<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A

                                 AMENDMENT NO. 1

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                                COMMISSION FILE NUMBER 0-26123

                               ONLINE RESOURCES &
                           COMMUNICATIONS CORPORATION

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
          <S>                                          <C>
              DELAWARE                                 52-1623052
              (State or other jurisdiction of          (I.R.S. Employer Identification Number)
              incorporation or organization)

              7600 COLSHIRE DRIVE
                MCLEAN, VIRGINIA                       22102
          (Address of principal executive offices)     (Zip code)

</TABLE>
                                (703) 394-5100
             (Registrant's telephone number, including area code)

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

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

                             TITLE OF EACH CLASS

                  Common Stock, $0.0001 par value per share

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

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

    The aggregate market value of the common stock of the registrant held by
nonaffiliates as of March 29, 2000 was $153,018,000. There were 11,180,019
shares of common stock outstanding as of March 29, 2000.

<PAGE>   2
 This Annual Report on Form 10-K/A ("Form 10-K/A") is being filed as Amendment
No. 1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999. This Form 10-K/A is filed with the Securities and Exchange
Commission solely for the purpose of revising and restating the following items
in their entirety. Such revisions are required to amend the number of shares
used in calculation of the basic and diluted loss per share from 9,327,202 to
8,010,331 and to adjust for 1999 the loss per share based upon such amended
number of shares.

                                   PART II

ITEM 6.  SELECTED FINANCIAL DATA

    You should read the following selected financial information in conjunction
with our financial statements and related notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this report.

<TABLE>
<CAPTION>

                                                               YEAR ENDED DECEMBER 31
                                            ---------------------------------------------------------------------
                                                1995          1996           1997           1998        1999
                                            ------------ -------------  -------------  ------------- ------------
                 <S>                        <C>          <C>            <C>            <C>           <C>
                   Statement of Operations
                     Data:
                   Revenues:
                     Core services........  $   372,573   $   417,590   $  1,011,161   $  2,221,230  $  4,362,695
                     Support services.....      307,423       176,653        207,697        644,818     2,015,480
                     Implementation fees..       66,620       417,116      1,310,950      1,200,158     1,772,290
                     Related products.....      237,654       119,150        324,736        259,898       295,070
                                            -----------   -----------   ------------   ------------  ------------
                          Total revenues..      984,270     1,130,509      2,854,544      4,326,104     8,445,535
                     Cost of revenues.....    1,853,486     1,864,991      5,128,584      6,289,462     9,081,269
                                            -----------   -----------   ------------   ------------  ------------
                                               (869,216)     (734,482)    (2,274,040)    (1,963,358)     (635,734)
                     General and
                        administration....    1,699,363     2,208,218      2,508,058      2,705,029     3,894,475
                     Sales and marketing..    1,423,255     2,249,405      3,257,725      3,377,728     5,266,044
                     Systems and
                        development.......    1,241,874     1,469,272      2,682,261      2,444,615     3,998,936
                                            -----------   -----------   ------------   ------------  ------------
                          Total expenses...   4,364,492     5,926,895      8,448,044      8,527,372    13,159,455
                                            -----------   -----------   ------------   ------------  ------------
                   Loss from operations...   (5,233,708)   (6,661,377)   (10,722,084)   (10,490,730)  (13,795,189)
                   Other income (expense).        6,251      (315,014)      (323,727)    (1,067,739)      (34,045)
                                            -----------   -----------   ------------   ------------  ------------
                   Loss before
                      extraordinary loss...  (5,227,457)   (6,976,391)   (11,045,811)   (11,558,469)  (13,829,234)
                   Extraordinary loss from
                     extinguishment of
                     debt (1).............           --            --             --             --      (885,407)
                   Net loss...............   (5,227,457)   (6,976,391)   (11,045,811)   (11,550,469)  (14,714,641)
                   Preferred stock
                     accretion............           --            --     (1,998,665)    (3,779,169)   (2,236,716)
                   Beneficial return on
                     preferred shares (2).           --            --             --             --    (2,668,109)
                                            -----------   -----------   ------------   ------------  ------------
                   Net loss available for
                     common...............   (5,227,457)   (6,976,391)   (13,044,476)   (15,337,638)  (19,619,466)
                   Net loss per share
                     basic and diluted....  $     (1.52)  $    (1.86)   $     (3.38)   $     (3.83)  $     (2.45)
                                            ============  ============  =============  ============= =============
                   Shares used in
                     calculation of basic
                     and diluted loss per
                     share................    3,427,844     3,742,648      3,858,366      4,009,713     8,010,331

                   </TABLE>

----------

(1) On June 10, 1999, we used $9.4 million of the net proceeds from our initial
    public offering to pay off corporate debt which resulted in a one time
    charge.

(2) We recorded a deemed beneficial return on the Series C preferred stock
    issued during the first three months of 1999, due to these shares being
    convertible into common stock at a discount from fair value at the date of
    issuance.



                                       2
<PAGE>   3

<TABLE>
<CAPTION>

                                                                     YEAR ENDED DECEMBER 31
                                             --------------------------------------------------------------------
                                                 1995         1996           1997          1998         1999
                                             ----------- -------------  ------------- -------------  ------------
               <S>                           <C>          <C>           <C>           <C>            <C>
                   Balance Sheet Data:
                   Cash and equivalents....  $  762,738   $    41,142   $  1,855,161  $  3,471,620    $ 1,588,187
                   Working capital.........   1,265,745    (1,399,022)      (144,592)      580,376     20,895,369
                   Total assets............   2,429,060     2,082,436      4,681,995     9,421,428     29,217,175
                   Notes payable, less
                    current portion........     475,000     4,555,808      1,199,225     8,525,467             --
                   Capital lease
                    obligations, less current
                    portion................      92,154            --        352,956       605,322        329,480
                   Put option liability....          --            --             --       362,700             --
                   Other non-current
                     liabilities...........          --            --             --       193,400             --
                   Total liabilities.......     993,447     6,927,011      4,217,590    14,833,950      3,750,141
                   Redeemable convertible
                     preferred stock.......          --       645,000     16,836,016    25,776,254             --
                   Series A Convertible
                     Preferred Stock.......       7,950         7,950          7,950         7,950             --
                   Stockholders' equity
                     (deficit).............   1,435,613    (5,489,575)   (16,371,611)  (31,188,776)    25,467,034
                   </TABLE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

Report of Ernst & Young LLP, Independent Auditors..................
Balance Sheets.....................................................
Statements of Operations...........................................
Statements of Stockholders' Equity.................................
Statements of Cash Flows...........................................
Notes to Financial Statements......................................



