SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-26763

NET2PHONE, INC.
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE 22-3559037
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

171 Main Street, Hackensack, New Jersey 07601
(Address of Principal Executive Offices, including Zip Code)
Registrant's Telephone Number, Including Area Code: (201) 530-4000

___________________________

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 ___
----

As of March 13, 2000, the registrant had outstanding 17,988,556 shares of
common stock, $.01 par value and 33,924,250 shares of Class A stock, $.01 par
value

NET2PHONE, INC.

TABLE OF CONTENTS

Page No.
--------

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements:..................................................................................... 3

Condensed Consolidated Balance Sheets as of January 31, 2000 and July 31, 1999................................. 3

Condensed Consolidated Statements of Operations for the six months and three months ended
January 31, 2000 and 1999.................................................................................... 4

Condensed Consolidated Statement of Stockholders' Equity for the six months ended
January 31, 2000............................................................................................. 5

Condensed Consolidated Statements of Cash Flows for the six months ended January 31, 2000
and 1999..................................................................................................... 6

Notes to Condensed Consolidated Financial Statements........................................................... 7

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk................................................ 10

PART II. OTHER INFORMATION

Item 1. Legal Proceedings......................................................................................... 10

Item 2. Changes in Securities and Use of Proceeds................................................................. 10

Item 3. Defaults Upon Senior Securities........................................................................... 10

Item 4. Submission of Matters to a Vote of Security Holders....................................................... 10

Item 5. Other Information......................................................................................... 11

Item 6. Exhibits and Reports on Form 8-K.......................................................................... 11

Signatures......................................................................................................... 12

PART I--FINANCIAL INFORMATION

Item 1. Financial Statements

NET2PHONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

January 31, July 31,
----------- --------
2000 1999
---- ----
(unaudited) (note 1)

ASSETS:
Current assets:
Cash and cash equivalents............................................................ $ 227,249,601 $ 20,379,048
Trade accounts receivable............................................................ 4,125,634 531,536
Prepaid contract deposits............................................................ 18,766,591 6,162,084
Other current assets................................................................. 6,671,527 999,918
------------- -------------
Total current assets.............................................................. 256,813,353 28,072,586
Property and equipment, net.......................................................... 29,007,872 17,844,901
Trademark, net....................................................................... 4,585,145 4,791,667
Investments.......................................................................... 870,000 --
Other assets......................................................................... 10,087,742 107,737
------------- -------------
Total assets...................................................................... $ 301,364,112 $ 50,816,891
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable..................................................................... $ 1,965,319 $ 2,151,778
Accrued expenses..................................................................... 4,716,473 4,692,953
Deferred revenue..................................................................... 5,266,361 2,370,632
Due to IDT Corporation............................................................... 7,581,327 12,553,771
------------- -------------
Total current liabilities......................................................... 19,529,480 21,769,134
Due to IDT Corporation................................................................. 4,761,729 5,181,624
------------- -------------
Total liabilities................................................................. 24,291,209 26,950,758

Commitments and contingencies

Redeemable convertible preferred stock, Series A, $.01 par value; 3,150,000 shares
authorized; no and 3,140,000 shares issued and outstanding............................. - 27,929,000

Stockholders' equity (deficit):
Common stock, par value $.01; 200,000,000 shares authorized; 17,988,556 an..... 179,885 48,198
4,819,777 shares issued and outstanding
Class A stock, par value $.01, 37,042,089 shares authorized; 33,924,250 an........... 339,242 276,220
27,622,089 shares issued and outstanding
Additional paid-in capital........................................................... 355,616,340 61,126,266
Accumulated deficit.................................................................. (51,962,980) (30,455,286)
Deferred compensation - stock options................................................ (24,566,843) (31,908,275)
Loans to stockholders................................................................ (2,532,741) (3,149,990)
------------- -------------
Total stockholders' equity (deficit)........................................... 277,072,903 (4,062,867)
------------- -------------
Total liabilities and stockholders' equity (deficit)........................... $ 301,364,112 $ 50,816,891
============= =============

The accompanying notes are an integral part of these condensed consolidated
financial statements.

