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, 1999.

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

Commission file number     0-011228

                       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.)

      815 Hornby Street, Suite 404,
   Vancouver, British Columbia                                   V6Z 2E6
(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:

                                                         Name of Each Exchange
   Title of Each Class                                    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: $93,934,688.

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of the latest practicable date: 12,967,500.

                                     Part I

Item 1.  Business.

         (a)      General.

         Digital  Commerce  International,  Inc. ("The  Company") is a financial
services holding  company.  The Company engaged in two primary types of business
activities  during fiscal year 1999.  First,  it  facilitated  the issuance of a
merchant number to a company listed on the Nasdaq bulletin  board.  Second,  the
Company  acted as a sales  agent for an  independent  sales  organization  named
Intercontinental  Financial  Services.  In the future,  the  Company  intends to
provide a variety  of  banking,  bankcard  processing,  and  financial  services
through its wholly-owned, diversified internet operating subsidiaries.

         The  Company's   operations  are  conducted  through  its  wholly-owned
subsidiaries,  including  Digital  Commerce  Inc.,  Digital  Commerce Bank Inc.,
Digital Commerce Merchant Services Inc., and Digital Commerce Canada Ltd.

     -    Digital  Commerce Bank Inc. During fiscal year 1999,  Digital Commerce
          Bank Inc. acted as a sales agent for an independent sales organization
          named  Intercontinental  Financial Services. The Company hopes that in
          the future,  Digital  Commerce  Bank Inc.  will deliver  international
          banking services  through its Class I Offshore Banking Charter,  which
          it  has  obtained  from  the  government  of  Saint  Vincent  and  the
          Grenadines.  The  Company  intends  for  the  bank  to  focus  on  the
          settlement of merchant accounts for international  bankcard processing
          and private banking for high net worth individuals.

     -    Digital Commerce  Merchant  Services Inc.  Digital  Commerce  Merchant
          Services Inc. did not generate revenues in fiscal year 1999.  However,
          Digital   Commerce   Merchant   Services  Inc.  is  now  a  registered
          Independent  Sales  Organization  and Merchant  Services  Provider for
          Humboldt Bank.  The Company  anticipates  that in the future,  Digital
          Commerce  Merchant  Services  Inc.  will provide  bankcard  processing
          services to domestic and  international  merchants on behalf of United
          States and international acquiring banks.

     -    Digital  Commerce Inc. Digital Commerce Inc. acts as a sales agent for
          organizations  engaged in the  processing of credit card  transactions
          for international merchants.

     -    Digital  Commerce Canada Ltd.  Digital Commerce Canada Ltd., which did
          not  generate  revenues  during  fiscal  year 1999,  is the  Company's
          technology  development division.  Through this division,  the Company
          attempts to expand its technological capabilities through research and
          development. Digital Commerce Canada Ltd. also provides administrative
          services  to  the  Digital  Commerce  International,   Inc.  group  of
          companies.

         The Company hopes to provide  United States and  international  clients
with  financial  and banking  services.  To that end,  the Company is  currently
pursuing the acquisition of a federal/state  banking charter.  While the Company
cannot  offer  any  assurance  that  the   contemplated   acquisition   will  be
consummated, it expects to conclude this acquisition during fiscal year 2000.

         (b)      Corporate History

            The Company was  incorporated  in July,  1982, as Systems  Assurance
Corporation.  From 1992 through  June 15, 1999,  the Company did not conduct any
active business operations,  but pursued business opportunities to merge with or
acquire  other  businesses.  On June  15,  1999,  the  Company  entered  into an
agreement  for the  acquisition  of all the  outstanding  capital  securities of
Digital Commerce Inc., a banking and financial services  organization ("DCI") in
exchange for 5,000,000  shares of the Company's  common stock and 500,000 shares
of the Company's convertible Class A preferred stock.  (Preferred stock has been
approved by the board of  directors  and  shareholders,  but the Company has not
amended its Articles of  Incorporation  and the  preferred  shares have not been
created and registered with the State of Delaware. The Company is in the process
of having  such  shares  registered.)  As a result of the  acquisition,  Digital
Commerce  Inc.  became  the  Company's  wholly-owned  subsidiary  and the former
shareholders of DCI became the Company's  majority  shareholders.  At that time,
the  Company  changed its name from  Systems  Assurance  Corporation  to Digital
Commerce  International Inc., and obtained a new CUSIP number and trading symbol
(THBK) for its common stock.

         The  combination  of Digital  Commerce  International  Inc. and Digital
Commerce  Inc.  was  recorded  as  a   recapitalization   of  Digital   Commerce
International Inc. In conjunction with the acquisition and  recapitalization,  a
prior director surrendered back to and the Company canceled 14,340,744 shares of
common stock. After the recapitalization  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.

            Michael Kang, the Company's Chief  Executive  Officer and President,
and John W. Combs,  the Company's  Executive Vice President and Secretary,  each
received  2,000,000  shares of the Company's  common stock and 250,000 shares of
the Company's  preferred stock as a result of the acquisition,  representing 48%
of the Company's  outstanding  shares as of October 31, 1999, on a fully-diluted
basis.  Each  share of  preferred  stock  issued  to  Messrs.  Kang and Combs is
convertible into 10 shares of common stock if certain  performance  criteria are
met.

            Pursuant to the acquisition of Digital Commerce Inc.,  Messrs.  Kang
and Combs were appointed to the Company's Board of Directors, each of whom is to
serve until his  respective  successor has been duly elected and  qualified,  or
until their respective earlier resignation or retirement.

         (c)      Operations

         The Company is a developing company. In the future the Company hopes to
provide a variety of banking and financial  services  through its  wholly-owned,
diversified  internet  operating  subsidiaries.  The  Company's  operations  are
conducted  through its  wholly-owned  subsidiaries,  including  through  Digital
Commerce Bank Inc.,  Digital  Commerce  Merchant  Services Inc, Digital Commerce
Inc., and Digital Commerce Canada Ltd.

         Digital Commerce Bank Inc.

         Digital Commerce Bank Inc. ("DCB"),  one of the Company's  wholly-owned
subsidiaries,  was  incorporated  on August  19th,  1999 in the country of Saint
Vincent and the Grenadines,  where it is based.  Digital Commerce Bank, Inc. was
incorporated as a subsidiary of Digital Commerce  International,  Inc.  ("DCII")
and operates as a  wholly-owned  subsidiary  of the  Company.  DCB was granted a
Class I Offshore  Banking  License by Saint Vincent and the Grenadines on August
23rd,  1999. Under the conditions of the licensing  agreement,  Digital Commerce
Bank,  Inc.  was  required to post 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 to facilitate a broad range of banking, trust,
and  merchant  service  functions on a fee for service  basis for  international
clients.  Since the granting of its license, DCB has arranged for the facilities
and established the strategic  relationships necessary to provide the full range
of services  required by  international  merchant and private  banking  clients,
including  internet  banking.  DCB also serves as an independent sales agent for
Intercontinental  Financial Services,  for whom the Company provide third-party,
online, real time processing for international merchants. The Company hopes that
Digital  Commerce Bank, Inc will be fully  operational  within the second fiscal
quarter of the year 2000.

