<PAGE>

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

                                   FORM 10-QSB

      [X] QUARTERLY REPORT PUSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the QUARTERLY PERIOD ended MARCH 31, 2004

                                       OR

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

  FOR THE TRANSITION PERIOD FROM __________________ TO ________________________

                        Commission File Number: 000-29217

                             ACCESSPOINT CORPORATION
        ----------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

               Nevada                                   95-4721385
----------------------------------------    ------------------------------------

   (State or Other Jurisdiction of          (I.R.S. Employer Identification No.)
    Incorporation or Organization)

    3030 S. VALLEY BLVD. SUITE 190
       LAS VEGAS, NEVADA, 89102                           89102
----------------------------------------    ------------------------------------

(Address of Principle Executive Offices)                (Zip Code)

                                  702 809 0206
          -------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

      Securities Registered Pursuant to Section 12(b) of the Exchange Act:

                                      None

      Securities Registered Pursuant to Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 Par Value

The number of the Company's shares of Common Stock outstanding as of March
31, 2004 was 18,971,230.

Transitional Small Business Disclosure Format (check one):  Yes [   ]   No [ X ]



<PAGE>

                             Accesspoint Corporation
                          Form 10-QSB QUARTERLY Report
                   FOR THE FIRST QUARTER ENDED MARCH 31, 2004
                                TABLE OF CONTENTS

Forward-Looking Statements

PART I

Item 1.  Financial Statements
Item 2.  Management's Discussion and Analysis or Plan of Operation
Item 3.  Controls and Procedures

PART II

Item 1.  Legal Proceedings
Item 2.  Changes in Securities
Item 3.  Defaults Upon Senior Securities
Item 4.  Submission of Matters to a Vote of Security Holders
Item 5.  Other Information
Item 6.  Exhibits and Reports on Form 8-K

Signatures

                                       2


<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Form 10-QSB contains forward-looking statements about the business,
financial condition and prospects of the Company that reflect assumptions made
by management and management's beliefs based on information currently available
to it. We can give no assurance that the expectations indicated by such
forward-looking statements will be realized. If any of management's assumptions
should prove incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, the Company's actual results may differ
materially from those indicated by the forward-looking statements.

     The key factors that are not within the Company's control and that may have
a direct bearing on operating results include, but are not limited to, the
acceptance by customers of the Company's products and services, the Company's
ability to develop new products and services cost-effectively, the ability of
the Company to raise capital in the future, the development by competitors of
products or services using improved or alternative technology, the retention of
key employees and general economic conditions.

     There may be other risks and circumstances that management is unable to
predict. When used in this Form 10-QSB, words such as, "believes," "expects,"
"intends," "plans," "anticipates" "estimates" and similar expressions are
intended to identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions. All
forward-looking statements are intended to be covered by the safe harbor created
by Section 21E of the Securities Exchange Act of 1934.

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

                             ACCESSPOINT CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004

                                TABLE OF CONTENTS

Consolidated Balance Sheets                                                 4

Consolidated Statements of Operations                                       5

Consolidated Statements of Cash Flow                                        6

Notes to Consolidated Financial Statements                                  7-12

                                       3


<PAGE>

                             ACCESSPOINT CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                     ------

                                                     March 31,      December 31,
                                                       2004             2003
                                                   -------------   -------------
                                                   (unaudited)

Current Assets
         Cash                                      $          0    $     28,393
         Accounts receivable, net of allowance
           for doubtful accounts $80,000 for
           March 31, 2004 and December 31, 2003,
           respectively                                 574,825         446,870
         Prepaid expenses                                63,032          39,235
                                                   -------------   -------------

                  Total Current Assets                  637,857         514,498
                                                   -------------   -------------

Fixed Assets
         Furniture and equipment (net)                   72,063          91,099
                                                   -------------   -------------

                  Total Fixed Assets                     72,063          91,099
                                                   -------------   -------------

Other Assets
         Deferred financing costs (net)                 624,400         752,873
         Deposits                                       312,104         285,108
                                                   -------------   -------------

                  Total Other Assets                    936,504       1,037,981
                                                   -------------   -------------

         Total Assets                              $  1,646,424    $  1,643,578
                                                   =============   =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Current Liabilities
         Bank overdraft                            $     46,138    $          0
         Accounts payable                               825,819         939,851
         Accrued payroll taxes and penalties            903,505       1,328,138
         Accrued liabilities                            477,102         504,014
         Merchant loss reserve                            2,778           2,778
         Lines of credit                              1,355,611       1,373,049
         Capitalized leases                             570,368         577,638
         Notes payable                                  430,133         415,000
                                                   -------------   -------------

