U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

For the Fiscal Year Ended June 30, 2000          Commission file number: 0-18224

                              TOTALAXCESS.COM, INC.
                         (formerly Group V Corporation)


          Delaware                                        95-4176781
(State of other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                       201 Clay Street, Oakland, CA 94607
                    (Address of Principal Executive Offices)

                                 (510) 286-8700
              (Registrant's Telephone Number, including Area Code)

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $0.15 Par Value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                    Yes X No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-K, is not contained  herein and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.

The Registrant had operating  revenues of $6,571,603 for the year ended June 30,
2000.

As of June 30, 2000, the aggregate  market value of the voting stock (based upon
the  average  closing  bid and asked  prices in the  over-the-counter  market as
quoted on NASD-OTC  Bulletin  Board as of June 30, 2000) held by  non-affiliates
was approximately $13,740,384.

         Class                          Outstanding at June 30, 2000
Common Stock, $.15 par value                  12,423,824 shares

Documents Incorporated by Reference:
None

<PAGE>

                         TABLE OF CONTENTS

                                                                            Page

                                     PART I

  Item 1. .................................Description of Business            1
  Item 2. ...............................Description of Properties            6
  Item 3. .......................................Legal Proceedings            6
  Item 4. .....Submission of Matters to a Vote of Security Holders            8

                                  PART II

  Item 5. Market for Common Equity and Related Stockholder Matters           11
  Item 6. ...................Management's  Discussion and Analysis           11
  Item 7. ....................................Financial Statements           13
  Item 8. ........Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure                        13

                                  PART III

  Item 9. Directors, Executive Officers, Promoters and Control
          Persons; Compliance with Section 16(a)of the Exchange Act          14

  Item 10....................................Executive Compensation          16

  Item 11.Security  Ownership of Certain   Beneficial   Owners  and
          Management                                                         17

  Item 12............Certain Relationships and Related Transactions          18

  Item 13............Exhibits and Reports on Form 8-K                        20

<PAGE>

                                   1
PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

General

     TotalAxcess.com,  Inc. (formerly, Group V Corporation) ("TotalAxcess",  the
"Company",  or the  "Registrant")  was originally  incorporated  in the State of
Delaware in 1987.  TotalAxcess.com,  Inc.  began trading under the Company's new
name and ticker symbol,  TXCI, in May 1999. Since the fiscal year ended June 30,
1997 and prior to May 1999,  the Company's  name was Group V  Corporation.  This
name change  reflects  the  Company's  continued  progression  into the Internet
Marketing, Telecommunications and E-Commerce business arenas.

     The Registrant's core business is providing telecommunication services to a
wide-variety of consumers.  These services take the form of one of the following
segments:

     1) Non Switched One Plus long  distance  service 2) Non Switched  wholesale
     and retail  pre-paid  calling cards 3) Switched  pre-paid  calling cards 4)
     Switched wholesale services 5) HitLotto program

     Switched  telecommunications  traffic  refers to the  process of  selecting
paths for the  transmission of video,  data and voice  information to a specific
recipient utilizing the Company's switching equipment.  This switching equipment
requires  the use of  dedicated  T-1's,  which are the  trunks/lines  that carry
telecommunications   traffic.   Tier  1  and  Tier  2  carriers   provide  these
lines/circuits.  Non-switched  refers to  utilizing a Tier 1 or Tier 2 carrier's
switching  equipment  to carry  either  the  Company's  one plus  long  distance
customers telephony traffic or pre-paid calling card traffic.

Company Strategy

     The  Company's  ongoing  plan  is  to  continue   expanding  its  switching
capabilities  in  Southern  California  where it has leased  space  conveniently
located  near  several  Tier 1  carriers  that can  provide  the  necessary  T-1
connections.  The  Company's  is  negotiating  with  several  Tier 1 and  Tier 2
carriers to provide the necessary  circuits in order to carry up to  100,000,000
minutes of traffic  per  month.  At the time of this  filing,  the  Company  was
carrying approximately  20,000,000 minutes per month in non-switched traffic and
2,250,000 minutes per month in switched telecommunications traffic.

     The Company  estimated that it would need to acquire 5 switches in order to
attain this level of switched traffic. It has acquired four of these switches as
of this filing.  Each switch has the ability to connect to approximately 64 T1's
and carry  approximately  20 million minutes per switch.  The Company intends to
continue  discussions  with  equipment  vendors  that  specialize  in  switching
equipment  that  will  allow  the  Company  to  expand  its  capacity  and  more
aggressively enter the switched wholesale service bureau arena.

     The Company plans to aggressively market its One Plus long distance service
by providing  competitive  rates and simple plans to existing and new customers.
The marketing plan is to utilize TotalAxcess'  existing wide spread distribution
network,  presently  in place,  to market to  wholesale  pre-paid  calling  card
customers.  The goal is to  steadily  increase  Company  revenues  from a steady
source of business that can be found in the residential long distance arena.

     TotalAxcess has also been negotiating to provide several overseas companies
with  telephony  services  to the  United  States.  The  Company  would  provide
high-volume switching services to these companies for traffic terminating in the
United States.

     The Company  intends to continue  actively  and  aggressively  pursuing the
increase of revenues and cash flow through the wholesale  distribution  and sale
of pre-paid  calling  cards,  increased  switched  wholesale  telecommunications
traffic and its One Plus long distance service.  TotalAxcess is negotiating with
several  equipment  suppliers to obtain the additional  switching  equipment and
that will allow the Company to meet its anticipated business growth. This growth
will  allow the  Company to obtain  more  competitive  rates  that will  greatly
enhance the  projected  profitability  of the Company.  Management  announced in
September 2000 a strategic alliance with Interoute  Telecommunications U.S.A., a
subsidiary of Interoute UK. Interoute is one of the fastest growing suppliers of
telecommunications  services in the world.  The Company has been negotiating and
is prepared to move forward with additional  strategic alliances or acquisitions
that will  provide  strategic  satellite  direct  routing to some of the highest
demand countries for  long-distance,  including Mexico,  Philippines and Panama,
with several other additions planned.

Significant Customers and Suppliers

     During the year ended June 30, 2000,  the Company's two largest  customers,
Blackstone  Calling Cards and RSL Primecall,  accounted for approximately 97% of
the Company's total consolidated revenues.

     During the year ended  June 30,  2000,  the  Company's  switching  supplier
provided  services through the following Tier 1 carriers:  Qwest,  MCI/WorldCom,
Network Enhanced Telecom and Edge2Net.  This accounted for  approximately 99% of
the Company's total consolidated cost of sales.

Competition

     The   telecommunications   industry   is  highly   competitive.   Increased
consolidation  and  strategic  alliances  in the  industry  resulting  from  the
Telecommunications Act of 1996 have allowed significant new competitors to enter
the  industry.  Such  consolidation  could result in larger,  better-capitalized
competitors.  Many of the Company's existing and potential  competitors  compete
with significantly greater financial,  personnel, marketing and other resources,
and have  other  competitive  advantages.  Furthermore,  the  telecommunications
industry  is in a  period  of  rapid  technological  evolution,  marked  by  new
technologies   and  the   introduction   of  new  products  and  services.   The
telecommunications  industry  is also  subject  to various  degrees of  federal,
state, local and international regulation.

The Business and History of National Pools Corporation

     National  Pools  Corporation  ("NPC")  is a  California  corporation  doing
business at 201 Clay Street,  Oakland,  California  94607.  The Company believes
that NPC is the first  company to have  developed  and marketed a pre-paid  long
distance  phone card with an  innovative  free method of group lottery play as a
value-added  incentive to phone card purchase.  The program  developed by NPC is
named "HitLoTTo" and facilitates lottery club participation in a number of State
Lotteries  throughout  the United  States.  The  HitLoTTo  program uses a unique
pre-paid phone card  promotion,  telecommunications,  and  proprietary  computer
software to organize and market electronic  lottery clubs for lottery players to
participate  in various  State  Lotteries.  This  program  provides  players the
opportunity  to  increase  their  chances of  winning  by 100 times by  randomly
joining  each club  participant  with 99 other  club  members.  NPC  offers  its
proprietary  HitLoTTo service to the public through the sale of a pre-paid phone
card,  the "HitLoTTo Club Card." The HitLoTTo Club Card will be sold at approved
retail outlets in two  denominations:  $10 and $20. The Company's plans to debut
its virtual HitLoTTo Club Card on a number of established  e-commerce  websites.
Each denomination of the HitLoTTo Club Card features both  competitively  priced
long distance calling and corresponding  free lottery club plays, which act as a
purchase  incentive.  The $10 HitLoTTo  Club Card offers the  purchaser one free
lottery  club play and the $20 HitLoTTo  Club Card offers  three free  lotteries
club plays. Special marketing opportunities have increased the available lottery
club plays to  encourage  participation  in  special  market  offers.  To join a
HitLoTTo  Club,   callers  will  dial   1-888-HitLoTTo,   enter  their  Personal
Identification Number ("PIN") found on the back of the card, and after selecting
the appropriate menu function are automatically  entered into the next available
open lottery club of their choice;  including  Powerball,  The Big Game, Florida
and California State Lotteries.

     NPC will  administer  the Clubs and purchases 100 state lottery  tickets on
behalf of the club members.  HitLoTTo Club  membership is allowed only after the
PIN, and appropriate account balance have been validated.  Each club consists of
one hundred $1.00 corresponding State Lottery tickets, and each HitLoTTo Club is
completed after receipt of 100 successful  HitLoTTo  telephone calls.  Each call
equates to one HitLoTTo lottery club plays, and is formed for the next available
caller designated Super Lotto jackpot. Depending on the denomination of pre-paid
phone card purchased,  callers may make the corresponding value of long distance
calls by selecting the appropriate menu option.

     NPC acts as an  agent of the club  member  (callers)  by  coordinating  the
formation of groups of purchasers of lottery tickets.  Once any of the available
HitLoTTo  Clubs has 100 members the club is closed,  the  computer  starts a new
HitLoTTo Club, and NPC purchases the 100 state lottery  tickets on behalf of the
just closed club.  Tickets are official State Lottery machine  generated  "Quick
Picks"  and are always  purchased  in  sequence  (to avoid any  manipulation  of
tickets).  The  HitLoTTo  Club is then  associated  with the  corresponding  100
tickets.  The first and last sequence numbers are entered into NPC's database to
ensure the integrity of the club. Further,  all tickets are endorsed and stamped
with the company name, the club number,  date and time. The physical tickets are
placed in tamper proof  storage  until the  validation  process  occurs the next
business day after the official  drawing when the winning numbers are confirmed.
Winnings less than $599 are automatically credited to the player's HitLoTTo Club
Card and added to the available  account balance the day after the lottery draw.
Winning clubs are also  published on the Company's  website- www.  HitLoTTo.com.
When  a  player  has  depleted  the  value  of  the  HitLoTTo  Club  Card  to an
insufficient  level  to  participate  in  another  HitLoTTo  Lottery  Club,  the
remaining card balance can be transferred to a new HitLoTTo Club Card.  HitLoTTo
players are able to cash out their winnings at any time by calling the toll-free
number and speaking with a customer service representative.

     NPC  will  process  winning  tickets  and  claim  prize  winnings  with the
appropriate  State  Lottery  on behalf  of club  members  up to $599.  When club
winnings  are over $600,  NPC will provide the names of the  individual  winning
club  members to the state  lottery by filling  out the State  Lottery  Multiple
Ownership  Claim form. In general,  a State Lottery will pay winnings in amounts
between  $600 and $1 million in a one-time  payment  directly to club members in
accordance with the State  Lottery's  established  policies and procedures.  The
State  Lottery  generally  pays prize  amounts of $1 million or more directly to
winners either over a 20 to 26 year period or in a single lump-sum payment.  NPC
does not participate in any winnings or prizes.

     The Company  entered  into a joint  venture  agreement  with  CPNM/Internet
Marketing  Consortium  in fiscal  year 1999 to  jointly  promote  and market the
Company's  virtual  HitLoTTo  product  through a network of 10 or more  Internet
retail  affiliates.   Management  believes  that  these  established  e-commerce
websites will drive more than 200 million hits in potential  retail  activity to
the  HitLoTTo  product.  Through  a  series  of  cross-promotional   multi-media
marketing  efforts with  CPNM/Internet  Marketing,  the Company's own e-commerce
website  will attempt to expand the  existing  market  channels for HitLoTTo and
open access to the growing millions of Internet users who sign on daily.

     Although  the  electronic  commerce/Internet  portion of HitLoTTo  sales is
expected to grow  exponentially,  the Company  continues to work the traditional
retail channel,  aggressively  recruiting  distributors and sales agents through
strategic   placement  of   advertisements.   The  Company   also   successfully
participated in a leading  pre-paid  industry  tradeshow and  exposition,  which
generated  considerable editorial exposure for both the product and the Company.
NPC has  introduced  the HitLoTTo Club Card in selected  areas in several states
within the United  States using local  distributors  and retail sales  networks.
Marketed as "The Phone Card That Can Make You Rich",  NPC has created  awareness
for the HitLoTTo Club Card through a number of "free play" direct mail campaigns
targeted to purchased lists of lottery  enthusiasts,  as well as other potential
customers.  The Company's  President has provided media coverage for the Company
with interviews in the "Wall Street Corporate Reporter", "MSNBC Business Video",
"Smart Money Magazine",  "Stockbroker  Magazine",  "Intele-Card  News" and other
significant news and media outlets. The Company has produced a variety of retail
Point of Sale (POS)  materials to assist with the promotion and marketing of the
HitLoTTo Club Card.  Additionally,  the Company has provided its retail  network
with a number of  education/training  materials designed to educate the retailer
and consumer on the benefits  and features of this unique  pre-paid  phone card.
Through the fiscal year ended June 30, 1999 there have been 500  HitLoTTo  Clubs
formed.  No  HitLoTTo  Clubs were  formed  during the fiscal year ended June 30,
2000.

     In May 1998,  the Company  obtained a legal  opinion  from James D. Cullen,
Esq., special counsel to TotalAxcess. After consideration and review of existing
pre-paid  calling card and rules for  promotion,  the legal and factual  matters
were found to be appropriate to distribute to all potential  markets.  The price
of the HitLoTTo  Club Card does not include any  consideration  for the purchase
and/or administration associated with the purchase of lottery tickets by NPC for
any HitLoTTo Club. Mr. Cullen cites various  recent  findings,  most notably The
Mississippi  Gaming  Commission v. Treasured  Arts, Inc. 699 So. 2d 936, and the
offering of a similar service by the Illinois Lottery.

     The Company's  management is confident  about the viability of the HitLoTTo
pre-paid  phone card  strategy  for  marketing  the  program  and  believes  the
acquisition of NPC represents an excellent opportunity for the Company.  Further
the  HitLoTTo  Club  Card  now  represents  the  convergence  of  three  dynamic
industries: pre-paid telecommunications, lottery play and the Internet. However,
the ultimate  market  acceptance of the HitLoTTo  program  cannot be guaranteed.
Although the HitLoTTo  program is registered and the system is proprietary,  the
Registrant  expects  competition  from  those  who may have more  personnel  and
greater financial resources than the Registrant.

The Acquisition of National Pools Corporation

     On June 13, 1996,  NuOasis  Resorts,  Inc.  (formerly,  Nona  Morelli's II,
Inc.), ("Nona"), ("NuOasis Resorts"), granted an option (the "Option") to Joseph
Monterosso,  the current  President of the Company,  to acquire 250,000 Series B
Preferred  Shares of  TotalAxcess  (the  "Series  B  Shares")  owned by  NuOasis
Resorts.  The Option is  exercisable  at a price of $13.00  per share,  and each
Series B share is convertible into 5.2 shares of TotalAxcess' common stock.

     On December 19, 1996,  TotalAxcess  entered into Stock Purchase  Agreements
with each of the shareholders of National Pools Corporation  ("NPC") pursuant to
which  TotalAxcess  agreed to issue a series of  Secured  Promissory  Notes (the
"Notes") in the aggregate  principal  amount of $1,200,000  and 66,667 shares of
TotalAxces'  restricted common stock to the NPC shareholders in exchange for all
of the issued and  outstanding  shares of capital stock of NPC.  During the year
ended June 30,  2000,  the notes were  converted  into an aggregate of 3,374,159
shares of the Company's  restricted stock. As part of this acquisition,  NuOasis
Resorts and TotalAxcess  agreed to a debt assumption  agreement  whereby NuOasis
Resorts assumed all TotalAxcess  debt in excess of $20,000 on December 24, 1996,
except for amounts owed to certain  affiliates,  which have been  converted into
shares of TotalAxcess common stock. The NPC Stock Purchase  Agreements closed on
December 24, 1996.