         Digital Commerce Merchant Services Inc. (D/B/A. "Bankthat.com")

         Digital  Commerce  Merchant  Services,  Inc.  ("DCMS"),  another of the
Company's wholly owned  subsidiaries,  was incorporated in the State of Delaware
in  November  1999.  It  operates  under the trade  name of  "Bankthat.com"  and
maintains its principal business operations in Salt Lake City, Utah. The Company
intends to develop DCMS in the near term into an Independent Sales Organization,
assembling  merchant  portfolios on behalf of United States  acquiring  banks to
facilitate bankcard processing for domestic merchants.

On November 8, 1999, the Company entered into an agreement with Humboldt Bank of
Eureka,  California to be an  Independent  Sales  Organization  on their behalf.
Under the terms of the  agreement,  commission  revenues are to be split equally
between the parties.

Digital Commerce  Merchant  Services,  Inc. did not generate  revenues in fiscal
year 1999.  The Company  hopes that during  fiscal year 2000,  Digital  Commerce
Merchant  Services,  Inc.  will  provide  a broad  array of  merchant  services,
generating fees and  commissions  from bankcard  transactions  and from sales of
bankcard processing equipment to United States and international merchants.

         Digital Commerce Inc.

Digital Commerce Inc. was incorporated on November 17, 1998 in the island nation
of Nevis and is based in the province of British  Columbia,  Canada. On June 15,
1999 the Company  acquired  this  subsidiary  through the  issuance of 5,000,000
shares of its common stock and 500,000 shares of its preferred stock in exchange
for all of the  outstanding  common stock of Digital  Commerce  Inc.  (Preferred
stock has been  approved by the board of  directors  and  shareholders,  but the
Company has not amended its Articles of  Incorporation  and the preferred shares
have not been created and registered with the State of Delaware.  The Company is
in the process of having such shares registered.)

This  subsidiary  acts  as a  sales  agent  for  organizations  engaged  in  the
processing of credit card transactions for international  merchants.  Due to the
formation of additional subsidiaries, the Company is currently in the process of
liquidating this subsidiary.

         Digital Commerce Canada Ltd.

Digital  Commerce  Canada  Ltd.  was  incorporated  on October  18,  1999 in the
province  of  British  Columbia,  Canada,  where it is  based.  This  subsidiary
provides  administrative  and  technological  services  for the  Company and its
subsidiaries.

         (d)  Operations

Currently,  the Company acts as an Independent Sales Agent for  Intercontinental
Financial Services and provides  third-party,  on-line, real time processing for
international  merchants.  In the U.S.,  the  Company  is a  registered  ISO for
Humboldt bank of Eureka, California.  Together with Humboldt and its third-party
providers,  the Company is able to offer U.S. online merchants  solutions to the
challenges of e-commerce transaction processing.  Upon completion of the initial
phases of its operation,  the Company believes that its control over third-party
providers  will  increase,  time-to-delivery  will  improve,  and its  operating
margins will widen;  however,  all of this will be  transparent to the Company's
merchant-customers.  For them,  the key  benefits of the  Company's  anticipated
services may include:

     -    Fast  time-to-market.   The  Company's   third-parties'  services  and
          technical  support may enable  online  merchants  to begin  processing
          transactions without lengthy or costly integration  efforts.  Services
          are invoked by a single  common  interface,  installed on a merchant's
          commerce server.  Typically, new merchants can be approved, have their
          software installed, and be operating online, generating revenues in as
          little as 72 hours from the time that their completed applications are
          received.

     -    Access to comprehensive suite of services.  The Company may be able to
          deliver to merchants on-demand, online access to services that address
          a broad spectrum of e-commerce  transaction  processing issues related
          to global  payment  processing,  fraud  prevention,  tax  calculation,
          export  compliance,  delivery  address  verification,  and fulfillment
          management.

     -    Simplify the  Merchant's  Operations.  The Company  hopes to provide a
          suite  of  e-commerce   transaction   services  designed  to  simplify
          merchants'  operations  and  allow  them to  focus  on  marketing  and
          merchandising   tasks  required  for  their  online  businesses.   The
          Company's services are transparent to the merchant's customers.

     -    Global reach.  The Company  hopes to obtain  access to  third-parties'
          services used by merchants in many countries around the globe. Through
          them, the Company hopes to obtain access to an established  network of
          virtual  network  access  points  in  various  countries  on  multiple
          continents.  In addition, the Company hopes to be able to support over
          100 currencies and provide sales tax/VAT  calculations  for all United
          States  jurisdictions,  Canadian  provinces  and all  countries in the
          European Union.

     -    Reduced overall costs. The Company hopes that its services will enable
          merchants to effectively process online transactions  without the cost
          of developing and maintaining their own complex transaction processing
          systems and infrastructure.

         (d)      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").  The  Company's  ability to  continue to
conduct an offshore  banking  business  depends upon its ability to maintain its
license. This requires the Company 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,  the Company
is  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.

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

         As an  offshore  banking  business,  the Company is required to send an
annual audit to the  Authority  within three months of the end of its  financial
year.  The Company has not yet sent an annual audit to the  Authority for fiscal
year 1999 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,  the
Company is 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 its inability to continue to do business as an offshore  banking
business in Saint Vincent.

         As an offshore  banking business under the Bank Act, the Company is 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.  Revisions to existing or adoption of new laws
or regulations could subject the Company to more demanding regulatory compliance
requirements and could adversely  affect its ability to conduct,  or its cost of
conducting,  business.  If the  Company is  successful  in  obtaining  a banking
charter,  it will be subject to certain  restrictions  imposed by the Federal or
State banking  regulators.  Digital  Commerce Bank, Inc. (the Company's  banking
subsidiary)  will be regulated by the FDIC.  The Company 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.  The Company 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
the Company's business,  financial  condition,  results of operations,  and cash
flows.