         Total Current Liabilities                    4,611,454       5,140,468

         Total Liabilities                            4,611,454       5,140,468
                                                   -------------   -------------
Stockholders' Equity

         Preferred Stock, $.001 par value,
         5,000,000 shares authorized,
         1,055,600 shares issued and
         outstanding, respectively                        1,056           1,056

         Common stock, $.001 par value,
         25,000,000 shares authorized,
         18,971,230 issued and
         outstanding, respectively                       18,971          18,971

         Additional paid in capital                  15,119,197      15,119,197
         Accumulated (deficit)                      (18,104,254)    (18,636,114)
                                                   -------------   -------------

         Total Stockholders' (Deficit)               (2,965,030)     (3,496,890)
                                                   -------------   -------------

         Total liabilities and
         Stockholders' Equity                      $  1,646,424    $  1,643,578
                                                   =============   =============

                   Refer to notes to the financial statements

                                       4


<PAGE>

                             ACCESSPOINT CORPORATION
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                                    Three Months Ended
                                              -----------------------------
                                                March 31,       March 31,
                                                  2004             2003
                                              -------------   -------------

Sales, net                                    $  2,675,779    $  3,390,275

Cost of sales                                    1,966,561       2,616,291
                                              -------------   -------------

         Gross profit                              709,218         773,984

Selling expenses                                     5,961           4,624

General and administrative expenses                352,007         774,595
                                              -------------   -------------

         Income (loss) from operations             351,250          (5,235)
                                              -------------   -------------

Other (Income) Expense
         Forgiveness of debt                      (436,032)              0
         Interest income                            (7,549)         (1,943)
         Penalties                                  27,603           2,141
         Amortization of deferred financing
          costs                                    128,473         128,473
         Miscelleneous expense                      45,000               0
         Bad Debt                                        0          36,912
         Interest expense                           61,895          49,979
                                              -------------   -------------
         Total Other (Income) Expense             (180,610)        215,562
                                              -------------   -------------

         Income (loss) before income
         taxes                                     531,860        (220,797)

Provision for income taxes                               0               0
                                              -------------   -------------

         Net income (loss)                    $    531,860    ($   220,797)
                                              =============   =============

         Net income (loss) per share
                  Basic                       $       0.03    ($      0.01)

         Weighted average number of shares
                  Basic                         18,971,230      24,163,965

                   Refer to notes to the financial statements

                                       5


<PAGE>

                             ACCESSPOINT CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                        Three Months Ended
                                                        -----------------
                                                    March 31,         March 31,
                                                     2004               2003
                                                 ------------      ------------
CASH FLOWS FROM OPERATING ACTIVITIES
         Net income (loss)                        $  531,860         ($220,797)

Adjustments to reconcile net income (loss) to net
cash used or provided by operating activities:
         Amortization                                128,473           128,473
         Depreciation                                 19,036            52,131
         Increase in receivables                    (127,955)          (23,167)
         Decrease (increase) in other
           current assets                             (4,555)           91,775
         Increase in clearing account                (26,996)                0
         Decrease (increase) in prepaid expenses     (19,242)              744
         (Decrease) increase in accounts
           payable and accrued expenses             (140,943)           75,045
         Decrease in accrued payroll taxes          (424,634)          (69,003)
         Increase in bank overdraft                   46,138                 0
                                                 ------------      ------------

         Total adjustments                          (550,678)          255,998
                                                 ------------      ------------
         Net cash provided by (used) in
          operations                                 (18,818)            35,201
                                                 ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES
         Payments on capital leases                   (7,270)           (5,999)
         Payments on line of credit                  (17,438)          (46,877)
         Increase in notes payable                    15,133                 0
                                                 ------------      ------------
         Net cash (used in)
         financing activities                         (9,575)          (52,876)
                                                 ------------      ------------

         Net change in cash                          (28,393)          (17,675)
                                                 ------------      ------------

         Cash at beginning of period                  28,393            35,961
                                                 ------------      ------------
         Cash at end of period                   $         0       $    18,286
                                                 ============      ============

                   Refer to notes to the financial statements

                                       6


<PAGE>

                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE A - NATURE OF OPERATIONS
         --------------------

         Accesspoint Corporation (subsequently referred to as "Accesspoint", the
         "Company" or "We") was incorporated as Accesspoint Corporation in
         Nevada in 1995 and is a provider of card- and web-based payment
         processing services to small businesses throughout the United States.
         The Company enables merchants to accept credit cards as payment for
         their products and services by providing card authorization, data
         capture, settlement, risk management, fraud detection and chargeback
         services. Our services also include transaction organization and
         retrieval, ongoing merchant assistance and support in connection with
         disputes with cardholders. We market and sell our services primarily
         through independent sales organizations ("ISOs") and registered sales
         agents ("RSAs").