     On June 13, 1997, Mr.  Monterosso  exercised the Option to purchase 128,041
Series B  Shares,  at $13.00  per  share,  by  payment  to  NuOasis  Resorts  of
approximately $1,665,000.  Additionally,  on June 13, 1997, TotalAxcess sold its
wholly owned subsidiary,  Casino Management of America, Inc., to NuOasis Resorts
for cash of $1,140,000,  notes  receivable from NPC  aggregating  $245,836 and a
credit against the NuOasis Resorts intercompany account of $95,000.

     On August 22, 1997 and effective June 13, 1996, the Option was amended (the
"Amended  Option") to  increase  the  exercise  price for 21,959 of the Series B
Shares from $13.00 per share to $72.20 per share,  or  approximately  $1,585,000
for the 21,959  shares of Series B Preferred  Stock.  The option to purchase the
remaining  100,000  Series B  Preferred  shares  was  terminated.  Concurrently,
NuOasis  Resorts  granted Mr.  Monterosso a new option to purchase the remaining
100,000 Series B shares at an exercise price of $11.70 per share.  Additionally,
as consideration for granting the new option, NuOasis Resorts acquired the right
to require Mr. Monterosso to purchase all or any remaining unexercised shares of
the 100,000 Series B shares in its entirety by September 1, 1998.

     Closing on September 2, 1997, but effective  June 30, 1997, Mr.  Monterosso
exercised the Amended Option to purchase  21,959 Series B Shares,  at $72.20 per
share, by payment to NuOasis  Resorts of  approximately  $1,585,000.  Concurrent
with the exercise of the Amended Option,  TotalAxcess  released  NuOasis Resorts
from liability, if any, arising from any events while NuOasis Resorts controlled
TotalAxcess, in exchange for approximately $1,585,000 of marketable securities.

     On September 2, 1997,  NuOasis Resorts sold to Mr.  Monterosso  400,000 New
Class D Warrants in  consideration  for a $1,800,000  promissory note secured by
the New Class D Warrants,  due in September 1998 (the "Warrant Note").  Each New
Class D Warrant is exercisable  at $15.00 per share and entitles Mr.  Monterosso
to receive,  upon  exercise,  two shares of common stock,  or a total of 800,000
common shares if all New Class D Warrants have been  exercised.  The New Class D
Warrants expire on March 30, 2004, and to date, none of the New Class D Warrants
have been exercised.

     On September 2, 1997,  NuOasis Resorts granted to Mr.  Monterosso an option
to purchase 520,000 common shares of the Company  exercisable at $2.25 per share
after  NuOasis  Resorts'  converted  its  remaining  100,000  shares of Series B
Preferred Stock into 520,000 common shares.

     As a result of the  acquisition  of NPC and the sales and  purchases of the
Series B  Preferred  Stock,  as  discussed  above,  a change in  control  of the
Registrant  occurred and the Registrant is no longer a controlled  subsidiary of
NuOasis Resorts.

Other Operating Subsidiaries and Businesses

      (1)  Lottery Publications Corporation

     Lottery  Publications  Company  ("LPC"),  which  published  Lottery Insider
Magazine,  was formed during the quarter ended March 31, 1998.  Lottery  Insider
Magazine was a monthly digest of player strategies,  human-interest  stories and
tips and statistics of interest to all Lottery  players.  A syndicated and award
winning  editorial  team  headed  the  groundbreaking  publication.  Due  to the
untimely death of its editor in chief, and the lack of any significant financial
contribution  during the fiscal years ended June 30, 1999 and 1998,  the Company
elected to cease operating LPC as a wholly owned subsidiary.

      (2)  Academy Network Services, Inc.

     On May 15, 1998,  and  effective  March 1, 1998,  the Company,  through its
newly formed wholly owned subsidiary,  Academy Network  Services,  Inc. ("ANS"),
acquired  certain  capital  leases  related to telephone  switching and platform
assets and office  equipment (the "Ark-Tel  Assets") of Ark-Tel,  Inc., a wholly
owned subsidiary of Universal Network Services,  Inc. ("UNSI").  Pursuant to the
related Asset Purchase Agreement,  the Company acquired assets with an estimated
fair market value that  approximated  related lease  obligations in exchange for
the forgiveness of amounts owed to the Company of  approximately  $300,000.  The
excess of the total  consideration  paid over the  estimated  fair  value of net
assets acquired approximated $300,000 and was charged to expense during the year
ended  June  30,  1998.  As a long  distance  carrier,  ANS  provided  the  full
telecommunications   and  support   service   needs  of  the   Company's   other
subsidiaries.

     During the year ended June 30, 1999,  the  management  determined  that the
Ark-Tel Assets were not year 2000  compliant,  and the Company ceased payment of
required  rents,  which  resulted in an event of default  per the related  lease
terms.  Accordingly,  the  Company  recognized  as asset  impairment  charge  of
$651,450  during the year ended June 30, 1999. In December  1999,  the lessor of
the  related  equipment  repossessed  the assets and the  Company  recognized  a
related  extraordinary  gain for the extinguishment of debt under capital leases
aggregating $693,261 during the year ended June 30, 2000.

     In June  1999,  the  Company  elected  to  consolidate  its  operations  in
California. As a result, all of the ANS assets have been relocated to California
and  related  assets  and  liabilities  have been  transferred  to the books and
records of TotalAxcess. Accordingly, ANS has ceased to operate as a wholly owned
subsidiary.

(3)   Premier Plus, Inc.

     On April 7, 1998, the Company  incorporated a new wholly owned  subsidiary,
Premier  Plus,  Inc.  ("PPI"),  as a network  marketing  company which sells and
distributes  the  Company's  various  telecommunication  products and  services,
including  custom  pre-paid  calling cards,  pre-paid  calling  cards,  One-Plus
residential and business long distance  services,  Lottery Insider  Magazine and
NPC's HitLoTTo(R)  program.  PPI, at one time, had approximately 200 independent
sales  representatives  nationwide who were  centrally  managed by the Company's
operations in San Francisco, California. PPI did not have significant operations
during the fiscal years ended June 30, 2000 and 1999.

     As a result of the above, TotalAxcess.com,  Inc. conducts substantially all
of the Company's business and its subsidiaries are essentially inactive.

     As of June 30,  2000,  TotalAxcess  employed  a total of  approximately  47
employees.  None of the  Company's  employees  are  currently  represented  by a
collective bargaining agreement and the Company believes that its relations with
its employees are good.

ITEM 2.    DESCRIPTION OF PROPERTIES.

      (1)  TotalAxcess.com, Inc.

     TXCI leases office space in Oakland,  California. The Oakland lease expires
July 2004. The monthly rent expense is $16,225.
ITEM 3.    LEGAL PROCEEDINGS

     On November 10, 1998, the Company filed legal action (TotalAxcess,  Inc. v.
NuOasis Resorts, Inc; Nona Morelli's II, Inc.; NuOasis International, Inc.; Fred
Luke, Jr.; Rocci Howe; Steven H. Dong; John D. Desbrow;  Archer & Weed;  Richard
Weed) in San Francisco  Superior Court, Case No. 999131.  The suit alleges fraud
and  misrepresentation  in the sale of securities,  which were not qualified for
sale and  professional  malpractice  against  legal  counsel.  On July 26, 1999,
NuOasis Resorts,  Inc. and Nona Morelli's II, Inc., and Howe, Fred Luke, Jr. and
Dong filed a cross complaint against the Company alleging claims for, inter alia
breach  of  contract,  fraud,  material  misrepresentation  in the  purchase  of
securities  and libel,  rescission of certain  contracts and the imposition of a
constructive   trust  over  certain   securities.   The  case  was  subsequently
transferred  to the  Superior  Court  for the  County  of  Orange.  The  case is
currently in the discovery  phase. The trial date is now set for March 2001; all
claims the Company  has  against  Richard  Weed are to be  arbitrated  after the
trial. Management plans to vigorously pursue its complaint and defend each cross
complaint, which it believes lack substantial merit.

     On January 6, 1999, the Company filed a lawsuit  (TotalAxcess.com,  Inc. v.
Dennis Houston,  Orange County  Superior Court Case No. 809248).  This complaint
alleges  breach  of  fiduciary  duty  by Mr.  Houston  as  one of the  Company's
directors for failing to disclose  material  facts in the Ark-Tel Asset Purchase
Agreement  that  management  believes  resulted in the WorldCom suit against the
Company (since  settled as per our June 30, 1999 10-KSB).  On June 29, 1999, Mr.
Houston filed a cross complaint  alleging claims for breach of contract,  breach
of the implied covenant of good faith and fair dealing, misrepresentation, fraud
and  embezzlement.  The Company is  vigorously  pursuing the matter  against Mr.
Houston and plans to  vigorously  defend the cross  complaint.  Trial is set for
October 2000.

     On June 26, 1997,  the Company  filed a lawsuit  (TotalAxcess.com,  Inc. v.
Network Long  Distance,  Inc.) filed in the District  Court,  City and County of
Denver, Case No. 97 CV 4131, Division 7. The complaint was filed against Network
Long Distance, Inc. and their transfer agent to compel them to release shares of
Network Long  Distance,  Inc.'s common stock (the "Shares") that was received by
the  Company  in  connection  with a release  of  liability  granted  to NuOasis
Resorts,  Inc. Once the Shares were  properly  transferred  to the Company,  the
Company  dismissed  its claims as moot.  However,  Network Long  Distance,  Inc.
(currently  known as Eclipse  Communications,  Inc. or  "Eclipse")  continues to
pursue the Shares  through its  counterclaims.  Eclipse is claiming that it owns
some or all of the Shares and is seeking  damages and an injunction  prohibiting
the transfer of the Shares. The Company took a judgment in the case; and Eclipse
has taken an  appeal.  Management  believes  that it is fairly  likely the lower
court ruling will be upheld. A final disposition of the case is expected in late
2000 or early 2001.

     M.H.  Meyerson & Co.  ("Meyerson")  claimed that it was entitled to 717,898
warrants to purchase common stock of the Company pursuant to a December 12, 1997
Investment  Banking  Agreement.  The  Company  contended  that  Meyerson  is not
entitled to the warrants because it failed to fulfill its obligations  under the
Investment Banking Agreement. In order to avoid the uncertainties of arbitration
and the inherent legal fees and costs attendant thereto, a settlement  agreement
was reached  whereby the Company caused a total of 20,000  restricted  shares of
common stock to be issued to Meyerson in full and final settlement of all claims
arising from the Investment Banking Agreement.

     On  October  27,  1999 in the  Superior  Court in and for the County of Los
Angeles,  California,  Cross Communications ("CCI") filed and served a complaint
for Breach of Contract and several Common Counts against the Company. CCI claims
it entered into a valid oral agreement with the Company whereby it would provide
telecommunications  services using its switch for routing the Company's pre-paid
calling cards. It claimed  approximately  $655,000 in damages on unpaid invoices
for its  services.  The  Company  filed a  cross-complaint  against  CCI seeking
unspecified  damages  arising from the  inability of CCI equipment to adequately
support and route the volume of traffic  delivered by pre-paid calling cards. In
order to avoid the  uncertainties  of trial and the potential  enforcement  of a
judgment,  as well as the inherent  legal fees and costs  attendant  thereto,  a
settlement  agreement  was reached  whereby CCI and the Company  entered  into a
mutual  release in full and final  settlement  of any and all claims  that might
arise out of their  relationship.  No other  consideration  is  involved  in the
settlement agreement.

     In November  1999,  the Company was served with Summons and Complaint in an
action filed by Republic Leasing Co., Inc. Case No. 816455 in the Superior Court
in and for the  County of  Orange,  California.  The  action  arose out of facts
related to the ArkTel and Dennis Houston matter discussed above and concerned an
equipment  lease.   Plaintiff  sought  approximately  $29,000  plus  prejudgment
interest and attorney  fees and costs.  In order to avoid the  uncertainties  of
arbitration  and  the  inherent  legal  fees  and  costs  attendant  thereto,  a
settlement  agreement was reached in May 2000 whereby the Company  agreed to pay
the aggregate  amount of $31,000 in two  installments  commencing  June 1, 2000.
Upon its  receipt  of the final  payment,  Republic  Leasing  caused  the action
against the Company to be dismissed.  The settlement amount is an element of the
damages  sought by the Company in its pending  action  against Dennis Houston in
the Orange County Superior court action discussed above.

     On or about  December 20, 1999 in the Superior  Court in and for the County
of San  Francisco,  California,  Comms People,  Inc.  ("CPI") filed and served a
complaint for Breach of Contract and several  Common Counts against the Company,
alleging  damages in the amount of  $17,050.  The claim  arose out of a personal
services contract.  The matter was referred by the court to non-binding judicial
arbitration to be heard in August 2000. In order to avoid the  uncertainties  of
arbitration  and  subsequent  trial,  and the  inherent  legal  fees  and  costs
attendant thereto, a settlement agreement was reached whereby the Company agreed
to pay the  aggregate  amount of $14,000 to CPI, in three  monthly  installments
commencing  September 1, 2000. In consideration  thereof,  CPI agreed to release
all claims it might have  against  the  Company,  which  might  arise out of the
personal service contract.

     In February  2000, in the Superior  Court in and for the County of Alameda,
Waterview  Resolution  Corporation filed and served a complaint against National
Pools Corporation for money owed in the amount of $59,673.  The action arose out
of a guarantee on leased  equipment  assumed by the Company on behalf of Ark-Tel
Incorporated  and Dennis Houston.  In order to avoid the  uncertainties of trial
and the inherent legal fees and costs attendant thereto, a settlement  agreement
was reached in May 2000 whereby the Company  agreed to pay the aggregate  amount
of $40,000 to Waterview in four equal monthly  installments  commencing  June 1,
2000.  Upon its receipt of the fourth and final  payment on or about  October 1,
2000, Waterview dismissed the case in its entirety.  The settlement amount is an
element of the  damages  sought by the  Company in its  pending  action  against
Dennis Houston in the Orange County Superior court action discussed above.

     The Company is from time to time,  involved in various  lawsuits  generally
incidental  to its  business  operations,  consisting  primarily  of  collection
actions and vendor  disputes.  The Company does not believe that such claims and
lawsuits,  either individually or in the aggregate,  will have an adverse effect
on its operations or financial condition.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     On January 28, 2000,  the Company held its Annual  Meeting of  Shareholders
for the following purposes:

     To elect two  directors,  each to hold office until the next Annual Meeting
of Shareholders and until their successors are elected and qualified;

1.   To approve an amendment to the Company's  Certificate of  Incorporation  to
     amend the voting  rights  granted to  Stockholders  of Series B Convertible
     Preferred Stock to be consistent with the proposed share consolidation;

2.   To approve an amendment to the Company's  Certificate of  Incorporation  to
     adopt a one-for-fifteen share consolidation of the outstanding Common Stock
     and  decrease  the  authorized  number  of  shares of  Commons  Stock  from
     333,000,000 to 22,200,000; and

3.   To adopt the TotalAxcess.com, Inc. 2000 Stock Option Plan; and

4.   To transact such other  business as may properly come before the meeting or
     any  adjournments  thereof.  The slate of  nominees  elected  for  director
     consisted of the following individuals:

                Joseph Monterosso, age 53

                Russell F. McCann, age 44

Mr. Monterosso  received  111,427,291 votes "for" his election to director;  the
number  of  votes  cast  "against"  was  1,376,860;  and  the  total  number  of
"abstentions" was 4,206,543.

Mr. McCann received 112,948,874 votes "for" his election to director; the number
of votes cast "against" was 4,040,573; and the total number of "abstentions" was
21,247.

The total number of votes cast was  117,010,694.  This represents  72.60% of the
outstanding number of shares, which were 161,171,448 at the time of the meeting

The second proposal to be acted upon pertained to the following:

           Although the  Certificate of  Determination  for Series B Convertible
           Preferred  Stock provides for the adjustment of the conversion  ratio
           to Common Stock in the event of a stock split or reverse stock split,
           it  inadvertently  did not provide for the  adjustment  of the voting
           rights.  The  Company  has  1,200  shares  of  Series  B  Convertible
           Preferred  Stock issued and  outstanding  in January 2000.  Under the
           terms of the Series B  Convertible  Preferred  Stock,  the holders of
           Series B Convertible  Preferred stock shall have  seventy-eight  (78)
           votes per share.  Therefore,  in the event of a one-for-fifteen share
           consolidation  as proposed in Proposal Three, the holders of Series B
           Convertible  Preferred Stock will still be entitled to  seventy-eight
           (78) votes per share after the  effective  date of a  one-for-fifteen
           share  consolidation.  That was not the intent of the  Company or the
           holders of Series B Preferred Stock.

           The Company  believes that adoption of Proposal Two, which will amend
           the voting  rights of the Series B Convertible  Preferred  Stock will
           maintain the rights, preference, privileges, and rights as originally
           intended  by the  Company  and the  holders  of Series B  Convertible
           Preferred Stock.  After  discussions,  the holders of the majority of
           the outstanding  shares of Series B Convertible  Preferred Stock have
           consented to the  amendment  and intend to vote for the  amendment to
           the Company's Certificate of Incorporation to amend the voting rights
           granted to the Series B Convertible Preferred Stock.