                                       3
<PAGE>   4

                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors
Online Resources & Communications Corporation

    We have audited the accompanying balance sheets of Online Resources &
Communications Corporation as of December 31, 1998 and 1999, and the related
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Online Resources &
Communications Corporation at December 31, 1998 and 1999, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

/s/ ERNST & YOUNG, LLP

McLean, Virginia
February 10, 2000



                                       4
<PAGE>   5

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                         DECEMBER 31,
                                                                                 --------------------------
                                                                                      1998       1999
                                                                                 ------------- ------------
                       <S>                                                       <C>           <C>
                         ASSETS
                         Current assets:
                           Cash and cash equivalents (Note 2)..................  $  3,471,620  $  1,588,187
                           Escrow deposit......................................       400,985            --
                           Investments (Note 3)................................            --    19,905,929
                           Accounts receivable (net of allowance of $52,000,and
                              $152,000 at December 31, 1998 and 1999,
                              respectively)....................................       933,585     1,875,707
                           Prepaid expenses and other current assets...........       921,247       946,207
                                                                                 ------------  ------------
                                   Total current assets........................     5,727,437    24,316,030
                         Property and equipment, net (Note 4)..................     3,166,019     4,616,672
                         Other assets..........................................       527,972       284,473
                                                                                 ------------  ------------
                                   Total assets................................  $  9,421,428  $ 29,217,175
                                                                                 ============  ============
                         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                         Current liabilities:
                           Accounts payable....................................  $  1,707,675  $    812,082
                           Accrued expenses and other current liabilities......       617,929       565,384
                           Accrued wages.......................................       425,703       537,553
                           Accrued vacation....................................       191,090       378,640
                           Deferred revenues...................................       678,117       417,926
                           Current portion of capital lease obligation.........       614,585       709,076
                           Current portion of long term debt (Note 5)..........       711,962            --
                           Current portion of notes payable to related parties.       200,000            --
                                                                                 ------------  ------------
                                   Total current liabilities...................     5,147,061     3,420,661
                           Capital lease obligation............................       605,322       329,480
                           Long Term debt (net of unamortized discount of
                            $506,861 at December 31, 1998) less current
                            portion.............................................    8,525,467            --
                           Put option liability................................       362,700            --
                           Other Noncurrent Liabilities........................       193,400            --
                                                                                 ------------  ------------
                                   Total Liabilities...........................    14,833,950     3,750,141
                         Commitments (Note 6)
                         Redeemable convertible Preferred Stock, $.01 par
                          value (Note 8)
                         Series B redeemable convertible preferred stock;
                          100,000 shares designated, 1,000 shares issued and
                          outstanding at December 31, 1998......................      120,854            --
                         Series C redeemable convertible preferred stock;
                           287,000 shares designated, 224,700 shares issued
                           and outstanding at December 31, 1998.................   25,655,400            --
                                                                                  -----------   -----------
                                    Total redeemable convertible Preferred Stock   25,776,254            --
                         Stockholders' equity (deficit) (Note 9)
                           Series A convertible preferred stock, $0.1 par
                            value; 1,000,000 shares authorized, 795,000 shares
                            issued and outstanding at December 31, 1998.........        7,950            --
                           Common stock, $.0001 par value; 35,000,000 shares
                              authorized, 4,053,653 and 11,050,456 issued and
                              outstanding at December 31, 1998 and 1999,
                              respectively.....................................           405         1,105
                           Additional paid-in capital..........................    11,078,308    83,035,825
                           Accumulated deficit.................................   (41,937,066)  (56,651,707)
                           Deferred stock compensation.........................            --      (267,949)
                           Receivable from the sale of common stock............      (338,373)     (650,240)
                                                                                 ------------  ------------
                                   Total stockholders' equity (deficit)........   (31,188,776)   25,467,034
                                                                                 ------------  ------------
                                   Total liabilities and stockholders' equity..  $  9,421,428  $ 29,217,175
                                                                                 ============  ============
</TABLE>



                                       5
<PAGE>   6




                  ONLINE RESOURCES & COMMUNICATIONS CORPORATION

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                              YEAR ENDED DECEMBER 31,
                                                                   -------------------------------------------
                                                                        1997           1998           1999
                                                                   -------------  -------------  -------------
                    <S>                                             <S>           <C>            <C>
                       Revenues:
                         Core services...........................   $  1,011,161   $  2,221,230   $  4,362,695
                         Support services........................        207,697        644,818      2,015,480
                         Implementation fees.....................      1,310,950      1,200,158      1,772,290
                         Related products........................        324,736        259,898        295,070
                                                                    ------------   ------------   ------------
                                 Total revenues..................      2,854,544      4,326,104      8,445,535
                       Expenses:
                         Cost of revenues........................      5,128,584      6,289,462      9,081,269
                                                                    ------------   ------------   ------------
                                                                      (2,274,040)    (1,963,358)      (635,734)
                         General and administrative..............      2,508,058      2,705,029      3,894,475
                         Selling and marketing...................      3,257,725      3,377,728      5,266,044
                         Systems and development.................      2,682,261      2,444,615      3,998,936
                                                                    ------------   ------------   ------------
                                 Total expenses..................      8,448,044      8,527,372     13,159,455
                       Loss from operations......................    (10,722,084)   (10,490,730)   (13,795,189)
                       Other income (expense):

                         Interest income.........................        147,988         94,312        989,520
                         Interest expense........................       (471,187)    (1,146,614)      (958,852)
                         Other...................................           (528)       (15,437)       (64,713)
                                                                     ------------   ------------   ------------
                                 Total other income (expense)....       (323,727)    (1,067,739)       (34,045)
                       Loss before extraordinary loss............    (11,045,811)   (11,558,469)   (13,829,234)
                       Extraordinary loss from the
                         extinguishment of debt..................             --             --       (885,407)
                                                                     ------------   ------------   ------------
                       Net loss..................................    (11,045,811)   (11,558,469)   (14,714,641)
                       Preferred stock accretion.................     (1,998,665)    (3,779,169)    (2,236,716)
                       Beneficial return on preferred shares.....             --             --     (2,668,109)
                                                                    ------------   ------------   ------------
                       Net loss available to common shareholders.   $(13,044,476)  $(15,337,638)  $(19,619,466)
                                                                    ============   ============   ============
                       Loss per share:
                         Net loss per share from continuing
                           operations (including accretion and
                           beneficial return on preferred shares).. $      (3.38)  $      (3.83)  $      (2.34)
                         Net loss per share -- extraordinary loss             --             --          (0.11)
                         Net loss per share attributable to
                          common shareholders....................   $      (3.38)  $      (3.83)  $      (2.45)
                       Shares used in calculation of loss per
                         share:
                         Basic and diluted.......................      3,858,366      4,009,713      8,010,331
</TABLE>



                                       6
<PAGE>   7

                  ONLINE RESOURCES & COMMUNICATIONS CORPORATION

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                        SERIES A
                                     PREFERRED STOCK              COMMON STOCK         ADDITIONAL
                                ----------------------       --------------------        PAID-IN        ACCUMULATED
                                  SHARES        AMOUNT        SHARES       AMOUNT        CAPITAL          DEFICIT
                                ----------   ----------      --------    --------     -------------     ------------
<S>                             <C>          <C>             <C>         <C>          <C>             <C>
Balance at December 31, 1996      795,000       $ 7,950      3,816,467     $   382    $ 13,834,879    $(19,332,786)
 Issuance of common stock...           --            --            151          --           1,454              --
 Exercise of common stock
   options..................           --            --         75,038           7         234,491              --
 Issuance of common stock
   warrants.................           --            --             --          --       2,145,986              --
 Series B preferred stock
   accretion................           --            --             --          --         (10,331)             --
 Series C preferred stock
   accretion................           --            --             --          --      (1,988,334)             --
 Net loss...................           --            --             --          --              --     (11,045,811)
                                  -------       -------      ---------     -------    ------------    ------------
Balance at December 31, 1997      795,000         7,950      3,891,656         389      14,218,145     (30,378,597)
 Issuance of common stock...           --            --            694          --           5,400              --
 Exercise of common stock
   options..................           --            --        208,587          20         674,041              --
 Purchase of treasury stock.           --            --        (64,392)         (6)       (517,997)             --
 Issuance of common stock
   options..................           --            --             --          --         333,890              --
 Conversion of Series C
   preferred stock to common
   stock....................           --            --         17,108           2         143,998              --
 Series B preferred stock
   accretion................           --            --             --          --         (10,523)             --
 Series C preferred stock
   accretion................           --            --             --          --      (3,768,646)             --
 Net loss...................           --            --             --          --              --     (11,558,469)
                                  -------       -------      ---------     -------    ------------    ------------
Balance at December 31, 1998      795,000         7,950      4,053,653         405      11,078,308     (41,937,066)
 Issuance of common stock...           --            --      3,100,072         310      38,645,647              --
 Conversion of preferred
   stock....................     (795,000)       (7,950)     3,571,559         357      35,751,430              --
 Exercise of common stock
   options..................           --            --        296,382          29       1,324,995              --
 Exercise of common stock
   warrants.................           --            --         36,066           4         165,191              --
 Issuance of common stock
   options..................           --            --             --          --         448,661              --
 Issuance of common stock
   warrants.................           --            --             --          --           3,191              --
 Amortization of deferred
   stock compensation.......           --            --             --          --              --              --
 Extinguishment of put
   option...................           --            --             --          --         584,477              --
 Purchase of treasury stock.           --            --         (7,276)         --         (61,250)             --
 Repayment of stock
   subscription.............           --            --             --          --              --              --
 Beneficial return on
   preferred shares.........           --            --             --          --      (2,668,109)             --
 Series B preferred stock
   accretion................           --            --             --          --          (4,689)             --
 Series C preferred stock
   accretion................           --            --             --          --      (2,232,027)             --
 Net loss...................           --            --             --          --              --     (14,714,641)
                                  -------       -------      ---------     -------    ------------    ------------
Balance at December 31, 1999           --       $    --      11,050,456    $ 1,105    $ 83,035,825    $(56,651,707)
                                  =======       =======      ==========    =======    ============    ============
</TABLE>




