U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 3 TO FORM 10-KSB (Mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2002 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ________________ Commission File Number: 0-24217 YP.NET, INC. (Name of Small Business Issuer in its Charter) NEVADA 85-0206668 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 4840 EAST JASMINE STREET, SUITE 105 MESA, ARIZONA 85205 (Address of principal executive offices) (Zip Code) (480) 654-9646 (Issuer's telephone number) Securities registered under Section 12(b) of the Exchange Act: NONE Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK, $.001 PAR VALUE (Title of Class) 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. X Yes No . Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB [X] Registrant's revenues for its most recent fiscal year were $13,232,743 The aggregate market value of the common stock held by non-affiliates computed based on the closing price of such stock on January 7, 2003 was approximately $1,677,062. The number of shares outstanding of the registrant's classes of common stock, as of January 7 , 2003 was 43,963,222. EXPLANATORY NOTE: This Amendment No. 3 to the Annual Report on Form 10-KSB for YP.Net, Inc., for the fiscal year ended September 30, 2003, as filed with the Securities and Exchange Commission on January 14, 2003, and as amended previously on April 10, 2003 and July 8, 2003, is being filed solely for the purpose of making the amendments set forth herein. This Form 10-KSB/A does not, unless indicated, reflect events occurring after the filing of the original Form 10-KSB, or modify or update the disclosures therein in any way other than as required to reflect the amendment set forth below. The filing of this Form 10-KSB/A shall not be deemed an admission that the original filing or the amendments made thereto, when made, included any untrue statement of a material fact or omitted to state a material fact necessary to make a statement not misleading. PART I ITEM 3. LEGAL PROCEEDINGS We are party to certain legal proceedings and other various claims and lawsuits in the normal course of our business, which, in the opinion of management, are not individually or collectively material to our business or financial condition. The Federal Trade Commission ("FTC") has aggressively pursued what it perceives as deceptive practices related to direct mailer and other promotions involving the Internet and/or LEC billing type practices. We had been involved in a significant FTC enforcement action regarding these matters. On or about June 26th, 2000 the FTC filed suit, in separate actions, against not less than 10 Internet companies of which the Company was one. Almost immediately the Company reached a preliminary settlement with the FTC (on July 13th, 2000), which essentially allowed the Company to continue "business as before", pending a final resolution. However, the Board of Directors of the Company determined that since the matter in question related to the Company's direct mail solicitations that the Company would voluntarily not mail any solicitations until a final agreement was reached with the FTC. With no findings of wrongdoing or admissions by us, on July 30, 2001 a Final settlement was reached. The Stipulated Final Judgment and Order for Permanent Injunction and other Equitable Relief (the "Order") was filed with the United States District Court wherein the FTC and the Company agreed to this stipulation, which states a claim upon which relief may be granted against the Company, should it be violated. The Order called for the following minor changes to our business practices; We have been restrained from using the word "rebate" on our solicitations and must state that the mailer is a solicitation of goods and services, We have voluntarily agreed not to use the "walking fingers" logo on our solicitation (unless accompanied by the language "not affiliated with any local or long distance phone company") and further have extended our refund policy to our new customers from 90 days to 120 days. Once the settlement was reached the Company tested its solicitations using all --- of the changes required under the agreement and upon determining that they had no material impact upon the results, resumed regular mailings in October 2001. As of this date the Company has complied with all ongoing requirements under the settlement, including the provision that all management personnel read and acknowledge the Final Order to ensure compliance. Other