     The total  number of votes cast "for" the  proposal  was  111,847,663;  the
number  of  votes  cast  "against"  was  4,841,763;  and  the  total  number  of
"abstentions" was 321,268. The total number of votes cast was 117,010,694.  This
represents 72.60% of the outstanding number of shares, which were 161,171,448 at
the time of the meeting.

The third proposal to be acted upon pertained to the following:

           The  Board  of  the  Company  adopted  a  resolution   approving  and
           recommending  to the holders of Common  Stock,  Series B  Convertible
           Preferred  Stock,  and 14%  Preferred  Stock  that  they  approve  an
           amendment   to   the   Company's    Certificate   of   Amendment   to
           one-for-fifteen  share and consolidation of outstanding  Common Stock
           and to decrease the authorized  number of shares of Common Stock from
           333,000,000  to  22,200,000,  all of which shall be considered as one
           proposal to be submitted to a vote of holders of Common Stock, Series
           B Convertible Preferred Stock, and 14% Preferred Stock. The vote will
           be  taken  "FOR" or  "AGAINST"  this  Proposal  Three so that all two
           elements are  considered in one vote.  Proposal  Three was adopted by
           the Board of  Directors  and is subject to  approval by a majority of
           votes cast by the holders of the Common  Stock,  Series B Convertible
           Preferred  Stock,  and 14%  Preferred  Stock,  voting as a class,  as
           determined  on the  record  date,  represented  in person or by proxy
           constitute a quorum for the Meeting.

           If  approved  by the  stockholders  and  implemented  by the Board of
           Directors,  other than (i) decreasing the authorized number of shares
           of Common Stock from 333,000,000 to 22,200,000,(ii) adjusting the par
           value of the Common Stock from $.01 to $.15, and (iii)  adjusting the
           total  number of shares of Common  Stock issued prior to the adoption
           of the  one-for-fifteen  share  consolidation will result in no other
           material  changes to ownership of the stock.  Each  stockholder  will
           hold  the same  percentage  of  Common  Stock,  Series B  Convertible
           Preferred  Stock,  and 14% Preferred  Stock  outstanding  immediately
           following the one-for-fifteen share consolidation as each stockholder
           did immediately  prior to the  one-for-fifteen  share  consolidation,
           except that the consolidation may result in an immaterial  adjustment
           due to the  purchase of any  fractional  shares of Common  Stock that
           result from the consolidation.

           If Proposal Three is approved by the stockholders of the Company, the
           amendment  will be filed unless the Board of Directors of the Company
           determines  that  filing  such  amendment  would  not be in the  best
           interest  of the  Company  and  its  stockholders.  If the  Board  of
           Directors makes such determination, it may elect not to file or elect
           to delay the filing of the amendment to implement Proposal Three. The
           actual  timing of such filing (and  whether such filing is made) will
           be determined by the Board of Directors  based upon their  evaluation
           as to when such action will be most  advantageous  to the Company and
           its  stockholders.  In addition,  the Board of Directors may make any
           and all changes to the one-for-fifteen share consolidation  amendment
           that it deems  necessary  to give effect to the intent and purpose of
           the one-for-fifteen share consolidation.

           The following table illustrates the principal effects of the proposed
           one-for-fifteen  share  consolidation  on the  authorized  number  of
           shares:


Number of Shares       Prior to              After
 of Common Stock       Proposal Three        Proposal Three
- ---------------      ---------------       ---------------
Authorized:            333,000,000           22,200,000
Outstanding:           159,161,506           10,610767(1)
Available for Future   173,838,494           11,589,233(1)
===================================================================
Number of Shares of    Prior to              After
 Preferred Stock       Proposal Three        Proposal Three
 ---------------       --------------        --------------
Authorized:            1,000,000             1,000,000
Outstanding Series B   23,589                23,589
Outstanding 14%        170,000               170,000
===================================================================

(1) Subject to minor adjustment due to rounding of fractional shares.

     The total  number of votes cast "for" the  proposal  was  106,101,453;  the
number  of  votes  cast  "against"  was  10,606,963;  and the  total  number  of
"abstentions" was 68,642.  The total number of votes cast was 117,010,694.  This
represents 72.60% of the outstanding number of shares, which were 161,171,448 at
the time of the meeting.

The fourth proposal to be acted upon pertained to the following:

           Effective January 31, 2000, and subject to stockholder approval,  the
           Board of  Directors  approved  adoption of the  Company's  2000 Stock
           Option  Plan (the "2000  Plan") to serve as a vehicle to attract  and
           retain  the  services  of   employees,   officers,   directors,   and
           consultants.  The 2000 Plan is a "dual plan" which  provides  for the
           grant  of  both  Incentive  Stock  Options  and  Non-qualified  Stock
           Options.

           The  2000   Plan   covers   30,000,000   (pre-one-for-fifteen   share
           consolidation as discussed in Proposal Three) shares of the Company's
           Common Stock,  which shares will be reserved upon confirmation of the
           2000 Plan. If Proposals  Three and Four are approved,  the 30,000,000
           shares of Common  Stock  reserved for the 2000 Plan shall be adjusted
           to  2,000,000   shares  of  Common  Stock   following   the  proposed
           one-for-fifteen share consolidation.

     The total  number of votes  cast "for" the  proposal  was  107,060161;  the
number  of  votes  cast  "against"  was  9,708,618;  and  the  total  number  of
"abstentions" was 241,915. The total number of votes cast was 117,010,694.  This
represents 72.60% of the outstanding number of shares, which were 161,171,448 at
the time of the meeting.

There was no other business conducted at the Annual Meeting of Shareholders.


                                     PART II

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

      The  Registrant's  common stock is listed on the NASD-OTC  Bulletin  Board
where they currently trade under the symbol "TXCS". The Registrant's  securities
are not publicly  traded on any other  market.  Set forth below are the high and
low bid prices for the common stock of the Registrant for each quarterly  period
commencing July 1, 1998:

                                        Bid Price of Common Stock
      Fiscal 1999                             Low      High

      Quarter ended 09/30/98                 $  .45   $  1.35
      Quarter ended 12/31/98                 $  .30   $   .75
      Quarter ended 03/31/99                 $  .30   $  3.45
      Quarter ended 06/30/99                 $ 1.35   $ 14.70

                                        Bid Price of Common Stock
      Fiscal 2000                             Low      High

      Quarter ended 09/30/99                 $ 2.34   $  6.80
      Quarter ended 12/31/99                 $ 5.86   $ 13.36
      Quarter ended 03/31/00                 $ 2.50   $  7.73
      Quarter ended 06/30/00                 $ 1.16   $  3.00

     Such  quotations  reflect  inter-dealer  prices,  without  retail  mark-up,
markdown or commissions and may not necessarily represent actual transactions.

     As of June 30, 2000, the Registrant had 4,880 shareholders of record and in
excess of 2,000 persons who were beneficial shareholders of its common stock.

     The Registrant  has never paid cash  dividends on its common stock.  At the
present time, the Registrant's anticipated capital requirements are such that it
intends to follow a policy of  retaining  earnings,  if any, in order to finance
the  development  of its  business.  Dividends  on common  stock may not be paid
unless provision has been made for payment of preferred dividends.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and Analysis

     The  Registrant  has  incurred  net  losses  and  negative  cash flows from
operating  activities  since its inception in 1987.  The Registrant had cash and
cash equivalents of approximately  $395,511 and $572,951 as of June 30, 2000 and
1999,   respectively,   and  a  working  capital  deficit  of  $(4,638,281)  and
$(3,860,552) as of June 30, 2000 and 1999, respectively.

     The Company's  revenues increased from $1,271,673 to $6,571,603 between the
years ended June 30, 1999 and June 30, 2000,  respectively.  This  represents an
increase of 417% in revenue.  This increase occurred  primarily as the result of
new  telecommunication  services  contracts  secured by the Company with new and
existing customers in fiscal year 1999 and 2000. Further,  the Company increased
its internal sales force and independent  distributor network relative to fiscal
year 1999.

     In fiscal  year 2000,  the  Company  recognized  stock  based  compensation
charges aggregating $3,877,338.  Such charges were generally recognized when the
estimated fair market value of restricted  stock issued by the Company  exceeded
the  estimated  fair  value of  consideration  received  by the  Company in such
transactions.  These charges are comprised of the following:  $1,134,000 related
to an officer's  conversion  of accrued  salaries and expenses  into  restricted
common stock, $863,347 related to a consultant's  conversion of accrued fees and
expenses  into  restricted  common  stock,   $1,100,000  related  to  shares  of
restricted  common  stock  issued to an officer for the pledging of his personal
assets and personal  guarantee,  and $581,850  related to the sale of restricted
common  stock.  In addition,  an officer of the Company  vested in 166,668 stock
options,  and the Company  recognized a related  expense of  $198,141.  Selling,
general and  administrative  expenses  increased from  $2,036,957 in fiscal year
1999 to $2,238,527 in fiscal year 2000, or a 10% increase. This overall increase
was the result of several  factors  including  increases in salaries,  wages and
benefits,  payroll  taxes,  contract and temporary  labor,  travel and occupancy
costs to  support  the  Company's  increased  operations  in fiscal  year  2000.
Further, marketing,  promotion, and selling expenses also increased in an effort
to develop and expand the Company's operating strategies.  Professional services
decreased  in fiscal  year 2000 to  $401,175  from  $428,600 in fiscal year 1999
primarily as the result of lower legal fees.  Such fees  declined in fiscal year
2000 as the Company negotiated the settlement of several previously  outstanding
litigious matters.  Depreciation and amortization  expenses increased to $32,700
in fiscal  year 2000 from  $32,656 in fiscal  year  1999.  The  increase  in net
interest  expense from $333,250 in fiscal year 1999 to $8,084,799 in fiscal year
2000 related to the NPC notes payable  conversion to common stock  whereby,  the
Company  converted  $1,100,717 of notes payable,  and related  accrued  interest
thereon,  into an  aggregate  of 3,374,159  shares of the  Company's  restricted
common stock. Because the estimated fair market value of the common stock issued
to the note  holders  exceeded  the  carrying  amounts of the notes  payable and
accrued  interest,  the  Company  recognized  an  effective  interest  charge of
$7,669,197.  The Company also realized  losses on the sale of marketable  equity
securities  that  aggregated  $130,321,  and  recognized  litigation  settlement
expenses  aggregating  $83,200 in fiscal year 2000. During fiscal year 2000, the
Company  recognized  extraordinary  gains related to the  extinguishment of debt
under capital lease agreements of $769,394,  and the extinguishment of debt with
a vendor in the amount for $666,621  resulting from a lawsuit  settlement.  As a
result of the above,  the Company's  net loss for fiscal year 2000  increased to
$12,866,278  ($1.23 per share)  from  $4,826,505  in fiscal year 1999 ($1.05 per
share).

     This  Annual  Report on Form  10-KSB for the year ended June 30,  2000 (the
"Form 10-KSB") contains certain "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and  Section  21E of the  Securities  Exchange  Act of  1934,  as  amended  (the
"Exchange Act"). Forward-looking statements are statements other than historical
information  or statements  of current  condition and relate to future events or
the future financial performance of the Company. Some forward-looking statements
may be identified by use of such terms as "expects,"  "anticipates,"  "intends,"
"estimates,"  "believes"  and words of  similar  import.  These  forward-looking
statements relate to plans,  objectives and expectations for future  operations.
In light of the risks and uncertainties inherent in all such projected operation
matters, the inclusion of forward-looking  statements in this Form 10-KSB should
not be regarded as a representation  by the Company or any other person that the
objectives or plans of the Company will be achieved or that any of the Company's
operating expectations will be realized.  Revenues and results of operations are
difficult to forecast and could differ  materially  from those  projected in the
forward-looking statements contained in this Form 10-KSB.

     The  Company  expects  to  increase  revenues  and cash  flow  through  the
wholesale  distribution  and sale of pre-paid  calling  cards by  expanding  its
in-house sales force and adding more  independent  distributors  to its network.
The Company's One Plus long distance service,  which the Company is revamping to
provide more competitive  rates,  and additional  services will be included as a
product for this sales force to market.

     TotalAxcess'  negotiation  to  obtain  additional  switching  equipment  is
critical  to  the  Company's   overall  business  plan  to  expand  all  of  its
telecommunications  services. In order, to achieve its projected business growth
TotalAxcess will need to acquire several  switching  platforms that will support
this  expansion.  The  ultimate  goal  is  for  TotalAxcess  to  negotiate  more
competitive  rates from Tier 1 carrier's that will greatly enhance the projected
profitability of the Company.

     Additionally,  management  announced in August 1999 the strategic  alliance
with licensed long distance carrier Comnet that which would have broadened their
international  pre-paid  network  services  into  Mexico.  This  network did not
provide  the  quality or the  capacity  that the  Company had desired to attain.
Therefore,  the Company continued  negotiating and prepared to move forward with
additional  strategic  alliances'  in  Mexico,  Paraguay,  India and Italy  that
management believes will further increase revenues and cash flow. The Registrant
will also continue to search for additional  sources of equity financing through
the private placement of its common stock.

     The Registrant is also pursuing other joint venture,  merger or acquisition
opportunities  that may provide  additional capital resources during fiscal 2001
and beyond.

Year 2000

     During  the  year  ended  June 30,  1999,  management  determined  that the
telephone  switching and platform  assets  acquired from Ark-Tel,  Inc. were not
year 2000 compliant and that  significant  upgrades were required to prepare the
equipment to properly  function in the year 2000.  As a result,  the Company has
ceased  payment of  required  rents.  As a result of the  cessation  of required
rents,  the Company is  currently  in default per the related  lease  terms.  In
connection with the above, the Company has recognized a related asset impairment
charge of  approximately  $651,000  during  the year ended  June 30,  1999.  The
Company  does not believe that it will be required to  significantly  modify its
internal  computer  systems,  or any  equipment  or  products,  other  than  the
equipment  mentioned  above.  There can be no assurance  that  another  entity's
failure to ensure year 2000  capability  would not have an adverse effect on the
Company.

     As of the date of this  report,  management  is not aware of any other year
2000 related issues.

ITEM 7.    FINANCIAL STATEMENTS

     Financial  statements are referred to in Item 13(a) and listed in the Index
to Consolidated Financial Statements filed as part of this Annual Report on Form
10-KSB.

ITEM 8.    CHANGES IN AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE.

     None.



                              PART III

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

(a)   Identification of Directors and Executive Officers

     The Registrant,  pursuant to its bylaws,  maintains a Board of Directors of
between one and  twenty-five  directors  and  officers,  comprised of President,
Secretary and Chief Financial Officer.  The same person may hold any two or more
officer positions. The directors and officers during fiscal year 2000 and fiscal
year 1999 are as follows:


Name                Position Held            Age  Dates of Service
----                -------------            ---  ----------------
Joseph Monterosso   Director and President   51   November 25, 1996 to Present
                    Chairman of the Boark         August 8, 1997 to Present

Russell F. McCann   Director                 44   September 23, 1998 to Present

Dennis Houston      Director                 55   August 8, 1997 to Jan.28.2000
                    COO                           July 1, 1997 to June 29, 1998

     All directors of the  Registrant  hold office until the next annual meeting
of  shareholders  and until their  successors  have been elected and  qualified.
Vacancies in the Board of Directors are filled by the  remaining  members of the
Board until the next annual meeting of shareholders.  The same current Directors
stand for election at the Registrant's next annual meeting.  The officers of the
Registrant are elected by the Board of Directors at its first meeting after each
annual meeting of the  Registrant's  shareholders and serve at the discretion of
the Board of Directors or until their earlier resignation or death.

     Directors  are elected by a favorable  vote of a plurality of the shares of
voting stock  present,  entitled to vote, and actually  voting,  in person or by
proxy, at the Annual Meeting.  Accordingly,  abstentions or broker non-voters as
to the  election  of  Directors  do not affect the  election  of the  candidates
receiving the plurality of votes.  Properly executed,  unrevoked proxies will be
voted FOR election of the above-named nominees unless the stockholders  indicate
that the proxy shall not be voted for any one or all of the nominees.

(b)   Business Experience

     The  following is a brief account of the business  experience  for at least
the past five years of each director,  director nominee and executive officer of
the  Registrant,  including  principal  occupations  and employment  during that
period,  and the  name  and  principal  business  of any  corporation  or  other
organization in which such occupation and employment were carried on.