<TABLE>
<CAPTION>


                                                   EMPLOYEE
                                   DEFERRED        STOCK                 TOTAL
                                     STOCK         SUBSCRIPTION       STOCKHOLDERS'
                                 COMPENSATION        RECEIVABLE           EQUITY
                                 -------------     -------------      -------------
<S>                              <C>               <C>              <C>
Balance at December 31, 1996      $      --         $      --       $ (5,489,575)
 Issuance of common stock...             --                --              1,454
 Exercise of common stock
   options..................             --          (219,498)            15,000
 Issuance of common stock
   warrants.................             --                --          2,145,986
 Series B preferred stock
   accretion................             --                --            (10,331)
 Series C preferred stock
   accretion................             --                --         (1,988,334)
 Net loss...................             --                --        (11,045,811)
                                  ---------         ---------       ------------
Balance at December 31, 1997             --          (219,498)       (16,371,611)
 Issuance of common stock...             --                --              5,400
 Exercise of common stock
   options..................             --          (118,875)           555,186
 Purchase of treasury stock.             --                --           (518,003)
 Issuance of common stock
   options..................             --                --            333,890
 Conversion of Series C
   preferred stock to common

   stock....................             --                --            144,000
 Series B preferred stock
   accretion................             --                --            (10,523)
 Series C preferred stock
   accretion................             --                --         (3,768,646)
 Net loss...................             --                --        (11,558,469)
                                  ---------         ---------       ------------
Balance at December 31, 1998             --          (338,373)       (31,188,776)
 Issuance of common stock...             --                --         38,645,957
 Conversion of preferred
   stock....................             --                --         35,743,837
 Exercise of common stock
   options..................             --          (321,250)         1,003,774
 Exercise of common stock
   warrants.................             --                --            165,195
 Issuance of common stock
   options..................       (448,661)               --                 --
 Issuance of common stock
   warrants.................             --                --              3,191
 Amortization of deferred
stock compensation..........        180,712                --            180,712
 Extinguishment of put
   option...................             --                --            584,477
 Purchase of treasury stock.             --                --            (61,250)
 Repayment of stock
   subscription.............             --             9,383              9,383
 Beneficial return on
preferred shares............             --                --         (2,668,109)
 Series B preferred stock
   accretion................             --                --             (4,689)
 Series C preferred stock
   accretion................             --                --         (2,232,027)
 Net loss...................             --                --        (14,714,641)
                                  ---------         ---------       ------------
Balance at December 31, 1999      $(267,949)        $(650,240)      $ 25,467,034
                                  =========         =========       ============
</TABLE>



                                       7
<PAGE>   8


                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                              YEAR ENDED DECEMBER 31,
                                                                   -------------------------------------------
                                                                        1997           1998         1999
                                                                   -------------- -------------- -------------
                    <S>                                            <C>            <C>            <C>
                      OPERATING ACTIVITIES
                      Net loss...................................   $(11,045,811)  $(11,558,469) $ (14,714,641)
                      Adjustments to reconcile net loss to net
                        cash used in operating activities:
                        Depreciation.............................        496,745        813,988      1,095,228
                        Amortization.............................         47,063        166,009        199,488
                        Compensation expense related to
                          issuance of common stock...............          1,454        333,890        180,712
                           Provision for losses on accounts
                             receivable..........................         53,553        (28,118)       100,000
                           Extraordinary loss on debt
                            extinguishment.......................             --             --        885,407
                           Reserve for inventory obsolescence....        496,721             --             --
                           Loss on write-off of long-term
                            receivable...........................        100,000             --             --
                           Changes in assets and liabilities:
                             Accounts receivable.................       (342,025)      (389,411)    (1,042,122)
                             Inventory...........................         85,215             --             --
                             Prepaid expenses and other current
                                assets...........................        (27,434)      (322,294)      (474,960)
                             Escrow deposit......................             --       (400,985)       400,985
                             Other assets........................             --       (352,009)       104,114
                             Accounts payable....................        151,219        718,273       (895,593)
                             Accrued expenses....................        299,476        339,687        246,854
                             Deferred revenues...................         15,650        295,917       (260,191)
                                                                    ------------   ------------  -------------
                      Net cash used in operating activities......     (9,668,174)   (10,383,522)   (14,174,719)
                      INVESTING ACTIVITIES
                      Purchase of property and equipment.........     (1,096,582)      (559,787)    (2,004,993)
                      Purchases of available for sale securities.             --             --   (195,468,564)
                      Sales of available for sale securities.....             --             --    175,119,313
                                                                    ------------   ------------  -------------
                      Net cash used in investing activities......     (1,096,582)      (559,787)   (22,354,244)
                      FINANCING ACTIVITIES
                      Net proceeds from issuance of common stock.         15,000         43,065     39,763,059
                      Net proceeds from issuance of Series B
                      Preferred Stock............................        360,000             --             --
                      Net proceeds from issuance of Series C
                      Preferred Stock............................      7,598,750      4,589,791      5,349,000
                      Proceeds from issuance of long-term debt...      4,020,000      8,434,000             --
                      Proceeds from issuance of long-term debt to
                        related parties..........................        750,000        450,000             --
                      Repayment of capital lease obligations.....       (114,327)      (568,026)      (722,239)
                      Repayment of long-term debt................        (50,000)      (189,710)    (9,744,290)
                      Repayment of long-term debt to related
                      parties....................................             --       (200,000)            --
                                                                    ------------   ------------  -------------
                      Net cash provided by financing activities..     12,579,423     12,559,120     34,645,530
                                                                    ------------   ------------  -------------
                      Net increase (decrease) in cash and Cash
                        equivalents..............................      1,814,667      1,615,811     (1,883,433)
                      Cash and cash equivalents at beginning of
                        period...................................         41,142      1,855,809      3,471,620
                                                                    ------------   ------------  -------------
                      Cash and cash equivalents at end of period.   $  1,855,809   $  3,471,620  $   1,588,187
                                                                    ============   ============  =============
</TABLE>



                                       8
<PAGE>   9




                  ONLINE RESOURCES & COMMUNICATIONS CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

1.  ORGANIZATION

    Online Resources & Communications Corporation (the "Company") is a leading
application service provider for Internet banking and other e-finance services
to regional and community financial institutions. The Company offers its
client's a cost-effective outsourced service, branded in their name, by
seamlessly integrating Internet banking, electronic bill payment, and other
e-financial services into a single-vendor, end-to-end solution. As part of its
services, the Company provides customer support through its call center,
marketing services, web site design, implementation and other services. The
Company operates in one business segment.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

CASH AND CASH EQUIVALENTS

    The Company considers all highly liquid instruments purchased with an
original maturity of three months or less to be cash equivalents. Cash held for
bill payments in process is immediately disbursed on behalf of users and no net
cash balance is reflected on the Company's financial statements.