         Internet  Regulation.  The Company's ability to conduct and/or its cost
of conducting business may also be adversely affected by a number of legislative
and regulatory  proposals  concerning  other aspects of the internet,  which are
currently under consideration by federal,  state, local and foreign governmental
organizations.  These proposals  include,  but are not limited to, the following
matters: on-line content, user privacy,  taxation, access charges,  liability of
third-party activities and jurisdiction. Moreover, the Company does not know how
existing  laws  relating to these  issues will be applied to the  internet.  The
adoption of new laws or the  application  of existing  laws could  decrease  the
growth in the use of the  internet,  which could in turn decrease the demand for
the  Company's  anticipated  products and  services,  increase its cost of doing
business, or otherwise have a material adverse effect on its business, financial
condition,  results  of  operations,  or  cash  flows.  Furthermore,  government
restrictions  on  internet  content  could slow the growth of  internet  use and
decrease  acceptance of the internet as a communications  and commercial  medium
and thereby have a material adverse effect on our business,  financial condition
and results of operations.  Some local telephone carriers have asserted that the
growing   popularity   and  use  of  the  internet  has  burdened  the  existing
telecommunications  infrastructure and caused interruptions in telephone service
in areas with high internet use.  These  carriers  have  petitioned  the Federal
Communications  Commission to impose access fees on internet  service  providers
and  commercial  on-line  service  providers.   If  the  Federal  Communications
Commission  imposes  access fees,  the costs of  transacting  business  over the
internet could increase substantially,  potentially slowing the growth in use of
the internet.  This could in turn decrease demand for the Company's  anticipated
services  or  increase  its cost of doing  business,  and thus  have a  material
adverse  effect on the  Company's  business,  financial  condition,  results  of
operations, and cash flows.

         Internet Privacy. Internet user privacy has become an issue both in the
United  States and abroad.  The Federal  Trade  Commission  has  proposed  model
legislation that would force companies to comply with specified core information
practices.  It is possible that Congress could adopt either legislation  similar
to that  proposed by the Federal Trade  Commission or other privacy  legislation
that  could have a material  adverse  effect on the way in which the  Company is
allowed to conduct its  business,  especially  those  aspects  that  involve the
collection  or use of personal  information.  At the  international  level,  the
European  Union has adopted a  directive  that  permits  European  Union  member
countries to impose  restrictions  on the  collection  and use of personal data.
This directive  could,  among other things,  affect United States companies that
collect  information over the internet from individuals in European Union member
countries  and may impose  restrictions  that are more  stringent  than  current
internet privacy  standards in the United States. In response to this directive,
on November 4, 1998,  the United  States  Department  of Commerce  published for
comment  a set of  safe  harbor  principles  regarding  privacy  protection  for
personally identifiable data. These principles were revised on April 19, 1999.

         (e)      Future Marketing Strategies

            The Company  hopes to employ a  multifaceted  marketing  strategy to
aggressively market its products and services to both domestic and international
markets.  The Company  expects its  revenue-generating  products and services to
include online retail,  commercial,  and private  banking  services,  as well as
merchant  services.  This  strategy  will utilize the  internet  platform as its
primary means of integrating and marketing these offerings.

            The use of the internet as the  Company's  common  delivery  channel
supports  its  commitment  to  providing  24  hours,  7 days a week  access  and
availability  of its products  and  services to its  domestic and  international
clients. To complement this, the Company anticipates using alternative  delivery
channels  including the  telephone,  automated  banking  machines and the postal
services  as a means of  increasing  the  availability  and  convenience  of its
products and services.

            The   Company   intends   to   develop  a   flagship   web  site  at
www.thatbank.com. The Company hopes that this site will serve as a comprehensive
multipurpose  hub or portal  site  providing  access to the  services  described
above.  The  Company  is  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.   The  Company's
anticipated direct marketing activities may include the use of an internal sales
force  as well as  outsourced  sales  activities  and  direct  advertising.  The
Company's  anticipated  indirect  marketing  activities would include the use of
strategic  partnership and alliance  agreements with suitable businesses as well
as co-branding activities.

            The Company  considers  its ongoing  attempts to develop and provide
complimentary  services such as those  described above to be an important to its
future  growth.  The Company  further  anticipates  that such  services,  if the
Company 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.

         (f)      Employees

         At October 31,  1999,  the Company  had 7  full-time  employees  and no
part-time  employees.  The Company considers its relations with its employees to
be excellent.  The Company's  employees are not  represented  by any  collective
bargaining  group,  and the  Company  is not  aware  of any  efforts  among  its
employees to organize.  The Company's future success depends in significant part
upon the continued service of its key technical and senior management  personnel
and its continuing ability to attract and retain highly qualified  technical and
managerial personnel.

         (g)      Competition

The  Company  believes  that the  principal  competitive  factors in the banking
industry are market presence, customer service, convenience,  interest rates and
product offerings. While the banking industry is highly competitive, the Company
believes it can compete  effectively with its principal  competitors,  which are
traditional banks,  internet banks, and other financial services providers.  The
Company  believe  that  its low cost  structure,  which  will  allow it to offer
attractive  interest rates and low fees,  gives us a competitive  advantage over
traditional banks, which must support a physical branch structure.  Furthermore,
the Company  hopes to be able to offer a broader  array of products and services
than many non-bank financial services providers.  However, most of the Company's
competitors  have larger  customer  bases,  greater name  recognition  and brand
awareness, greater financial and other resources, and longer operating histories
than the Company does. Additionally, new competitors and competitive factors are
likely to emerge,  particularly  in view of the rapid  development  of  internet
commerce.

Item 2.  Description of Properties

         The  Company  occupies  2,500  square feet of  commercial  space at 815
Hornby Street, Suite 404, Vancouver,  British Columbia. The terms of the leasing
agreement are on a  month-to-month  basis,  renewable  under the same terms upon
notice. The Company's current monthly rent for this facility is US $3,100.

         The Company also occupies 2,000 square feet of commercial space at 4049
South Highland Drive,  Salt Lake City, Utah. The terms of the leasing  agreement
are on a month-to-month  basis,  renewable under the same terms upon notice. The
Company's current monthly rent for this facility is US $1,000.

         The Company maintains 2000 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. The Company's current monthly
rent for this facility is US $3,000.

         The  Company  believes  its office  space is  adequate  for its current
needs.

Item 3.  Legal Proceedings.

         On January 5, 2000,  the Company and Directors Kang and Combs were made
defendants  to a  lawsuit  by a  former  business  partner.  In that  case,  the
plaintiff,  the former business partner, alleged breach of a statutory duty owed
by Kang and  Combs to the  plaintiff.  He  claims  that he was not made  part of
certain  corporate  opportunities  and was not  included  in  certain  corporate
changes  and the  benefits  therefrom.  The Company  believes  the claims of the
plaintiffs  regarding the Company are without  merit.  In addition,  the Company
believes that any decision  granted in favor of the plaintiff  would only affect
the  shares  held by Kang and  Combs  and  would  not  affect  Digital  Commerce
International, Inc. directly.

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, 1999.


<PAGE>


                                     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 FFY 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           $0.125
                    October 31, 1999           $12           $10

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

         On  January  24,   1997,   the   Company's   stockholders   approved  a
one-for-seventy (1:70) reverse common stock split, and on December 19, 1997, the
Company's 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,  the  Company's  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 500,000 shares of Class A
Preferred  Stock on February 9, 2000.  When and if the Board declares a dividend
or distribution with respect to the then outstanding shares of Common Stock, the
holders of the Series A  Preferred  shares  shall be  entitled  to the amount of
dividends per share in an amount equal to ten times the amount,  and in the same
form, as they would have received if they held an equal number of Common Shares.
(Preferred  stock has been approved by the board of directors and  shareholders,
but the Company has not amended its Articles of Incorporation  and the preferred
shares have not been  created and  registered  with the State of  Delaware.  The
Company is in the process of having such shares registered.)

