UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                                    FORM 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

              For the year ended December 31, 2000

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



                         Commission file number 0-24940
                            ------------------------

                        PIONEER COMMERCIAL FUNDING CORP.
     ----------------------------------------------------------------------
                 (Name of small business issuer in its charter)

New York                                                13-3763437
----------------                               -----------------------------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
 of incorporation or organization)

One Rockefeller Plaza, Suite 2412, New York, N.Y.                10020
-------------------------------------------------                --------
(Address of principal executive offices)                         (Zip Code)

         Issuer's telephone number (212) 218-1850
                                   ----- --------

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

 Title of each class              Name of each exchange on which registered



Securities registered under Section 12(g) of the Exchange Act:

Common Stock                                                 (Title of Class)
----------------------



         Check whether the issuer (1) filed all reports  required to be filed by
         Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or
         for such shorter  period that the  registrant was required to file such
         reports),  and (2) has been subject to such filing requirements for the
         past 90 days. Yes x No

                                                         1

<PAGE>
         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained,  to the best of  registrant's  knowledge,  in definitive  proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

         State issuer's  revenues for its most recent fiscal year $ 245,012.  As
of March 23, 2001, there were 3,403,663 shares of the Registrant's common stock,
$.01 par value, issued and outstanding of which 1,004,368 held by non-affiliates
of the  Issuer.  Based on the closing  price for shares of common  stock on that
date, the aggregate market value of the common stock held by  non-affiliates  of
the  Issuer  was  approximately  $3,264,196.   For  purposes  of  the  foregoing
calculation only, all directors and executive  officers of the Issuers have been
deemed affiliates.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

         Check whether the issuer has filed all  documents and reports  required
to be  filed  by  Section  12,  13 or  15(d)  of  the  Exchange  Act  after  the
distribution of securities under a plan confirmed by a court.

         Yes       No
             ---      ---

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         State the number of shares  outstanding of each of the Issuer's classes
         of common equity,  as of the latest  practicable  date. As of March 23,
         2001 there were 3,403,663 shares of common stock outstanding.

         DOCUMENTS INCORPORATED BY REFERENCE

         The   following   exhibits  are   incorporated   by  reference  to  the
         Registrant's  Annual  Report on Form  10KSB  filed  for the year  ended
         December 31, 1999 or to the  Company's  Registration  Statement on Form
         SB-2, Registration No. 33-82838 NY.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

         Exhibit
         Number                     Description

         3.1                        Certificate of Incorporation

         3.2                        Certificate of Amendment of the Company's Certificate of Incorporation

         3.3                        Certificate of Amendment of Certificate of Incorporation of the Company

         3.4                        By-Laws of the Company

         10.1                       Credit Agreement between Bank One, Texas, N.A.
                                    and the Company

         10.3                       The Company's Non-Qualified Stock Option Plan

                                                            2
</TABLE>

<PAGE>
                                     PART I


         Item 1.           Description of the Business.

         General

                  Pioneer Commercial Funding Corp.  ("Pioneer" or the "Company")
was engaged in the business of a mortgage warehouse lender providing  short-term
(generally  10-90 days per loan)  financing to small and medium  sized  mortgage
bankers who hold  ("warehouse")  mortgage loans which they originate pending the
nonrecourse  sale  of such  loans  to  institutional  investor  agencies  in the
secondary mortgage market such as the Government  National Mortgage  Association
("GNMA"),  the Federal National Mortgage Association  ("FNMA"),  and the Federal
Home Loan  Mortgage  Corporation  ("FHLMC");  each one  referred to herein as an
"Agency")  and/or  accredited  financial  institutions  such as banks,  thrifts,
insurance carriers and large mortgage bankers (each one and each Agency referred
to herein as a "Financial Institution").


                  Pursuant to an Asset  Purchase  Agreement  dated July 30, 1999
with  Princap  Mortgage  Warehouse,  Inc., a  California  corporation,  with its
principal office at 23550 Hawthorne Boulevard,  Torrance, California ("PMW") the
Company  has sold to PMW all of its  equipment,  furniture  and  other  physical
assets, all of its computer operating systems, for the sum of $800,000. PMW also
had the right to purchase any or all of the customer accounts of the Company for
an amount equal to the aggregate  outstanding  principal balance and all accrued
but unpaid fees and  interest on such  accounts as of the  Closing.  The Company
will continue its collection activities with respect to those accounts which are
not purchased by PMW. The Company's  shareholders approved the sale on September
21, 1999.

                  Management of the Company  determined that the Company did not
meet the revenue  objectives for its mortgage  warehouse  lending business as it
was not able to procure  credit  lines and did not expect the Company to be able
to meet these  objectives  in the  foreseeable  future.  The  Company  therefore
decided to sell its hard assets and explore other business opportunities.

                  The Company found that the present  comparatively high cost to
it for  borrowed  funds and the  inability  to borrow  enough  funds to create a
sufficient  volume of loan  transactions  resulted  in rates of return and total
returns  that were  unacceptable  in relation to the degree of risk  inherent in
lending in the secondary market.

                  The high cost to the Company for available  borrowed  money is
due,  in large  measure,  to the fact that,  unlike its  competitors  which are,
generally,  banking institutions or their affiliates,  it was required to borrow
funds at the Prime Rate of interest  rather than at LIBOR base.  This difference
often meant as much as a 2% difference in the borrowing rates,  thereby having a
significant  negative  effect  on the  margins  for each  loan  transaction.  In
addition,  unlike banking  institutions,  which could generally  obtain borrowed
funds at up to ten to fifteen times their capital,  the Company was only able to
borrow  approximately  six  times  its  capital.  This  resulted  in less  funds
available to make loans; therefore, the

                                                            3

<PAGE>
volume of transactions and the resulting revenues have been significantly  lower
than that which could be achieved by the Company's competitors. This problem was
significantly  exacerbated  by a situation  which arose in October and November,
1997 in which the Company was unable to gain access to over $1.7  Million of its
own  funds.  This  matter  is  the  subject  of an  ongoing  litigation  in  the
Philadelphia  Court  of  Common  Pleas,   entitled  Pioneer  Commercial  Funding
Corporation  and  Banc  One,  Texas,   N.A.  v.  American   Financial   Mortgage
Corporation,  Thomas F. Flately, Norwest Funding, Inc. and Corestates Bank, N.A.
(No.  0885,  April  Term,  1998) in  which  the  Company  has  alleged  that the
defendants have wrongfully diverted  approximately $1.7 Million belonging to the
Company,  representing amounts due for loans made by the Company to a company in
the business of originating  residential  mortgage loans. The  unavailability of
these funds has further significantly  contributed to the Company's inability to
generate a sufficient  volume of loan  transactions  by decreasing its borrowing
abilities, and the rate at which it could borrow, thereby severely affecting the
Company's  ability  to  generate   sufficient  revenues  to  make  its  business
economically   viable.  The  defendants  in  this  matter  denied  all  material
allegations of the Company's complaint.

                    These high costs of obtaining  funds and the  difficulty  in
obtaining  adequate levels of funding have resulted in a much slower development
for the Company than was originally anticipated. The high cost of borrowed funds
and the low  volume of  transactions  has made the  mortgage  warehouse  lending
business unattractive in relation to the risks inherent in this business.  Since
the loans are in the secondary  market,  the source for recovery on the loans is
frequently  limited  to the  value of the  underlying  property.  This  leads to
greater risk of recovery on a loan.  In  addition,  since the Company acts as an
intermediary  as a warehouse  lender,  it does not  receive all the  information
necessary to fully assess the risk of each loan transaction; therefore, the risk
of lending is greater.

                  Based on these factors,  Management decided that the Company's
assets would be more  efficiently  utilized in investment  in other  businesses;
however no other businesses have been identified at this time.

                  As a  result  of the  sale,  the  Company  no  longer  has any
continuing  business  operation  other than  winding up of its  operations.  The
Company  is seeking to engage in other  business  ventures,  but there can be no
assurance as to when, or if, an economically  viable business can be acquired or
continued successfully. Management is diligently seeking other opportunities for
the Company.


         The Company's Bank One, Texas, N.A. Line of Credit.

                  As of March 31,  1997,  the  Company  entered  into a one year
credit  agreement (the "Credit  Agreement")  with Bank One,  Texas,  N.A. ("Bank
One").  Pursuant to the Credit  Agreement,  Bank One provided the Company with a
$25,000,000  revolving  line of credit  (the  "Bank One  Credit  Line")  and the
Company  paid fees  ranging from $17.50 to $12.50 per loan based on monthly loan
volume. In addition, based on the type of the loan, the Company pays interest on
advances  made by Bank One at a variable  rate  ranging  from 1/8% below to 1/8%
above Bank One's prime rate of interest  (the "Bank One Prime  Rate").  The Bank
One Prime Rate is the rate quoted  from time to time by the Wall Street  Journal
as the base rate on corporate loans at large U.S. money center  commercial banks
 . As  collateral  security  for its  indebtedness  to Bank One under the  Credit
Agreement, the Company has granted to Bank One a security

                                                            4

<PAGE>
interest in various assets  including,  but not limited to, all promissory notes
acquired by the  Company  with  respect to any loan  funded by the Company  with
proceeds  of the  Bank  One  Credit  Line and all  mortgages  or other  forms of
collateral  securing  the funding of such  loans.  On August  25,1997,  Bank One
amended the credit facility that it provides to the Company to  $35,000,000.  On
September   26,1997  and  December  12,  1997  the  facility  was  increased  to
$50,000,000  and  $60,000,000,  respectively.  On February  18,  1999,  Bank One
extended the Stated  Termination  date to April 30, 1999. In addition,  Bank One
amended the total  Principal  Debt of Borrowings so that it may never exceed the
lesser of either (a) a  $40,000,000  Commitment  or (b) the sum of the Borrowing
Base plus (i)  through  and  including  February  28,  1999,  $15,000,000,  (ii)
thereafter  through March 31, 1999,  $10,000,000,  and (iii) thereafter  through
April 30, 1999,  $5,000,000.  This credit facility was subsequently  extended to
September 30, 1999. No further extension has been granted.


         The Company's Mortgage Banking Company Customers

                  During the 2000  fiscal  year,  the  Company  did not fund any
loans.  During the 1999 fiscal year, the Company  funded 1972 loans  aggregating
$164,256,735 with the three largest customers, which accounted for 49.2 % of its
total  fundings.  The Company funded 466 loans  aggregating  $28,715,350 for one
customer,  which  accounted  for  17.5% of the  Company's  fundings;  176  loans
aggregating  $28,108,730 for the second  customer,  which accounted for 17.1% of
the Company's  fundings;  and 275 loans aggregating  $23,970,531  funded for the
third customer, which accounted for 14.6% of the Company's fundings.

                  At December  31,  2000,  the  Company had no mortgage  banking
customers.

         Mortgage Banking Operations

                  On April 16, 1997,  the Company  entered into a joint  venture
agreement  with  Maryland  Financial  Corporation  ("MFC") to form  Pioneer Home
Funding,  LLC, a  California  limited  liability  company  ("PHF").  The Company
accounts for this investment on the equity method.  The agreement  provides that
the  Company  and MFC would  maintain  a 80 percent  and a 20 percent  ownership
interest,  respectively.  An amendment to the  agreement was made on October 31,
1997. This amendment provides that the Company would contribute $40,000 for a 20
percent  interest  in PHF. In  addition,  the Company may from time to time make
loans to PHF as  needed.  Under this  agreement  the  Company  has the option to
convert loans made to PHF into an 80 percent interest in PHF. As of December 31,
1999 the Company made  advances to PHF and  reflected a receivable  (included in
other assets on the balance sheet) totaling $294,345.  At December 31, 1999, the
Company had recorded a reserve aggregating  $294,345 against this receivable due
to the financial condition of PHF. There were no advances made to PHF during the
year ended December 31, 2000.

         Employees

         At December 31, 2000 the Company employed one full-time  employee.  The
Company believes that its relations with its employee is good.


