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


                                 AMENDMENT NO. 1
                                       To
                                   FORM 10-KSB


(Mark One)

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

For the fiscal year ended: November 30, 2000
                           -----------------

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

For the transition period from ________________ to ______________.

Commission file Number:  0-18686

                        PAK MAIL CENTERS OF AMERICA, INC.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

          Colorado                                       84-0934575
 ------------------------------              ----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

7173 South Havana, Suite 600, Englewood, CO                 80112
 --------------------------------------                    --------
(Address of principal executive offices)                  (Zip Code)

Issuer's telephone number: 303-957-1000

Securities registered under Section 12(b) of the Exchange Act:  NONE

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par
value $.001 per share

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been
subject to such filing requirements for the past 90 days. YES X NO ___

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Issuer'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 Issuer's revenues for its most recent fiscal year were $5,162,789.

The aggregate market value of the Issuer's voting stock held as of a recent date
by non-affiliates of the Issuer cannot be ascertained due to the absence of
reliable information as to quoted prices with respect to the Issuer's common
stock.

As of February 18, 2000, the Issuer had 3,873,747 shares of its $0.001 par value
common stock issued and outstanding.

Transitional small business disclosure format: YES   NO X
                                                  ---  ---
<PAGE>


                        PAK MAIL CENTERS OF AMERICA, INC.
                         2000 FORM 10-KSB ANNUAL REPORT
                                TABLE OF CONTENTS


PART I                                                                 Page No.
------                                                                 --------

Item 1.           Description of Business....................................1

Item 2.           Description of Property....................................6

Item 3.           Legal Proceedings..........................................6

Item 4.           Submission of Matters to Vote of Security Holders..........7

PART II
-------

Item 5.           Market for Common Equity and Related Stockholder Matters...7

Item 6.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations .......................7

Item 7.           Financial Statements......................................10

Item 8.           Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure.......................11

Part III
--------

Item 9.           Directors, Executive Officers, Promoters and Control
                  Persons; Compliance with Section 16(a) of the
                  Exchange Act..............................................12

Item 10.          Executive Compensation....................................14

Item 11.          Security Ownership of Certain Beneficial Owners and
                  Management................................................16

Item 12.          Certain Relationships and Related Transactions............19

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

                  Signatures................................................21

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

     (a) Business Development. Pak Mail Centers of America, Inc. (the "Issuer"
or "Company") was incorporated in the State of Colorado on January 27, 1984. The
Company is principally engaged in franchising of retail service centers which
specialize in the packaging and shipping business ("Pak Mail Centers" or
"Centers"). Pak Mail Centers typically provide mailbox service, parcel shipping
and receiving, packaging, freight forwarding and other communications and
information products and services to commercial and residential customers
through a variety of carriers and may offer a variety of related items such as
stamps, greeting cards, stationery supplies, keys and passport photographs.

     (b) Business of Issuer.

         (1)(2) Principal Products or Services; Distribution Methods. The
Company's principal business is the marketing of Pak Mail Center franchises and
its principal source of revenues is derived from royalties and franchise fees as
well as from the sale of certain equipment, supplies, forms and materials to
franchisees. As of November 30, 2000, there were 345 domestic and 44
international individual franchises and 25 domestic and 8 international area
agreements in existence.

Franchise Program
-----------------

     The Company offers individual franchise agreements and area marketing
agreements. Individual franchisees are granted the nonexclusive right, within a
specified area, to use the Pak Mail trademarks as well as Pak Mail's proprietary
operating procedures, techniques, forms, equipment and advertising materials in
the operation of a Pak Mail Center. Area marketers and, under a previously
offered area franchise program, area developers, are granted rights to sell
individual franchises for the Company in designated areas and are required to
provide site selection and start up assistance and continuing support for
individual franchisees within those areas. The Company locates prospective
franchisees through advertising, referrals from existing franchisees and the
marketing efforts of its area marketers and developers.

Franchise Agreements, Fees and Related Matters
----------------------------------------------

     Individual Franchises

     Each individual franchisee enters into a franchise agreement (the
"Franchise Agreement") with the Company. The Franchise Agreement requires
payment of an initial franchise fee of $27,950, although franchisees who acquire
more than one franchise are eligible for certain discounts and may be eligible
for financing of the discounted initial franchise fees for second and subsequent
Centers. Individual franchisees are also charged an initial fee ranging between
$580 and $900 for a grand opening advertising and marketing program which is
provided by the Company at or around the time the individual franchisee
commences operation of a Pak Mail Center. Under the Company's current standard

                                       1

<PAGE>


Franchise Agreement, individual franchisees pay a sliding scale monthly royalty
in each calendar year of five percent of the first $200,000 of the franchisee's
royalty based revenues, plus four and one-half percent for the next $50,000 of
royalty based revenues, plus four percent for the next $50,000 of royalty based
revenues, plus three and one-half percent for the next $50,000 of royalty based
revenues, plus three percent for all subsequent royalty based revenues received
in that calendar year. No royalty fee is paid with respect to revenues from
postage stamps. Individual franchisees are also required to pay an advertising
fee each month in the amount of two percent of royalty based revenues, with the
exception of franchisees operating under agreements entered into prior to March
1990 who are required to pay an advertising fee of one percent of gross
revenues. The advertising fees are held in a separate legal trust controlled by
the Company. These fees are used in connection with the formulation and
execution of national advertising and for other marketing purposes. The
Company's current standard Franchise Agreement has a term of ten years. With the
approval of the Company, the franchisee has the right to transfer and assign
their franchise rights.

     Area Marketing Agreement

     Each area marketer franchisee enters into an area marketing agreement which
requires the payment of an initial fee based upon several factors including
population and other demographic factors in the designated geographic region.
The area marketing agreement grants the right to market franchises within a
specified territory using certain of the Company's trademarks. When an area
marketer successfully markets an individual franchise in its territory, the
Company typically pays the area marketer 40% to 60% of the franchise fee paid by
the individual franchisee. The area marketer receives 50% to 60% of the
royalties paid to the Company by individual franchisees in its territory. If an
individual franchise is sold in an area where there is no area marketer, the
Company retains 100% of all fees and royalties paid by the franchisee. There may
be variations in the terms of specific area marketing agreements based on
special circumstances affecting the geographic area and the area marketer.

     Area Developer Franchises

     The Company no longer offers area developer agreements. Under area
developer agreements previously entered into, initial franchise fees paid to the
Company by individual franchisees within an area are generally divided 60% and
40% between the Company and the area franchisee, respectively. Generally, the
individual franchise royalty fees are divided equally between the Company and
the area franchisee. All franchise fees and royalties are paid directly to the
Company, which then remits the portion of fees owed to the area franchisee. For
individual franchisees in locations which are not encompassed by an area
franchise, the Company retains all fees and royalties.

     International Area Franchises

     The Company's international area franchise agreements require the payment
of an initial franchise fee based upon several factors including population and
other demographic factors in the designated country or geographic region. The
Company often finances a portion of the area franchise fee. The international

                                       2

<PAGE>


area franchisee is responsible for individual franchise marketing, site
selection assistance and lease negotiation, on-site training and continuing
local support of the individual franchisees within their areas.

     Generally, the division of initial franchise fees of individual franchises
within an international area and the individual franchise royalty fees within an
international area is negotiated on a case by case basis. As of November 30,
2000, there were seven international franchise agreements in existence with
respect to geographic areas in the Mexican cities of Mexico City and
Guadalajara, the Mexican states of Baja California and Sonora and the countries
of Chile, Argentina, Venezuela, Honduras, Panama, Nicaragua, El Salvador, Costa
Rica, Belize, Guatemala, Australia, New Zealand and Japan. Because of the large
number of factors that exist with respect to different countries and different
geographic locations within a given country which may affect the terms of an
international area franchise agreement, the specific terms of international area
franchises may vary significantly from one another.

     Related Matters

     The Company provides various training and support to its franchisees. The
Company furnishes to each franchisee an operations manual, which sets forth many
of the Company's standards and specifications and contains certain provisions
designed to ensure uniformity in the quality of the Pak Mail Center, and
provides updates thereto. In addition, each franchisee is required to attend a
nine day training class with regard to packaging, pricing and available shipping
and mailing services; preparation and execution of marketing and placement of
advertising; record keeping and systems operation; the Company's proprietary
software; soliciting and servicing customers; selecting and training personnel;
and store location and operation. There is no charge for the class, but
franchisees pay their own expenses, including travel, lodging and meals. The
Company also provides three days of on-the-job training in an individual
franchisee's Pak Mail Center.

     The Company offers to franchisees various equipment, supplies, forms and
materials necessary or useful in connection with the operation of the Pak Mail
Center, although, with the exception of required computer hardware and software,
the franchisees are not required to purchase such items from the Company. Prior
to and upon the opening of a new franchisee's Pak Mail Center, the Company or
area franchisee provides additional on-site assistance to the franchisee. The
Company maintains ongoing communications with its franchisees designed to inform
the franchisees of new services to be provided by the Company, marketing
techniques and other operational aspects of the Pak Mail system.

Services
--------

     The typical Pak Mail Center offers a wide range of services and products
for personal and business support, communications services and convenience items
and services. The type and importance of particular services and products vary
from Center to Center. Prices for services and products are set by individual
franchisees and depend on competitive conditions in their respective franchise
locations.

                                       3

<PAGE>


     Major services and products offered at typical retail Pak Mail Centers
include the following:

     Shipping and Receiving. Pak Mail Centers offer shipping services through a
variety of carriers and can assist the customer in selecting the fastest and
most cost effective method of sending goods. Pak Mail Centers also act as
receiving agents for goods shipped to their customers. Pak Mail Centers advise
customers as to the packaging requirements of the various carriers, provide
packaging of items for shipment and sell packaging materials.

     Business Support Products and Services. Small businesses are often major
users of a Pak Mail Center. Pak Mail Centers provide a small business with a
variety of business services and products such as mailbox rental, telecopy
transmission, copying and office supplies.

     Communications Services. Pak Mail Centers may offer customers a wide range
of communications services such as telecopies, wire transfer of funds and
electronic mail and Internet access.

