant to he terms of an undertaking, the
burden  of  proving  that the indemnitee is not entitled to be indemnified or to
such  advancement  of  expenses  under this Section or otherwise shall be on the
Corporation.

5.3. SPECIFIC  LIMITATIONS ON INDEMNIFICATION.  Notwithstanding anything in this
Article  to  the  contrary,  the  Corporation shall not be obligated to make any
payment  to any indemnitee with respect to any proceeding (i) to the extent that
payment  is  actually  made  to the indemnitee under any insurance policy, or is
made  to  indemnitee  by  the Corporation or an affiliate thereof otherwise than
pursuant  to this Article, (ii) for any expense, liability or loss in connection
with  a  proceeding  settled  without  the  Corporation's written consent, which
consent, however, shall not be unreasonably withheld, (iii) for an accounting of
profits  made  from  the purchase or sale by the indemnitee of securities of the
Corporation  within  the meaning of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or similar provisions of any state statutory or common law,
(iv)  where  the  indemnitee acted in bad faith or with gross negligence, or (v)
where  prohibited  by  applicable  law.

5.4. CONTRACT.  The  provisions of this Article shall be deemed to be a contract
between  the  Corporation  and  each  director  and  officer  who serves in such
capacity  at  any  time  while  such  Section  is  in  effect, and any repeal or
modification  thereof  shall  not affect any rights or obligations then existing
with  respect  to any state of facts then or theretofore existing or any action,
suit  or proceeding theretofore or thereafter based in whole or in part upon any
such  state  of  facts.


<PAGE>
5.5. PARTIAL  INDEMNITY.  If  the  indemnitee is entitled under any provision of
this  Article to indemnification by the Corporation for some or a portion of the
expenses,  liabilities  or  losses  incurred in connection with a proceeding but
not,  however, for the entire amount thereof, the Corporation shall nevertheless
indemnify  the  indemnitee  for  the  portion thereof to which the indemnitee is
entitled.  Moreover, notwithstanding any other provision of this Article, to the
extent  that  the  indemnitee  has been successful on the merits or otherwise in
defense  of any or all claims relating in whole or in part to a proceeding or in
defense  of  any issue or matter therein, including dismissal without prejudice,
the  indemnitee  shall  be  indemnified  against all loss, expense and liability
incurred  in connection with the portion of the proceeding with respect to which
indemnitee  was  successful  on  the  merits  or  otherwise.

5.6. NON-EXCLUSIVITY  OF  RIGHTS.  The  rights  to  indemnification  and  to the
advancement  of expenses conferred in this Article shall not be exclusive of any
other  right  which  any person may have or hereafter acquire under any statute,
the  Articles of Incorporation, these Bylaws, agreement, vote of stockholders or
disinterested  directors  or  otherwise.

5.7. INSURANCE.  The  Corporation  may  maintain  insurance,  at its expense, to
protect  itself  and any director, officer, employee or agent of the Corporation
or  another  corporation,  partnership, joint venture, trust or other enterprise
against  any  expense,  liability  or loss, whether or not the Corporation would
have  the power to indemnify such person against such expense, liability or loss
under  the  GCL.

5.8. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The Corporation
may, to the extent authorized from time to time by the Board of Directors, grant
rights to indemnification and to the advancement of expenses, to any employee or
agent of the Corporation to the fullest extent of the provisions of this Article
with respect to the indemnification and advancement of expenses of directors and
officers  of  the  Corporation, or to such lesser extent as may be determined by
the  Board  of  Directors.

5.9. NOTICE  BY  INDEMNITEE AND DEFENSE OF CLAIM.  The indemnitee shall promptly
notify  the Corporation in writing upon being served with any summons, citation,
subpoena,  complaint,  indictment, information or other document relating to any
matter,  whether  civil,  criminal,  administrative  or  investigative,  but the
omission  so  to  notify  the Corporation will not relieve it from any liability
which  it  may  have  to  the indemnitee if such omission does not prejudice the
Corporation's  rights. If such omission does prejudice the Corporation's rights,
the  Corporation  will  be  relieved  from  liability only to the extent of such
prejudice;  nor  will  such  omission relieve the Corporation from any liability
which  it  may  have to the indemnitee otherwise than under this Article V. With
respect  to  any proceedings as to which the indemnitee notifies the Corporation
of  the  commencement  thereof:

     (a)  The  Corporation  will  be  entitled to participate therein at its own
expense;  and

     (b)  The  Corporation  will be entitled to assume the defense thereof, with
counsel  reasonably  satisfactory to the indemnitee; provided, however, that the
Corporation  shall  not be entitled to assume the defense of any proceeding (and
this  Section  5.9  shall  be inapplicable to such proceeding) if the indemnitee
      ------------
shall have reasonably concluded that there may be a conflict of interest between
the  Corporation  and  the  indemnitee  with  respect  to such proceeding. After