                                                            5

<PAGE>

         Item 2.           Property

                  On October 17,1997,  the Company entered into a ten year lease
to rent 6,846 square feet on the sixteenth  floor of an office building at 21700
Oxnard Street, Woodland Hills, California. The monthly base rent during year one
through five is $13,692 and for years six through ten is $15,745. This space was
sublet to PMW through  January 31, 2000 at the same rental.  The Company was not
able  to  negotiate  with  the  landlord  or  to  sublease  the  space  and  has
relinquished  its lease.  The landlord has drawn on a letter of credit issued by
the Company as a security deposit.

         Item 3. Legal Proceedings.

                  During  October 1997 the Company  warehoused  mortgages  for a
customer  who  used  a  third  party  conduit,   American   Financial   Mortgage
Corporation, to sell its loans to an investor, Norwest Funding, Inc. The Company
provided instructions to the third party conduit that the funds were to be wired
by the investor to the Company's bank. The investor mis-wired approximately $1.7
Million to the conduit's  bank,  Corestates  Bank,  N.A. the conduit's  bank has
refused to return the funds. The Company  commenced legal action, to collect the
funds from the conduit, the conduit's guarantor,  the investor and the conduit's
bank. In addition the company has a $5 million personal guarantee from the third
party conduit's primary  shareholder and an additional $2 million guarantee from
the customer's primary shareholder. After trial, on December 4, 2000 a judgement
was entered in favor of the Company as follows:

Compensatory damages in the amount of $1,779,519.99 plus interest of $78,854.29
Consequential damages in the amount of $13,500,000.00
Punitive damages in the amount of $40,500,000.00
For a total of $55,858,374.28

and in favor of Pioneer  Commercial  Funding Corp.  against  American  Financial
Mortgage Corp. and Thomas F. Flatley as follows:

Compensatory   damages  on  the  contract  and   conversion  in  the  amount  of
$1,779,519.99  plus interest of  $890,442.56 on the contract  claims
Attorney's fees in the amount of $1,200,000.00
For a total of $3,869,962.55

     The defendants have appealed the judgement. No assurance can be given as to
the ultimate outcome of this litigation.

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

         Not applicable.


                                                            6

<PAGE>
                                                          PART II

         Item 5.   Market for Common Stock and Related Stockholder Matters.

                  The Common Stock issued by the Company in connection  with the
IPO is listed on the Bulletin Board under the symbol "PCFC". The following table
sets  forth  below the high and low sale  prices  for the  Common  Stock for the
periods indicated:

         Quarter Ended               High                      Low

         March 31, 1999                $   4.00               $ 0.75
         June 30, 1999                 $   2.625              $ 1.00
         September 30, 1999            $   1.937              $ 1.00
         December 31, 1999             $   0.625              $ 0.50
         March 31, 2000                $   0.625              $ 0.625
         June 30, 2000                 $   0.875              $ 0.875
         September 30, 2000            $   5.875              $ 4.00
         December 31, 2000             $   6.50               $ 3.625

         As of December  31,  2000,  there were 25 record  holders of the Common
Stock.

         Dividend Policy and Restrictions on Payment of Dividends.

                  The Company has never paid cash dividends on its Common Stock.
Furthermore, the provisions of the plan of reorganization (the "POR") pertaining
to the Predecessor's  emergence from bankruptcy prohibit the Company from paying
any dividends to its common  shareholders until the sum of $1,350,000 shall have
been  paid  to  the  Predecessor's  pre-bankruptcy  unsecured  creditors.  As of
December 31, 2000, no payment to the unsecured creditors has been made. Further,
in  accordance  with the POR, the  Predecessor  became  obligated to pay certain
portions of its net income in  satisfaction  of said payment  obligation  to its
pre-bankruptcy  creditors.  Upon consummation of the Merger,  the Company became
obligated,  by  operation  of law, to comply with such  payment  obligation  and
dividend payment prohibition,  among other operating  restrictions.  The Company
does not anticipate paying cash dividends on the Common Stock in the foreseeable
future as it  intends to retain  future  earnings  to finance  the growth of the
business.  The payment of future cash  dividends on the Common Stock will depend
on such  factors as  earnings  levels,  anticipated  capital  requirements,  the
operating  and  financial  condition  of the  Company and other  factors  deemed
relevant by the Board of Directors.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

                  When used in this Form  10-KSB  and in future  filings  by the
Company with the Securities and Exchange Commission,  the words or phrases "will
likely result" and "the company  expects,"  "will  continue," "is  anticipated,"
"estimated,"  "project,"  "outlook"  or  similar  expressions  are  intended  to
identify "forward-looking statements." Pioneer Commercial Funding Corp wishes to
caution  readers  not  to  place  undue  reliance  on any  such  forward-looking
statements, each of which

                                                            7

<PAGE>



speak only as of the date made. Such statements are subject to certain risks and
uncertainties  that  could  cause  actual  results  to  differ  materially  from
historical  earnings and those presently  anticipated or projected.  The Company
has no obligation to publicly release the result of any revisions,  which may be
made to any  forward-looking  statements to reflect anticipated or unanticipated
events or circumstances occurring after the date of such statements.

         General

                  The  Company  commenced  active  operations  on June 14,  1993
following its emergence from Chapter 11 bankruptcy proceedings.  The Company did
not engage in any substantial  mortgage  warehouse  lending  activities from the
time it emerged from bankruptcy  through March 31, 1997.  During the nine months
ended  December  31,  1997 the Company  significantly  increased  its  financing
facility and began the process of evaluating many new customer relationships. On
March 31, 1997 the Company  entered  into a credit  agreement  with Bank One. On
August 25, 1997,  Bank One amended the credit  facility  that it provided to the
Company to $35,000,000. On September 26, 1997 and December 12, 1997 the facility
increased to $50,000,000 and $60,000,000,  respectively.  The line of credit was
reduced to $50,000,000  on October 1, 1998 and  $40,000,000 on October 30, 1998.
As of August, 1999 the Company sold its assets constituting its mortgage lending
business and as a result, the Company does not have any operations at this time.
The Company is seeking other business opportunities.

                  As of December  31,  1999,  the Company had no  customers  and
funded 1972 Loans with an aggregate value of $164,256,735. The Company is in the
process of liquidating such loans.

      As of December 31, 2000, the Company had no customers and funded no loans.

Results of  Operations  for Year Ended  December  31, 2000  Compared to the Year
Ended December 31, 1999.

                  Revenues: The Company's revenues decreased from $2,089,286 for
the year ended  December  31, 1999 to $245,012  for the year ended  December 31,
2000. This decrease is  attributable to the Company's  winding down its mortgage
business.  Processing  fees  decreased from $476,743 for the year ended December
31, 1999 to $44,400 for the year ended  December 31, 2000.  Part of the decrease
in  loan  volume  is  the  interest  component  of  revenues  (interest  charged
customers).  Interest  revenue  decreased  from  $1,553,085  for the year  ended
December 31, 1999 to $200,612 for the year ended December 31, 2000.

                  Interest and Fee Costs:  The Company's direct costs consist of
interest and other charges that it pays to its revolving  credit line  provider.
The Company's  interest and fee charge for the year ended  December 31, 2000 was
$495,533 as compared to $1,563,837  for the year ended  December 31, 1999.  This
decrease is attributable to the decrease in loan funding volume during 2000.

                  Loan Loss  Provision:  The $1,157,401  loan loss provision for
the year ended December 31, 2000 and $2,442,899 loan loss provision for the year
ended December 31, 1999 were due to the recognition of a discount on the sale of
loans during the years and the accrual of a reserve for estimated  losses on the
future  disposition  of loans held for sale,  mortgage  warehouse  loans and for
uncollectible

                                                            8

<PAGE>



interest  and  fees   receivable.   Management   estimates  that  certain  other
uncommitted  mortgage warehouse loans belonging to customers described above may
be sold at discounts  significant  enough that those  customers may be unable to
cover  the  shortage  and pay all of the  accrued  interest  and  fees  thereon.
Accordingly,  an  estimate  for  these  future  potential  losses  has also been
established.

                  Other Operating  Expenses:  Other operating expenses increased
to $2,690,290 for the year ended December 31, 2000 from  $2,670,122 for the year
ended December 31, 1999.  Compensation and benefits  decreased from $850,435 for
the year ended  December  31, 1999 to $310,100  for the year ended  December 31,
2000 due to the  reduction of employees  after the decision to exit the mortgage
business.  It is the Company's  intention to dramatically reduce operating costs
during the wind down of operations.

                  Depreciation  expense  decreased  from  $144,508  for the year
ended  December 31, 1999 to $-0- for the year ended December 31, 2000 due to the
sale of all fixed assets in 1999 (See Note A of Notes to Financial Statements).

                  Professional  fees, which include  accounting,  legal fees and
consulting,  increased to $1,850,763  for the year ended  December 31, 2000 from
$1,038,257  for the year ended December 31, 1999 primarily due to the additional
legal costs  attendant to the lawsuit,  more fully  described in Item 3, against
Corestates  Bank,  N.A.,  American  Financial  Mortgage  Corporation and Norwest
Funding, Inc.

                  Rent  expense  increased  from  $148,840  for the  year  ended
December 31, 1999 to $286,270 for the year ended December 31, 2000 primarily due
to a $150,000  certificate  of deposit which was security for a letter of credit
in favor of the  Company's  landlord,  being  claimed by the landlord for unpaid
rent.

         Net Loss:

                  The Company incurred a net loss of $3,837,404 including a loan
loss provision of  $1,157,401,  for the year ended December 31, 2000 compared to
net loss of $4,445,262  including loan loss provision of $2,442,899 for the year
ended  December 31, 1999.  The exiting of the mortgage  business,  and increased
loan loss reserves negatively effected the 2000 operations.

         Cash Flows:

                  Operating  Activities:  Along with a  $3,837,404  loss for the
year ended  December 31, 2000,  the Company used $884,653 of cash from operating
activities  as a result of a reduction  in  warehouse  mortgages  receivable  of
$689,786.  In the year ended  December  31,  1999 the  Company  generated  $28.5
million due to decreases of $29.9 million of mortgage warehouse loans.

        Investing Activities: In 1999, the Company invested $113,773 in fixed
assets and  subsequently  sold all of its fixed assets and recorded net proceeds
on the sale of $792,638.

        Financing Activities: In 2000, $1.5 million was used to reduce short
term  borrowings on the Company's  line of credit  compared to a $28.7 million
reduction in short term line of credit

                                                            9

<PAGE>



borrowings in 1999. In 2000,  $1,105,002 was generated by the issuance of common
stock compared to the repayment of $100,000 of subordinated debt in 1999.

         Liquidity and Capital Resources:

                  Bank One has not renewed the revolving line of credit with the
Company,  which was previously extended to September 30, 1999. In 2000 and 1999,
the  Company's  primary  sources of capital,  which it employed in its warehouse
lending  operations,  were borrowings under its Bank One line of credit and $1.7
million in subordinated debt, of which a portion was converted into common stock
of the Company.

                  Risk Factors

In addition to the other  information  included in, or incorporated by reference
into this report,  the following risk factors should be considered  carefully in
evaluating the Company and its business. An investment in the Company involves a
high  degree of risk.  The  following  risk  factors are some but not all of the
factors that are associated  with an investment in the Company.  Some statements
included  herein  are based on many  assumptions  and are  subject  to risks and
uncertainties. Actual results could differ materially from the results discussed
in the forward looking statements due to a number of factors, including, but not
limited to, those identified below.

The Company no longer has any continuing business operations

          Pursuant to an Asset Purchase  Agreement  dated July 30, 1999 with PMW
the  company  sold to PMW all of its  equipment,  furniture  and other  physical
assets, all of its computer operating systems, for the sum of $800,000. PMW also
had the right to purchase any or all of the customer accounts of the company for
an amount equal to the aggregate  outstanding  principal balance and all accrued
but unpaid fees and interest on such  accounts.  The company  will  continue its
collection  activities with respect to those accounts which are not purchased by
PMW. The  company's  shareholders  approved the sale on September 21, 1999. As a
result of the sale, the company no longer has any continuing  business operation
other than  winding up of its  operations.  The  company is seeking to engage in
other  business  ventures,  but there can be no assurance as to when,  or if, an
economically  viable  business  can  be  acquired  or  continued   successfully.
Management is diligently seeking other opportunities for the company.

