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


                                   FORM 10-QSB


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


                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002


                                       OR


           [ ] TRANSITION REPORT PURSUANT 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
 Incorporation or Organization)                              Identification No.)


   21031 Ventura Boulevard, Suite 200
       Woodland Hills, California                                       91364
________________________________________________________________________________
(Address of Principle Executive Offices)                              (Zip Code)


                                 (818) 737-3232
                ________________________________________________
                (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 June 30,
2002 was 24,163,965.

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


                                      -1-


<PAGE>


                             ACCESSPOINT CORPORATION
                          FORM 10-QSB QUARTERLY REPORT
                  AS OF AND FOR THE QUARTER ENDED JUNE 30, 2002
                                TABLE OF CONTENTS



Forward-Looking Statements

PART I

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

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 our 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,  our  Company's  actual  results  may  differ
materially from those indicated by the forward-looking statements.

     The key factors that are not within our Company's control and that may have
a direct  bearing on  operating  results  include,  but are not  limited to, the
acceptance  by customers of our Company's  products and services,  our Company's
ability to develop new products and  services  cost-effectively,  the ability of
our 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

     Our reviewed  consolidated  financial statements for the periods ended June
30, 2002 and June 30, 2001 are filed herewith.









                                      -3-


<PAGE>


                             ACCESSPOINT CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2002

                                TABLE OF CONTENTS








Independent Accountant's Report                                               2

Consolidated Balance Sheets                                                   3

Consolidated Statements of Operations                                         4

Consolidated Statements of Cash Flow                                          5

Consolidated Statements of Changes in Stockholders' Equity                    7

Notes to Consolidated Financial Statements                                    8









                                      -4-


<PAGE>





                         INDEPENDENT ACCOUNTANT'S REPORT






To the Board of Directors
Accesspoint Corporation
Los Angeles, California


We have reviewed the  accompanying  consolidated  balance  sheets of Accesspoint
Corporation  and its  subsidiaries  ("the  Company") as of June 30, 2002 and the
related consolidated statements of operations,  changes in stockholders' equity,
and cash flows for the six month  periods  ended June 30,  2002 and 2001.  These
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information  consists  principally  of  inquiries  of  persons  responsible  for
financial and accounting matters and analytical  procedures applied to financial
data.  It is  substantially  less in  scope  than an audit  in  accordance  with
generally accepted auditing standards generally accepted in the United States of
America,  the objective of which is the  expression of an opinion  regarding the
financial  statements taken as a whole.  Accordingly,  we do not express such an
opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the accompanying  consolidated financial statements in order for them
to be in conformity with generally accepted accounting  principles in the United
States of America.

We previously audited in accordance with auditing  standards  generally accepted
in the United States of America,  the consolidated  balance sheet as of December
31, 2001,  and the related  consolidated  statements of  operations,  changes in
stockholders'  equity  and cash  flows for the year then  ended  (not  presented
herein),  and in our report  dated  April 4, 2002 we  expressed  an  unqualified
opinion  on  those  consolidated  financial  statements.  In  our  opinion,  the
information  set  forth in the  accompanying  consolidated  balance  sheet as of
December 31, 2001 is fairly  stated in all material  respects in relation to the
consolidated balance sheet from which it has been derived.




July 30, 2002
Los Angeles, California


                                      -5-


<PAGE>

<TABLE>
<CAPTION>


                             ACCESSPOINT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

                                     ASSETS

                                                                June 30,          December, 31
                                                                  2002                2001
                                                              ___________         ____________
<S>                                                           <C>                  <C>

Current Assets

        Cash and cash equivalents                             $   195,975          $   78,229
        Accounts receivable, net                                  373,948             255,873
        Inventory                                                   6,414               6,366
        Other receivables                                          26,250                   0
        Prepaid expenses                                           39,702              13,807
                                                              ___________          __________

                Total Current Assets                              642,289             354,275
                                                              ___________          __________

Fixed Assets
        Furniture and equipment (net)                             376,015             401,685
                                                              ___________          __________

                Total Fixed Assets                                376,015             401,685
                                                              ___________          __________

Other Assets
        Deferred financing costs (net)                          5,656,329           6,288,967
        Intangible asset                                          500,000                   0
        Deposits                                                  291,597             292,058
                                                              ___________          __________

                Total Other Assets                              6,447,926           6,581,025
                                                              ___________          __________

        Total Assets                                          $ 7,466,230          $7,336,985
                                                              ===========          ==========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                June 30,          December, 31
                                                                  2002                2001
                                                              ___________         ____________
Current Liabilities
        Accounts payable and accrued expenses                 $ 1,594,351          $1,467,688
        Accrued payroll taxes and penalties                     1,038,125           1,091,080
        Accrued loss contingencies                                343,233             338,233
        Deferred compensation                                           0             221,477