<PAGE>
notice  from  the  Corporation  to  the indemnitee of its election to assume the
defense thereof, the Corporation will not be liable to the indemnitee under this
Article V for any expenses subsequently incurred by the indemnitee in connection
with  the  defense  thereof,  other than reasonable costs of investigation or as
otherwise  provided below. The indemnitee shall have the right to employ his own
counsel  in  such  proceeding but the fees and expenses of such counsel incurred
after notice from the Corporation of its assumption of the defense thereof shall
be  at  the  expense  of  the  indemnitee  unless:

          (i)  The  employment  of counsel by the indemnitee has been authorized
     by  the  Corporation  in  writing;  or

          (ii)  The  Corporation  shall  not have employed counsel to assume the
     defense  in  such  proceeding or shall not have assumed such defense and be
     acting  in connection therewith with reasonable diligence; in each of which
     cases  the fees and expenses of such counsel shall be at the expense of the
     Corporation.

     (c)  The  Corporation  shall  not settle any proceeding in any manner which
would  impose  any  penalty  or  limitation  on  the  indemnitee  without  the
indemnitee's  written  consent;  provided, however, that the indemnitee will not
unreasonably  withhold  his  consent  to  any  proposed  settlement.

                                   ARTICLE VI

                   CERTIFICATES FOR SHARES AND THEIR TRANSFER

6.1. CERTIFICATES  FOR SHARES.  Unless otherwise provided by a resolution of the
Board  of  Directors,  the  shares  of the Corporation shall be represented by a
certificate.  The certificates of stock of the Corporation shall be numbered and
shall be entered in the stock ledger of the Corporation as they are issued. They
shall  exhibit  the holder's name and number of shares and shall be signed by or
in  the  name  of  the  Corporation  by  (a) the Chief Executive Officer, or the
President  and  (b)  the Secretary or any Assistant Secretary. Any or all of the
signatures  on  a  certificate  may  be by facsimile. In case any officer of the
Corporation,  transfer  agent  or  registrar  who has signed, or whose facsimile
signature  has  been  placed upon such certificate, shall have ceased to be such
officer,  transfer  agent  or  registrar before such certificate is issued, such
certificate  may  nevertheless be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issuance.

6.2. CLASSES  OF  STOCK.

     (a)  If the Corporation shall be authorized to issue more than one class of
stock  or  more  than  one  series  of  any  class,  the  powers,  designations,
preferences and relative participating, optional or other special rights of each
class  of  stock  or  series  thereof  and  the  qualification,  limitations, or
restrictions  of  such  preferences  or  rights  shall  be  set forth in full or
summarized  on  the  face  or back of the certificate that the Corporation shall
issue  to  represent  such  class  or  series  of


<PAGE>
stock;  provided, that, except as otherwise provided in Section 78.195(5) of the
Nevada  Revised Statutes in lieu of the foregoing requirements, there may be set
forth on the face or back of the certificate that the Corporation shall issue to
represent  such  class or series of stock, a statement that the Corporation will
furnish  without  charge  to  each  stockholder  who  so  requests  the  powers,
designations,  preferences and relative participating, optional or other special
rights  of  each  class  of  stock  or  series  thereof  and the qualifications,
limitations  or  restrictions  of  such  preferences  or  rights.

     (b)  Within a reasonable time after the issuance or transfer of uncertified
stock,  the  Corporation  shall  send  to the registered owner thereof a written
notice  containing  the  information  required  to  be  set  forth  or stated on
certificates  pursuant  to  applicable  law  (including Sections 78.195, 78.205,
78.235  and  78.242  of  the  Nevada  Revised  Statutes) or a statement that the
Corporation  will furnish without charge to each stockholder who so requests the
powers,  designations, preferences and relative participating, optional or other
special  rights of each class of stock or series thereof and the qualifications,
limitations  or  restrictions  of  such  preferences  or  rights.

6.3. TRANSFER.  Subject  to  applicable  federal and state securities laws, upon
surrender  to  the  Corporation  or  the  transfer agent of the Corporation of a
certificate  for  shares  duly  endorsed  or  accompanied  by proper evidence of
succession,  assignation  or  authority to transfer, it shall be the duty of the
Corporation  to  issue  a new certificate to the person entitled thereto, cancel
the  old  certificate  and  record  the  transaction upon its stock ledger. Upon
receipt of proper transfer instructions from the registered owner of uncertified
shares,  such  uncertified  shares shall be canceled, issuance of new equivalent
uncertified  shares  or  certified  shares  shall be made to the person entitled
thereto  and  the  transaction  shall  be  recorded upon the stock ledger of the
Corporation.

6.4. RECORD  OWNER.  The  Corporation  shall  be entitled to treat the holder of
record  of  any  share  or  shares  of stock as the holder in fact thereof, and,
accordingly,  shall not be bound to recognize any equitable or other claim to or
interest  in such share on the part of any other person, whether or not it shall
have  express or other notice thereof, save as expressly provided by the laws of
the  State  of  Nevada.