    Cash paid for interest during the years ended December 31, 1997, 1998 and
1999 was approximately $151,000, $953,000, and $1,016,000, respectively.

REVENUE RECOGNITION

    The Company generates revenues from several sources including implementation
fees, core services, support services and related products. Revenues from core
services include account access and transaction fees. Support services include
customer service, communications, web page design and other services.
Implementation revenues are generated from the linking of the Financial
Institution client's to the Company's proprietary Opus(SM) system through
various networks and the Company's gateways. The Company earns revenues from
related products through the sale of devices used to access the Opus(SM) system.

    Core and support service revenues are recognized over the term of the
contract as the services are provided. Revenues from implementation fees are
recognized under the percentage of completion method in accordance with
Statement of Position ("SOP") 81-1, "Accounting for performance of
Construction-Type and Certain Production Type Contracts" as certain milestone
output measures are completed. Related product sales revenue is recognized as
products are shipped. Deferred revenues result from advance receipts on product
sales and implementation services while complying with the aforementioned
revenue recognition policies. For the years ended December 31, 1997, 1998 and
1999, the Company derived 36%, 11% and 14% of its revenue from three, one and
one customers, respectively.

SYSTEMS AND DEVELOPMENT

    Systems and development costs are charged to expense as incurred.

PROPERTY AND EQUIPMENT

    Property and equipment, including leasehold improvements, are recorded at
cost. Depreciation is calculated using the straight-line method over the
estimated useful lives of the related assets which range from five to seven
years. Equipment recorded under capital leases is amortized over the shorter of
the estimated useful life of the asset or the lease term.

                                       9
<PAGE>   10

FAIR VALUE OF FINANCIAL INSTRUMENTS

    At December 31, 1999, the carrying value of the following financial
instruments: cash and cash equivalents, investments in available for sale
securities, accounts receivable, accounts payable and accrued liabilities
approximates their fair value based on the liquidity of these financial
instruments or based on their short term nature. The carrying value of capital
lease obligations approximates fair value based on the market interest rates
available to the Company for debt of similar risk and maturities.

EARNINGS (LOSS) PER SHARE

    Net loss per share is computed by dividing the net loss applicable to common
shareholders for the period by the weighted average number of common shares
outstanding. Shares associated with stock options, warrants and convertible
preferred stock are not included to the extent they are anti-dilutive.

STOCK BASED COMPENSATION

    The Company has adopted Statement of Financial Accounting Standard No. 123,
"Accounting for Stock-Based Compensation" (SFAS No. 123). The provisions of SFAS
No. 123 allow companies to either expense the estimated fair value of stock
options or to continue to follow the intrinsic value method set forth in APB
Opinion 25, "Accounting for Stock Issued to Employees" (APB No. 25) but disclose
the pro forma effects on net loss had the fair value of the options been
expensed. The Company has elected to continue to apply APB No. 25 in accounting
for its stock option incentive plans and, accordingly, recognizes compensation
expense for the difference between the fair value of the underlying common stock
and the grant price of the option at the date of grant.

IMPAIRMENT OF LONG-LIVED ASSETS

    The Company assesses the impairment of long-lived assets in accordance with
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of
("SFAS 121"). SFAS 121 requires impairment losses to be recognized for
long-lived assets when indicators of impairment are present and the undiscounted
cash flows are not sufficient to recover the assets' carrying amount. The
impairment loss of these assets is measured by comparing the carrying amount of
the asset to its fair value, with any excess of carrying value over fair value
written off. Fair value is based on market prices where available, an estimate
of market value, or determined by various valuation techniques including
discounted cash flow.

3.  INVESTMENTS

    The Company classifies its investments as available-for-sale. Investments in
securities that are classified as available-for-sale and have readily
determinable fair values are measured at fair market value in the balance
sheets. Any unrealized gains or losses, net of taxes, are reported as a separate
component of stockholders' equity. Realized gains and losses and declines in
market value judged to be other than temporary are included in investment
income. Interest and dividends are included in investment income. For purposes
of determining gross realized gains and losses, the cost of securities sold is
based on the average cost method. As of December 31, 1999, there are no material
unrealized gains or losses on investments. The contractual maturities on the
investments are generally greater than twelve months.

    The following is a summary of the estimated fair value of available-for-sale
securities at December 31, 1999:

<TABLE>
<CAPTION>

                            <S>                                          <C>
                                      US Government Treasury
                                        Obligations....................  $ 8,343,786
                                      Commercial Bonds.................   11,562,143
                                                                         -----------
                                                                         $19,905,929
                                                                         ===========
</TABLE>

4.  PROPERTY AND EQUIPMENT

    Property and equipment consists of the following:

<TABLE>
<CAPTION>

                                                                               DECEMBER 31,
                                                                           -------------------
                                                                             1998       1999
                                                                           -------     -------
                  <S>                                                    <C>          <C>
                       Central processing systems and terminals......... $ 2,348,465  3,273,148
                         Office furniture and equipment.................     643,895  1,167,033
                         Central processing systems and terminals
                           under capital leases.........................   1,212,103  1,752,991

</TABLE>

                                       10
<PAGE>   11

<TABLE>

                              <S>                                               <C>           <C>
                              Office furniture and equipment under capital
                                leases.........................................     781,698     781,698
                                Leasehold improvements.........................     483,687   1,040,859
                                                                                -----------   ----------
                                                                                  5,469,848   8,015,729

                                Less accumulated depreciation..................   2,303,829   3,399,057
                                                                                -----------   ---------
                                                                                $ 3,166,019   4,616,672
                                                                                ===========   =========
</TABLE>

5.  LONG TERM DEBT

    From November 1995 to May 1996, the Company issued $4,500,000 of long-term
notes payable (the "Bridge Notes"), $360,000 of which was to related parties.
Each bridge unit consisted of a 10% promissory note with a face value ranging
from $10,000 to $500,000, convertible into shares of preferred stock at a price
per share achieved in future equity placements, and warrants to purchase 519,195
shares of common stock (12,830 of which are held by directors of the Company)
ranging from $7.01 to $7.72 per share which approximated the fair value of the
warrants (Note 9). Payments of $50,000 plus $51,900 in accrued interest, were
made during 1997. In addition, during 1997, $4,250,000 of the Bridge Notes plus
accrued interest of approximately $443,000 were converted into 46,920 shares of
Series C redeemable convertible Preferred Stock ("Series C Preferred Stock").
Upon conversion into Series C Preferred Stock, each stockholder received a
warrant with a five year term to purchase common stock equal to 40% of the
stockholder's investment at $8.42 per share (Notes 8 and 9).