         (b)      Security Holders

         The  approximate  number of record  holders of shares of the  Company's
common stock as of October 31, 1999 was 1555.

         (c)      Dividends

         The Company has not paid dividends within the last three years and does
not anticipate or contemplate  paying cash dividends in the foreseeable  future.
The Company presently intends to utilize all available funds for the development
and growth of its business and operations.

         (d)      Recent Sales of Unregistered Securities

         The Company has entered into six  transactions  in the past three years
involving the issuance of its securities under certain exempt transactions under
the Securities Act of 1933.

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

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

          On January 9, 1998,  the Company  issued  900,000 shares of its common
stock in exchange for $9,000 cash consideration.

         On June 15,  1999,  the  Company  issued  to  Messrs.  Kang  and  Combs
5,000,000  shares  of its  common  stock  and  500,000  shares  of its  Series A
Preferred  Stock in  exchange  for all of the  issued  and  outstanding  capital
securities of Digital  Commerce Inc.  (Preferred  stock has been approved by the
board of  directors  and  shareholders,  but the  Company  has not  amended  its
Articles of  Incorporation  and the  preferred  shares have not been created and
registered  with the State of Delaware.  The Company is in the process of having
such shares registered.)

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

         In February,  2000,  the Company  issued  200,000  shares of its common
stock to Theodore Swindells, for a total purchase price of $500,000.

         In connection with each of these isolated issuances of securities, each
purchaser  represented  and  warranted to the Company 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.  The Company  believes 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 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-looking
statements.  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

The Company did not conduct any active  business  operations  from 1992  through
June 15,  1999.  The  Company  is a  developing  company.  It hopes to become an
internet  banking and financial  services  company,  specializing in providing a
variety of banking and financial services,  including the integration of banking
services,  both  commercial  and  private,  bankcard  processing,  and  merchant
services  with an emphasis on the internet as the common  platform for delivery.
The Company  operates  through  four  wholly  owned  subsidiaries,  two of which
generated  revenues  during  fiscal  year 1999.  In November  1999,  the Company
incorporated Digital Commerce Merchant Services,  Inc., a Delaware  corporation,
as its domestic based Independent Sales  Organization  (ISO) to provide merchant
bankcard transactions for domestic clients in settling credit card transactions.
In the future,  the Company hopes to establish  domestic banking  operations and
hopes to offer a full range of retail banking services.

         Results of Operations

         The  Company  earned  operating  revenues of $255,000 in the year ended
October 31st, 1999. These revenues  consisted  primarily of commission  revenues
from the  Company's  role as a sales  agent for credit  card  transactions.  The
Company  received  $190,000 of such revenues  through its issuance of a merchant
numbers and $65,000 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.  The Company  hopes 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

         The Company's  operating  expenses have increased in each quarter since
its  acquisition of Digital  Commerce Inc. in June,  1999. The Company  believes
that  operating  expenses will continue to increase in the future as the Company
continues to develop, implement, and deploy its services and operations.

         General and administrative expenses for the year ended October 31, 1999
totaled  $806,861.  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

         The  Company   financed  its  operations   primarily   through  private
placements  of its common stock which  provided  net  proceeds of  approximately
$1,227,500.  At October 31st,  1999, the Company had  approximately  $431,000 in
cash and cash  equivalent  in  short-term  investments.  The Company has no debt
facilities.

         The Company has no material  commitments,  other than those  employment
agreements  described elsewhere herein. The Company hopes to realize an increase
in its working  capital,  and anticipates a substantial  increase in its capital
expenditures due to the anticipated expansion of its business units, in the year
2000.

         Net cash used by  operating  activities  during the year ended  October
31st, 1999 was $769,000.  The Company's  principal uses of cash were to fund its
net loss from  operations and to finance the increases in receivables  and other
assets.

         Net  cash  used by  investing  activities  consisted  of  $27,535  paid
principally for acquisition of capital assets.

         Net cash  provided  by  financing  activities  was  $1,227,500  derived
primarily from capital contributions.  Of the capital contributions,  $1,227,500
was recorded from private sales of restricted stock.

         Management  believes  that the  combination  of  revenues  and  capital
contributions  will be sufficient  to fund  operations  for the upcoming  fiscal
year. To the extent that the Company  requires  additional  funds to support its
operations  or the expansion of its  business,  the Company may sell  additional
equity, issue debt, or obtain credit facilities through financial  institutions.
Any  sale of  additional  equity  securities  will  result  in  dilution  to the
Company's stockholders.  There can be no assurance that additional financing, if
required,  will be available to the Company in amounts or on terms acceptable to
us.

         Impact of Inflation

         The impact that  inflation  may have upon the Company  differs from the
potential impact of inflation upon an industrial company,  because substantially
all of the  Compay's  assets and  liabilities  will be monetary  in nature,  and
interest  rates and inflation  rates do not always move in concert.  The Company
believes  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 the Company's operating expenses.  The actual effect of inflation on
the Company's net interest income,  however, would depend on the extent to which
the  Company was able to  maintain a spread  between  the  average  yield on its
interest-earning   assets  and  the   average   cost  of  its   interest-bearing
liabilities,  which  would  depend  to a  significant  extent  on the  Company's
asset-liability sensitivity. As discussed above, the Company 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 the Company's  results of operations  for
the past three years has been minimal.

         Year 2000 Issue

         Many existing computer programs, hardware, and peripherals use only two
digits to identify a year in the date field.  These  programs  and systems  were
designed  without  considering the impact of the upcoming change in the century.
If not corrected,  these computer  applications and systems could fail or create
erroneous  results  by,  at, or after the year  2000.  Based on the  preliminary
review of the computer programs the Company currently uses,  management does not
anticipate  that the  Company  will  incur  material  operating  expenses  or be
required to incur  material costs to be year 2000  compliant.  To the extent the
Company's  systems are not fully year 2000 compliant,  there can be no assurance
that potential systems interruptions or the cost necessary to update software or
hardware would not have a material effect on its business,  financial condition,
results of operations, or business prospects. In addition, in the event that the
Company's significant suppliers do not successfully and timely achieve year 2000
compliance, its business or operations could be adversely affected.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.

Reference  is  made  to  "Interest  Rate  Sensitivity  Management"  in  Item  7,
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

Item 8. Financial Statements and Supplementary Data.