6.5. LOST  CERTIFICATES.  The Board of Directors may direct a new certificate or
certificates  or  uncertified shares to be issued in place of any certificate or
certificates  theretofore  issued  by the Corporation alleged to have been lost,
stolen  or destroyed, upon the making of an affidavit of that fact by the person
claiming  the  certificate  of  stock  to  be  lost,  stolen  or destroyed. When
authorizing  such  issue  of  a  new  certificate or certificates or uncertified
shares,  the  Board  of  Directors  may,  in  its  discretion and as a condition
precedent  to  the  issuance  thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to advertise
the  same  in  such  manner  as the Board of Directors shall require to give the
Corporation  a  bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to  have  been  lost  stolen  or  destroyed.

6.6. DIVIDENDS.  In  the  event a dividend is declared, the stock transfer books
will  not  be  closed but a record date will be fixed by the Board of Directors,
and  only stockholders of record on that date shall be entitled to the dividend.


<PAGE>
                                   ARTICLE VII

                              EMERGENCY PROVISIONS

7.1. GENERAL.  THE  PROVISIONS OF THIS ARTICLE VII WILL BE OPERATIVE ONLY DURING
A  NATIONAL  EMERGENCY  DECLARED  BY  THE  PRESIDENT OF THE UNITED STATES OR THE
PERSON  PERFORMING  THE  PRESIDENT'S  FUNCTIONS,  OR  IN THE EVENT OF A NUCLEAR,
ATOMIC,  OR OTHER ATTACK ON THE UNITED STATES OR A DISASTER MAKING IT IMPOSSIBLE
OR IMPRACTICABLE FOR THE CORPORATION TO CONDUCT ITS BUSINESS WITHOUT RECOURSE TO
THE PROVISIONS OF THIS ARTICLE VII. Said provisions in such event shall override
all  other  Bylaws  of  this Corporation in conflict with any provisions of this
Article  VII,  and  shall  remain  operative so long as it remains impossible or
impracticable  to  continue  the  business  of  the  Corporation  otherwise, but
thereafter  shall  be inoperative; provided that all actions taken in good faith
pursuant  to  such  provisions  shall thereafter remain in full force and effect
unless  and  until  revoked by action taken in accordance with the provisions of
the  Bylaws  (other  than  those  contained  in  this  Article  VII).

7.2. UNAVAILABLE  DIRECTORS.  All  Directors  of  the  Corporation  who  are not
available  to  perform their duties as Directors by reason of physical or mental
incapacity  or for any other reason or who are unwilling to perform their duties
or whose whereabouts are unknown shall automatically cease to be Directors, with
like  effect  as  if  such  persons  had  resigned as Directors, so long as such
unavailability  continues.

7.3. AUTHORIZED  NUMBER  OF DIRECTORS.  The authorized number of Directors shall
be  the number of Directors remaining after eliminating those who have ceased to
be  Directors  pursuant to Section 7.2 hereof, or the minimum number required by
                           -----------
law, whichever number is greater, until such time as the vacancy created thereby
can  be  filled,  or the applicable provisions of these Bylaws can be amended to
reflect  such  change.

7.4. QUORUM.  The  number of Directors necessary to constitute a quorum shall be
one-third  of  the  authorized number of Directors as specified in the foregoing
Section  7.3,  or  such  other  minimum number as, pursuant to the law or lawful
- ------------
decree then in force, it is possible for the Bylaws of a Corporation to specify.

7.5. CREATION  OF  EMERGENCY  COMMITTEE.  In  the  event the number of Directors
remaining  after  eliminating  those who have ceased to be Directors pursuant to
Section  7.2  of  this Article VII is less than the minimum number of authorized
- ------------
Directors required by law, then until the appointment of additional Directors to
make  up  such required minimum, all the powers and authorities, which the Board
could  by  law  delegate,  including  all powers and authorities which the Board
could  delegate  to  a  committee, shall be automatically vested in an emergency
committee  (the  "Emergency  Committee"),  and  the  Emergency  Committee  shall
thereafter  manage  the  affairs  of the Corporation pursuant to such powers and
authorities  and  shall have all such other powers and authorities as may by law
or  lawful  decree be conferred on any person or body of persons during a period
of  emergency.


<PAGE>
7.6. CONSTITUTION OF EMERGENCY COMMITTEE.  The Emergency Committee shall consist
of  all  the  Directors  remaining after eliminating those who have ceased to be
Directors  pursuant  to  Section  7.2  of  this  Article VII, provided that such
                         ------------
remaining Directors are not less than three in number (unless such lesser number
would otherwise be permissible under applicable law if no emergency existed). In
the  event  such  remaining  Directors  are  less than three in number (and such
number  is  not  otherwise  permitted  under applicable law), then the Emergency
Committee shall consist of three persons, who shall be the remaining Director or
Directors  plus  either  one or two officers or employees of the Corporation, as
the  remaining  Director  or  Directors may in writing designate. If there is no
remaining  Director,  the  Emergency  Committee  shall consist of the three most
senior officers of the Corporation who are available to serve, and if and to the
extent  such  officers  are  not  available,  the  most  senior employees of the
Corporation. Seniority shall be determined in accordance with any designation of
seniority  in the minutes of the proceedings of the Board, and in the absence of
such  designation,  shall  be determined by the highest rate of remuneration. In
the  event that there are no remaining Directors and no officers or employees of
the  Corporation  available,  the  Emergency  Committee  shall  consist of three
persons  designated  in  writing by the Shareholder owning the largest number of
shares  of  record  as  of  the  date  of  the  last  record  date.