than this one action, The Company and the United States Federal Trade Commission have had no other issues. The Company is or was a Plaintiff in various legal actions: The Company had initiated various legal actions to recover shares of stock that had been issued by former management to various consultants. In all of these cases, management has alleged that this stock was issued to these consultants for the promise of valuable services to be rendered that were never performed. The cases and their current status are summarized below; - -YP.Net v. Elrod Maricopa County Superior Court CV2000-021154 (154,284 shares of common stock) On July 28, 1999, Elrod was hired as a consultant to the Company relating to financial and strategic matters. He was a consultant at the time the shares were transferred to him. The Company believes that Elrod did not perform in accordance with the consulting agreement. Subsequently, Elrod transferred the shares to a third party. Proceedings in this case began on November 27, 2000. All parties have agreed to enter into a tri-parte agreement on May 8, 2002 whereby the shares would be returned to the Company. The shares have not yet been returned to the Company as Elrod is disputing the terms of the settlement agreement. - -YP.Net v. Eriksson Maricopa County Superior Court CV2000-021151 (132,500 shares of common stock) On or about July 8, 1999, Eriksson was hired as a consultant to the Company relating to financial and strategic matters. He was a consultant at the time the shares were transferred to him. The Company believes that Eriksson did not perform in accordance with the consulting agreement. Subsequently, Eriksson had transferred all of these shares to third parties. Proceedings in this case began on November 27, 2000. One of those third parties, Tiger Lewis, has returned the shares transferred to them (82,500 shares). McConkie, another third party recipient of 50,000 shares had sued the Company so that he can further transfer the shares. A tri-parte agreement has been reached whereby the shares would be returned to the Company upon payment of $6,187.50. That payment, final settlement and return of shares to the Company occurred on or about December 12, 2002. - -YP.Net v. Wolfson Maricopa County Superior Court CV2000-021152 (385,716 shares of common stock) On July 28, 1999, Wolfson was hired as a consultant to the Company relating to financial and strategic matters. He was a consultant at the time the shares were transferred to him. The Company believes that Wolfson did not perform in accordance with the consulting agreement. After agreeing to return the shares and filing a settlement agreement in court, Wolfson transferred these shares to an undisclosed third party. Proceedings in this case began on November 27, 2000. Presently,in settlement negotiations, Wolfson has agreed to provide the name of the third party and to negotiate the return of the shares to the Company. The shares have not yet been returned. - -YP.Net v. Anderson Maricopa County Superior Court CV2000-021153 (250,000 shares of common stock) On July 28, 1999, Anderson was hired as a consultant to the Company relating to financial and strategic matters. She was a consultant at the time the shares were transferred to her. The Company believes that Anderson did not perform in accordance with the consulting agreement. Proceedings in this case began on November 27, 2000. On June 10, 2002, the Company obtained judgment in its favor rescinding the original contract and all of the shares have been awarded to the Company. The shares are in the process of being transferred by the transfer agent. - -YP.Net v. Pamela J. Thompson et al. Maricopa County Superior Court CV2002-010117 On May 29th, 2002 the Company filed suit against Pamela J. Thompson, former CFO and related parties ("Thompson") in the Superior Court of Arizona alleging, among other things, that Thompson removed Company property without authorization and misappropriated Company funds. On July 10th, 2002, the Court issued a Temporary Restraining Order against Thompson enjoining them from disclosing or disseminating the Company's trade secrets, financial or confidential information and interfering in the Company's contractual obligations or contracts of the Company. The Company is seeking the return of the misappropriated funds and the Company property removed without authorization as well as the repayment of loans outstanding to the Company. The Company is also seeking punitive damages, attorney fees