<PAGE>

              DIGITAL COMMERCE INTERNATIONAL, INC. AND SUBSIDIARIES

                 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF
                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                                OCTOBER 31, 1999




                                 C O N T E N T S


                                                                            Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                             1

CONSOLIDATED FINANCIAL STATEMENTS

    BALANCE SHEET                                                              3

    STATEMENT OF OPERATIONS                                                    4

    STATEMENT OF STOCKHOLDERS' EQUITY                                          5

    STATEMENT OF CASH FLOWS                                                    6

    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                 7








                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS
                          ----------------------------



The Directors and Stockholders of
Digital Commerce International, Inc.


We have audited the accompanying  consolidated balance sheet of Digital Commerce
International,  Inc. and  Subsidiaries  as of October 31, 1999,  and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
the year then ended.  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 financial position of Digital
Commerce  International,  Inc. and  Subsidiaries as of October 31, 1999, and the
consolidated  results of their operations and their  consolidated cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

/s/

Grant Thorton LLC

Salt Lake City, Utah
January 14, 2000


<PAGE>

                        CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

              Digital Commerce International, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEET

                                October 31, 1999

                                     ASSETS

<S>                                                                 <C>             <C>
CURRENT ASSETS
    Cash                                                                            $      430,803
    Accounts receivable, no allowance deemed necessary (Note G)
       Trade                                                                               244,358
       Other                                                                                 9,099
    Receivable from shareholders                                                            18,587
                                                                                     --------------
             Total current assets                                                          702,847


EQUIPMENT, AT COST                                                  $       27,535
    Less accumulated depreciation                                           (7,083)         20,452
                                                                     --------------  --------------
DEPOSITS                                                                                   203,731
                                                                                     --------------
                                                                                    $      927,030
                                                                                     ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Trade accounts payable                                                          $      177,891
    Accrued liabilities                                                                     73,587
                                                                                     --------------
             Total current liabilities                                                     251,478


COMMITMENTS AND CONTINGENCIES (Notes C and E)                                                    -

STOCKHOLDERS' EQUITY (Notes B, E and i)
    Preferred stock to be issued                                    $            -
    Common stock, $0.001 par value; 30,000,000 shares
      authorized, 12,967,500 shares issued and outstanding                  12,967
    Additional paid-in capital                                           1,214,404
    Accumulated deficit                                                   (551,819)
                                                                     --------------
             Total stockholders' equity                                                    675,552
                                                                                     --------------

                                                                                    $      927,030
                                                                                     ==============
The accompanying notes are an integral part of this statement.
</TABLE>

<PAGE>

              Digital Commerce International, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENT OF OPERATIONS

                           Year ended October 31, 1999

Revenues                                                       $    255,042

Operating expenses
    Salaries                                     $   198,654
    Professional services                            195,425
    Travel                                            97,842
    Licensing fees                                    92,300
    Occupancy and telecommunications                  50,230
    Advertising                                       21,919
    Depreciation and amortization                     15,873
    Website                                           11,691
    Other                                            122,928        806,861
                                                  -----------   ------------
             Loss before income taxes                              (551,819)

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

             NET LOSS                                          $   (551,819)
                                                                ============

Loss per common share (Note D)
    Basic                                                      $      (0.61)
    Diluted                                                           (0.61)

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


The accompanying notes are an integral part of this statement.


<PAGE>

<TABLE>
<CAPTION>

                               Digital Commerce International, Inc. and Subsidiaries

                                  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                            Year ended October 31, 1999


                                                         Common stock           Additional
                                                  -------------------------      paid-in       Accumulated
                                                     Number         Amount       capital         deficit         Total
                                                  ------------    ---------    ------------   --------------   ----------
<S>                 <C>                             <C>          <C>          <C>            <C>              <C>
Balance at November 1, 1998                         21,080,755   $  21,080    $10,142,134    $ (10,172,133)   $   (8,919)

Recapitalization of Company (Note B)                (9,340,755)     (9,341)    (10,154,002)     10,172,133         8,790

Issuance of common stock for cash                    1,227,500       1,228      1,226,272                -     1,227,500

Net loss                                                     -           -              -         (551,819)     (551,819)
                                                  ------------    ---------    ------------   --------------   ----------
Balance at October 31, 1999                         12,967,500   $  12,967    $ 1,214,404    $    (551,819)   $  675,552
                                                  ============    =========    ============   ==============   ==========
</TABLE>

The accompanying notes are an integral part of this statement.



<PAGE>

              Digital Commerce International, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                           Year ended October 31, 1999

Increase (decrease) in cash
    Cash flows from operating activities
       Net loss                                                  $   (551,819)
       Adjustments to reconcile net loss to net cash
         used in operating activities
             Depreciation and amortization                             15,873
             Changes in assets and liabilities
              Accounts receivable                                    (253,457)
              Receivable from shareholders                            (18,587)
              Deposits                                               (203,731)
              Accounts payable                                        168,972
              Accrued liabilities                                      73,587
                                                                  -------------
                  Total adjustments                                  (217,343)
                                                                  -------------
                  Net cash used in
                    operating activities                             (769,162)
                                                                  -------------
    Net cash flows from investing activities -
       Purchase of property and equipment                             (27,535)
                                                                  -------------
    Cash flows from financing activities
       Proceeds from issuance of common stock                       1,227,500
                                                                  -------------

                  Net increase in cash                                430,803

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

Supplemental disclosures of cash flow information
-------------------------------------------------
    The Company did not pay interest expense or income taxes during 1999.


Noncash investing and financing activities
------------------------------------------
     On June  15,  1999,  the  Company  acquired  Digital  Commerce,  Inc.  in a
     transaction  accounted for as a recapitalization.  In the  recapitalization
     goodwill was recorded  totaling  $8,920,  which was  subsequently  expensed
     (Note B).

The accompanying notes are an integral part of this statement.


<PAGE>

              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

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.

       6. Depreciation and amortization

       Depreciation  of property and equipment is provided on the  straight-line
       method over the estimated useful lives of the assets of two years.


<PAGE>



              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

       7.   Fair value of financial instruments

       The  carrying   value  of  the  Company's   accounts  and  related  party
       receivables,  accounts payable and accrued liabilities  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.

       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. DCI was originally
       formed on  November  17,  1998.  On June 15,  1999 the  Company  acquired
       Digital  Commerce Inc.  (DCI),  a Nevis  Corporation  based in Vancouver,
       Canada.  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 of DCI.  Preferred  stock has been  approved by the board of
       directors and shareholders,  but the Company has not amended its Articles
       of  Incorporation  and the  preferred  shares  have not been  created and
       registered  with  the  State  of  Delaware.   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.


<PAGE>



              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

NOTE B - RECAPITALIZATION - CONTINUED

       Upon issuance of the preferred stock,  certain  reclassifications  may be
       made within the stockholders'  equity section to reflect the terms of the
       preferred stock issued.