NET2PHONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Six months ended Three months ended
----------------- ------------------
January 31, January 31,
----------- -----------
2000 1999 2000 1999
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (unaudited)

Revenue:
Service revenue................................................ $ 26,926,116 $ 12,828,420 $ 14,546,160 $ 7,396,991
Product revenue................................................ 1,682,613 337,465 925,651 100,475
------------- ------------ ------------- -----------
Total revenues............................................ 28,608,729 13,165,885 15,471,811 7,502,466
Costs and expenses:
Direct cost of revenue:
Service cost of revenue..................................... 14,017,346 7,127,448 7,686,848 3,913,201
Product cost of revenue..................................... 1,208,820 196,303 705,208 57,303
------------- ------------ ------------- -----------
Total direct cost of revenue.............................. 15,226,166 7,323,751 8,392,056 3,970,504
------------- ------------ ------------- -----------
Gross profit........................................................ 13,382,563 5,842,134 7,079,755 3,531,962
Operating expenses:
Selling and marketing.......................................... 15,495,696 2,991,713 9,229,220 1,691,810
General and administrative..................................... 13,718,498 4,187,004 8,010,959 2,286,770
Depreciation and amortization.................................. 1,976,366 739,053 1,126,335 400,584
Compensation charge from the issuance of stock options......... 7,341,432 - 4,410,858 -
------------- ------------ ------------- -----------
Total costs and expenses.................................. 53,758,158 15,241,521 31,169,428 8,349,668
Loss from operations................................................ (25,149,430) (2,075,636) (15,697,617) (847,202)
------------- ------------ ------------- -----------
Interest income, net................................................ 3,641,736 - 2,555,193 -
------------- ------------ ------------- -----------
Net loss............................................................ ($21,507,694) ($2,075,636) ($13,142,424) ($847,202)
============= ============ ============= ===========
Basic and diluted net loss per common share......................... ($ .44) ($ .07) ($ .17) ($ .03)
============= ============ ============= ===========

Weighted average number of common shares used in the calculation of
basic and diluted net loss per common share 49,277,807 30,960,000 50,701,248 30,960,000
============= ============ ============= ===========

The accompanying notes are an integral part of these condensed consolidated
financial statements.

Net2Phone, Inc.
Condensed Consolidated Statement of Stockholders' Equity (Deficit)
(Unaudited)

Additional
Common Stock Class A Stock Paid-In
Shares Amount Shares Amount Capital
------ ------ ------ ------ -------

Balance at July 31, 1999 4,819,777 $ 48,198 27,622,089 $ 276,220 $ 61,126,266

Issuance of Common Stock in initial public offering 6,210,000 62,100 85,159,384
Conversion of Preferred Stock to Class A Stock 9,420,000 94,200 27,834,800
Conversion of Class A Stock to Common Stock 3,117,839 31,178 (3,117,839) (31,178)
Exercise of stock options 440,940 4,409 3,675,152
Amortization of Deferred Compensation
Repayment of Loans to Stockholders
Secondary Equity Offering 3,400,000 34,000 177,820,738
Net Loss for Six Months Ended January 31, 2000

----------- -------------------------------------------------------------
Balance at January 31, 2000 17,988,556 $ 179,885 33,924,250 $ 339,242 $ 355,616,340
=========== =============================================================

Total
Accumulated Deferred Loans to Stockholders'
Deficit Compensation Stockholders Equity (Deficit)
------- ------------ ------------ ----------------

Balance at July 31, 1999 $ (30,455,286) $ (31,908,275) $ (3,149,990) $ (4,062,867)

Issuance of Common Stock in initial public offering 85,221,484
Conversion of Preferred Stock to Class A Stock 27,929,000
Conversion of Class A Stock to Common Stock -
Exercise of stock options 3,679,561
Amortization of Deferred Compensation 7,341,432 7,341,432
Repayment of Loans to Stockholders 617,249 617,249
Secondary Equity Offering 177,854,738
Net Loss for Six Months Ended January 31, 2000 (21,507,694) (21,507,694)
-
-------------------------------------------------------------------
Balance at January 31, 2000 $ (51,962,980) $ (24,566,843) $ (2,532,741) $277,072,903
===================================================================

The accompanying notes are an integral part
of these condensed consolidated financial statements.