and compensatory damages. Discovery in the case is ongoing. Currently, the Company is seeking approximately $95,000 as restitution. The Company had made a demand for arbitration against a former billing Company for the return of funds that the Company alleged was wrongfully withheld from payments by them to us. The matter was settled by payment to the Company by the billing company of $200,000 The Company was named as a Defendant in a lawsuit filed by Joseph and Helen Van Sickle on May 24th, 2002 (CV2002-010296) demanding immediate repayment of a promissory note for monies loaned to the Company by The Van Sickles. The Van Sickles claimed the Company owed approximately $500,000, which amount the Company disputed. A settlement was reached and the case was dismissed with payment by the Company of $300,000 on October 17th, 2002. All other matters have been settled or dismissed and no other matters are pending. PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT DIRECTORS AND EXECUTIVE OFFICERS The following biographical information is provided for each of the Company's Directors and Executive Officers: ANGELO TULLO. Mr. Tullo has served as the Chairman of the Board of YP.Net since February 2000. Mr. Tullo was hired as Chief Executive Officer and President on September 10, 2000. Since December 1999, Mr. Tullo has also been the president of Sunbelt Financial Solutions, Inc., an investment banking and consultant firm in Scottsdale, Arizona. From Janaury 1997 to December 1999, Mr Tullo was an officer and director of American Business Funding Corp. Currently and for over twenty years, Mr. Tullo has been active as a business consultant. Mr. Tullo has actively worked with commercial financing and factoring for the past ten years. He has owned and operated factoring companies, leasing companies, consulting companies, wholesale companies, professional employment organizations, insurance agencies, heating and air-conditioning contractors, retail oil companies, real estate companies and restaurants. He is a former member of the CEO Club in New York, and current a member of the Presidential Business Roundtable Committee. In February 2000, American Business Funding Corp. filed for protection under Chapter 11 of the Bankruptcy Code in the Federal District Court of Arizona. Mr. Tullo had previously been a director, officer and shareholder of American Business Funding prior to the time of its bankruptcy filing. GREGORY B. CRANE. Mr. Crane has been a director of YP.Net since February, 2000 and also served as its Director of Operations from February 2000 to September 2000. Mr. Crane is the President of AMCS. He has been employed by AMCS since January 29, 2001. AMCS provides marketing and administrative services as well as personnel to the Company. From mid 1997 to December 2002, he was a marketing consultant to BESI, a related party to the Company (See "Certain Relationships and Related Transactions"). From September 1998 to June 1999, Mr. Crane was the General Manager of Telco Billing, Inc. ("Telco"). Mr. Crane has also owned and/or operated several businesses, including residential and commercial builders, multi-state mail order, and document-preparation companies (including State Recording Services, Inc.), and was also the creator of the Yellow-Page.Net concept. Mr. Crane is a former member of the Young Entrepreneur's Organization ("YEO"). In connection with providing homestead declaration document preparation and filing services, Mr. Crane (personally) and one of these businesses (State Recording Services, Inc.) have been subject to injunctive actions brought by the states of Arizona, Florida, Texas and Washington. Mr. Crane was the President and a significant shareholder of State Recording Services, Inc. These actions generally raised legal questions concerning mailer solicitations for document preparation services. Mr. Crane and various of the state plaintiffs have entered into consent orders in connection with these actions that required the modification of mailers and the payment of civil penalties, restitution, and attorneys' fees. Regarding each injunctive action, the use of the mail solicitation for document preparation services was prohibited in the State of Washington and Mr. Crane satisfied a judgment rendered in December 1994 of $500,000. Mr. Crane voluntarily entered into an agreement with the State of Florida in connection with these matters and due to an error in type size made by the printing company; Mr. Crane technically violated that order. In