         Our payment processing services enable merchants to process both
         traditional swipe transactions, as well as card-not-present
         transactions. A card-not-present transaction occurs whenever a customer
         does not physically present a payment card at the point-of-sale and may
         occur over the Internet or by mail, fax or telephone. Our processing
         services include evaluation and acceptance of card numbers, detection
         of fraudulent transactions, receipt and settlement of funds and service
         and support. By outsourcing some of these services to third parties,
         including the evaluation and acceptance of card numbers and receipt and
         settlement of funds, we maintain an efficient operating structure,
         which allows us to easily expand our operations without significantly
         increasing our fixed costs. We believe our experience and knowledge in
         providing payment processing services to merchants of all sizes gives
         us the ability to effectively identify, evaluate and manage the payment
         processing needs and risks that are unique to businesses of varying
         levels.

         We market and sell our services primarily through our relationships
         with ISOs and RSAs. ISOs and RSAs act as a non-employee, external sales
         force in communities throughout the United States. By providing the
         same high level of service and support to our ISOs and RSAs as we do to
         our merchants, we maintain our access to an experienced sales force
         sales professionals who market our services, with minimal direct
         investment in sales infrastructure and management. After an agent
         refers a merchant to us and we execute a processing agreement with that
         merchant, we pay the referring ISO or RSAs a percentage of the revenues
         generated by that merchant. Although our relationships with agents are
         mutually non-exclusive, we believe that our understanding of the unique
         payment processing needs of merchants of all sizes enables us to
         develop compelling incentives for agents to continue to refer newly
         identified merchants to us.

                                       7


<PAGE>

                             ACCESSPOINT CORPORATION
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
                  FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         Unaudited Interim Financial Information
         ---------------------------------------
         The accompanying financial statements have been prepared by Accesspoint
         Corporation, ("Accesspoint", the "Company" or "We") pursuant to the
         rules and regulations of the Securities and Exchange Commission (the
         "SEC") Form 10-QSB and Item 310 of regulation S-B, and generally
         accepted accounting principles for interim financial reporting. These
         financial statements are unaudited and, in the opinion of management,
         include all adjustments (consisting of normal recurring adjustments and
         accruals) necessary for a fair presentation of the balance sheets,
         operations results, and cash flows for the periods presented. Operating
         results for the three months ended March 31, 2004 are not
         necessarily indicative of the results that may be expected for the year
         ending December 31, 2004, or any future period, due to seasonal and
         other factors. Certain information and footnote disclosures normally
         included in financial statements prepared in accordance with generally
         accepted accounting policies have been omitted in accordance with the
         rules and regulations of the SEC. These financial statements should be
         read in conjunction with the audited consolidated financial statements
         and accompanying notes, included in the Company's Annual Report for the
         year ended December 31, 2003.

         Revenues, expenses, assets and liabilities can vary during each quarter
         of the year. Therefore, the results and trends in these interim
         consolidated financial statements may not be the same as those for the
         full year.

NOTE C - LITIGATION AND CONTINGENCIES
         ----------------------------

         The Company is subject to various claims and legal proceedings covering
         a wide range of matters that arise in the ordinary course of its
         business activities. Listed below are only those matters considered to
         be material to the Company by management and its counsel.

         CITICORP - During 2001 the Company vacated office facilities it had
         leased under an operating lease agreement in Chicago, Illinois. The
         lessor subsequently filed suit against the Company for the remaining
         amount of unpaid rent and other various expenses. A judgment was filed
         against the Company in the amount of $95,000. As of March 31, 2004
         the Company has accrued for the liability in full on its Balance Sheet.
         No payments have been made.

