SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark one)

[X]      Annual  report  pursuant  to  Section  13 or  15(d)  of the  Securities
         Exchange Act of 1934 for the fiscal year ended October 31, 2000.

[ ]      Transition  report  under  section  13 or  15(d)  of the  Securities
         Exchange Act of 1934 for the transition period from to  _______________
         to ______________.

                         Commission file number 0-011228

                      DIGITAL COMMERCE INTERNATIONAL, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                       Delaware                            02-0337028
           (State or Other Jurisdiction of              (I.R.S. Employer
            Incorporation or Organization)            Identification No.)

           300 - 1199 West Hastings Street,
             Vancouver, British Columbia                    V6E 3T5
       (Address of principal executive office)             (Zip Code)

                                  604.899.0411
                           (Issuer's telephone number)

           Securities to be registered under Section 12(b) of the Act:

                 Title of Each Class             Name of Each Exchange
                                                  On Which Registered

                         None                             None

        Securities to be registered pursuant to Section 12(g) of the Act:

                          Common Stock, par value $.001

         Indicate  by check mark  whether the  registrant  (1) 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),  Yes[X] No ____, and (2) has been
subject  to such  filing  requirements  for the past 90  days.  Yes [X] No _____
Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K.

         State the aggregate  market value of the voting and  non-voting  common
equity held by  non-affiliates  of the  registrant.  The aggregate  market value
shall be computed by reference to the price at which the common equity was sold,
or the average bid and asked  prices of such  common  equity,  as of a specified
date within 60 days prior to the date of filing: $10,117,816.

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of the latest practicable date: 13,312,916.

<PAGE>

                                     Part I

         Throughout  this report,  we refer to Digital  Commerce  International,
Inc., together with its subsidiaries, as "we," "us," or "the Company."

         THIS ANNUAL  REPORT ON FORM 10-K CONTAINS  FORWARD-LOOKING  STATEMENTS.
THESE STATEMENTS RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. IN
SOME CASES, YOU CAN IDENTIFY  FORWARD-LOOKING  STATEMENTS BY TERMINOLOGY SUCH AS
MAY, WILL, SHOULD, EXPECT, PLAN, INTEND, ANTICIPATE, BELIEVE, ESTIMATE, PREDICT,
POTENTIAL  OR  CONTINUE,   THE  NEGATIVE  OF  SUCH  TERMS  OR  OTHER  COMPARABLE
TERMINOLOGY. THESE STATEMENTS ARE ONLY PREDICTIONS. ACTUAL EVENTS OR RESULTS MAY
DIFFER  MATERIALLY.  IN EVALUATING  THESE  STATEMENTS,  YOU SHOULD  SPECIFICALLY
CONSIDER VARIOUS FACTORS, INCLUDING THE RISKS OUTLINED IN THE "FACTORS AFFECTING
OPERATING  RESULTS,  OUR BUSINESS AND OUR STOCK PRICE" BELOW.  THESE FACTORS MAY
CAUSE  OUR  ACTUAL  RESULTS  TO  DIFFER  MATERIALLY  FROM  ANY   FORWARD-LOOKING
STATEMENT.

         ALTHOUGH   WE  BELIEVE   THAT  THE   EXPECTATIONS   REFLECTED   IN  THE
FORWARD-LOOKING  STATEMENTS ARE REASONABLE,  WE CANNOT GUARANTEE FUTURE RESULTS,
LEVELS OF ACTIVITY,  PERFORMANCE OR ACHIEVEMENTS.  MOREOVER,  NEITHER WE NOR ANY
OTHER PERSON ASSUMES  RESPONSIBILITY  FOR THE ACCURACY AND  COMPLETENESS  OF THE
FORWARD-LOOKING  STATEMENTS.  WE  ARE  UNDER  NO  DUTY  TO  UPDATE  ANY  OF  THE
FORWARD-LOOKING  STATEMENTS AFTER THE DATE OF THIS ANNUAL REPORT TO CONFORM SUCH
STATEMENTS TO ACTUAL RESULTS OR TO CHANGES IN OUR EXPECTATIONS.

Item 1            Business


         Digital Commerce  International,  Inc. is an e-commerce  infrastructure
company,  specializing in the  aggregation and vertical  integration of critical
e-business components.  We provide our merchant clients,  primarily small to mid
sized  businesses,   with  end-to-end  solutions  to  create  and  manage  their
e-business.  Our products  and services are designed to serve  merchants in four
critical  areas of their  e-business:  e-commerce  enabling,  Internet  banking,
marketing  and business  intelligence.  Features of the  categories  include the
following:

         o        Enabling,   Payment  Processing  &  Financial  Services:   Our
                  products  and  services  facilitate  the  issuance of merchant
                  accounts to expedite credit card  acceptance.  We also provide
                  an IP-based  payment gateway with a virtual  terminal,  neural
                  network based credit card fraud mitigation products,  complete
                  banking  packages  tailored  for  Internet  merchants,  online
                  banking   services,    electronic   bill   payment   services,
                  multi-currency  settlement  technologies  and cash  management
                  products.

         o        Internet  Storefront:  We  provide a  template  based  website
                  builder, website hosting, merchant accounts, web-based payment
                  gateways and internet shopping carts.

         o        Marketing:   Our  marketing   services  include  placement  in
                  shopping  portals and search engines,  direct e-mail,  loyalty
                  programs and cross advertising.

         o        Intelligence: We also provide customer relationship management
                  tools, customer experience management services, advanced fraud
                  scrubbing, data mining and analysis and research.

         Our products  and  services are either  provided by us directly or by a
partner third party software provider, specializing in these fields.

         Our  operations  are  conducted  primarily  through  our  wholly  owned
subsidiaries.  Primary  concentration  at this time is on the development of the
merchant services division known as Digital Commerce Merchant Services Inc. Over
the past year operations have been consolidated into one main office operated in
Vancouver,  British  Columbia and an office operated in Salt Lake City, Utah. We
intend to expand our operations into  international  markets  through  strategic
relationships  developed  with  banking and channel  partners  once our domestic
operations   have  been  developed   satisfactorily.   Subsidiaries   have  been
established to accommodate  this business and are poised for this activity.  Our
main subsidiaries  include Digital Commerce  Merchant  Services,  Inc.,  Digital
Commerce Canada Ltd., and Digital Commerce Bank Inc.:

         We have  revised our  business  plan and  operations  from the original
concepts  promulgated  at our  inception in June of 1999 due to market  changes,
regulatory barriers and migration from its under-performing  divisions. This has
allowed us to  concentrate  on the  development  and  execution  of the features
listed  above.  We  are  a  registered  ISO  (Independent  Sales   Organization)
registered with Humboldt Bank and HSBC Bank USA through Total Merchant Services,
which  gives us the ability to effect the  issuance  of Merchant  Identification
Numbers  (MIDS) to our merchant  clients,  allowing our clients to accept credit
card payments for sales through their business.

         We had planned to directly  provide our US domestic  and  international
clients with full banking  services  within  fiscal 2000.  This was to have been
provided  through the  acquisition  of a  federal/state  chartered  bank and the
modification  of services  provided to include  Internet  banking.  Although the
Company did negotiate this purchase with a number of prospects,  no equitable or
appropriate transaction was ever consummated.

         Accordingly,  we have  reformulated  our business model to indicate the
provision of these banking services  through third parties.  We have developed a
strategic  partnership  with  University  Bank of Ann  Arbor  Michigan,  an FDIC
insured  qualifying  state  chartered  bank, to develop and provide the Internet
banking features we will offer to our merchant clients. Each party shares in the
net revenue of this venture on an equal  basis.  The contract has a term of five
years,  with  provision  for  renewals.  This  partner bank also carries with it
membership in the Visa and Mastercard  Associations,  a feature which will allow
us to move  forward  on our  plan to  obtain  membership  (initially  Associate,
ultimately Primary) in the Visa/Mastercard and other card associations.  We have
also  formed  a  relationship  with  University  Bank  whereby  we  provide  the
University  Bank with a complete suite of Internet  banking tools,  which it, in
turn offers to its customers. In addition, we maintain relationships with a host
of  merchant  clients,  in ever  growing  numbers.  We also  maintain  an agency
relationship with Intercontinental Financial Services for transaction processing
for  our  international   clients  and  continue  to  derive  income  from  this
relationship.

         (a)      Products:

         The products and services we offer include the following:

         o        Secure order and payment processing. We provide online payment
                  processing services.  Our services assist our merchant clients
                  with  credit   card   authorization,   address   verification,
                  automated tax and shipping  calculations,  order  tracking and
                  customer  service.  Our payment  processing  system  currently
                  interacts  with  a  number  of  credit  card  processors.  For
                  security,  we use  advanced  encryption  methods.  To exchange
                  information  with merchants and shoppers on our web sites, our
                  network  servers use software  that  complies  with the Secure
                  Sockets  Layer  specification,   the  predominant  method  for
                  managing the security of transmissions over a network.

         o        Fraud Prevention. Our fraud prevention services use artificial
                  intelligence  programs, a database of historical  transactions
                  and  validation  by an  authorized  financial  institution  to
                  confirm  shoppers'  identities  and  to  assess  their  credit
                  status.  We can adjust the  stringency of the fraud  screening
                  process based upon a merchant's requirements and the nature of
                  the  transaction  to assist the merchant in  maximizing  sales
                  opportunities.  Under an agreement with HNC Software,  we have
                  licensed  the  right to use  their  eFalcon  fraud  management
                  system.

         o        E-commerce  hosting and  maintenance.  We provide  services to
                  operate  and  maintain  online  stores on behalf of our listed
                  merchants. We use data centers with redundant servers, 24-hour
                  monitoring and support and high-speed Internet  connections to
                  provide customers with continuous  e-commerce  operations.  We
                  also provide merchants with detailed  electronic and hard copy
                  reports  summarizing  visits to and transactions made on their
                  online stores.

         o        On-line  store  development.  We provide our merchant  clients
                  with design and technical  development  services for their web
                  sites and online stores,  including  design and  advertisement
                  copy services and image  management and production.  We create
                  commerce-enabled  web  sites  ranging  from  the  basic to the
                  highly customized.

         o        Online Banking  Products.  Through are strategic  relationship
                  with the University  Bank, we plan to provide online  banking,
                  electronic   bill  payment  and   presentment   and  financial
                  management services.

         Our various  merchant  services can be purchased as an integrated suite
or individually,  which allows  businesses and merchants to tailor their service
package to their  particular  needs.  Fee arrangements are based on the specific
service purchased and may be computed on a project basis, a monthly fee basis, a
per transaction basis or a combination thereof.

          (b)     Revenue Model:

         For our merchant  products  and  services we have  deployed a strategic
revenue model designed to capture income from multiple recurring streams.  These
revenue sources can be describes as follows:

         o        Volume Fees:  revenue  generated as a percentage  of the total
                  dollar volume of transactions processed;

         o        Transaction   Fees:   revenue   generated   as  a  charge  per
                  transaction processed;

         o        Monthly Maintenance:  revenue generated as a recurring monthly
                  fee for the services provided to the merchant, with additional
                  pass-on fees for opt-in services provided; and

         o        Set-up Fee: revenue  generated from the initial  establishment
                  of services for the merchant.

         We either own or have  favorable  contracts  in place for the supply of
the services we offer.  Therefore, we are able to maintain complete control over
our pricing models and billing.

          (c)     Operating subsidiaries:

         We will  deliver our  strategies  and  products  through our  operating
entities, as follows:

         Digital Commerce Merchant Services,  Inc.  ("DCMS"),  one of our wholly
owned subsidiaries,  was incorporated in the State of Delaware in November 1999.
Digital  Commerce  Merchant  Services Inc.  (DCMS) is the primary entity through
which  domestic  merchant  services  are  currently  provided  to the  Company's
merchant  clients.  Formerly  operated under the trade name  "thatbank.com"  and
"thatbank",  it  operates  under the trade  name (DBA) of  "smartchili.com"  and
"smartchili"  and maintains its  principal  business  address in Salt Lake City,
Utah.  DCMS is an  Independent  Sales  Organization  (ISO) for Humboldt  Bank of
Eureka,  California,  HSBC Bank USA through TMS Services and University  Bank of
Ann Arbor,  Michigan.  Since its inception,  DCMS has been  assembling  merchant
portfolios to facilitate the provision of its range of services, principally for
US domestic  merchants.  DCMS has  developed  relationships  designed to rapidly
expand its  client  base and deploy its  customer  services  through  aggressive
marketing,  competitive  pricing and  providing  the "one stop"  solution to its
merchant clients needs. DCMS revenues were nominal  throughout fiscal 2000. DCMS
has  contracted  to acquire the asssets of  iShopper,  Limited,  an  established
online  shopping  mall,  including  their  merchant  base,  software and hosting
platforms,  to accelerate our growth. We are currently working with these assets
and servicing merchant clients from this source. This transaction is expected to
close within the second  quarter of fiscal 2001.  DCMS intends to offer its full
range of services to the Canadian market by mid 2001 through establishment of an
ISO relationship with major Canadian banks.

         Digital  Commerce  Canada Ltd. was  incorporated on October 18, 1999 in
the province of British Columbia,  Canada, and is our technology development and
administrative  division.  Through  fiscal  2000  DCCL did not  generate  direct
revenues but provided support services to the Company.

         Digital  Commerce  Bank  Inc.  ("DCB"),  another  of  our  wholly-owned
subsidiaries,  was  incorporated  on August  19th,  1999 in the country of Saint
Vincent  and the  Grenadines,  where  it is  based.  DCB was  granted  a Class I
Offshore  Banking  License by Saint  Vincent and the  Grenadines on August 23rd,
1999.  The Class I  Offshore  Banking  License is  permanent  as long as we meet
certain  requirements and regulations as defined by the host  government.  Under
the  conditions of the licensing  agreement,  Digital  Commerce  Bank,  Inc. has
posted a security deposit in the amount of $100,000 with the Government of Saint
Vincent.  The  deposit  remains  an  asset  of DCB,  to be  released  only  upon
cancellation  or  surrender  of  the  license.   The  deposit  is  held  by  the
International  Finance Authority of Saint Vincent in an interest bearing account
to the benefit of DCB.

         DCB has been  established  primarily to provide for the  settlement  of
international bankcard business of the company's international merchants. It has
also been organized to facilitate a broad range of banking,  trust, and merchant
service  functions on a fee for service basis for international  clients,  to be
offered  in  the  future  once  domestic  operations  have  been  satisfactorily
established.

         Through  fiscal  2000  activities  of this  division  did  not  grow as
expected due to the regulatory and  capitalization  requirements  established by
the Visa and Mastercard  Associations for qualification for primary  membership.
This  division  did,  however,  generate  revenues  by  acting  as an agent  for
Intercontinental  Financial Services, an ISO for several international banks. As
our association with US domestic banking  facilities  develops to the point that
we (or one of our subsidiaries) are accepted as a primary member of the Visa and
Mastercard  associations,  sponsorship for membership in the Visa and Mastercard
International  associations  will be  provided,  allowing  the DCBI  division to
acquire bankcard business.