       The  combination  of Digital  Commerce  International  Inc.  and  Digital
       Commerce  Inc. was  recorded as a  recapitalization  of Digital  Commerce
       International    Inc.   In   conjunction   with   the   acquisition   and
       recapitalization,  a prior director  surrendered  back to and the Company
       canceled  14,340,744 shares of common stock.  After the  recapitalization
       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 agreements may be modified until a secondary  offering of the Company
       is completed and the Company  receives funds totaling  $20,000,000 or the
       Company achieves a market  capitalization  of $150,000,000.  The modified
       salary would be $10,000 a month with a deferral of the remaining  balance
       until the underwriting or market capitalization occur.

2.       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.

NOTE D - LOSS PER COMMON SHARE

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

<TABLE>
<CAPTION>
<S>                                                                                           <C>
           Common shares outstanding during the entire period                                 6,740,011
           Weighted-average common shares issued during the period                            2,371,568
                                                                                       -----------------
           Weighted-average number of common  shares used in basic EPS                        9,111,579
           Dilutive effect of options                                                                 -
                                                                                       -----------------
           Weighted-average number of common shares and dilutive potential common
              stock used in diluted EPS                                                       9,111,579
                                                                                       =================
</TABLE>



<PAGE>



              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

NOTE D - LOSS PER COMMON SHARE - CONTINUED

       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 year ended  October 31,
       1999.

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  1,530,000  shares of the
       Company's common stock. The options were granted to the following:

                                                                        Shares
                                                                    ------------
        Advisory board                                                  100,000

        Executive officers, including officers who are directors      1,150,000

        Other employees                                                 280,000
                                                                    ------------
                                                                      1,530,000
                                                                    ============

<PAGE>

              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

NOTE E - OPTIONS - CONTINUED

       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 been
       increased to the following pro forma amounts:

        Net loss                               As reported         $  (551,819)
                                               Pro forma              (607,324)
        Loss per share - basic and diluted
                                               As reported               (0.61)
                                               Pro forma                 (0.61)

       The fair value of these  options was estimated at the date of grant using
       the  modified  Black-Scholes  American   option-pricing  model  with  the
       following  weighted-average  assumptions for 1999: expected volatility of
       52 percent; risk-free interest rate of 5.75 percent; and expected life of
       10 years. The weighted-average fair value of options granted was $0.68.

       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>
<CAPTION>
                                                                                       Weighted-
                                                                                         average
                                                       Stock           Exercise          exercise
                                                      options            price            price
                                                   -------------   ----------------   -------------
<S>                                                <C>             <C>                <C>
         Outstanding at November 1, 1998                      -    $          -       $       -
             Granted                                  1,530,000      0.50 - 3.00           0.68
             Exercised                                        -               -               -
             Canceled or expired                              -               -               -
                                                   -------------
         Outstanding at October 31, 1999              1,530,000      0.50 - 3.00           0.68
                                                   =============
         Exercisable at October 31, 1999                 83,600     $0.50 - 3.00       $   1.80
                                                   =============
</TABLE>


<PAGE>



              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

NOTE E - OPTIONS - CONTINUED

       A summary of the status of the options  outstanding  under the  Company's
       stock option plan at October 31, 1999 is presented below:
<TABLE>
<CAPTION>
                                                     Weighted-
                                                      average      Weighted-                  Weighted-
                                                     remaining      average                    average
                                      Number         contractual    exercise     Number       exercise
        Range of exercise prices    outstanding     life (years)     price     exercisable      price
        ------------------------    ------------   ------------   ----------   -----------   -----------
<S>      <C>                          <C>              <C>          <C>            <C>          <C>
         $ 0.50                       1,420,000        1.69         $ 0.50         40,000       $ 0.50
         $ 3.00                         110,000        1.69           3.00         43,600         3.00
                                    ------------                               -----------
         $ 0.50 - $3.00               1,530,000                                    83,600
                                    ============                               ===========
</TABLE>

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 $122,365
       for the year ended October 31, 1999.

       As of October 31, 1999, the Company had net operating loss  carryforwards
       for tax reporting  purposes of approximately  $385,000 in various taxable
       jurisdictions. The taxable jurisdictions, estimated net operating losses,
       and  expiration  dates are as follows:  United  States,  $345,000,  2019,
       Canada,  $40,000, 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                                        $   (187,618)
       Foreign net operating losses with no current tax benefit          65,253
       Change in valuation allowance                                    122,365
                                                                    ------------
                                                                    $          -
                                                                    ============

<PAGE>


              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

NOTE F - INCOME TAXES - CONTINUED

       Deferred income tax assets and liabilities are as follows:

        Deferred tax assets

        Benefit of net operating loss carryforwards - U.S.      $     117,584
        Benefit of net operating loss carryforwards - Foreign          18,144
                                                                --------------
                                                                      135,728
        Less valuation allowance                                     (135,728)
                                                                --------------
        Net deferred tax asset (liability)                      $           -
                                                                ==============


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  96 percent of accounts  receivable  are with two different
       customers.  The Company routinely evaluates the financial strength of its
       customers and monitors each account to minimize the risk of loss.

       The Company has two  customers  which account for more than 10 percent of
       revenues.  The Company's major customers and revenue  received  therefrom
       are as follows:

                  Company A                   $     190,000
                  Company B                   $      59,742


NOTE H - BUSINESS SEGMENTS

       The Company has two  reportable  segments for the year ended  October 31,
       1999,  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       Banking      Consolidated
                                      services       services         balance
                                   -------------   ------------   --------------
        Revenues                   $   255,042     $         -    $    255,042
        Operating loss                (132,028)        (45,947)       (177,975)
        Administration expense               -               -        (373,844)
                                                                   -------------
             Net loss                                              $  (551,819)
                                                                   =============


<PAGE>



              Digital Commerce International, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 1999

NOTE H - BUSINESS SEGMENTS - CONTINUED

       Identifiable assets

<TABLE>
<CAPTION>
                                     Processing       Banking                    Consolidated
                                      services       services      Corporate        balance
                                    ------------   ------------   -----------   --------------
<S>                                 <C>            <C>            <C>           <C>
        Current assets              $   206,036    $    69,122    $   237,690   $     512,848
        Non-current assets              290,000        103,730              -         393,730
        Capital assets                   10,450              -         10,002          20,452
                                    ------------   ------------   -----------   --------------
           Total assets             $   506,486    $   172,852    $   247,692   $     927,030
                                    ============   ============   ===========   ==============
</TABLE>


NOTE I - SUBSEQUENT EVENTS

       In 2000, the Company  initiated two private  placements.  The Company has
       received  approximately  $500,000  toward the purchase of 200,000  common
       shares at $2.50 per share.  The Company has also  received  approximately
       $195,000 toward the purchase of 50,000 common shares at $3.00 per share.