         BENTLEY PROMISSORY NOTES - Various family trusts related to James W.
         Bentley, a former Director of the Company, have filed three related
         actions seeking to collect in excess of $500,000 in promissory notes
         allegedly due. The Company believes these claims were settled by the
         June 26, 2002 Settlement and in any event, believes the sums due are
         substantially less than claimed. The Company continues to fight these
         actions vigorously. These cases have been consolidated with the case of
         Bentley v. Barber, et al (see below) and are scheduled to go to trial
         on July 25, 2004

                                       8


<PAGE>

                              ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
                  FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE C - LITIGATION AND CONTINGENCIES (CONTINUED)
         ----------------------------------------

         MERCHANTSWAREHOUSE.COM - This is a claim against PSI for breach of an
         independent sales agent agreement. The claim is disputed. The matter
         was submitted to arbitration and was heard by the arbitrator. The
         arbitrator made an interim award of $296,720 and denied the Company's
         counterclaim. The Company is directed to pay the agent residuals
         according to the terms of the Company's agreement with the agent. The
         Company has made all payments to the agent since the date of the award.
         On November 7, 2003, Merchantswarehouse.com obtained a judgment
         consistent with the arbitrator's award. The Company is presently
         assessing the advisability of an appeal. The amount of the award has
         been accrued.

         CIT COMMUNICATIONS CO. ("CIT") - CIT, an equipment lessor, claims that
         we defaulted on an equipment lease. We are vigorously defending against
         this claim. The total amount of any potential judgment for the value of
         the equipment has been accrued.

         GLOBAL ATTORNEYS NETWORK CO. - This is an action filed on behalf of an
         equipment lessor on a defaulted lease. In April 2003 the matter was
         settled for $16,900. This amount has been accrued. No payments have
         been made.

         FOSTER TEPPER - This is an action recently brought by a former attorney
         for the Company for approximately $63,000 in legal fees, which are
         allegedly due and payable. The Company has accrued $37,000 for this
         matter. Trial is scheduled to start August 30, 2004

         ACCESS HOLDINGS LIMITED PARTNERSHIP - This is a lawsuit brought on
         behalf of two holders of Company stock who claim the Company has
         violated a prior settlement agreement and that they are therefore
         entitled to the return of approximately 4.1 million shares of Company
         stock, which they had previously surrendered, to the Company per that
         agreement. The Company denies both that it has breached the prior
         settlement agreement and that the plaintiffs are entitled to the relief
         they seek. Plaintiffs are not seeking monetary damages from the
         Company, though they are seeking court costs and attorney fees. The
         Company is fighting this action vigorously. No trial date has been set.

                                       9


<PAGE>

                             ACCESSPOINT CORPORATION
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE C - LITIGATION AND CONTINGENCIES (CONTINUED)
         ----------------------------------------

         BENTLEY V. WILLIAM R. BARBER, ET AL. - On March 22, 2002, James Bentley
         ("Plaintiff"), a shareholder of the Company, filed a shareholder
         derivative lawsuit against the Company and several individual
         defendants for breach of contract, breach of fiduciary duty,
         misappropriation of trade secret, recovery of personal property,
         imposition of a constructive trust, unfair competition in violation of
         Business and Profession Code Section 17200, conversion, unfair business
         practices, and usurpation of corporate opportunity. On several
         occasions, Plaintiff also sought provisional remedies with the Court,
         including multiple applications for preliminary injunction and the
         appointment of a receiver. To date, none of Plaintiff's requests for
         provisional relief have been granted. On June 26, 2002, the parties to
         the action executed a Settlement Agreement. Plaintiff purported to
         rescind the Settlement Agreement in early December 2002. Plaintiff
         thereafter filed an ex parte application for temporary restraining
         order, which the court denied on December 24, 2002. The Court set a
         hearing for Plaintiff's application for preliminary injunction in late
         January 2003. Plaintiff thereafter continued the hearing on the
         application for preliminary injunction on several occasions.
         Ultimately, after Defendant's opposition to the preliminary injunction
         request was filed; Plaintiff took his application for preliminary
         injunction off calendar completely. A number of depositions and law and
         motion were conducted during January and February 2003. On July 3, 2003
         in a special meeting of the Board of Directors, the Directors received,
         reviewed and considered the report of the findings of the Special
         Litigation Committee ("the Committee").

         The Committee was formed in January 2003 for the purpose of
         investigating the allegations contained within the shareholder
         derivative action known as BENTLEY v. BARBER (" the Bentley matter").
         Based on its investigation, which included the review of thousands of
         pages of documents, 1,200 pages of transcripts of depositions, reviews
         of the declarations of ten witnesses, and interviews of the Plaintiff,
         and his representatives, as well as of at least fifteen other
         witnesses, the Committee met on July 2, 2003 and unanimously agreed and
         found as follows:

         1)       The action was previously settled, after both the plaintiff
                  and the court in the Bentley matter concluded the settlement
                  agreement was in the best interests of the Company, so that
                  the Committee likewise concludes that the best interests of
                  the company are served by a dismissal of the action and the
                  enforcement of the settlement agreement previously approved by
                  the court:
         2)       That the allegations raised in the Bentley matter are without
                  merit;