         (d)      Strategic Relationships

         We view  our  business  relationships  as an  important  factor  in our
overall  business  strategy.  In  earlier  operations,  we  devoted  significant
portions of our resources to the  development of our own,  proprietary  software
solutions.  We  found  this to be an  enormously  expensive  and  time-consuming
exercise.  Therefore,  we  have  actually  sought  qualified  and  market  ready
providers of the systems and services we required to execute our business model.
Our  focus  currently  concentrates  on us being  the hub of  business  activity
through  which we assemble  the suite of  products  and  services  useful to our
merchant clients to successfully operate their e-business  activities.  This has
helped  simplify the business  model and  simplified  the revenue stream for our
operations.

         We  have  entered  into  strategic  business   relationships  with  the
following companies:

         University  Bank: We have  established a joint venture with  University
Bank of Ann Arbor, Michigan,  which allows us to cross-market financial services
and  e-commerce  packages to our clients.  Under this  arrangement we assist the
bank the in the  acquisition  of new business by providing  online  development,
management and marketing tools. This relationship also allows us to provide full
Internet  based  banking  services  for our clients  through  University  Bank's
facilities,  branded through our smartchili platform.  This venture allows us to
co-brand and market Internet banking services. Revenues are divided equally.

         Humboldt Bank: We are registered as an Independent  Sales  Organization
(ISO) with Humboldt Bank of Eureka,  California.  Our partnership with Humboldt,
an Acquiring  institution,  allows us to issue merchant accounts on their behalf
which facilitates our merchant clients acceptance of credit card payments.

         Total  Merchant  Services:  We are  registered  as an ISO  with TMS and
together with HSBC Bank USA, a major  acquiring  institution,  we issue merchant
accounts  on their  behalf for our  merchant  clients,  allowing  them to accept
credit card payments.

         HNC  Software:  We have  entered  into a four year  agreement  with HNC
Software,  Inc.  whereby  HNC  provides  us with a  number  of  fraud-prevention
e-commerce  products including  marketing,  fraud detection and customer support
software  at  preferential  prices.  Integration  of  these  products  with  our
technology  platform allows us to provide  merchants with better tools to manage
their customer relationships.

         FiNET:  We have  entered  into a long  term  agreement  with  Financial
National  Electronic  Transfer,  Inc.  whereby we have obtained a license to use
FiNET's  products  to provide  electronic  financial  transfer  services  to our
customers.

         Growth  Experts:   We  have  entered  into  an  agreement  with  Growth
Experts.Com  Inc. for the provision of advanced  sales and marketing  technology
services used in conducting direct marketing to our merchant clients.

         iTransact: We have established a strategic relationship with iTransact,
Inc. to whereby  iTransact  provides  payment  gateway  services for our payment
processing transactions services.

         Presinet:  We have established a strategic  relationship with Presinet,
Inc. whereby Presinet provides us with Internet firewall security services which
we in turn provide to our merchants.

         Thawte:  We have  entered into an  agreement  with  Thawte,  a Verisign
company, for the provision of their SSL certificate program.

         Responsetek:   We  have  entered  into  a  strategic  partnership  with
Responsetek  Networks Corp.  whereby  Responsetek  provides Customer  Experience
Management solutions for the smartchili services platform.

         These  relationships  generally do not  establish  minimum  performance
requirements but instead rely on the contractual best efforts of the parties. In
addition, several of our strategic business relationships may be terminated with
little notice.

         (e)      Sales and Marketing:

         Our sales  strategy is designed to  increase  market  awareness  of the
smartchili  brand,  expand the smartchili  marketplace,  and develop  additional
revenue  opportunities by cross-selling and up-selling additional e-commerce and
marketing services to our existing clients.

         We sell our merchant services primarily through our direct sales force.
Our sales organization targets businesses and merchants seeking online marketing
services  and  custom  e-commerce  services.  We  intend to  increase  our sales
presence by devoting  resources to our sales team and their  targeted  marketing
efforts.  Our  success  in  doing  so will  depend  on our  ability  to  attract
additional qualified sales personnel.

         We  currently  employ a variety of  traditional  and  online  marketing
programs,  business  development  and  promotional  activities  as  part  of our
marketing strategy. We rely on relationship  marketing,  including word-of-mouth
advertising  by merchants and shoppers,  indirect  promotions by merchants  with
links to our web sites  and  indirect  advertising  arising  through  use of our
services. We believe that this relationship  marketing will continue to generate
a substantial  number of new merchant  customers and additional shopper traffic.
We intend to introduce a number of other brand  awareness  and customer  loyalty
programs through our web sites.

         We also rely on public relations activities and direct mail programs to
increase  merchant  awareness  of our  products  and  services  and to  generate
additional sales. We intend to continue to participate in joint promotions using
online and traditional advertising media.

         (f)      Technology and Infrastructure:

         Some of our  e-commerce  enabling  products  and  services  and  online
marketplaces  require the  development  and  deployment  of advanced  e-commerce
technologies and methodologies. These are and will be supplied directly by us or
through our strategic relationships.  Consequently,  we have invested heavily in
licensing advanced technologies and in developing a core set of technologies.

         Our software  runs on leased  system  hardware that is hosted in leased
and third party data centers located in Vancouver,  British Columbia and various
locations  within the United  States.  These data  centers are  connected to our
headquarters in Vancouver,  BC through high-speed networks.  These data centers,
as well as the system  hardware  located at our  headquarters,  are connected to
supplementary power sources to maintain uninterrupted  electrical service and to
the Internet through multiple Internet service  providers to avoid  connectivity
problems.  Our systems are redundant,  and we maintain  multiple  clustered load
balancing hardware,  multiple web servers and multiple  application and database
servers. Data is stored on dedicated,  high speed and redundant disk arrays that
provide  continuous access to the data even if individual disk drives fail. Data
is backed up  regularly  and is stored off site to provide for data  recovery in
the event of a disaster.  We employ extensive automated and manual monitoring to
maintain a high level of network uptime.

         We intend to employ several relational databases to collect transaction
data for our merchant  activities.  Our databases  have been or will be designed
for high  levels of  performance  and  scalability.  Shopper  data is or will be
maintained in a profile database that is used for targeted shopper  relationship
management.

         We believe  that our future  success will depend in part on our ability
to license, develop and maintain advanced e-commerce technologies. Consequently,
as a support and control measure for the implementation of our business plan, we
expect to invest heavily in developing new technologies  and/or making strategic
acquisitions  to  increase  our direct  control  and  ownership  of  proprietary
technology.

         (g)      Intellectual Property:

         Intellectual  property  is  critical  to  our  success.  Our  software,
documentation  and other written  materials are provided  limited  protection by
international  and United States  copyright  laws.  In addition,  we protect our
proprietary  rights through the use of  confidentiality  and license  agreements
with employees, consultants and affiliates.

         We currently do not have any issued patents. We have applied for United
States trademark  registrations for the marks "smartchili" and "smartchili.com".
In a transaction  subsequent to the company's  fiscal year end we have acquiredf
the "ishopper" and "ishopper.com" trademarks, URLs and their registrations.  All
of these marks may also be protected in other jurisdictions.

         We intend to have our transaction processing technology collect and use
data  derived from user  activity on our web sites and on the merchant  customer
web sites we maintain.  This data is intended to be used for targeted  marketing
and data analysis.  Although we believe that we have the right to use such data,
trade  secret,  copyright  or other  protection  may not be  available  for such
information or others may claim rights to such information.

         (h)      Competition:

         The market for e-commerce enabling solutions and online marketplaces is
new,  intensely  competitive,  highly  fragmented and rapidly  changing.  On the
positive side the broad  build-up of the general  infrastructure  to service the
e-commerce  markets and the constant  patterning  of  potential  user and buyers
through the Internet  creates an  ever-increasing  marketplace for the goods and
services  we  provide.  However,  barriers  to entry  are  significant  and with
increasing demand we expect competition to intensify in the future.  Although we
believe  no one  company  currently  offers  the  range of  e-commerce  enabling
solutions as comprehensive as our suite of products and services, many companies
offer alternatives to one or more of our products and services.

         The number of companies  providing  products and services  that compete
with ours is large and increasing at a rapid rate.  Many of our  competitors and
potential competitors have substantially greater financial, technical, marketing
and other resources.  We expect that additional companies which to date have not
had a substantial  commercial  presence on the Internet or in our markets,  will
offer competing products and services.  In addition,  as the use of the Internet
and  online  products  and  services  increases,   larger  well-established  and
well-financed entities may continue to acquire, invest in or form joint ventures
with  providers of  e-commerce  products and services and existing  providers of
e-commerce solutions may continue to consolidate. Providers of Internet browsers
and other Internet  products and services who are  affiliated  with providers of
web  directories  and  information  services  may more tightly  integrate  these
affiliated  offerings into their browsers or other products or services.  Any of
these trends would increase the competition we face.

         (j)      Employees

         At October 31st,  2000,  we had 10  employees,  including 5 in merchant
services and 5 in general and  administrative  functions.  We are not subject to
any collective bargaining agreements and believe that our employee relations are
good.

         (k)      Banking Regulations Generally

         International  Banking  Regulation.   Digital  Commerce  Bank  Inc.  is
currently authorized to provide international banking services through its Class
I Offshore Banking Charter obtained from the government of Saint Vincent and the
Grenadines ("Saint Vincent").  Under the International  Banks Act, 1996 of Saint
Vincent,  offshore banking business may be transacted from within Saint Vincent,
only upon obtaining a license from the Saint Vincent and the Grenadines Offshore
Finance  Authority  (the  "Authority").  Our  ability to  continue to conduct an
offshore banking business depends upon our ability to maintain our license. This
requires us to have a resident  director in Saint Vincent,  to be  incorporated,
subsisting or continued under the Companies Act, 1994 or under the International
Business Companies Act of 1996; and to be engaged solely in the offshore banking
business.  As an offshore  banking  business,  we are  prohibited  from taking a
deposit  from any  resident  of Saint  Vincent,  investing  in any  asset  which
represents a claim on any resident of Saint  Vincent,  and  purchasing  bonds or
other securities issued by the Government of Saint Vincent.

         We operate under a Class I Offshore  Banking License for the purpose of
carrying on our offshore banking  business.  In order to maintain our license we
must have and maintain a fully  paid-up  capital with the value of not less than
five hundred thousand  dollars  ($500,000) or its equivalent in another currency
(cash or asset),  or such greater sum as may be determined by the Authority.  In
addition,  we must have  deposited or invested  the sum of one hundred  thousand
($100,000) or its  equivalent in an acceptable  currency,  in such manner as the
may be prescribed.

         As an  offshore  banking  business,  we are  required to send an annual
audit to the Authority  within three months of the end of its financial year. We
have not yet sent an annual audit to the Authority for fiscal year 2000 (October
31st,  2000) but is in the process of having such audit  prepared and intends to
provide it to the Authority as soon as it has been  completed.  In addition,  we
are  required to have no fewer than two  directors,  who must be approved by the
Authority.  The Authority  could withhold the approval of its  directors,  which
would result in our inability to continue to do business as an offshore  banking
business in Saint Vincent.

         As an offshore banking business under the Bank Act, we are not required
to pay income tax,  capital  gains tax or other direct tax to the State of Saint
Vincent or any political subdivision thereof.

         U.S. Banking Regulation. As we are not a licensed banking organization,
we are not  directly  subject  to  banking  regulations  in the  United  States.
However,  our banking partner,  University Bank, is subject to and complies with
such regulations.  Accordingly, revisions to existing or adoption of new laws or
regulations   could  subject  us  to  more   demanding   regulatory   compliance
requirements and could adversely  affect its ability to conduct,  or its cost of
conducting,  business.  If we are  successful in obtaining a banking  charter at
some point in the future, we will be subject to certain  restrictions imposed by
the Federal or State banking regulators. We will also be subject to various laws
and regulations relating to commercial and consumer transactions generally, such
as the Uniform  Commercial  Code, as well as the electronic funds transfer rules
which are contained in Regulation E, issued by the Federal Reserve Board. Any of
these agencies,  or other governmental or regulatory  authorities,  could revise
existing  regulations  or adopt new  regulations  at any time.  Legislation  and
regulatory  initiatives  containing  wide-ranging  proposals  for  altering  the
structure,  regulation and competitive  relationships of financial  institutions
are introduced  regularly.  We cannot predict whether or in what form a proposed
statute or  regulation  will be adopted or the extent to which it may affect its
business.  Furthermore,  given the rapid  expansion of the  electronic  commerce
market,  many  regulatory  bodies are  adopting  measures  to ensure  that their
regulations are keeping pace. For example, Congress has held hearings on whether
to  regulate  the  electronic   commerce  market,   while  numerous  states  are
considering  adopting their own laws to regulate internet banking.  Furthermore,
bank regulators are considering proposing new laws relating to customer privacy.
If enacted,  these laws, rules and regulations could force the Company to comply
with more complex and perhaps more  burdensome  regulatory  requirements,  which
could materially adversely affect our business,  financial condition, results of
operations, and cash flows.

          (l)     Development and Marketing Strategies

         At this time, as we are still a developing  company,  current  revenues
are insufficient to cover our expenses.  However, we have developed our programs
and established the relationships  necessary to fulfill our business plan to the
degree that we believe will allow us to achieve a self-sustaining operation once
a  sufficient  merchant  client base has been  established.  To that end we have
negotiated a contract for the acquisition of a large merchant portfolio, and are
currently at the stage of conducting  proper due  diligence  prior to closing on
the  transaction.  This  acquisition  is designed as the launch of our  merchant
acquisition and marketing programs.