connection with that violation of the Florida order, Mr. Crane was subject to a judgment, dated February 1998, in the amount of approximately $1.4 million, plus accrued interest. As of February 2003, this judgment has expired and is no longer binding on Mr. Crane under Florida law and is in the process of being vacated. The injuctive actions in Arizona and Texas were both satisfied in April 1995 for primarily attorneys fees and refund offers to customers. Mr. Crane was also named in the action filed by the Federal Trade Commission ("FTC") against the Company and has been included in the stipulated preliminary order entered into by the FTC and us and approved by the FTC. The Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable Relief by and between the FTC, Mr. Crane, Telco, us and others (the "Order") places certain restrictions on the way mail solicitations will appear. The Order has been approved by the U.S. District Court Judge and the matter is closed with no findings of wrong doing on the part of the company, its officers and directors or Mr. Crane. DANIEL L. COURY. Mr. Coury has served as a director of YP.Net since February 2000. For the last twelve years, Mr. Coury's principal business has been Mesa Cold Storage, Inc., which owns and operates the largest cold storage facilities in Arizona. He is also involved in the ownership and operation of various real estate interests and business ventures. DEVAL JOHNSON. Mr. Johnson has served as a director since October 1999. Mr. Johnson was the graphics designer and director of Telco Billing from September 1998 until June 1999 when the Company acquired it. Since that time, Mr. Johnson has been responsible for the design of the in-house sales presentations and creation of the corporate logo(s) and image for YP.Net. In 2001, Mr Johnson formed his own company called Advanced Internet Marketing, Inc. to provide design and marketing services to a variety of companies and has continued to offer these services to YP.Net. In 2002, Mr. Johnson accepted the position of Vice President of Corporate Image for YP.Net. From 1995 through 1998, Mr. Johnson was a graphics designer for Print Pro, Inc. Mr. Johnson is actively involved with Website promotion, interactive design and Internet advertising. Mr. Johnson also serves as an officer and board member and is the beneficial owner of Simple.Net a national Internet service provider, a related party. See "Certain Relationships and Related Transactions". PETER BERGMANN. Mr. Bergmann has served as a director of the Company since May 2002. Since January 1999, Mr. Bergmann has served as the President of Perfect Timing Media, Inc. ("Perfect Timing"), a television development and production company which he founded. Perfect Timing focuses primarily on family fare programming. From 1994 to1999, Mr. Bergmann was a member of the faculty at Fairleigh Dickinson University where he inaugurated the Electronic Filmmaking and Digital Video Design program which is a distinctive program in video and computer-generated graphics technologies offering students an opportunity to study commerce and art. In 1988, Mr. Bergmann joined Major Arts, Inc., a division of Paramount Communications, Inc., as the head of its television division where he was responsible for developing projects for television production. In 1987, Mr. Bergmann served as the President of Odyssey Entertainment, Inc. where he engineered the purchase of Coast Productions, Inc., which subsequently became Odyssey Filmmakers, Inc. where he served as President. From 1984 through 1987, Mr. Bergmann served as President of The Film Company where he had directorial and production responsibilities for theatrical releases and projects for television. During the 14 years prior to 1984, Mr. Bergmann was employed in various capacities by the American Broadcasting Company. These positions included line producer, division head, assistant to the President, Executive Vice President and Special Assistant to the Chairman of the Board. Mr. Bergmann received his PhD from New York University. David J. Iannini. Mr. Iannini has served as the Chief Financial Officer since August 2002. Mr. Iannini was employed by Viad Corp from July 1999 to June 2002. He was Viad Corp Treasurer and Vice President of Corporate Development . Viad Corp. is a diversified service business with operating companies involved in the financial services, convention, travel and other businesses. Viad Corp. is an SEC Reporting company. Mr.Iannini was an investment banker from August 1986 to July 1999 , primarily with Salomon Brothers, Inc. Mr. Iannini received his Masters in Business Administration, Summa Cum Laude, from the Anderson Graduate School of Management at U.C.L.A. Prior to his graduate studies, he worked with a Big Five accounting firm and is a C.P.A. Mr. Iannini received his Bachelors of Science degree, Magna Cum Laude, in Accounting from Boston College in 1981. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based solely on review of reports under Section 16(a) of the Securities Exchange Act of 1934, as amended, that were filed by executive officers and directors and beneficial owners of 10% or more of our common stock during the fiscal year ended September 2002, to the best of the Company's knowledge, except as follows, all 16(a) filing requirements have been made through the fiscal year ended September 30, 2001, and September 30, 2002. This information is based on a review of Section 16(a) reports furnished to us and other information. Name # of Reports ---- ------------ Angelo Tullo 4 Greg Crane 5 DeVal Johnson 3 Dan Coury 1 Peter Bergmann 1 David Iannini 1 ITEM 10. EXECUTIVE COMPENSATION DIRECTORS AND EXECUTIVE OFFICERS The directors and executive officers of YP.Net, their ages and positions are as follows:
NAME AGE POSITIONS HELD(1) - -------------------- --- ---------------------------------------------------------------------- Angelo Tullo 47 Chairman of the Board, Director, Chief Executive Officer and President Gregory B. Crane 38 Vice President and Director DeVal Johnson 36 Vice President, Secretary and Director David J. Iannini, 43 Chief Financial Officer Daniel L. Coury, Sr. 48 Director Peter Bergmann 54 Director (1) All current directors serve until the next annual shareholders meeting or their earlier resignation or removal.
OFFICER COMPENSATION The following table reflects all forms of compensation for the fiscal years ended September 30, 2002, and September 30, 2001, for the Chief Executive Officer and the other two most highly compensated executive officers of YP.Net, Inc., whose salaries exceed $100,000 annually, for the years stated.
SUMMARY COMPENSATION TABLE Annual Compensation FISCAL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY Bonus COMPENSATION - --------------------------------------- ---- --------- -------- -------------- Angelo Tullo (1) 2002 $ 240,000 $208,000 Chairman, Chief Executive 2001 $ 210,000 $44,000 Officer, 2000 $ 121,662 $21,000 President Pamela J Thompson (2) 2002 $ 177,678 (2) Former Chief Financial Officer 2001 $ 255,855 $4,500 Former Secretary, Former Treasurer 2000 -0- -0- DeVal Johnson(3) 2002 $ 113,800 $20,000 - Vice President, Secretary and Director 2001 -0- 5,618 -0- 2000 10,000 -0- $10,500 Greg Crane(4) 2002 $ 237,000 $35,000 - Vice President and Director 2001 114,000 -0- -0- 2000 $ 34,500 -0- $10,500
(1) The amount shown herein as compensation to Mr. Tullo is the total amount paid by the Company to Sunbelt for services provided to the Company by Mr. Tullo and his staff, but may not reflect Mr. Tullo's actual compensation from Sunbelt, which may be greater or less. Mr. Tullo is not directly compensated by the Company. Includes 200,000 shares of YP.Net stock valued at $.22 per Share in 2001 and 100,000 shares of YP.Net stock valued at $.21 per share in 2000. These shares and amounts are reflected in the respective reporting periods. Subsequent to September 30, 2002, 4,000,000 shares of YP.Net stock valued at $.075 per share were issued to Mr. Tullo, these shares and related amount are not included in the table since such shares were not issued during the reporting periods. On September 20, 2002, the Company entered into an Executive Consulting Agreement with Sunbelt pursuant to which Mr Tullo provides services to the Company. See "Certain Relationships and Related Transactions". (2) The amount shown herein as compensation to Ms. Thompson is the total amount paid by the Company to The Thompson Group P.C. for services provided to the Company by Ms. Thompson and her staff, but may not reflect Ms. Thompson's actual compensation from The Thompson Group P.C., which may be greater or less. Ms. Thompson was not directly compensated by the Company. Includes $16,898 issued as a Note Receivable in 2002 (see legal proceedings) and 50,000 shares of YP.Net stock valued at $.09 per share in 2001. (3) The amount shown herein as compensation is the total amount paid by the Company for the services of AIM including Mr. Johnson and his staff but may not reflect