Current Directors and Officers

Joseph Monterosso:  Mr. Monterosso has used his entrepreneurial skills to launch
a variety of companies over the past 25 years,  culminating  with National Pools
Corporation  in 1992.  Prior to NPC,  Monterosso  embarked upon  fulfilling  his
lifelong dream of producing his own automobile  after  attending the Geneva Auto
Show in 1986.  After  raising over $45 million for funding,  Monterosso  founded
Laforza  Automobiles,  Inc.,  which  produced a four-wheel  drive sport  utility
vehicle for the luxury market and  established  a new mark in  four-wheel  drive
sport vehicles. Monterosso conceived the concept of a new kind of Sports Utility
Four Wheel Drive  Vehicle when he  discovered a unique  Italian  Sports  Utility
Vehicle at the  Geneva  Auto Show in 1986.  Monterosso  negotiated  the  design,
licensing  and  purchase of the body stamps and dies from the  manufacturer  and
contracted Pininfarina in Turin to produce the automobile. Monterosso raised the
capital through U.S. investors and European partners.  Monterosso negotiated all
vendor  contracts  in the U.S.  and Italy,  including  the lengthy and  delicate
negotiations with Ford to supply the power train and warranty. Monterosso headed
AutoItalia SpA, of Turin,  the company that produced the automobile.  Monterosso
supervised  the  redesign  of  the   automobile  to  meet  U.S.   Department  of
Transportation  specifications and market  expectations.  Designing the interior
and the wheels  himself,  Monterosso  resided  in Turin at this time,  commuting
monthly to his home in California, overseeing the production and delivery of the
automobile to the U.S.

Upon production of the finished body, interior and chassis in Turin, the LaForza
was flown to an after  market  assembler  located in Detroit to receive the Ford
engine,  drive  train and  electronics.  A final fit and finish was done and the
LaForza was then delivered directly to the U.S. distributor, LaForza Automobiles
Inc.,  of  Hayward,  CA.  LaForza  Automobiles  was  independent  of the Italian
production  company,  and was  operated  by a  President  and CPA. In late 1989,
LaForza  Automobiles  Inc.,  caught in the market downturn and resulting capital
crunch,  could not finance their  marketing  operation and filed for  bankruptcy
protection and ceased doing business,  eventually being  liquidated.  Monterosso
tried to salvage the situation by seeking capital for the U.S. company,  but was
unsuccessful  as he was  given  only  weeks  notice of the  impending  financial
shortfall. Without a distribution network, Monterosso closed down the production
of the automobile,  paid AutoItalia's  creditors and shelved the designs for the
next  generation  of the  automobile  that  were  in  process  and  returned  to
California in Mid-1990.

AutoItalia  produced 650 LaForza  vehicles for the U.S.  market,  almost all are
still  on the  road  today  and are a  highly  sought  after  collector's  item,
ironically  selling  for more today than their  original  price.  In  hindsight,
Monterosso   believes  that  the  market  timing  could  have  been  better  and
capitalization  stronger,  while the basic  concept was sound.  He believes that
this is shown by the fact that the rounded, aerodynamic LaForza body style, four
wheel-on-the-fly   technology,   elegant,  luxurious  yet  Spartan  design,  has
subsequently  been  copied  by  every  sports  utility  manufacturer   currently
producing  vehicles  worldwide;  and that the Sports Utility / Light Truck 4 x 4
market is now the strongest share of the U.S. auto market.

In June 1979,  Monterosso  was named Sales and Operating Vice President for Tony
Ward, Inc., an importer of forklifts from Japan. Monterosso left Tony Ward, Inc.
to found North American  Forklift,  Inc. in July 1980. While living in Australia
from 1970 - 1979,  Monterosso founded three successful firms including a company
that  manufactured  custom wheels and imported  accessories  for off-road  sport
vehicles, which was subsequently sold to Ford Motor Corporation in 1979.

Russell F.  McCann,  Jr.:  Mr.  McCann is  President  and CEO of Actio  Software
Corporation  and on the Board of  Trustees  for the Bigelow  Laboratory  for the
Ocean Sciences in Boothbay,  Maine. Actio Software Corporation was co-founded in
1996 by Mr. McCann;  Actio is a pioneer in providing MSDS subscription  services
and chemical  management  services  via the  Internet.  The company  maintains a
sophisticated MSDS database supporting a variety of MSDS standards. The database
is the backbone of a chemical management and reporting system,  which is used to
automatically comply with a wide range of local, state and federal regulations.

Previous to Actio, Mr. McCann was Co-founder, President and CEO of Ares Software
Corporation. Ares invented and patented a parametric font technology that used a
single  font  outline  that could be  manipulated  into a wide range of typeface
designs.   This  compact  means  of  representing   typefaces   enabled  printer
manufacturers  to increase  the number of  typefaces  offered in their  printers
while simultaneously reducing memory requirements. Ares also had a wide range of
award  winning  Microsoft  Windows  and  Apple  Macintosh  shrink-wrap  software
products that were widely distributed  through mail order resellers and computer
retailers.  Adobe Systems  Incorporated  acquired Ares Software  Corporation  in
1995.

Prior to Ares,  Mr. McCann was Vice President of Marketing and Sales for Emerald
City Software.  Emerald City Software  produced  software  development tools for
Apple Macintosh and NeXT computer platforms and developed  shrink-wrap  software
products designed to produce special typographic and 3 dimensional effects using
an Adobe PostScript printer.  Under Mr. McCann's marketing and sales leadership,
sales of  Emerald  City  products  increased  600% over a 1-year  period.  Adobe
Systems acquired Emerald City in March 1990.

Mr. McCann also  previously  worked for Letraset  Graphics  Design  Software,  a
subsidiary of Esselte Business Systems, and Boston Software  Publishers.  Boston
Software Publishers,  which Mr. McCann co-founded,  shipped the first commercial
software product for the Apple Macintosh. This product helped define the desktop
publishing industry.  He has a Bachelor of Science with high honors in political
science and  economics  and an MBA in finance and  marketing  from  Northeastern
University and specialized marketing studies from the Sloan School of Management
at MIT.

(c) Compliance with Section 16(a) of the Securities Exchange Act

     Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended  (the
"Exchange Act") requires the  Registrant's  officers and directors,  and persons
who own more than ten percent of a registered class of the  Registrant's  equity
securities,  to file  reports of  ownership  and changes in  ownership  with the
Securities  and  Exchange  Commission.  Officers,  directors,  and greater  than
ten-percent  shareholders  are required by  Securities  and Exchange  Commission
regulations  to furnish the  Registrant  with copies of all Section  16(a) forms
they file.

     Based  solely on  review  of the  copies  of such  forms  furnished  to the
Registrant,  or  representations  that no Forms 5 were  required  or filed,  the
Registrant  believes  that during the periods from July 1, 1997 through June 30,
1999,  all  Section  16(a)  filing  requirements  applicable  to  its  officers,
directors, and greater than ten-percent beneficial owners were complied with.

ITEM 10.  EXECUTIVE COMPENSATION

(a)   Summary Compensation Table

The  following  summary  compensation  table  sets  forth  in  summary  form the
compensation  received  during  each of the  Registrant's  last three  completed
fiscal years by the  Registrant's  Chief Executive  Officer.  No other executive
earned in excess of $100,000.


                             LONG TERM COMPENSATION
--------------------------------------------------------------------------------
                           ANNUAL COMPENSATION          Awards         Payouts
--------------------------------------------------------------------------------
                         Salary    Bonus  Other   Restricted                All
                                          Annual  Stock              LTIP Other
                                           Comp   Award(s)  Options  Pay-  Comp
                                                                      Outs
                              $      $      $       $         #       $     $
--------------------------------------------------------------------------------
Joseph Monterosso   2000  $250000(1) -   $1134000   -      166,668    -     -
 President &
 Director           1999  $250000(1) -      -       -         -       -     -
  (11-25-96 through
   12-31-99)        1998  $175000(1) -      -       -         -       -     -
 CEO & Director
  (1-1-00 through
   6-30-00)
--------------------------------------------------------------------------------
(1)  Mr.  Monterosso has not taken his salary  compensation  in the form of cash
     for the past three years. Mr.  Monterosso  typically elects to converts his
     accrued salary to restricted common stock. (2) Refer to Item 6.


(b)   Option and Long Term Compensation

     During fiscal year 1999, there were no options granted or exercised. During
fiscal year 2000,  options were granted to the Chief Executive  Officer that are
discussed in Item 10(d).

 (c)  Pension Plans and Other Benefit or Actuarial Plans

     The Registrant has no annuity,  pension or retirement  plans or other plans
for which benefits are based on actuarial computations.

(d)   Employment, Consulting and Advisory Management Contracts

     On April 1, 1994,  NPC entered  into an  employment  agreement  with Joseph
Monterosso to serve as the Company's  Chief  Executive  Officer.  In conjunction
with the acquisition of NPC, Mr. Monterosso  became the Company's  President and
Director on November 25, 1996,  and  Chairman on August 8, 1997.  Subsequent  to
June 30,  1997,  the Board  ratified  the  agreement  with Mr.  Monterosso.  The
agreement  initially  compensates Mr. Monterosso $125,000 per annum and $250,000
per annum upon the first sale of the Company's HitLoTTo(R) Club Card, payable in
cash or in  common  stock  of the  Company.  The  first  sale  of the  Company's
HitLoTTo(R)  Club Card  occurred in February  1998.  Mr.  Monterosso is also the
Company's Chief Financial Officer.

     Effective January 1, 2000, the Company and Mr.  Monterosso  entered into an
Executive  Employment Agreement for Mr. Monterosso to serve a three year term as
the Company's  Chief  Executive  Officer.  The agreement may be extended for two
additional  years by mutual written  consent of Mr.  Monterosso and the Company.
The agreement provides for annual compensation of $250,000 with annual increased
of $25,000.  Additionally,  Mr. Monterosso will earn annual bonuses ranging from
$100,000  to $150,000 if the Company  achieves  certain  pre-determined  revenue
targets.  During the first year of the  agreement,  Mr.  Monterosso  may convert
accrued salary to shares of the Company's common stock at a rate equal to 50% of
the stock's fair market value averaged over the preceding 15-day pay period.  In
addition,  Mr.  Monterosso  was granted  stock  options in the amount of 333,333
shares in the first  year and  200,000  shares in each of the  second  and third
years.  Such options are  exercisable at $1.56 per share,  vest in equal monthly
installments,  and  expire  five  years  from the  last day of Mr.  Monterosso's
employment.  As of June 30, 2000,  166,668 options have vested, and accordingly,
the Company recognized a stock based compensation  charge of $198,141 during the
year ended June 30, 2000. None of the vested options have been exercised by Mr.
Monterosso.

(e)   Director Compensation

     The  Registrant  has no standard  arrangements  by which its  directors are
compensated.

(f)   Interlocking Relationships of Directors

     As of the date of this Report,  there are no interlocking  relationships of
Directors.

ITEM  11.  SECURITY   OWNERSHIP   OF  CERTAIN   BENEFICIAL   OWNERS  AND
           MANAGEMENT.

     The following table sets forth, as of June 30, 2000, the stock ownership of
each person known by the Registrant to be the  beneficial  owner of five percent
or more of the  Registrant's  voting  securities  and  each  officer,  director,
director nominees,  and all officers and directors as a group.  Unless otherwise
indicated,  each person has beneficial  voting and investment power with respect
to the shares owned.

                              Shares of Common
Name of Beneficial Owners     Number   Percentage
Joseph Monterosso            2,151,668     17%
Russell F. McCann, Jr.       1,111,900      9%
Brad Hunt                      632,106      5%
Dano Construction, Inc.        573,839      5%
Walter & Linda Gauger          451,537      4%
All directors and executive  3,263,568     26%
-------------------------------------------------


     The  following  table sets forth,  as of June 30, 2000,  the 14%  Preferred
Stock  ownership of all holders of more than five  percent of the 14%  Preferred
Stock of the  Registrant.  No  officers or  directors  own any shares of the 14%
Preferred Stock.

                               Shares of 14%
Name of Beneficial Owners     Number   Percentage
-------------------------     ------   ----------
Raymond C. Kitely             30,000     17.6%
Eli Moshe                     10,000      5.9%
Walter K. Theis, M.D.         20,000     11.8%
David Serer,                  77,500     45.6%
 Chapter 7 Trustee for the
 Estate of David Paletz
Neil Miller                   15,000      8.8%
David Sheetrit                10,000      5.9%
-------------------------------------------------------


ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

a)     Sale of Common Stock to Blackstone Calling Cards, Inc.

     In September  1999,  the Company sold 140,000  shares of restricted  common
stock to  Blackstone,  a significant  customer,  for cash  proceeds  aggregating
$510,000. Because the estimated fair market value of the restricted common stock
sold to  Blackstone  exceeded  the  purchase  price  paid by  Blackstone  by the
aggregate  amount of  $327,120,  the Company  recognized a  corresponding  stock
compensation charge during the year ended June 30, 2000.

     In November  1999,  the Company sold 133,333  shares of  restricted  common
stock to  Blackstone.  In exchange,  the Company  received a  receivable  in the
aggregate  amount of $250,000.  Such receivable  does not bear interest,  has no
stated repayment terms and is  collateralized  by 66,667 shares of the Company's
common stock  previously  sold to Blackstone.  Because the estimated fair market
value of the  restricted  common stock sold to Blackstone  exceeded the purchase
paid by Blackstone by the aggregate amount of $254,730, the Company recognized a
corresponding stock compensation charge during the year ended June 30, 2000.

b)     Transactions with the Chief Executive Officer and Chairman

     In December  1999,  the  Company's  Chief  Executive  Officer and  Chairman
converted  $383,463  of accrued  salary owed to him  pursuant to his  employment
agreement, and $76,837 of accrued expenses owed to his wife, into 666,667 shares
of the Company's  restricted  common stock. In connection with this  conversion,
the Company recognized  compensation expenses of $1,134,000.  Such expenses were
determined by  multiplying  the number of shares  issued to the Chief  Executive
Officer and Chairman by the closing price of the  Company's  common stock on the
date of the  conversion,  less a 15%  discount  factor  based on the  restricted
nature of the shares issued.


     In December  1999,  the  Company's  Chief  Executive  Officer and  Chairman
deposited his personal  shares of the  Company's  common stock as security for a
service agreement with a vendor.  Additionally,  the Chief Executive Officer and
Chairman  executed a personal  guarantee of the Company's  obligations under the
related service  agreement.  As a result,  the Company's Chief Executive Officer
and Chairman  received 333,333 shares of the Company's  restricted common stock,
and the Company recognized  related  compensation  expenses of $1,100,000.  Such
expenses were determined by multiplying the number of shares issued to the Chief
Executive  Officer and  Chairman by the closing  price of the  Company's  common
stock on the date the issuance was approved by the Company's board of directors,
less a 15% discount factor based on the restricted nature of the shares issued.

c)     Stock Transaction with a Director's Wife

     In December 1999, the wife of a director of the Company  converted  accrued
compensation  and  expenses  aggregating  $284,586  into  379,448  shares of the
Company's  restricted  common stock.  In connection  with this  conversion,  the
Company  recognized a related stock  compensation  charge  aggregating  $863,347
during the year ended June 30, 2000. Such charge was determined as the amount by
which the  estimated  fair market  value of the  restricted  common stock issued
exceeded the aggregate carrying amount of the accrued compensation and expenses.

d)     Related Party Note Payable Conversions

     In  connection  with current year note payable  conversions,  the Company's
Chief  Executive  Officer and  Chairman  will  receive an  aggregate  of 671,626
restricted shares of common stock, his wife will receive and aggregate of 94,647
restricted shares of common stock, and a relative will receive 10,062 restricted
shares of common stock.  In addition,  a director of the Company will receive an
aggregate of 106,911  restricted  shares of common stock,  his wife will receive
and aggregate of 76,506 shares of restricted  common stock,  and a relative will
receive 24,907 restricted shares of common stock.

e)    Due to Officers and Related Party

     As of June 30, 2000, the Company owes Mr. Monterosso,  an officer,  and his
wife a net aggregate amount of $235,474.  Such amounts do not bear interest, are
not collateralized,  and have no fixed repayment terms. During each of the years
ended June 30,  2000 and 1999,  the  Company  recorded  aggregate  salaries  and
consulting expenses to these two individuals of approximately $350,000, and such
amounts are included in the selling general, and administration  expenses in the
accompanying consolidated statements of operations and comprehensive loss.

e)     Due to Officers and Related Party

     On April 1, 1994,  NPC entered  into an  employment  agreement  with Joseph
Monterosso to serve as NPC's Chief Executive  Officer.  In conjunction  with the
acquisition of NPC, Mr. Monterosso  became the Company's  President and Director
on November 25, 1996, and Chairman on August 8, 1997. The agreement provides for
annual compensation to Mr. Monterosso of $250,000.

f)    Employment Agreement with Chief Executive Officer

     Effective January 1, 2000, the Company and Mr.  Monterosso  entered into an
Executive  Employment Agreement for Mr. Monterosso to serve a three year term as
the Company's  Chief  Executive  Officer.  The agreement may be extended for two
additional  years by mutual written  consent of Mr.  Monterosso and the Company.
The agreement provides for annual compensation of $250,000 with annual increases
of $25,000.  Additionally,  Mr. Monterosso will earn annual bonuses ranging from
$100,000  to $150,000 if the Company  achieves  certain  pre-determined  revenue
targets.  During the first year of the  agreement,  Mr.  Monterosso  may convert
accrued  salary to shares of the  Company's  common stock at a rate of $3.75 per
share.  During the second and third  years,  accrued  salary may be converted to
shares of the Company's  common stock at a rate equal to 50% of the stock's fair
market value  averaged over the preceding  15-day pay period.  In addition,  Mr.
Monterosso  was  granted  stock  options in the amount of 333,333  shares in the
first  year and  200,000  shares in each of the  second  and third  years.  Such
options are exercisable at $1.56 per share, vest in equal monthly  installments,
and expire five years from the last day of Mr.  Monterosso's  employment.  As of
June 30,  2000,  166,668  options  have  vested,  and  accordingly,  the Company
recognized a stock based  compensation  charge of $198,141 during the year ended
June 30, 2000. Mr. Monterosso has exercised none of the vested options.