         As it is our goal is to be a leading  e-commerce  enabling  company for
our merchant clients and business customers. We plan to achieve this through the
implementation of the following strategies and services:

         o        Develop  our  Business-to-Customer   Hub:  Through  our  newly
                  renovated web site, we provide  e-commerce  enabling solutions
                  for businesses and merchants seeking to transact business with
                  their clients  online.  This includes the following  features:
                  online store building tools,  sales and marketing services and
                  information and content relevant to businesses.

         o        Expand the smartchili  marketplace.  We intend to aggressively
                  expand  the  smartchili  marketplace  primarily  by using  the
                  technology and services  acquired through our recent alliances
                  with our  strategic  partners to broaden the range of features
                  available to our merchant clients. We will continue to seek to
                  promote a high  volume of shopper  traffic on our  network and
                  attempt  to  increase  the number of  quality  customer  leads
                  generated for listed  merchants.  We plan to expand the number
                  of new smartchili affiliates and syndication shopping sites to
                  make the smartchili  marketplace  more visible and accessible.
                  We have commenced  implementation of this strategy through the
                  pending acquisition of the ishopper.com  branded Internet mall
                  and its merchnat base. In addition, we are currently exploring
                  the use of technologies and applications  relating to commerce
                  transactions over wireless communication devices.

         o        Enhance and extend our suite of e-commerce  enabling  products
                  and services. We intend to continue to add new features to our
                  suite of e-commerce enabling solutions that we anticipate will
                  contribute   additional   revenues   from   lead   generation,
                  advertising,  up-selling  merchant  services and licensing and
                  syndication.  For  example,  we are  attempting  to expand our
                  merchant  marketing  services by updating  our  technology  to
                  increase  the quality and amount of data  provided by shoppers
                  on the thatbank marketplace.  To provide additional and better
                  quality  leads to  merchants,  we intend  to expand  the tools
                  available  to shoppers  to include  price  search  engines and
                  merchant rating systems.

         o        Promote  brand  visibility.  We will  continue  to promote the
                  smartchili brand as the best means for conducting  business on
                  the Internet.  To accelerate the acceptance and penetration of
                  our brand among businesses,  merchants and shoppers, we intend
                  to advertise  our brand  through  both online and  traditional
                  channels.

         o        Pursue additional strategic business relationships.  We intend
                  to enter into additional  business  relationships that enhance
                  the effectiveness of our products and services and the quality
                  of our  online  marketplaces.  To  date,  we have  focused  on
                  acquisitions and strategic business relationships that provide
                  us  access  to   improved   technology,   new   domestic   and
                  international  markets and prospective  clients. In the future
                  we expect to focus  principally on acquisitions  and strategic
                  business relationships that will enhance and grow smartchili.

         o        Expand   internationally.   We  will  seek  to  leverage   the
                  anticipated  global  growth in  e-commerce  by  expanding  our
                  online marketplaces  internationally.  We plan to commence our
                  international  expansion  with  the  development  of  business
                  opportunities  in the  latter  half  of  2001.  We  intend  to
                  accelerate  our  international   expansion  by  entering  into
                  strategic alliances with foreign  businesses.  We also plan to
                  register our web sites on international  search engines,  seek
                  relationships  with  foreign  portal  web  sites  and  develop
                  foreign-language  user  interfaces.   We  believe  that  these
                  features  will  enable  international  shoppers to more easily
                  access our online marketplaces,  thereby increasing the number
                  of participants on the smartchili.com network.

         We intend to  maintain a flagship  web site at  www.smartchili.com.  We
hope that this site will  serve as a  comprehensive  multipurpose  hub or portal
site  providing  access to the services  described  above.  We are attempting to
create a site that will be appealing, versatile, and informative to its existing
and potential clients by offering a number of complimentary value-added services
including  free  email  accounts,  web  site  personalization  features,  timely
Industry specific news,  investment  portfolio tools, and Internet search engine
capabilities. Our anticipated direct marketing activities may include the use of
an  internal  sales  force as well as  outsourced  sales  activities  and direct
advertising. Our anticipated indirect marketing activities would include the use
of strategic  partnership and alliance  agreements  with suitable  businesses as
well as co-branding activities.

         We consider our ongoing  attempts to develop and provide  complimentary
services such as those  described above to be an important to its future growth.
We anticipate  that these  services  shall include  loyalty  programs,  customer
relationship  management services, CRM and CEM comparison sales reporting tools,
online  banking,  online  shopping  portal,  registration  in multiple  portals,
micro-payment, recurring billing, and alternative forms of payment such as debit
card, smart card, and e-check.  We further anticipate that such services,  if we
are is able to provide them, will help build customer loyalty, web site traffic,
and help grow its database of  subscribers,  which will be  integrated  into its
direct marketing efforts.

         (m)      Risks:

         YOU SHOULD  CAREFULLY  CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER
INFORMATION IN THIS ANNUAL REPORT. WHILE WE HAVE ATTEMPTED TO IDENTIFY ALL RISKS
THAT  ARE  MATERIAL  TO OUR  BUSINESS,  ADDITIONAL  RISKS  THAT WE HAVE  NOT YET
IDENTIFIED  OR THAT WE  CURRENTLY  THINK  ARE  IMMATERIAL  MAY ALSO  IMPAIR  OUR
BUSINESS OPERATIONS.  THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE DUE TO
ANY OF THESE RISKS. IN ASSESSING THESE RISKS, YOU SHOULD ALSO REFER TO THE OTHER
INFORMATION  IN  THIS  ANNUAL  REPORT,   INCLUDING  THE  CONSOLIDATED  FINANCIAL
STATEMENTS AND RELATED NOTES.

         i.       Risks Related to our Business:

         Our rapid  growth and  evolution  may make it difficult to evaluate our
business and prospects.

         In recent  months,  we have  increasingly  focused  on  developing  and
providing products and services to enable businesses to conduct online commerce.
The  recent  shifts  in our  business  focus  may make it  difficult  for you to
evaluate  our  business  and  prospects.  You should  also  consider  the risks,
expenses and difficulties  that we may encounter as a young company in a rapidly
evolving market.

         ii.      We have a history of losses and we expect future losses:

         We incurred net losses of $551,819 for the year ended  October 31, 1999
and  $2,281,169 for the year ended October 31, 2000. At October 31, 2000, we had
an accumulated deficit of $2,832,987.  We have historically  invested heavily in
sales and marketing,  technology infrastructure and research and development and
expect  to  continue  to do so in the  future.  As a  result,  we must  generate
significant revenues to achieve and maintain  profitability.  We expect that our
sales and marketing expenses,  research and development expenses and general and
administrative  expenses will  continue to increase in absolute  dollars and may
increase as a percentage  of revenues.  In  addition,  we may incur  substantial
expenses in connection with future acquisitions.

         iii.     Our  future  revenues  are  unpredictable  and we  expect  our
                  operating results to fluctuate from period to period:

         Our business model has only been applied to the Internet since 1999 and
continues  to evolve.  Therefore  we have  limited  experience  in planning  the
financial  needs and  operating  expenses of our  business.  It is  difficult to
accurately  forecast  our  revenues in any given  period.  We may not be able to
sustain our recent revenue growth rates or obtain sufficient revenues to achieve
profitability.  If  our  revenues  in a  particular  period  fall  short  of our
expectations,  it will likely be difficult for us to quickly adjust our spending
in order to compensate for that revenue shortfall.

         iv.      Our  operating  results are likely to fluctuate  substantially
                  from period to period as a result of a number of factors, such
                  as:

         o        declines in the number of businesses and merchants to which we
                  provide our products and services;

         o        the  amount  and timing of  operating  costs and  expenditures
                  relating to expansion of our operations; and

         o        the mix of products and services that we sell.

         In addition,  factors  beyond our control may also cause our  operating
results to fluctuate, such as:

         o        the  announcement or introduction of new or enhanced  products
                  or services by our competitors; and

         o        the pricing policies of our competitors.

         Period-to-period  comparisons  of our operating  results are not a good
indicator of our future performance.  It is likely that our operating results in
some  quarters  may not  meet the  expectations  of stock  market  analysts  and
investors and this could cause our stock price to decline.

         v.       Our business model is unproven and changing:

         Our  business  model  consists of providing  our merchant  clients with
e-commerce  enabling  solutions.  We have limited  experience  as a company and,
additionally,  the  Internet,  on which  our  business  model  relies,  is still
unproven  as a  business  medium.  Accordingly,  our  business  model may not be
successful,  and we may need to change it. Our  ability to  generate  sufficient
revenues to achieve  profitability will depend, in large part, on our ability to
successfully  market our  e-commerce  products  and services to  businesses  and
merchants that may not be convinced of the need for an online presence or may be
reluctant  to rely upon third  parties to develop  and manage  their  e-commerce
offerings and marketing efforts.

         vi.      Our  future  growth  will  depend on our  ability  to make and
                  successfully integrate additional acquisitions:

         Our success  depends on our ability to  continually  enhance and expand
our e-commerce  enabling  products and services and our online  marketplaces  in
response to changing  technologies,  customer demands and competitive pressures.
Consequently,  we have acquired complementary  technologies or businesses in the
past, and intend to do so in the future.  If we are unable to identify  suitable
acquisition targets, or if we are unable to successfully  complete  acquisitions
and successfully integrate the acquired businesses,  technologies and personnel,
our ability to increase  product and  service  offerings  will be reduced.  This
could cause us to lose business to our  competitors,  and our operating  results
could suffer.

         vii.     Acquisitions involve a number of risks:

         We actively  seek to identify  and acquire  companies  with  attributes
complementary to our e-commerce products and services. Acquisitions that we make
may involve numerous risks,  including:  diverting  management's  attention from
other business concerns;

         o        being  unable  to  maintain   uniform   standards,   controls,
                  procedures and policies;

         o        entering markets in which we have no direct prior experience;

         o        improperly   evaluating  new  services  and   technologies  or
                  otherwise  being  unable  to  fully  exploit  the  anticipated
                  opportunity; and

         o        being   unable  to   successfully   integrate   the   acquired
                  businesses, technologies and other assets.

         If we are unable to accurately assess any newly acquired  businesses or
technologies,  our business could suffer. For example,  in March 2000 we entered
into a venture agreement  intending  ultimate  acquisition of RedKnot Industries
Inc. This company had developed payment processing  technologies that we planned
to  utilize  as part of our  e-commerce  products  and  services.  However,  the
technologies  were not fully  deployed and we determined  that the likelihood of
deployment  of the  finished  product was remote  within an  acceptable  cost or
timeframe.  This project was ultimately abandoned,  but at the cost of in excess
of $600,000.  Future  acquisitions  may involve the assumption of obligations or
large one-time  write-offs  and  amortization  expenses  related to goodwill and
other intangible  assets. Any of the factors listed above would adversely affect
our results of operations.

         In addition, in order to finance any future acquisition, we may need to
raise additional funds through public or private  financings.  In this event, we
could be  forced  to  obtain  equity  or debt  financing  on terms  that are not
favorable to us and that may result in dilution to our shareholders.

         viii.    Our success  depends upon achieving  adequate  market share to
                  increase our revenues and become profitable:

         Our success depends upon achieving  significant  market penetration and
acceptance  of our  e-commerce  enabling  products  and  services.  We have only
recently begun to expand our business-to-business initiatives designed to enable
businesses  to  maximize  their   e-commerce   opportunities,   and  our  online
marketplaces  have achieved only limited  market  acceptance to date. We may not
currently have adequate market share to successfully  execute our business plan.
If we are  unable  to  reach  and  retain  substantial  numbers  of  businesses,
merchants and shoppers, our business model may not be sustainable.

         To successfully  market and sell our e-commerce  enabling  products and
services we must:

         o        become recognized as a leading provider of end-to-end enabling
                  solutions;

         o        enhance existing products and services;

         o        add new products and services;

         o        complete projects on time;

         o        increase  the number of  businesses  and  merchants  using our
                  e-commerce products and services and online marketplaces; and

         o        continue to increase the  attractiveness of the smartchili and
                  ishopper shopping malls to shoppers.

         ix.      If we do not increase brand awareness our sales may suffer:

         Due in  part to the  emerging  nature  of the  markets  for  e-commerce
enabling  products  and  services  and online  marketplaces,  together  with the
substantial  resources available to many of our competitors,  our opportunity to
achieve and maintain a significant  market share may be limited.  Developing and
maintaining  awareness of the smartchili.com brand name is critical in achieving
widespread  acceptance of our e-commerce enabling products and services. We have
only recently begun to expand our  business-to-business  initiatives designed to
enable businesses to maximize their e-commerce opportunities.  The importance of
brand  recognition  will  increase  as  competition  in our  markets  increases.
Successfully  promoting and  positioning  our brands will depend  largely on the
effectiveness  of our  marketing  and sales  efforts  and our ability to develop
reliable and useful products and services at competitive  prices. If our planned
marketing  and  sales  efforts  are  ineffective,  we may need to  increase  our
financial   commitment  to  creating  and  maintaining   brand  awareness  among
businesses,  merchants and shoppers, which could divert financial and management
resources from other aspects of our business, or cause our operating expenses to
increase  disproportionately to our revenues.  This could cause our business and
operating results to suffer.

         x.       We face significant competition:

         The market for  e-commerce  enabling  products  and services and online
marketplaces is highly  competitive,  and we expect  competition to intensify in
the  future.  Barriers  to entry are not  significant.  Our  failure  to compete
effectively could result in the following:

         o        fewer  businesses  and  merchants  relying  upon our  enabling
                  solutions;

         o        the obsolescence of the technology underlying our products and
                  services;

         o        fewer businesses and merchants listed in our directories;

         o        a decrease in shopper traffic on our web sites; and

         o        a reduction  in the prices of or profits on our  products  and
                  services.

         The number of  companies  providing  e-commerce  enabling  products and
services  is large and  increasing  at a rapid rate.  We expect that  additional
companies  which to date have not had a substantial  commercial  presence on the
Internet or in our markets will offer competing products and services.  Although
we  believe  no one  company  currently  offers a range of  e-commerce  enabling
solutions  as  comprehensive  as our  suite  of  products  and  services,  other
companies offer alternatives to one or more of our products and services.

         Many of our  competitors  and potential  competitors  have  substantial
competitive advantages as compared to us, including:

         o        larger customer or user bases;

         o        the ability to offer a wider array of e-commerce  products and
                  solutions;

         o        greater  name  recognition  and larger  marketing  budgets and
                  resources;

         o        substantially   greater   financial,   technical   and   other
                  resources;

         o        the   ability   to  offer   additional   content   and   other
                  personalization features; and

         o        larger production and technical staffs.

         These  advantages  may enable our  competitors to adapt more quickly to
new technologies and customer needs,  devote greater  resources to the promotion
or sale of their products and services,  initiate or withstand substantial price
competition,  take advantage of acquisition or other  opportunities more readily
or develop and expand their product and service offerings more quickly.