    From January 1997 through May 1997, the Company obtained $3,270,000 in
bridge financing (The "1997 Bridge Notes") through the sale of bridge units.
Each bridge unit consisted of an 8% promissory note with a face value ranging
from $10,000 to $750,000 and warrants to purchase common stock equal to 40% of
the principal amount of the underlying note at $8.42 per share (Note 9). The
Company allocated $405,000 of the 1997 Bridge Notes to the fair value of the
warrants issued using the Black -- Scholes pricing model and recorded a
corresponding debt discount which was amortized using the effective interest
method. Upon successful completion of a Series C Preferred Stock offering during
1997 (Note 8), the Company converted $3,270,000 in principal plus $60,741 in
accrued interest less the unamortized discount of $392,000 into 33,301 shares of
Series C Preferred Stock.

    In June 1997, the Company entered into a $2,000,000 four year note secured
by inventory and equipment (the "Equipment Note"). The Equipment Note called for
interest at 9% per annum with interest only to be paid in the first twelve
months and with principal and interest starting in month thirteen. The Company
drew $1,500,000 of proceeds under the agreement in June 1997 and $434,000 in
April 1998. In connection with this note, the Company issued warrants to
purchase 10,500 shares of Series C Preferred Stock at $100.00 per share (Note
9). The Company allocated $325,000 of the Equipment Note proceeds to the fair
value of the warrants issued using the Black -- Scholes method and recorded a
corresponding debt discount which was amortized using the effective interest
method over the term of the debt. The discount to the debt resulted in an
effective interest rate of 14%, which is consistent with debt instruments having
similar risks had no warrants been attached. During the years ended December 31,
1997, 1998 and 1999, the Company recognized additional interest expense of
$47,000, $82,000 and $41,000, respectively, related to this allocation. The
Company repaid the entire outstanding balance of this note in June 1999.
Accordingly, the Company recorded an extraordinary loss of $286,419 from the
extinguishment of debt related to the unamortized discounts and loan fees.

    In March 1998, the Company issued $250,000 of promissory notes to certain
stockholders which bear interest at 8% per annum. The principal and accrued
interest was converted into 2,653 shares of Series C Preferred Stock in December
1998.

    In March 1998, the Company entered into a $6,000,000 Loan Agreement with
Sirrom Capital Corporation ("Sirrom"). In June 1998, the Company entered into an
additional $2,000,000 Loan Agreement with Sirrom, collectively the "Sirrom
Loan". The Sirrom Loan was secured by a second lien on the Company's existing
secured assets and a first lien on the balance of the Company's assets. The
Sirrom Loan called for interest at a stated annual rate of 12.75% payable
monthly through February 2003, with principal and any remaining interest due in
March 2003. In connection with the Sirrom Loan, the Company issued stock
purchase warrants expiring in May 2003, granting Sirrom the right to purchase a
total of 165,736 shares of the Company's common stock at $8.42 per share. The
Sirrom Loan required the Company to maintain cash in an escrow account to be
used by the lender for the first year of interest payments.

    The stock purchase warrants were subject to a put option whereby Sirrom can
sell the warrants to the Company in the 30-day period prior to the warrants
expiration date. The put option is terminated in the event of an initial public
offering. The put option price was equal to the fair market value of the common
stock issuable under the warrants less the exercise price of $8.42 per share.
The Company allocated $584,477 of the proceeds to the fair value of the 165,736
warrants issued using the Black -- Scholes method. The discount to the debt
resulted in an effective interest rate of 14%, which is consistent with debt
instruments having similar risks had no warrants been attached. The allocation
of value to the warrants resulted in a corresponding debt discount and put
option liability. The $584,477 debt discount was being amortized to interest
expense using the effective interest method over the term of the loan. During


                                       11
<PAGE>   12

the years ended December 31, 1998 and 1999, the Company recognized additional
interest expense of approximately $52,000 and $49,000 related to this
allocation, respectively.

    In June, 1999, the Company repaid the entire $8,000,000 face amount of the
Sirrom Loan. Accordingly, the Company recognized an extraordinary loss on the
extinguishment of debt of $598,000 related to the unamortized debt discount and
loan fees.

    As of December 31, 1997, 1998, and 1999, accrued interest on notes payable
totaled approximately $333,000, $57,000 and $0, respectively.

    The following table summarizes the notes payable activity:

<TABLE>
<CAPTION>

                                                                                         DECEMBER 31,
                                                                                    -------------------
                                                                                       1998       1999
                                                                                    --------     ------
                         <S>                                                        <C>          <C>
                           Related Party Notes...................................   $  200,000      $ --
                             Equipment Note (net of unamortized discount of
                               $196,481 at December 31, 1998)....................    1,547,809        --
                             Sirrom Notes (net of unamortized discount of
                               $310,380 at December 31, 1998)....................    7,689,620        --
                                                                                     ---------      ----
                                                                                     9,437,429        --
                             Less current portion................................      911,962        --
                                                                                     ---------      ----
                             Long term debt, less current portion................   $ 8,525,467     $ --
                                                                                    ===========     ====
                           </TABLE>

6.  COMMITMENTS

OFFICE SPACE

    The Company leases office space and equipment under operating leases. Rent
expense under the operating leases was approximately $500,000, $676,000 and
$921,000 for the years ended December 31, 1997, 1998, and 1999, respectively.
The office leases provide for escalating rent over the respective lease term.

EQUIPMENT

    The Company also leases equipment under capital leases. In 1998 and 1999,
the Company incurred capital lease obligations of $1,259,000 and $541,000,
respectively, for the purchase of equipment. Amortization of assets held under
capital leases is included in depreciation and amortization in the statements of
cash flows.

    Future minimum lease payments on operating and capital leases are as
follows:

<TABLE>
<CAPTION>

                                                                             OPERATING      CAPITAL
                                                                             ---------   ------------
                                                                             DECEMBER    DECEMBER 31,
                                                                             31, 1999        1999
                                                                             ---------   ------------
                                <S>                                        <S>           <C>
                                 2000..................................... $   984,069    $  753,200
                                 2001.....................................   1,013,590       318,229
                                 2002.....................................     609,000        63,765
                                                                           -----------    ----------
                                           Total minimum lease payments... $ 2,606,659     1,135,194
                                                                           ===========
                                 Less amount representing interest........                   (96,638)
                                                                                          ----------
                                 Present value of minimum lease payments..                 1,038,556
                                 Less current portion.....................                   709,076
                                                                                          ----------
                                 Long-term portion of minimum lease
                                 payments.................................                $  329,480
                                                                                          ==========
</TABLE>

7.  INCOME TAXES

    At December 31, 1999, the Company has net operating loss carryforwards of
approximately $57 million that expire at varying dates from 2010 to 2019. Of
that $57 million, approximately $2 million relates to the exercise of stock
options, an equity item. The use of these losses may be subject to significant
limitations due to ownership changes pursuant to Section 382 of the Internal
Revenue Code resulting from the issuances of Preferred and Common Stock.

    Significant components of the Company's net deferred tax assets are as
follows:

<TABLE>
<CAPTION>

                                                                                  DECEMBER 31,
                                                                           -----------------------
                                                                               1998        1999
                                                                           ------------- ---------
                              <S>                                          <C>           <C>
                               Deferred tax assets:

</TABLE>


                                       12
<PAGE>   13

<TABLE>

                              <S>                                         <C>           <C>
                                 Inventory allowance....................  $    322,000  $    290,000
                                 Net operating loss carryforwards.......    16,348,000    22,877,000
                                 Deferred wages.........................       446,000       235,000
                                 Other deferred tax assets..............        49,000        91,000
                                                                          ------------  ------------
                                         Total deferred tax assets......    17,165,000    23,493,000
                               Deferred liabilities:
                                 Depreciation...........................      (161,000)     (265,000)
                                 Other deferred tax liabilities.........            --            --
                                                                          ------------  ------------
                                         Total deferred tax liabilities.      (161,000)     (265,000)
                               Valuation allowance for net deferred tax
                                 assets.................................   (17,004,000)  (23,228,000)
                                                                          ------------  ------------
                               Net deferred tax assets..................  $         --  $         --
                                                                          ============  ============
</TABLE>

    The Company had not paid income taxes during 1997, 1998 or 1999 due to its
net operating loss position.