     Convenience Items and Services. Pak Mail Centers generally offer
convenience items such as postage stamps, envelopes, custom rubber stamps,
laminating, passport and identification photos and keys. Most Pak Mail Centers
also offer office supplies, greeting cards, gift wrapping and other gift items.

     Insurance. Also available at the customer's option is loss damage insurance
which can be purchased either through the courier's insurance carrier and/or
separate parcel insurance which is available on an as needed basis from the
Company's carrier. The insurance prices for the Company's insurance vary from
those charged by couriers.

     Private Mailbox Service. Pak Mail Centers usually offer private mailbox
rentals. Mailbox rental fees vary based on the size of the box, the rental terms
and the location of the Pak Mail Center.

         (3) Status of New Product or Service. For the fiscal years 1996, 1997,
1998 and 1999, the Company developed a point of sale software program ("PSS")
for inclusion in the Pak Mail operating system. The point of sale software
contains all of the shipping rates of various carriers and assists the
franchisee in selecting the most efficient and cost effective way to ship a
package. It also records the transaction for accounting purposes. The
franchisees are required to use PSS in the operation of the store. Management's
decision to develop PSS was based upon two main issues: software purchased from
third parties did not handle specific industry needs and requirements or meet
the requirements of the Company's unique markets, and the software previously
used was not fully Year 2000 compliant. In August 1999, the Company was granted
a copyright registration on the Program. The Company is preparing an application
for copyright registration on the current PSS version. Total capitalized
expenditures for development of PSS from December 31, 1995 through November 30,
1999 were $850,854. Early release of the Program started in December of 1999 and
conversion of the entire franchise system was started in February 2000. After

                                       4

<PAGE>


PSS was used by the franchisees for a month it was determined that PSS was not
serviceable as written due to bugs and architecture. A $557,853 impairment of
capitalized software costs was recognized and Immedient (Raymond James) was
contracted for the re-write. PSS version 1 is currently being used by the
franchisees and the re-write is expected to be completed in early 2001. Portions
of PSS version 1 costing $293,000 will be integrated into PSS version 2 and will
be amortized over a three-year period starting in fiscal 2000. PSS version 2
development costs of approximately $320,000 now being incurred will be amortized
over a 3 year period once the software is released. The Company charges the
franchisees an annual fee of $500 to $600 for maintaining, servicing and
developing updates for the Program as needed. It is expected that PSS version 2
will lower operating costs of the Centers and give Pak Mail franchisees a
competitive advantage.

         (4) Competition. The Company and its franchisees face competition
primarily from independent packaging and shipping service centers and other
franchised operations offering similar products and services. Mail Boxes Etc. is
the largest competitor. The Company's franchising approach and the operations of
a Pak Mail Center are not unique or patentable and can be imitated by others.
Although the Company and its franchisees offer services similar to those offered
by the U.S. Postal Service, such as private mail box service and parcel
handling, the U.S. Postal Service does not offer certain of the business
support, communications and personal services offered by most Pak Mail Centers.

         (5) Raw Materials and Supplies. The Company purchases materials for
resale to its franchisees. These materials are available from a variety of
suppliers, and the Company has not experienced any delays in obtaining such
materials.

         (6) Customer Dependence. The Company does not depend upon a single
customer, or a few customers, for its revenues, the loss of any one or more
which would have a material adverse effect on the Company.

         (7) Patents, Trademarks, Licenses, Etc. The Company has registered the
service mark "Pak Mail" and the Pak Mail logo on the Principal Register of the
United States Patent and Trademark Office ("USPTO"). The service mark was
renewed for an additional 10 years in November 2000 and the logo expires in
2005. The Company has registered several other related service marks on the
Principal Register of the USPTO, and has registered the service mark "Pak Mail"
and the Pak Mail logo in several international countries.

         (8)(9) Government Regulations. The Federal Trade Commission has adopted
a rule that requires franchisors to make certain disclosures to prospective
franchisees prior to the offer or sale of franchises. This rule requires the
disclosure of information necessary for a franchisee to make an informed
decision as to whether to enter into a franchise relationship and delineates the
circumstances in which franchisors may make predictions on future sales, income
and profits. Failure to comply with this rule constitutes an unfair or deceptive
act or practice under the Federal Trade Commission Act.

                                       5

<PAGE>


     Numerous states have adopted laws regulating franchise operations and the
franchisor/franchisee relationship. Applicable franchise laws vary from filing
and disclosure requirements in the offer and sale of franchises to the
application of statutory standards regulating the establishment and termination
of franchise relationships. Although the foregoing matters may result in some
modification of the Company's franchising activities and the legal inability to
enforce all of the terms of its franchise agreements in certain states, such
inabilities have not had a material adverse effect on the operations or business
of the Company to date. However, the laws applicable to franchise operations and
relationships are subject to change, and the Company is unable to predict the
effect, if any, on its operations of additional laws, regulations or
restrictions that may be enacted or promulgated or of court decisions that may
be adverse to the franchise industry.

         (10) Research and Development. In developing versions 1 and 2 of PSS,
the Company spent $124,202 in fiscal 1997, $227,005 in fiscal 1998, $499,647 in
fiscal 1999, $211,881 in fiscal 2000 and an estimated $150,000 in 2001. The
Company's new franchisees are required to purchase the PSS System when they
establish a Center and existing franchisees are required to convert their
existing system to that of a PSS System. Other than developing the PSS System,
the Company has not engaged in material research and development activities
during its last two fiscal years.

         (11) Environmental Regulation. Compliance with federal, state and local
environmental law provisions does not have any material effect on the capital
expenditures, earnings and competitive position of the Company.

         (12) Employees. As of November 30, 2000, the Company had 16 employees,
1 part-time and 15 full-time.

ITEM 2. DESCRIPTION OF PROPERTY

     The Company's executive offices are located in approximately 12,540 square
feet of office space in Englewood, Colorado under a lease expiring in May 2006
with a base rental currently at approximately $14,940 per month and rising to
approximately $15,840 per month by the end of the term. The Company is the first
tenant in this office space and the offices are in excellent condition.

ITEM 3. LEGAL PROCEEDINGS

     On February 4, 2000 the Company filed Arapahoe County District Court Case
No. 00 CV 295, Division 5 against its Ramona, California franchisee, Sherry
Foreman. The Complaint asserts causes of action for breach of contract and
unjust enrichment and seeks to recover $12,415 in past royalties and advertising
fees, $63,000 in future royalties and $11,095.33 for sums advanced on Foreman's
behalf. The company has obtained a judgement in the amount of $93,000 and is in
the process of enforcing the judgement.

                                       6

<PAGE>


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

     No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of the Company's security holders.


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     (a) Market Information.
     ----------------------

     The Company's common stock is sporadically traded in the over-the-counter
market. During fiscal 2000, 1999 and 1998 there was no established trading
market for the Company's common stock, and the Company has been unable to obtain
reliable information as to quoted prices with respect to the common stock.

     (b) Holders.
     -----------

     As of November 30, 2000, the Company had 1,134 holders of record of its
$0.001 par value common stock.

     (c) Dividends.
     -------------

     The Company has not declared cash dividends on its common stock in the last
two fiscal years and in any subsequent period for which financial information is
required. The Company has issued and outstanding 2,216.668 shares of its Series
C Preferred Stock, which have a 6% annual dividend payable on March 31 of each
year. All dividends have been declared and paid. The Company must pay all
dividends in arrears on the Series C Preferred Stock before any dividends may be
paid or declared and set aside for payment and before any other distribution may
be made on the Company's common stock. The Company does not anticipate paying
any cash dividends on its common stock in the foreseeable future.

     (d) Recent Sales of Unregistered Securities
     -------------------------------------------

         None

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Changes in Accounting Principle Imposed by the SEC
--------------------------------------------------

     The Company changed its accounting policy to reflect a decision made by the
Securities and Exchange Commission ("SEC") in December 1999 relative to the
recognition of area developer/marketer franchise fee revenue. Revenue from area
developer/marketer agreements which is not tied to unit sales performance is

                                       7

<PAGE>


initially deferred and recognized on a straight line basis over the life of the
agreement. The Company's policy in previous fiscal years was to recognize sales
to area developers/marketers on a cash received basis. As cash was received on a
sales contract, the Company recognized the associated income. The area marketing
agreements were typically executed for a 5 year period. Under the method started
in 1999, all payments received must be capitalized and amortized over the life
of the agreement. The new method was applied retroactively in 1999 on all
contracts in existence. Due to this accounting method change, the Company
recognized $30,406 in area franchise fee revenue amortized into income during
the fiscal year ending November 30, 2000 and $13,400 in fiscal 2001 from sales
made in previous fiscal years.

     This change is strictly an accounting reporting issue and has no affect on
cash flow or the Company's business operations.

Liquidity and Capital Resources
-------------------------------

     The Company consumed cash in operating activities of $106,841 during fiscal
2000 compared to cash provided from operating activities of $62,310 during
fiscal 1999. This use was primarily funded by an increase in the loan from D.P.
Kelly & Associates from $100,000 on November 30, 1999 to $400,000 as of November
30, 2000. The cash was used primarily for PSS software development during fiscal
2000. The note from D.P. Kelly & Associates accrues interest at the "Prime Rate"
of Bank One, NA, Chicago, Illinois (currently 9%) and is payable upon demand.
However, written confirmation assures that no demand will be made within the
next 12 month period from December 1st, 2000 to November 31st, 2001. The company
believes it will be able to re-pay this note out of working capital when due.

     As of November 30, 2000, the average age of accounts receivable was
approximately 68 days. Accounts receivable relate primarily to royalties from
franchisees and sales of equipment, supplies and services. Royalties are payable
on a monthly basis and invoices for equipment, supplies and services are payable
within 30 days. The Company continues to take an aggressive approach to managing
accounts receivable and reducing the average age by implementing a proactive
collection system and hiring the personnel to maintain it. The Company believes
that cash flow from operating activities will be adequate to cover capital needs
for the next 12 months. The Company anticipates an additional $100,000 will be
spent on software development.

Results of Operations
---------------------

     Financial statements for the year ended November 30, 1998 are included
strictly for franchising purposes and no comparisons will be included in
management's discussion and analysis.