NET2PHONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended
January 31
2000 1999
---- ----
(unaudited) (unaudited)

Operating activities:
Net loss............................................................................... ($21,507,694) ($2,075,636)
Adjustments to reconcile net loss to net cash (used in) provided by operating
activities:
Depreciation and amortization.......................................................... 1,976,366 739,053
Amortization of deferred compensation.................................................. 7,341,432 --
Changes in assets and liabilities:
Accounts receivable.................................................................... (3,594,098) 1,280,924
Prepaid contract deposits.............................................................. (12,604,507) --
Other current assets................................................................... (5,671,609) (7,800)
Other assets........................................................................... 19,995 (5,007,336)
Accounts payable....................................................................... (186,459) 5,000,000
Accrued expenses....................................................................... 23,520 --
Deferred revenue....................................................................... 2,895,729 498,953
------------- ------------
Net cash (used in) provided by operating activities...................................... (31,307,325) 428,158

Investing activities:
Purchases of property and equipment.................................................... (12,932,815) (2,476,003)
Cash held in escrow.................................................................... (10,000,000) --
Investments............................................................................ (870,000) --
------------- ------------
Net cash used in investing activities.................................................... (23,802,815) (2,476,003)

Financing activities:
Proceeds from issuance of common stock in initial public offering, net................. 85,221,484 --
Proceeds from issuance of common stock in secondary offering, net...................... 177,854,738 --
Proceeds from exercise of stock options................................................ 3,679,561 --
Proceeds from repayment of loans to stockholders....................................... 617,249 --
Net (repayments to) advances from IDT Corporation...................................... (5,392,339) 2,047,845
------------- ------------
Net cash provided by financing activities................................................ 261,980,693 2,047,845
------------- ------------
Net increase in cash and cash equivalents................................................ 206,870,553 --
Cash and cash equivalents at beginning of period......................................... 20,379,048 10,074
------------- ------------
Cash and cash equivalents at end of period............................................... $ 227,249,601 $ 10,074
============= ============

Supplemental disclosure of cash flow information:
Cash payments made for interest.......................................................... $ -- $ --
============= ============
Cash payments made for income taxes...................................................... $ -- $ --
============= ============

The accompanying notes are an integral part of these condensed consolidated
financial statements.

NET2PHONE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of
Net2Phone, Inc. and Subsidiary (collectively "the Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for annual
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. The results for the interim periods presented are not
necessarily indicative of the results that may be expected for any future
period. The balance sheet at July 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. For further information, refer to the financial statements
and notes thereto included in Net2Phone's annual report on Form 10-K for the
year ended July 31, 1999.

2. Recently Issued Accounting Standards

In June, 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in fiscal years beginning after June 15, 2000. Management
does not anticipate that the adoption of this standard will have a significant
effect on earnings or the financial position of the Company.

3. Earnings Per Share

The shares issuable upon the exercise of stock options and warrants are
excluded from the calculation of net loss per share as their effect would be
antidilutive.

4. Secondary Offering

On November 30, 1999, the Company completed a public offering of 7,245,000
shares of common stock at a price of $55.00 per share. 3,845,000 shares were
sold by selling stockholders and 3,400,000 shares were sold by Net2Phone. Net
proceeds to Net2Phone, after deducting underwriting discounts and commissions
and offering expenses were approximately $177.9 million.

5. Investments

In January 2000, the Company signed a definitive agreement to acquire
1,696,667 shares of WebDialogs Series D Convertible Preferred Stock at $5.893
per share. WebDialogs is, an e-commerce enabler, that focuses on collaborative
browsing applications. The purchase is expected to be completed in the Company's
fiscal third quarter. At January 31, 2000, cash of approximately $10,000,000 was
held in escrow and classified in other assets as cash held for acquisition of
WebDialogs. The Company expects to account for this investment using the equity
method.