7.7. POWERS  OF  EMERGENCY  COMMITTEE.  The Emergency Committee, once appointed,
shall  govern  its own procedures and shall have power to increase the number of
members  thereof  beyond  the  original number, and in the event of a vacancy or
vacancies  therein,  arising at any time, the remaining member or members of the
Emergency  Committee  shall have the power to fill such vacancy or vacancies. In
the  event  at  any  time  after  its  appointment, all members of the Emergency
Committee  shall  die  or  resign  or  become  unavailable to act for any reason
whatsoever,  a new Emergency Committee shall be appointed in accordance with the
foregoing  provisions  of  this  Article  VII.

7.8. DIRECTORS  BECOMING  AVAILABLE.  Any person who has ceased to be a Director
pursuant to the provisions of Section 7.2 of this Article VII and who thereafter
                              -----------
becomes  available to serve as a Director shall automatically become a member of
the  Emergency  Committee.

7.9. ELECTION  OF  BOARD  OF  DIRECTORS.  The Emergency Committee shall, as soon
after its appointment as is practicable, take all requisite action to secure the
election  of  a  board  of  directors, and upon such election all the powers and
authorities  of  the  Emergency  Committee  shall  be  vested  therein,  and the
Emergency  Committee  shall  thereafter  cease.

7.10. TERMINATION  OF  EMERGENCY COMMITTEE.  In the event, after the appointment
of  an  Emergency  Committee,  a  sufficient  number of persons who ceased to be
Directors  pursuant to Section 7.2 of this Article VII become available to serve
                       -----------
as Directors, so that if they had not ceased to be Directors as aforesaid, there
would be enough Directors to constitute the minimum number of Directors required
by law, then all such persons shall automatically be deemed to be reappointed as
Directors,  the powers and authorities of the Emergency Committee shall again be
vested  in  the  Board,  and  the  Emergency  Committee  shall thereafter cease.


<PAGE>
                                  ARTICLE VIII

                                  MISCELLANEOUS

8.1. EXECUTION  OF  INSTRUMENTS.  The Board of Directors may, in its discretion,
determine  the  method and designate the signatory officer or officers, or other
persons,  to  execute  any  corporate  instrument  or  document  or  to sign the
corporate  name  without limitation, except where otherwise provided by law, the
Articles  of  Incorporation  or these Bylaws. Such designation may be general or
confined  to  specific  instances.

8.2. VOTING  OF  SECURITIES  OWNED  BY  THE  CORPORATION.  All  stock  and other
securities of other corporations held by the Corporation shall be voted, and all
proxies  with  respect thereto shall be executed, by the person so authorized by
resolution  of the Board of Directors, or, in the absence of such authorization,
by  the  Chairman  of  the  Board.

8.3. CORPORATE SEAL.  A corporate seal shall not be requisite to the validity of
any  instrument  executed  by  or  on  behalf  of  the  Corporation.

8.4. CONSTRUCTION  AND  DEFINITIONS.  Unless  the context requires otherwise the
general  provisions, rules of construction and definitions in the Nevada Revised
Statutes  and  the  Articles  of  Incorporation shall govern the construction of
these  Bylaws.

8.5. AMENDMENTS.  These Bylaws may be altered, amended or repealed by a majority
vote  of  the  Board  of  Directors  or  the  stockholders.

8.6. DESCRIPTIVE HEADINGS.  The  descriptive headings of the paragraphs of these
Bylaws  are  inserted  for  convenience only and shall not control or affect the
meaning  or  construction  of  any  provision  hereof.

8.7. REFERENCE THERETO.  Any reference herein made to the Corporation's Articles
will  be  deemed  to  refer  to its Articles of Incorporation and all Amendments
thereto  as  at  any  given  time  on  file  with the Nevada Secretary of State,
together with any and all certificates theretofore filed by the Corporation with
the  Nevada  Secretary  of  State  pursuant  to  applicable  law.

8.8. SENIORITY THEREOF.  The  Articles will in all respects be considered senior
and  superior to these Bylaws, with any inconsistency to be resolved in favor of
the Articles, and with these Bylaws to be deemed automatically amended from time
to  time  to  eliminate  any  such  inconsistency  which  may  then  exist.

8.9. NUMBER AND GENDER.  Whenever used herein, the singular number shall include
the  plural  and  the singular, and the use of any gender shall be applicable to
all  genders.