     Fiscal 2000 Compared to Fiscal 1999
     -----------------------------------

     The Company's recorded net loss from operations for fiscal 2000 was
$786,584 compared to a net gain of $368,789 in fiscal 1999. The $1,155,373
reduction was attributable to a decrease in recognition of individual franchise

                                       8

<PAGE>


sales (down 19.7% from $1,067,130 to $856,890) a decrease in sales of equipment
supplies and services (down 24.43% from $1,106,313 to $836,082), a decrease in
the gross profit margin on sales of equipment supplies and services (down 20%
from a 18% profit to a 2% loss), and an increase in Selling, general and
administrative costs (up 25.97% from $2,061,493 to $2,596,832) .

     The $254,212 increase in royalties from franchisees is due to an increase
in the average sales volume per store.

     The $270,231 decrease in sales of equipment, supplies and services in
fiscal 2000 is the result of fewer store buildouts. Fewer stores were sold in
areas not covered by area developers. The area developers tend to do their own
store buildout work.

     The $210,240 decrease in individual franchise fees is represented by a
decrease in franchise sales recognized during the fiscal year ended November 30,
2000. The Company recognized 48 individual franchises in fiscal 1999 and 33 in
fiscal 2000. There was 1 individual franchise awarded but deferred as of
November 30, 1999 and 4 individual franchises awarded but deferred as of
November 30, 2000. In addition there were 2 deposits on individual franchises
deferred as of November 30, 1999 and 3 deposits on individual franchises
deferred as of November 30, 2000

     The $94,749 decrease in area franchise fees is due to a lack of sales. Most
of the revenue recognized in fiscal 2000 is due to the change in accounting
principle from fiscal 1999 and is associated with sales in prior years.

     The $301,175 increase in PSS licensing and maintenance fees is a result of
Pak Mail's decision to develop proprietary software. There was no revenue from
this activity in 1999 as the related software was released in early fiscal 2000.

     The $96,962 increase in other income is due primarily to a lawsuit
settlement of $30,000 and an increase in the number of stores transferred in
fiscal 2000.

     The $535,339 increase in Selling, general and administrative is due to an
increase in the allowance for bad debt (up $212,822), duplicate rent paid for
office space through May of 2000,the date the prior lease expired, (up $54,601),
PSS salaries and PSS temporary help not being capitalized, (up $246,741).

     The $53,961 decrease in cost of sales of equipment, supplies and services
is the result of fewer store buildouts. Fewer stores were sold in areas not
covered by -area developers. The area developers tend to do their own store
buildout work.

     The $95,464 increase in royalties paid to area franchisees is due primarily
to the higher proportion of stores operating within area franchisee regions
during the fiscal year ended November 30, 2000 compared to the same prior year
period. Of the 25 stores that closed, 9 were not within area franchise regions
whereas only 2 of the 35 new store openings were in regions not controlled by
area developers.

                                       9

<PAGE>


     The $140,648 decrease in commissions on franchise sales is the direct
result of fewer sales being recognized in fiscal 2000.

     The $139,393 increase in depreciation and amortization is a result of
placing the PSS software package in service in February of 2000. Amortization of
PSS started on the portion that was not impaired as described in the next
paragraph.

     The $557,853 increase in impairment of capitalized software costs for
fiscal 2000 is the result of the decision to re-write the program using a
different database to increase the modularity of the program and reduce future
maintenance costs. PSS version 1 is currently being used by the franchisees.
Portions of version 1 costing $293,000 will be integrated into PSS version 2.
The initial un-impaired cost of version 1 will be amortized over a three-year
period. The PSS version 2 development costs now being incurred will be amortized
over a three-year period once the software is released presumably in the first
part of fiscal 2001. The new PSS version 2 costs are expected to total
approximately $350,000 for a combined capital cost of $643,000. This impairment
represents a $557,854 write-off on a total capitalized expenditure of $850,854,
amounting to 65.56% of total capitalized expenditures.

     The foregoing discussion contains certain forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements include the plans and
objectives of management for future operations, including plans and objectives
relating to the development of the Company. The forward-looking statements
included herein are based on current expectations that involve numerous risks
and uncertainties. Assumptions relating to the foregoing involve judgments with
respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes that the assumptions underlying the
forward looking statements are reasonable, any of the assumptions could be
inaccurate and, therefore, there can be no assurance that the forward looking
statements included in this Form 10-KSB will prove to be accurate. In light of
the significant uncertainties inherent in the forward looking statements
included herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.

ITEM 7. FINANCIAL STATEMENTS

     See Financial Statements in this report following the signature page. Three
years of Financial Statements are presented in this filing. The two most recent
years are compared to each other, fiscal 2000 and fiscal 1999. Fiscal 1998 is
presented for informational and franchising purposes only.

                                       10

<PAGE>


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

     During the Company's two most recent fiscal years, and any interim period,
the principal independent accountant of the Company did not resign (or decline
to stand for re-election) and was not dismissed.

                                       11

<PAGE>
<TABLE>
<CAPTION>


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

     (a) Identification of Directors and Executive Officers.

     The present term of office of each director will expire at the next annual
meeting of shareholders. The executive officers of the Company are elected
annually at the first meeting of the Company's Board of Directors held after
each annual meeting of shareholders. Each executive officer holds office until
his or her successor is duly elected and qualified or until his or her
resignation or until he or she shall be removed in the manner provided by the
Company's Bylaws. The name, position with the Company, the age of each director
and executive officer, and the period during which each has served are as
follows:


Name, Age and                             Director or              Principal Occupation
Position in the Company                   Officer Since            During the Last Five Years
-----------------------                   -------------            --------------------------
<S>                                       <C>                      <C>
John E. Kelly, 60                         September, 1989          Executive officer of the Company
(President, Chief Executive                                        since September, 1989.
Officer andDirector)

P. Evan Lasky, 59                         March, 1988              Executive officer of the Company
(Executive Vice President and                                      since March, 1988.
Chief Operating Officer)

James Q. Race, 51                         December, 1999           Executive officer of the Company
(Controller, Treasurer,                                            since December, 1999; consultant
Secretary)                                                         for George S. May International
                                                                   Company, a business consulting
                                                                   company, from May, 1999 to
                                                                   December, 1999; Controller of R & S
                                                                   Steel Co. from 1996 to May, 1999;
                                                                   and Controller of Nelowet Business
                                                                   Machines, a copier sales and
                                                                   service company, from 1992 to 1996;
                                                                   President of Ranchers Coal, Inc. a
                                                                   coal strip mining company, from
                                                                   1983 to 1991.

Tonya D. Sarina, 39                       December, 1996           Executive officer of the Company
(Vice President of Sales and                                       since December 1996; marketing
 Marketing)                                                        manager of the Company  from
                                                                   March, 1991 through November,
                                                                   1996.


                                                  12
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


Name, Age and                 Director or              Principal Occupation
Position in the Company       Officer Since            During the Last Five Years
-----------------------       -------------            --------------------------

<S>                           <C>                      <C>
Alex Zai, 41                  May, 1996                Executive officer of the Company
(Vice President of                                     since May, 1996; director of store
Store Operations)                                      operations of theCompany since
                                                       April, 1994.

J. S. Corcoran, 57            September, 1989          Self-employed as a business
(Director)                                             consultant since October, 1996;
                                                       executive officer of D.P. Kelly &
                                                       Associates L.P., a firm offering
                                                       management services, from November,
                                                       1988 to January, 1997; executive
                                                       officer of Envirodyne Industries,
                                                       Inc., a manufacturer of food
                                                       packaging and food service
                                                       supplies, from June, 1989 to March,
                                                       1996.

John W. Grant, 76             September, 1989          Retired since September, 1987.
(Director)

F. Edward Gustafson, 59       September, 1989          Executive officer of D.P. Kelly &
(Director)                                             Associates L.P., a firm offering
                                                       management services, since
                                                       November, 1988; executive officer
                                                       of Viskase Companies, Inc., a
                                                       manufacturer of food packaging and
                                                       food service supplies, since June,
                                                       1989; director of Viskase
                                                       Companies, Inc. since December,
                                                       1993; executive officer of Viskase
                                                       Corporation, a wholly-owned
                                                       subsidiary of Viskase Companies,
                                                       Inc., from February, 1990 to
                                                       August, 1993.

Laura K. McGrath 44           September, 1989          General Partner of KMK &
(Director)                                             Associates, an investment
                                                       partnership since May, 1986;
                                                       President of Emerald Valley Farms,
                                                       Inc. a farm land acquisition and
                                                       management company since March,
                                                       1999; Treasurer of the Donald P.
                                                       and Byrd M. Kelly Foundation, a
                                                       family foundation that focuses on
                                                       educational support for non-profit
                                                       organizations, since November,
                                                       1988.

                                          13
</TABLE>

<PAGE>


     (b) Identification of Certain Significant Employees.

     Not Applicable.

     (c) Family Relationships.

     Not Applicable.

     (d) Involvement in Certain Legal Proceedings.

     Not Applicable.

     (e) Section 16(a) Beneficial Ownership Reporting Compliance.

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than 10% of the Company's
outstanding common stock to file reports of ownership with the SEC. Officers,
directors and greater than 10% shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.

     Based solely on a review of Form 3, 4 and 5 and amendments thereto
furnished to the Company during and for the Company's fiscal year ended November
30, 2000, there were no directors, officers or more than 10% shareholders of the
Company that failed to timely file a Form 3, Form 4 or Form 5.

ITEM 10. EXECUTIVE COMPENSATION

     Cash Compensation.
     -----------------

     The following table shows all cash compensation paid by the Company for
services rendered during the fiscal years ended November 30, 2000, November 30,
1999 and November 30, 1998 to John E. Kelly and P. Evan Lasky (there were no
other executive officers of the Company whose annual salary and bonus exceeded
$100,000).