In January 2000, the Company purchased 240,000 shares of Series A Preferred
Stock at $3.00 per share in WebEx, a provider of online meetings on the Web.
This investment is being accounted for using the cost method.

6. Related Party Transactions

In February, 2000, $5,951,000 of the remaining principal of the promissory
note from IDT was repaid using proceeds from the secondary offering.

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

The following discussion of the financial condition and results of
operations of Net2Phone should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
Consolidated Financial Statements and the Notes thereto included in the
Company's Annual Report on Form 10-K for the year ended July 31, 1999. This
quarterly report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These forward- looking
statements involve risks and uncertainties and actual results could differ
materially from those discussed in the forward-looking statements. All forward-
looking statements and risk factors included in this document are made as of the
date hereof, based on information available to Net2Phone as of the date thereof,
and Net2Phone assumes no obligation to update any forward-looking statement or
risk factors.

Six Months Ended January 31, 2000 Compared to Six Months Ended January 31, 1999

Results of Operations

Revenue. Our revenues are derived from per-minute charges we billed to our
customers on a pre-paid basis and from the sale of internet telephony equipment
and services to resellers, IDT and other carriers. Revenue increased 117% from
approximately $13.2 million for the six months ended January 31, 1999 to
approximately $28.6 million for the six months ended January 31, 2000. The
increase in revenue was primarily due to an increase in billed minutes of use
resulting from additional marketing of our products and services.

Direct Cost of Revenue. Net2Phone's direct cost of revenue consists
primarily of network costs associated with carrying our customers' traffic on
our network and leased networks, and routing their calls through a local
telephone company to reach their final destination. Direct cost of revenue
increased by 108%, from approximately $7.3 million for the six months ended
January 31, 1999 to approximately $15.2 million for the six months ended January
31, 2000. As a percentage of total revenue, these costs decreased from
approximately 55.6% for the six months ended January 31, 1999 to approximately
53.2% for the six months ended January 31, 2000. This decrease is primarily
attributable to improved efficiencies in terminating traffic and utilization of
network assets.

Selling and Marketing. Selling and marketing expenses consist primarily of
expenses associated with acquiring customers, including commissions paid to our
sales personnel, advertising costs, referral fees and amounts paid to our
strategic partners in connection with revenue-sharing arrangements. Selling and
marketing expenses increased approximately 418% from approximately $3.0 million
for the six months ended January 31, 1999 to approximately $15.5 million for the
six months ended January 31, 2000. This increase primarily reflects the
increased marketing and advertising expenses associated with the agreements
established with Priceline.com, Infospace.com, Yahoo!, Excite, Snap and other
strategic partners.

General and Adminstrative. General and administrative expenses consist of
the salaries of our employees and associated benefits, and the cost of
insurance, travel, entertainment, rent and utilities. General and administrative
expenses increased approximately 228% from approximately $4.2 million for the
six months ended January 31, 1999 to approximately $13.7 million for the six
months ended January 31, 2000. As a percentage of total revenue these costs
increased from approximately 32% for the six months ended January 31, 1999 to
approximately 48% for the six months ended January 31, 2000. This increase was
primarily attributable to the additional organizational infrastructure and
increase in personnel as the Company continues to build its operations, customer
service, marketing and business development functions.

Depreciation and Amortization. Depreciation and amortization increased
approximately 167% from approximately $739,000 for the six months ended January
31, 1999 to approximately $2.0 million for the six months ended January 31,
2000. As a percentage of total revenues, these costs increased from
approximately 5.6% for the six months ended January 31, 1999 to approximately
6.9% for the six months ended January 31, 2000. Depreciation will continue to
increase as we increase capital expenditures for the deployment of network
equipment both domestically and internationally to manage increased call
volumes.

Compensation Charge from the Issuance of Stock Options. We recognized $7.3
million of non-cash compensation expense in the six months ended January 31,
2000. As a percentage of total revenue, the compensation charge from the

issuance of stock options was 25.7%. No compensation charge from the issuance of
stock options was recognized in the six months ended January 31, 1999.