<PAGE>
                             CERTIFICATE OF ADOPTION

The undersigned Secretary of the Corporation hereby certifies that the foregoing
Amended  and  Restated  Bylaws  of  YP.Net,  Inc.,  a  Nevada  corporation  (the
"Corporation"),  constitute  the  Bylaws  of  said Corporation, duly adopted and
approved,  pursuant  to  a  resolution  of  the  Board  of  Directors.

December  31,  2003               /s/  DeVal  Johnson
                                  ---------------------------------------
                                  DeVal  Johnson,  Corporate  Secretary


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14
<SEQUENCE>4
<FILENAME>doc4.txt
<DESCRIPTION>EXHIBIT 14
<TEXT>
                                                                      Exhibit 14

                                    YP CORP.

                       CODE OF BUSINESS CONDUCT AND ETHICS

                            Adopted December 31, 2003

     1.   INTRODUCTION

     This  Code  of Business Conduct and Ethics ("CODE") has been adopted by the
Board of Directors of YP Corp. (the "COMPANY") and summarizes the standards that
must  guide  our  actions. While covering a wide range of business practices and
procedures,  these standards cannot and do not cover every issue that may arise,
or  every  situation  where ethical decisions must be made, but rather set forth
key  guiding  principles  that  represent  the  Company's policies and establish
conditions  for  employment  at  the  Company.

     We  must  strive  to  foster  a culture of honesty and accountability.  Our
commitment to the highest level of ethical conduct should be reflected in all of
the  Company's  business activities including, but not limited to, relationships
with  employees, IAP advertisers, suppliers, competitors, the government and the
public,  including  the  Company's shareholders. All of the Company's employees,
officers  and  directors  must  conduct themselves according to the language and
spirit  of this Code and seek to avoid even the appearance of improper behavior.

     Even  well intentioned actions that violate the law or this Code may result
in  negative  consequences for the Company and for the individuals involved. For
Company  personnel,  such  consequences  may  result  in  corrective  and/or
disciplinary  action,  which  may  include  termination of employment or service
and/or  dismissal  and  removal from office.  If you are in a situation that you
believe  may  violate or lead to a violation of this Code, follow the guidelines
described  in  Section  15  of  this  Code.

     2.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS

     The  Company  is strongly committed to conducting its business affairs with
honesty  and  integrity  and  in  full  compliance  with  all  laws,  rules  and
regulations  in  the cities and states in which we operate. No employee, officer
or  director of the Company shall commit an illegal or unethical act or instruct
others  to  do  so,  for  any  reason.

     If  you  believe  that  any practice raises questions as to compliance with
this  Code  or  applicable  law,  rule  or  regulation  or if you otherwise have
questions  regarding  any  law, rule or regulation, please contact the Company's
Chief  Executive  Officer.

     3.   TRADING  ON  INSIDE  INFORMATION

     Employees  who have access to confidential information are not permitted to
use  or  share  that  information  for  stock  trading purposes or for any other
purpose  except  the  conduct of our business.  All non-public information about
the  Company  should  be considered confidential information.  To use non-public
information  for  personal  financial  benefit  or  to  "tip"  others  who


<PAGE>
might  make  an investment decision on the basis of this information is not only
unethical  but  also  illegal.  If  you  have any questions, please consult your
supervisor  or  the  Company's  Chief  Executive  Officer.

     4.   PROTECTION  OF  CONFIDENTIAL  PROPRIETARY  INFORMATION

     Confidential proprietary information generated and gathered in our business
is  a  valuable  Company  asset.

     Protecting  this  information plays a vital role in the Company's continued
growth  and  ability  to  compete,  and all confidential proprietary information
should  be maintained in strict confidence, except when disclosure is authorized
by  the  Company  or  required  by  law.

     Confidential  proprietary  information  includes all non-public information
that  might  be useful to competitors or that could be harmful to the Company or
its  IAP  advertisers  or  suppliers if disclosed. Confidential information also
includes  intellectual  property  such as trade secrets, patents, trademarks and
copyrights,  as  well as business research and new product plans, objectives and
strategies,  records,  databases,  salary  and  benefits  data, employee medical
information,  IAP  advertiser,  employee and suppliers lists and any unpublished
financial  or  pricing  information  must  also  be  protected. It also includes
information  received from third parties, such as suppliers and IAP advertisers,
and  entrusted  to  us  on  a  confidential  basis.

     Unauthorized use or distribution of confidential or proprietary information
violates  Company  policy  and  could be illegal. Such use or distribution could
result  in  negative  consequences  for  both  the  Company  and the individuals
involved,  including  potential  legal  and disciplinary actions. We respect the
property rights of other companies and their proprietary information and require
our  employees,  officers  and  directors  to  observe  such  rights.

     Your  obligation  to  protect  the  Company's  proprietary and confidential
information  continues even after you leave the Company, and you must return all
proprietary  and  confidential  information  in your possession upon leaving the
Company.