<PAGE>


Item  9.  Changes  In and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

On December 6, 1999, the Company's Board of Directors  authorized the engagement
of Grant  Thornton  LLP ("GT") as its auditor for the fiscal year ended  October
31, 1999. ThE decision to change  accountants  was prompted by the ability of GT
to provide audit services to the Company on an  international  scale. GT entered
into an engagement  letter with the Company on December 7, 1999 and concurrently
with that engagement,  the Company  dismissed  Crouch Bierwolf & Chisholm,  P.C.
("Crouch Bierwolf"),  which had served as the Company's independent  accountants
since 1998, as its auditor within the meaning of Item 304(a)(1)(i) of Regulation
S-K of the Securities and Exchange Commission.

         The reports of Crouch  Bierwolf on the financial  statements for fiscal
year 1998  contained no adverse  opinion or  disclaimer  of opinion and were not
qualified or modified as to uncertainty,  audit scope, or accounting principles.
The Board of  Directors  participated  in and  approved  the  decision to change
independent accountants.  In connection with its audit for the fiscal year ended
1998,  and through  December 6, 1999,  there were no  disagreements  with Crouch
Bierwolf  on  any  matter  of  accounting  principles  or  practices,  financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved  to the  satisfaction  of Crouch  Bierwolf  would  have  caused  Crouch
Bierwolf to make reference  thereto in their report on the financial  statements
for such year.  During the fiscal  year ended  October  31,  1998,  and  through
December  6, 1999,  there were no  reportable  events as that term is defined in
Item 304 (a)(1)(v)of Regulation S-K.

         During the fiscal year ended October 31, 1998, and through  December 6,
1999,  the  Company  had  not  consulted  with  GT  regarding  either:  (i)  the
application  of  accounting  principles  to  a  specified  transaction,   either
completed  or proposed,  or the type of audit  opinion that might be rendered on
the Company's financial statements, and neither a written report was provided to
us nor oral  advice was  provided  that GT  concluded  was an  important  factor
considered  by us in  reaching  a decision  as to the  accounting,  auditing  or
financial  reporting  issue; or (ii) any matter that was either the subject of a
disagreement,  as that term is defined in Item 304  (a)(1)(iv) of Regulation S-K
and the related  instructions  to Item 304 of  Regulation  S-K, or a  reportable
event, as that term is defined in Item 304 (a) (1) (v) of Regulation S-K.

                                    Part III

Item 10.  Directors and Executive Officers of the Registrant

         The Company's  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 the  Company's  directors  or  executive  officers.  The
Company's  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,  39, 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,
54, 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 Brockton  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.  Prior  to  joining  Mr.  Kang in the  founding  of  Digital  Commerce
International  Inc.  Mr.  Combs has been active in the real  estate  development
business in Ontario and British Columbia since the early 1970's. Throughout this
time Mr. Combs has developed for his own and investors' interests and maintained
a high level of contract  services for such  companies  as Quadrant  Development
Corp., a division of Weyerhauser Canada Ltd. and Webb & Knapp Canada Ltd.

         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.

         (b)      Advisory Board

         The Company has formed an advisory  board for the purpose of  assisting
it in the  identification  of  market  and  product  development  opportunities,
reviewing with management the progress of its specific projects,  recruiting and
evaluating its management and operational systems and, in general, assisting the
Company in its regulatory and strategic planning.  Members of the advisory board
are leaders in the fields of  business,  banking,  and  internet  commerce,  and
generally meet with the Company's management on an informal basis.

         Andrew G. Smith,  28, has served on the  advisory  board of the Company
since June 1999. He has been the President of  DietSmart.com  since  November of
1999.  DietSmart.com  is a leading  online weight loss and fitness  destination,
offering consumers diet and fitness programs tailored to their individual needs.
Prior  to  founding   DietSmart.com,   Mr.  Smith  was  the  Vice  President  of
Sponsorships and Strategic  Development for iVillage.com,  a top 25 site and the
number one women's  network on the  internet.  Mr. Smith was  responsible  for a
number of the iVillage's largest strategic  relationships,  including those with
AT&T,  Visa, First USA, and PNC Bank. He holds a B.A. in Religion from Dartmouth
College, 1994.

         George  Reznik,  34, has served on the Company's  advisory  board since
June 1999. He is currently the Director of Finance,  Pivotal Corporation,  where
he is responsible for all finance  activities for Pivotal  including  regulatory
filings,  preparation of financial  information,  business plans and budgets and
treasury  management  functions.   Mr.  Reznik  was  instrumental  in  Pivotal's
successful initial public offering on the Nasdaq Stock Market on August 5, 1999.
Prior to joining  Pivotal in early 1999,  Mr. Reznik was a Senior Manager in the
Corporate Finance practice with Deloitte & Touche leading the business valuation
practice based from the Vancouver  office in Canada.  Mr. Reznik has significant
international   corporate   finance   experience   having   worked  on  numerous
international  projects  in various  industries.  Mr.  Reznik has a Bachelor  of
Commerce  Degree  (Honours)  from the  University  of Manitoba  (1988) and was a
medallist in obtaining his Chartered  Accountant ("CA") designation in 1990. Mr.
Reznik also obtained the Chartered  Business  Valuator  ("CBV")  designation  in
1995.

         Brian Flynn, 30, has served on the Company's advisory board since June,
1999. He has nine years of experience in marketing and communications, including
product development, branding, advertising/public relations, database marketing,
and interactive  communications.  Brian has been the Chief Executive  Officer of
Annotate.net, an internet company that develops software to enhance and simplify
the web user experience,  since August, 1999. Prior to joining Annotate.net,  he
was a Senior Vice President,  Management Director at Foote, Cone & Belding (FCB)
in New York, a top worldwide advertising and communications  company. During the
previous  three  years,   Brian  was  Vice  President,   Director  of  Marketing
Communications  for  Citibank in North  America.  Brian  developed  and launched
Citibank's internet Banking product. He also serves as the Marketing Advisor for
SOHOnet, a provider of web content management solutions. Brian holds a degree in
business from Georgetown University in Washington, D.C.

         Kevin  Fortuna,  28, has served on the Company's  Advisory  Board since
January  of 1999.  He is  currently  Director  of  Business  Development  at NBC
internet,  where he manages NBCi's east coast business  development group and is
responsible for several of NBCi's largest strategic alliances.  He has also held
senior  business  development and electronic  commerce  positions at Juno Online
Services,  and has worked in the internet  industry for the past five years.  He
graduated  summa cum laude from  Georgetown  University with a degree in English
and History.

         (c)      Involvement in Certain Legal Proceedings

         On January 5, 2000,  the Company and Directors Kang and Combs were made
defendants to a lawsuit by a former business partner. The plaintiff,  the former
business  partner,  alleged breach of a statutory duty owed by Kang and Combs to
the  plaintiff (a fellow  director and  shareholder).  He claims that he was not
made part of certain  corporate  opportunities  and was not  included in certain
corporate changes and the benefits therefrom. The Company believes the claims of
the plaintiffs regarding the Company are without merit. In addition, the Company
believes that any decision  granted in favor of the plaintiff  would only affect
the shares held by Kang and Combs and would not affect the Company directly.