The  Company has no customer  and has not funded any loans.  As of December  31,
2000 the Company had no customers and funded no loans.

The verdict in favor of the Company was appealed by the defendants.

In connection  with the civil action Pioneer  Commercial  Funding Corporation
and Banc One,  Texas,  N.A.  v.  American  Financial Mortgage Corporation,
Thomas F. Flately Norwest Funding, Inc. and Corestates  Bank,  N.A. (No.  0885,
April Term,  1998),  a final judgement was entered on December

4, 2000 in favor of the Company as follows:

                                                            10

<PAGE>



Compensatory damages in the amount of $1,779,519.99 plus interest of $78,854.29
Consequential damages in the amount of $13,500,000.00
Punitive  damages  in the amount of  $40,500,000.00
For a total of $55,858,374.28

and in favor of Pioneer Commercial Funding Corp. against American Financial
Mortgage Corp. and Thomas F. Flatley as follows:

Compensatory damages on the contract and conversion in the amount of
$1,779,519.99  plus interest of $890,442.56 on the contract claims
Attorney's  fees in the  amount  of  $1,200,000.00
For a total of $3,869,962.55

   The defendants  have appealed the judgement.  No assurance can be given as to
the ultimate outcome of this litigation.

Control by principal stockholder.
--------------------------------

          Leedan Business Enterprise Ltd. ("Leedan") owns between  approximately
1,338,570  shares  of  common  stock of the  Company  representing  39.3% of the
outstanding  Common  Stock.  As a result of its  ownership,  Leedan  has a major
influence in determining the direction and policies of the Company, the election
of the directors of the Company,  the outcome of any other matter submitted to a
vote of  stockholders,  and to  prevent  or cause a  change  in  control  of the
company.

Market considerations.

          There can be no  assurance  that the market  price of the Common Stock
will not decline.

The Company is no longer listed on the NASDAQ stock market

          The Company is no longer listed on the NASDAQ stock market as a result
of no longer meeting NASDAQ's listing qualifications.  There can be no assurance
that the Company will meet  NASDAQ's  requirements  in the future so that it may
re-apply for listing,  nor can there be assurance that, even if the company does
meet NASDAQ's listing requirements, the company will be accepted by NASDAQ.

The Company has never paid any dividends

          The  Company  has  never  paid cash  dividends  on its  Common  Stock.
Furthermore,  the POR pertaining to the Predecessor's  emergence from bankruptcy
prohibit the Company from paying any dividends to its common  shareholders until
the sum of $1,350,000 shall have been paid to the  Predecessor's  pre-bankruptcy
unsecured  creditors.  As of  December  31,  2000,  no payment to the  unsecured
creditors has been made.  Further,  in accordance  with the POR, the Predecessor
became  obligated to pay certain  portions of its net income in  satisfaction of
said payment obligation to its pre- bankruptcy  creditors.  Upon consummation of
the Merger,  the Company became  obligated,  by operation of law, to comply with
such payment obligation and dividend payment prohibition,  among other operating
restrictions.  The Company  does not  anticipate  paying cash  dividends  on the
Common Stock in the  foreseeable  future as it intends to retain future earnings
to finance the growth of the business.  The payment of future cash  dividends on
the Common  Stock will depend on such  factors as earnings  levels,  anticipated
capital  requirements,  the operating and financial condition of the Company and
other factors deemed relevant by the Board of Directors.

     Item 7.
     Financial Statements

     See pages F-1 to F-19

     Item 8.
     Changes in and Disagreements with Accountants on Accounting and Financial
     Disclosure.

      None


                                                            11

<PAGE>



                                                         PART III


          Item 9.
          Directors, Executive Officers and Control Persons.

          Executive Officers and Directors

          The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

          Name                                           Age                                          Position

          Boaz Harel.........                          37                              Chairman of the Board, Director

          M. Albert Nissim...                          67                              President, Director

          David W. Sass......                          65                              Secretary

          Richard Fried......                          54                              Director

          Tamar Lieber.......                          58                              Director

          Lynda Davey........                          46                              Director

          Joseph Samuels.....                          70                              Director

</TABLE>

               Boaz  Harel  was  appointed  to the  Board in  November  1996 and
               elected as  Chairman  of the Board on July 2, 1997.  From 1991 to
               1993,  Mr. Harel was the founder and managing  director of Mashik
               Business and Development Ltd., an engineering consulting company.
               From 1993 to 1997,  Mr. Harel had been the  Managing  Director of
               Leedan  Business  Enterprise  Ltd.   ("Leedan"),   which  is  the
               beneficial  owner of 39.3% of the Company's  Common Stock.  Since
               January 1994, Mr. Harel has served as a member of the Supervisory
               Board of ICTS  International  N.V. and since  September 1996, Mr.
               Harel has served as the  Chairman  of ICTS USA (1994),  Inc.,  an
               indirect  subsidiary  of  Leedan.  Mr.  Harel  was a  Co-Managing
               Director  of Leedan  International  Holdings  B.V.,  a  principal
               shareholder   of  the  Company   and  an  indirect   wholly-owned
               subsidiary of Leedan.

               M. Albert Nissim was appointed as the President of the Company in
               January 1997 and was elected to the Board on September  25, 1997.
               He has  served as  Secretary  of ICTS  International  N.V.  since
               January 1996. Mr. Nissim has also served as President of ICTS USA
               (1994),  Inc. since January 1994. From 1994 to 1995, he served as
               Managing Director of ICTS International B.V. Mr. Nissim served as
               the President of Harel & Partners from 1991 to 1994. From 1990 to
               the  present,  he has been the Vice  President  and a director of
               Tuffy Associates  Corp., an automotive  repair franchise  company
               affiliated  with Mr. Ezra Harel,  the brother of Boaz Harel.  Mr.
               Nissim is also a  Co-Managing  Director  of Leedan  International
               Holdings B.V., a principal  shareholder of the Company.  In April
               1997, Mr. Nissim was appointed as one of the Company's  designees
               on the Board of  Directors  of Pioneer Home  Funding,  L.L.C.,  a
               subsidiary of the Company.

                                                            12

<PAGE>



               David W. Sass has been a Director since April,  1998 and has been
               a practicing  attorney in New York City for the past 40 years and
               is  currently a senior  partner in the law firm of  McLaughlin  &
               Stern, LLP, securities counsel to the Company. Mr. Sass is also a
               director  of  BarPoint.Com,  Inc. a company  that will  operate a
               patent pending search engine and software  technology that allows
               consumers  to search  for  product  specific  information  on the
               Internet and a member and Vice  Chairman of the Board of Trustees
               of Ithaca College.  Mr. Sass earned a B.A. from Ithaca College, a
               J.D.  from  Temple  University  School of Law and an  L.L.M.  (in
               taxation) from New York University School of Law.

               Richard  Fried  was  appointed  to  the  Predecessor's  Board  in
               February 1994 and served as Vice-  President of the  Predecessor.
               Upon  consummation  of the Merger in November  1994,  he became a
               director of the Company.  Since June 1991 Mr. Fried has served as
               President  of Medical  Systems,  Inc.,  an  application  software
               development   company,   of  which   he  has  been  a   principal
               shareholder.  From  February  1993, he has served as President of
               Montgomery Associates,  Inc., a corporation  wholly-owned by him,
               which is engaged in business as an importer-exporter. Since April
               1993, Mr. Fried has been a principal shareholder,  and has served
               as  President,  of Sea Change  Systems,  Inc.,  a software  tools
               development company. From April 1993 to May 1994, he was a Branch
               Manager of LPL Financial Services,  a stock brokerage firm, which
               is an NASD member firm. Since November 1994, Mr. Fried has been a
               controlling  shareholder and has served as President of SMARTpay,
               Inc.,  a  collection  service.  From  April 1995 he has served as
               President of Centennial Systems,  Inc., a software  distribution,
               sales and service  firm of which he is a  principal  shareholder.
               Since October 1996, Mr. Fried has been a controlling shareholder,
               and has  served as  President,  of  Leeward  Software,  Inc.,  an
               application  software  developer.  From  October 1996 he has also
               served as  President  of  Windward  Software,  Inc.,  a materials
               management software  intellectual property company of which he is
               also a principal shareholder. From December 1996 he has served as
               President of Strategic Reporting Systems, Inc., a database report
               generation software development and distribution firm of which he
               is a principal  shareholder.  From April  1997,  he has served as
               managing  director of HYCOM USA, Inc., an international  software
               development and distribution  company, of which he is a principal
               shareholder.

               Tamar Lieber was appointed to the Board in June 1995.  Ms. Lieber
               has been engaged in practice as a senior  psychotherapist  at the
               Center for  Preventive  Psychiatry in White  Plains,  New York, a
               non-for profit community mental health clinic,  for more than the
               past five years.

               Lynda Davey was elected to the Board on September  25, 1997.  Ms.
               Davey has  served as the  President  of Avalon  Group,  Ltd.  And
               Chairman of Avalon  Securities,  Ltd., private investment banking
               firms,  since April,  1992. From April,  1988 throughout 1991 Ms.
               Davey was  Managing  Director and head of  investment  banking at
               Tribeca Corporation, a New York merchant bank. Prior to 1988, Ms.
               Davey was  Vice-President  of the Merchandise and Retail Group in
               the corporate  finance  department  of Salomon  Brothers Inc. Ms.
               Davey also serves as a director of Tuffy Associates Corp. And the
               Center  for  Design   Innovation  of  the  Fashion  Institute  of
               Technology. Ms. Davey is a registered architect.

               Joseph  Samuels  has  served  as a  president  and  is  the  sole
               shareholder  of Fulton  Properties of Calif.  Inc., an investment
               corporation engaged in acquisition, development and management of
               real  estate for more than the past five years.  Mr.  Samuels has
               also served as President and is the sole shareholder of Goldsboro
               Properties Inc., a real estate holding corporation, for more than
               the past five years.


                                                            13

<PAGE>




          Item 10.
          Executive Compensation.


     The following table sets forth  compensation  awarded to, earned by or paid
to executives of the Company. During such fiscal year, the Company did not grant
any  restricted  stock  awards  or  stock  appreciation  rights  to  any  of its
executives.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                           Annual Compensation                                Awards
                         -------------------
    Name and
Principal Position      Fiscal Year       Salary($)         Bonus            Other Annual              Securities
------------------      -----------       ---------                          Compensation ($)          Underlying
                                                                             ----------------          Option
Boaz Harel*              2000               $100,000
Chairman of              1999               $100,000
the Board                1998(1)            $100,000         $15,000                                      50,000


M. Albert Nissim**
President                2000               $114,000
                         1999               $118,385
                         1998(1)            $118,654         $12,000                                      25,000


John O'Brien***
Chief Financial          2000               $0
 Officer                 1999               $122,083
                         1998(1)            $58,513

David W. Sass            2000               $0
Secretary                1999               $0
                         1998               $0

</TABLE>

*     Commenced as Chairman on July 2, 1997.
**    Commenced  service as  President of the Company in the fourth quarter of
      the 1996 fiscal year.
***   Commenced service as Chief Financial Officer in the second quarter of the
      1998 fiscal year and terminated employment in September, 1999.
****  Commenced  service as Secretary  in the second  quarter of the 1998 fiscal
      year.

(1)  For the Year Ending December 31, 1998


Compensation of Directors.

The Directors of the Company  receive cash  compensation  of $300 per meeting in
his or her capacity as a director  when there is a  telephonic  meeting and $500
when the Board meets in person.


                                                       14

<PAGE>



Options Issued to Executives.

 The table below sets forth  information  regarding  option  grants to executive
officers and Directors of the Company.