         In  addition,  as the  use of the  Internet  and  online  products  and
services  increases,  larger  well-established  and  well-financed  entities may
continue  to  acquire,  invest  in or form  joint  ventures  with  providers  of
e-commerce   enabling   solutions,   and  existing  providers  may  continue  to
consolidate.  Providers  of Internet  browsers and other  Internet  products and
services who are affiliated  with providers of web  directories  and information
services that compete with our products and services may more tightly  integrate
these  affiliated  offerings  into their browsers or other products or services.
Any of these trends would increase the competition we face.

         xi.      If we fail to maintain our  strategic  business  relationships
                  and enter into new relationships our business will suffer:

         An important  element of our strategy  involves  entering into business
relationships with other companies.  Our success is dependent on maintaining our
current  contractual  relationships and developing new strategic  relationships.
These contractual relationships typically involve joint marketing,  licensing or
promotional  arrangements.  Although these relationships are an important factor
in our  strategy  because  they  enable us to enhance  our  product  and service
offerings,  the parties with which we contract may not view their  relationships
with us as  significant  to their own  businesses.  To date, we have not derived
material  revenue  from  these  relationships,  and some of these  relationships
impose substantial  obligations on us. It is not certain that the benefits to us
will outweigh our obligations.  Several of our significant business arrangements
do  not  establish  minimum   performance   requirements  but  instead  rely  on
contractual best efforts  obligations of the parties with which we contract.  In
addition,  most of these  relationships  may be  terminated by either party with
little  notice.  Accordingly,  in  order  to  maintain  our  strategic  business
relationships we will need to meet our partners'  specific business  objectives,
including  incremental  revenue,  brand awareness and implementation of specific
e-commerce   applications.   If  our  strategic   business   relationships   are
discontinued  for any reason,  or if we are  unsuccessful  in entering  into new
relationships  in the future,  our  business  and results of  operations  may be
harmed.

         xii.     If we fail to  effectively  manage  the  rapid  growth  of our
                  operations our business will suffer:

         Our ability to  successfully  offer  e-commerce  enabling  products and
services and implement our business plan in a rapidly  evolving  market requires
an effective planning and management  process. In 2001 we expect to increase the
scope of our operations  domestically and  internationally,  and we will have to
increase our headcount  substantially.  This growth has placed and will continue
to place a significant  strain on our  management  systems,  infrastructure  and
resources.  We will need to  continue to improve our  financial  and  managerial
controls  and  reporting  systems and  procedures,  and will need to continue to
expand, train and manage our workforce worldwide. Furthermore, we expect that we
will be required to manage an increasing  number of  relationships  with various
customers  and other third  parties.  Any failure to expand any of the foregoing
areas efficiently and effectively could cause our business to suffer.

         xiii.    We depend on our key personnel for successful operation of our
                  business:

         Our success  depends on the skills,  experience and  performance of our
senior  management and other key personnel.  If we do not efficiently  integrate
new personnel into our management  and culture,  our business could suffer.  Our
business could also suffer if we do not retain our key personnel.

         xiv.     We must hire additional personnel to expand our operations:

         Our future  success  depends on our ability to identify,  hire,  train,
retain and motivate highly skilled executive,  technical,  managerial, sales and
marketing,  business development and administrative personnel. We intend to hire
a number of personnel during the next year.  Competition for qualified personnel
is intense,  particularly in the technology and Internet markets.  If we fail to
successfully  attract and retain a  sufficient  number of  qualified  executive,
technical,   managerial,   sales  and  marketing,   business   development   and
administrative  personnel,  our ability to manage and expand our business  could
suffer.

         xv.      Our ability to develop and integrate  e-commerce  technologies
                  is subject to uncertainties:

         We have  limited  experience  delivering  our  e-commerce  products and
services and operating online marketplaces.  In order to remain competitive,  we
must  regularly  upgrade our  e-commerce  products and  services to  incorporate
current technology, which requires us to integrate complex computer hardware and
software components.  If we do not successfully integrate these components,  the
quality and performance of our online offerings may be reduced. In addition, the
ability  of our online  marketplaces  to  accommodate  an  increasing  number of
businesses,  merchants and shoppers would suffer.  While these  technologies are
generally commercially available, we may be required to expend considerable time
and money in order to successfully integrate them into our products and services
and this may cause our  business  to suffer.  We must also  maintain an adequate
testing  and  technical   support   infrastructure   to  ensure  the  successful
introduction of products and services.

         xvi.     Our computer systems may be vulnerable to system failures:

         Our success depends on the performance, reliability and availability of
the technology  supporting  our e-commerce  products and services and our online
marketplaces.  Our revenues  depend,  in large part, on the number of businesses
and merchants that use our products and services and the number of shoppers that
access our web site and our merchant client's web sites. This depends,  in part,
upon our actual and  perceived  reliability  and  performance.  Any inability to
provide our  products  and  services  or any  slowdown or stoppage of our online
marketplaces  could cause us to lose clients and  therefore  lose  revenue.  Our
systems and  operations  are  vulnerable  to damage or  interruption  from fire,
flood, power loss,  telecommunications failure, break-in, earthquake and similar
events.  Because we  presently do not have fully  redundant  systems or a formal
disaster  recovery plan, a systems failure could adversely  affect our business.
Our computer systems are vulnerable to computer viruses,  physical or electronic
break-ins and similar disruptions, which may lead to interruptions, delays, loss
of data or inability to process online  transactions for our clients.  We may be
required to expend considerable time and money to correct any system failure. If
we are unable to fix a problem that arises,  we may lose clients or be unable to
conduct our business at all.

         xvii.    Our  business  may be harmed by  defect  in our  software  and
                  systems:

         We have developed some custom software for our network servers and have
licensed  additional  software  from third  parties.  This  software may contain
undetected  errors or defects.  Although we have not suffered  significant  harm
from any  errors or  defects  to date,  we may  discover  significant  errors or
defects in the future that we may be unable to fix in a timely or cost-effective
manner.

         xviii.   We will need to expand  and  upgrade  our  systems in order to
                  maintain customer satisfaction:

         We must  expand and  upgrade  our  technology,  transaction  processing
systems and network  infrastructure  if the number of  businesses  and merchants
using our  e-commerce  products  and services  and online  marketplaces,  or the
volume  of  traffic  on our web  sites  or our  clients'  web  sites,  increases
substantially.  We could experience  periodic  capacity  constraints,  which may
cause unanticipated  system disruptions,  slower response times and lower levels
of customer service.  We may be unable to accurately  project the rate or timing
of increases, if any, in the use of our products or services or our web sites or
when we must expand and upgrade our systems and  infrastructure  to  accommodate
these  increases  in a timely  manner.  Any  inability  to do so could  harm our
business.

         xix.     Our international operations involve risks:

         We are subject to risks specific to Internet-based companies in foreign
markets. These risks include:

         o        delays in the development of the Internet as a commerce medium
                  in international markets;

         o        restrictions on the export of encryption technology; and

         o        increased  risk of piracy and limits on our ability to enforce
                  our intellectual property rights.

         xx.      We may require additional funding to successfully  operate and
                  grow our business:

         Although  we  expect  that  our  cash  reserves  and  cash  flows  from
operations  will be  adequate to fund our  operations  for at least the next six
months,  these  resources  may  be  inadequate.  Consequently,  we  may  require
additional  funds during or after this period.  Additional  financing may not be
available on favorable terms or at all. If we raise  additional funds by selling
stock,  the  percentage  ownership  of our  then  current  shareholders  will be
reduced. If we cannot raise adequate funds to satisfy our capital  requirements,
we  may  have  to  limit  our  operations  significantly.   Our  future  capital
requirements depend upon many factors, including, but not limited to:

         o        the rate at which we expand our sales and marketing operations
                  and our product and service offerings;

         o        the extent to which we develop and upgrade our  technology and
                  data network infrastructure; and

         o        the occurrence, timing, size and success of acquisitions.

         xxi.     We  may be  unable  to  adequately  protect  our  intellectual
                  property and proprietary rights:

         We regard our intellectual  property rights as critical to our success,
and we  rely on  trademark  and  copyright  law,  trade  secret  protection  and
confidentiality and license agreements with our employees,  customers and others
to protect our proprietary rights.  Despite our precautions,  unauthorized third
parties  might  copy  portions  of our  software  or  reverse  engineer  and use
information  that we regard as  proprietary.  We do not currently own any issued
patents and there is no  assurance  that any  pending  patent  application  will
result in an issued  patent,  or that any future patent will not be  challenged,
invalidated  or  circumvented,  or that the rights granted under any patent will
provide  us with a  competitive  advantage.  The laws of some  countries  do not
protect  proprietary  rights  to the same  extent  as do the laws of the  United
States,  and our means of protecting  our  proprietary  rights abroad may not be
adequate.  Any misappropriation of our proprietary  information by third parties
could  adversely  affect our business by enabling  third parties to compete more
effectively with us.

         xxii.    Our  technology  may  infringe  the  intellectual  property of
                  others:

         Although we have not received notice of any alleged infringement by us,
we cannot be certain that our  technology  does not infringe  issued  patents or
other  intellectual  property  rights of others.  In  addition,  because  patent
applications in the United States are not publicly disclosed until the patent is
issued, applications may have been filed which relate to our software. We may be
subject to legal proceedings and claims from time to time in the ordinary course
of our business,  including claims of alleged infringement of the trademarks and
other  intellectual  property  rights of third  parties.  Intellectual  property
litigation is expensive and  time-consuming,  and could divert our  management's
attention away from running our business.

         xxiii.   If  the  security  provided  by  our  e-commerce  services  is
                  breached we may be liable to our  clients  and our  reputation
                  could be harmed:

         A fundamental  requirement for e-commerce is the secure transmission of
confidential  information  of  businesses,   merchants  and  shoppers  over  the
Internet.  Among the  e-commerce  services we offer to  merchants  are  security
features such as:

         o        secure online payment services;

         o        secure order processing services; and

         o        fraud prevention and management services.

         Third  parties  may  attempt to breach  the  security  provided  by our
e-commerce  products  and  services  or the  security of our  clients'  internal
systems.  If they are  successful,  they could obtain  confidential  information
about  businesses and shoppers using our online  marketplaces,  including  their
passwords, financial account information,  credit card numbers or other personal
information.  We may be liable to our clients or to  shoppers  for any breach in
security.  Even if we are not held  liable,  a  security  breach  could harm our
reputation,  and the mere  perception of security  risks,  whether or not valid,
could inhibit market acceptance of our products and services. We may be required
to  expend  significant  capital  and  other  resources  to  license  additional
encryption or other  technologies  to protect  against  security  breaches or to
alleviate  problems  caused by these  breaches.  In addition,  our clients might
decide to stop using our  e-commerce  products and  services if their  customers
experience security breaches.

         xxiv.    Problems  relating  to the year  2000  issue  could  adversely
                  affect our business:

         Although  the year  2000  issue has  passed,  there  could be  problems
arising  from the Year 2000 issue.  If problems do arise,  they could  adversely
affect our business.

         xxv.     Risks related to our industry:

         Our success  depends on continues  increases in the use of the Internet
as a  commercial  medium.  We depend on the  growing use and  acceptance  of the
Internet by  businesses,  merchants and shoppers as a medium of commerce.  Rapid
growth in the use of and  interest  in the  Internet  and  online  products  and
services is a recent development.  No one can be certain that acceptance and use
of the Internet and online  products  and services  will  continue to develop or
that a sufficiently broad base of businesses,  merchants and shoppers will adopt
and continue to use the Internet and online products and services as a medium of
commerce.

         The  Internet  may fail as a  commercial  marketplace  for a number  of
reasons,  including potentially  inadequate development of the necessary network
infrastructure  or  delayed  development  of  enabling  technologies,  including
security technology and performance  improvements.  For example, if technologies
such as software that stops  advertising from appearing on a web user's computer
screen gain wide acceptance,  the  attractiveness of the Internet to advertisers
would be diminished, which could harm our business.

         xxvi.    Rapid   technological   change  could  negatively  affect  our
                  business:

         Rapidly changing  technology,  evolving  industry  standards,  evolving
customer demands and frequent new product and service introductions characterize
the market for  e-commerce  products and services and online  marketplaces.  Our
future  success  will depend in  significant  part on our ability to improve the
performance, content and reliability of our products and services in response to
both the  evolving  demands of the market and  competitive  product  and service
offerings.  Our efforts in these areas may not be successful.  If a large number
of our clients  adopt new Internet  technologies  or  standards,  we may need to
incur substantial expenditures modifying or adapting our e-commerce products and
services to remain compatible with their systems.

         xxvii.   We rely on the Internet  infrastructure  provided by others to
                  operate our business:

         Our success  depends in large part on other  companies  maintaining the
Internet infrastructure. In particular, we rely on other companies to maintain a
reliable  network  backbone  that  provides  adequate  speed,  data capacity and
security  and to develop  products  that  enable  reliable  Internet  access and
service.  If the Internet  continues  to  experience  significant  growth in the
number of users,  frequency of use and amount of data transmitted,  the Internet
infrastructure  of thousands of computers  communicating  via  telephone  lines,
coaxial cable and other telecommunications  systems may be unable to support the
demands placed on it, and the Internet's  performance or reliability  may suffer
as a result of this continued  growth.  If the performance or reliability of the
Internet suffers,  Internet users could have difficulty  obtaining access to the
Internet. In addition, data transmitted over the Internet, including information
and  graphics  contained  on web pages,  could  reach  Internet  users much more
slowly. This could result in frustration of Internet users, which could decrease
online traffic and cause advertisers to reduce their Internet expenditures.

         xxviii.  Future  Governmental  regulation  and privacy  concerns  could
                  adversely affect our business:

         We are not currently  subject to direct  regulation  by any  government
agency, other than regulations applicable to businesses generally, and there are
currently few laws or regulations  directly  applicable to access to or commerce
on the  Internet.  However,  due to the  increasing  popularity  and  use of the
Internet,   a  number  of  legislative   and  regulatory   proposals  are  under
consideration by federal,  state, local and foreign governmental  organizations,
and it is  possible  that a number of laws or  regulations  may be adopted  with
respect to the  Internet  relating  to issues  such as user  privacy,  taxation,
infringement,  pricing,  quality  of  products  and  services  and  intellectual
property ownership. The adoption of any laws or regulations that have the effect
of imposing additional costs, liabilities or restrictions relating to the use of
the Internet by businesses or consumers  could decrease the growth in the use of
the  Internet,  which could in turn  decrease  the demand for our  products  and
services,  decrease  traffic on our online  marketplaces,  increase  our cost of
doing  business,  or otherwise  have a material  adverse effect on our business.
Moreover,  the  applicability  to the Internet of existing laws governing issues
such as property  ownership,  copyright,  trademark,  trade secrets,  obscenity,
libel and personal  privacy is uncertain and developing.  Any new legislation or
regulation,  or application  or  interpretation  of existing laws,  could have a
material adverse effect on our business.

         The  Federal  Communications  Commission  is  currently  reviewing  its
regulatory  positions on the privacy protection given to data transmissions over
telecommunications   networks   and   could   seek  to   impose   some  form  of
telecommunications   carrier  regulation  on  telecommunications   functions  of
information  services.  State public utility commissions generally have declined
to regulate  information  services,  although the public service  commissions of
some states  continue to review  potential  regulation of such services.  Future
regulation or regulatory  changes  regarding  data privacy could have an adverse
effect on our business by requiring us to incur substantial  additional expenses
in order to comply with this type of regulation.

         A number of proposals  have been made at the  federal,  state and local
level that would impose  additional taxes on the sale of goods and services over
the  internet  and certain  states have taken  measures to tax  Internet-related
activities.  Foreign countries also may tax Internet transactions.  The taxation
of  Internet-related  activities  could have the effect of  imposing  additional
costs on companies, such as smartchili, that conduct business over the Internet.
This, in turn, could lead to increased  prices for products and services,  which
could result in decreased demand for our solutions.

         xxix     We could face  liability  for  material  transmitted  over the
                  internet by others:

         Because  material  may be  downloaded  from web sites  hosted by us and
subsequently  distributed  to others,  there is a potential  that claims will be
made against us for  negligence,  copyright or trademark  infringement  or other
theories  based on the  nature  and  content of this  material.  Negligence  and
product liability claims also potentially may be made against us due to our role
in facilitating the purchase of some products, for example firearms. Although we
carry general liability  insurance,  our insurance may not cover claims of these
types,  or may not be adequate to indemnify  us against this type of  liability.
Any imposition of liability,  and in particular liability that is not covered by
our insurance or is in excess of our insurance  coverage,  could have a material
adverse effect on our reputation and our operating  results,  or could result in
the imposition of criminal penalties on us.

         xxx      We do not currently collect sales taxes from all transactions:

         We do not  currently  collect  sales or other similar taxes on products
sold by us. However,  one or more states or foreign countries may seek to impose
sales tax collection  obligations on out-of-state or foreign companies  engaging
in e-commerce.  In addition,  any new operation in states outside the states for
which we currently  collect sales tax could subject  shipments into these states
to state or foreign sales taxes. A successful assertion by one or more states or
any foreign  country that we should  collect sales or other similar taxes on the
sale of  merchandise or services could result in liability for penalties as well
as substantially higher expenses incurred by our business.

         xxxi.      Our stock price may be volatile:

         The stock market in general,  and the stock prices of  Internet-related
companies in particular, have recently experienced extreme volatility, which has
often been unrelated to the operating  performance of any particular  company or
companies.  Our stock price could be subject to wide fluctuations in response to
factors such as the following:

         o        actual or  anticipated  variations  in  quarterly  results  of
                  operations;

         o        the addition or loss of merchants and shopper traffic;

         o        announcements  of technological  innovations,  new products or
                  services by us or our competitors;

         o        changes  in   financial   estimates  or   recommendations   by
                  securities analysts;

         o        conditions or trends in the Internet, e-commerce and marketing
                  industries;

         o        changes in the market  valuations of other  Internet or online
                  service or software companies;

         o        our  announcements  of  significant  acquisitions,   strategic
                  relationships, joint ventures or capital commitments;

         o        additions or departures of key personnel;

         o        sales of our common stock;

         o        general market conditions; and

         o        other events or factors, many of which are beyond our control.