                                      -6-


<PAGE>


        Customer deposits                                          19,465              99,465
        Line of credit                                          1,168,542                   0
        Current portion, capitalized leases                       409,956             303,158
        Current portion, notes payable                          1,212,750           1,111,500
                                                              ___________          __________

        Total Current Liabilities                               5,786,422           4,632,601

Capital Lease obligations, net of current portion                       0                   0
Notes payable, net of current portion                             197,500                   0
                                                              ___________          __________

        Total Liabilities                                       5,983,922           4,632,601
                                                              ___________          __________

Stockholders' Equity

        Common stock, $.001 par value, 25,000,000
             shares authorized, 24,163,965 and 23,375,208
             issued and outstanding, respectively                  24,164              23,375
        Preferred Stock, $.001 par value, 5,000,000 shares
             authorized, 1,055,600  shares issued
             and outstanding, respectively                          1,056               1,056
        Additional paid in capital                             14,554,621          14,418,900
        Retained deficit                                      (13,097,533)        (11,738,947)
                                                              ___________          __________

        Total Stockholders' Equity                              1,482,308           2,704,384
                                                              ___________          __________

        Total Liabilities and Stockholders' Equity            $ 7,466,230          $7,336,985
                                                              ===========          ==========
















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

</TABLE>


                                      -7-


<PAGE>

<TABLE>
<CAPTION>


                            ACCESSPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

                                                                Three Months Ended                   Six Months Ended
                                                           _____________________________      ______________________________
                                                            June 30,          June 30,         June 30,           June 30,
                                                              2002              2001             2002               2001
                                                           ___________       ___________      ___________        ___________
<S>                                                        <C>                <C>              <C>               <C>

Sales, net                                                 $ 3,261,131        $1,001,633       $6,263,494        $ 1,904,911

Cost of sales                                                2,837,491           508,370        5,072,264            765,901
                                                           ___________       ___________      ___________        ___________

  Gross profit                                                 423,640           493,263        1,191,230          1,139,010

Selling expenses                                                 4,522            77,154            4,946            218,212

General and administrative expenses                            877,631         1,274,319        1,922,233          2,809,050
                                                           ___________       ___________      ___________        ___________

  Income (loss) from operations                               (458,513)         (858,210)        (735,949)        (1,888,252)
                                                           ___________       ___________      ___________        ___________

Other (Income) Expense
  Interest income                                              (27,897)           (2,831)         (31,861)            (2,847)
  Gain on sale of asset                                       (101,250)                 0        (101,250)                 0
  Penalties                                                      1,490            36,256            1,785            108,232
  Bad debt expense                                              38,350            13,800          145,922             37,411
  Miscellaneous                                                  4,825                 0            5,416             (3,167)
  Litigation expenses                                           60,000                 0           60,000                  0
  Amortization of deferred financing costs                     316,319                 0          632,638                  0
  Interest expense                                              82,530            54,666          129,064            109,888
                                                           ___________       ___________      ___________        ___________

  Total Other (Income) Expense                                 374,367           101,891          841,714            249,516
                                                           ___________       ___________      ___________        ___________

  Income (loss)  before income taxes
       and extraordinary items                                (832,880)         (960,101)      (1,577,663)        (2,137,768)

  Extraordinary items
       Gain on forgiveness of deferred compensation                  0                 0         (221,477)                 0
                                                           ___________       ___________      ___________        ___________

  Income (loss) before income taxes                           (832,880)         (960,101)      (1,356,186)        (2,137,768)
                                                           ___________       ___________      ___________        ___________


                                      -8-


<PAGE>


Provision for income taxes                                           0             1,300            2,400              3,200
                                                           ___________       ___________      ___________        ___________

  Net income (loss)                                        $  (832,880)        ($961,401)     $(1,358,586)       $(2,140,968)
                                                           ===========       ===========      ===========        ===========


  Net loss per share (basic and diluted)
       Basic                                               $     (0.03)           ($0.05)     $     (0.06)       $     (0.12)
       Diluted                                             $     (0.03)           ($0.04)     $     (0.05)       $     (0.08)

  Weighted average number of shares
       Basic                                                23,848,618        18,992,955       23,769,587         18,401,042
       Diluted                                              30,164,522        26,377,178       30,154,522         25,594,945






































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

</TABLE>


                                      -9-


<PAGE>

<TABLE>
<CAPTION>


                             ACCESSPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                                                        Six Months Ended
                                                                 ______________________________
                                                                   June 30,           June 30,
                                                                    2002                2001
                                                                 ___________        ___________
<S>                                                              <C>                <C>