Mr. Johnson's actual compensation from AIM, which may be greater or less. Mr. Johnson is not compensated directly by the Company. Includes 50,000 shares of YP.Net stock valued at $.21 per share in 2000, which is included in the specified reporting period. Subsequent to September 30, 2002, 1,000,000 shares of YP.Net stock valued at $.075 per share were issued to Mr. Johnson, these shares and related amount are not included in the table since such shares were not issued during the reporting periods. On September 20, 2002, the Company entered into an Executive Consulting Agreement with AIM pursuant to which Mr. Johnson provides services to the Company. See "Certain Relationships and Related Transactions". (4) The amount shown herein as compensation to Mr. Crane is the total amount paid by the Company to AMCS for services provided to the Company by Mr. Crane and his staff, but may not reflect Mr. Crane's actual compensation from AMCS, which may be greater or less. Mr. Crane is not directly compensated by the Company. Mr. Crane is the President of AMCS. AMCS provides marketing and administrative services and personnel to the Company. Includes 50,000 shares of YP.Net stock valued at $.21 per share in 2000, which is included in the specified reporting period. Subsequent to September 30, 2002, 1,000,000 shares of YP.Net stock valued at $.075 per share were issued to Mr. Crane, these shares and related amount are not included in the table since such shares were not issued during the reporting periods. On September 20, 2002, the Company entered into an Executive Consulting Agreement with AMCS pursuant to which Mr. Crane provides services to the Company. See "Certain Relationships and Related Transactions". COMPENSATION PURSUANT TO STOCK OPTIONS No stock options were granted to executive officers during the fiscal years ended September 30, 2001, and September 30, 2002. DIRECTOR COMPENSATION Upon appointment to the Board, Mr. Tullo was awarded 100,000 shares of our common stock. All other directors were awarded 50,000 shares. The shares awarded were earned monthly for director services performed. The 425,000 shares of common stock paid to the directors as compensation for their services were valued at $.22 per share for a total value of $93,500 and the value is considered based upon the average bid and ask price as of date of issuance by the Board of Directors and is in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. Additionally, the directors receive $2,000 per meeting or per quarter for their service on the Board and may receive $250 per hour for services related to any Board Committee on which they serve. Effective September 30, 2002, the Company pays $10,000 monthly to DLC Consulting pursuant to an oral agreement. DLC Consulting is owned by Daniel Coury Sr., a director of the Company. The payments relate to various financial, strategic and administrative services performed for the Company's Board of Directors. See Certain Relationships and Related Transactions. 1998 Stock Option Plan In June 1998, our Board of Directors adopted, and our shareholders approved, the 1998 Stock Option Plan (the "Plan"). The purpose of the Plan was to provide incentives to employees, directors and service providers to promote our success. The Plan provides for the grant of both qualified and non-qualified options to purchase up to 1,500,000 shares of our common stock at prices determined by the Board of Directors, but in the case of incentive options, at a price not less than the fair market value of the stock on the date of the grant. The Plan is administered by the Board of Directors or by a committee appointed by the Board. areas of September 30, 2002 there were no options currently outstanding under this Plan which has been replaced by the 2002 Stock Option Plan discussed below. 2002 Stock Option Plan The 2002 Stock Option Plan was adopted by the Board of Directors on April 10th, 2002, and provided for the issuance of up to 3,000,000 options. It was approved by our shareholders on September 20, 2002. The Board of Directors has reserved 3,000,000 shares of Common Stock for issuance under the 2002 Option Plan. The 2002 Stock Option Plan replaces the 1998 Stock Option plan and was approved by the shareholders on September 20th, 2002. The primary purpose of the 2002 Option Plan is to attract and retain the best available personnel for the Company in order to promote the success of the Company's business and to facilitate the ownership of the Company's stock by employees. The