                                       10


<PAGE>

                             ACCESSPOINT CORPORATION
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE C - LITIGATION AND CONTINGENCIES (CONTINUED)
         ----------------------------------------

         3)       That it is not in the Company's interests to pursue the
                  litigation, as the costs of prosecuting the litigation far
                  exceed any possible recovery to the Company, particularly
                  given the possible indemnity obligations of the Company;
         4)       The balance of the Company's corporate interests, including
                  its need to maintain its relationship with Chase, the need for
                  and ability to focus on obtaining new accounts, the need to
                  apply the Company's resources, management, and assets to the
                  payment and resolution of outstanding debts and the need to
                  repair the Company's reputation that has been damaged by this
                  litigation, warrants dismissal of the action, regardless of
                  the merits of the Bentley matter; and
         5)       The Company has new management and has carefully reviewed the
                  subject matter of the litigation and the accounting of the
                  assets of the Company and the handling of related party
                  transactions.

         Based on the findings of the Committee, the Directors determined it to
         be in the best interests of the company to cause the Bentley matter to
         be dismissed. On July 3, 2003, the company's attorneys filed a motion
         for summary judgment with the Orange County Superior Court, the motion
         contends that: there is no merit to the charges, the suit is not being
         prosecuted for the benefit of the shareholders or the company, but is a
         vendetta by the a shareholder brought for its own purposes and that the
         burdens of litigation are largely responsible for the fall in the
         corporation's stock price since the case was filed. On July 3, 2003,
         the Company's attorneys concurrently filed a motion for an indefinite
         stay in discovery pending judgment on the motion for summary judgment.
         On July 25, 2003, the court granted the Company's request for stay
         pending ruling on the motion for summary judgment. On September 18,
         2003, the Court denied the summary judgment motion, finding that there
         were triable issues of material fact as to the Committee's
         investigation. As of this writing, the Court has not entered a formal
         order on this motion. The Company believes the Court's ruling is
         incorrect and plans to seek further review once the written order is
         issued. The Court's ruling also ended the stay of proceedings which had
         been in effect since July 25, and the case - along with the Bentley
         Promissory Note cases (see above), with which it has been consolidated
         - is now set for trial on July 26, 2004. The Company continues to
         fight this action vigorously. The Company has recorded no liability for
         the potential of an adverse outcome of the action.

                                       11


<PAGE>

                             ACCESSPOINT CORPORATION
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

NOTE D - PAYROLL TAXES
         -------------

         The IRS has made formal demand of amounts due and unpaid for the period
         of January 1 - December 31, 2000, including interest and penalties,
         from the Company, and has appropriately filed tax liens against all
         assets of the Company. The Company filed requests for an "Offer in
         Compromise" for all amounts owed by the Company and its subsidiaries.
         During the three months ended March 31, 2004 the Company made a
         settlement with the IRS for claims against the Company and its
         subsidiary Processing Source International. (See Note E-Related Party
         Transactions)

NOTE E - RELATED PARTY TRANSACTIONS
         --------------------------

         The Company has entered into a number of relationships that fit the
         definition provided by Statement of Financial Accounting Standards No.
         57, "Related Party Disclosures". An entity that can control or
         significantly influence the management or operating policies of another
         entity to the extent one of the entities may be prevented from pursuing
         its own interests. As of March 31, 2004, the following related party
         relationships existed between the Company, its shareholders, officers
         and directors:

         MBS, partially owned by William P. Barber, President and Chief
         Executive Officer of the Company and currently a Director of the
         Company, is also an agent of the Company and sells the Company's
         products and services through its own network of subagents and sales
         personnel.

         During the three months ended March 31, 2004, the Company settled debt
         in excess of $1,510,000. The settlements included outstanding IRS
         claims against the Company and its subsidiary Processing Source
         International, Inc. and funds necessary to settle an approximate
         $800,000 legal judgment obligation to Roycap, Inc.

NOTE F - SUBSEQUENT EVENT
         ----------------

         In April the Company concluded a funding agreement with MBS that calls
         for the sale and Exchange of certain e-commerce accounts and related
         billing software and host server, in exchange for $545,000. The
         agreement allows the Company to repurchase the assets with stock equal
         in value to the purchase price at the Company's discretion within the
         first twelve months.

                                       12


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the financial statements and related notes contained elsewhere in this document.
The discussion contained herein relates to the financial statements, which have
been prepared in accordance with GAAP.

