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
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Angelo Tullo, Chairman of the Board
(Principal Executive Officer)
Dated: January 22, 2004 /s/ David Iannini
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Chief Financial Officer
(Principal Accounting Officer)
BOARD OF DIRECTORS
Dated: January 22, 2004 By /s/ Angelo Tullo
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Angelo Tullo
Dated: January 22, 2004 By /s/ Gregory B. Crane
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Gregory B. Crane
Dated: January 22, 2004 By /s/ Daniel L. Coury, Sr.
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Daniel L. Coury, Sr.
Dated: January 22, 2004 By /s/ Peter Bergmann
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Peter Bergmann
Dated: January 22, 2004 By /s/ DeVal Johnson
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DeVal Johnson