                                       14

<PAGE>


                           SUMMARY COMPENSATION TABLE

Name and                                                           Other Annual
Principal Position         Fiscal Year    Salary     Bonus         Compensation
------------------         -----------    ------     -----         ------------
John E. Kelly                 2000       $153,300       -0-(1)      $8,520(2)
President and Chief           1999       $146,000   $33,016(1)      $8,520(2)
Executive Officer             1998       $138,000   $47,472(1)      $7,980(2)
P. Evan Lasky                 2000       $112,000       -0-(1)         -0-
Executive Vice                1999       $102,000   $19,573(1)         -0-
President and Chief           1998       $ 96,000   $28,205(1)         -0-
Operating Officer

     (1) Bonus was earned in the fiscal year indicated, although it may have
been paid in the following fiscal year.

     (2) The amount for fiscal 2000 and 1999 consists of a $4,800 car allowance
and $3,720 of country club dues. 1998 consists of a $4,800 car allowance and
$3,180 of country club dues.

     Stock Option Plans.
     ------------------

     Effective January 1, 1999, the Company adopted the 1999 Incentive and
Nonstatutory Stock Option Plan ("1999 Plan"). The 1999 Plan authorizes the
granting of options to employees and non-employee directors of the Company to
purchase an aggregate of 400,000 shares of the Company's common stock. No
options may be granted after December 31, 2008 under the 1999 Plan. There were
no options issued during the year ended November 30, 2000. For the fiscal year
ended November 30, 1999, employees of the Company were issued options under the
1999 Plan to purchase a total of 157,227 shares of the Company's common stock at
$.75 per share expiring in December 2009. There were no options issued during
the year ended November 30, 1998.

     Options/SAR Grants.
     ------------------

     The following table sets forth the individual grants of stock options made
during the last two completed fiscal year to each of the named executive
officers:

There were no options granted in fiscal 2000.

                                       15

<PAGE>
<TABLE>
<CAPTION>


                                           Option Grants in Fiscal 2000

                              Number of              Percent of Total
                             Securities              Options Granted
                             Underlying              to Employees in           Exercise
       Name                Options Granted             Fiscal Year               Price          Expiration Date
--------------------      -----------------         -----------------         ----------       ------------------

<S>                            <C>                        <C>                    <C>                     <C> <C>
John E. Kelly                  30,000                     19.1%                  $0.75          December 31, 2009

P. Evan Lasky                  22,000                     14.0%                  $0.75          December 31, 2009


     Long-Term Incentive Plans.
     -------------------------

     Not Applicable.

     Compensation of Directors--Standard Arrangement.
     -----------------------------------------------

     Members of the Board of Directors, other than members who are also officers
of the Company, are entitled to receive a fee of $2,000 per year and $250 for
each attended meeting of the Board of Directors.

     Compensation of Directors--Other Arrangements.
     ---------------------------------------------

     Not Applicable.

     Employment Contracts and Termination of Employment and Change of Control
     ------------------------------------------------------------------------
Arrangements.
------------

     Not Applicable.

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

     (a)(b) Security Ownership of Certain Beneficial Owners and Management.
            --------------------------------------------------------------

     The following table sets forth as of November 30, 2000, the number of
shares of the Company's $0.001 par value common stock, its only class of
outstanding voting securities, beneficially owned by each of the Company's
current directors and executive officers, by all of the Company's current
directors and executive officers as a group, and by each person who owned of
record, or was known to own beneficially, more than 5% of the Company's
outstanding shares of common stock:

                                       16
</TABLE>

<PAGE>


Name and Address                        Amount and Nature of
Of Beneficial Holder                   Beneficial Ownership(1)  Percent of Class
--------------------                   -----------------------  ----------------

J. S. Corcoran                              2,405,264(2)                62.1%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523

John W. Grant                                     800(3)                  (7)
701 Harger Road, Suite 190
Oak Brook, Illinois 60523

F. Edward Gustafson                         2,931,578(2)(4)(8)          75.7%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523

John E. Kelly                                  30,000(5)                  (7)
3033 S. Parker Road, Suite 1200
Aurora, Colorado 80014

P. Evan Lasky                                  22,000(6)                  (7)
3033 S. Parker Road, Suite 1200
Aurora, Colorado 80014

All directors and executive officers        2,933,378(2)(4)             75.7%
as a group
(9 persons)

D.P. Kelly and Associates, L.P.               492,814                   12.7%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523

Donald P. Kelly                             2,966,184(2)(4)             76.6%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523

Pak Mail Investment Partnership L.P.        2,404,264                   62.1%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523

     (1) The beneficial owners listed have sole voting and investment power with
respect to the shares shown unless otherwise indicated.

     (2) Includes 2,404,264 shares of common stock owned by Pak Mail Investment
Partners, L.P. ("PMIP"). Messrs. Corcoran, Gustafson and Donald Kelly are
officers, directors and shareholders of Norcross Corporation, 701 Harger Road,
Suite 190, Oak Brook, Illinois 60523, which exercises control over PMIP, and may
be deemed to have the ability to vote or dispose of securities owned by PMIP.
Therefore, they may be deemed to be the beneficial owners of such shares of

                                       17

<PAGE>


common stock for the purposes of this table. However, for purposes of Rule 16a-1
adopted under the Securities Exchange Act of 1934, as amended, Messrs. Corcoran,
Gustafson and Donald Kelly disclaim beneficial ownership of the shares of common
stock owned by PMIP, except to the extent of each of their respective pecuniary
interests in PMIP.

     (3) Shares owned jointly by Mr. Grant and his wife.

     (4) Includes 492,814 shares of common stock owned by D.P. Kelly and
Associates, L.P. ("D.P. Kelly"). Messrs. Gustafson and Donald Kelly are
principals and executive officers of D.P. Kelly and may be deemed to have the
ability to vote or dispose of securities owned by D.P. Kelly. Therefore, they
may be deemed to be the beneficial owners of such shares of common stock for the
purposes of this table. However, for purposes of Rule 16a-1 adopted under the
Securities Exchange Act of 1934, as amended, Messrs. Gustafson and Donald Kelly
disclaim beneficial ownership of the shares of common stock owned by D.P. Kelly,
except to the extent of each of their respective pecuniary interest in D.P.
Kelly.

     (5) Consists of 30,000 shares underlying stock options that are exercisable
at $0.75 per share, which vest as follows: 10,000 shares on January 1, 2000,
10,000 shares on January 1, 2001, and 10,000 shares on January 1, 2002.

     (6) Consists of 22,000 shares underlying stock options that are exercisable
at $0.75 per share, which vest as follows: 7,333 shares on January 1, 2000,
7,333 shares on January 1, 2001, and 7,333 shares on January 1, 2002.

     (7) Less than 1%.

     (8) Includes 6,000 shares of common stock owned by Mr. Gustafson's
children, for whom he acts as custodian.


     (c) Changes in Control. Not Applicable.
         ------------------
                                       18

<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a)(b) Transactions With Management and Others and Certain Business
            ------------------------------------------------------------
Relationships.
-------------

     None

     (c) Parent Companies. PMIP owns a controlling interest in the Company
through its ownership of 2,404,264 shares of common stock, representing
approximately 62.1% of the outstanding common stock.

     (d) Transactions With Promoters. Not Applicable.
         ---------------------------
                                       19

<PAGE>


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.
         --------

(3)(a)         Articles of Incorporation incorporated by reference to Exhibit
               (3)(a) of the Company's Annual Report on Form 10-KSB for the
               fiscal year ended November 30, 1995.

(3)(b)         Articles of Amendment to the Articles of Incorporation filed with
               the Colorado Secretary of State on January 26, 1998 incorporated
               by reference to Exhibit (3)(b) of the Company's Annual Report on
               Form 10-KSB for the fiscal year ended November 30, 1997.

(3)(c)         Articles of Amendment to the Articles of Incorporation filed with
               the Colorado Secretary of State on July 13, 1998, incorporated by
               reference to Exhibit 3(a) of the Company's Quarterly Report on
               Form 10-QSB for the quarter ended May 31, 1998.

(3)(d)         Bylaws incorporated by reference to Exhibit 3(b) of the Company's
               Quarterly Report on Form 10-QSB for the quarter ended May 31,
               1998.

(10)(a)*       Individual Franchise Agreement.

(10)(b)*       Area Marketing Agreement.

(10)(c)        Pak Mail Centers of America, Inc. Management Incentive Plan for
               Fiscal Year 1998 incorporated by reference to Exhibit (10)(f) of
               the Company's Annual Report on Form 10-KSB for the fiscal year
               ended November 30, 1998.

(10)(d)        Pak Mail Centers of America, Inc. Management Incentive Plan for
               Fiscal Year 1999 incorporated by reference to Exhibit (10)(g) of
               the Company's Annual Report on Form 10-KSB for the fiscal year
               ended November 30, 1998.

(10)(e)        Pak Mail Centers of America, Inc. 1999 Incentive and
               Non-statutory Employee Stock Option Plan incorporated by
               reference to Exhibit (10)(h) of the Company's Annual Report on
               Form 10-KSB for the fiscal year ended November 30, 1998.

(10)(f)*       Contract with Immedient, a software development company to
               re-write the PSS software. (Scope Document)

(10)(g)*       Promissory Note, D.P. Kelly & Associates, Inc.

(10)(h)*       Office Lease with Bedford Property Investors for office located
               at 7173 South Havana Street, Denver, CO 80112, approximately
               12,540 square feet.

(21)*          Subsidiaries of the Registrant.


     * Filed herewith.

     (b) 8-K Reports. None.

                                       20

<PAGE>


                                   SIGNATURES

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

                                            PAK MAIL CENTERS OF AMERICA, INC.,
                                            a Colorado corporation

                                            By:  /s/  John E. Kelly
                                               --------------------------------
                                                      John E. Kelly, President
                                                      and  Chief Executive
                                                      Officer


                                            By:  /s/  James Q. Race
                                               --------------------------------
                                                      James Q. Race, Controller,
                                                      Treasurer and Secretary
         Dated:   January 25, 2001.