    The following is a summary of the items that caused recorded income taxes to
differ from taxes computed using the statutory federal income tax rate for the
years ended December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>

                                                                                DECEMBER 31,
                                                                  --------------------------------------
                                                                      1997         1998        1999
                                                                  ------------ ------------  -----------
                          <S>                                     <C>          <C>           <C>
                            Tax expense (benefit) at statutory
                              Federal rate......................  $(3,756,000) $(3,930,000)  $(5,003,000)
                            Effect of:
                                 State income tax, net..........     (663,000)    (693,000)           --
                                 Non-statutory stock options
                                    exercise....................      (26,000)     (16,000)     (421,000)
                                 Other..........................        8,000       10,000        18,000
                                 Increase in valuation allowance    4,437,000    4,629,000     5,406,000
                                                                  -----------  -----------   -----------
                            Income tax expense..................  $        --  $        --   $        --
                                                                  ===========  ===========   ===========
</TABLE>

8.  PREFERRED STOCK

    Of the 3,000,000 authorized preferred shares of the Company, 100,000 shares
have been designated as Series B redeemable convertible Preferred Stock ("Series
B Preferred Stock") and 287,000 have been designated as Series C Preferred
Stock. In addition, 1,000,000 shares have been designated as Series A
convertible Preferred Stock ("Series A Preferred Stock"). Upon liquidation of
the Company, the following represents the order of preference given to holders
of the Company's Preferred Stock: Series C Preferred Stock, Series B Preferred
Stock and Series A Preferred Stock. The Company has not designated for any
series the remaining 1,613,000 preferred shares.

SERIES A PREFERRED STOCK

    Each share of Series A Preferred Stock is convertible into .35642 of one
share of common stock. Holders of Series A Preferred Stock shares are entitled
to receive dividends at the same rate as holders of common stock and have voting
rights equal to their common stock equivalent on an as if converted basis.
Additionally, each Series A Preferred Stock holder is entitled to a liquidation
preference equal to $1.00 plus declared but unpaid dividends. Concurrent with
the closing of the Company's initial public offering in June 1999, all shares of
Series A Preferred Stock converted automatically into 283,343 shares of common
stock.

SERIES B PREFERRED STOCK

    In the fourth quarter of 1996 and during 1997, the Company issued 6,700 and
3,350 shares of Series B Preferred Stock at $100 per share for total proceeds of
$670,000 and $335,000, respectively. During 1997, Series B Preferred Stock
stockholders converted 9,050 shares of Series B Preferred Stock into an
equivalent number of shares of Series C Preferred Stock. Additionally, as an
incentive to convert to Series C Preferred Stock, the Series B Preferred Stock
stockholders received in aggregate an additional consideration of 322 shares of
Series C Preferred Stock which was included in the calculation of the discount
for purposes of accretion. At December 31, 1998 holders of 1,000 shares of
Series B Preferred Stock had the option of converting their investment into an
equivalent number of shares of Series C Preferred Stock. During the first
quarter of 1999, a stockholder converted 250 shares of Series B Preferred Stock
into an equivalent number of shares of Series C Preferred Stock. The stockholder
received an additional seven shares of Series C Preferred Stock and 1,222
warrants to purchase common stock at $8.42 per share expiring on June 1, 2002
(Note 9). Each share of the Series B Preferred Stock was convertible at the
holder's option and automatically in an IPO, as defined into 11.880 shares of
common stock. The Series B Preferred Stock holders were also entitled to vote
and receive dividends and distributions on an as if converted basis and were
entitled to a liquidation preference of $175 per share plus declared but unpaid
dividends. Additionally, the holders of the Series B Preferred Stock could
demand redemption of their shares at the greater of $175 per share or the fair
market value of the preferred stock. The excess of the redemption value over the
carrying value was being accreted using the interest method so that the


                                       13
<PAGE>   14


carrying value will equal the redemption value of $175 per share plus cumulative
unpaid dividends on the scheduled redemption date of December 31, 2003. The
Company recorded accretion on the Series B Preferred Stock of $10,331, $10,523,
and $4,689 during the years ended December 31, 1997, 1998 and 1999 respectively.
Concurrent with the closing of the Company's initial public offering in June
1999, the remaining 750 shares of Series B Preferred Stock converted into 8,910
shares of common stock.

SERIES C PREFERRED STOCK

    During 1997, the Company issued 173,036 shares of Series C Preferred Stock
at $100 per share. Of the 173,036 shares issued, 9,050 shares were issued
related to the conversion of Series B Preferred Stock; 42,500 shares were issued
related to the conversion of $4,250,000 of the 1996 Bridge Notes; 32,700 shares
were issued related to the conversion of $3,270,000 of 1997 Bridge Notes; 5,343
shares were issued to satisfy approximately $504,000 of accrued interest and
additional consideration, and 83,443 shares were issued resulting in cash
proceeds of $7,750,000. During 1998, 1,440 shares of Series C issued in
connection with the conversion of the Bridge Notes were converted into 17,108
shares of common stock. In conjunction with the 1997 Series C financings and
conversions, each stockholder received a warrant with a five-year term to
purchase common stock equal to 40% of the stockholder's investment at $8.42 per
share. Total warrants issued in connection with the Series C Preferred Stock
were 664,133. The Company allocated $1,732,977 to the value of the warrants
based on their estimated fair value at the date of issuance (Note 9).

    During December 1998, the Company issued 50,451 shares of Series C Preferred
Stock for total proceeds of $5,039,791. Included in the $5,039,791 of proceeds
is a receivable balance of $450,000 which is classified in prepaid expenses and
other current assets at December 31, 1998. In addition to the Series C Shares,
the shareholders received warrants to purchase a total of 126,056 Shares of
common stock at $8.42 per share (Note 9). These warrants have a five year life.

    From January through March 1999, the Company sold 49,034 shares of Series C
Preferred Stock resulting in net proceeds of $4,899,000. The Company also
converted the $200,000 related party note outstanding at December 31, 1998 plus
accrued interest of $3,800 into 2,038 shares of Series C Preferred Stock. In
addition to the Series C shares, the shareholders received warrants to purchase
a total of 121,420 shares of the Company's common stock at $8.42 per share (Note
9). These warrants have a five year life. The Company recorded a deemed
beneficial return on these shareholders of approximately $2.7 million due to the
Series C Preferred Stock being convertible into common stock at a discount from
fair value at the date of issuance.

    Each share of Series C Preferred Stock was convertible at the holder's
option and automatically in an IPO, as defined into 11.880 shares of common
stock. The Series C Preferred Stock holders were also entitled to vote and
receive dividends and distributions on an as if converted basis and were
entitled to a liquidation preference of $100 per share plus $17,500,000
allocated based on the percentage of shares owned, and declared but unpaid
dividends. Additionally, the holders of the Series B Preferred Stock could
demand redemption of their shares at the greater of $200 per share or the fair
market value of the preferred stock. The excess of the redemption value over the
carrying value was being accreted using the interest method so that the carrying
value will equal the redemption value of $200 per share plus cumulative unpaid
dividends on the scheduled redemption date of January 1, 2004. The Company
recorded accretion on the Series C Preferred Stock of $1,988,334, $3,768,646,
and $2,232,027 during the years ended December 31, 1997, 1998 and 1999
respectively.