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K.

(a)   1.   Financial Statements

     The financial  statements listed in the accompanying  index to consolidated
financial statements are filed as part of this Report.

      2.   Financial Statement Schedules

     There were no financial statement schedules required to be filed as part of
this Annual Report.

      3.   Exhibits

     Unless otherwise noted, Exhibits are filed herewith.

     Exhibit
     Number Description

     24.1       Schedule of Subsidiaries.

     27.        Financial Data Schedule

(b)      Reports on Form 8-K

     The Company filed no reports on Form 8-K for fiscal year 2000.


                                   SIGNATURES

     In accordance  with Section 13 or 15 (d) of the Securities  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                              TOTALAXCESS.COM, INC.
                         (formerly Group V Corporation)



Date: October 23, 2000         By:       //s//                            __
                                  ------------------------------------------
                   Joseph Monterosso, Chief Executive Officer
                                   and Director

Date: October 23, 2000         By:       //s//
                                  Russell F. McCann, Jr., Director



      In accordance  with the  requirements  of the  Securities  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant and in the capacities and on the dates indicated.



Date: October 23, 2000        By:       //s//
                                 Joseph Monterosso, Chief Executive Officer
                                  and Director


Date: October 23, 2000        By:      //s//
                                 Russell F. McCann, Jr., Director






<PAGE>




                              TOTALAXCESS.COM, INC.
                         (formerly, Group V Corporation)

                                       F-1
                                Table of Contents





                                                                         Page

Independent Auditors' Report                                              F-2

Financial Statements

      Consolidated Balance Sheet                                          F-3

      Consolidated Statements of Operations and Comprehensive Loss        F-5

      Consolidated Statements of Stockholders' (Deficit) Equity           F-6

      Consolidated Statements of Cash Flows                               F-7

      Notes to Consolidated Financial Statements                          F-9


<PAGE>



                                       F-2


                          INDEPENDENT AUDITORS' REPORT



Board of Directors
TotalAxcess.com, Inc.
(formerly, Group V Corporation)


We have audited the accompanying  consolidated balance sheet of TotalAxcess.com,
Inc.  (formerly,  Group V Corporation)  (the "Company") as of June 30, 2000, and
the related  consolidated  statements  of  operations  and  comprehensive  loss,
stockholders'  (deficit)  equity and cash flows for each of the years ended June
30, 2000 and 1999.  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  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable  assurance about whether the  consolidated  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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Company as of June 30, 2000, and the  consolidated  results of their  operations
and their cash  flows for each of the years  ended  June 30,  2000 and 1999,  in
conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements,  the Company has experienced recurring losses
from  operations,   and  has  net  working  capital  and  stockholders'   equity
deficiencies.  These matters raise substantial doubt about the Company's ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  consolidated  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.



                                          HASKELL & WHITE LLP

October 18, 2000
Irvine, California

<PAGE>


                             TOTALAXCESS.COM, INC.
                         (formerly, Group V Corporation)

                           Consolidated Balance Sheet
                               As of June 30, 2000



                                     Assets

Current assets
   Cash and cash equivalents......................................$    395,511
   Accounts receivable............................................   1,425,217
   Inventories....................................................      27,553
   Prepaid expenses...............................................      13,735
   Employee advances..............................................       8,829
 ..Total current assets                                               1,870,845
Equipment and furniture, net (Note 3).............................     271,562
Deposits and other assets.........................................     258,563

            Total assets                                          $  2,400,970


                     Consolidated Balance Sheet (continued)
                               As of June 30, 2000



                 Liabilities and Stockholders' (Deficit) Equity

Current liabilities
   Accounts payable                                               $  1,291,063
   Accrued expenses                                                    383,138
   Due to officer and related party (Note 6)                           235,474
   Accrued litigation settlements (Note 8)                              35,776
   Capital lease obligations, current portion (Notes 3 and 8)            6,355
   Common stock payable (Note 4)                                     4,557,320
Total current liabilities                                            6,509,126
Capital lease obligations, noncurrent portion (Notes 3 and 8).....         536
 ....Total liabilities                                                6,509,662

Commitments and contingencies (Notes 4, 6, 8, and 11)

Stockholders'  (deficit)  equity  (Note 5)  Preferred  stock - par  value  $.01;
   authorized 1,000,000 shares; 14% cumulative convertible;  redeemable;  issued
   and
   outstanding   170,000  shares  (aggregate   liquidation  of  $170,000)  1,700
   Preferred  Stock  Series B - par  value  $2.00;  authorized  150,000  shares;
   convertible;  no shares issued and outstanding Common stock - par value $.15;
   authorized  22,200,000  shares;  12,423,834  shares  issued  and  outstanding
   1,863,575
Additional paid-in capital                                          31,046,404
   Common stock receivable                                            (250,000)
   Accumulated deficit                                             (36,770,371)
   ...      Total stockholders' (deficit) equity                    (4,108,692)

   ...      Total liabilities and stockholders' (deficit) equity  $  2,400,970

<PAGE>

          Consolidated Statements of Operations and Comprehensive Loss
                   For the Years Ended June 30, 2000 and 1999


                                                    2000              1999

Revenues                                        $  6,571,603      $  1,271,673
Operating costs                                    6,021,005         1,193,225
            Gross profit                             550,598            78,448

Cost and expenses
   Stock based compensation                        3,877,338                 -
   Selling, general and administrative             2,238,527         2,036,957
   Professional services                             401,175           428,600
   Interest expense, net                           8,084,799           333,250
   Realized loss on sale of marketable
     equity securities                               130,321           195,459
   Litigation settlement expenses (Note 7)            83,200           876,789
   Depreciation and amortization                      32,700            32,656
   Asset impairment charge (Note 3)                        -           651,450
   Provision for stockholder and affiliate receivables
    (Notes 2 and 5)                                        -           515,967
            Total costs and expenses             (14,848,060)       (5,071,137)

Loss before provision for income taxes and
   extraordinary item                            (14,297,462)       (4,992,689)
Provision for income taxes (Note 7)                    4,831             1,345
Net loss before extraordinary items              (14,302,293)       (4,994,034)
Extraordinary items (Note 9)                       1,436,015           167,529
Net loss                                         (12,866,278)       (4,826,505)

Other comprehensive (loss) income:
   Unrealized holding loss arising
     during the year                                       -           (31,051)
   Reclassification adjustment for
     losses included in net loss                           -           145,775
Other comprehensive income                                 -           114,724
Comprehensive loss                              $(12,866,278)     $ (4,771,781)

Net loss applicable to common stock             $(12,890,078)     $ (4,850,305)

Basic and diluted net loss per common share     $      (1.23)    $       (1.05)

Weighted average common shares outstanding        10,435,151         4,579,580


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

                              TOTALAXCESS.COM, INC.
                         (formerly, Group V Corporation)
            Consolidated Statements of Stockholders' (Deficit) Equity
                   For the Years Ended June 30, 2000 and 1999
------------------------------------------------------------------------------------------------------------------
                            Preferred                  Additional  Common     Accumulated            Stockholders'
              Preferred     Series B     Common Stock    Paid-In   Stock      Other Comp.  Accumulated   (Deficit)
            Shares Amount Share  Amount  Shares  Amount  Capital   Receivable    Loss        Deficit        Equity
------------------------------------------------------------------------------------------------------------------
Balances,
6/30/98     170000 $1700  150000 $300000 3322325 $498348 $16635791 $(515967)  $(214869)   $(19077588)   $(2372585)
------------------------------------------------------------------------------------------------------------------
Conversion of Preferred Stock
 Series B       -      - (114807)(229614) 596996   89550    140064        -          -              -           -
------------------------------------------------------------------------------------------------------------------
Conversion of notes
 payable        -      -       -       - 1867968  275695    399488        -          -              -      675183
------------------------------------------------------------------------------------------------------------------
Common stock
 issuance       -      -       -       - 2553057  382959   1735550        -          -              -     2118509
------------------------------------------------------------------------------------------------------------------
Write-off of stockholder's
 receivable     -      -       -       -       -       -         -   515967          -              -      515967
------------------------------------------------------------------------------------------------------------------
Other Comprehesive
 income         -      -       -       -       -       -         -        -     114724              -      114724
------------------------------------------------------------------------------------------------------------------
Net loss        -      -       -       -       -       -         -        -          -      ( 4826505)   (4826505)
------------------------------------------------------------------------------------------------------------------
Balances,
6/30/99     17000  $1700   35193 $ 70386 8310346 $1246552 $18910893       -   (100,145)     (23904093)   (3774707)
------------------------------------------------------------------------------------------------------------------
Conversion of Preferred Stock
 Series B       -      -  (35193) (70386) 183004    27450     42936       -          -              -           -
------------------------------------------------------------------------------------------------------------------
Conversion of notes payable
 and accrued interest to
 common stock   -      -       -       - 1740535   261080   4700364       -          -              -     4961444
------------------------------------------------------------------------------------------------------------------
Conversion of accrued expenses to
 common stock   -      -       -       - 1046115   156917   2446757       -          -              -     2603674
------------------------------------------------------------------------------------------------------------------
Common stock in litigation
 settlements    -      -       -       -  202314    30347    874323       -          -              -      904670
------------------------------------------------------------------------------------------------------------------
Common stock issuance for
 cash           -      -       -       -  463521    69529   2506484       -          -              -     2576012
------------------------------------------------------------------------------------------------------------------
Common stock issuance for
 receivable     -      -       -       -  133333    20000   484730  (250000)         -              -      254730
------------------------------------------------------------------------------------------------------------------
Common stock for personal
 guarantee      -      -       -       -  333333    50000  1050000        -          -              -     1100000
------------------------------------------------------------------------------------------------------------------
Common stock issuance for
 consulting svc -      -       -       -   11333     1700    29917        -          -              -       31617
------------------------------------------------------------------------------------------------------------------
Other Comprehensive loss       -       -       -        -        -        -     100145              -      100145
------------------------------------------------------------------------------------------------------------------
Net loss        -      -       -       -       -        -        -        -          -      (12866278)  (12866278)
------------------------------------------------------------------------------------------------------------------
Balances,
6/30/00    170000 $ 1700       -    $  - 12423834 $1863575 $31046404 $(250000)  $    -     $(36770371)  $(4108692)
==================================================================================================================
</TABLE>


                      Consolidated Statements of Cash Flows
                   For the Years Ended June 30, 2000 and 1999

                Increase (Decrease) in Cash and Cash Equivalents


                                                    2000              1999

Cash flows from operating activities:
   Net loss                                     $(12,866,278)     $ (4,826,505)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
      Interest expense                             8,084,799                 -
      Stock based compensation                     3,877,338                 -
      Depreciation and amortization                   32,700            32,656
      Extraordinary items                         (1,436,015)         (167,529)
      Realized loss on marketable securities         130,321           195,459
      Asset impairment charge                              -           651,450
      Provision for receivables                            -           515,967
      Increase (decrease) from changes in:
       Accounts receivable                          (876,668)         (538,462)
       Inventories                                   (27,553)           41,368
       Prepaid expenses and other current assets      39,802           (46,448)
       Deposits and other assets                    (251,363)                -
       Accounts payable                              834,354           740,071
       Accrued expenses                               27,273           241,849
       Accrued interest                                    -            60,820
       Due to officer and related party              338,790           356,686
       Deferred revenue and other liabilities              -            (7,068)
       Accrued litigation settlements                 35,776           876,798

         Net cash used in operating activities    (2,056,724)       (1,872,888)

Cash flows from investing activities:
   Proceeds from sale of marketable equity
     securities                                       14,514            78,941
   Acquisition of equipment and furniture           (219,263)          (13,442)
   Net cash (used) provided by investing
     activities                                     (204,749)           65,499


                Consolidated Statements of Cash Flows (continued)
                   For the Years Ended June 30, 2000 and 1999

                Increase (Decrease) in Cash and Cash Equivalents


                                                    2000              1999

Cash flows from financing activities:
  Proceeds from loans                                      -           575,900
  Proceeds related to the issuance of
     common stock                                  2,088,327         1,763,870
  Payments on capital lease obligations               (4,294)          (21,838)
       Net cash provided by financing activities   2,084,033         2,317,932
Net (decrease) increase in cash                     (177,440)          510,543
Cash and cash equivalents, beginning of period       572,951            62,408
Cash and cash equivalents, end of period        $    395,511      $    572,951


Supplemental Disclosure of Cash Flow Information

Cash paid during the period for:
   Income taxes                                 $      4,831      $      1,345
   Interest                                     $          -      $     20,417

Non-cash investing and financing activities:
   Notes payable converted to common stock      $  1,100,717      $    591,900
   Extinguishment of capital lease obligations
     and related amounts                             769,394                 -
   Preferred Stock Series B converted to
     common stock                               $     70,386     $     229,614
   Acquisition of equipment and furniture and
    assumption of capital leases                $          -      $     14,888

<PAGE>

                              TOTALAXCESS.COM, INC.
                         (formerly, Group V Corporation)

                   Notes to Consolidated Financial Statements
                   For the Years Ended June 30, 2000 and 1999


1.    Business Activities and Summary of Significant Accounting Policies

Description of Business

TotalAxcess.com,  Inc.  (formerly,  Group V  Corporation)  (the  "Company")  was
originally incorporated in the State of Delaware in 1987 as NuOasis Gaming, Inc.
During the fiscal year ended June 30, 1997,  and through May 1999, the Company's
name was Group V  Corporation.  During the year ended June 30, 1998, the Company
entered the one-plus long distance and pre-paid  telecommunications  industry as
its main focus of operations.

Principles of Consolidation

The  accompanying  consolidated  financial  statements,  include the accounts of
TotalAxcess.com,  Inc.,  and  its  wholly  owned  subsidiaries,  National  Pools
Corporation ("NPC"), Lottery Publications Corporation, Academy Network Services,
Inc., Premier Plus, Inc., and Signature Communications Network, Inc. None of the
Company's subsidiaries had significant operations during the year ended June 30,
2000.

As used herein,  the above is collectively  referred to as the "Company," unless
the context indicates otherwise. All intercompany accounts and transactions have
been eliminated in consolidation.

Going Concern

The accompanying  consolidated  financial statements have been prepared assuming
that the Company  will  continue as a going  concern.  However,  the Company has
experienced  recurring net losses, and has net working capital and stockholders'
equity  deficiencies.  These matters raise substantial doubt about the Company's
ability to continue as a going concern.  Management's  plans are to increase its
distribution   channels  and  service   capacity  through   strategic   business
acquisitions  and  alliances,   focused  marketing  efforts,  and  other  means.
Concurrently, management will attempt to operate with minimal fixed overhead and
will  attempt to  streamline  and  consolidate  administrative  functions  where
appropriate.  Management  will continue to negotiate  payment terms with vendors
and attempt to satisfy the Company's obligations with common stock. The ultimate
outcome of these plans is uncertain and the consolidated financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.


Management Estimates

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

Revenue Recognition

     The Company's  telecommunication  services provide personal  identification
numbers ("PIN's") for its customers,  who are primarily distributors of pre-paid
phone cards. The PIN's are pre-numbered  code combinations that are imprinted on
these  cards by the  customers.  This  allows  for the proper  routing  and time
recording of minutes used on the calling  cards.  The Company  contracts  with a
provider of switching  equipment  that  processes the phone card calls when they
are ultimately used by the end consumer.  When cards are ready for  distribution
to end  consumers,  customers  authorize  the  Company  to  activate  a specific
sequence of PIN's. The Company then immediately notifies its switching equipment
contractor to activate the related PIN's.

     The Company  recognizes revenue when the risks and rewards of the activated
PIN's are  transferred  to the  customer,  and when no right of  return  exists.
Typically,  this occurs upon first use of the related pre-paid card. However, it
may occur earlier when the Company has a contractual  right to bill the customer
within sixty days after PIN  activation,  regardless of when the related card is
used.