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                            Number of Exercise Price
Name                          Options Granted              Per Share                     Expiration Date

M. Albert Nissim(1)           45,000                       $ 4.50                        February, 2002
                              25,000                       $10.00                        October, 2002

Boaz Harel(1)                  7,500                       $2.25                         March, 2002
                              50,000                       $4.75                         October, 2002

Richard Fried(1)               7,500                       $2.25                         March, 2002
                              12,000                       $4.25                         October, 2002

Tamar Lieber(1)                7,500                       $2.25                         March, 2002
                              12,000                       $4.25                         October, 2002

Joseph Samuels(1)             12,000                       $4.25                         October, 2002


Lynda Davey(1)                12,000                       $4.25                         October, 2002


(1)   Options vested at the rate of 1/3rd each year.

</TABLE>


Employment Agreements.

In July 1997,  the Company  extended  the  Employment  Agreement  with M. Albert
Nissim as President for an indefinite  period, on a part-time basis, at a salary
of $6,000  (amended to $9,500) per month.  The  Agreement  may be  terminated by
either  party on not less than 90 days prior  notice.  On May 12,  1998,  Albert
Nissim's  compensation was increased to $9,500 per month effective April 1, 1998
in consideration of his  contributions to the Company.  In addition,  Mr. Nissim
was awarded a $12,000 bonus payable in the second  quarter in  consideration  of
the Company's performance.



                                                        15

<PAGE>



Boaz and Leedan Agreement

The Company has approved a  compensation  plan for Mr. Boaz Harel and/or  Leedan
Business  Enterprises,  Ltd.  ("Leedan"),  the company which provides management
services to the Company by making Mr. Harel available to the Company.  Leedan is
also a  principal  shareholder  of the  Company.  The  plan  provides  aggregate
remuneration  to Mr.  Harel  and/or  Leedan of $100,000 per annum plus 5% of the
Company's net income  pre-tax above  $1,000,000  annually.  Leedan and Mr. Harel
will determine how such  compensation  will be divided  between them. On May 12,
1998 Boaz Harel was awarded a $15,000  bonus,  payable in the second  quarter in
consideration of the Company's performance.


Item 11.    Security Ownership of Certain Beneficial Owners and Management

The following  table sets forth the holdings of the Common Stock as of March 23,
2001 by each person or entity known to the Company to be the beneficial owner of
more than five percent (5%) of the outstanding shares of Common Stock and by (1)
each director and named executive  officer;  and (2) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                              Number of Shares                  Percent
Name                      Title                               of Common Stock                   of Class
----                      -----                               ---------------                   ---------

ICTS International N.V.                                         150,000                            4.4%
Biesboch 225
1181 JC Amstelveen
The Netherlands

Lancer Partners L.P.                                             212,130                           6.2%
200 Park Avenue, Ste 3900
New York, NY 10166

Leedan Business
  Enterprise Ltd.                                                1,338,570(1)                      39.3%
7 Yad Harytzim
4th Floor
Industrial Zone
Herzliya, Israel 46120

Rogosin International B.V.                                       265,000(3)                        7.7%
One Rockefeller Plaza,
Ste. 2412
New York, NY 10020

Boaz Harel               Director                                 57,500(2)                        *
1 Rockfeller Plaza
Suite 2412
New York, New York
10020

SHR Finanz Gm                                                    200,000                           5.8%
32 Ost Weststrasse
Rostock 18132
Germany


                                                            16

<PAGE>



                                                              Number of Shares                  Percent
Name                      Title                               of Common Stock                   of Class
----                      -----                               ---------------                   ---------

M. Albert Nissim         President and                             73,200(4)                       *
One Rockefeller Plaza    Director
Suite 2412
New York, NY

Tamar Lieber             Director                                 139,250(5)                     3.5%
160 W. 66th Street
Apt. 49B
New York, NY 10023

Richard Fried            Director                                 19,500(5)                        *
33 Marian Road
Marblehead, MA 01945

Lynda Davey              Director                                17,250(6)                          *
1375 Broadway
6th Floor
New York, NY 10018

Joseph Samuels           Director                                35,650(6)                          *
321 24th Street
Santa Monica, CA 90402

Directors and
Executive
Officers as a
group (6 persons)                                                1,479,530(7)                     43.4%

*        Less than 1%



(1)      Leedan International Holdings B.V., which together with Leedan Systems & Properties
         Promotion (1003) Ltd. Holds 39.3% of the issued and outstanding Common Stock of the
         Company, is an indirect wholly-owned subsidiary of Leedan Business. Certain members
         of the family of Mr. Boaz Harel, a director of the Company, collectively, own
         approximately 50% of the outstanding shares of Leedan Business.  Mr. Boaz Harel no
         longer is a shareholder of Leedan.

(2)      Includes  a three  year  option for  50,000,  vesting  1/3rd each year,
         exercisable at $4.75 per share and a three year option for 7,500 shares
         exercisable at $2.25 per share, vesting 1/3rd each year.

(3)      An affiliate to Leedan Business Enterprises Ltd. Shares were purchased in a
         private transaction.

(4)      Includes  45,000 shares of Common Stock  exercisable at $4.50 per share
         which Mr. Nissim has the right to acquire  within 60 days from the date
         hereof  upon  exercise  of an  option  held by him and  25,000  options
         exercisable at $10.00 per share at the rate of 1/3rd per year for three
         years.

(5)      Includes 7,500 shares as part of a 3 year option,  exercisable at $2.25
         per share,  vesting  at the rate of 1/3rd per year for three  years and
         12,000  shares  exercisable  $4.25 per vesting at the rate of 1/3rd per
         year for three years.

(6)      Includes  12,000 shares as part of a three year option,  exercisable at
         $4.25 per share, vesting at the rate of 1/3rd per year.

(7)      Does not include any options  referred to in notes (2),  (3),  (4), (5)
         and (6)  hereof,  but  included  the  shares  owned by Leedan  Business
         Enterprises, Ltd.

</TABLE>
                                                            17

<PAGE>



Item 12.   Certain Relationships and Related Transactions Certain Transactions.

         On November  18, 1998 a  settlement  was reached  with a guarantor of a
mortgage banking  customer's  defaulted line of credit. The guarantor was also a
company stockholder. Pursuant to the settlement, an entity which is an affiliate
of Leedan accepted $530,000 of the guarantor's recognized debt to the Company in
exchange for the guarantor's shares in the Company. This entity paid the Company
$176,667 and issued two  installment  notes of $176,667 each with maturity dates
of August 23, 1999 and May 23, 2000, respectively.  These notes bear interest at
a rate of 8.25% per annum and are payable quarterly commencing three months from
the date of issuance which was November 23, 1998.

                  On  November  18,  1998,  a  settlement  was  reached  with  a
guarantor  of a  mortgage  banking  customer's  defaulted  line of  credit.  The
guarantor was also a Company  stockholder.  Pursuant to the settlement,  Rogosin
Business Enterprises Ltd., accepted $530,000 of the guarantor's  recognized debt
to the Company in trade for the guarantor's shares in the Company.  Furthermore,
pursuant to the  settlement,  the guarantor  issued two additional  notes in the
amount of $735,102 to the Company.

                  Pursuant to the  settlement  as stated  above,  the  guarantor
issued to the Company  two  installment  notes in the  amounts of  $265,103  and
$470,000,  respectively.  These notes bear interest at a rate of 8.25% per annum
and are payable  quarterly  commencing  three months from November 18, 1998, the
date of issuance of the notes.  Both notes mature November 18, 2000 but have not
yet been fully paid.

         On September 14, 1998 Joseph Samuels, a Director of the Company and two
affiliates of Leedan Business  Enterprises  Ltd. loaned to the Company  $100,000
and $550,000 and $76,000,  respectively. The loan was in connection to the Ninth
Amendment to the Credit  Agreement with Bank One to authorize the infusion of an
aggregate of $726,000 in the form of the  Company's 11%  Subordinated  Debenture
for a term until a new lending facility is in place to replace Bank One.

         On April 2, 1997 and April 4, 1997, the Company issued  unsecured loans
of  $400,000  and  $600,000,  respectively,  to  Rogosin  Converters,  Inc.,  an
affiliate of the Company. Members of the family of Mr. Boaz Harel, a director of
the Company,  have an indirect controlling interest in Rogosin Converters,  Inc.
The loans were  guaranteed by Leedan  International  B.V., a shareholder  of the
Company.  The  Company  earned  interest  of 12% per annum on the  loans,  which
interest was paid monthly.  The principal and accrued interest on the loans were
paid in full on June 20, 1997.


                                                        18

<PAGE>



Item 13. Exhibits & Reports on Form 8-K

 (A) The Following financial statements are included in Part II, Item 7:

      Independent  Auditors' Report by Lazar,  Levine & Felix, LLP for the
       two years ended December 31, 2000

      Balance Sheets as of December 31, 2000 and 1999.

      Statements of Operations for the two years ended December 31, 2000.

      Statements of Comprehensive  Income for the two years ended December 31,
       2000.

      Statements of Stockholders'  Equity for the two years ended December 31,
       2000.

      Statements of Cash Flows for the two years ended December 31, 2000.

      Notes to Financial Statements.

Schedules  are  omitted  for the  reason  that  they are not  required,  are not
applicable,  or the required information is included in the financial statements
or notes thereto.

            (B) Reports on Form 8-K. Not applicable.

            (C)  Exhibits.  The  following  exhibits  are  filed  as part of the
Company's  report.  Where  such  filing is made by  incorporation  by  reference
(I/B/R) to a previously  filed statement or report,  such statement or report is
identified in parenthesis.

                               Official Exhibit

               Number    Description

               [3.1] Certificate of Incorporation of the Company.

               [3.2]  Certificate  of Amendment of the Company's  Certificate of
               Incorporation.

               [3.3] Certificate of Amendment of Certificate of Incorporation of
               the Company.

               [3.4] By-Laws of the Company.

               [10.1] Credit  Agreement  between Bank One,  Texas,  N.A. and the
               Company, dated March 31, 1997.

               11 Earnings Per Share



                                                        19

<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
Pioneer Commercial Funding Corp.


We have audited the accompanying  balance sheets of Pioneer  Commercial  Funding
Corporation (a New York  corporation)  as of December 31, 2000 and 1999, and the
related statements of operations, changes in stockholders' equity (deficit), and
cash  flows  for the  years  then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Pioneer  Commercial  Funding
Corporation  as of December 31, 2000 and 1999, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note C to the
financial  statements,  the  Company is  winding  down its'  mortgage  warehouse
lending  business.   The  Company  has  also  suffered   recurring  losses  from
operations.  These factors raise substantial doubt about its ability to continue
as a  going  concern.  Management's  plans  regarding  those  matters  also  are
described in Note C. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainty.