CASH FLOWS FROM OPERATING ACTIVITIES
         Net Income (loss)                                       $(1,358,586)       $(2,140,968)

Adjustments to reconcile net loss to net cash
     used in operating
activities:
         Amortization                                                632,638                  0
         Depreciation                                                139,998            164,129
         Gain on sale of asset                                      (101,250)                 0
         Decrease (Increase) in receivables                         (118,074)           (73,887)
         Decrease (Increase) in inventory                                (48)            (5,047)
         Decrease (Increase) in other receivables                          0              9,735
         Decrease (Increase) in prepaid expenses                     (25,895)            (5,190)
         Decrease (Increase) in deposits                                 461             47,121
         (Decrease) Increase in accounts payable
              and accrued expenses                                   271,797            315,931
         (Decrease) Increase in accrued payroll taxes                (52,955)           158,739
         (Decrease) Increase in loss contingencies                     5,000                  0
         (Decrease) Increase in deferred compensation               (221,477)            (2,500)
                                                                 ___________        ___________

         Total Adjustments                                           530,195            609,031
                                                                 ___________        ___________

         Net cash used in operations                                (828,391)        (1,531,937)
                                                                 ___________        ___________

CASH FLOWS FROM INVESTING ACTIVITIES
         Sale of asset                                                75,000                  0
         Purchase of portfolio                                      (500,000)                 0
         Purchase of fixed assets                                   (114,329)           (53,959)
                                                                 ___________        ___________

         Net cash used in investing activities                      (539,329)           (53,959)
                                                                 ___________        ___________


                                      -10-


<PAGE>


CASH FLOWS FROM FINANCING ACTIVITIES
         Issuance of notes payable                                   500,000             14,000
         Payments on notes payable                                  (201,250)                 0
         Payments on capital leases                                  (38,336)          (100,299)
         Line of credit                                            1,168,542                  0
         Sale of stock                                                56,510          1,813,709
                                                                 ___________        ___________

         Net cash provided by financing activities                 1,485,466          1,727,410
                                                                 ___________        ___________

         Net change in cash and cash equivalents                     117,746            141,514
                                                                 ___________        ___________

         Cash and cash equivalents at beginning of year               78,229             31,954
                                                                 ___________        ___________

         Cash and cash equivalents at end of year                $   195,975        $   173,468
                                                                 ===========        ===========

         Supplemental cash flows disclosures:
              Income tax payments                                $     2,400        $     2,900
                                                                 ___________        ___________

              Interest payments                                  $         0        $    24,498
                                                                 ___________        ___________

              Non cash investing and financing activities:

                   Note payable issued on portfolio purchase     $   300,000        $         0
                   Stock issued for customer deposit             $    80,000        $         0




















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

</TABLE>


                                      -11-


<PAGE>

<TABLE>
<CAPTION>


                             ACCESSPOINT CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (unaudited)



                                                          June 30,          December 31,
                                                            2002                2001
                                                        ________________________________
<S>                                                     <C>                 <C>

Retained (deficits)
            Balance at beginning of period              $(11,738,947)       $ (7,832,485)
            Net income (loss)                             (1,358,586)         (3,906,462)
                                                        ____________        ____________

            Balance at end of period                     (13,097,533)        (11,738,947)
                                                        ____________        ____________

Common stock, par value $.001 (thousands of shares)
            Balance at beginning of period                    23,375              16,558
            Issuance of common stock                             789               6,817
                                                        ____________        ____________

            Balance at end of period                          24,164              23,375
                                                        ____________        ____________

Preferred stock, $.001 par value  (thousands of
shares)
            Balance at beginning of period                     1,056                   0
            Issuance of preferred stock                            0               1,056
                                                        ____________        ____________

            Balance at end of period                           1,056               1,056
                                                        ____________        ____________

Additional paid in capital
            Balance at beginning of period                14,418,900           5,390,011
            Issuance of common stock                         135,721           2,702,508
            Transfer of common stock                               0           6,326,381
                                                        ____________        ____________

            Balance at end of period                      14,554,621          14,418,900
                                                        ____________        ____________

Total stockholders' equity at end of period             $  1,482,308        $  2,704,384
                                                        ============        ============




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

</TABLE>


                                      -12-


<PAGE>



                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001


NOTE A - NATURE OF OPERATIONS

         Incorporated  in the State of  Nevada,  Accesspoint  Corporation  ("the
         Company") is a "C" Corporation as organized under the Internal  Revenue
         Code.  As of December  31,  2001,  the Company has  combined its mature
         Internet  Application Services technology platform with its credit card
         and  check-processing  platform to provide bundled payment  acceptance,
         processing and business  management  services.  These programs  provide
         customers  with  multiple  payment  acceptance  capabilities  including
         credit card and check transaction,  a fully-operational  e-commerce and
         business management Website,  and a central Web-based management system
         for  servicing  both the  brick-and-mortar  and web based sides to each
         business.