ability of a company to offer a generous stock option program has now become a standard feature in the industry in which the company operates. All terms of the previous plan remain in force except as modified by the new plan. Some modifications include; options can only be made for a option price that is not less than 110% of the current stock price, and the options are not transferable. (see the Company's form 14-A as filed on August 31, 2002 for more details). As of September 30, 2002, there were no options outstanding under this Plan. ITEM 11. SECURITY OWNERSHIP OF OWNERS AND MANAGEMENT The following table sets forth, as of January 7, 2003, the ownership of each person known by us to be the beneficial owner of five percent or more of our common stock, each officer and director individually, and all officers and directors as a group. We have been advised that each person has sole voting and investment power over the shares listed below unless otherwise indicated. NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF BENEFICIAL OWNER OF OWNERSHIP OF CLASS(1) ------------------------------------ ----------------- ----------- Angelo Tullo(2) 4,300,000 8.7% 4840 East Jasmine Street Suite 105 Mesa, AZ 85205 Gregory B. Crane (3) 1,077,500 2.2% 4840 East Jasmine Street Suite 105 Mesa, AZ 85205 DeVal Johnson (4) 1,125,000 2.3% 4840 East Jasmine Street Suite 105 Mesa, AZ 85205 David Iannini 50,000 * 4840 East Jasmine Street Suite 105 Mesa, AZ 85205 Daniel L. Coury, Sr. 50,000 * 4840 East Jasmine Street Suite 105 Mesa, AZ 85205 Peter Bergmann 50,000 * 4840 East Jasmine Street Suite 105 Mesa, AZ 85205 Matthew & Markson Ltd. (5) 11,566,032 23.4% Woods Centre, Frair's Road P.O. Box 1407 St. John's Antigua, West Indies Morris & Miller Ltd. (5) 10,350,000 20.1% Woods Centre, Frair's Road P.O. Box 1407 St. John's Antigua, West Indies Sunbelt Financial Concepts, Inc. 4,000,000 8.1% 7579 East main Street #200 Scottsdale, AZ 85251 All Directors as a Group (7 persons) 6,652,500 13.4% * Represents less than one percent (1%) of our issued and outstanding common stock. (1) Based on shares outstanding as of January 7, 2003. This amount excludes 4,500,000 shares issued and held as collateral for obligations of YP.Net under two promissory notes. Upon timely payment of the notes, the shares will be returned to YP.Net for cancellation. (2) Of which 4,000,000 shares are owned by Sunbelt Financial Concepts , Inc. ("Sunbelt") which are also shown separately in this table. While Mr. Tullo is the President of Sunbelt, he has no ownership interest in Sunbelt. Mr. Tullo does, however, have dispositive powers over the shares of Common Stock owned by Sunbelt. Hickory Management is the owner of Sunbelt but does not exercise ownership over the Company's shares. Mr. Tullo disclaims beneficial ownership of the shares owned by Sunbelt except to the extent of any proportionate interest therein. Mr. J. C. McDaniel, Esq. Is the control person for Hickory Management. (3) Of which 1,000,000 shares are owned by Advertising Management and Consulting Services, Inc.("AMCS"). While Mr. Crane is President of AMCS, he has no ownership interest in AMCS. As President of AMCS, however, he shares dispositive power over the stock owned by AMCS. Mr. Crane disclaims beneficial ownership of the shares owned by AMCS except to the extent of any proportionate interest therein. (4) Of the number shown 1,000,000 shares owned by Advanced Internet Marketing, Inc. ("AIM"). Mr Johnson is President of AIM and his minor children are the beneficiaries of the trust that owns AIM. Mr. Johnson disclaims beneficial ownership of the shares owned by AIM except to the extent of any proportionate interest therein. (5) The number of shares held by Matthew & Markson, Ltd. includes 2,000,000 shares issued as collateral for a note payable issued by YP.Net. Matthew & Markson has voting control of these shares. These shares will be returned to YP.Net and cancelled upon timely payment of the note. Ilse Cooper, is the control person for both Mathew & Markson Ltd. as well as Morris & Miller Ltd. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS 3.1 Certificate of Restated Articles of Incorporation of Renaissance International, Inc. Incorporated by reference from Form 10-QSB as filed May 6, 1998 3.2 Amended Articles - Name Change to RIGL Corporation &, Authorized Capital Increase to 50,000,000 Incorporated by reference from Form S-8 as filed July 10, 1998 3.3 Amended Articles - Name Change to YP.Net, Inc.Incorporated by reference from Form10-KSB Exhibit # 3.3 for the fiscal year ended September 30, 1999 3.4 Certificate of Designation - Series B preferred shares. Incorporated by reference from Form 10-_KSB for the fiscal year ended September 30, 1999 3.5 Bylaws of Renaissance International Group, Ltd.Incorporated by reference from Form 10-QSB as filed May 6, 1998 3.6 Addendum to Bylaws to add office of Vice Chairman. Incorporated by reference from Form 10-KSB Exhibit #3.6 for the fiscal year ended September 30, 1999 3.7* Certificate of Designation - Series E Preferred Stock 10.1 1998 Stock Option Plan. Incorporated by reference from Exhibit 99.1 to Form S-8 as filed July 10, 1998 10.2* 2002 Stock Option Plan 10.5 Federal Trade Commission Settlement Agreement. Incorporated by reference from form 10-QSB Exhibit #10.5 for the quarter ended June 30, 2001 10.6 Hudson Consulting Group, Inc. Settlement Agreement. Incorporated by reference from Form 10-QSB Exhibit #10.6 for the quarter ended June 30, 2001 10.10* Acxiom Licensing Agreement 10.11* Info USA Master Database and Services Agreement 10.12* Experian Database Extract License Agreement 10.13 Standard Industrial/Commercial Multi-Tenant Lease between the Company Art Grandlich dba McKellips Corporate Square. Incorporated by reference from Form 10-KSB Exhibit #10.5 for the fiscal year ended September 30, 1999 10.14* Amendment to the Lease between the Company and Art Grandlich dba McKellips Corporate Square and Addendum to Sublease Agreements 10.15 Stock Purchase Agreement between the Company, Morris & Miller, Mathew & Markson and Telco Billing dated September 21, 1998. Incorporated by reference from Form 8-K/A as filed March 29, 1999 10.16* Amendment One to Stock Purchase Agreement between the Company, Morris & Miller, Mathew & Markson and Telco Billing 10.17* Second Amendment to Stock Purchase Agreement between the Company, Morris & Miller, Mathew & Markson and Telco Billing 10.18 License Agreement between the Company and Mathew & Markson. Incorporated by reference from Form 8-K/A as filed March 29, 1999 10.19* Sunbelt Executive Consulting Agreement 10.20* AMCS Executive Consulting Agreement 10.21* AIM Executive Consulting Agreement 10.22* BESI Mail Marketing Agreement 10.23 Agreement between the Company and Integretel, Inc. Incorporated by reference from Form 10-KSB Exhibit # 10.23 for the fiscal year ended September 30, 2001 10.29* Level 3 Communications 10.30* Agreement dated November 1, 2000 between Intelligenx, Inc. d/b/a i411.com and YP.Net 10.31* Forebearance Letter Agreement dated February 8, 2001 between Telco and Finova Capital Corporation 10.32* S.G. Martin Securities LLC agreement with investment banker 10.33* ACI Communications, Inc. 10.34* InfoUSA, Inc. Database and Services Agreement-Annual Fee 11 Statement Regarding Computation of Per Share Earnings: Incorporated in Item 7 of the Audited Financial Statements for period ending September 30, 2000 and September 30, 2001 21* Subsidiaries of YP.Net, Inc. 31 Certification pursuant to SEC Release No. 33-8238, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. _____________ *Previously filed. REPORTS ON FORM 8-K a Form 8-K was filed on May 17, 2002 which disclosed that Harold Roberts had resigned from the Board of Directors and that Peter Bergmann had joined the Board of Directors. - -A Form 8-K was filed on August 14, 2002 wherein Angelo Tullo, the Chairman, CEO and President of the Company certified the Company's financial records pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. - -A Form 8-K was filed on September 3, 2002 which disclosed the appointment of David J. Iannini as Chief Financial Officer. 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.NET, INC. Dated: January 22, 2004 By /s/ Angelo Tullo -------------------------------------- Angelo Tullo, Chairman of the Board (Principal Executive Officer) Dated: January 22, 2004 /s/ David Iannini -------------------------------------- Chief Financial Officer (Principal Accounting Officer) BOARD OF DIRECTORS Dated: January 22, 2004 By /s/ Angelo Tullo -------------------------------------- Angelo Tullo Dated: January 22, 2004 By /s/ Gregory B. Crane -------------------------------------- Gregory B. Crane Dated: January 22, 2004 By /s/ Daniel L. Coury, Sr. -------------------------------------- Daniel L. Coury, Sr. Dated: January 22, 2004 By /s/ Peter Bergmann -------------------------------------- Peter Bergmann Dated: January 22, 2004 By /s/ DeVal Johnson -------------------------------------- DeVal Johnson