                                                     LAZAR LEVINE & FELIX LLP

New York, New York
February 13, 2001

                                      F-1
<PAGE>
                        PIONEER COMMERCIAL FUNDING CORP.
                                 BALANCE SHEETS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                   - ASSETS -
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                                        2000                1999
CURRENT ASSETS:
     Cash and cash equivalents ...............................................................         $  738,937         $1,979,395
     Mortgage warehouse loans receivable, net of allowance for loan losses ...................            582,254          1,572,550
     Loans held for resale, net of allowance for loan losses .................................               --              236,179
     Receivable for loans shipped ............................................................          1,716,969          1,716,969
     Accrued interest and fee receivable .....................................................             41,705            208,256
     Notes receivable, net of reserve ........................................................            450,291          1,067,696
     Prepaid and other current assets ........................................................             50,302            138,688
                                                                                                       ----------         ----------

TOTAL CURRENT ASSETS .........................................................................          3,580,458          6,919,733

OTHER ASSETS:
     Investment securities available for sale ................................................            108,750            108,750
     Other assets ............................................................................             32,199            192,282
                                                                                                       ----------         ----------

TOTAL ASSETS .................................................................................         $3,721,407         $7,220,765
                                                                                                       ==========         ==========


                                           - LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)-

CURRENT LIABILITIES:
     Mortgage warehouse loans payable ........................................                 $3,261,010                 $4,721,817
     Accounts payable and accrued expenses ...................................                    132,965                    152,131
     Accrued interest and fees ...............................................                    886,186                    511,349
     Deferred loan fees ......................................................                     29,000                     29,000
     Deferred legal fees .....................................................                     65,395                     65,395
                                                                                               ----------                 ----------

TOTAL CURRENT LIABILITIES ....................................................                  4,374,556                  5,479,692

SUBORDINATED DEBT ............................................................                  1,000,000                  1,626,000
                                                                                               ----------                 ----------

TOTAL LIABILITIES ............................................................                  5,374,556                  7,105,692
                                                                                               ----------                 ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
     Common  stock - $.01 par  value;  authorized  20,000,000  shares;  3,403,663  and
      2,771,134 shares issued and outstanding for 2000 and 1999, respectively                      34,037                    27,712
     Additional paid-in capital ................................................               16,647,520                14,584,663
     Accumulated deficit .......................................................              (18,218,456)              (14,381,052)
     Accumulated other comprehensive income (loss) .............................                 (116,250)                 (116,250)
                                                                                             ------------              ------------

TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ...........................................               (1,653,149)                  115,073
                                                                                             ------------              ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ...........................             $  3,721,407              $  7,220,765
                                                                                             ============              ============

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

                                      F-2
<PAGE>



                        PIONEER COMMERCIAL FUNDING CORP.
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


                                                                                                        2000                1999
INCOME:
     Interest income .............................................................             $   200,612              $ 1,553,085
     Commissions and facility fees ...............................................                    --                     59,458
     Processing fees .............................................................                  44,400                  476,743
                                                                                               -----------              -----------

TOTAL INCOME .....................................................................                 245,012                2,089,286
                                                                                               -----------              -----------

INTEREST AND FEE COSTS:
     Interest expense - warehouse and lines of credit ............................                 491,423                1,470,003
     Bank charges and facility fees ..............................................                   4,094                   59,228
     Bank processing fees ........................................................                      16                   34,606
                                                                                               -----------              -----------

TOTAL INTEREST AND FEE COSTS .....................................................                 495,533                1,563,837
                                                                                               -----------              -----------

NET INTEREST AND FEE (LOSS) INCOME ...............................................                (250,521)                 525,449

     Loan loss and other provisions ..............................................               1,157,401                2,442,899
                                                                                               -----------              -----------
                                                                                                (1,407,922)              (1,917,450)
                                                                                               -----------              -----------
OTHER OPERATING EXPENSES:
     Compensation and benefits ...................................................                 310,100                  850,435
     Depreciation and amortization ...............................................                    --                    144,508
     Professional fees ...........................................................               1,850,763                1,038,257
     Utilities ...................................................................                  11,318                   27,954
     Rent ........................................................................                 286,270                  148,840
     Repairs and maintenance .....................................................                    --                      2,826
     Other .......................................................................                 231,839                  457,302
                                                                                               -----------              -----------

TOTAL OTHER OPERATING EXPENSES ...................................................               2,690,290                2,670,122
                                                                                               -----------              -----------

LOSS FROM OPERATIONS .............................................................              (4,098,212)              (4,587,572)
                                                                                               -----------              -----------

OTHER INCOME AND (EXPENSE):
     Interest income - other .....................................................                  37,475                   53,002
     Interest expense - other ....................................................                    --                     (2,749)
     Litigation settlement .......................................................                 219,828                     --
     Miscellaneous income ........................................................                   5,504                    2,579
     Gain from sale of fixed assets ..............................................                    --                     90,577
                                                                                               -----------              -----------

TOTAL OTHER INCOME AND EXPENSE ...................................................                 262,807                  143,409
                                                                                               -----------              -----------
LOSS BEFORE TAXES ................................................................              (3,835,405)              (4,444,163)

     Provision for taxes .........................................................                   1,999                    1,099
                                                                                               -----------              -----------

NET LOSS .........................................................................             $(3,837,404)             $(4,445,262)
                                                                                               ===========              ===========
BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK .................................             $     (1.31)             $     (1.60)
                                                                                              ===========              ===========
WEIGHTED AVERAGE NUMBER OF SHARES ................................................               2,929,266                2,771,134
                                                                                               ===========              ===========

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

                                      F-3
<PAGE>
                        PIONEER COMMERCIAL FUNDING CORP.
                       STATEMENTS OF COMPREHENSIVE INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999



                                                                                                   2000                1999

NET LOSS                                                                                       $   (3,837,404)     $   (4,445,262)

     Change in unrealized gain on investment in securities available for sale                              -             (210,000)
                                                                                            -----------------   -----------------

COMPREHENSIVE NET LOSS                                                                         $   (3,837,404)     $   (4,655,262)
                                                                                               ===============     ==============


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

                                      F-4
<PAGE>
                        PIONEER COMMERCIAL FUNDING CORP.
             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


                                                                                                Other
                                                        Additional         Accumulated     Comprehensive      Total
                                             Common      Paid-In             Deficit        Income (Loss)   Stockholders'
                                             Stock       Capital                                            Equity (Deficit)

Balance, December 31, 1998 ..............$   27,712      $14,584,663     $(9,935,790)     $    93,750      $ 4,770,335

Change in unrealized gain on
  investment in securities for sale ......      --              --              --           (210,000)        (210,000)

Net loss ................................(4,445,262)            --        (4,445,262)
                                         -----------      -----------     -----------      -----------      -----------

Balance, December 31, 1999                   27,712        14,584,663    (14,381,052)        (116,250)         115,073

Issued  168,334 shares of common stock
  for cash on September 28, 2000              1,683           503,319          -                  -            505,002

Issued  200,000 shares of common stock
  for cash on October 3, 2000                 2,000           598,000          -                  -            600,000

Converted  loans plus accrued  interest in
the aggregate amount of $792,586 to
264,195 shares of common stock
on September 30, 2000                         2,642           789,944          -                   -           792,586

Issued  104,630  warrants on September
  30, 2000                                        -           171,594          -                   -           171,594

Net loss                                          -                -      (3,837,404)              -        (3,837,404)
                                        ------------      ------------    -------------       ----------    -----------

Balance, December 31, 2000                $  34,037      $ 16,647,520   $(18,218,456)      $   (116,250)   $ (1,653,149)
                                           =========     ============   ============         ===========   =============

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

                                      F-5
<PAGE>

                        PIONEER COMMERCIAL FUNDING CORP.
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


                                                                                                    2000                 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss ..........................................................................         $ (3,837,404)         $ (4,445,262)
     Adjustments  to  reconcile  net loss to net  cash
     (used  in)  provided  by  operating  activities:
        Depreciation and amortization ..................................................                 --                 144,508
        Loan loss reserve and provision for bad debts ..................................              930,193             1,782,719
        Gain from sale of fixed assets .................................................                 --                 (90,577)
        Note receivable written off ....................................................                 --                  75,000
        Value of warrants issued .......................................................              171,594                  --
     (Increase) decrease in:
        Mortgage warehouse loans receivable ............................................              689,786            29,935,861
        Loans held for resale ..........................................................               80,472               160,300
        Accrued interest receivable ....................................................               61,125               617,084
        Prepaid expenses ...............................................................               88,387                41,815
        Notes receivable ...............................................................              249,854               603,813
        Other assets ...................................................................              159,083               282,781
     Increase (decrease) in:
        Accrued interest payable .......................................................              541,423               (61,515)
        Due to mortgage banking companies ..............................................                 --                (220,228)
        Accounts payable and accrued expenses ..........................................              (19,166)             (266,449)
                                                                                                 ------------          ------------
          Net cash (used in) provided by operating activities ..........................             (884,653)           28,559,850
                                                                                                 ------------          ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of fixed assets ..........................................................                 --                (113,773)
     Net proceeds from sale of fixed assets ............................................                 --                 792,638
                                                                                                 ------------          ------------
          Net cash provided by investing activities ....................................                 --                 678,865
                                                                                                 ------------          ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net (decrease) in borrowings used in operations ...................................           (1,460,807)          (28,663,108)
     Payment of subordinated debt ......................................................                 --                (100,000)
     Net proceeds from issuance of stock ...............................................            1,105,002                  --
                                                                                                 ------------          ------------
          Net cash (used in) financing activities ......................................             (355,805)          (28,763,108)
                                                                                                 ------------          ------------

NET (DECREASE) INCREASE IN CASH ........................................................           (1,240,458)              475,607

     Cash and cash equivalents at the beginning of year ................................            1,979,395             1,503,788
                                                                                                 ------------          ------------

CASH AND CASH EQUIVALENTS AT THE END OF YEAR ...........................................         $    738,937          $  1,979,395
                                                                                                 ============          ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Interest ..........................................................................         $       --            $  1,540,309
                                                                                                 ============          ============
     Income taxes ......................................................................         $      1,999          $      1,099
                                                                                                 ============          ============

NONCASH FINANCING ACTIVITIES:
     Conversion of mortgage loans receivable to notes receivable .......................         $       --            $    658,072
     Conversion of loans payable and accrued interest to common stock ..................              792,586                  --

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

                                      F-6
<PAGE>
                        PIONEER COMMERCIAL FUNDING CORP.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE A - NATURE OF OPERATIONS:

Pioneer  Commercial  Funding  Corp.  (the  "Company"),  formerly  known  as  PCF
Acquisition  Corp.  ("PCF") is a New York corporation  which merged with Pioneer
Commercial  Funding Corp. (a New York  corporation)  ("Pioneer") on November 23,
1994.  PCF was  organized  and  commenced  operations  on March 8,  1994 for the
express purpose of raising  capital  through an initial public offering  ("IPO")
for the benefit of Pioneer.

In 1997, the Company changed its year end from March 31 to December 31.

Pioneer's Reorganization:

On  April  2,  1993,  Pioneer  emerged  from  Chapter  11 of the  United  States
Bankruptcy  Code  pursuant  to  a  confirmed  First  Amended  Modified  Plan  of
Reorganization  ("POR").  From June 14, 1993, when the Company  commenced active
operations following its emergence from Chapter 11 until fiscal year ended March
31, 1997, it operated with limited  financing  sources and  substantially all of
the  business  conducted  by the Company was with one to four  mortgage  banking
companies.

Operations:

The Company was engaged in the  business  of mortgage  warehouse  lending  which
primarily  consists  of  providing  lines of credit,  in the form of  "warehouse
financing,"  to mortgage  banking  companies to enable them to close real estate
loans  on  single  family,  owner-occupied  dwellings  and  sell  such  loans to
investors in the  secondary  market.  The Company  obtained its funds to provide
such  financing  from  third-party  funding  sources with which it had available
lines of credit and from its own sources.  The Company's  loans  receivable from
the mortgage banking companies are secured by an interest in the underlying real
property  which are then assigned to the  Company's  funding  sources.  Investor
groups who purchase the mortgages  (which  generally occurs within 10 to 45 days
from the time the  Company  makes the loan) remit the  proceeds  directly to the
Company in  satisfaction  of the loan and interest  receivable from the mortgage
banking company.  The Company will  simultaneously  use the funds to pay off its
loan and accrued interest payable to its funding sources.  The Company's primary
sources  of income  from  operations  were  processing  fees  received  from the
mortgage  banking  company for each loan  financed and the interest  rate spread
(usually 1.75%) between the rate at which the Company  borrowed from its funding
source and the rate it charged  the  mortgage  banking  company.  The  Company's
customers fund loans throughout the United States.

The Company's operations were subject to certain risks which are inherent to its
industry.  Its results of  operations  depended  heavily upon the ability of its
mortgage banking customers to originate mortgage loans. This ability was largely
dependent  upon general  economic  conditions in the  geographic  areas that the
Company serves.  Because these general economic conditions fluctuate,  there was
no  assurance  that  prevailing  economic  conditions  would  always  favor  the
Company's  business and  operations.  In addition,  mortgage  banking firms have
historically  experienced  a  wide  range  of  financial  results,  from  highly
profitable  to highly  unprofitable.  These  financial  results were due to many
factors which affect most, if not all, firms in the mortgage banking business at
about the same time. Three of these factors which predominate  were:  changes in
mortgage interest rates, the availability of affordable credit, and the state of
the domestic economy.  These three factors,  among others, affect the demand for
new and used  housing  and thus the  demand for  financing  and  refinancing  of
mortgages. Lastly, although the Company's mortgage banking customers should have
a commitment for each loan from an approved third-party agency ("Agency") before
the Company would extend mortgage  warehouse  financing,  there was no guarantee
that the Agency would,  in fact,  accept the mortgage loan when delivered due to
certain deficiencies in the loan or other unanticipated  circumstances which may
exist.