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

Name and Title               Signature                        Date
--------------               ---------                        ----

J.S. Corcoran                /s/  J.S. Corcoran               February 25, 2001
Director                     ---------------------------



John W. Grant                /s/  John W. Grant               February 25, 2001
Director                     ---------------------------


F. Edward Gustafson          /s/  F. Edward Gustafson         February 25, 2001
Director                     ---------------------------


John E. Kelly                /s/  John E. Kelly               February 25, 2001
Director                     ---------------------------

                                       21

<PAGE>
[GRAPHIC OMITTED]

                        PAK MAIL CENTERS OF AMERICA, INC.
                                 AND SUBSIDIARY

                      Consolidated Financial Statements and
                          Independent Auditors' Report
                           November 30, 2000 and 1999



                                                    Ehrhardt
                                                    Keefe
                                                    Steiner &
                                                    Hottman PC

                                                    Certified Public Accountants
                                                    and Consultants



<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY



                   Index to Consolidated Financial Statements
                   ------------------------------------------


                                                                         Page
                                                                         ----


Independent Auditors' Report.............................................F-1

Financial Statements

        Consolidated Balance Sheets - November 30, 2000 and 1999.........F-2

        Consolidated Statements of Operations - For the Years Ended
         November 30, 2000, 1999 and 1998................................F-3

        Consolidated Statement of Stockholders' Equity - For the
         Years Ended November 30, 2000, 1999 and 1998....................F-4

        Consolidated Statements of Cash Flows - For the Years Ended
         November 30, 2000, 1999 and 1998................................F-5

Notes to Consolidated Financial Statements...............................F-6





<PAGE>

                                                    Ehrhardt
                                                    Keefe
                                                    Steiner &
                                                    Hottman PC

                                                    Certified Public Accountants
                                                    and Consultants


                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders
Pak Mail Centers of America, Inc. and Subsidiary
Aurora, Colorado


We have audited the accompanying consolidated balance sheets of Pak Mail Centers
of America, Inc. and Subsidiary as of November 30, 2000 and 1999, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended November 30, 2000. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
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 audit 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 consolidated 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 financial position of Pak Mail Centers of
America, Inc. and Subsidiary as of November 30, 2000 and 1999, and the results
of their operations and their cash flows for each of the three years in the
period ended November 30, 2000 in conformity with generally accepted accounting
principles.




                                        /s/ Ehrhardt Keefe Steiner & Hottman PC

                                            Ehrhardt Keefe Steiner & Hottman PC
January 5, 2001
Denver, Colorado

          7979 E. Tufts Avenue, Suite 400 Denver, Colorado 80237-2843
                         303 740-9400 Fax 303 740 9009

 Member of The Leading Edge Alliance, DFK International and PKF International -
                     Providing Services in Cities Worldwide

                                      F-1


<PAGE>
<TABLE>
<CAPTION>
                           PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                                      Consolidated Balance Sheets

                                                                            November 30,
                                                                 ------------------------------------
                                                                     2000                     1999
                                                                 -----------              -----------
                                               Assets
<S>                                                               <C>                      <C>
Current assets
   Cash and cash equivalents                                     $      --                $    44,536
   Restricted cash                                                    11,129                    1,880
   Accounts receivable, net of allowance
     of $127,438 (2000) and $135,716 (1999)
                                                                     556,437                  567,945
   Inventories                                                        44,283                  101,357
   Prepaid expenses and other current assets                          22,686                   29,274
   Deferred income tax benefit - current                             347,500                  347,500
                                                                 -----------              -----------
       Total current assets                                          982,035                1,092,492
                                                                 -----------              -----------

Furniture and equipment, net of accumulated depreciation             136,256                  179,768
                                                                 -----------              -----------

Other assets
   Notes receivable, net                                             456,130                  587,368
   Deposits and other                                                157,274                  145,902
   Deferred franchise costs, net of accumulated
    amortization of $117,251 (2000)
    and $73,062 (1999)                                                66,862                   95,191
   Capitalized software costs, net of accumulated
    amortization of $81,390 (2000)
    and $0(1999)                                                     423,491                  850,854
                                                                 -----------              -----------
       Total other assets                                          1,103,757                1,679,315
                                                                 -----------              -----------

                                                                 $ 2,222,048              $ 2,951,575
                                                                 ===========              ===========

                                 Liabilities and Stockholders' Equity
Current liabilities
   Trade accounts payable                                        $   317,231              $   315,375
   Accrued bonuses and commissions                                      --                    157,168
   Other accrued expenses                                            212,659                  147,073
   Deferred rent                                                      70,434                   55,960
   Due to advertising fund                                            11,129                    1,880
   Preferred stock dividends payable                                 133,000                  133,000
   Notes payable                                                        --                    120,000
   Current portion of capital lease obligation                        10,520                     --
                                                                 -----------              -----------
       Total current liabilities                                     754,973                  930,456
                                                                 -----------              -----------
Long-term liabilities
   Deferred revenue                                                  607,120                  663,189
   Notes payable - shareholder                                       400,000                     --
   Capital lease obligation                                           21,608                     --
                                                                 -----------              -----------
       Total long-term liabilities                                 1,028,728                  663,189
                                                                 -----------              -----------
Commitments

Stockholders' equity
   Series C redeemable  preferred stock,
    $1,000 par value; 6% cumulative; 2,500
    shares authorized 2,216 shares issued
    and outstanding (liquidation
    preference $2,349,668)                                         2,216,668                2,216,668
   Common stock, $.001 par value; 200,000,000
    shares authorized, 3,873,747
    shares issued and outstanding                                      3,874                    3,874
   Additional paid-in capital                                      5,113,995                5,113,995
   Accumulated deficit                                            (6,896,190)              (5,976,607)
                                                                 -----------              -----------
       Total stockholders' equity                                    438,347                1,357,930
                                                                 -----------              -----------

                                                                 $ 2,222,048              $ 2,951,575
                                                                 ===========              ===========

                            See notes to consolidated financial statements.

                                                F-2


<PAGE>

                                         PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                                             Consolidated Statements of Operations

                                                                                   For the Years Ended
                                                                                        November 30,
                                                                   -----------------------------------------------------
                                                                       2000                1999                  1998
                                                                   -----------          -----------          -----------
Revenue
    Royalties from franchisees                                     $ 2,709,764          $ 2,455,552          $ 2,225,581
    Individual franchise fees                                          856,890            1,067,130              860,800
    Sales of equipment, supplies, and services                         836,082            1,106,313              749,071
    Area franchise fees                                                206,425              301,174              683,633
    Software licensing and service                                     301,175                 --                   --
    Interest income and other                                          252,453              155,491               96,382
                                                                   -----------          -----------          -----------
                                                                     5,162,789            5,085,660            4,615,467
                                                                   -----------          -----------          -----------
Costs and expenses
    Selling, general and administrative                              2,596,832            2,061,493            1,859,272
    Cost of sales of equipment, supplies and services                  852,732              906,693              672,451
    Royalties paid to area franchisees                               1,070,974              975,510              828,848
    Commissions on franchise sales                                     398,884              539,532              589,357
    Advertising                                                        171,844              143,429              166,698
    Depreciation and amortization                                      224,839               85,446               66,463
    Interest                                                            63,193                4,768                1,692
                                                                   -----------          -----------          -----------
                                                                     5,379,298            4,716,871            4,184,781
                                                                   -----------          -----------          -----------

(Loss) income from operations                                         (216,509)             368,789              430,686

Other expenses
    Impairment capitalized software costs                             (557,853)                --                   --
    Loss on asset disposition                                          (12,221)                --                   --
                                                                   -----------          -----------          -----------
                                                                      (570,074)                --                   --
                                                                   -----------          -----------          -----------

(Loss) income before                                                  (786,583)             368,789              430,686
    Income tax benefit                                                    --                   --                138,900
                                                                   -----------          -----------          -----------
Net (loss) income before preferred
  dividends and cumulative effect of
  change in accounting principle                                      (786,583)             368,789              569,586

Preferred stock dividend                                              (133,000)            (133,000)            (133,000)
                                                                   -----------          -----------          -----------
Net (loss) income before cumulative
 effect of change in accounting principle                             (919,583)             235,789              436,586

Cumulative effect of change in
  accounting principle, net of income tax
  benefit of $72,500                                                      --               (140,728)                --
                                                                   -----------          -----------          -----------
Net(loss) income and comprehensive (loss)
  income attributed to common shares                               $  (919,583)         $    95,061          $   436,586
                                                                   ===========          ===========          ===========
Net (loss) income per share - basic
    Net (loss) income per share before
     cumulative effect of change in
     accounting principle                                                 (.26)                 .07                  .15
    Cumulative effect of changes in
     accounting principle                                                 --                   (.04)                --
                                                                   -----------          -----------          -----------

Basic net (loss) income per share of common stock                  $      (.26)         $       .03          $       .15
                                                                   ===========          ===========          ===========

Net (loss) income per share - diluted
    Net income per share before cumulative
     effect of change in accounting principle                             (.26)                 .07                  .12
    Cumulative effect of change in accounting principle                   --                   (.04)                --
                                                                   -----------          -----------          -----------

Diluted net (loss) income per share of common stock                $      (.26)         $       .03          $       .12
                                                                   ===========          ===========          ===========
Weighted average common shares outstanding

Weighted average common shares outstanding - basic                   3,568,494            3,568,494            2,989,483
                                                                   ===========          ===========          ===========

Weighted average common shares outstanding - diluted                 3,568,494            3,568,494            3,716,489
                                                                   ===========          ===========          ===========

                                          See notes to consolidated financial statements.

                                                             F-3

<PAGE>

                                         PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                                          Consolidated Statement of Stockholders' Equity
                                       For the Years Ended November 30, 2000, 1999 and 1998


                                       Preferred Stock
                                          Series C                 Common Stock            Additional                     Total
                                --------------------------  ---------------------------     Paid-in      Accumulated   Stockholders'
                                    Shares       Amount         Shares       Amount         Capital       Deficit        Equity
                                ------------  ------------  ------------  ------------    -----------  ------------    ------------

Balance, November 30, 1997             2,216   $ 2,216,668    2,989,483    $    2,990     $ 5,026,453  $ (6,508,254)   $    737,857

Net income                                -             -            -             -               -        436,586         436,586
                                 -----------   -----------   ----------    ----------     -----------   -----------    ------------

Balance, November 30, 1998             2,216     2,216,668    2,989,483         2,990       5,026,453    (6,071,668)      1,174,443

Warrants exercised                        -             -       884,264           884          87,542            -           88,426

Net income                                -             -            -             -                         95,061          95,061
                                 -----------   -----------   ----------    ----------     -----------   -----------    ------------

Balance, November 30, 1999             2,216     2,216,668    3,873,747         3,874       5,113,995    (5,976,607)      1,357,930

Net loss                                  -             -            -             -               -       (919,583)       (919,583)
                                 -----------   -----------   ----------    ----------     -----------   -----------    ------------

Balance, November 30, 2000             2,216   $ 2,216,668    3,873,747    $    3,874     $ 5,113,995   $(6,896,190)   $    438,347
                                 ===========   ===========   ==========    ==========     ===========   ===========    ============


                                          See notes to consolidated financial statements.