    Concurrent with the consummation of the initial public offering in June
1999, all outstanding shares of Series C Preferred Stock converted into
3,279,306 shares of common stock.

9.  STOCKHOLDERS' EQUITY (DEFICIT)

COMMON STOCK

    Effective May 2, 1999, the Board of Directors and stockholders of the
Company approved a 1 for 2.8056787 reverse stock split of the Company's $0.0001
par value common stock. All references in the accompanying financial statements
to the number of shares of common stock and per share amounts have been restated
to reflect the split.

    On June 4, 1999, the Company completed an initial public offering of
3,100,000 shares of its common stock. The offered shares generated proceeds, net
of underwriting commissions, to the Company of approximately $40 million and
this was further reduced by an additional $1 million of other related offering
costs.

WARRANTS

                                       14
<PAGE>   15

    The Company's common stock warrant activity is as follows:

<TABLE>
<CAPTION>

                                                                                            EXERCISE      EXPIRATION
                                                                              WARRANTS        PRICE          DATE
                                                                             ---------       ------       -------------
                        <S>                                                  <C>             <C>          <C>
                           Outstanding at January 1, 1996.................     124,833
                                Warrants issued in connection with debt
                                  financing...............................      44,552         7.01       Mar. 31, 2000
                                Warrants issued in connection with debt
                                  financing...............................     611,611         7.01       Apr. 30, 2001
                                Warrants issued in connection with debt
                                  financing...............................       4,859         7.72       Dec. 31, 2000
                                                                             ---------
                           Balance at December 31, 1996...................     785,855
                                Warrants issued in connection with
                                  conversion of Series B Preferred Stock...     44,591         8.42       June 1, 2002
                                Warrants issued in connection with
                                  conversion of the Bridge Notes..........     225,888         8.42       June 1, 2002
                                Warrants issued in connection with the
                                  issuance of the 1997 Bridge Notes.......     155,388         8.42       June 1, 2002
                                Warrants issued in connection with
                                  issuance of Series C Preferred Stock....     396,540         8.42       June 1, 2002
                                                                             ---------
                           Balance at December 31, 1997...................   1,608,262
                             Warrants issued in connection with
                           issuance of the Sirrom Loan....................     139,004         8.42       May 31, 2003
                                                                             ---------
                           Balance at December 31, 1998...................   1,747,266
                             Warrants issued in connection with Sirrom
                                Loan......................................      26,732         8.42       May 31, 2003
                             Warrants issued in connection with
                                conversion of Series B Preferred Stock.....      1,222         8.42       June 1, 2002
                             Warrants issued in connection with
                               issuance of Series C Preferred Stock........    247,476         8.42       Dec. 31, 2003
                             Conversion of Series C Preferred Stock
                               Warrants issued in connection with the
                               Equipment Note into Common Stock Warrants...    124,717         8.42       June 3, 2002
                             Exercise of warrants during 1999..............    (36,066)
                                                                             ---------
                           Balance at December 31, 1999....................  2,111,347
                                                                             =========
</TABLE>

    During 1999, warrants to purchase 19,621 shares of common stock were
exercised for net proceeds of approximately $165,000. Additionally, certain
holders exercised warrants to purchase 31,093 shares of common stock by electing
to receive 16,445 shares.

STOCK OPTIONS

    In February 1989, the Company adopted an Incentive Stock Option Plan (the
Plan). During June 1997, the Company's Board of Directors authorized an increase
of 124,747 shares of common stock that can be issued under the Plan. During
1998, the Company's Board of Directors increased the number of shares of common
stock that can be issued under the plan to 2,316,730. The option price under the
Plan will not be less than fair market value, as determined by the Board of
Directors, on the date of grant. The vesting period of the options is determined
by the Board of Directors and is generally four years. Outstanding options
expire after ten years.

    During 1999, the Company adopted the 1999 Stock Option Plan (the "1999
Plan"). The 1999 Plan permits the granting of both incentive stock options and
nonqualified stock options to employees, directors and consultants. The
aggregate number of shares that can be granted under the 1999 Plan is 757,708.
The option price under the 1999 Plan will not be less than fair market value, as
determined by the Board of Directors, on the date of grant. The vesting period
of the options is determined by the Board of Directors and is generally four
years. Outstanding options expire after ten years.

    During 1998, three employees tendered a total of 64,392 shares of common
stock to the Company at prices ranging from $7.01 to $8.42 per share. The
proceeds were used to exercise 156,109 options to purchase shares of common
stock. During 1999, an employee tendered 1,336 shares of common stock to the
Company for $8.42 per share. The proceeds were used to exercise options to
purchase 2,673 shares of common stock.

    During the year ended December 31, 1997, two employees exercised 27,088
options in exchange for notes receivable totaling $71,244. During 1998, four
employees exercised 40,451 options in exchange for $118,875 of notes receivable.
During 1999, five employees exercised 79,302 options in exchange for notes
receivable totaling $321,250. As of December 31, 1997, 1998 and 1999, 27,088,
167,539 and 244,168, respectively, of these shares of common stock were held by
the Company as collateral for the notes receivable.

                                       15
<PAGE>   16

    Additional information with respect to incentive stock option activity under
the stock option plans is summarized as follows:

<TABLE>
<CAPTION>

                                                                        YEARS ENDED DECEMBER 31,
                                                 ---------------------------------------------------------------------
                                                          1997                   1998                    1999
                                                 ---------------------  ----------------------  ----------------------
                                                             WEIGHTED-               WEIGHTED-               WEIGHTED-
                                                              AVERAGE                 AVERAGE                 AVERAGE
                                                             EXERCISE                EXERCISE                EXERCISE
                                                   SHARES      PRICE      SHARES       PRICE      SHARES       PRICE
                                                 --------    --------    --------    --------    --------    ---------
               <S>                               <C>         <C>        <C>         <C>         <C>         <C>
               Outstanding at beginning of
                 period........................  1,448,906     $5.15    1,532,993      $5.20    1,779,382    $ 6.77
               Options granted.................    235,811      8.58      551,787       8.42    1,068,491     13.14
               Options exercised...............    (75,038)     3.13     (208,588)      3.23     (296,670)     4.60
               Options canceled or expired.....    (76,686)     7.04      (96,810)      6.55     (110,291)     9.28
                                                 ---------     ----      --------       ----     --------    ------
               Outstanding at end of period....  1,532,993     $5.68     1,779,382     $6.77    2,440,912    $ 9.68
                                                 =========     =====     =========     =====    =========    ======
               Options exercisable at end of
                 period........................  1,273,467     $5.20     1,487,480     $6.48    1,355,198    $ 7.30
                                                 =========     =====     =========     =====    =========    ======
</TABLE>

    The following table summarizes information about stock options outstanding
at December 31, 1999

<TABLE>
<CAPTION>

                                                     DECEMBER 31, 1999
                                                    OPTIONS OUTSTANDING                   DECEMBER 31, 1999
                                       -------------------------------------------       OPTIONS EXERCISABLE
                                                                                     --------------------------
                                                         WEIGHTED-
                                                          AVERAGE       WEIGHTED-                    WEIGHTED-
                                                         REMAINING       AVERAGE                      AVERAGE
                                          NUMBER     CONTRACTUAL LIFE   EXERCISE        NUMBER       EXERCISE
                                        OUTSTANDING     (IN YEARS)        PRICE       EXERCISABLE      PRICE
                                       -------------- ---------------  ------------   -------------  --------
                 <S>                   <C>           <C>               <C>            <C>            <C>
                   $0.06 to $7.00....     691,896       2.91             $5.65          662,636      $ 5.63
                   $7.01 to $8.39....       3,212       3.42              7.70            3,212        7.70
                   $8.40 to $8.49....     651,708       6.20              8.40          543,837        8.40
                   $8.50 to $13.99...     434,446       6.35             11.10          140,513       10.68
                   $14.00 to $21.13..     659,650       7.34             14.25            5,000       16.00
                                         --------                                      --------
                                        2,440,912       5.60             $9.68        1,355,198      $ 7.30
                                        =========                                     =========
</TABLE>