THE DISCUSSION IN THIS SECTION AND OTHER PARTS OF THIS REGISTRATION STATEMENT
CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS SUCH AS STATEMENTS OF THE COMPANY'S
PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS. THESE STATEMENTS INVOLVE RISKS
AND UNCERTAINTIES. THEY ARE MADE AS OF THE DATE OF THIS REPORT, AND THE COMPANY
ASSUMES NO OBLIGATION TO UPDATE THEM.

RESULTS OF OPERATIONS
----------------------

     The three months ended March 31, 2004 compared with the three months ended
March 31, 2003.

     Revenues for the three months ended March 31, 2004 decreased to
$2,675,779 from $3,390,275 for the three months ended March 31, 2003. The
decrease of $714,496, 21% is due primarily to the decreased revenues associated
with credit card processing which resulted in an overall decrease in sales.

     Cost of sales for the three months ended March 31, 2004 decreased to
$1,966,561 from $2,616,291 for the three months ended March 31, 2003. The
decrease of $649,730 or 25%, resulted primarily from lowered agent residual
expenses and more attention focused on the profitability of each merchant's
relationship.

     Selling and marketing expenses for the three months ended March 31, 2004
$5,961 remained about the same as the $4,624 for the three months ended March
31, 2003.

     General and administrative expenses for the three months ended March 31,
2004 decreased to $352,007 from $774,595 for the three months ended March 31,
2003. The decrease of $422,000, or (55%), resulted primarily from a decrease of
salaries and wages, occupancy costs, reversal of allowance for doubtful accounts
Chase clearing and other operating efficiencies realized through the
consolidation of two offices into one.

     Interest expense, net, for the three months ended March 31, 2004 was
$61,895, as compared to $49,979 for the three months ended March 31, 2003. The
increase resulted primarily from the Company's continued interest charges on
indebtedness and borrowing costs.

     Other (Income) Expense, net of Interest expense was $(242,505) for the
three months ended March 31, 2004, as compared to $165,583 for the three months
ended March 31, 2003. The increase in income of $418,088 resulted primarily from
the forgiveness of debt income $436,032 occurring in the first three months of
March 31, 2004, as compared to the three months ended March 31, 2003.

     Net income for the three months ended March 31, 2004 $531,860, as compared
to a loss of ($220,797) for the three months ended March 31, 2003. The
difference, a gain of $752,657 is due to the forgiveness of debt and reduction
of general and administrative expenses due to increased efficiency in
operations.

                                       13


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
--------------------------------

     The Company had an overdraft of $46,138 at March 31, 2004, as compared to
cash of $28,393 at December 31, 2003.

     The Company had negative working capital at March 31, 2004. We believe that
cash generated from operations will not be sufficient to fund the current and
anticipated cash requirements. Subsequent to March 31, 2004 the Company sold off
a book of business (merchant portfolio) in order to pay down IRS claims against
it subsidiary Processing Source International, Inc. and Roycap settlement.

ITEM 3. CONTROLS AND PROCEDURES.

     Our President and Treasurer/Chief Financial Officer (the "Certifying
Officer") is responsible for establishing and maintaining disclosure controls
and procedures and internal controls and procedures for financial reporting for
the Company. The Certifying Officer has designed such disclosure controls and
procedures and internal controls and procedures for financial reporting to
ensure that material information is made known to him, particularly during the
period in which this report was prepared. The Certifying Officer has evaluated
the effectiveness of the Company's disclosure controls and procedures and
internal controls and procedures for financial reporting as of March 31, 2004
and believes that the Company's disclosure controls and procedures and internal
controls and procedures for financial reporting are effective based on the
required evaluation. There have been no significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.


                                     PART II
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS-

         The Company is subject to various claims and legal proceedings covering
         a wide range of matters that arise in the ordinary course of its
         business activities. Listed below are only those matters considered to
         be material to the Company by management and its counsel.

         CITICORP - During 2001 the Company vacated office facilities it had
         leased under an operating lease agreement in Chicago, Illinois. The
         lessor subsequently filed suit against the Company for the remaining
         amount of unpaid rent and other various expenses. A judgment was filed
         against the Company in the amount of $95,000. As of March 31, 2004
         the Company has accrued for the liability in full on its Balance Sheet.
         No payments have been made.