Loss from Operations. Loss from operations was approximately $2.1 million
for the six months ended January 31, 1999 as compared to loss from operations of
approximately $25.1 million for the six months ended January 31, 2000. Excluding
the non-cash compensation charge described above, our loss from operations for
the six months ended January 31, 2000 would have been $17.8 million.

Interest Income, net. Interest income, consists primarily of interest
earned on cash and cash equivalents. Interest income for the six months ended
January 31, 2000 was approximately $3.6 million. No interest income was
recognized for the six months ended January 31, 1999. The interest income
resulted from the investment of the proceeds of our offerings.

Three Months Ended January 31, 2000 Compared to Three Months Ended January 31,
1999

Results of Operations

Revenue. Our revenues are derived from per-minute charges we billed to our
customers on a pre-paid basis and from the sale of internet telephony equipment
and services to resellers, IDT and other carriers. Revenue increased 106% from
approximately $7.5 million for the three months ended January 31, 1999 to
approximately $15.5 million for the three months ended January 31, 2000. The
increase in revenue was primarily due to an increase in billed minutes of use
resulting from additional marketing of our products and services.

Direct Cost of Revenue. Net2Phone's direct cost of revenue consists
primarily of network costs associated with carrying our customers' traffic on
our network and leased networks, and routing their calls through a local
telephone company to reach their final destination. Direct cost of revenue
increased by 111%, from approximately $4.0 million for the three months ended
January 31, 1999 to approximately $8.4 million for the three months ended
January 31, 2000. As a percentage of total revenue, these costs increased from
approximately 52.9% for the three months ended January 31, 1999 to approximately
54.2% for the three months ended January 31, 2000. This increase is primarily
attributable to a reduction in per minute pricing for domestic traffic charged
to our customers.

Selling and Marketing. Selling and marketing expenses consist primarily of
expenses associated with acquiring customers, including commissions paid to our
sales personnel, advertising costs, referral fees and amounts paid to our
strategic partners in connection with revenue-sharing arrangements. Selling and
marketing expenses increased approximately 446% from approximately $1.7 million
for the three months ended January 31, 1999 to approximately $9.2 million for
the three months ended January 31, 2000. This increase primarily reflects the
increased marketing and advertising expenses associated with the agreements
established with Priceline.com, Infospace.com, Yahoo!, Excite, Snap and other
strategic partners.

General and Adminstrative. General and administrative expenses consist of
the salaries of our employees and associated benefits, and the cost of
insurance, travel, entertainment, rent and utilities. General and administrative
expenses increased approximately 250% from approximately $2.3 million for the
three months ended January 31, 1999 to approximately $8.0 million for the three
months ended January 31, 2000. As a percentage of total revenue these costs
increased from approximately 30.5% for the three months ended January 31, 1999
to approximately 51.8% for the three months ended January 31, 2000. This
increase was primarily attributable to the additional organizational
infrastructure and increase in personnel as the Company continues to build its
operations, customer service, marketing and business development functions.

Depreciation and Amortization. Depreciation and amortization increased
approximately 181% from approximately $401,000 for the three months ended
January 31, 1999 to approximately $1.1 million for the three months ended
January 31, 2000. As a percentage of total revenues, these costs increased from
approximately 5.3% for the three months ended January 31, 1999 to approximately
7.3% for the three months ended January 31, 2000. Depreciation will continue to
increase as we increase capital expenditures for the deployment of network
equipment both domestically and internationally to manage increased call
volumes.

Compensation Charge from the Issuance of Stock Options. We recognized $4.4
million of non-cash compensation expense in the three months ended January 31,
2000. As a percentage of total revenue, the compensation charge from the
issuance of stock options was 28.5%. No compensation charge from the issuance of
stock options was recognized in the three months ended January 31, 1999.