                                                               F-4
<PAGE>


                                      PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                                            Consolidated Statements of Cash Flows

                                                                                          For the Years Ended
                                                                                               November 30,
                                                                               -------------------------------------------
                                                                                  2000            1999             1998
                                                                               ---------        ---------        ---------
Cash flows from operating activities
    Net (loss) income                                                          $(919,583)       $  95,061        $ 436,586
                                                                               ---------        ---------        ---------
    Adjustments to reconcile net (loss)
     income cash provided by operating activities -
        Depreciation and amortization                                            224,839           85,446           66,463
        Provision for loss on accounts receivable                                  8,278           65,735          (31,058)
        Provision for loss on notes receivable                                    27,086             --             (8,039)
        Bad debts                                                                255,381           42,559           36,850
        Deferred franchise costs                                                 (15,860)          84,190          (40,140)
        Franchise fee revenue financed through notes receivable                     --            (48,786)         (39,257)
        Deferred income taxes                                                       --            (72,500)        (138,900)
        Impairment of capitalized software                                       557,853             --               --
        Changes in operating assets and liabilities -
             Accounts receivable                                                (235,595)        (310,962)        (108,278)
             Inventories                                                          57,074          (45,120)         (21,723)
             Prepaid expenses and other current assets                             6,588            8,226           (5,695)
             Trade accounts payable                                                1,856          125,621           (1,811)
             Accrued expenses and deferred rent                                  (77,108)         175,786           20,095
             Due to advertising fund                                               9,249           (2,000)         (19,900)
             Deferred revenue                                                     (6,899)        (140,946)          66,642
                                                                               ---------        ---------        ---------
                                                                                 812,742          (32,751)        (224,751)
                                                                               ---------        ---------        ---------
                 Net cash (used in) provided by operating activities            (106,841)          62,310          211,835
                                                                               ---------        ---------        ---------

Cash flows from investing activities
    Capital expenditures                                                         (82,799)        (136,694)         (96,389)
    Capitalized software costs                                                  (211,880)        (499,647)        (227,005)
    Deposits and other                                                           (11,372)         (50,649)          (5,123)
    Payments on notes receivable                                                 109,154          227,826          207,341
                                                                               ---------        ---------        ---------
                 Net cash used in investing activities                          (196,897)        (459,164)        (121,176)
                                                                               ---------        ---------        ---------

Cash flows from financing activities
    Payments on notes payable and capital lease obligations                      (31,549)            --           (100,000)
    Advances on notes payable                                                    300,000          120,000             --
    Preferred stock dividends accrued                                            133,000          133,000          133,000
    Preferred stock dividends paid                                              (133,000)        (133,000)            --
    Proceeds from sale of stock                                                     --             88,426             --
    Decrease in restricted cash                                                   (9,249)           2,000           19,900
                                                                               ---------        ---------        ---------
                 Net cash provided by financing activities                       259,202          210,426           52,900
                                                                               ---------        ---------        ---------

Net (decrease) increase in cash and cash equivalents                             (44,536)        (186,428)         143,559

Cash and cash equivalents, beginning of year                                      44,536          230,964           87,405
                                                                               ---------        ---------        ---------

Cash and cash equivalents, end of year                                         $    --          $  44,536        $ 230,964
                                                                               =========        =========        =========

Supplemental disclosure of cash flow information:
        Cash paid during the year for interest was approximately $63,194 (2000), $4,768 (1999) and $1,700 (1998).

Supplemental schedule of non-cash investing and financing activities:
        At November 30, 2000, 1999 and 1998 $49,170, $100,000 and $103,975 of notes receivable additions are included in deferred
        revenue, respectively.

        During 2000, the Company incurred capital lease obligations and recorded related equipment of $43,677.

                                     See notes to consolidated financial statements.

                                                      F-5
</TABLE>

<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies
--------------------------------------------------------------------

Organization
------------

Pak Mail Centers of America, Inc. was incorporated in Colorado in 1984 and is
engaged in the business of marketing and franchising Pak Mail Retail and Service
Centers, which specialize in custom packaging of items to be mailed or shipped
throughout the United States and Mexico.

The consolidated financial statements include the accounts of Pak Mail Centers
of America, Inc. and its wholly owned subsidiary, Pak Mail Crating and Freight
Service, Inc., collectively referred to as the Company. All significant
intercompany transactions and balances have been eliminated in consolidation.

The following table summarizes the number of Pak Mail Retail and Service Centers
in operation during the last three fiscal years:


                                                      November 30,
                                             --------------------------------
                                               2000        1999        1998
                                             --------    --------    --------
Franchises:
    Franchise centers in operation:
           Domestic                               345         332         318
           International                           44          33          17
    Rights to franchise centers sold
      and not in operation                         29          37          27
                                             --------     -------     -------

                                                  418         402         362
                                             ========     =======     =======


Cash and Cash Equivalents
-------------------------

The Company considers cash on hand and investments with original maturities of
three months or less to be cash equivalents.

Fair Value of Financial Instruments
-----------------------------------

The carrying amounts of financial instruments including accounts receivable,
accounts payable and accrued expenses approximate fair values as of November 30,
2000, as a result of the relatively short maturity of these instruments.

The fair value of the notes receivable approximate the carrying value as both
the stated rate and discount rate on the notes approximate the estimated current
market rate.

                                      F-6


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Inventories
-----------

Inventories consist of equipment and supplies held for resale to franchisees for
use at their store locations or held at corporate owned stores for resale to the
public and are stated at the lower of cost (determined on the first-in,
first-out method) or market.

Property and Equipment
----------------------

Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over an estimated useful life of three to seven years.

Long-Lived Assets
-----------------

The Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not
be recovered. The Company looks primarily to the undiscounted future cash flows
in its assessment of whether or not long-lived assets have been impaired.

Deferred Rent
-------------

The Company was granted free rent periods on its office facility. The
accompanying financial statements reflect rent expense on a straight-line basis
over the term of the lease.

Franchise Fee Revenue Recognition
---------------------------------

The Company has awarded franchise rights under the following franchise
agreements:

o    Individual franchise agreement - Right to operate one store at a location
     to be determined. Franchise fees are payable in cash or notes upon
     execution of agreement.

o    Area developer agreement - Right to develop stores within a specified
     geographic area. The area franchise fee (based upon the estimated
     development potential of the area) is payable in cash and notes upon
     execution of the area developer agreement. Upon awarding of individual
     franchises within the franchise area, the Company typically receives 60% of
     the individual franchise fee and the area developer receives 40%. The area
     developer receives 50% to 60% of the royalties from individual franchisees
     within the area. Although the Company currently has several franchises
     operating under this agreement, during fiscal year 1994, the Company
     changed the terms of this agreement as specified in the area marketing
     agreement below.

                                      F-7


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Franchise Fee Revenue Recognition (continued)
---------------------------------------------

o    Area marketing agreement - Right to market franchises within a specified
     geographic region. The area marketing fee is payable in cash and notes upon
     execution of the area marketing agreement. Upon selling of individual
     franchises within the area, the Company typically receives 60% of the
     individual franchise fee and the area marketer receives 40%. The area
     marketer receives 50% of the royalties from individual franchisees within
     the area.

o    International area franchise agreement - Right to market franchises within
     a designated country or specified geographic region. The international
     franchise fee is payable in cash and notes upon execution of the franchise
     agreement. The Company's participation in franchise fees and royalties for
     individual franchises sold within the international area are negotiated on
     a case-by-case basis. Additionally, the Company agrees to train all new
     individual franchisees for a flat fee.

Individual franchise fees outside a marketing or development area are recognized
as revenue when all material services and conditions relating to the sale have
been substantially performed by the Company and the franchise has commenced
operations.

Prior to December 1, 1998, area marketing fees were recognized as income upon
completion of the initial training by the area marketer and collection of the
marketing fee. Effective December 1, 1998, the Company changed its accounting
policy based on an SEC directive related to the recognition of area marketing
agreement fees to one that recognizes such fees on a straight-line basis over
the effective term of the agreement, which is five years or as stores within the
area are opened. The effect of the change in fiscal 1999 resulted in the
deferral of $213,228 of net revenue previously recognized in prior years. This
change was reported as a cumulative effect of change in accounting principle of
$140,728 (net of $72,500 in income tax benefits) and is included in the net
income in fiscal 1999. Fiscal years 2000 and 1999 income included $30,400 and
$114,628 of amortized deferred net revenue related to area marketing agreement
fees that had been previously recognized in prior years.

Individual franchise fees within a domestic area are recognized as revenue when
all material services and conditions relating to the sale have been
substantially performed by the Company, principally site selection and training.

International area franchise fees are deferred and recognized as revenue until
training provided to the international area marketer is completed and once
collection of notes receivable is reasonably assured.

                                      F-8


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Royalties From Franchisees
--------------------------

Royalties from individual franchisees are based upon a percentage of each
franchisee's sales and are recognized when earned based upon reported sales
activity by each franchisee.

Software Revenue Recognition
----------------------------

The Company's software products are generally licensed to franchisees for a
one-time initial fee and subsequent annual license and maintenance fees. The
initial license fee is recognized as revenue upon execution of a signed
contract, delivery of licensed software and when the Company believes that the
collection of the receivable is probable. Revenue on annual license fees will be
recognized over the related 12 month period.

Sales Equipment, Supplies and Services
--------------------------------------

Revenue is recognized as product is shipped or services rendered.