         These broad market and industry  factors may  materially  and adversely
affect our stock price,  regardless  of our operating  performance.  The trading
prices of the  stocks of many  technology  companies  are at or near  historical
highs and  reflect  price to  earnings  ratios  substantially  above  historical
levels. These trading prices and price-to-earnings ratios may not be sustained.

         In the past,  securities class action litigation has often been brought
against companies  following periods of volatility in their stock prices. We may
in the future be the target of similar litigation.  Securities  litigation could
result in  substantial  costs and divert our  management's  time and  resources,
which could cause our business to suffer.

Item 2. Description of Properties

         We occupy 4,820 square feet of  commercial  space at 1199 West Hastings
Street,  Suite 300,  Vancouver,  British Columbia on a five year lease term. Our
current  gross  monthly rent for this facility is  approximately  US $8,000.  We
sub-lease  approximately one half of this space to non-related parties, to cover
approximately one half of the rental obligation.

         As of December 31st, 2000 we closed our office in Salt Lake City, Utah.
We maintain a mailing address with its counsel in Salt Lake City, Utah.

         We maintain  approximately  1,000 square feet of premises in Kingstown,
Saint  Vincent,  West  Indies.  The  terms  of the  leasing  agreement  are on a
month-to-month  basis,  renewable under the same terms upon notice.  Our current
monthly rent for this facility is US $1,000.

         We believe our office space is adequate for our current needs.

Item 3. Legal Proceedings.

         From time to time we have been,  currently are and expect to be subject
to legal  proceedings and claims in the ordinary  course of business.  We do not
believe that any of the pending litigation is material.

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

         No  matters  were  submitted  to a vote of the  Company's  stockholders
during the fourth quarter of the fiscal year ended October 31, 2000.

                                     Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

         (a)      Market Information.

         Prior to the  acquisition  of Digital  Commerce,  Inc.,  the  Company's
common stock  traded on the Nasdaq  Over-The-Counter  Bulleting  Board under the
symbol "SYAE." Systems Assurance did not have any trading volume for FY 1998 and
the first two quarters of FY 1999. On June 17, 1999, the Company's  common stock
commenced trading on the Nasdaq Over-The-Counter Bulletin Board under the symbol
"THBK".  The following table sets forth the range of high and low bid quotations
for the Company's common stock for each of the periods  indicated as reported by
the Nasdaq Over-The-Counter  Bulletin Board. Bid quotations reflect inter-dealer
prices,  without retail markup,  markdown or commission and may not  necessarily
represent actual transactions on June 17, 1999.

                             Quarter Ended High Low

July 31, 1999 (1)                     $12.00                        $ 0.25
October 31, 1999                      $12.00                        $10.00
January 31, 2000                      $10.25                        $10.125
April 30, 2000                        $13.00                        $10.00
July 31, 2000                         $10.00                        $ 4.50
October 31, 2000                      $ 4.50                        $ 0.76

         (1) For the period  commencing on June 17, 1999, and concluding on July
31,1999.

         On January 24, 1997, our stockholders approved a one-for-seventy (1:70)
reverse common stock split, and on December 19, 1997, our stockholders  approved
a one-for-five  (1:5) reverse  common stock split,  and changed the par value of
the  common  shares  from $.01 to $.001.  In  January,  1997,  our  stockholders
approved the creation of three classes of preferred stock, par value $.001, with
rights  and  privileges  to be set by the  Board  of  Directors.  The  Board  of
Directors authorized and designated 500,000 shares of Class A Preferred Stock on
February 9, 2000, but cancelled distribution of these shares by Board resolution
in March, 2000.

         (b)      Security Holders

         The  approximate  number of record  holders of shares of the our common
stock as of October 31, 2000 was 1541.

         (c)      Dividends

         We have not paid  dividends  within  the last  three  years  and do not
anticipate or contemplate  paying cash dividends in the foreseeable  future.  We
presently  intend to utilize all available  funds for the development and growth
of its business and operations.

         (d)      Recent Sales of Unregistered Securities

         We have  entered  into  eight  transactions  in the  past  three  years
involving  the issuance of our  unregistered  securities  under  certain  exempt
transactions under the Securities Act of 1933.

         On February 4, 1997,  we issued 80,000 shares of our common stock to an
investment firm to in order to pay a $52,829 promissory note.

         On January 5, 1998, we issued  20,000,000 shares of our common stock to
our sole officer and director in exchange  for services  rendered.  These shares
were valued at $90,000.

         On January 9, 1998,  we issued  900,000  shares of our common  stock in
exchange for $9,000 cash consideration.

         In May and June,  1999, we issued  l,227,500 shares of our common stock
at a price of $1.00 per share,  for a total  purchase  price of  $1,227,500,  to
twenty two investors.  We believe that each of these twenty two investors was an
"accredited investor."

         In February,  2000, we issued  200,000  shares of our common stock at a
price of $2.50 per share to Theodore  Swindells,  for a total  purchase price of
$500,000.

         In  February,  2000 we issued  83,666  shares of our common  stock at a
price of $3.00 per  share,  for a total  purchase  price of  $250,998,  to eight
investors.  We believe  that each of these eight  investors  was an  "accredited
investor".

         In August,  2000 we issued 5,500 and 56,250  shares of our common stock
to  Century  America   Promotions,   Inc.  and  Online  OTC   Review.Com,   Inc.
respectively, in connection with the provision of services.

         In connection with each of these isolated issuances of securities, each
purchaser  represented  and  warranted  to us  that it (i) was  aware  that  the
securities had not been registered under federal  securities laws, (ii) acquired
the securities  for its own account for investment  purposes and not with a view
to or for resale in connection with any distribution for purposes of the federal
securities  laws,  (iii)  understood  that  the  securities  would  need  to  be
indefinitely held unless registered or an exemption from registration applied to
a proposed  disposition,  (iv) was aware that the certificate  representing  the
securities  would bear a legend  restricting  their transfer,  and (v) was aware
that there was no public market for the securities. We believe that, in light of
the  foregoing,  and in  light  of  the  sophisticated  nature  of  each  of the
acquirers,  the  sale of its  securities  to the  respective  acquirers  did not
constitute  the sale of an  unregistered  security in  violation  of the federal
securities  laws and  regulations  by reason  of the  exemption  provided  under
Section  4(2)  and  Regulation  S of the  Securities  Act,  and  the  rules  and
regulations promulgated thereunder.

Item 6.  Selected Financial Data

Item 7. Management's  Discussion And Analysis Of Financial Condition And Results
Of Operations

         Special Note Regarding Forward-Looking  Statements.  Certain statements
in this report and elsewhere  (such as in our other filings with the  Securities
and Exchange Commission ("SEC"), press releases, presentations by our management
and oral  statements)  may constitute  "forward-looking  statements"  within the
meaning of the Private  Securities  Litigation Reform Act of 1995. Words such as
"expects,"  "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
and  "should,"  and  variations  of these  words and  similar  expressions,  are
intended to identify  these  forward-looking  statements.  The Company's  actual
results   could   differ    materially   from   those   anticipated   in   these
forward-lookingstatements.  Factors  that  might  cause  or  contribute  to such
differences include,among others,  competitive pressures, the growth rate of the
banking,  merchant  services  and  electronic  commerce  industries,  constantly
changing  technology  and market  acceptance of our products and  services.  The
Company does not undertake any obligation to publicly  release the result of any
revisions  to these  forward-looking  statements,  which may be made to  reflect
events or  circumstances  after the date hereof or to reflect the  occurrence of
unanticipated events.

         Overview

         Digital Commerce  International,  Inc. is an e-commerce  infrastructure
company,  specializing  in  the  aggregation  and  vertical  integration  of the
critical  components  required  to  build  a  successful  e-business.   This  is
accomplished  by providing our merchant  clients,  primarily  small to mid sized
businesses,  with  seamless  end-to-end  solutions  to create and  manage  their
e-business.  The services  provided also service the "brick and mortar" needs of
our merchant  clients.  We focus on four mission critical  categories of service
provision  designed to serve  merchants at all stages of the life cycle of their
e-business:  e-commerce  enabling,  Internet  banking,  marketing  and  business
intelligence.  Specifically,  sub-categories  of these four features include the
following:

         o        Enabling:  Payment Processing & Financial  Services:  includes
                  the issuance of merchant  accounts to  facilitate  credit card
                  acceptance,  IP-based  payment gateway with virtual  terminal,
                  neural network based credit card fraud  mitigation,  provision
                  of complete banking packages tailored for Internet  merchants,
                  online  banking,   electronic  bill  payment,   multi-currency
                  settlement, cash management

         o        Internet Storefront:  includes template based website builder,
                  website  hosting,  provision  of a merchant  account,  payment
                  gateway and shopping cart

         o        Marketing:  includes  placement in shopping portals and search
                  engines, direct e-mail, loyalty programs, cross advertising

         o        Intelligence:   includes  customer  relationship   management,
                  customer experience management, advanced fraud scrubbing, data
                  mining and analysis and research

         While we own a number of the  services  noted above,  the  provision of
many  of  the  services  offered  by  us is  outsourced  to  partner  providers,
specialists in their fields. We manage our relationship with merchant clients to
the degree that the technologies for these services are pre-integrated  into its
platform and all  customer  support is provided  in-house  allowing us to create
positive customer  experiences and high levels of satisfaction with our merchant
clients.

         We were incorporated in 1982 as Systems Assurance  Corporation.  We did
not conduct any active  business  operations from 1992 through June 15, 1999, at
which  time we bought  Digital  Commerce  Inc.  and  focused  our  energies  and
resources  in efforts  to become an  Internet  banking  and  financial  services
company,  designed to specialize in providing a variety of banking and financial
services,  bankcard processing, and merchant services with an emphasis on use of
the Internet as the common platform for delivery.

         In August of 1999 we obtained a Class 1 Offshore  Banking  License from
the country of St. Vincent and the  Grenadines.  Our facility in St. Vincent was
established to provide for the settlement of the international bankcard business
of our international  merchant  clients.  Through fiscal 2000 activities of this
division  did not grow as  expected  due to the  regulatory  and  capitalization
requirements   established   by  the  Visa  and  Mastercard   Associations   for
qualification  for primary  membership.  This  division did,  however,  generate
revenues by acting as an agent for Intercontinental  Financial Services,  an ISO
for several international banks.

         In the  second  quarter  of the year 2000 we  recognized  the change of
business  opportunity  available in the Internet  market and began to change the
focus  of our  business  from  the  development  and  implementation  of our own
proprietary  platform to a revised  strategy of providing  the "hub" or "switch"
through  which all of the  services we offer  could be provided to our  merchant
clients  on a more  immediate  timeline.  While we own a number of the  services
noted above,  the  provision of many of our services are  outsourced  to partner
providers.  These services are pre-integrated into its platform and all customer
support is provided in-house allowing us to create positive customer experiences
and high levels of satisfaction with its merchant clients.

         We operate through three wholly owned  subsidiaries,  Digital  Commerce
Merchant Services Inc. (DCMS), a Delaware corporation  established as a domestic
based  Independent  Sales   Organization  (ISO)  to  provide  merchant  bankcard
transactions for domestic clients in settling credit card transactions,  Digital
Commerce Canada Limited (DCCL) providing technical, research and development and
administrative  services  for  us  ,  and  Digital  Commerce  Bank  Inc.  (DCB),
incorporated  in St.  Vincent and the  Grenadines  and  operating  to settle our
international bankcard processing and financial services.

         Results of Operations

         We earned  operating  revenues of  $138,117  in the year ended  October
31st, 2000. These revenues consisted  primarily of commission  revenues from the
Company's role as a sales agent for credit card transactions. We received $4,527
of such revenues  through its issuance of merchant  numbers and $133,590 of such
revenues  as   commissions   received  in  its   capacity  as  sales  agent  for
organizations  engaged  in  the  processing  of  credit  card  transactions  for
international  merchants. We hope to recognize an increase in commission revenue
in  the  future  due to  the  establishment  and  integration  of its  operating
divisions together with increased sales and marketing efforts.

         Operating Expenses

         Our  operating  expenses  have  increased  in each  quarter  since  its
acquisition  of Digital  Commerce Inc. in June,  1999. We believe that operating
expenses  will  continue  to  increase  in the future as we continue to develop,
implement, and deploy its services and operations.

         General  and  administrative  expenses  for the year ended  October 31,
2000 totaled  $2,421,314.  General and administrative expenses for the year were
comprised   primarily  of   compensation   for   personnel,   fees  for  outside
professionals, telecommunications, bank licensing fees and other overhead costs,
including travel and entertainment expenses.

         Liquidity and Capital Resources

         We financed its operations  primarily through private placements of its
common  stock and  convertible  loan  advances  which  provided  net proceeds of
approximately  $1,267,000.  At October 31st, 2000, we had approximately $72,953
in  cash  and  cash  equivalent  in  short-term  investments.

         We  have  no  material   commitments,   other  than  those   employment
agreements,  lease  agreements and  consulting  agreements  described  elsewhere
herein. We hope to realize an increase in our working capital, and anticipates a
substantial  increase  in  our  capital  expenditures  due  to  the  anticipated
expansion of our business units, in the year 2001.

         Net cash used by  operating  activities  during the year ended  October
31st, 2000 was $1,393,791.  Our principal uses of cash were to fund its net loss
from operations.

         Net  cash  used by  investing  activities  consisted  of  $41,996  paid
principally for acquisition of capital assets.

         Net cash  provided  by  financing  activities  was  $1,267,937  derived
primarily  from  capital  contributions  and  short-term  debt.  Of the  capital
contributions, $750,000 was recorded from private sales of restricted stock.

         We believe that the  combination of revenues and capital  contributions
will be  sufficient  to fund  operations  for the upcoming  fiscal year.  To the
extent  that we  require  additional  funds to  support  our  operations  or the
expansion of our business,  we may sell additional equity, issue debt, or obtain
credit facilities through financial institutions.  Any sale of additional equity
securities  will  result  in  dilution  to  our  stockholders.  There  can be no
assurance that  additional  financing,  if required,  will be available to us in
amounts  or on terms  acceptable  to us. If we are  unable to secure  additional
financing,  our  operating  will be  adversely  affected and are  likelihood  of
success could be significantly impaired.