                                      F-7
<PAGE>
                        PIONEER COMMERCIAL FUNDING CORP.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE A - NATURE OF OPERATIONS (Continued):

Operations (Continued):

If for any reason an Agency did not accept the mortgage  loan, and the Company's
mortgage  banking  customer was unable to pay back its obligation to the Company
through other means, the Company would find itself the owner of a long-term loan
of less than market value instead of short-term bridge financing receivable.

In September  1999, the Company  pursuant to an Asset Purchase  Agreement  dated
July 30, 1999 with Princap Mortgage Warehouse,  Inc. ("PMW"), sold to PMW all of
its  equipment,  furniture  and  other  physical  assets  and all  its  computer
operating systems for the sum of $800,000. As a result of this sale, the Company
moved its  operations  to New York and no  longer  has any  continuing  business
operations  other  than  winding up its  operations  which  includes  collection
activities with respect to outstanding loans.


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Use of Estimates:

The  accompanying  financial  statements,  which are prepared in conformity with
generally accepted accounting  principles,  require the use of estimates made by
management.  The most  significant  estimates  with  regard  to these  financial
statements  relate  to the  valuation  allowance  for  estimated  losses  on the
disposition  of stale loans and  uncollectable  interest and fees,  for deferred
income  taxes and the  estimated  obligations  due under the POR,  as more fully
described in Notes M and O,  respectively.  Actual results may differ from those
assumed in management's estimates.

Cash and Cash Equivalents:

Cash  equivalents  include time  deposits  and highly  liquid  investments  with
original maturities of three months or less.

Income Taxes:

The Company  utilizes SFAS 109  "Accounting for Income Taxes" which requires use
of the  asset and  liability  approach  of  providing  for  income  taxes.  This
statement  requires  recognition of deferred tax  liabilities and assets for the
expected  future  tax  consequences  of events  that have been  included  in the
financial statements or tax returns.  Under this method deferred tax liabilities
and  assets  are  determined  based on the  differences  between  the  financial
statement  and tax basis of assets and  liabilities  using  enacted tax rates in
effect for the year in which the  differences  are  expected to  reverse.  Under
Statement 109, the effect on deferred tax assets and  liabilities of a change in
tax rates is recognized in income in the period that includes the enactment date
(see also Note K).

Revenue Recognition:

The Company recognizes revenue at the time a mortgage loan receivable is funded.
Interest income is recorded on the accrual basis in accordance with the terms of
the customer loan and security agreement.

Loan Fees:

Loan  processing  fees are  capitalized  and  recognized as an adjustment of the
yield of the related loan in accordance with SFAS No. 91.

                                      F-8
<PAGE>
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Basic and Diluted Earnings (Loss) Per Share of Common Stock:

Net earnings or loss per share is  calculated in  accordance  with  Statement of
Financial  Standards No. 128, Earnings Per Share ("SFAS 128"),  which superseded
APB  Opinion No. 15.  Basic net  earnings  per share is based upon the  weighted
average number of common shares outstanding. Diluted earnings per share is based
on the assumption that all stock options and warrants were exercised.

For the years ended  December 31, 2000 and 1999, the exercise price exceeded the
average sale price for most options and  warrants,  and the impact of conversion
of the  warrants  and  options  would  have  been  antidilutive  or  immaterial.
Therefore,  the options and warrants were not  considered in the  calculation of
earnings (loss) per common share.

Concentration of Credit Risk/Fair Value:

Financial  instruments that potentially  subject the Company to concentration of
credit risk consist principally of cash investments and mortgage warehouse loans
receivable.

The  Company  maintains,  at times,  deposits  in  federally  insured  financial
institutions  in excess of federally  insured  limits.  Management  monitors the
soundness  of these  financial  institutions  and  feels the  Company's  risk is
negligible.

Management  believes that concentrations of credit risk with respect to mortgage
warehouse loans receivable are limited due to the underlying  assignment of note
and  deed of  trust  on  residential  real  estate  collateral  for  each  loan,
guarantees  by  mortgage  banking   customer   principals,   security   deposits
approximating  10% of each  customer's  line of credit  and UCC  filings  on the
assets of the Company's mortgage banking customers.

As of December 31, 2000 and 1999,  the fair value of cash and cash  equivalents,
receivables, obligations under accounts payable and debt instruments approximate
the carrying value.

Marketable Securities:

At December 31, 2000 and 1999,  marketable  securities have been  categorized as
available for sale and, as a result, are stated at fair value in accordance with
Statement of Financial Standards No. 115, "Accounting for Certain Investments in
Debt and  Equity  Securities".  Unrealized  gains and  losses  are  included  in
shareholders' equity as other comprehensive income (loss).

Fixed Assets:

Fixed assets (which were sold during 1999) were  recorded at cost.  Depreciation
of fixed assets was provided on a straight-line basis as follows:

    Furniture and equipment                          3 - 10 years
    Proprietary computer software                         5 years

Maintenance  and repairs are expensed as incurred.  Leasehold  improvements  are
amortized over the useful life of the asset or the lease,  whichever is shorter.
Proprietary  computer software consisted of a set of computer programs that were
developed internally by the Company for the use in its business and were not for
resale to the other mortgage finance companies (see also Note A).

Depreciation and amortization  expense for the years ended December 31, 2000 and
1999 aggregated $-0- and $144,508, respectively.

                                      F-9
<PAGE>
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Advertising Costs:

Advertising costs,  which are included in general and  administrative  expenses,
are  expensed  as  incurred.  For the years  ended  December  31, 2000 and 1999,
advertising costs aggregated $-0- and $3,338, respectively.

Comprehensive Income:

In 1997, the Company  adopted  Statement of Financing  Accounting  Standards No.
130,  "Reporting  Comprehensive  Income" (SFAS 130), which establishes new rules
for the reporting and display of other comprehensive  income and its components.
SFAS 130 requires unrealized gains or losses on the Company's available-for-sale
securities to be included in other comprehensive income.

Segments of an Enterprise and Related Information:

In 1998, the Company adopted Financial  Accounting Standards Board Statement No.
131,  "Disclosures  about  Segments of an Enterprise  and Related  Information",
which establishes standards for reporting on operating segments. The Company has
determined  that no  operating  segment  outside  of its core  business  met the
quantitative  thresholds  for  separate  reporting.   Accordingly,  no  separate
information has been reported.

Employee stock options:

The Company  accounts for its stock option plans and its employee stock purchase
plan in accordance with the provisions of Accounting  Principles Board's Opinion
No. 25, "Accounting for Stock Issued to Employees ("APB 25"). (See Note N.)

Recent pronouncements:

In June 1998, the FASB issued FAS 133,  "Accounting  for Derivative  Instruments
and Hedging  Activities",  which the  Company  will be required to adopt for the
year ending  December 31, 2001.  FAS 133  established  methods of accounting for
derivative  financial  instruments  and  hedging  activities  related  to  those
instruments as well as other hedging  activities.  Because the Company currently
holds no  derivative  financial  instruments  and does not  currently  engage in
hedging  activities,  adoption  of FAS 133 is not  expected  to have a  material
impact on its financial condition or results of operations.

In December 1999, the  Securities and Exchange  Commission  ("SEC") issued Staff
Account Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements",
which provides guidance related to revenue  recognition based on interpretations
and  practices  followed by the SEC.  Subsequently,  SAB Nos. 101A and 101B were
issued delaying the implementation of SAB No. 101 to the fourth quarter of 2001.
The SAB  requires  companies to report any changes in revenue  recognition  as a
cumulative  change in  accounting  principle  at the time of  implementation  in
accordance with  Accounting  Principles  Board ("APB")  Opinion 20,  "Accounting
Changes".  We are currently evaluating the impact, if any, SAB No. 101 will have
on our financial position or results and operations.

In  March  2000,  the  Financial   Accounting   Standards  Board  (FASB)  issued
Interpretation No. 44 (FIN 44), "Accounting for Certain  Transactions  involving
Stock  Compensation",  an interpretation of APB Opinion No. 25. FIN 44 clarifies
the application of APB No. 25 for certain issues, including the definition of an
employee,  the treatment of the acceleration of stock options and the accounting
treatment for options assumed in business combinations.  FIN 44 became effective
on July 1, 2000,  but is  applicable  for  certain  transactions  dating back to
December  1998.  The  adoption  of FIN 44 did not have a material  impact on the
Company's financial position or results of operations.


                                      F-10

<PAGE>
NOTE C - GOING CONCERN UNCERTAINTY:

The  accompanying  financial  statements  have been prepared in accordance  with
generally accepted accounting principles, which contemplates continuation of the
Company as a going  concern.  However,  the Company is winding down its mortgage
warehouse lending business,  has sustained substantial operating losses over the
last two  years and has used  substantial  amounts  of  working  capital  in its
operations.  Management of the Company  determined that the Company did not meet
the revenue  objectives for its mortgage  warehouse lending business and did not
expect  the  Company  to be able to meet  these  objectives  in the  foreseeable
future.  The Company therefore decided to sell all its operating assets and will
explore other business opportunities.

In view of these matters,  realization of the assets of the Company is dependent
upon the Company's ability to meet its financing requirements and the success of
future  operations.  These  financial  statements  do  not  include  adjustments
relating to the  recoverability and classification of recorded asset amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue in existence.


NOTE D - MORTGAGE WAREHOUSE LOANS RECEIVABLE/PAYABLE:

Loans receivable are generally due within sixty days from the date funded,  with
an average outstanding period of 33 days and interest payable ranging from prime
plus 1.75% to prime plus 2.0%.  Similarly,  all of the related loans payable are
due within the same time frame. During the fiscal year ended March 31, 1997, the
Company  obtained a $25 million  revolving line of credit pursuant to a security
agreement  between the Company  and Bank One,  Texas,  N.A.  ("Bank  One").  The
Company paid  interest on advances at the "prime rate" of interest,  quoted from
time to time by the Wall Street  Journal plus or minus  one-eighth of a percent.
As collateral  security for its  indebtedness to Bank One the Company granted to
Bank One a security  interest in various assets  including,  but not limited to,
all promissory  notes acquired by the Company with respect to any loan funded by
it with  moneys  advanced  under its Bank One credit line and all  mortgages  or
other forms of collateral  security  obtained by the Company in connection  with
the funding of such loans.  On August 25,  September  26 and  December 12, 1997,
Bank One amended the credit  facility to provide the Company  with  $35,000,000,
$50,000,000  and  $60,000,000,  respectively.  Effective  June 30,  1998  Leedan
Business Enterprise Ltd. ("Leedan"),  a 49% owner of the Company, entered into a
Capital  Maintenance  Agreement  with Bank One  wherein  Leedan  agreed to cause
capital  contributions or subordinated  debt advances,  up to $2 million,  to be
made to the  Company in order to  maintain  an  adjusted  Company net worth of a
least $8 million,  upon official  written  request by Bank One.  This  agreement
continues  in effect until the Company has paid its  obligation  to Bank One and
Bank One  terminates  its commitment to supply the Company credit (See also Note
M). On September 1 and September 15, 1998,  Bank One amended the credit facility
to decrease the borrowing limit to $55,000,000 and $50,000,000 respectively. The
credit  facility  expired  on October  30,  1998,  whereupon  Bank One agreed to
continue  funding the Company's  loans until the facility was renewed or another
lender  replaced  Bank One. On February  18,  1999,  Bank One renewed the credit
facility with a borrowing  limit of  $40,000,000  through  April 30, 1999.  This
credit  facility was  subsequently  extended to September 30, 1999 and as of the
date of these financial  statements,  no additional  renewal was granted by Bank
One. At December 31, 2000, the Company continues to owe Bank One $3,261,010.