Net Income Per Common Share
---------------------------

Basic net income per share is computed based on the weighted average number of
common shares outstanding. Diluted net income per share is computed based on the
weighted average number of common shares outstanding plus potential dilutive
shares of common shares outstanding plus potential dilutive shares of common
stock including common stock warrants granted to preferred shareholders.

Recently Issued Accounting Pronouncements
-----------------------------------------

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" as
amended by SFAS 137 and 138 requires companies to record derivatives on the
balance sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from changes in the values of those derivatives are accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. The key criterion for hedge accounting is that the hedging
relationship must be highly effective in achieving offsetting changes in fair
value or cash flows. SFAS No. 133 is effective for fiscal years beginning after
June 15, 2000. Management believes that the adoption of SFAS No. 133 will have
no material effect on its financial statements.

                                      F-9


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Recently Issued Accounting Pronouncements (continued)
-----------------------------------------------------

In March 2000, the FASB issued FASB Interpretation No. 44, Accounting for
Certain Transactions Involving Stock Compensation (FIN 44), which was effective
July 1, 2000, except that certain conclusions in this interpretation, which
cover specific events that occur after either December 15, 2998 or January 12,
2000 are recognized on a prospective basis from July 1, 2000. This
interpretation clarifies the application of APB Opinion 25 for certain issues
related to stock issued to employees. The Company believes its existing stock
based compensation policies and procedures are in compliance with FIN 44 and
therefore, the adoption of FIN 44 had no material impact on the Company's
financial condition, results of operations or cash flows.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, which provides guidance on applying generally accepted
accounting principles to selected revenue recognition issues. Management
believes that the Company's revenue recognition policies are in accordance with
SAB 101.

Income Taxes
------------

The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the difference between the financial statements
and tax basis of assets and liabilities using the enacted tax rates in effect
for the year in which the differences are expected to reverse. The measurement
of deferred tax assets is reduced, if necessary, by the amount of any tax
benefits that, based on available evidence, are not expected to be realized.

Deferred Franchise Costs
------------------------

Costs related to the development of the franchise operations are capitalized and
amortized over the expected period of benefit of five years. These costs are
primarily comprised of costs incurred to develop the franchise documents.

Incremental direct development costs, such as commissions, are deferred, but not
in excess of the deferred revenue and are expensed when the related franchise
fee revenue is recognized.

                                      F-10


<PAGE>



                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Capitalized Software Costs
--------------------------

Capitalized software costs consist of costs of internally developed software
developed for sale to franchisees. Capitalization of internally developed
software costs begins upon the establishment of the technological feasibility of
a product. The recoverability of capitalized software costs requires
considerable judgment by management with respect to certain external factors,
including, but not limited to, technological feasibility, anticipated future
gross revenues, estimated economic life and changes in software and hardware
technologies. Amortization of internally developed software costs are provided
on a product-by-product basis using the amount computed by the straight-line
method over the remaining economic life of the product. Generally, an original
estimated economic life of three years is assigned to capitalized software
costs. The software was placed in service by the majority of the franchises in
February 2000. As such, no amortization was recorded during fiscal year 1999,
amortization in 2000 is $81,390. After two months of use, it became apparent
that the software was not working as intended. The Company contracted with a
software development company to rewrite a significant portion of the program for
approximately $230,000. Management's analysis indicated that approximately
$557,853 of the originally capitalized asset needed to be written off as an
impaired asset.

Concentration of Credit Risk
----------------------------

Financial instruments, which potentially subject the Company to concentrations
of credit risk consist of cash and cash equivalents, and accounts and notes
receivable from franchisees, area developers and marketing directors. The
Company places its temporary cash investments in high credit quality financial
institutions, which at times may exceed federally insured limits. To reduce
credit risk, the Company reserves the right to terminate franchise agreements
for non-payment of amounts owed. Additionally, at November 30, 2000,
approximately $347,353 of notes receivable are offset by comparable amounts in
deferred revenue.

Use of Estimates
----------------

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

                                      F-11


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------------------

Use of Estimates (continued)
----------------------------

The Company has recorded an allowance for doubtful collection on accounts
receivable and notes receivable. These allowances are continually reviewed based
upon changes in the nature of the amounts outstanding. Accordingly, the
allowances are subject to changes due to circumstances not presently known.

The Company has recorded a valuation allowance for potentially unrealizable
deferred tax assets. This allowance is reviewed based upon historical and
projected financial results of the Company. Accordingly, the allowance is
subject to changes due to circumstances not presently known.

Advertising Costs
-----------------

Advertising costs are expensed in the period incurred.

Reclassifications
-----------------

Certain amounts in the 1998 and 1999 financial statements have been reclassified
to conform to the 2000 presentation.


Note 2 - Furniture and Equipment
--------------------------------

Furniture and equipment consists of the following:
                                                            November 30,
                                                    ---------------------------
                                                      2000              1999
                                                    ---------         ---------

Office equipment                                    $ 196,260         $ 483,853
Furniture and fixtures                                228,088           197,960
                                                    ---------         ---------
                                                      424,348           681,813
Less accumulated depreciation                        (288,092)         (502,045)
                                                    ---------         ---------

                                                    $ 136,256         $ 179,768
                                                    =========         =========

                                      F-12

<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 3 - Capital Lease Obligations
----------------------------------

The Company is obligated under a capital lease. The total cost and accumulated
depreciation of equipment under the capital lease was $43,677 and $13,649,
respectively at November 30, 2000. The Company entered into a four-year lease
for cubicle structures with a monthly payment of $1,223, expiring in August
2003.

The future minimum lease payments due under capital leases are as follows at
November 30, 2000:

2001                                                         $       14,676
2002                                                                 14,676
2003                                                                  9,784
                                                             --------------
Future minimum payments                                              39,136
Less interest                                                        (7,008)
                                                             --------------
                                                                     32,128
Less current portion                                                (10,520)
                                                             --------------

Long-term capital lease obligation                           $       21,608
                                                             ==============


Note 4 - Notes Receivable
-------------------------

Notes receivable consist of franchise fees and area marketer fees financed by
the Company. The notes are collateralized by the underlying franchise agreements
and by essentially all of the franchisees' assets incidental to the operation of
the franchise centers. Most of the notes are personally guaranteed by the owners
of each franchise.

Notes receivable consist of the following:
<TABLE>
<CAPTION>

                                                                             November 30,
                                                                 --------------------------------------
                                                                       2000                   1999
                                                                 ---------------          -------------
<S>                                                              <C>                     <C>
Non-interest-bearing notes; interest
imputed at 7%, net of unamortized discounts
of $3,039 and $3,039 in 2000 and 1999, respectively.              $     296,420           $     342,244

Interest-bearing notes; interest rates from 6% to 8%                    177,718                 290,218
                                                                  -------------           -------------
                                                                        474,138                 632,462
       Less allowance for doubtful collections                          (18,008)                (45,094)
                                                                  -------------           -------------

                                                                  $     456,130           $     587,368
                                                                  =============           =============
</TABLE>


                                      F-13


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 4 - Notes Receivable (continued)
-------------------------------------

It is the Company's policy not to impute interest on the notes, which are
included in deferred revenue. Included in these notes are financed area marketer
fees, the maturities of which are based upon the expected opening of franchises
within the area.

Future minimum principal payments to be received pursuant to the notes are as
follows:

      Year Ending November 30,

                2001                                          $      169,982
                2002                                                  98,799
                2003                                                  85,920
                2004                                                  61,092
                2005                                                  29,212
               Thereafter                                             32,172
                                                              --------------
                                                                     477,177
               Less unamortized discount                              (3,039)
                                                              --------------
                                                                     474,138

               Less allowance for doubtful collections               (18,008)
                                                              --------------

                                                              $      456,130
                                                              ==============

At the time the notes receivable are executed, the Company reserves an allowance
for doubtful collections. The provision for uncollectible amounts is continually
reviewed and adjusted to maintain the allowance at a level considered adequate
to cover future losses. The allowance is management's best estimate of
uncollectible amounts and is determined based on historical performance of the
notes, which is tracked by the Company on an ongoing basis. The losses
ultimately incurred could differ materially in the near term from the amounts
estimated in determining the allowance.


Note 5 - Long-Term Debt
-----------------------

The Company has a long-term, $400,000 note payable to the majority shareholder
requiring the balance plus interest at prime rate (9.5%) to be paid upon demand
subsequent to January 2002. The note is unsecured.

The Company has a $300,000 line-of-credit agreement requiring monthly interest
payments at 1.5% over prime (11%) and maturing March 2001. The balance
outstanding at November 30, 2000 was $0.

                                      F-14


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 6 - Stockholders' Equity
-----------------------------

Dividends on the Series C Preferred Stock will accrue at 6% per year commencing
December 1, 1997. Dividends are payable annually commencing March 31, 1999 and
each March 31 thereafter for the previous year end. The preferred stock does not
vote although holders of 51% must approve certain items such as any change in
control, sale of the Company or a sale of the majority of the Company's assets.
The Series C Preferred Stock may be redeemed at the Company's option any time at
$1,000 per share plus accrued dividends.

As an incentive to exchange for the Series C preferred stock, the preferred
shareholders were granted a total of 884,264 common stock warrants. There was no
fair value attributed to the warrants as no material imputed value was estimated
in the Company pricing model. All warrants were exercised during fiscal year
1999.

The fair values of the warrants granted are estimated on the date of the grant
using the Black-Scholes option pricing model with the following weighted average
assumptions used for grants: dividend yield of 0%; expected volatility of 133%;
discount rate of 5.25% and expected lives of 10 years.


Note 7 - Stock Option Plan
--------------------------

The 1999 Incentive and Non-statutory Stock Option Plan (the Plan) authorizes the
issuance of up to 400,000 shares of the Company's Common Stock. The Plan will
remain in effect until December 31, 2008 unless terminated earlier by action of
the Board. All employees of the Company are eligible to receive options under
the Plan at the discretion of the Board. Options issued under the Plan vest
one-third per year upon each of the first three anniversaries of the issue date
and have a term of ten years from the date of issue.