Cash Equivalents

     Cash  equivalents  are highly liquid  investments  with maturities of three
months or less when acquired.

Marketable Equity Securities

     As of June 30,  1999,  marketable  equity  securities  consisted of 650,292
shares of common  stock of  NuOasis  Resorts,  Inc.  ("NuOasis")  (Note 2).  The
Company   classified  these  equity   securities  as   available-for-sale   and,
accordingly,  they were presented in the Company's consolidated balance sheet at
their  estimated  fair market value based on quoted market prices as of June 30,
1999.  Additionally,  unrealized  losses on these securities were presented as a
component of other comprehensive loss in the related consolidated  statements of
operations and comprehensive loss.

     During the year ended June 30, 2000, the Company sold all 650,292 shares of
common  stock,  and  realized  a loss on the  sale of  these  securities  in the
aggregate  amount of $130,321.  Prior to its  disposition  of these shares,  the
Company received a stock dividend from NuOasis that consisted of common stock of
five entities that were previously  wholly-owned  subsidiaries of NuOasis. These
five entities  currently  have no significant  operations,  and no public market
currently exists for their common stock. As a result,  management  believes that
the common stock of these five entities has a nominal value as of June 30, 2000,
and  accordingly,  they have not been  valued in the  accompanying  consolidated
financial statements.

Fair Value of Financial Instruments

     Disclosure about fair value of financial  instruments is based on pertinent
information  available  to  management  as of June  30,  2000  and  considerable
judgment is necessary to interpret market data and develop estimated fair value.
The Company has  determined  that the fair value of all  financial  instruments,
which include accounts  receivable and capital lease  obligations,  approximated
their carrying values as of June 30, 2000.

Credit Risk

     Financial  instruments that potentially  subject the Company to credit risk
at June 30, 2000 are  primarily  comprised of accounts  receivable.  The Company
generally  does not require  collateral on its accounts  receivable and informal
credit evaluations of its customers are regularly performed.

     As of June 30, 2000, 81% of the Company's  accounts  receivable is due from
RSL Primecall USA, and 19% is due from Blackstone  Calling Cards, Inc., which is
also a stockholder of the Company.

Credit Risk (continued)

     The Company  places its  deposits  with  financial  institutions  which are
considered by management to be of  high-credit  quality.  At times,  balances in
these cash accounts may exceed the Federal Deposit Insurance  Corporation (FDIC)
limit of  $100,000.  Uninsured  balances  at June 30,  2000  were  approximately
$383,072.

Equipment and Furniture

     Equipment  and  furniture  are recorded at cost.  Depreciation  is provided
using the  straight-line  method over the estimated  useful lives of the related
assets  which is five to seven  years.  Maintenance  and  repairs are charged to
operations as incurred.

Long Lived Assets

     Long-lived assets and certain identifiable  intangibles to be held and used
by the  Company  are  reviewed  for  impairment  whenever  events or  changes in
circumstances  indicate the carrying  amount of an asset may not be recoverable.
For the purposes of evaluating  potential  impairment,  the Company's assets are
grouped by the subsidiary to which they relate.  Since adopting this  statement,
the Company gives  consideration to events or changes in circumstances  for each
of its  subsidiaries.  Related  asset  impairment  charges  are  presented  on a
separate line item in the accompanying  consolidated statement of operations and
comprehensive loss and are described in Note 3.

Income Taxes

     The Company uses the  "liability  method" of  accounting  for income taxes.
Accordingly,  deferred tax  liabilities  and assets are determined  based on the
difference  between  the  financial  statement  and  tax  bases  of  assets  and
liabilities,  using  enacted  tax  rates in  effect  for the  year in which  the
differences  are  expected to  reverse.  Current  income  taxes are based on the
year's taxable income for federal and state income tax reporting purposes.

Accounting for Employee Stock Options

     In October 1995, the Financial  Accounting  Standards Board ("FASB") issued
SFAS No. 123, "Accounting for Stock-Based  Compensation." In conformity with the
provisions of SFAS No. 123, the Company has  determined  that it will not change
to the fair value method  prescribed by SFAS No. 123 and will continue to follow
Accounting  Principles  Board Opinion No. 25 for  measurement and recognition of
employee stock-based transactions.

Issuance of Stock for Services

     Shares of the  Company's  common  stock issued for services are recorded in
accordance with SFAS No. 123 at the fair market value of the stock issued or the
fair market value of the services  provided,  whichever  value is more  reliably
measurable.

Reverse Stock Split

     In February  2000,  the Company  effected a 1-for-15  reverse  split of its
common  stock.  Accordingly,  the  authorized  number of shares was reduced from
333,000,000 to 22,200,000. Related common stock share and per share amounts have
been  retroactively   adjusted  in  the  accompanying   consolidated   financial
statements for this reverse stock split.

Loss per Common Share

     Loss per common share is computed based on the net loss for each period, as
adjusted  for  dividends  required on preferred  stock  ($23,800 for each of the
years ended June 30, 2000 and 1999) and the  weighted  average  number of common
shares outstanding. Common stock equivalents were not considered in the loss per
share calculations,  as the effect would have been anti-dilutive.  A schedule of
common shares reserved for issuance upon  conversion,  redemption or exercise of
various equity securities is included in Note 5.

Segments and Related Information

     A public  enterprise  is  required  to  report  financial  and  descriptive
information about its reportable  operating  segments and establishes  standards
for related disclosures about product and services,  geographic areas, and major
customers.

     Currently,  management  believes  that the Company has only one  reportable
operating segment, as the Company is organized in a single operating segment for
purposes of making  operating  decisions  and assessing  performance.  The chief
executive officer (the chief operating decision maker),  evaluates  performance,
makes  operating  decisions,  and allocates  resources  based on financial  data
consistent with the  presentation  in the  accompanying  consolidated  financial
statements.

     During the years ended June 30, 2000 and 1999,  Blackstone  Calling  Cards,
Inc.  ("Blackstone"),  accounted for  approximately 49% and 41% of the Company's
revenues,  respectively.  Blackstone is a stockholder of the Company. During the
year ended June 30, 2000,  RSL  Primecall USA accounted for 48% of the Company's
revenues. The Company had no revenues attributed to geographic locations outside
the United States during each of the years ended June 30, 2000 and 1999.

2.  Acquisition of National Pools  Corporation and Change in Control of the
Company

     On June 13, 1996, NuOasis Resorts, Inc.  ("NuOasis"),  the then controlling
parent of the Company,  granted an option (the  "Option") to Joseph  Monterosso,
the current  Chief  Executive  Officer and Chairman of the  Company,  to acquire
250,000  Series B Preferred  Shares of the Company (the "Series B Shares") owned
by NuOasis at that time (Note 5). The Option is exercisable at a price of $13.00
per  share  and each  Series  B share is  convertible  into  5.2  shares  of the
Company's common stock.

     On December 19, 1996, the Company  entered into Stock  Purchase  Agreements
with each of the  shareholders  of NPC  pursuant to which the Company  agreed to
issue a series of  Secured  Promissory  Notes  (the  "Notes")  in the  aggregate
principal  amount of $1,200,000  and 66,667  shares of the Company's  restricted
common  stock to the NPC  shareholders  in  exchange  for all of the  issued and
outstanding  shares of capital  stock of NPC. The Notes are  convertible  into a
maximum of 16,126,667  shares of the Company's  common stock.  The conversion of
the Notes are contingent upon NPC's operations achieving certain financial goals
over the next several fiscal years.  The terms of the conversion  are, for every
$250,000 of net annual  operating  income  achieved by NPC,  $7,500 in principal
amount of the Notes may be converted  into 100,792  shares of restricted  common
stock. The Notes are non-recourse to the Company,  secured by the assets of NPC,
bear  interest  at 8% per annum,  and were due and payable on May 31, 1999 (Note
4).  As part of this  acquisition,  NuOasis  and the  Company  agreed  to a debt
assumption  agreement  whereby all Company debt in excess of $20,000 on December
24,  1996,  except  for  amounts  owed to  certain  affiliates,  which have been
converted into shares of the Company's common stock, was assumed by NuOasis. The
NPC Stock Purchase Agreements closed on December 24, 1996.

     On June 13, 1997, Mr.  Monterosso  exercised the Option to purchase 128,041
Series B Shares,  at $13.00  per share,  by payment to NuOasis of  approximately
$1,665,000.  Additionally  on June 13,  1997,  the Company sold its wholly owned
subsidiary,  Casino  Management  of  America  ("CMA"),  to  NuOasis  for cash of
$1,140,000, notes receivable from NPC aggregating $245,836, and a credit against
the NuOasis intercompany account of $95,000.

     On August 22, 1997 and effective June 13, 1996, the Option was amended (the
"Amended  Option") to  increase  the  exercise  price for 21,959 of the Series B
Shares from $13.00 per share to $72.20 per share,  or  approximately  $1,585,000
for the 21,959  shares of Series B Preferred  Stock.  The option to purchase the
remaining  100,000  shares  of  Series B Shares  was  terminated.  Concurrently,
NuOasis  granted Mr.  Monterosso a new option to purchase the remaining  100,000
Series B Shares at an  exercise  price of $11.70  per  share.  Additionally,  as
consideration for granting the new option, NuOasis acquired the right to require
Mr.  Monterosso  to  purchase  all or any  remaining  unexercised  shares of the
100,000 Series B Shares in its entirety by September 1, 1998. In September 1997,
NuOasis  converted  the 100,000  Series B Shares into 520,000  common shares and
granted Mr.  Monterosso an option to purchase 520,000 common shares at $2.25 per
share (the "Common Option").

     Closing on September 2, 1997, but effective  June 30, 1997, Mr.  Monterosso
exercised the Amended Option to purchase  21,959 Series B Shares,  at $72.20 per
share, by payment to NuOasis of  approximately  $1,585,000.  Concurrent with the
exercise of the Amended Option, the Company released NuOasis from liability,  if
any, arising from any events while NuOasis  controlled the Company,  in exchange
for approximately $1,585,000 of marketable securities (the "Securities").

     On September 2, 1997,  NuOasis sold to Mr.  Monterosso  400,000 New Class D
Warrants in  consideration  for a $1,800,000  promissory note secured by the New
Class D Warrants,  due in September 1998 (the "Warrant Note").  Each New Class D
Warrant  is  exercisable  at $15.00 per share and  entitles  Mr.  Monterosso  to
receive, upon exercise, two shares of common stock, or a total of 800,000 common
shares if all the of the New Class D  Warrants  are  exercised.  The New Class D
Warrants expire on March 30, 2004, and to date, none of the New Class D Warrants
have been exercised.

     In October  1997,  the  Company  entered  into an Exchange  Agreement  with
NuOasis in which the Company  exchanged the Securities,  having a net book value
of  $1,585,000,  for  $700,000 in cash,  a $500,000 6% secured  promissory  note
receivable and 3,600,000 shares of common stock of NuOasis.  Upon the closing of
the Exchange  Agreement,  the Company received cash from NuOasis of $441,801 and
the  remaining  cash balance that was provided for in the Exchange  Agreement of
$258,199 was applied against amounts Mr.  Monterosso owed to NuOasis pursuant to
the Common  Option and  Warrant  Note.  In  addition,  the  $500,000  6% secured
promissory  note  receivable was not ultimately  received by the Company as such
amount was also applied against amounts Mr.  Monterosso owed to NuOasis pursuant
to the Common Option and the Warrant  Note.  As a result of these  transactions,
the Company  recorded a charge against earnings in the amount of $758,199 during
the year ended June 30, 1998.

     In  November  1998,  the  Company  filed suit  against  NuOasis  and others
alleging fraud and  misrepresentation  in connection with the above transactions
(Note 8).

     As a result of the Company's acquisition of NPC and the sales and purchases
of the Series B Preferred  Stock, as discussed above, a change in control of the
Company  occurred  and the  Company  is no  longer a  controlled  subsidiary  of
NuOasis.


3.    Equipment and Furniture

     Equipment  and  furniture,  net is comprised  of the  following at June 30,
2000:

            Office equipment, furniture and fixtures              $    180,292
            Telecommunications equipment                               179,776
                                                                       360,068

            Less accumulated depreciation                              (88,506)

                                                                  $    271,562

     Effective  March 1998,  the Company  acquired the  telephone  switching and
platform assets and office equipment of Ark-Tel, Inc., a wholly owned subsidiary
of Universal Network Services,  Inc. ("UNSI").  NPC's Chief Operating Officer at
that time, who was also a director of the Company  through  December 1999, was a
significant  shareholder  and officer of UNSI.  Pursuant  to the  related  Asset
Purchase  Agreement,  the Company  acquired certain capital and operating leases
(Note  8)  whose  remaining  outstanding  principle  balances  approximated  the
estimated fair value of the related leased equipment.  In exchange,  the Company
forgave approximately  $300,000 that was owed to the Company by UNSI. The excess
of the total  consideration  paid over the  estimated  fair  value of net assets
acquired of approximately  $300,000 was charged to expense during the year ended
June 30, 1998.

     During  the  year  ended  June 30,  1999,  management  determined  that the
telephone  switching and platform assets  acquired from Ark-Tel,  Inc., were not
year 2000  compliant and that  significant  equipment  upgrades were required to
prepare the equipment to operate in the year 2000 and beyond.  As a result,  the
Company ceased payment of required rents,  which resulted in an event of default
per the related equipment lease terms.  Based on the above, the Company recorded
a related asset  impairment  charge  aggregating  $651,450 during the year ended
June 30, 1999.

     In December 1999, the lessor repossessed the related assets and the Company
recognized an extraordinary  gain of $769,394 related to the  extinguishment  of
the debt under the capital lease agreement (Note 9). Such amount represented all
amounts due to the related lessor on the date of repossession.

 4.    Convertible Notes Payable

     In  connection  with  the  Stock  Purchase  Agreements  with  each  of  the
shareholders of NPC (Note 2), the Company issued Secured  Promissory  Notes (the
"Notes")  in the  aggregate  principal  amount  of  $1,200,000.  The  Notes  are
convertible into a maximum of 241,900,000  shares of the Company's common stock.
The  conversion  of the Notes is  contingent  upon  NPC's  operations  achieving
certain  financial  goals over the next several  fiscal years.  The terms of the
conversion  are, for every $250,000 of net annual  operating  income achieved by
NPC,  $7,500 in principal  amount of the Notes may be converted  into  1,511,875
shares of restricted  common stock. The Notes are  non-recourse,  secured by the
assets of NPC,  bear  interest at 8% per annum,  and were due and payable,  with
related interest, on May 31, 1999. During the year ended June 30, 1999, $134,283
of notes payable was converted to 111,902 shares of the Company's common stock.

     In  September  1998,  the  Company  issued  $575,900  of  12%  convertible,
subordinated  notes payable,  due in April 1999.  Certain note holders converted
$540,900 of the notes payable into  1,830,508  shares of common stock during the
year ended June 30, 1999.

     As a result of the above transactions, the Company's aggregate note payable
balance at June 30, 1999 was $1,100,717.

     During the year ended June 30, 2000, the Company and each  respective  note
holder agreed to convert the outstanding principal balance of the notes payable,
and all accrued interest  thereon,  into an aggregate of 3,374,159 shares of the
Company's  restricted  common stock. An aggregate of 1,740,535 share were issued
in February  2000,  and the remaining  1,633,624  shares are payable in February
2001. As a result,  the Company has recorded a common stock payable  aggregating
$4,557,320  as of June 30,  2000 for the  portion of the stock to be released in
February  2001. In  connection  with this note payable  conversion,  the Company
recognized  a  related  effective  interest  charge in the  aggregate  amount of
$7,669,197. Such charge was determined as the amount by which the estimated fair
market value of the  restricted  common stock  issued  exceeded the  outstanding
amount of the notes payable and accrued interest.

 5.    Stockholders' (Deficit) Equity

Common Shares Reserved for Issuance

     At June 30, 2000, shares of common stock were reserved for the exercise and
conversion of the following:

      Preferred stock:
         14% Preferred Stock issued and outstanding                     11,333

      Redeemable common stock purchase warrants:
         New Class A (exercisable at $7.50 per share)                  102,000
         New Class B (exercisable at $11.25 per share)                 205,333
         New Class C (exercisable at $15.00 per share)                 100,667
         New Class D (exercisable at $7.50 per share)                  800,000

      Stock options:
        Stock option grants outstanding                                 56,500
         2000 Incentive and Non-qualified Stock Options -
          available for grant                                        2,000,000
         1993 Incentive and Non-qualified Stock Options -
          available for grant                                           80,000
         1991 Non-qualified Stock Options - available for grant         40,000

      Note payable conversion to common stock                        1,740,535

            Total                                                    5,136,368

Preferred Stock

     During 1989, stockholders authorized the issuance of up to 1,000,000 shares
of preferred stock with a par value of $.01 per share.