Loss from Operations. Loss from operations was approximately $0.8 million
for the three months ended January 31, 1999 as compared to loss from operations
of approximately $15.7 million for the three months ended January 31, 2000.
Excluding the non-cash compensation charge described above, our loss from
operations for the three months ended January 31, 2000 would have been $11.3
million.

Interest Income, net. Interest income, consists primarily of interest
earned on cash and cash equivalents. Interest income for the three months ended
January 31, 2000 was approximately $2.6 million. No interest income was
recognized for the three months ended January 31, 1999. The interest income
resulted from the investment of the proceeds of our offerings.

Liquidity and Capital Resources

As of January 31, 2000, the Company had cash and cash equivalents of
approximately $227.3 million and working capital of approximately $237.3
million. The Company generated negative cash flow from operating activities of
approximately $31.3 million during the six months ended January 31, 2000,
compared with positive cash flow from operating activities of $0.4 million
during the six months ended January 31, 1999. The decrease in cash flow from
operating activities was primarily caused by an increase in the net loss before
depreciation and amortization and non-cash compensation expense and an increase
in prepaid and other assets.

The Company's capital expenditures increased from approximately $2.5
million in the six months ended January 31, 1999 to approximately $12.9 million
in the six months ended January 31, 2000, as the Company expanded its domestic
and international network infrastucture.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

PART II--OTHER INFORMATION

Item 1. Legal Proceedings

On February 15, 2000, Multi-Tech Systems, Inc. filed suit against Net2phone and
other companies in the United States Federal District Court in Minneapolis,
Minnesota. In its press release, Multi-Tech stated that "the defendant companies
are infringing because they are providing the end users with the software
necessary to simultaneously transmit voice and data on their computers in the
form of making a phone call over the Internet." Net2Phone intends to defend the
lawsuit vigorously. Net2Phone believes that the Multi-Tech claims are without
merit. However, should a judge issue an injunction against Net2Phone requiring
that Net2Phone cease distributing its software or providing its software-based
services, such an injunction could have an adverse effect on Net2Phone's
business.

Item 2. Changes in Securities and Use of Proceeds

On November 30, 1999, the Securities and Exchange Commission declared
effective Net2Phone's registration statement on Form S-1 (File No. 333-90317),
pursuant to which Net2Phone completed a public offering of 7,245,000 shares of
common stock at an offering price of $ 55.00 per share (the "Secondary
Offering"). 3,845,000 shares were sold by selling stockholders and 3,400,000
shares were sold by Net2Phone. The Secondary Offering was managed by Hambrecht &
Quist LLC, Donaldson Lufkin & Jenrette Securities Corporation, Deutsche Bank
Securities, BancBoston Robertson Stephens Inc. and Bear, Stearns & Co. Inc.
Proceeds to Net2Phone were approximately $177.9 million after deducting
underwriting commissions and discounts of approximately $8.6 million and
expenses of $620,000. Net2Phone expects to use the net proceeds for developing
and maintaining strategic relationships, advertising and promotion, upgrading
and expanding its network, international expansion, research and development,
potential acquisitions and general corporate purposes.

Item 3. Defaults Upon Senior Securities

Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable

Item 5. Other Information

Not Applicable.

Item 6. Exhibits and Reports on Form 8-K

a) Exhibits.