                                      F-15


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 7 - Stock Option Plan (continued)
--------------------------------------

The following is a summary of options granted:
<TABLE>
<CAPTION>

                                                                                                                Weighted
                                                       Incentive          Weighted                               Average
                                                     Stock Options        Average                             Exercise Price -
                                                         and              Exercise         Currently           Currently
                                                       Warrants            Price           Exercisable         Exercisable

<S>                                                     <C>                    <C>           <C>                      <C>
Outstanding November 30, 1998                               884,264                .10           884,264                  .10
                                                   ----------------   ----------------   ---------------      ---------------

    Options and warrants exercised                         (884,264)               .10          (884,264)                 .10
    Options and warrants granted                            157,227                .75           157,227                  .75
                                                   ----------------   ----------------   ---------------      ---------------

Outstanding November 30, 1999                               157,227   $            .75           157,227      $           .75
                                                   ----------------   ----------------   ---------------      ---------------

    Options and warrants exercised                               -                  -                 -                    -
    Options and warrants granted                                 -                  -                 -                    -
                                                   ----------------   ----------------   ---------------     ---------------


Outstanding November 30, 2000                               157,227   $            .75           157,227      $           .75
                                                   ================   ================   ===============      ===============

The weighted average fair value of all warrants granted during 1999 was $.45.

                                                          November 30, 2000
                                                  Options and Warrants Outstanding
                                                                                     Weighted
                                                                   Weighted          Average
                                                                   Average           Remaining
                                         Number                   Exercise           Contractual
Range of Exercise Price                Outstanding                 Price                Life
                                    -------------------     -------------------      ------------

$.75                                      157,227                   .75                9.08
</TABLE>

The Company accounts for stock based compensation in accordance with Financial
Accounting Standards Board Statement No. 123, "Accounting for Stock Based
Compensation," ("FAS 123") which encourages, but does not require, companies to
recognize compensation expense for grants of stock, stock options and other
equity instruments to employees. FAS 123 requires the recognition of expense for
such grants, described above, to acquire goods and services from all
non-employees. Additionally, although expense recognition is not mandatory for
issuances to employees, FAS 123 requires companies that choose not to adopt the
new fair value accounting rules to disclose pro forma net income and earnings
per share information using the new method.

                                      F-16


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 7 - Stock Option Plan (continued)
--------------------------------------

The Company has adopted the disclosure-only provisions of FAS 123. Accordingly,
no compensation cost has been recognized for the issuances of stock options to
employees. For the year ended November 30, 1999, employees of the Company were
issued options to purchase a total of 157,227 shares of the Company's common
stock at $.75 per share expiring in December 2009. There were no options issued
during the year ended November 30, 1998 or 2000.

Had compensation cost for the Company's issuances of stock options during the
year ended November 30, 1999 been determined based on the fair value at the date
of grant consistent with the provisions of FAS 123, the Company's 1999 net loss
and loss per share would have been decreased to the pro forma amounts indicated
below:

                                                                   November 30,
                                                                      1999
                                                                   ------------
   Net income - as reported                                        $    95,061
   Net income - pro forma                                          $    19,496
   Net income per share, basic and diluted - as reported           $       .03
   Net income per share, basic and diluted - pro forma             $       .01

The Company utilizes the Black-Scholes options-pricing model to calculate the
fair value of each individual issuance of options or warrants with the following
assumptions used for grants during the year ended November 30, 1999; dividends
yield of 0.0%; expected average annual volatility of 102.5%; average annual
risk-free interest rate of 5.25%; and expected terms averaging 10 years.

The following is an illustration of the reconciliation of the numerators and
denominators of the basic and diluted Earnings Per Share (EPS) computations:
<TABLE>
<CAPTION>


                                                                         For the Year Ended November 30, 1998
                                                            --------------------------------------------------------------
                                                                  Income                 Shares              Per-Share
                                                               (Numerator)           (Denominator)             Amount
                                                            -------------------    ------------------    -----------------
<S>                                                         <C>                     <C>                  <C>
Net income                                                  $           569,586
Less preferred stock dividends                                         (133,000)
                                                            -------------------

Basic EPS
  Income available to common stockholders                               436,586              2,989,483   $             .15
                                                            -------------------                          =================

Effect of dilutive securities
  Warrants                                                                   -                 727,006
                                                            -------------------    -------------------

Diluted EPS
  Income available to common stockholders
  plus assumed conversions                                              436,586              3,716,489   $             .12
                                                            ===================    ===================   =================
</TABLE>

                                      F-17

<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 7 - Stock Option Plan (continued)
--------------------------------------

For November 30, 2000 and 1999, the options to acquire 157,227 shares of common
stock are excluded as their effect would be antidilutive.


Note 8 - Advertising Fund
-------------------------

The Company has established an advertising trust to administer funds collected
from franchisees for advertising. The advertising trust is a separate legal
entity and, therefore, the Company is not contingently liable for any trust
liabilities incurred; nor is the trust activity reflected in the accompanying
consolidated financial statements.


Note 9 - Restricted Cash
------------------------

At November 30, 2000 and 1999, the amounts due the advertising trust of $11,129
and $1,880, respectively, are included in restricted cash.


Note 10 - Income Taxes
----------------------

During 2000, 1999 and 1998 the Company utilized approximately $0, $80,000 and
$58,000 in net operating loss carryforwards to offset current taxable income.
This resulted in tax savings of approximately $0, $27,000 and $20,000,
respectively. The Company's valuation allowance on its remaining net operating
loss carryforward is an estimate based on the Company's ability to utilize net
operating loss carryforwards to offset taxable income projected in future years.

The components of long-term deferred tax assets are as follows:

<TABLE>
<CAPTION>

                                                                               November 30,
                                                     ----------------------------------------------------------------
                                                           2000                    1999                    1998
                                                     ----------------        ----------------        ----------------
<S>                                                  <C>                     <C>                     <C>
    Deferred tax assets
           Net operating loss carryforward           $      2,176,000        $      2,034,000        $      2,061,600
           Reserves and other deferrals                       162,000                 174,000                  41,300
           Depreciation and amortization                     (145,000)               (301,000)               (111,000)
                                                     ----------------        ----------------        ----------------
                  Total deferred tax assets                 2,193,000               1,907,000               1,991,900
           Valuation allowance                             (1,845,500)             (1,559,500)             (1,716,900)
                                                     ----------------        ----------------        ----------------

                                                     $        347,500        $        347,500        $        275,000
                                                     ================        ================        ================
</TABLE>

At November 30, 2000, the Company has net operating loss carryforwards for tax
purposes of approximately $6,400,000. If not used, these carryforwards will
expire in varying amounts during the years 2001 to 2020.

                                      F-18


<PAGE>


                PAK MAIL CENTERS OF AMERICA, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


Note 11 - Employee Benefit Plan
-------------------------------

Effective December 1, 1991, the Company established the Pak Mail 401(k) Profit
Sharing Plan (the Plan). All employees of the Company who are 21 years of age
and have completed one year of eligibility service, as defined, may participate
in the Plan. Participants may make tax deferred contributions in any amount up
to the maximum allowable under current federal tax laws. The Company will
contribute an amount equal to 50% of each participant's contribution, limited to
3% of the participant's compensation as defined in the Plan. Contributions made
by the Company in connection with the Plan were approximately $25,610 (2000) and
$14,900 (1999).


Note 12 - Commitments
---------------------

Operating Lease Commitments
---------------------------

The Company leases office space and office equipment under noncancelable
operating leases. Aggregate future minimum rental commitments for these
operating leases as of November 30, 2000 are as follows:

         Year Ending November 30,
         ------------------------

                 2001                                     $       261,295
                 2002                                             255,999
                 2003                                             254,153
                 2004                                             246,384
                 2005                                             248,643
                 Thereafter                                       104,211
                                                          ---------------

                                                          $     1,370,685
                                                          ===============


Rental expense for 2000 and 1999 and 1998 was approximately $342,000, $287,000,
and $198,000, respectively.

                                      F-19


<PAGE>


                                  EXHIBIT INDEX

(3)(a)         Articles of Incorporation incorporated by reference to Exhibit
               (3)(a) of the Company's Annual Report on Form 10-KSB for the
               fiscal year ended November 30, 1995.

(3)(b)         Articles of Amendment to the Articles of Incorporation filed with
               the Colorado Secretary of State on January 26, 1998 incorporated
               by reference to Exhibit (3)(b) of the Company's Annual Report on
               Form 10-KSB for the fiscal year ended November 30, 1997.

(3)(c)         Articles of Amendment to the Articles of Incorporation filed with
               the Colorado Secretary of State on July 13, 1998, incorporated by
               reference to Exhibit 3(a) of the Company's Quarterly Report on
               Form 10-QSB for the quarter ended May 31, 1998.

(3)(d)         Bylaws incorporated by reference to Exhibit 3(b) of the Company's
               Quarterly Report on Form 10-QSB for the quarter ended May 31,
               1998.

(10)(a)*       Individual Franchise Agreement.

(10)(b)*       Area Marketing Agreement.

(10)(c)        Pak Mail Centers of America, Inc. Management Incentive Plan for
               Fiscal Year 1998 incorporated by reference to Exhibit (10)(f) of
               the Company's Annual Report on Form 10-KSB for the fiscal year
               ended November 30, 1998.

(10)(d)        Pak Mail Centers of America, Inc. Management Incentive Plan for
               Fiscal Year 1999 incorporated by reference to Exhibit (10)(g) of
               the Company's Annual Report on Form 10-KSB for the fiscal year
               ended November 30, 1998.

(10)(e)        Pak Mail Centers of America, Inc. 1999 Incentive and
               Non-statutory Employee Stock Option Plan incorporated by
               reference to Exhibit (10)(h) of the Company's Annual Report on
               Form 10-KSB for the fiscal year ended November 30, 1998.

(10)(f)*       Contract with Immedient, a software development company to
               re-write the PSS software. (Scope Document)

(10)(g)*       Promissory Note, D.P. Kelly & Associates, Inc.

(10)(h)*       Office Lease with Bedford Property Investors for office located
               at 7173 South Havana Street, Denver, CO 80112, approximately
               12,540 square feet.

(21)*          Subsidiaries of the Registrant.


     * Filed herewith.

                                       22