     5.   CONFLICTS OF INTEREST

     The  Company's  employees, officers and directors have an obligation to act
in  the  best  interest  of  the  Company. All employees, officers and directors
should  endeavor to avoid situations that present a potential or actual conflict
between  their  interest  and  the  interest  of  the  Company.

     A "conflict of interest" occurs when a person's private interest interferes
in  any  way,  or  even  appears to interfere, with the interest of the Company,
including its subsidiaries and affiliates. A conflict of interest can arise when
an  employee,  officer  or  director takes an action or has an interest that may
make  it  difficult  for  him  or her to perform his or her work objectively and
effectively.  Conflicts  of interest may also arise when an employee, officer or
director (or his or her family members) receives improper personal benefits as a
result  of  the  employee's,  officer's  or  director's position at the Company.


<PAGE>
     Although  it  would  not be possible to describe every situation in which a
conflict  of  interest may arise, the following are examples of situations which
may  constitute  a  conflict  of  interest:

     -    working, in any capacity, for a competitor, IAP advertiser or supplier
          while  employed  by  the  Company;

     -    accepting  gifts  of  more  than  modest  value  or receiving personal
          discounts  or  other  benefits  as  a  result  of your position at the
          Company  from  a  competitor,  IAP  advertiser  or  supplier;

     -    competing  with  the  Company  for  the  purchase or sale of property,
          services  or  other  interests;

     -    having  an  interest  in  a  transaction  involving the Company, a IAP
          advertiser  or supplier (not including routine investments in publicly
          traded  companies);

     -    receiving  a  loan  or  guarantee of an obligation as a result of your
          position with the Company, other than permitted loans or guarantees by
          the  Company  that  are  properly  documented  and  made  pursuant  to
          established  policies;  and

     -    directing  business  to  a  supplier  owned  or  managed  by, or which
          employs,  a  relative  or  friend.

     Situations  involving  a  conflict of interest may not always be obvious or
easy  to resolve. Employees should report actions that may involve a conflict of
interest  to  their  supervisor  or  the  Company's  Chief  Executive  Officer.

     In order to avoid conflicts of interests, all senior officers and directors
must  disclose to the Company's Chief Executive Officer any material transaction
or  relationship  that  reasonably  could  be  expected  to  give rise to such a
conflict,  and  the  Company's Chief Executive Officer shall notify the Board of
Directors of any such disclosure. Conflicts of interests involving the Company's
Chief  Executive Officer shall be disclosed to the Company's Board of Directors.
Employees,  officers  and  directors who knowingly fail to disclose conflicts of
interest are subject to disciplinary action, including dismissal or removal from
office.

     6.   PROTECTION AND PROPER USE OF COMPANY ASSETS

     Protecting  Company  assets  against  loss,  theft  or other misuse are the
responsibility  of every employee, officer and director. Loss, theft, misuse and
waste  of  Company  assets  directly  impact  our  profitability. Any such loss,
misuse,  waste  or suspected theft should be reported to a manager/supervisor or
the  Company's  Chief  Executive  Officer.  The  sole  purpose  of the Company's
equipment,  inventory and supplies is the conduct of our business. They may only
be  used  for  Company  business  consistent  with  Company  guidelines,  though
incidental  personal  use  may  be  permitted.


<PAGE>
     7.   CORPORATE  OPPORTUNITIES

     Employees, officers and directors are prohibited from taking for themselves
business opportunities that arise or are discovered through the use of corporate
property,  information  or  position.  No  employee, officer or director may use
corporate  property, information or position for personal gain, and no employee,
officer  or  director  may  compete  with  the  Company  directly or indirectly.
Competing  with the Company may involve engaging in the same line of business as
the  Company or any situation where the employee, officer or director takes away
from  Company  opportunities  for  sales  or  purchases of products, services or
interests.  Employees,  officers  and  directors  owe  a  duty to the Company to
advance  its  legitimate  interests  when  the  opportunity  to  do  so  arises.

     8.   FAIR  DEALING

     Each  employee, officer and director of the Company should endeavor to deal
fairly  with  IAP  advertisers, suppliers, competitors, shareholders, the public
and  one another at all times and in accordance with ethical business practices.
No one should take unfair advantage of anyone through manipulation, concealment,
abuse  of  privileged  information,  misrepresentation  of material facts or any
other  unfair dealing practice. No payment in any form shall be made directly or
indirectly  to  or for anyone for the purpose of obtaining or retaining business
or  obtaining  any other favorable action. The Company and the employee, officer
or  director involved may be subject to disciplinary action as well as potential
civil  or  criminal  liability  for  violation  of  this  policy.

     Occasional  business gifts to and entertainment of non-government employees
in  connection  with  business  discussions  or  the  development  of  business
relationships  are  generally deemed appropriate in the conduct of the Company's
business.  However,  these  gifts  should  be given infrequently and their value
should be modest. Gifts or entertainment in any form that would likely result in
a  feeling  or  expectation  of  personal  obligation  should not be extended or
accepted.