Exhibit No. Description
----------- -----------

3.1* Certificate of Incorporation, as amended.
3.2* Bylaws.
3.3* Certificate of Amendment to the Restated Certificate of
Incorporation of the Registrant.
3.4* Certificate of Amendment to the Restated Certificate of
Incorporation of the Registrant.
4.1* Specimen Common Stock Certificate of the Registrant.
10.1* Employment Agreement, dated May 1, 1997, by and between
Clifford M. Sobel and IDT Corporation.
10.2* Amendment to Employment Agreement between IDT Corporation
and Clifford M. Sobel, dated as of May 11, 1999, by and
between Clifford M. Sobel, IDT Corporation and the
Registrant.
10.3#* Bundling and Distribution Services Agreement, dated as of
January 31, 1999, by and between Netscape Communications
Corporation and the Registrant.
10.4* General License Terms & Conditions, dated as of January 31,
1999, by and between Netscape Communications Corporation and
the Registrant.
10.5* Trademark License Agreement, dated as of January 31, 1999,
by and between Netscape Communications Corporation and the
Registrant.
10.6* Internet/Telecommunications Agreement, dated as of May 7,
1999, by and between IDT Corporation and the Registrant.
10.7* Joint Marketing Agreement, dated as of May 7, 1999, by and
between IDT Corporation and the Registrant.
10.8* IDT Services Agreement, dated as of May 7, 1999, by and
between IDT Corporation and the Registrant.
10.9* Net2Phone Services Agreement, dated as of May 7, 1999, by
and between IDT Corporation and the Registrant.
10.10* Assignment Agreement, dated as of May 7, 1999, by and
between IDT Corporation and the Registrant.
10.11* Tax Sharing and Indemnification Agreement, dated as of May
7, 1999, by and between IDT Corporation and the Registrant.
10.12* Separation Agreement, dated as of May 7, 1999, by and
between IDT Corporation and the Registrant.
10.13* Lease Agreement, dated as of March 1, 1999, by and between
171-173 Main Street Corporation and the Registrant.
10.14* Lease Agreement, dated as of March 1, 1999, by and between
294-298 State Street Corporation and the Registrant.
10.15* The Registrant's Amended and Restated 1999 Stock Option and
Incentive Plan.
10.16* Series A Subscription Agreement, dated as of May 13, 1999,
by and between the Investors listed therein and the
Registrant.
10.17* Series A Preferred Shareholder Registration Rights
Agreement, dated as of May 13, 1999, by and between the
Investors listed therein and the Registrant.
10.18* Form of Warrant to Purchase Common Stock.
10.19* Promissory Note of Registrant to IDT Corporation, dated as
of May 12, 1999.
10.20* Stockholders Agreement, dated as of May 13, 1999, by and
among the Investors listed therein, IDT Corporation,
Clifford M. Sobel, the trustee of the Scott Sobel Annual
Gift Trust and the Registrant.
10.21* Letter agreement, dated as of May 12, 1999, by and among IDT
Corporation, Clifford M. Sobel and the Registrant.
10.22* Letter agreement, dated as of May 17, 1999, by and among IDT
Corporation, Clifford M. Sobel and the Registrant.

10.23* Co-Location and Facilities Management Services Agreement,
dated as of May 20, 1999, by and between IDT Corporation and
the Registrant.
10.24* Form of Loan Agreement between the Registrant and each of
its executive officers.
10.25* Form of Stock Option Agreement for Executive Officers.
10.26#* Letter agreement, dated as of June 25, 1999, by and between
National Broadcasting Company, Inc. and the Registrant.
10.27* Employment Agreement, dated July 2, 1999, by and between
Jonathan Fram and the Registrant.
10.28#* IP Telephony Services Distribution and Interactive Marketing
Agreement, dated as of July 15, 1999, by and between ICQ,
Inc. and the Registrant.
10.29#* Stock Subscription Warrant, dated July 15, 1999, by and
between America Online, Inc. and the Registrant.
10.30* Amendment No. 1 to Employment Agreement, dated July 16,
1999, by and between Jonathan Fram and the Registrant.
10.31** Amendment to Stock Subscription Warrants, dated November 19,
1999, by and between America Online, Inc. and the
Registrant.
27.1 Financial Data Schedule.

- --------
* Incorporated by reference from our registration statement on Form S-
1(Registration No. 333-78713).
** Incorporated by reference from our registration statement on Form S-
1(Registration No. 333-90317).
# Confidential treatment granted as to parts of this document.

b) Reports on Form 8-K.

No reports on Form 8K were filed during the quarter ended January 31, 2000.

SIGNATURES

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

NET2PHONE, INC.

By:

/s/ Howard S. Balter
-----------------------------------
Howard S. Balter
Chief Executive Officer

By:

/s/ Ilan M. Slasky
-----------------------------------
Ilan M. Slasky
Chief Financial Officer