     During 1989, the Company sold 750,000 shares of preferred stock  designated
as 14% cumulative  convertible  preferred stock (the "14% Preferred Stock"). The
14%  Preferred  Stock is  redeemable,  in whole or in part, at the option of the
Company  at a  redemption  price of $100 per  share  plus any  unpaid  dividends
thereon to the redemption date. The 14% Preferred Stock has a liquidation  value
of $1.00 per share, ranks, as to dividends and liquidation,  prior to the common
stock and is  convertible  at the option of the holder  upon 30 days notice into
one share of common stock,  subject to adjustments in certain events. Each share
is entitled to one vote and an annual dividend of $.14 per share.  Dividends are
cumulative and payable  quarterly  when declared.  Dividends on common stock may
not be paid unless provision has been made for payment of preferred dividends.

Preferred Stock (continued)

     The 14%  Preferred  Stock  has a  liquidation  preference  of the  original
purchase  price ($1.00 per share) plus unpaid  dividends on each share  thereof.
The  balance of  proceeds  of  liquidation,  if any, is to be paid to the common
stockholders of the Company.  A merger or reorganization or other transaction in
which control is transferred will be treated similar to liquidation.

     Subject to anti-dilution adjustments,  each fifteen shares of 14% Preferred
Stock is convertible  at any time into one share of the Company's  common stock.
Each share of the 14% Preferred Stock votes on a 1:1  converted-to-common  stock
basis,  and the holders of 14%  Preferred  Stock and the holders of common stock
shall  vote  together  as one class on all  matters  submitted  to a vote of the
Company's  stockholders.  The  conversion  ratio of the 14%  Preferred  Stock to
common  stock will be  proportionally  adjusted in the event of  dilution,  i.e.
proportional adjustments for stock splits and stock dividends will be made.

     No 14% Preferred Stock was converted and no dividends were declared or paid
on the 14%  Preferred  Stock  during  each of the years  ended June 30, 2000 and
1999. Dividends in arrears aggregated $229,625 at June 30, 2000.

     In March 1994,  the  Company  issued  250,000  shares of Series B Preferred
Stock to NuOasis.  The Series B Preferred Stock has no redemption  rights and is
not entitled to any  dividends.  It has a  liquidation  value of $2 per share in
preference to any payment on common stock, subject only to rights of the holders
of the 14%  Preferred  Stock.  Each share is  entitled to 5.2 votes and shall be
convertible into 5.2 fully paid and  nonassessable  shares of common stock, or a
total of  1,300,000  shares  of  common  stock if all of the  shares of Series B
Preferred  Stock are converted.  All shares of the Company's  Series B Preferred
Stock have been converted into common stock as of June 30, 2000.

Private Sale of Common Stock and New Warrants

     During June 1993, the Company undertook a private placement of 25 units for
an aggregate  sales price of $250,000  ("Private  Placement  I"), with each unit
consisting of 2,667 shares of common stock,  2,667 New Class A redeemable common
stock  purchase  warrants  ("New  Class  A  Warrants")  and  2,667  New  Class B
redeemable  common stock purchase  warrants  ("New Class B Warrants").  Each New
Class A Warrant entitles the holder to purchase one share of common stock at the
price of $7.50 per share for the  period  from  August 1, 1993 to the  effective
date of a  registration  statement  registering  the common stock and the common
stock underlying the New Class A Warrants offered and issuable under the related
private  placement  memorandum.  Each New Class B Warrant entitles the holder to
purchase  one  share of common  stock at the  price of $11.25  per share for the
period from August 1, 1993 to the  effective  date of a  registration  statement
registering  the common  stock and the common stock  underlying  the New Class B
Warrants offered and issuable under the related private placement memorandum.

     During  July  1993,  the  Company  undertook  a  private  placement  of  an
additional 25 units for an aggregate sales price of $250,000 ("Private Placement
II"), with each unit consisting of 2,667 shares of common stock, 2,667 New Class
A Warrants, and 2,667 New Class B Warrants.

     During  August  1993,  the  Company  undertook  a private  placement  of an
additional 20 units for an aggregate sales price of $200,000 ("Private Placement
III"),  with each unit  consisting  of 2,667 shares of common  stock,  2,667 New
Class A Warrants, and 2,667 New Class B Warrants.

     In connection with Private  Placements I, II and III, the Company  received
aggregate  proceeds of $559,000 (net of sales agent and other direct costs which
aggregated  $141,000)  from the sale of 70 units and  issued  186,667  shares of
common  stock,  186,667  New Class A Warrants  and  186,667 New Class B Warrants
during fiscal year 1993.

     In September 1993, in an effort to encourage  early  exercise,  the Company
offered one New Class C redeemable  common stock purchase  warrant ("New Class C
Warrants")  for each New Class A Warrant  exercised on or before  September  30,
1993. In connection with that offer, 103,333 New Class A Warrants were exercised
resulting in the issuance of an  additional  103,333  shares of common stock for
$775,000 and 103,333 New Class C Warrants. Each New Class C Warrant entitles the
holder to purchase one share of common stock at the price of $15.00 per share.

Private Sale of Common Stock and New Warrants (continued)

     All New Class A, B and C Warrants are  exercisable up to one year after the
effective date of the  registration  of the underlying  stock. As of the date of
this report, the registration of the underlying stock has not been completed and
therefore is not yet effective.

     In March 1994,  the Company issued 400,000 New Class D Warrants to NuOasis.
Each New Class D Warrant is exercisable at $15.00 per share and will entitle the
holder to receive upon  exercise two (2) shares of common  stock,  or a total of
800,000 shares if all of the New Class D Warrants are exercised. The New Class D
Warrants expire on March 30, 2004, and to date, none of the New Class D Warrants
have been exercised. In September 1997, NuOasis sold the New Class D Warrants to
Mr.  Monterosso  for a  $1,800,000  promissory  note  secured by the New Class D
Warrants (Note 2).

2000 Incentive and Non-qualified Stock Option Plans

     Effective  January 31, 2000, the Company's Board of Directors  approved the
Company's  2000 Stock  Option Plan (the "2000  Plan"),  which  provides  for the
granting of both incentive stock options and  non-qualified  stock options.  The
2000 Plan covers 2,000,000 shares of the Company's common stock. Options granted
pursuant to the 2000 Plan will generally have terms no longer than 10 years, and
the related option  exercise price will be determined by the Company's  Board of
Directors. No options have yet been granted under the 2000 Plan.

1993 Incentive and Non-qualified Stock Option Plans

     Under stock option plans adopted on January 22, 1993,  the Company's  Board
of  Directors  may grant  "incentive  stock  options" and  "non-qualified  stock
options" whereby option holders may purchase up to 80,000 shares of common stock
prior to the  termination  of the plan on  January  22,  2003.  Incentive  stock
options may only be granted to officers and other employees; non-qualified stock
options may be granted to employees,  advisors,  consultants  and members of the
Board of Directors of the Company. Incentive stock options may not be granted at
a price less than 100% of fair market  value as of the date of grant to officers
and employees  who own less than 10% of the  Company's  common stock and 110% of
fair  market  value to those  officers  and  employees  who own more  than  10%.
Non-qualified  stock  options may be granted at a price to be  determined by the
compensation  committee of the Board of Directors on the date such non-qualified
stock options are granted.  Options are  exercisable  from the date of grant and
expire no later  than ten years from the date of grant or such  earlier  date as
determined by the compensation committee at the date of grant. However, the term
of an incentive  stock option granted to an officer or other employee who at the
time of grant owns at least 10% of the Company's common stock,  shall not exceed
five  years.  No  options  have  been  granted  under  the  1993  incentive  and
non-qualified stock options plans.

1991 Non-qualified Stock Options

     Under a stock option plan adopted on February 1, 1991, the Company's  Board
of Directors  may grant  "non-qualified  stock  options"  whereby  employees may
purchase up to 40,000  shares of common  stock prior to the  termination  of the
plan on  February 1, 2001.  Options  must be granted at no less than 85% of fair
market value as of the date of grant.  Options are exercisable  from the date of
grant and expire no later  than five  years  from the date of grant.  No options
were issued or  exercised  during each of the years ended June 30, 2000 and 1999
and 40,000 options remain available for grant as of June 30, 2000.

1989 Incentive Stock Option and Non-qualified Stock Option Plans

     In July 1999,  the 1989  incentive  stock  option and  non-qualified  stock
option plans were terminated.

The NuOasis Option

     In March 1994, the Company granted to NuOasis a nontransferable  option for
the purchase of up to 410,667 shares of the Company's common stock. The exercise
price and total  number of shares  that can be  purchased  upon  exercise of the
option  is equal to the  exercise  price and  number  of shares of common  stock
subject to New Class A, New Class B and New Class C Warrants  outstanding at the
Closing Date that eventually expired unexercised.  The Warrant Agreements extend
the expiration dates of the respective  warrants to one year after the effective
date of a registration  statement, at which time NuOasis may exercise its option
provided all the New Class A, B and C Warrants have not been exercised.  NuOasis
does not  hold any of the New  Class  A, B or C  Warrants,  nor is it  currently
entitled to exercise its Option. In conjunction with the sale of the New Class D
Warrants  (Note 2),  NuOasis  also sold its  rights to  exercise  any  remaining
unexercised New Class A, New Class B and New Class C Warrants.

Other Stock Options

     A summary of other stock option transactions is as follows:

                                                 Year Ended        Year Ended
                                                June 30, 2000     June 30, 1999

            Outstanding at beginning of year          56,500            56,500
               Granted                               166,668                 -
               Exercised                                   -                 -
               Cancelled                                   -                 -

            Outstanding at end of year               223,168            56,500

     Stock options  granted during the year ended June 30, 2000 are described in
Note 6.

Stock Options Exercised

     During the year ended June 30,  1997,  certain  affiliates  of the  Company
exercised stock options and the Company  received notes in the aggregate  amount
of $584,167 and  aggregate  cash  payments of $67,874 as  consideration  for the
exercise of these  options.  The notes were  originally due in May 1998 and earn
interest at 10% per annum.  The Company  recorded a  provision  against  related
receivables of $515,967 during the year ended June 30, 1999.

 6.    Related Party Transactions

Due to Officers and Related Party

     As of June 30, 2000, the Company owes Mr. Monterosso,  an officer,  and his
wife a net aggregate amount of $235,474.  Such amounts do not bear interest, are
not collateralized,  and have no fixed repayment terms. During each of the years
ended June 30,  2000 and 1999,  the  Company  recorded  aggregate  salaries  and
consulting expenses to these two individuals of approximately $350,000, and such
amounts are included in selling,  general,  and  administration  expenses in the
accompanying consolidated statements of operations and comprehensive loss.

Transactions with the Chief Executive Officer and Chairman

     On April 1, 1994,  NPC entered  into an  employment  agreement  with Joseph
Monterosso to serve as NPC's Chief Executive  Officer.  In conjunction  with the
acquisition of NPC, Mr. Monterosso  became the Company's  President and Director
on November 25, 1996, and Chairman on August 8, 1997. The agreement provides for
annual compensation to Mr. Monterosso of $250,000.

     Effective January 1, 2000, the Company and Mr.  Monterosso  entered into an
Executive  Employment Agreement for Mr. Monterosso to serve a three year term as
the Company's  Chief  Executive  Officer.  The agreement may be extended for two
additional  years by mutual written  consent of Mr.  Monterosso and the Company.
The agreement provides for annual compensation of $250,000 with annual increases
of $25,000.  Additionally,  Mr. Monterosso will earn annual bonuses ranging from
$100,000  to $150,000 if the Company  achieves  certain  pre-determined  revenue
targets.  During the first year of the  agreement,  Mr.  Monterosso  may convert
accrued  salary to shares of the  Company's  common stock at a rate of $3.75 per
share.  During the second and third  years,  accrued  salary may be converted to
shares of the Company's  common stock at a rate equal to 50% of the stock's fair
market value  averaged  over the preceding 15 day pay period.  In addition,  Mr.
Monterosso  was  granted  stock  options in the amount of 333,333  shares in the
first  year and  200,000  shares in each of the  second  and third  years.  Such
options are exercisable at $1.56 per share, vest in equal monthly  installments,
and expire five years from the last day of Mr.  Monterosso's  employment.  As of
June 30,  2000,  166,668  options  have  vested,  and  accordingly,  the Company
recognized a stock based  compensation  charge of $198,141 during the year ended
June 30, 2000. None of the vested options have been exercised by Mr. Monterosso.

Transactions with the Chief Executive Officer and Chairman (continued)

     In December  1999,  the  Company's  Chief  Executive  Officer and  Chairman
converted  $383,463  of accrued  salary owed to him  pursuant to his  employment
agreement, and $76,837 of accrued expenses owed to his wife, into 666,667 shares
of the Company's  restricted  common stock. In connection with this  conversion,
the Company recognized  compensation expenses of $1,134,000.  Such expenses were
determined by  multiplying  the number of shares  issued to the Chief  Executive
Officer and Chairman by the closing price of the  Company's  common stock on the
date of conversion, less a 15% discount factor based on the restricted nature of
the shares issued.

     In December  1999,  the  Company's  Chief  Executive  Officer and  Chairman
deposited his personal  shares of the  Company's  common stock as security for a
service agreement with a vendor.  Additionally,  the Chief Executive Officer and
Chairman  executed a personal  guarantee of the Company's  obligations under the
related service  agreement.  As a result,  the Company's Chief Executive Officer
and Chairman  received 333,333 shares of the Company's  restricted common stock,
and the Company recognized  related  compensation  expenses of $1,100,000.  Such
expenses were determined by multiplying the number of shares issued to the Chief
Executive  Officer and  Chairman by the closing  price of the  Company's  common
stock on the date the issuance was approved by the Company's board of directors,
less a 15% discount factor based on the restricted nature of the shares issued.

Stock Transaction with Director's Wife

     In December 1999, the wife of a director of the Company  converted  accrued
compensation  and  expenses  aggregating  $284,586  into  379,448  shares of the
Company's  restricted  common stock.  In connection  with this  conversion,  the
Company  recognized a related stock  compensation  charge  aggregating  $863,347
during the year ended June 30, 2000. Such charge was determined as the amount by
which the  estimated  fair market  value of the  restricted  common stock issued
exceeded the aggregate carrying amount of accrued compensation and expenses.

Related Party Note Payable Conversions

     In connection  with the note payable  conversions  described in Note 4, the
Company's  Chief  Executive  Officer and  Chairman  will receive an aggregate of
671,626 restricted shares of common stock, his wife will receive an aggregate of
94,647  restricted  shares of common stock,  and a relative will receive  10,062
restricted  shares of common stock. In addition,  a director of the Company will
receive an aggregate of 106,911 restricted shares of common stock, his wife will
receive an aggregate of 76,506 shares of restricted common stock, and a relative
will receive 24,907 restricted shares of common stock.

Stock Transactions with Blackstone Calling Cards, Inc.

     In September  1999,  the Company sold 140,000  shares of restricted  common
stock to  Blackstone,  a significant  customer,  for cash  proceeds  aggregating
$510,000. Because the estimated fair market value of the restricted common stock
sold to  Blackstone  exceeded  the  purchase  price  paid by  Blackstone  by the
aggregate  amount of  $327,120,  the Company  recognized a  corresponding  stock
compensation charge during the year ended June 30, 2000.

     In November  1999,  the Company sold 133,333  shares of  restricted  common
stock to  Blackstone.  In exchange,  the Company  received a  receivable  in the
aggregate  amount of $250,000.  Such receivable  does not bear interest,  has no
stated repayment terms and is  collateralized  by 66,667 shares of the Company's
common stock  previously  sold to Blackstone.  Because the estimated fair market
value of the  restricted  common stock sold to Blackstone  exceeded the purchase
paid by Blackstone by the aggregate amount of $254,730, the Company recognized a
corresponding stock compensation charge during the year ended June 30, 2000.

7. Income Taxes

     The income tax effects of  significant  items  comprising the Company's net
deferred income tax assets and liabilities are as follows as of June 30:

                                                    2000              1999

      Stock based compensation                  $  1,807,000      $    259,501
      Interest expense                             3,569,800           349,328
      Accrued expenses                                81,000            68,844
      Valuation allowance                         (5,457,800)         (677,673)

            Current portion of deferred tax
              assets                            $          -      $          -

      Net operating loss carryforwards          $  6,551,110         6,230,800
      Valuation allowance                         (6,551,110)       (6,230,800)

            Long-term portion of deferred
              tax assets                        $          -      $          -

     The  reconciliation  of income taxes computed at the federal  statutory tax
rate to income tax expense at the effective income rate is as follows:

                                                        2000              1999
      Federal statutory income tax rate                (34.0)%           (34.0)%
      Increases (decreases) resulting from:
          State tax effect                              (8.5)            (10.5)
          Net change in valuation allowance             42.5              44.5
      Effective income tax rate                            -%                -%

     The  Company  has  federal  and  state  net  operating   losses   ("NOL's")
approximating $16,801,000 and $14,805,000,  respectively, as of June 30, 2000. A
significant  portion of the NOL's  resulted from the  acquisition of NPC and are
likely  to be  subject  to  ownership  change  limitations.  The  federal  NOL's
carryforwards begin to expire in fiscal year 2005. The state NOL's carryforwards
began expiring in fiscal year 1999. In addition, utilization of the NOL's may be
limited on Section 382 of the Internal Revenue Code due to additional  ownership
changes.