         Impact of Inflation

         The impact that  inflation  may have upon us differs from the potential
impact of inflation upon an industrial company, because substantially all of our
assets and  liabilities  will be  monetary  in nature,  and  interest  rates and
inflation  rates do not always  move in concert.  We believe  that the impact of
inflation on financial  results depends upon its ability to manage interest rate
sensitivity  and,  by such  management,  reduce  the  inflationary  impact  upon
performance.  The most direct impact of an extended period of inflation would be
to  increase  interest  rates  and to place  upward  pressure  on our  operating
expenses.  The actual effect of inflation on our net interest  income,  however,
would  depend on the extent to which we were able to  maintain a spread  between
the average  yield on its  interest-earning  assets and the average  cost of our
interest-bearing liabilities,  which would depend to a significant extent on our
asset-liability  sensitivity.  As  discussed  above,  we will seek to manage the
relationship  between  interest-sensitive  assets  and  liabilities  to  protect
against  wide  interest  rate  fluctuations,   including  those  resulting  from
inflation.  The effect of  inflation on our results of  operations  for the past
three years has been minimal.



<PAGE>

Item 8.           Financial Statements and Supplementary Data.










                      Digital Commerce International, Inc.

                        Consolidated Financial Statements

                                October 31, 2000


<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Directors and Stockholders of
Digital Commerce International, Inc. and Subsidiaries

We have audited the accompanying  consolidated balance sheet of Digital Commerce
International,  Inc. (a Delaware Corporation) and Subsidiaries as of October 31,
2000,  and the related  consolidated  statements  of  operations,  stockholders'
equity  and cash flows for the year then  ended.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility is to express an opinion on the consolidated financial statements
based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Digital
Commerce  International,  Inc. and  Subsidiaries as of October 31, 2000, and the
consolidated  results of their operations and their  consolidated cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  As discussed in Note I, the Company's
recurring  operating losses and lack of working capital raise  substantial doubt
about its ability to continue as a going concern.  Management's  plans in regard
to those matters are also  described in Note I. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.




Crouch, Bierwolf & Associates
Salt Lake City, Utah
March 20, 2001

<PAGE>

                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS


The Directors and Stockholders of
Digital Commerce International, Inc.


We  have  audited  the  accompanying   consolidated  statements  of  operations,
stockholders' equity and cash flows of Digital Commerce International,  Inc. and
Subsidiaries,  for the period from November 17, 1998 (inception) through October
31, 1999.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to  express  an  opinion  on the  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of operations
and  consolidated  cash  flows  of  Digital  Commerce  International,  Inc.  and
Subsidiaries for the period from November 17, 1998  (inception)  through October
31, 1999, in conformity  with generally  accepted  accounting  principles in the
United States of America.

/s/

Grant Thorton LLC

Salt Lake City, Utah
January 14, 2000



<PAGE>

<TABLE>
<CAPTION>

              Digital Commerce International, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEET
                                October 31, 2000

                                     ASSETS
<S>                                                                             <C>
CURRENT ASSETS
       Cash (Note A)                                                            $              72,953
       Accounts receivable,
          trade (Net of $21,514 allowance for bad debt)(Note G)                                53,641
          other                                                                                12,833
       Prepaid expenses                                                                       127,774
                                                                                ---------------------
       Total current assets                                                                   267,201

EQUIPMENT, AT COST (Net) (Note A)                                                              38,267

OTHER ASSETS
       Deposits                                                                               115,000
       Marketable securities (Note L)                                                         250,000
                                                                                ---------------------
                                                                                $             670,468
                                                                                =====================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
       Trade accounts payable                                                   $             238,313
       Accrued liabilities                                                                     46,130
       Accrued liabilities-related party (Note C)                                             406,593
       Interest payable                                                                        25,561
       Unearned revenue                                                                           490
       Notes payable (Note N)                                                                 516,937
                                                                                ---------------------
       Total current liabilities                                                            1,234,024

COMMITMENTS AND CONTINGENCIES (Notes C and E)                                                       -

STOCKHOLDERS'  EQUITY  (Notes B, K and E)  Preferred  stock,  $.001  par  value;
       500,000 shares
          authorized, 0 shares issued and outstanding                           $                   -
       Common stock, $0.001 par value; 30,000,000 shares
          authorized, 13,312,916 shares issued and outstanding                                 13,313
       Additional paid-in capital                                                           2,204,496
       Accumulated deficit                                                                 (2,832,987)
       Other comprehensive income/loss (Note M)                                                51,622
                                                                                ---------------------
       Total stockholders' equity                                               $            (563,556)
                                                                                ---------------------
                                                                                $             670,468
                                                                                =====================
</TABLE>
         The accompanying notes are an integral part of this statement.
<PAGE>


              Digital Commerce International, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                               For the Year Ended

                                                        October 31,
                                                    2000             1999
-----------------------------------------------------------    ----------------
Revenues                                $           140,145    $        255,042

Operating expenses
    Salaries                            $           965,963    $        198,654
    Professional services                           680,978             195,425
    Travel                                          114,979              97,842
    Licensing fees                                   11,000              92,300
    Occupancy and telecommunications                102,718              50,230
    Advertising                                      55,319              21,919
    Depreciation and amortization                    21,219              15,873
    Website                                               -              11,691
    Interest                                         29,301                   -
    Other                                           439,837             122,928
                                        -------------------    ----------------
       Total expenses                             2,421,314             806,861

             Loss before income taxes            (2,281,169)           (551,819)

Income taxes (Note F)                                     -                   -
                                        -------------------    ----------------

             NET LOSS                   $        (2,281,169)   $       (551,819)
                                        ===================    ================

Loss per common share (Note D)
    Basic                               $             (0.17)   $          (0.06)
    Diluted                                           (0.17)              (0.06)

Weighted-average common and dilutive
   common equivalent shares outstanding
    Basic                                        13,219,326           9,111,579
    Diluted                                      13,219,326           9,111,579

         The accompanying notes are an integral part of this statement.

<PAGE>
<TABLE>
<CAPTION>

              Digital Commerce International, Inc. and Subsidiaries
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
             From November 17, 1998 (Inception) to October 31, 2000

                                                                  Additional       Other
                                         Common Stock             Paid-in        Comprehensive    Accumulated
                                      Number        Amount       Capital           Income/Loss      Deficit
----------------------------------------------- ------------ --------------- -----------------  ----------------
<S>                               <C>            <C>           <C>              <C>                 <C>
Balance at November 17,
   1998 (inception)                        10     $     -         $   371         $      -            $      371

Recapitalization of
       Company (Note B)            11,739,990      11,740         (12,240)               -                  (500)

Issuance of common stock
       for cash                     1,227,500       1,227       1,226,273               -              1,227,500

Net loss                                  -            -                -                               (551,819)
                                --------------- ------------ --------------- -----------------   ---------------

Balance at
       October 31, 1999            12,967,500      12,967       1,214,404                                675,552

Issuance of common stock
       for cash (Note K)              283,666         284         750,716               -                     -

Issuance of common stock
       for services (Note K)           61,750          62         239,376               -                     -

Other Comprehensive Income/Loss: (Note M)
    Foreign Currency
       Translation                          -           -               -           (8,378)                   -

    Unrealized Gain on available
       for Sale Securities                  -           -               -           60,000                    -

Net loss                                    -           -               -                -            (2,281,169)
                                        ------       -------         -----          -------           -----------


Balance at
       October 31, 2000            13,312,916    $ 13,313    $  2,204,496     $     51,622         $  (2,832,987)
                                ==============  ===========  ==============  =================  ================
</TABLE>

         The accompanying notes are an integral part of this statement.
<PAGE>
<TABLE>
<CAPTION>

              Digital Commerce International, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                      Years ended October 31,
Increase (decrease) in cash                                          2000                  1999
                                                              -------------------    ----------------
<S>                                                           <C>                    <C>
    Cash flows from operating activities
       Net loss                                               $        (2,281,169)   $       (551,819)
       Adjustments to reconcile net loss to net cash
         used in operating activities
          Depreciation and amortization                                    21,219              15,873
          Gain from sale of fixed assets                                     (680)                  -
          Stock for services                                              239,438                   -
          Foreign currency translation                                     (8,378)                  -
       Changes in assets and liabilities
          Accounts receivable                                             205,570            (272,044)
          Deposits                                                         88,731            (203,731)
          Prepaid expenses                                               (124,131)                 -
          Accounts payable & accrued liabilities                          465,609             242,559
                                                                -------------------    ----------------
              Total adjustments                                           887,378            (217,343)
                                                                          -------          ------------
               Net cash used in
                operating activities                                   (1,393,791)           (769,162)
                                                                        ----------         ------------

    Net cash flows from investing activities -
       Purchase of property and equipment                                 (41,996)            (27,535)
       Purchase of marketable securities                                 (190,000)                 -
                                                              -------------------    ----------------
         Net cash used in investing activities                           (231,996)            (27,535)

       Net Cash flows from financing activities
       Proceeds from issuance of common stock                             751,000           1,227,500
       Proceeds from notes payable                                        516,937               -
                                                              -------------------    ----------------
          Net cach used in financing activities                         1,267,937           1,227,500

                Net increase in cash                                     (357,850)            430,803

Cash at beginning of year                                                 430,803               -
                                                              -------------------    ----------------
Cash at end of year                                           $            72,953    $        430,803
                                                              ===================    ================

Supplemental disclosures of cash flow information:
       Cash Paid For:
          Interest                                            $             -        $          -
          Taxes                                               $             -        $          -
</TABLE>

Noncash investing and financing activities

         On June 15, 1999,  the Company  acquired  Digital  Commerce,  Inc. in a
transaction  accounted  for  as  a  reverse acquisition (Note B).

         In August,  2000,  the Company issued 61,750 shares of common stock for
services rendered for the Company. (Note K).

         The accompanying notes are an integral part of this statement.
<PAGE>


              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A summary of the significant  accounting policies  consistently applied
in the preparation of the accompanying financial statements follows.

         1. Organization and business activity

         Digital  Commerce  International  Inc.  (the  Company)  is  a  Delaware
corporation  that has been inactive from October 31, 1991 through June 15, 1999.
On June 15, 1999 the Company acquired Digital Commerce Inc. This acquisition was
accounted for as a  recapitalization  (Note B). The Company is  headquartered in
Vancouver,  Canada  and  currently  processes  credit  card  transactions.   One
subsidiary,  Digital Commerce Bank, Inc., holds a class I banking license in St.
Vincent and the Grenadines.

         2. Principles of consolidation

         The  consolidated  financial  statements  include  the  accounts of the
Company  and its wholly  owned  subsidiaries,  Digital  Commerce  Inc.,  Digital
Commerce Bank, Inc.,  Digital Commerce Canada Ltd. and MBS Acquisition  Corp. On
January 6, 2000,  MBS  Acquisition  Corp.  changed its name to Digital  Commerce
Merchant Services, Inc. (d.b.a.  "Bankthat.com").  All significant  intercompany
accounts and transactions have been eliminated in consolidation.

         3. Use of estimates

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

          4. Cash and cash equivalents

         The Company  considers all highly liquid debt instruments with original
maturity dates of three months or less when purchased, to be cash equivalents.

         5. Revenue recognition

          The Company recognizes  transaction  processing  revenues and merchant
set-up fees as the related services are performed.



<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

          6. Depreciation and amortization

         Property and  equipment are recorded at cost.  Repairs and  maintenance
are charged to operations, and renewals and additions are capitalized.

         Property and equipment consists of the following:
                                             October  31,
                                                 2000
                                          ------------------
         Computer & Office Equipment      $        57,840
         Less: Accumulated Depreciation           (19,573)
                                           -----------------
                                          $        38,267
                                          ===============

         Depreciation  is based on the  estimated  useful life of the asset on a
straight line basis over 2 to 5 years.

         Depreciation and Amortization expense for 2000 and 1999 was $21,219 and
$15,873, respectively.

          7. Fair value of financial instruments

         The  carrying  value  of  the  Company's  accounts  and  related  party
receivables,  marketable securities,  accounts payable,  accrued liabilities and
notes payable approximate their fair values.

         8. Income taxes

         The Company  utilizes the  liability  method of  accounting  for income
taxes.  Under the  liability  method,  deferred tax assets and  liabilities  are
determined  based on differences  between  financial  reporting and tax bases of
assets and  liabilities  and are  measured  using the enacted tax rates and laws
that will be in  effect,  when the  differences  are  expected  to  reverse.  An
allowance  against deferred tax assets is recorded,  when it is more likely than
not that such tax benefits will not be realized.

         9. Advertising costs

         Advertising and marketing costs are expensed as incurred.



<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         10. Net earnings (loss) per share

         Basic earnings  (loss) per common share (BEPS) is based on the weighted
average number of common shares outstanding during each period. Diluted earnings
(loss) per common share are based on shares outstanding (computed as under BEPS)
and dilutive  potential  common shares.  Potential common shares included in the
dilutive earnings (loss) per share calculation include stock options awarded.

NOTE B - RECAPITALIZATION

         In June  1999 the  Company  changed  its name  from  Systems  Assurance
Corporation to Digital Commerce  International Inc. On June 15, 1999 the Company
acquired  Digital Commerce Inc. (DCI), a Nevis  Corporation  based in Vancouver,
Canada. DCI was originally formed on November 17, 1998. DCI was acquired through
the  issuance of  5,000,000  shares of the  Company's  common  stock and 500,000
shares of the Company's  preferred stock to the  shareholders of DCI in exchange
for all of the outstanding common stock DCI. The acquisition agreement indicates
that each preferred share will carry 10 votes at shareholder meetings,  and will
have the same rights to dividends  and other  distributions  as a common  share.
Once the Company has  achieved  gross  transaction  volume of $240  million (the
"Trigger Event"),  each preferred share will be convertible at the option of its
holder into 10 common shares.  The conversion  right will expire if the "Trigger
Event" has not occurred by the end of the Company's  second complete fiscal year
following  the  acquisition.  The  preferred  shares  were  never  used  in  the
acquisition.

         The  combination of Digital  Commerce  International,  Inc. and Digital
Commerce  Inc.  was  recorded  as a  reverse  acquisition  of  Digital  Commerce
International  Inc. As such,  the  historical  financial  statements  of Digital
Commerce,  Inc.,  the  accounting  acquirer,  are  presented.  After the reverse
acquisition  there  were  11,740,000  shares of common  stock  outstanding  with
approximately  57 percent of those shares being held by former  stockholders  of
the Company.

NOTE C - COMMITMENTS AND CONTINGENCIES

1.       Employment agreements

         The Company has  employment  agreements  with  certain  officers of the
Company.  Total salaries covered by these  agreements  increase from $250,000 in
the  first  year to  $450,000  annually  over five  years.  The  agreements  are
exclusive of bonuses,  benefits,  and other compensation.  The Company currently
owes  $406,593 in unpaid wages and other  advances made with two of the officers
of the Company.