     Practices  that  are  acceptable in commercial business environments may be
against  the  law  or  the policies governing federal, state or local government
employees.  Therefore,  no  gifts  or  business entertainment of any kind may be
given  to  any  government  employee without the prior approval of the Company's
Chief  Executive  Officer.

     The  Foreign  Corrupt  Practices  Act ("FCPA") prohibits giving anything of
value  directly  or  indirectly  to  any  "foreign  official" for the purpose of
obtaining  or  retaining  business.  When  in doubt as to whether a contemplated
payment  or  gift  may  violate  the FCPA, contact the Company's Chief Executive
Officer  before  taking  any  action.

     9.   QUALITY OF PUBLIC DISCLOSURES

     The  Company  has  a  responsibility  to  communicate  effectively  with
shareholders  so  that  they are provided with full and accurate information, in
all  material  respects, about the financial condition and results of operations
of  the  Company. The Company's Chief Executive Officer and all senior financial
officers  are  responsible  for  full, fair, accurate, timely and understandable
disclosure  in  periodic  reports  required  to be filed by the Company with the
Securities  and


<PAGE>
Exchange  Commission.  For  purposes  of  this Code, "senior financial officers"
means  the  Company's  principal  financial  officer,  the  Company's  principal
accounting  officer or controller and other persons performing similar functions
for  the  Company.  Accordingly  it is the responsibility of the Company's Chief
Executive  Officer  and  each  senior financial officer promptly to bring to the
attention  of  the  Audit  Committee  of  the  Board  of  Directors any material
information  of  which  he  or she may become aware that affects the disclosures
made  by  the  Company  in  its  public  filings  or  otherwise assist the Audit
Committee  in  fulfilling  its  responsibilities.

     The  Company's  Chief  Executive  Officer and each senior financial officer
shall  promptly  bring  to  the attention of the Audit Committee or the Board of
Directors  any information concerning (a) significant deficiencies in the design
or  operation  of  internal  controls which could adversely affect the Company's
ability  to  record,  process,  summarize  and  report financial data or (b) any
fraud,  whether or not material, that involves management or other employees who
have  a  significant  role  in the Company's financial reporting, disclosures or
internal  controls.

     The  Company's  Chief  Executive  Officer and each senior financial officer
shall  promptly  bring  to  the attention of the Audit Committee any information
concerning  evidence  of  a  material violation of the securities or other laws,
rules  or  regulations  applicable  to  the  Company  and  the  operation of its
business,  by  the  Company  or  any  agent  thereof.

     10.  COMPLIANCE WITH ANTITRUST LAWS

     The antitrust laws prohibit agreements among competitors on such matters as
prices,  terms  of  sale  to  IAP  advertisers  and  allocating  markets  or IAP
advertisers.  Antitrust laws can be very complex, and violations may subject the
Company  and its employees to criminal sanctions, including fines, jail time and
civil  liability.  If  you  have  any  questions,  consult  the  Company's Chief
Executive  Officer.

     11.  POLITICAL  CONTRIBUTIONS  AND  ACTIVITIES

     Any  political  contributions  made  by or on behalf of the Company and any
solicitations  for  political  contributions  of  any kind must be lawful and in
compliance with the Company's policies. This policy applies solely to the use of
Company  assets  and  is  not  intended  to  discourage  or  prevent  individual
employees, officers or directors from making political contributions or engaging
in  political  activities on their own behalf. No one may be reimbursed directly
or  indirectly  by  the  Company  for  personal  political  contributions.

     12.  ENVIRONMENT,  HEALTH  AND  SAFETY

     The  Company is committed to conducting its business in compliance with all
applicable  environmental  and workplace health and safety laws and regulations.
The  Company  strives  to  provide  a  safe and healthy work environment for our
employees  and  to  avoid  adverse  impact  and  injury  to  the environment and
communities  in  which  we  conduct  our  business.  Achieving  this goal is the
responsibility  of  all  officers,  directors  and  employees.  Violence  and
threatening  behavior  are  not  permitted.  Employees  should report to work in
condition  to  perform their duties, free from the influence of illegal drugs or
alcohol.


<PAGE>
     13.  EQUAL OPPORTUNITY, NON-DISCRIMINATION AND FAIR EMPLOYMENT

     The  Company's  policies  for  recruitment,  advancement  and  retention of
employees  forbid discrimination on the basis of any criteria prohibited by law,
including  but  not  limited  to  race,  sex and age. The Company's policies are
designed  to ensure that employees are treated, and treat each other, fairly and
with  respect  and  dignity.  In  keeping with this objective, conduct involving
discrimination  or  harassment  of  others  will  not  be  tolerated.

     14.  REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR

     Situations  which  may involve a violation of ethics, laws or this Code may
not always be clear and may require difficult judgment. Employees are encouraged
to  discuss  any  questions  they  may  have with supervisors, managers or other
appropriate  personnel  when  in  doubt  about  the  best  course of action in a
particular  situation.