For the years ended  December 31, 2000 and 1999, the weighted  average  interest
rate on loans  receivable  was  14.15%  and  9.65%,  respectively,  and on loans
payable was 9.0% and 7.88%, respectively. Loans receivable are collateralized by
a security  interest in the  underlying  real  property  which the Company  then
assigns to its funding sources as security for the loans payable.

                                      F-11

<PAGE>
NOTE E - LOANS HELD FOR RESALE

In 1997,  the Company in accordance  with its loan and security  agreement  took
possession from a customer in the process of liquidating  under Chapter 7 of the
Bankruptcy  Code, 37 loans it funded having an aggregate  value of $4.5 million.
The Company had a perfected  interest in the loans and sold 32 of the loans at a
net  discount of  $72,070.  The five loans  unsold at December  31, 1998 with an
original loan amount of $698,116,  together with  holdback  receivables  on sold
loans of $180,945, were held at net realizable value which included a reserve of
$173,582.  These loans were subsequently sold during the year ended December 31,
1999.

In September  1999,  the Company used a portion of the proceeds from the sale of
fixed  assets (see Note A) and  acquired 36 stale loans for  $574,774  from Bank
One. At December  31,  2000,  the  balance of these loans are  reflected  in the
financial  statements at net realizable value aggregating $-0-, which includes a
reserve of $494,302.


NOTE F - RECEIVABLE FOR LOANS SHIPPED:

During  October 1997, the Company  warehoused  $1.7 million in mortgages for the
same  customer as  described  in Note E above,  who used a third party  conduit,
American  Financial  Mortgage  Corporation,  to sell its  loans to an  investor,
Norwest  Funding,  Inc.  The Company  provided  instructions  to the third party
conduit that the funds were to be wired by the investor to the  Company's  bank.
The investor miswired the funds to the conduit's bank, Corestates Bank, N.A. The
conduit's  bank  refused  to return the funds.  The  Company is taking  actions,
including  legal  action,  to collect the funds from the conduit,  the conduit's
guarantor,  the investor and the conduit's bank. The Company's lender,  Bank One
Texas, N.A. ("Bank One"), has joined the litigation as a co-plaintiff in support
of the Company's  position.  In addition,  the Company has a $5 million personal
guarantee from the third party conduit's  primary  shareholder and an additional
$2 million guarantee from the customer's primary shareholder.  In June 2000, the
Company received a check in the amount of $219,828 which represented payment for
a settlement reached with Norwest Funding, Inc. After trial, on December 4, 2000
a judgment  was  entered  (a)  against  the bank and in favor of the  Company as
follows:  compensatory  damages in the amount of  $1,779,520  plus  interest  of
$78,854, consequential damages in the amount of $13,500,000, punitive damages in
the amount of  $40,500,000,  for a total of $55,858,374  and (b) in favor of the
Company  against  American  Financial  Mortgage  Corp.  and Thomas F. Flatley as
follows:  compensatory  damages on the contract and  conversion in the amount of
$1,779,520 plus interest of $890,443 on the contract claims,  attorney's fees in
the  amount  of  $1,200,000,  for a total of  $3,869,963.  The  defendants  have
appealed the judgment.  No assurance can be given as to the ultimate  outcome of
this  litigation.  The Company has only  reflected  the  original  $1.7  million
receivable on its balance sheet.


NOTE G - INVESTMENT SECURITIES AVAILABLE FOR SALE:

On July 7, 1997, the Company  purchased  300,000  shares,  at $.75 per share, of
Fidelity First Mortgage Corp., NASDAQ (FFIR) for a total investment of $225,000.
On May 6, 1999,  management  of FFIR  approved a 1 for 50 reverse  stock  split,
reducing the Company's  number of shares to 6,000. In November 1999, the Company
received 1,250 restricted bonus FFIR shares.  FFIR shares closed on December 31,
2000 and 1999 at $15 per share (before  reverse  stock  split),  resulting in an
unrealized  gain of $-0- in 2000 and an  unrealized  loss of  $210,000  in 1999.
Fidelity First Mortgage,  which was also a customer of the Company,  is based in
Columbia,  Maryland  and  funds  conforming  and  non-conforming  single  family
residential mortgages in Maryland,  Virginia, Delaware, Florida, North and South
Carolina.

                                      F-12


<PAGE>
NOTE H - NOTES RECEIVABLE:

     On November  18,  1998,  a  settlement  was reached  with a guarantor  of a
mortgage  banking  customer's   defaulted  line  of  credit.   Pursuant  to  the
settlement,  the guarantor  issued to the Company two  installment  notes in the
amounts of $265,103 and $470,000,  respectively.  These notes bear interest at a
rate of 8.25% per annum and are payable  quarterly  commencing three months from
November 18, 1998, the date of issuance of the notes. Both notes mature November
18, 2000. Due to the default of these notes,  the Company recorded a 50% reserve
against the amounts due.                                                             $ 735,103

     On March 29,  1999,  a  settlement  was reached  with two clients and their
guarantor  wherein the  remaining  loans on each  client's line and interest and
fees due through  October 31,  1998 were  replaced  with a note from each client
guaranteed  by the client's  guarantor in the amounts of $453,430 and  $204,640,
respectively,  each payable in sixteen monthly  installments plus interest at an
annual   rate   of   10%.   Both   notes   matured   June   29,   2000.                 82,740
                                                                                      --------
                                                                                       817,843
Less:  reserve                                                                         367,552
                                                                                      ---------
                                                                                      $450,291


NOTE I - INVESTMENT IN AND ADVANCES TO PIONEER HOME FUNDING:

On April 16, 1997,  the Company  entered  into a joint  venture  agreement  with
Maryland  Financial  Corporation  ("MFC") to form Pioneer Home  Funding,  LLC, a
California  Limited Liability  Company,  ("PHF").  The Company accounts for this
investment on the equity method. The agreement provides that the Company and MFC
would  maintain  80% and  20%  ownership  interests,  respectively,  in PHF.  An
amendment to the agreement was made on October 31, 1997. This amendment provides
that the Company would  contribute  $40,000 for a 20 percent interest in PHF. In
addition, the Company may from time to time, at its option, make loans to PHF as
needed. Under this agreement the Company has the option to convert loans made to
PHF into an 80%  interest  in PHF.  As of  December  31,  1999,  the Company has
advanced as a loan receivable $294,345 (which is included in other assets on the
balance  sheet).  At December 31, 1999, the Company has recorded a 100% reserve,
against this  receivable  due to the financial  condition of PHF.  There were no
advances made to PHF during the year ended December 31, 2000.


NOTE J - OTHER ASSETS:

The following  items are also included in other assets on the Company's  balance
sheet:

1.  Effective April 25, 1996, a one year certificate of deposit in the amount of
    $25,000 was pledged in order for the Company to receive a California  Lender
    Bond as a  California  Financial  Lender.  The  certificate  of deposit  was
    renewed as of October 22, 2000 and is renewable  quarterly at the discretion
    of the insurance carrier.

2.  As a result of the  signing  of a ten (10) year  lease for  office  space at
    21700 Oxnard Street, Suite 1650, Woodland Hills, California,  on October 17,
    1997,  the Company  delivered an  unconditional,  irrevocable  and renewable
    Letter of Credit (LC), in the amount of $150,000,  in favor of the Landlord.
    A $150,000 Certificate of Deposit which was security for the LC, was claimed
    by the  landlord  for  unpaid  rent  in  January  2001,  and  the  financial
    statements as of December 31, 2000 were adjusted accordingly. (See Note 0).

                                      F-13

<PAGE>
NOTE K - INCOME TAXES:

The components of the provision for income taxes are as follows:

                                                                                                   2000                      1999

                       Current:
   Federal .................................................................                      $ --                        $ --
   State ...................................................................                       1,999                       1,099
                                                                                                  ------                      ------
                                                                                                   1,999                       1,099
Deferred:
   Federal .................................................................                        --                          --
   State ...................................................................                        --                          --
                                                                                                  ------                      ------
Provision for income taxes .................................................                      $1,999                      $1,099
                                                                                                  ======                      ======

The tax effects of temporary  differences  that give rise to deferred tax assets
are presented below:

                                                                                                    2000                     1999


                     Net operating losses ........................                            $ 3,500,000               $ 2,230,000
                     Valuation allowances ........................                             (3,500,000)               (2,230,000)
                                                                                              -----------               -----------
                                                                                              $     -                   $     -
                                                                                              ===========               ===========

At December 31, 2000, the Company had net operating  loss (NOL's)  carryforwards
available  for income tax purposes of  approximately  $8.7  million  expiring in
varying amounts through 2014.  Approximately $1 million of the NOL's are limited
in use pursuant to a change in ownership in November 1994.


NOTE L - DEFERRED LEGAL FEES:

Deferred legal fees are a consequence of the POR (see Note O) and are payable in
four annual installments which began on April 16, 1994. The Company has not paid
the April 1996, 1997 and 1998  installments  aggregating  $65,395 as of December
31, 2000.


NOTE M - STOCKHOLDERS' EQUITY, PRIVATE PLACEMENT AND INITIAL PUBLIC OFFERING:

Common Stock:

At the annual  meeting of the  stockholders  on June 29, 1999,  a reverse  stock
split of 1 for 2 was approved. The date of record for the reverse split was June
29, 1999.  All references to shares of common stock,  stock  options,  warrants,
exercise  prices per share and per share  amounts have been  restated to reflect
the effect of the reverse stock split.

On  September  28 and October 3, 2000,  the Company  issued  168,334 and 200,000
shares of common  stock for  $505,000 and  $600,000,  respectively  in a private
placement.

On September  30, 2000,  the Company  converted  loans in the amount of $626,000
plus accrued interest of $166,586 to 264,195 shares of common stock.

                                      F-14
<PAGE>
NOTE  M -  STOCKHOLDERS'  EQUITY,  PRIVATE  PLACEMENT  AND  INITIAL  PUBLIC
OFFERING: (Continued)

Initial Public Offering:

In August 1996,  the Company  consummated  its IPO pursuant to which the Company
issued and sold  600,000  shares of its common  stock,  par value $.01 per share
(the  "Common  Stock"),  and  690,000  warrants  (including  warrants  sold upon
exercise of the underwriters' over-allotment option) to the public at a price of
$5.00 per share and $.10 per warrant,  which yielded to the Company net proceeds
of approximately  $2 million.  The warrants give the owner the right to purchase
an  additional  share of  common  stock at a price of $5.50 for a period of four
years commencing after the completion of the IPO (the "Exercise  Period").  Such
warrants will be immediately tradable separate from the common stock. Commencing
two years after the  completion  of the IPO and through the end of the  exercise
period,  the warrants may be redeemed by the Company upon 30 days written notice
at a price of $.05 per warrant,  provided that (1) the closing sale price of the
Company's  common stock shall not be less than $7.50 per share for any period 20
days subsequent to the issuance of the written  notice,  or (2) that the warrant
holders  have not  exercised  their  warrants at any time prior to the period 30
days after the issuance of the written notice. In addition,  the underwriter was
issued  the right  for a period  of four  years  commencing  one year  after the
completion of the IPO to purchase,  in tandem,  60,000 shares of common stock of
the Company and 60,000  common stock  purchase  warrants at a price of $6.12 for
each  combined  share and  warrant.  The terms of the  warrants  acquired by the
managing  underwriter  were the same as those  discussed  above except that such
options are nontransferable. The warrants are exercisable into 690,000 shares of
Common Stock at a price of $5.50 per share August 12, 2000. The expiration  date
of these  warrants  was  extended  to  October  31,  2000 at which date they all
expired.