<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE C - COMMITMENTS AND CONTINGENCIES (continued)

     Litigation

          The Company is engaged in certain litigation in the ordinary course of
business.  In the opinion of management,  based upon the advice of counsel,  the
ultimate  outcome of this  litigation  should not have a material  impact on its
financial position.

         Office Lease

         During the year, the Company  entered into a lease agreement for office
space in Vancouver, British Columbia. The lease is for a period of five years at
a monthly rent of $6,586 ($6,537 CND rent,  $2,860 CND operating  costs and $689
CND tax). Total lease obligation for real estate for the term of the lease is as
follows:

         Fiscal year ended
         2001                               $      79,032
         2002                                      79,032
         2003                                      79,032
         2004                                      79,032
         2005                                      39,516

         Lease obligations stated in U.S. dollar amounts will fluctuate with the
currency  exchange  rate  of the  Canadian  dollar.  The  Company  is  currently
subleasing  space to a related  party on an as needed  basis for  $2,000 CND per
month.

4.       Operating Lease

         The  Company  has one  operating  lease for an  automobile  used in the
business. The terms of the lease are as follows:

         Operating  lease  obligation  to a  corporation,  lease payment of $592
($907 CND) per month for 36 months beginning in March 1999.

         Total future operating lease payment obligation for automobiles:
          For the Fiscal Year Ended:
          2001                  $         7,104
          2002                            2,960
                                ----------------
                                $        10,064

<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE C - COMMITMENTS AND CONTINGENCIES (continued)

5.       Consulting Agreements

         The Company has entered into two different contracts for consulting and
promotional services as follows:

         Contract #1:
         Term:  Two years,  with the option to cancel after the first six months
with five days notice.
         Cost: 225,000 shares,  56,250 up front for the first six months, 28,125
for each succeeding three month period for total of 225,000 shares.

         The shares  issued for this  contract  have been  classified as prepaid
expense for services to be provided beyond October 31, 2000.

         Contract #2:
         Term: One year
         Cost:  5,500 shares,  paid in full up front.  Contract also calls for a
finders fee of 3% of any funds  arranged by a third party  financing  agreement.
(The 3% fee arrangement is for a period of five years).

         The shares  issued for this  contract  have been  classified as prepaid
expense for services to be provided beyond October 31, 2000.

         Future  minimum costs on future  outlay of stock under these  contracts
can  only be  determined  by the  fair  market  value  of  stock  at the time of
issuance.

NOTE D - LOSS PER COMMON SHARE

         The  following  data show the shares used in computing  loss per common
share including dilutive potential common stock.

                                                            2000         1999
                                                      -------------   ----------
    Common shares outstanding during the entire period    9,111,579    6,740,010
    Weighted-average common shares
         issued during the period                         4,107,747    2,371,569
                                                      -------------   ----------
    Weighted-average number of common
         shares used in basic EPS                        13,219,326    9,111,579
    Dilutive effect of options                                -            -
                                                      -------------   ----------
    Weighted-average number of common
           shares and dilutive potential common
             stock used in diluted EPS                   13,219,326    9,111,579
                                                      =============   ==========

       Shares from the  exercise of the  outstanding  options  (Note E) were not
included in the  computation  of diluted loss per share because their  inclusion
would have been antidilutive for the years ended October 31, 1999 and 2000.


<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE E - OPTIONS

         During 1999,  the board of directors  approved a stock option plan. The
maximum  number of shares of common  stock that may be issued  under the plan is
4,000,000  shares.  All employees,  directors,  officers and  consultants of the
Company are eligible.  Awards of options are given to eligible  participants  at
the  discretion  of the  board of  directors  and will be based on  present  and
potential contributions of a particular individual to the success of the Company
and other factors,  which the Board may deem proper and relevant.  The plan is a
non-qualified  plan, and the options granted thereunder are non-qualified  stock
options.

         Under the plan,  options vest in the  following  manner:  directors and
advisory  board members vest 50 percent upon grant and 50 percent one year after
grant date, senior officers,  to vice president vest three percent at the end of
each calendar  month from grant date,  employees vest nine percent at the end of
the later of the first  three  months or the stated  probation  period and three
percent at the end of each  calendar  month  thereafter.  Other  holders vest 10
percent at the end of the first 30 days of their  engagement,  20  percent  upon
completion of 50 percent of the term,  where there is a particular term, or upon
50 percent of the project completion,  where project specific, and the remainder
upon completion, and for a period of 90 days thereafter.

         Options  granted  to an  officer,  director,  or more  than 10  percent
shareholder  of the  Company  shall not  become  exercisable  until at least six
months following the date of grant.

          The Company has granted  options to purchase  2,516,610  shares of the
Company's common stock. The options were granted to the following:

                                                                     Shares
-------------------------------------------------------------------------------
         Advisory board                                                40,000

         Executive officers, including officers who are directors   1,550,000

         Other employees                                              926,611
                                                                  -----------
                                                                    2,516,611

         The Company has adopted  only the  disclosure  provisions  of Financial
Accounting  Standard No. 123,  "Accounting  for Stock-Based  Compensation"  (FAS
123).  Therefore,  the Company continues to account for stock based compensation
under  Accounting  Principles  Board Opinion No. 25, under which no compensation
cost has been recognized. Had compensation cost for the stock based compensation
been  determined  based  upon the fair  value of the  awards at the  grant  date
consistent  with the  methodology  prescribed by FAS 123, the Company's net loss
and loss per share would have not changed.


<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE E - OPTIONS (continued)

         Option  pricing   models   require  the  input  of  highly   subjective
assumptions  including the expected stock price volatility.  Also, the Company's
employee stock options have characteristics  significantly  different from those
of  traded  options,  and  changes  in  the  subjective  input  assumptions  can
materially  affect the fair value estimate.  Management  believes the best input
assumptions  available  were used to value the  options  and that the  resulting
option values are reasonable.

         Changes in the Company's stock options are as follows:
<TABLE>

                                                                                                Weighted-
                                                                                                  average
                                                          Stock              Exercise            exercise
                                                          options             price               price
----------------------------------------------------------------------   -----------------    --------------
<S>                                                          <C>         <C>                  <C>
         Outstanding at November 1, 1999                     1,530,000   $       0.50-3.00    $         0.68
          Granted                                            1,218,000          0.50-10.00              0.98
          Exercised                                                  -                   -                 -
          Canceled or expired                                  231,389           0.50-3.00              1.36
                                                     -----------------   -----------------    --------------
       Outstanding at October 31, 2000                       2,516,611   $      0.50-10.00    $         0.76
                                                     =================   =================    ==============
       Exercisable at October 31, 2000                       2,116,611   $      0.50-10.00    $         0.71
                                                     =================   =================    ==============
</TABLE>

       A summary of the status of the options  outstanding  under the  Company's
stock option plan at October 31, 2000 is presented below:
<TABLE>

                                      Weighted-
                                      Average                     Weighted-                       Weighted-
                                     Remaining    Contractual      Average                         Average
              Range of                 Number       Life          Exercise         Number         Exercise
             Exercise prices        Outstanding     (years)        Price         Exercisable      Price
-----------------------------  ---------------- ------------- -------------  ---------------   -------------

<S>                                   <C>           <C>       <C>                  <C>         <C>
      $ 0.50 - $ 0.99                 1,468,055          8.67 $        0.50        1,468,055   $        0.50
      $ 1.00 - $ 3.00                 1,045,556     8.67-10.0          1.15          645,556            1.25
      $ 3.01 - $10.00                     3,000           9.5         10.00            3,000           10.00
                               ---------------- ------------- -------------  --------------- ----------------

                                      2,516,611                                    2,116,611
                               ================                              ===============
</TABLE>


<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE F - INCOME TAXES

         The Company has sustained a net operating loss in the period presented.
There  were no  deferred  tax  assets or income  tax  benefits  recorded  in the
financial statements for net deductible  temporary  differences or net operating
loss  carryforwards  because the  likelihood of  realization  of the related tax
benefits  cannot be  established.  Accordingly,  a valuation  allowance has been
recorded to reduce the net deferred tax asset to zero and consequently, there is
no income tax provision or benefit for the period presented. The increase in the
valuation allowance was $835,362 for the year ended October 31, 2000.

         As  of  October  31,  2000,   the  Company  had  net   operating   loss
carryforwards for tax reporting purposes of approximately  $2,628,000 in various
taxable  jurisdictions.  The  taxable  jurisdictions,  estimated  net  operating
losses,  and  beginning   expiration  dates  are  as  follows:   United  States,
$1,908,000,  2016, Canada,  $720,000, 2006. Utilization of approximately $39,000
of the total net  operating  loss is  dependent on the  profitable  operation of
Digital  Commerce  International,  Inc. in the future under the separate  return
limitation  rules and limitations on the  carryforward  of net operating  losses
after a change in ownership according to the US Internal Revenue Code.

         Income tax expense  differs  from the amounts  computed by applying the
U.S.  Federal  income tax rate of 34 percent to pretax  income  from  continuing
operations as a result of the following:

       Computed tax benefit                                        $   (966,152)
       Foreign net operating losses with no current tax benefit         130,790
       Change in valuation allowance                                    835,362
                                                                  -------------
                                                                   $          -
                                                                  =============

       Deferred income tax assets and liabilities are as follows:

        Deferred tax assets
        Benefit of net operating loss carryforwards - U.S.         $    648,840
        Benefit of net operating loss carryforwards - Foreign           331,160
                                                                  -------------
                                                                        980,000
        Less valuation allowance                                       (980,000)
                                                                  -------------
        Net deferred tax asset (liability)                          $         -
                                                                  =============

<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE G - CONCENTRATIONS AND PRIMARY CUSTOMERS

       The Company's financial  instruments that are exposed to concentration of
credit risk consist primarily of accounts receivable.

       Approximately  92 percent of accounts  receivable  are with one customer.
The Company  routinely  evaluates  the  financial  strength of its customers and
monitors each account to minimize the risk of loss.

NOTE H - BUSINESS SEGMENTS

       The Company has two  reportable  segments for the year ended  October 31,
2000, namely processing  services and banking services.  The accounting policies
of the  segments are the same as those  described in the summary of  significant
accounting policies.  The Company evaluates performance of each segment based on
earnings or loss from  operations.  Identifiable  assets by segment are reported
below.  The  Company  allocates  certain  general and  administrative  expenses,
consisting primarily of management and utilities.

                                           Processing      Consolidated
                                          Services           Balance
                                     ----------------   ---------------
       Revenues                      $        134,779   $       134,779
       Operating loss                        (134,492)         (134,492)
       Administration expense                   -            (2,146,677)
                                     ----------------   ---------------
           Net loss                  $            N/A   $    (2,281,169)
                                     ================   ===============

    Identifiable assets
                                 Processing                       Consolidated
                                  Services         Corporate         Balance
                              -------------   ----------------  --------------

       Current assets         $      50,911   $        216,290  $      267,201
       Non-current assets           115,000            250,000         365,000
       Capital assets                 -                 38,267          38,267
                              -------------   ----------------  --------------
       Total assets           $     165,911   $        504,557  $      670,468
                              =============   ================  ==============

<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE I - GOING CONCERN

         The accompanying  financial statements have been prepared assuming that
the Company will continue as a going concern.  The Company has negative  working
capital and has had recurring  operating  losses and is dependent upon financing
to continue operations.  The financial statements do not include any adjustments
that might result from the outcome of this  uncertainty.  Management  intends to
obtain  funding from short term loans and long term equity funding and also find
other businesses to merge or acquire.

NOTE J - SUBSEQUENT EVENTS

         In 2001,  the Company  announced  its  purchase  of selected  assets of
iShopper Internet Services, Inc. and 250,000 shares of EnSurge, Inc., the parent
company of iShopper Internet Services,  Inc. The purchase price of the assets is
1)  925,926  shares  of  Company  common  stock,  2)  $250,000  cash,  and  3) a
convertible  promissory note in the amount of $500,000. The price of the EnSurge
shares is 925,926 of Company common stock.

NOTE K - COMMON STOCK TRANSACTIONS

       In 2000, the Company issued stock for both cash and services as follows:

         -        83,666 shares of stock were sold in a private placement for $3
                  per share for total proceeds of $251,000

         -        200,000  shares of stock were sold in a private  placement for
                  $2.50 per share for total proceeds of $500,000

         -        61,750  shares  of  stock  were  issued  for   consulting  and
                  promotional fees at average price of $3.88 per share.

NOTE L - CONCENTRATION OF RISK - MARKETABLE SECURITIES

         One of the  primary  assets  of the  Company  is  1,000,000  shares  of
marketable  securities of one stock that is considerably volatile in its pricing
and  limited  trading  volume.  The  stock  held  by the  Company  is  currently
restricted,  and the Company  must go through  the proper  legal  procedures  to
remove the  restrictive  legend to trade in the open  market.  The quoted  stock
price as of the financial statement date was $.25 per share (free trading),  but
has since  lost a  considerable  amount of its value  since  then;  the  current
trading  value of the stock was quoted at between  $.12 and $.06 one week before
the audit report date. This type of stock is considered highly volatile and wide
swings of the stock  price can  produce  large  gains and losses in the value of
this investment.

<PAGE>

              Digital Commerce International, Inc. and Subsidiaries
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                October 31, 2000

NOTE L - CONCENTRATION OF RISK - MARKETABLE SECURITIES (Continued)

         Investments at October 31, 2000 are as follows:
                                                                     Estimated
                                                         Unrealized  Fair Market
                                                Cost      Gains      Value
------------------------------------------------------- ------------ -----------

       Total available for sale securities  $   190,000   $ 60,000    $ 250,000

NOTE M - OTHER COMPREHENSIVE INCOME/LOSS

    As of January 1, 1999, the Company adopted Statement of Financial Accounting
Standards  (SFAS)  No.  130,  "Reporting  Comprehensive  Income".  SFAS No.  130
establishes new rules for the reporting and display of comprehensive  income and
its  components;  however,  the adoption of this  statement had no impact on the
Company's  net  income or  shareholders'  equity.  SFAS No. 130  requires  other
comprehensive  income  to  include  foreign  currency  translation  adjustments,
minimum  pension  liability  adjustments,  and  unrealized  gain  or  loss  from
available-for-sale securities.

A summary of the  components  of other  comprehensive  income for the year ended
October 31, 2000 is as follows:

                                        Before-Tax     Income        After-Tax
                                          Amount       Tax            Amount
                                        -----------  -----------   -------------

Foreign Currency Translation             $ (8,378)  $      -      $     (8,378)
Net change in unrealized gain (loss)
    on available-for-sale securities       60,000          -            60,000
                                         ---------  -----------   -------------
Other Comprehensive Income               $ 51,622   $      -      $     51,622
                                         =========  ===========   =============

NOTE N - NOTES PAYABLE

    During  the year 2000,  the  Company  acquired  short  operating  loans from
various individuals and corporations to assist in the operations of the Company.
All loans are short term (less than 12  months)  and carry an  interest  rate of
from 8% to 18%. All loans are unsecured.

    Currently,  some of the loans are past due,  and the Company is currently in
negotiations to extend the terms of the loans.