     Employees  should  promptly  report  any concerns about violations of laws,
rules, regulations or this Code to the Company's Chief Executive Officer, or, in
the  case  of  accounting, disclosures, internal accounting controls or auditing
matters,  the  Audit  Committee  or  the  Board  of  Directors.  If  concerns or
complaints  require confidentiality, including keeping an identity anonymous, we
will  endeavor  to  protect  this  confidentiality,  subject  to applicable law,
regulation  or  legal  proceedings.

     The  Company  will  not  tolerate  any  kind  of retaliation for reports or
complaints regarding misconduct that were made in good faith. Open communication
of  issues  and  concerns  by  all  employees  without  fear  of  retribution or
retaliation  is  vital  to  the  successful implementation of this Code. You are
required  to  cooperate  in  internal investigations of misconduct and unethical
behavior.

     15.  COMPLIANCE PROCEDURES

     The  Company  recognizes  the  need  for this Code to be applied equally to
everyone  it  covers.  The  Company's  Chief Executive Officer will have primary
authority  and  responsibility  for the enforcement of this Code, subject to the
supervision  of  the Board of Directors, or, in the case of accounting, internal
accounting  controls  or  auditing  matters, the Audit Committee or the Board of
Directors,  and  the  Company  will devote the necessary resources to enable the
Company's  Chief  Executive  Officer  to  establish  such  procedures  as may be
reasonably  necessary  to  create  a  culture  of  accountability and facilitate
compliance  with  the Code. Questions concerning this Code should be directed to
the  Company's  Chief  Executive  Officer.

     16.  WAIVERS AND AMENDMENTS

Any waivers of the provisions in this Code for the Company's executive officers,
senior financial officers or directors may be granted only by the Board of
Directors and will be promptly disclosed as required by applicable law and
regulations. Any waivers of this Code for other employees may be granted only by
the Company's Chief Executive Officer and must be in writing to be effective.
Amendments to this Code must be approved by the Board of Directors, and
amendments of the provisions in this Code applicable to the Company's Chief
Executive


<PAGE>
Officer and senior financial officers also will be promptly disclosed as
required by applicable law and regulations.


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>doc5.txt
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
                                                                    Exhibit 31.1

            CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY

I, Angelo Tullo, Chairman and Chief Executive Officer of YP Corp., certify that:

1.   I have reviewed this Quarterly Report on Form 10-QSB of YP Corp.;

2.   Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4.   The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small
business issuer and have;

     a)   Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being
prepared;

     b)   Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

     c)   Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and

5.   The small business issuer's other certifying officers and I have disclosed,
based on our most recent evaluation of internal control over financial reporting
to the small business issuer's auditors and the audit committee of small
business issuer's board of directors (or persons performing the equivalent
function);

     a)   All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.

     Date: May 13, 2004          /s/ Angelo Tullo
                                 -----------------------
                                 Angelo Tullo
                                 Chairman and Chief Executive Officer
                                 (Principal Executive Officer)


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>doc6.txt
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
                                                                    Exhibit 31.2

I, David Iannini, Chief Financial Officer of YP Corp., certify that:

1.   I have reviewed this Quarterly Report on Form 10-QSB of YP Corp.;

2.   Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4.   The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small
business issuer and have;

     a)   Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being
prepared;

     b)   Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

     c)   Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and

5.   The small business issuer's other certifying officers and I have disclosed,
based on our most recent evaluation of internal control over financial reporting
to the small business issuer's auditors and the audit committee of small
business issuer's board of directors (or persons performing the equivalent
function);

     a)   All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.

     Date: May 13, 2004          /s/ David Iannini
                                 ------------------------
                                 David Iannini
                                 Chief Financial Officer
                                 (Principal Financial Officer)


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>7
<FILENAME>doc7.txt
<DESCRIPTION>EXHIBIT 32
<TEXT>
                                                                      Exhibit 32

                              CERTIFICATION OF THE
           PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, Angelo Tullo, the CEO of YP Corp., certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that the Quarterly Report of YP Corp. on Form 10-QSB for the quarter ended
March 31, 2004 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and that information contained in such
Annual Report on Form 10-KSB fairly presents in all material respects the
financial condition and results of operations of YP.Net, Inc.

     Date: May 13, 2004        /s/ Angelo Tullo
                               ---------------------
                               Angelo Tullo
                               Chairman and Chief Executive Officer


     I, David Iannini, the CEO of YP Corp., certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that the Quarterly Report of YP Corp. on Form 10-QSB for the quarter ended
March 31, 2004 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and that information contained in such
Annual Report on Form 10-KSB fairly presents in all material respects the
financial condition and results of operations of YP.Net, Inc.

     Date: May 13, 2004       /s/ David Iannini
                               ---------------------
                              David Iannini
                              Chief Financial Officer


<PAGE>

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