Private Placement:

 On February 28, 1997, the Company  completed a private  placement of securities
 (the "Private  Placement") with eight investors who invested an aggregate of $4
 million in the Company in consideration  for 2.2 million shares of Common Stock
 and $1.8  million  principal  amount  of  convertible  promissory  notes of the
 Company (the  "Convertible  Notes").  On May 9, 1997, the Company increased its
 authorized  shares of common  stock by 15 million to 20  million  shares.  With
 these newly available shares, the Company immediately converted the outstanding
 Convertible Notes into 1.8 million shares of common stock.

Subordinated Debt:

On November 26, 1997, the Company issued $1,000,000 in subordinated debt as part
of a $4 million private placement.  The private placement provided for a minimum
purchase of $250,000 (1 unit) with each unit obtaining 7,500 Warrants that allow
for the purchase of 7,500 shares.  The exercise  price of the shares is equal to
the  price of the  Company's  stock as of the date of issue of the  subordinated
debt. The Company has 30,000 Warrants  outstanding (7,500 per unit for 4 units).
The  subordinated  debt carries an interest rate of 10% per annum and matures on
November 25, 2002. The Company's stock price on November 26, 1997 was $2.875. On
September  11,  1998 three  subordinated  debt  advances  pursuant to the Leedan
Capital  Maintenance  Agreement  (Note  D)  were  made to the  Company  totaling
$726,000,  secured by notes.  The notes are due when a replacement  for the Bank
One lending facility is in place, with interest paid quarterly at 11% per annum.
During the first  quarter of 1999  $100,000 of debt was repaid and in  September
2000, $626,000 of debt was converted into 208,667 shares of common stock.

 Dividend Restriction:

 The holders of the  Company's  common  stock are  entitled to one vote for each
 share held of record on all matters  submitted to a vote of  stockholders.  The
 common  stockholders  are entitled to receive  ratably such dividends as may be
 declared  by the  Board of  Directors  out of funds  legally  available.  As of
 December  31,  2000,  in  management's  opinion,  it is  not  anticipated  that
 dividends will be paid on common stock in the foreseeable  future as certain of
 the debt  instruments  to which the  Company is a party to prohibit or restrict
 the payment of dividends  (see Note O for further  discussion  of  restrictions
 under the POR).

                                      F-15
<PAGE>
NOTE N - STOCK OPTION PLANS AND WARRANTS:

Stock option plans:

The  Company  has  adopted  the  disclosure-only  provisions  of SFAS  No.  123,
"Accounting for Stock-Based  Compensation."  Accordingly,  no compensation costs
have been  recognized  for the  Company's  Non-Qualified  Stock Option Plan (the
"Plan").

The Plan (previously known as PCF Acquisition Corp.  Non-qualified  Stock Option
Plan) was adopted on August 1, 1994, and provided for the issuance of options to
purchase up to 151,515  shares of the Company's  common stock to persons who are
at the time of grant, employees of, or consultants to, the Company. The Plan was
modified on November 4, 1994, in  anticipation of the then  forthcoming  merger,
with and into Pioneer Commercial  Funding Corp. The modification  provided for a
maximum of 200,000 shares of stock that may be optioned or sold under the Plan.

In 1997, the Company  adopted the 1997 Omnibus Stock  Incentive Plan under which
it was authorized to issue non-qualified stock options, incentive stock options,
and warrants to key employees, directors and selected advisors to purchase up to
an aggregate of 500,000  shares of the stock of the Company.  The options have a
term of five years and  generally  become  fully  vested by the end of the third
year.

The Company has issued additional  options outside the Plan at the discretion of
its Board of Directors ("BOD").

The following table  summarizes  information  related to shares under option and
shares available for grant under the Plan and separate actions of the BOD.

Weighed  average fair value of options  granted  during the year (adjusted for 1
for 2 reverse stock split) is as follows:

                                                        December 31, 2000      December 31, 1999
                                                        ----------------     -------------------
                                                          Weighted                      Weighted
                                                           Average                      Average
                                                          Exercise                      Exercise
                                          Shares           Price          Shares        Price
                                                          ---------      ----------    -------
   Options outstanding
     beginning                              208,500         $4.90          208,500        $4.90
   Granted                                   -                 -            -               -
   Exercised                                 -                 -            -               -
   Canceled                                 (18,000)         4.25           -               -
                                          ----------                     ---------

   Options outstanding ending               190,500         $4.96          208,500        $4.90
                                            =======                        =======


                                      F-16
<PAGE>
NOTE N - STOCK OPTION PLANS AND WARRANTS (Continued):

The following information applies to options outstanding at December 31, 2000

                                                 Options Outstanding                      Options Exercisable
   Range of exercise                                 Weighted
     prices                       Number             Average
                                Outstanding         Remaining          Weighted                Number
                                                  Contractual Life      Average              Exercisable
                                                    (Years)          Exercise Price


      $1.00 - $2.25                 22,500              1.25                 $2.25               22,500
      $2.26 - $4.50                 93,000              1.50                 $4.37               93,000
      $4.51 - $10.00                75,000              1.75                 $6.50               75,000
                                  --------                                                     --------
                                   190,500              1.57                 $4.96              190,500
                                   =======                                                      =======


No options were granted during the years ended December 31, 2000 and 1999.

Warrants:

On September 30, 2000, the Company issued 104,630  warrants to purchase  104,630
shares of common stock at $3.00 per share to the parties who acquired  shares in
a private  placement  in  September  2000,  and to the  holders of the loans and
accrued  interest  that were  converted  into common stock.  These  warrants are
exercisable on December 31, 2001 and expire on December 31, 2002.

The fair value of the warrants was estimated using the Black-Scholes  model with
the following weighted average  assumptions:  expected  volatility of 100%; risk
free interest rate of 5.30%;  and expected  lives of 1 to 3 years.  Accordingly,
for the year ended December 31, 2000,  compensation expense aggregating $171,594
was recorded.


NOTE O - COMMITMENTS AND CONTINGENCIES:

Plan of Reorganization:

Under  the POR,  the  Company  is  contingently  liable  to its  pre-Chapter  11
unsecured creditors,  for such creditors' pro rata shares of noninterest-bearing
notes (the "Notes") totaling $1,350,000. Commencing with the close of the fiscal
year ending March 31, 1996, and for all succeeding years thereafter,  until full
aggregate  payment of $1,350,000 is made under the Notes, each Note holder shall
receive a cash  distribution  equal to such Creditors'  pro-rata share of twenty
percent of the Net Income Available for Note Payments, if the Net Income for any
such year exceeds $1,300,000.

In addition to the Notes, approximately $50,000 in professional fees incurred in
connection  with the POR were  deferred  and will only be paid to the extent the
Notes are paid in full.

For the years ended  December  31,  2000 and 1999 the Company had not  generated
income that resulted in payment on the Notes. Accordingly, no liability has been
reflected in the Company's  balance sheet for the Notes or the professional fees
for 1999 or 2000.

As of December  31,  2000,  the Company  was unable to  determine  whether it is
probable  that it will  generate  income in future  years which would  result in
payments on the Notes.  As such, no future  liability has been  reflected in the
Company's balance sheet for the Notes or the professional fees.

                                      F-17
<PAGE>
NOTE O - COMMITMENTS AND CONTINGENCIES (Continued):

In accordance with the POR, certain operating restrictions have been placed upon
the  Company  until the time that all amounts due on the Notes have been paid in
full. These restrictions include:

-    Incurring  new debt in  excess  of  $25,000,  except  for  secured  lending
     required  in  the  ordinary  course  of  the  Company's   mortgage  lending
     operations.

-    Expending more than $25,000 in the aggregate in a calendar year to purchase
     or lease capital assets, except to replace existing assets.

-    Expending  more than $320,000  annually in the aggregate to the officers of
     the Company and placing limitations on salary increases.

-    Merging or consolidating with another business.

-    Declaring  dividends on any class of common  stock,  except that,  if there
     should be a public  offering of the  securities of the Company,  and, if at
     the  option of the  Company,  fifty  percent of the  proceeds  in excess of
     $5,000,000  from such  offering  are utilized for the payment of the Notes,
     then such dividend restriction shall be deemed waived.

In 1999 the Company made expenditures of more than $25,000 to purchase and lease
capital  assets  in  connection  with  its  move to new  facilities.  Management
believed that these expenditures were necessary to expand the Company's mortgage
operations,  and is not aware of any  financial  impact on the Company under the
restrictions of the POR because of these expenditures.

Lease Obligation:

The Company  leases 6,846 square feet of office space  through  October of 2007.
The  monthly  base rent  through  September  2002 is  $13,692  and for years six
through ten is $15,745.  The Asset Purchase agreement (see Note A) also provides
for the purchaser to rent this space for four months commencing  October 1, 1999
at $13,873 per month.

The Company  continues to be  obligated  under a previous  office lease  through
October 31, 2001.  This lease calls for monthly rent of $2,178 and CPI increases
with a minimum of 3% and a maximum of 5%  annually.  The  Company  sublets  this
space for $1,410 per month subject to three one year leases.

Rent expenses (net of rental  income) for the years ended  December 31, 2000 and
1999 aggregated $286,270 and $148,840, respectively.

At December 31, 2000, future net minimum rental expenses are as follows:

Fiscal Year Ended December 31,

                           2001                                   $    188,262
                           2002                                        164,304
                           2003                                        188,950
                           2004                                        188,950
                           2005                                        188,950
                           Thereafter                                  346,410
                                                                  ------------
                                                                    $  1,265,826

                                      F-18
<PAGE>
NOTE O - COMMITMENTS AND CONTINGENCIES (Continued):

Employment Agreement:

In July 1997,  the Company  extended  the  Employment  Agreement  with M. Albert
Nissim as President for an indefinite  period,  at a salary of $6,000 per month.
Effective April 1, 1998, Mr. Nissim's  compensation  was increased to $9,500 per
month.  In  addition,  he was  awarded a $12,000  bonus.  The  Agreement  may be
terminated by either party on not less than 90 days prior to notice.

Other Agreement:

The Company has approved a compensation  plan for a director and/or Leedan,  the
company  which  provides  management  services to the Company.  Leedan is also a
principal  shareholder of the Company. The plan provides aggregate  remuneration
to the director and/or Leedan of $100,000 per annum plus 5% of the Company's net
income  (pre-tax)  above  $1,000,000  annually.  Leedan  and the  director  will
determine how such compensation will be divided between them.


NOTE P - ECONOMIC DEPENDENCY:

During the year ended  December 31, 1999,  the Company  funded 466, 176, and 275
loans aggregating  approximately  $28.7 million,  $28.1 million and $24 million,
respectively to three customers.  At December 31, 1999 mortgage  warehouse loans
receivable  from  these  customers   amounted  to  $662,000,   $-0-,  and  $-0-,
respectively.

During the 2000 fiscal year, no new loans were funded.
</TABLE>

<PAGE>

                                   SIGNATURES

                  In  accordance  with Section 13 or 15(d) of the Exchange  Act,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                            PIONEER COMMERCIAL FUNDING CORP.


                                            By: /s/ M. Albert Nissim
                                            Name:  M. Albert Nissim
                                            Title: President

                                            Date:     March 29, 2001

                  In  accordance  with the  Exchange  Act,  this report has been
signed below by the  following  persons on behalf of the  registrant  and in the
capacities and on the dates indicated.


                                            By: /s/ M. Albert Nissim
                                            Name:  M. Albert Nissim
                                            Title: President and Chief Financial
                                                    Officer

                                            Date:   March 29, 2001

                                            By: /s/ Richard Fried
                                            Name:  Richard Fried
                                            Title: Director

                                            Date:    March 29, 2001


                                            By: /s/ Boaz Harel
                                            Name:  Boaz Harel
                                            Title: Director

                                            Date:    March 29, 2001


                                            By: /s/ Tamar Lieber
                                            Name:  Tamar Lieber
                                            Title: Director

                                            Date:    March 29, 2001

                                            By: /s/ Lynda Davey
                                            Name: Lynda Davey
                                            Title: Director

                                            Date:     March 29, 2001


                                            By: /s/ Joseph Samuels
                                            Name: Joseph Samuels
                                            Title: Director

                                            Date: March 29, 2001