<PAGE>
                                    Part III

Item 10. Directors and Executive Officers of the Registrant

         Our directors,  executive  officers and key  employees,  as of the date
hereof, and their respective ages and positions with the Company,  are set forth
below.  Biographical  information for each of the senior management  members and
directors is also presented below. There are no family relationships  between or
among any of our  directors  or  executive  officers.  Our board of directors is
currently comprised of two members.  Executive officers are chosen by, and serve
at the discretion of, the board of directors:

         (a)      Directors and Executive Officers

         MICHAEL Y. H. KANG - CHAIRMAN,  CHIEF EXECUTIVE  OFFICER AND PRESIDENT.
Michael  Y.H.  Kang,  42, a resident  of  Vancouver,  British  Columbia,  is the
Company's  Chairman and Chief Executive  Officer,  and is a cofounder of Digital
Commerce Inc., which the Company acquired in June, 1999. Born in Korea, Mr. Kang
spent his early years in Korea and Brazil, then moved to Toronto where he earned
a Bachelor of Commerce  degree from the  University  of Toronto in 1981.  He was
hired by Continental  Illinois National Bank and Trust Company of Chicago to the
position of foreign  exchange  trader and credit  analyst,  stationed  in Seoul,
Korea.  Subsequently,  Mr.  Kang  returned  to Canada to assume the  position of
General  Manager of his family's  chain of convenience  stores.  When the stores
were eventually  sold, Mr. Kang moved to Phoenix,  Arizona and purchased  Prisma
Graphics  Inc., a sheet feed printer in the State of Arizona.  In 1995, Mr. Kang
returned  to  Vancouver  to  co-found  several  private  investment  and capital
management  firms,  subsequently  leading to the development of Digital Commerce
International, Inc.

         Mr.  Kang's  term of office  as a  director  is until  the next  annual
meeting of stockholders. He has served as a director since June 15, 1999.

         JOHN W. COMBS - DIRECTOR,  EXECUTIVE VICE PRESIDENT AND SECRETARY. Jack
Combs, 55, a resident of Vancouver, British Columbia, is the Company's Executive
Vice-President and Secretary and is a co-founder of Digital Commerce Inc., which
the Company acquired in June,  1999. In  collaboration  with Mr. Kang, Mr. Combs
co-founded  several  private  investment and capital  management  firms and is a
shareholder  in Combs Group,  a family  commercial  real estate  corporation  in
Toronto.  He is also the owner of Combs  Realty  Inc.,  a  Vancouver  based real
estate and  development  Company  which has been  involved  in all phases of the
development process, including planning,  financing,  development,  construction
management and  marketing.  Born in New York, Mr. Combs moved with his family to
Toronto where he earned a Bachelor of Arts degree from the University of Toronto
in 1969.

         Mr.  Combs'  term of office  as a  director  is until  the next  annual
meeting of the Company's  stockholders.  He has served as a director  since June
15, 1999.

          (c)     Involvement in Certain Legal Proceedings

         We are not  aware  of any  material  legal  proceedings  involving  any
director,  director  nominee,  promoter,  or control person  including  criminal
convictions,  pending criminal matters,  pending or concluded  administrative or
civil  proceedings  limiting  one's  participation  in the securities or banking
industries, or finding of securities or commodities law violations.

         (d)      Section 16(a): Beneficial Ownership Reporting Compliance

         Section 16(a) of the  Securities  Exchange Act of 1934, as amended (the
"Exchange Act"),  requires our directors,  executive officers and persons owning
ten percent of the Company's common stock (collectively, "Reporting Persons") to
file reports of ownership with the Securities and Exchange Commission. Reporting
Persons are  required by SEC  regulations  to furnish the Company with copies of
all Section  16(a) forms  filed.  Based solely on a review of the copies of such
reports furnished to us and written  representations  that no other reports were
required, we believe that all Reporting Persons during fiscal year 2000 complied
on a timely basis with all applicable filing requirements under Section 16(a) of
the Exchange Act.

Item 11.          Executive Compensation

         Summary Compensation Table

         We did not conduct active  business  operations  from 1992 through June
15, 1999. The following  table  summarizes the total  compensation  of the Chief
Executive  Officer  and our other most  highly  compensated  executive  officers
(collectively,  the Named Executive Officers") earning in excess of $100,000 for
the year ended October 31, 2000.

         (Note:  Kang and Combs  were paid only  through  June 2000 - no further
salary  has been  paid to Kang or Combs  since  June 2000 -  suggesting  that in
settlement of contracts  unpaid  salaries be settled in our common stock for the
amounts  outstanding - Note Item 7 above in body of MD&A - therefore no one paid
over $100,000 in fiscal 2000.)

Name and Principal     Year   Salary $      Unpaid    Other Annual    Securities
Underlying Position            Paid       Contract   Compensation   Options/SARS
                      ------  ---------   --------- --------------- ------------

Michael Y H Kang       2000  $  80,000    $ 186,667       -            200,000
CEO

John W. Combs          2000  $  80,000    $ 186,667       -            200,000
Executive VP

         The additional compensation received reflects an automobile allowance.

         The salary and other  annual  compensation  amounts in the table  above
represent  annualized amounts for the period between November 1, 1999 to October
31, 2000.

         Stock Option Grants

         The  following  table  provides  information  relating to stock options
awarded to each of the Named  Executive  Officers  during the fiscal  year ended
October 31, 2000.

         Individual Grants
<TABLE>

                                                                                  Potential Realizable
                                                                                Value at Assumed Annual
                        Number of    Percent of Total                          Rate of Stock Appreciation
Name                    Securities       Options                                          for
                        Underlying       Granted          Exercise                    Option terms
                         Options     to Employees in      Price Per
                       Granted (#)     Fiscal Year        Share (2)
                                                                    Expiration
                                                                       Date          5% ($)            10% ($)
------------------------------------- ---------------- ------------ -------------------------------------------------

<S>                      <C>              <C>         <C>            <C>        <C>                <C>
Michael Y H Kang         200,000          19.84%      $     1.00     9/29/2010  $      291,650     $     443,294


John W. Combs            200,000          19.84%      $     1.00     9/29/2010  $      291,650     $     443,294
</TABLE>


         (1) Based on options for an  aggregate  of  2,516,611  shares of common
stock granted during the fiscal year ended October 31, 2000.

         (2) On the date of the grant of the  options  for the  shares of common
stock, our Board of Directors estimated that the fair market value of that stock
to be $0.94.

         (3)  Potential  realizable  value is based on the  assumption  that the
shares of our common  stock  appreciates  at the annual  rate shown  (compounded
annually) from the date of grant until the expiration of the option term.  These
numbers are calculated based on the  requirements  promulgated by the Securities
and  Exchange  Commission  and do not reflect our estimate of future stock price
growth.

         Fiscal Year-End Option Value

         The following table provides information regarding the number and value
of  options  to  acquire  shares of  common  stock  held by the Named  Executive
Officers on October 31, 2000.

         Number of Securities

Value of Unexercised                              Underlying Unexercised
In-the-Money
Options at                                        Options at
Fiscal Year-End (#)                               Fiscal Year-End

--------------------------------------------------------------------------------
Name                 Exercisable  Unexercisable    Exercisable     Unexercisable

Michael Kang              0          775,000            0        $   431,250
John Combs                0          775,000            0        $   431,250

         (1) For purposes of  determining  the values of the options held by the
Named Executive Officers,  we assumed that the shares of common stock underlying
the option granted had a value of $0.75 per share on October 31, 2000,  which is
the estimated fair market value the Board of Directors  attributed to that stock
on October 31,  2000.  The option value is based on the  difference  between the
fair market  value of such shares on October 31, 2000,  and the option  exercise
price per share, multiplied by the number of shares subject to the options.

         Employment Agreements

         We have adopted a policy of entering into  employment  agreements  with
each of its senior management and key personnel, and have either entered into an
employment  agreement  with each of those  persons or have approved the terms of
such agreements.  The employment agreements generally have initial terms of five
years. Under the agreements, the employee is entitled to a base salary ($250,000
for Mr. Kang,  $250,000 for Mr. Combs), plus incentive bonuses (as determined by
the Board of Directors),  standard  benefits such as health and life  insurance,
and  reimbursement of reasonable  expenses.  The base salary payable to Mr. Kang
and Mr.  Combs  increases by $50,000  every year to a maximum of  $450,000.  The
agreements also provide for moving allowances in some instances.  The employment
agreements for a number of our senior  management  also provide for the grant of
options.

         We may terminate the  employment  contracts for cause (which is defined
in the agreements) or without cause. In addition, the employee can terminate the
contract  on  notice  to us  ranging  from 90 to 180 days.  If the  contract  is
terminated  without cause or as a result of a "change of control," as defined in
the  agreements,  the employee is entitled to receive  severance pay of up to 36
months  salary,  depending on the  particular  agreement.  The  agreements  also
contain   non-competition,   non-solicitation   and   assignment  of  inventions
provisions which we believe are consistent with industry practice.

         Limitations of Liability and Indemnification

         Our  Certificate  of  Incorporation  limits the  personal  liability of
directors and officers for monetary  damages to the maximum extent  permitted by
Delaware law. Under Delaware law, such limitations  include monetary damages for
any action taken or failed to be taken as an officer or director  except for (i)
an act or omission that involves  intentional  misconduct or a knowing violation
of the law, or (ii) payment of improper distributions.

         Delaware law also  permits a  corporation  to indemnify  any current or
former  director,  officer,  employee or agent if the person acted in good faith
and in a manner in which he  reasonably  believed to be in or not opposed to the
best  interest of the  corporation.  In the case of a criminal  proceeding,  the
indemnified  person must also have had no  reasonable  cause to believe that his
conduct was unlawful.

         Our  Bylaws  provide  that,  to  the  full  extent   permitted  by  its
Certificate of Incorporation  and the Delaware General  Corporation Law, we will
indemnify  (and advance  expenses to) its  officers,  directors and employees in
connection  with any action,  suit or  proceeding  (civil or  criminal) to which
those  persons are made party by reason of their  being a  director,  officer or
employee.  Any  such  indemnification  is in  addition  to  the  advancement  of
expenses.

         Compensation of Directors

         Directors do not receive cash  compensation for serving on the Board of
Directors or any committee of the Board,  or for any other services  rendered to
us in their  capacity as our  directors,  but are  reimbursed  for expenses they
incur in connection  with attending  Board or committee  meetings.  There are no
other arrangements for compensation to the Board of Directors' members.

Item 12. Security Ownership of Certain Beneficial Owners and Management

         (a)      Security Ownership of Certain Beneficial Owners

         The table below sets forth  information,  as of October 31, 2000,  with
respect to  beneficial  ownership of our common stock by each person known by us
to be the beneficial  owner of more than 5% of its outstanding  common stock, by
each  of its  directors,  by each  Named  Executive  Officer,  and by all of the
Company's  officers  and  directors as a group.  Unless  otherwise  noted,  each
shareholder has sole investment and voting power over the shares owned.

Title of Class      Name of Beneficial Owner             Amount and Nature of
Percent of Class                                         Beneficial Owner

Common              John W. Combs (1)                    1,845,000
14.22%              300 - 1199 West Hastings Street
                    Vancouver, British Columbia
                    V6E 3T5

Common              Michael Y.H. Kang (2)                1,845,000
14.22%              300 - 1199 West Hastings Street
                    Vancouver, British Columbia
                    V6E 3T5



         (1) Includes  1,845,000  shares held by West Point Asset Management Ltd
for the benefit of Mr. Combs and his family.

         (2) Includes  1,845,000 shares held by Raging Bull Asset Management Ltd
for the benefit of Mr. Kang and his family.

(b)      Security Ownership of Named Executive Officers

Title of Class       Name of Beneficial Owner            Amount and Nature of
Percent of Class                                         Beneficial Owner

Common               John W. Combs (1)                   1,845,000
14.22%               300 - 1199 West Hastings Street
                     Vancouver, British Columbia
                     V6E 3T5

Common               Michael Y.H. Kang (2)               1,845,000
14.22%               300 - 1199 West Hastings Street
                     Vancouver, British Columbia
                     V6E 3T5



Item 13. Certain Relationships and Related Transactions

         Digital  Commerce Bank Inc. is the holder of our bank charter.  John W.
Combs, as nominee of our bank,  applied for the bank charter and contributed the
charter  to  our  bank  once  the  application   was  approved.   Following  the
contribution,  the capital  securities of Digital Commerce Bank were transferred
to the Company.

                                     Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

         (a)      Financial Statements

         The Company's  consolidated financial statements and its subsidiary are
included elsewhere in this Report.

         (b)      Financial Statement Schedules

         No schedules are required in connection  with the filing of this Report
as amounts are either  immaterial  or are  otherwise  disclosed in the financial
statements.

         (c)      Exhibits

                                INDEX TO EXHIBITS

Exhibit    Exhibit                                               Page
No.

3.1*     Certificate of Incorporation of EZ Data Systems, Inc.
3.2*     Bylaws
3.3*     Certificate  of Amendment of Certificate  of  Incorporation  of EZ Data
         Systems, Inc.
3.4*     Certificate  of Amendment of Certificate  of  Incorporation  of Systems
         Assurance Corporation.
3.5*     Certificate  of Amendment of Certificate  of  Incorporation  of Systems
         Assurance Corporation.
3.6*     Certificate  of Amendment of Certificate  of  Incorporation  of Systems
         Assurance Corporation.
3.7*     Certificate of Ownership and Merger Merging EZ Data,  Inc. into EZ Data
         Systems, Inc.
3.8*     Certificate   of  Ownership  and  Merger  Merging   Systems   Assurance
         Corporation into Unidata Systems, Inc.
4.1*     Certificate  Establishing  and Designating the Rights,  Preferences and
         Restrictions of Series A Preferred Stock of Digital Commerce, Inc.
10.1*    Acquisition  Agreement by and between Assurance Corporation and Digital
         Commerce, Inc.
10.2*    1999 Stock Option Plan
10.3*    Employment Agreement with Michael Kang
10.4*    Employment Agreement with John W. Combs
10.5*    Humboldt Bank Independent Sales Organization (ISO) Agreement
10.6     University Bank Agreement
10.7     Presinet Referral Agreement
10.8     Agreement with iTransact
10.9     FiNet Resellers Agreement
21.1*    Subsidiaries of the Registrant

     *   Incorporated  by reference  to the Annual  Report filed on Form 10-K on
         February 14, 200

         (d)      Reports on Form 8-K

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

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
and Exchange  Act of 1934,  the Company has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                            Digital Commerce International, Inc.



March 23, 2001             By: /s/ Michael Y H Kang
                               ------------------------------
                            Michael Y H Kang
                            Chairman and Chief Executive Officer

                            Digital Commerce International, Inc.



March 23, 2001             By: /s/ John W. Combs
                               ------------------------------
                            John W. Combs
                            Director and Executive Vice President,
                            Principal Financial Officer

                            DIRECTORS



March 23, 2001             By: /s/ Michael Y H Kang
                               ------------------------------
                            Michael Y H Kang




March 23, 2001             By: /s/ John W. Combs
                               ------------------------------
                            John W. Combs