         BENTLEY PROMISSORY NOTES - Various family trusts related to James W.
         Bentley, a former Director of the Company, have filed three related
         actions seeking to collect in excess of $500,000 in promissory notes
         allegedly due. The Company believes these claims were settled by the
         June 26, 2002 Settlement and in any event, believes the sums due are
         substantially less than claimed. The Company continues to fight these
         actions vigorously. These cases have been consolidated with the case of
         Bentley v. Barber, et al (see below) and are scheduled to go to trial
         on July 25, 2004

                                       14


<PAGE>

         MERCHANTSWAREHOUSE.COM - This is a claim against PSI for breach of an
         independent sales agent agreement. The claim is disputed. The matter
         was submitted to arbitration and was heard by the arbitrator. The
         arbitrator made an interim award of $296,720 and denied the Company's
         counterclaim. The Company is directed to pay the agent residuals
         according to the terms of the Company's agreement with the agent. The
         Company has made all payments to the agent since the date of the award.
         On November 7, 2003, Merchantswarehouse.com obtained a judgment
         consistent with the arbitrator's award. The Company is presently
         assessing the advisability of an appeal. The amount of the award has
         been accrued.

         CIT COMMUNICATIONS CO. ("CIT") - CIT, an equipment lessor, claims that
         we defaulted on an equipment lease. We are vigorously defending against
         this claim. The total amount of any potential judgment for the value of
         the equipment has been accrued.

         GLOBAL ATTORNEYS NETWORK CO. - This is an action filed on behalf of an
         equipment lessor on a defaulted lease. In April 2003 the matter was
         settled for $16,900. This amount has been accrued. No payments have
         been made.

         FOSTER TEPPER - This is an action recently brought by a former attorney
         for the Company for approximately $63,000 in legal fees, which are
         allegedly due and payable. The Company has accrued $37,000 for this
         matter. Trial is scheduled to start August 30, 2004

         ACCESS HOLDINGS LIMITED PARTNERSHIP - This is a lawsuit brought on
         behalf of two holders of Company stock who claim the Company has
         violated a prior settlement agreement and that they are therefore
         entitled to the return of approximately 4.1 million shares of Company
         stock, which they had previously surrendered, to the Company per that
         agreement. The Company denies both that it has breached the prior
         settlement agreement and that the plaintiffs are entitled to the relief
         they seek. Plaintiffs are not seeking monetary damages from the
         Company, though they are seeking court costs and attorney fees. The
         Company is fighting this action vigorously. No trial date has been set.

         BENTLEY V. WILLIAM R. BARBER, ET AL. - On March 22, 2002, James Bentley
         ("Plaintiff"), a shareholder of the Company, filed a shareholder
         derivative lawsuit against the Company and several individual
         defendants for breach of contract, breach of fiduciary duty,
         misappropriation of trade secret, recovery of personal property,
         imposition of a constructive trust, unfair competition in violation of
         Business and Profession Code Section 17200, conversion, unfair business
         practices, and usurpation of corporate opportunity. On several
         occasions, Plaintiff also sought provisional remedies with the Court,
         including multiple applications for preliminary injunction and the
         appointment of a receiver. To date, none of Plaintiff's requests for
         provisional relief have been granted. On June 26, 2002, the parties to
         the action executed a Settlement Agreement. Plaintiff purported to
         rescind the Settlement Agreement in early December 2002. Plaintiff
         thereafter filed an ex parte application for temporary restraining
         order, which the court denied on December 24, 2002. The Court set a
         hearing for Plaintiff's application for preliminary injunction in late
         January 2003. Plaintiff thereafter continued the hearing on the
         application for preliminary injunction on several occasions.
         Ultimately, after Defendant's opposition to the preliminary injunction
         request was filed; Plaintiff took his application for preliminary
         injunction off calendar completely. A number of depositions and law and
         motion were conducted during January and February 2003. On July 3, 2003
         in a special meeting of the Board of Directors, the Directors received,
         reviewed and considered the report of the findings of the Special
         Litigation Committee ("the Committee").

                                       15


<PAGE>

         The Committee was formed in January 2003 for the purpose of
         investigating the allegations contained within the shareholder
         derivative action known as BENTLEY v. BARBER (" the Bentley matter").
         Based on its investigation, which included the review of thousands of
         pages of documents, 1,200 pages of transcripts of depositions, reviews
         of the declarations of ten witnesses, and interviews of the Plaintiff,
         and his representatives, as well as of at least fifteen other
         witnesses, the Committee met on July 2, 2003 and unanimously agreed and
         found as follows:

         1)       The action was previously settled, after both the plaintiff
                  and the court in the Bentley matter concluded the settlement
                  agreement was in the best interests of the Company, so that
                  the Committee likewise concludes that the best interests of
                  the company are served by a dismissal of the action and the
                  enforcement of the settlement agreement previously approved by
                  the court:
         2)       That the allegations raised in the Bentley matter are without
                  merit;
         3)       That it is not in the Company's interests to pursue the
                  litigation, as the costs of prosecuting the litigation far
                  exceed any possible recovery to the Company, particularly
                  given the possible indemnity obligations of the Company;
         4)       The balance of the Company's corporate interests, including
                  its need to maintain its relationship with Chase, the need for
                  and ability to focus on obtaining new accounts, the need to
                  apply the Company's resources, management, and assets to the
                  payment and resolution of outstanding debts and the need to
                  repair the Company's reputation that has been damaged by this
                  litigation, warrants dismissal of the action, regardless of
                  the merits of the Bentley matter; and
         5)       The Company has new management and has carefully reviewed the
                  subject matter of the litigation and the accounting of the
                  assets of the Company and the handling of related party
                  transactions.

         Based on the findings of the Committee, the Directors determined it to
         be in the best interests of the company to cause the Bentley matter to
         be dismissed. On July 3, 2003, the company's attorneys filed a motion
         for summary judgment with the Orange County Superior Court, the motion
         contends that: there is no merit to the charges, the suit is not being
         prosecuted for the benefit of the shareholders or the company, but is a
         vendetta by the a shareholder brought for its own purposes and that the
         burdens of litigation are largely responsible for the fall in the
         corporation's stock price since the case was filed. On July 3, 2003,
         the Company's attorneys concurrently filed a motion for an indefinite
         stay in discovery pending judgment on the motion for summary judgment.
         On July 25, 2003, the court granted the Company's request for stay
         pending ruling on the motion for summary judgment. On September 18,
         2003, the Court denied the summary judgment motion, finding that there
         were triable issues of material fact as to the Committee's
         investigation. As of this writing, the Court has not entered a formal
         order on this motion. The Company believes the Court's ruling is
         incorrect and plans to seek further review once the written order is
         issued. The Court's ruling also ended the stay of proceedings which had
         been in effect since July 25, and the case - along with the Bentley
         Promissory Note cases (see above), with which it has been consolidated
         - is now set for trial on July 26, 2004. The Company continues to
         fight this action vigorously. The Company has recorded no liability for
         the potential of an adverse outcome of the action.

                                       16


<PAGE>

ITEM 2.           CHANGES IN SECURITIES

     None.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

     None.

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

     No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the quarter ended September 30,
2003.

ITEM 5.           OTHER INFORMATION

     None.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

     a.  Exhibits

     The following Exhibits are incorporated herein by reference or are filed
with this report as indicated below.

     Exhibit No.  Description
     ----------------------------------
     21.00        *List of Subsidiaries

     *   Incorporated by reference from the exhibit to the Annual Report on Form
         10-KSB filed by us on April 16, 2001

    Exhibit 31       CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                    AND CHIEF FINANCIAL OFFICER PURSUANT
                                    TO SECTION 302 OF THE SARBANES-OXLEY ACT

    Exhibit 32       CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                    AND CHIEF FINANCIAL OFFICER PURSUANT TO
                                    SECTION 906 OF THE SARBANES-OXLEY ACT

    b. Reports on Form 8-K.

         8-K filed February 10, 2004 Item 5. Other events and regulation FD
                  disclosure
         8-K filed March 26, 2004 Item 5. Other events and regulation FD
                  disclosure
         8-K filed March 29, 2004 Item 5. Other events and regulation FD
                  disclosure

                                       17


<PAGE>

                                   SIGNATURES

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

Dated:  May 17, 2004                          ACCESSPOINT CORPORATION

                                              By  /S/ WILLIAM R. BARBER
                                                  ------------------------------
                                              William R. Barber,
                                              Chief Executive Officer, Chief
                                              Officer and President

                                       18


<PAGE>

     Pursuant to the requirements of the Securities Act of 1934, this report has
been signed by the following persons in the capacities and on the dates
indicated:

<TABLE>
<CAPTION>

         Signature                           Title                              Date
---------------------------     -----------------------------------     -----------------------

<S>                             <C>                                        <C>
/S/ GENE VALENTINE              Chairman of the Board of Directors         May 17, 2004
-----------------------
Gene Valentine

/S/ JOE BYERS                   Director                                   May 17, 2004
-----------------------
Joe Byers

/S/ MIKE SAVAGE                 Director                                   May 17, 2004
-----------------------
Mike Savage

/S/ WILLIAM R. BARBER           Director                                   May 17, 2004
-----------------------
William R. Barber

                                             19
</TABLE>