     At June 30, 2000 and 1999, a 100% valuation  allowance has been provided to
reduce  the  Company's  net  deferred  tax  assets  for the  amount by which the
deferred tax asset  exceeded the net deferred tax liability  resulting  from all
temporary  differences.  The Company has provided the allowance since management
could not determine  that is was "more likely than not" that the benefits of the
deferred tax assets would be realized.

 8.    Commitments and Contingencies

Legal Proceedings

     On August 28,  1998,  the Company was named in a lawsuit  filed by Worldcom
Network Services,  Inc.  ("Worldcom") to recover the sum of $2,208,362 allegedly
due and owing as a result of a debt that the  Company  allegedly  guaranteed  on
behalf of UNSI.  Although the Company  denies  liability on the  guarantee,  the
Company  reached a  settlement  with  Worldcom in which the Company  transferred
177,778 shares of its restricted common stock to Worldcom. In exchange, Worldcom
agreed to release the Company from any and all  liability,  known and unknown up
to the date of the related settlement agreement, which is November 3, 1999. As a
result of the settlement,  the Company recorded a litigation  settlement expense
of $712,560  during the year ended June 30, 1999.  The expense was determined by
multiplying  the number of shares issued upon settlement by the closing price of
the Company's common stock on the date of settlement, less a 10% discount factor
based on the restricted nature of shares issued.

     On  October 2,  1998,  Pickett  Communications,  Inc.  ("Pickett")  filed a
complaint for monetary  damages and challenged  the Company's  rights to use the
HitLoTTo  logo. In July 1999, a settlement  agreement was executed that required
the Company to release 14,536 shares of its restricted  common stock to Pickett.
This stock had  previously  been issued to Pickett  pursuant to a contract dated
October  14, 1997 in which the  Company  agreed to pay  Pickett for  services it
provided to NPC. The Company had previously refused to release the common stock,
as NPC disputed certain charges which it believed were unauthorized. As a result
of the  settlement,  the Company  recorded a  litigation  settlement  expense of
$141,287  during the year ended June 30,  1999.  The expense was  determined  by
multiplying  the number of shares issued upon settlement by the closing price of
the Company's common stock on the date of settlement, less a 10% discount factor
based on the restricted nature of shares issued.

     On February 19, 1999,  Accountempts  and RHI Management  Resources  filed a
complaint for breach of contract to recover  approximately $26,000 allegedly due
and  owing  for  temporary  employment  services.  In July  1999,  a  settlement
agreement was executed in which the Company agreed to pay an aggregate amount of
$24,000 at the rate of $2,000  per  month.  As the  Company  previously  accrued
$35,475 to these  parties,  the  Company  recorded  a  reduction  of  litigation
settlement expenses of $11,475 during the year ended June 30, 1999.

     On August 30, 1999, the California Labor Commissioner  awarded Joseph Arton
$34,426 in wages,  interest and penalties  based on claims that this  individual
was an employee of the  Company.  As a result of the  Company's  appeal filed on
September 20, 1999, Joseph Arton filed a related complaint. Although the Company
contends  that  Joseph  Arton was not an  employee  of the  Company,  but was an
independent contractor, the Company recognized a $34,426 litigation expense with
respect to this matter  during the year ended June 30, 1999.  In December  1999,
the Company  settled this matter and issued 10,000  shares of restricted  common
stock. As a result of this  settlement and related stock  issuance,  the Company
recognized an additional expense of $16,424 during the year ended June 30, 2000.
The expense  was  determined  by  multiplying  the number of shares  issued upon
settlement  by the closing  price of the  Company's  common stock on the date of
settlement,  less a 15% discount factor based on the restricted nature of shares
issued.

     On November 10, 1998, the Company filed legal action (TotalAxcess,  Inc. v.
NuOasis Resorts, Inc; Nona Morelli's II, Inc.; NuOasis International, Inc.; Fred
Luke, Jr.; Rocci Howe; Steven H. Dong; John D. Desbrow;  Archer & Weed;  Richard
Weed)  in  San   Francisco   Superior   Court.   The  suit  alleges   fraud  and
misrepresentation  in the sale of securities,  which were not qualified for sale
and professional  malpractice  against legal counsel.  On July 26, 1999, NuOasis
Resorts,  Inc. and Nona Morelli's II, Inc. filed a cross  complaint  against the
Company   alleging   claims   for   breach   of   contract,    fraud,   material
misrepresentation  in the purchase of securities and libel, and seeks rescission
of certain  contracts and the  imposition of a  constructive  trust over certain
securities.  Also on July 26, 1999,  Rocci Howe,  Fred Luke, Jr. and Steven Dong
filed  cross  complaints  against  the  Company  alleging  claims  for breach of
contract,  indemnity and libel. All counsel have stipulated to a change in venue
from San Francisco to Orange County Superior Court,  and the San Francisco Court
has transferred  the file to the Orange County Court.  The trial date is set for
March 2001.  The Court  ordered that all claims the Company has against  Richard
Weed are to be arbitrated  subsequent to the completion of the trial against the
other defendants. Management plans to vigorously pursue its complaint and defend
each  cross  complaint,  which it  believes  lack  substantial  merit.  Based on
information presently available, management is unable to determine the amount of
the potential loss contingency, if any.

     On January 6, 1999, the Company filed a lawsuit against Dennis  Houston,  a
former officer of NPC and a Director of the Company through  December 1999. This
complaint  alleges  breach  of  fiduciary  duty  by  Mr.  Houston  as one of the
Company's  directors for failing to disclose material facts in the Ark-Tel Asset
Purchase  Agreement which  management  believes  resulted in the Company's being
sued by Worldcom  Network  Services,  Inc.  (see above).  On June 29, 1999,  Mr.
Houston filed a cross complaint  alleging claims for breach of contract,  breach
of the implied covenant of good faith and fair dealing, misrepresentation, fraud
and  embezzlement.  The Company is  vigorously  pursuing the matter  against Mr.
Houston  and plans to  vigorously  defend the cross  complaint.  This  action is
presently being tried. Based on information  presently available,  management is
unable to determine the amount of the potential loss contingency, if any.

     On June  26,  1997,  the  Company  filed a  lawsuit  against  Network  Long
Distance,  Inc. and their stock  transfer agent to compel them to release shares
of Network Long  Distance,  Inc.'s common stock (the "Shares") that was received
by the  Company in  connection  with a release of  liability  granted to NuOasis
Resorts,  Inc.  (Note 2).  Once the  Shares  were  properly  transferred  to the
Company,  the  Company  dismissed  its  claims as moot.  However,  Network  Long
Distance,  Inc. (currently known as Eclipse  Communications,  Inc. or "Eclipse")
continues to pursue the Shares  through its  counterclaims.  Eclipse is claiming
that it owns some or all of the Shares and is seeking  damages and an injunction
prohibiting  the transfer of the Shares.  In response to Eclipse's  allegations,
management is vigorously  contesting the litigation,  as it believes the case to
be groundless and without merit. In February 2000,  Eclipse's case was dismissed
with prejudice. However, in March 2000, Eclipse filed a Notice of Appeal, and in
August 2000,  filed its opening brief. The Company is preparing an answer brief,
and  thereafter,  Eclipse will have an  opportunity  to  presently  file a reply
brief.  In the event the case is  returned  to the trial  court,  management  is
unable to predict  the  ultimate  outcome of the matter.  If Eclipse  ultimately
prevails,  it may be able to recover a significant portion of the Shares, or the
value thereof. Additionally,  Eclipse may be entitled to statutory interest from
1997 through the trial.

     In August 2000, the Company settled a lawsuit with Comms Peoples, Inc. that
requires the Company to make  payments  aggregating  $14,000.  Such amounts have
been fully accrued in accounts payable as of June 30, 2000.

     In September 2000, the Company settled a lawsuit with Cross Communications,
Inc.  ("Cross")  whereby Cross agreed to dismiss its claims  against the Company
for  nonpayment  of $666,621  of  services  provided by Cross and accrued by the
Company. In exchange,  the Company agreed to dismiss its counter-claims  against
Cross,  which related  primarily to the quality of the services  provided to the
Company  by Cross.  As a result of this  settlement  and debt  forgiveness,  the
Company  recognized an  extraordinary  gain in the amount of $666,621 during the
year ended June 30, 2000 (Note 10).

     In September,  2000, the Company settled a matter with M.H.  Meyerson & Co.
("Meyerson")  who claimed  that it was  entitled to 47,860  warrants to purchase
common stock of the Company  pursuant to a December 12, 1997 Investment  Banking
Agreement.  In connection with the settlement,  the Company issued 20,000 shares
of restricted common stock and recorded a litigation  settlement  expense and an
accrued  litigation  settlement  liability of $23,375 during the year ended June
30, 2000. The expense was determined by multiplying  the number of shares issued
upon  settlement by the closing price of the Company's  common stock on the date
of settlement,  less a 15% discount factor based on the restricted nature of the
shares issued.

     In November  1999,  the Company was served with Summons and Complaint in an
action filed by Republic Leasing Co., Inc. The action arose out of facts related
to the  Ark-Tel and Dennis  Houston  matter  discussed  above and  concerned  an
equipment  lease.   Plaintiff  sought  approximately  $29,000  plus  prejudgment
interest and attorney fees and costs. A settlement  agreement was reached in May
2000 whereby the Company paid the aggregate amount of $31,000.  Upon its receipt
of the final payment,  the plaintiff caused the action against the Company to be
dismissed.  The  settlement  amount is an element of the  damages  sought by the
Company in its pending action against Dennis Houston discussed above.

     In  February  2000,  Waterview  Resolution  Corporation  filed and served a
complaint  against  National Pools  Corporation  for money owed in the amount of
$59,673.  The action arose out of a guarantee on leased equipment assumed by the
Company on behalf of Ark-Tel and Dennis  Houston.  A  settlement  agreement  was
reached in May 2000 whereby the Company  agreed to pay the  aggregate  amount of
$40,000 to the plaintiff in four equal monthly  installments  commencing June 1,
2000.  Upon its receipt of the fourth and final  payment on or about  October 1,
2000, the plaintiff dismissed the case in its entirety. The settlement amount is
an element of the damages  sought by the Company in its pending  action  against
Dennis Houston discussed above. During the year ended June 30, 2000, the Company
recorded a litigation  settlement expense and an accrued  litigation  settlement
liability  in the amount of  $12,401.  Such  represents  the amount by which the
settlement exceeded previously accrued amounts.

     The Company is, from time to time,  involved in various lawsuits  generally
incidental  to its  business  operations,  consisting  primarily  of  collection
actions and vendor  disputes.  The Company does not believe that such claims and
lawsuits,  either individually or in the aggregate, will have a material adverse
effect on its consolidated operations or consolidated financial condition.

Corporate Financing Program

     During the year ended June 30, 1999,  the Company  implemented a program in
which current stockholders were invited to exchange their free trading shares of
common stock for a larger number of restricted  common  shares.  Pursuant to the
Company's  "Corporate Financing Program," each free trading share surrendered to
the Company entitled the contributing stockholder to 1.1333 shares of restricted
common  stock.  The shares of  restricted  common  stock are  issuable  upon the
Company  liquidating the free trading shares  surrendered.  As of June 30, 1999,
there were 69,867 shares of free trading  common stock that were held in escrow.
During the year ended June 30, 2000, the Company received an additional  167,695
free trading shares and issued,  in the  aggregate,  190,049  restricted  shares
pursuant to this program. As of June 30, 2000, there were 444,744 shares of free
trading  common  stock held in escrow that will  require the issuance of 504,028
shares of restricted common stock.


Capital and Operating Leases

     The  Company  sublet  office  space  in San  Francisco,  California  from a
stockholder  on a month to month basis,  which ended in July 1999. In June 1999,
the  Company  entered  into a five  year  operating  lease for  office  space in
Oakland,  California  commencing  August 1999.  Monthly lease payments under the
lease are $12,542. The Company also leased office space in Naples,  Florida, and
Springdale,  Arkansas  through  April 1999.  In addition,  the Company  acquired
certain leases from Ark-Tel, Inc. (Note 3).

     Minimum annual payments related to all  noncancelable  operating leases are
as follows for the years ending June 30:


                  2001                               $     150,503
                  2002                                     150,503
                  2003                                     150,503
                  2004                                     150,503
                  2005                                      12,542


                  Total                              $     614,554

     Rent  expense  aggregated  $258,735  and  $182,961 in fiscal years 2000 and
1999, respectively.

     As described in Note 3, certain of the  Company's  equipment  under capital
leases  was  repossessed  during the year ended  June 30,  2000.  The  Company's
remaining  obligations  under capital leases are not  significant as of June 30,
2000.

Security Interest in Company Assets

     During the year ended June 30,  2000,  the  Company  and  Worldcom  Network
Services,  Inc. entered into certain service  agreements,  and other instruments
related thereto,  that required the Company to assign and grant to this vendor a
lien and security  interest in substantially  all of the Company's  assets.  The
Company's Chief  Executive  Officer and Chairman was also required by the vendor
to personally  guarantee the obligations of the Company  pursuant to the service
agreements (Note 6).

Year 2000

     Other than the matter  described  in Note 3, the  Company  does not believe
that  the  impact  of the  year  2000  computer  issue  has had or  will  have a
significant  impact on its  consolidated  operations or  consolidated  financial
position. Also, the Company does not believe that it will be required to further
modify its  internal  computer  systems,  equipment  or  products.  However,  if
internal  systems do not correctly  recognize date  information in the year 2000
and  beyond,  there  could  be  adverse  impact  on the  Company's  consolidated
operations.  There can be no assurance that another  entity's  failure to ensure
year 2000 capability would not have an adverse effect on the Company.

9.     Extraordinary Items

     During the year ended June 30,  2000,  certain of the  Company's  equipment
under capital leases was  repossessed by the related  lessor.  As a result,  the
Company   recognized  an   extraordinary   gain  of  $769,394   related  to  the
extinguishment  of the debt  under  the  capital  lease  agreement  (Note 3). In
addition,  the Company  settled a lawsuit  with a vendor  that  resulted in debt
forgiveness   of  $666,621   (Note  8).  Such  amounts  have  been  recorded  as
extraordinary   items  in  the   accompanying   statements  of  operations   and
comprehensive  loss.  The items  have not been  presented  net of tax due to the
Company's current year net loss and existing net operating loss carryforwards.

     During the year ended June 30, 1999, the Company satisfied certain accounts
payable and accrued  liabilities  for amounts  that were less than the  carrying
values of the related  liabilities.  The resulting  $167,529 of debt forgiveness
has been  recorded as an  extraordinary  item in the  accompanying  consolidated
statements of operations and comprehensive loss. The item has not been presented
net of tax due to the Company's current year net loss and existing net operating
loss carryforwards.

10.    Fourth Quarter Adjustments

     The Company recorded certain adjustments in the fourth quarter that related
to transactions  in earlier  quarters in the current fiscal year. The nature and
amounts of significant adjustments are as follows:

         Reversal of revenues and accounts receivable          $ 15,458,568
         Reversal of operating costs and accrued expenses       (16,842,392)
         Interest expenses                                        7,715,675
         Stock based compensation charges                         3,877,338
         Extraordinary items for debt forgiveness                  (769,394)
         Conversion of notes payable                              1,100,717
         Settlement of accrued litigation                          (876,798)

     The Company has restated its unaudited quarterly  financial  statements and
filed amendments to its quarterly reports on Form 10-QSB.

11.    Subsequent Events

Acquisition of Justice Telecom Corporation (Unaudited)

     Pursuant to a stock purchase  agreement  dated August 30, 2000, the Company
acquired  all of the  outstanding  common stock of Justice  Telecom  Corporation
("Justice") in exchange for promissory notes aggregating $1,300,000. The Company
has accounted for this business  combination  as a purchase,  and  management is
presently in the process of evaluating  the  estimated  fair value of the assets
and liabilities acquired. The operating results of Justice will be included with
the results of the Company from the closing date of the acquisition, which is on
or around September 19, 2000. Assuming the business  combination had occurred on
July 1, 1999, the Company's  revenues,  net loss, and basic and diluted loss per
share would have been $69,300,000, $(24,400,000), and $(2.34), respectively.