         Aside from the above mentioned action,  the Company is not aware of any
other  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  the  Company's  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 the Company and written
representations  that no other reports were required,  the Company believes that
all  Reporting  Persons  during fiscal year 1999 complied on a timely basis with
all applicable filing requirements under Section 16(a) of the Exchange Act, with
the  exception of Mr. Kang, a member of the Board of Directors and the Company's
Chief Executive  Officer,  and Mr. Combs, a member of the Board of Directors and
the Company's Executive Vice President,  each of whom, the Company believes, was
delinquent  in the filing of a report  covering  the  issuance  of shares of our
common and  preferred  stock and options to purchase  shares of common  stock in
connection with the acquisition of Digital  Commerce,  Inc. The Company believes
that each  Reporting  Person is now making  efforts to effect  such  filings and
satisfy all reporting obligations.


<PAGE>


Item 11.  Executive Compensation

         Summary Compensation Table

         The  Company  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 the  Company's  other most highly  compensated
executive  officers  (collectively,  the Named Executive  Officers")  earning in
excess of $100,000 for the year ended October 31, 1999.

Name and Principal    Year     Salary $    Other Annual    Securities Underlying
   Position                                Compensation       Options/SARS
Michael Y H Kang      1999     $120,000       $10,932            575,000
CEO
John W Combs          1999      $120,000      $10,882            575,000
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 June 15, 1999 to October 31, 1999.

         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, 1999.

<TABLE>
<CAPTION>
                                                        Individual Grants
                                                        -----------------                    Potential Realizable
                                                                                       Value at Assumed Annual Rate
                        Number of        Percent of Total                               of Stock Appreciation for
                       Securities         Options Granted   Exercise                           Option Term(3)
                       Underlying         to Employees in   Price Per    Expiration            ---------------
      Name         Options Granted (#)    Fiscal Year(1)     Share(2)       Date                5%($)   10%($)
--------------------------------------------------------------------------------------------------------------------
<S>                      <C>                 <C>              <C>           <C>           <C>           <C>
Michael Y H Kang         575,000             37.58%           $.50     June 18 2009       $223,003      $302,257

John W Combs             575,000             37.58%           $.50     June 18, 2009      $223,003      $302,257

</TABLE>


(1)  Based on options  for an  aggregate  of  1,530,000  shares of common  stock
     granted during the fiscal year ended October 31, 1999.

(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
     $0.25.

(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, 1999.

<TABLE>
<CAPTION>
                                             Number of Securities                     Value of Unexercised
                                            Underlying Unexercised                        In-the-Money
                                                  Options at                               Options at
                                              Fiscal Year-End (#)                       Fiscal Year-End(1)
                                   --------------------------------------------------------------------------------
               Name                     Exercisable        Unexercisable         Exercisable        Unexercisable
-------------------------------------------------------------------------------------------------------------------
<S>                                         <C>               <C>                     <C>             <C>
           Michael Kang                     0                 575,000                 0               $5,534,375
            John Combs                      0                 575,000                 0               $5,534,375
-------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)  For  purposes of  determining  the values of the options  held by the Named
     Executive  Officers,  the Company  assumed  that the shares of common stock
     underlying  the option  granted had a value of $10.125 per share on October
     31, 1999,  which is the estimated  fair market value the Board of Directors
     attributed to that stock on October 31, 1999.  The option value is based on
     the difference  between the fair market value of such shares on October 31,
     1999, and the option exercise price per share,  multiplied by the number of
     shares subject to the options.

         Employment Agreements

         The Company has adopted a policy of entering into employment agreements
with each of its senior  management  and key  personnel,  and has either entered
into an  employment  agreement  with each of those  persons or has  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 the  Company's  senior  management  also
provide for the grant of options.

         The Company 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 the Company  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 the Company  believes are consistent with industry
practice.

         Limitations of Liability and Indemnification

         The  Company's   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.

         The Company's  Bylaws provide that, to the full extent permitted by its
Certificate  of  Incorporation  and the Delaware  General  Corporation  Law, the
Company 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
the Company in their  capacity as directors of the Company,  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, 1999,  with
respect to  beneficial  ownership of the  Company's  common stock by each person
known  by  the  Company  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.

<TABLE>
<CAPTION>
Title of Class     Name of Beneficial Owner           Amount and Nature of     Percent of Class
                                                        Beneficial Owner

<S>               <C>                                       <C>                     <C>
Common            John W Combs(1)                           1,845,000               14.22%

Common            Michael Y H Kang(2)                       1,845,000               14.22%
</TABLE>

(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.




<PAGE>


(b)      Security Ownership of Named Executive Officers

Title of Class      Name and Address of   Amount and nature of  Percent of Class
                    Beneficial Owner      Beneficial Owner

Class A Preferred   Michael Y H Kang           250,000                50%

Class A Preferred   John W Combs               250,000                50%



Item 13. Certain Relationships and Related Transactions

Digital  Commerce Bank Inc. is the holder of the Company's bank charter.  John W
Combs,  as nominee of the  Company's  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.

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 No.           Exhibit                                               Page
----------            -------                                               ----
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 Change of Location of Registered  Office and/or  Registered
     Agent of Systems Assurance Corporation

3.8  Certificate  of Change of Location of Registered  Office and/or  Registered
     Agent of Systems Assurance Corporation

4.1  Certificate  Establishing  and  Designating  the  Rights,  Preferences  and
     Restrictions of Series A Preferred Stock of Digital Commerce, Inc.

10.1 Certificate  of Ownership  and Merger  Merging EZ Data,  Inc.  into EZ Data
     Systems, Inc.

10.2 Certificate of Ownership and Merger Merging Systems  Assurance  Corporation
     into Unidata Systems, Inc.

10.3 Acquisition  Agreement  by and between  Assurance  Corporation  and Digital
     Commerce, Inc. 10.4 1999 Stock Option Plan

10.5 Employment Agreement with Michael Kang

10.6 Employment Agreement with John W. Combs

10.7 Humboldt Bank Independent Sales Organization (ISO) Agreement

21.1 Subsidiaries of the Registrant

27.1 Financial Data Schedule

         (d)      Reports on Form 8-K

     No reports on Form 8-K were filed  during the  quarter  ended  October  31,
1999.

                                   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.

February 14, 2000                         By: /s/ Michael Y H Kang,
                                               ---------------------
                                           Chairman and Chief Executive Officer

                                           Digital Commerce International, Inc.

February 14, 2000                         By: /s/ John W. Combs,
                                               ------------------
                                           Director and Executive Vice President

                                    DIRECTORS

February 14, 2000                         By: /s/ Michael Y H Kang
                                               --------------------


February 14, 2000                         By: /s/ John W. Combs
                                               -----------------