    In 1996, the Company adopted the disclosure-only provisions of SFAS No. 123.
Had compensation cost for the Company's stock option plan been determined based
on the fair value at the grant date for awards under the plan consistent with
the methodology prescribed under SFAS No. 123, the Company would have incurred
an additional expense of approximately $580,000, $933,000 and $2,412,000
resulting in a net loss in 1997, 1998, and 1999 of approximately $11,376,000,
$12,491,500 and $17,126,000, respectively. The resulting basic and diluted pro
forma net loss per share would be $(3.01), $(3.12) and $(1.84) for the years
ended December 31, 1997, 1998 and 1999, respectively. The effect of applying
SFAS No. 123 on 1997, 1998, and 1999 pro forma net loss as stated above is not
necessarily representative of the effects on reported net loss for future years
due to, among other things, (1) the vesting period of the stock options and (2)
the fair value of additional stock options in future years. The fair value of
each option grant is estimated on the date of grant using the Black-Scholes
option-pricing model with the following assumptions: expected life of four
years, dividend yield of 0%, risk free interest rate of 6.625% and a volatility
of 25% for option grants in 1997 and 1998 and a volatility of 108% for option
grants in 1999. The weighted average fair values of the options granted during
1997, 1998 and 1999 with a stock price equal to the exercise price are estimated
as $2.61, $2.61 and $10.56 per share, respectively, on the date of grant. The
weighted average fair value of the options granted during 1999 with a stock
price greater than the exercise price is $10.12 per share.

10.  NET LOSS PER SHARE

    The following table sets forth the computation of basic and diluted net loss
per share:

<TABLE>
<CAPTION>

                                                                           YEARS ENDED DECEMBER 31,
                                                                 --------------------------------------------
                                                                      1997           1998            1999
                                                                 -------------  -------------  --------------
                       <S>                                        <C>            <C>           <C>
                        Net loss...............................   $(11,045,811)  $(11,558,469)  $(14,714,641)
                        Beneficial return on preferred shares..             --             --     (2,668,109)
                        Preferred stock accretion..............     (1,998,665)    (3,779,169)    (2,236,716)
                                                                  ------------   ------------    ------------
                        Net loss available for common
                          shareholders.........................    (13,044,476)   (15,337,638)   (19,619,466)
                                                                  ============   ============   ============
                        Weighted average number of common
                          shares...............................      3,858,366      4,009,713      8,010,331
                        Effect of dilutive securities:
                        Stock options..........................             --             --             --
                        Warrants...............................             --             --             --
                        Redeemable convertible preferred stock.             --             --             --
                                                                  ------------   ------------   ------------
                        Adjusted weighted average shares and
                          assumed conversions..................      3,858,366      4,009,713      8,010,331
                                                                  ============   ============   ============
                        Loss per share:
                          Basic and diluted....................   $   (3.38)     $   (3.83)     $   (2.45)

</TABLE>


                                       16
<PAGE>   17


    Due to their antidilutive effects, outstanding shares of preferred stock,
stock options and warrants to purchase 5,616,962, 6,616,096 and 4,552,259 shares
of common stock at December 31, 1997, 1998 and 1999, respectively, were excluded
from the computation of diluted earnings per share.

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) EXHIBITS AND FINANCIAL STATEMENTS AND SCHEDULES.

    (1) Financial Statements. The Company's financial statements are included in
        Part II, Item 8 of this report on Form 10-K.

    (2) Schedule II -- Valuation and Qualifying Accounts.


(23.1) Consent of Ernst & Young LLP, Independent Auditors.


                                       17
<PAGE>   18

         REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULE

     We have audited the financial statements of Online Resources &
Communications Corporation as of December 31, 1998 and 1999, and for each of the
three years in the period ended December 31, 1999, and have issued our report
thereon dated February 10, 2000 (included elsewhere in the Annual Report on Form
10-K/A). Our audits also included the financial statement schedule listed in
Item 14(a)(2) of the Form 10-K/A. This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits.

    In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

    /s/ ERNST & YOUNG LLP

McLean, Virginia
February 10, 2000



                                       18
<PAGE>   19


          SCHEDULE II -- VALIDATION AND QUALIFYING ACCOUNT AND RESERVE

<TABLE>
<CAPTION>

                                                            BALANCE AT                             BALANCE AT
                                                           BEGINNING OF                              END OF
                                    CLASSIFICATION            PERIOD       ADDITIONS   DEDUCTIONS    PERIOD
                            ------------------------       ------------    ---------   ----------   ----------
                         <S>                               <C>             <C>         <C>         <C>
                            Allowance for doubtful
                            accounts:
                              Year ended December 31,
                               1997......................     $  26,000     $  53,553            --    $  79,553
                              Year ended December 31,
                               1998......................     $  79,553            --      $ 28,118    $  51,435
                              Year ended December 31,
                               1999......................     $  51,435     $ 100,000            --    $ 151,435
                            Inventory Reserve:
                              Year ended December 31,
                               1997.......................    $ 402,638     $ 496,721            --    $ 899,359
                              Year ended December 31,
                               1998.......................    $ 899,359            --      $ 83,542    $ 815,817
                              Year ended December 31,
                               1999.......................    $ 815,817            --      $ 90,321    $ 725,496

</TABLE>

    All other schedules set forth in the applicable accounting regulations of
the Securities and Exchange Commission either are not required under the related
instructions or are not applicable and, therefore, have been omitted.



                                       19
<PAGE>   20




                                   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.

                                               ONLINE RESOURCES & COMMUNICATIONS
                                               CORPORATION

Date:  June 30, 2000

                                           By:  /s/ Matthew P. Lawlor
                                               --------------------------------
                                                        Matthew P. Lawlor
                                                           Chairman and
                                                     Chief Executive Officer

    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 date indicated.

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

                          SIGNATURE                                   TITLE                         DATE
           --------------------------------------     ----------------------------------       --------------


                    /s/ Matthew P. Lawlor             Chairman and Chief Executive             June 30, 2000
           --------------------------------------     Officer
                      Matthew P. Lawlor


                  /s/ Carl D. Blandino                Executive Vice President and Chief       June 30, 2000
           --------------------------------------     Financial Officer (Principal
                      Carl D. Blandino                Financial and Accounting Officer)

                      /s/ Thomas S. Johnson           Director                                 June 30, 2000
           --------------------------------------
                         Thomas S. Johnson

                      /s/ Joseph J. Spalluto          Director                                 June 30, 2000
           --------------------------------------
                        Joseph J. Spalluto

                     /s/ David A. O'Connor            Director                                 June 30, 2000
           --------------------------------------
                       David A. O'Connor

                     /s/ Ervin R. Shames              Director                                 June 30, 2000
           --------------------------------------
                        Ervin R. Shames

                    /s/ George M. Middlemas           Director                                 June 30, 2000
           --------------------------------------
                      George M. Middlemas

                      /s/ Barry D. Wessler            Director                                 June 30, 2000
           --------------------------------------
                        Barry D. Wessler

                     /s/ Michael H. Heath             Director                                 June 30, 2000
           --------------------------------------
                        Michael H. Heath

</TABLE>



                                       20