         The Company  focuses on specific  markets that  historically  have been
         under served by the  transaction  processing  industry.  The  Company's
         multi-application  e-payment systems allow their growing national sales
         channel to market a single source solution to merchants and businesses.
         Clients  enjoy the benefits of a versatile,  multi-purpose  system that
         provides a broad level of payment  acceptance  options and  value-added
         business  services  without  having to  manage  the  multiple  business
         relationships normally required for these functions.

         The Accesspoint  advantage is full transaction  processing,  settlement
         and software delivered as a bundled service for the cost of an industry
         standard  transaction  fee.  Furthermore,  as a result of the Company's
         systems, prospective clients can be approved in a short period, instead
         of the several-day  time frame  typically  implemented by the Company's
         competition.

         In November 2000, the Company  launched its card  processing  division,
         managed   by   its   wholly   owned   subsidiary,   Processing   Source
         International,  Inc.  and began  earning  card  processing  revenues in
         addition to its check processing  revenues through the underwriting and
         processing  of these  electronic  payment  transactions  in its growing
         merchant base.

         The Company has targeted the Independent Sales  Organization  (ISO) and
         Independent  Agent  marketplace as a prime driver and sales channel for
         its services. The Company's operating systems makes it simple for these
         sale  organizations to  electronically  submit a client's  application,
         track the progress of that application,  monitor merchant service,  and
         even track  commissions,  all in real time via a private  label  portal
         provided by the Company.  This program,  called ISO Advantage,  aims to
         establish  a new  standard  for  service  and  support in the  merchant
         services   industry  and  appears  to  present   distinct   marketplace
         advantages for those sales organizations who enter the program.


                                      -13-


<PAGE>


                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         UNAUDITED INTERIM FINANCIAL INFORMATION
         The accompanying financial statements have been prepared by Accesspoint
         Corporation, ("Accesspoint" or the "Company") 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 six  months  ended June 30,  2002 and 2001 are not  necessarily
         indicative  of the  results  that may be  expected  for the year ending
         December  31,  2002,  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, 2001.

         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.

         REVENUE RECOGNITION
         The Company  recognizes  revenue from;  settlement  fees for electronic
         payment  processing,  credit and debit card payment  settlement,  check
         conversion  and  financial  processing  programs and  transaction  fees
         related to the use of its software and credit card processing products,
         licensure of its software  products and providing  Internet  access and
         hosting of Internet business services and web sites.

         Revenue from software and hardware sales and services are recognized as
         products are shipped, downloaded, or used.

         The Company  reports  income and expenses on the accrual basis for both
         financial and income tax reporting purposes.

         PRINCIPLES OF CONSOLIDATION
         The consolidated  financial  statements  include the accounts of J.S.J.
         Capital  III,  Inc.,  Accesspoint  Corporation,  and its  wholly  owned
         subsidiaries Processing Source International,  Inc. (PSI) and Black Sun
         Graphics,  Inc. (BSG),  collectively referred to within as the Company.
         All material intercompany accounts,  transactions and profits have been
         eliminated in consolidation.

         RISKS AND UNCERTAINTIES
         The Company is subject to substantial  risks from,  among other things,
         intense competition from the providers of financial  electronic payment
         processing,  settlement  services,  software development and e-commerce
         service companies  specifically and the technology industry in general,
         other risks associated with the Internet services industry,  financing,
         liquidity requirements, rapidly changing customer requirements, limited
         operating history, and the volatility of public markets.


                                      -14-


<PAGE>



                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         CONTINGENCIES
         Certain  conditions  may exist as of the date the financial  statements
         are  issued,  which may result in a loss to the  Company but which will
         only be resolved when one or more future events occur or fail to occur.
         The  Company's  management  and legal  counsel  assess such  contingent
         liabilities,  and such  assessment  inherently  involves an exercise of
         judgment.  In assessing loss contingencies related to legal proceedings
         that are  pending  against the  Company or  unasserted  claims that may
         result in such  proceedings,  the Company's legal counsel evaluates the
         perceived merits of any legal  proceedings or unasserted claims as well
         as the  perceived  merits of the amount of relief sought or expected to
         be sought.

         If the assessment of a contingency indicates that it is probable that a
         material  loss has been incurred and the amount of the liability can be
         estimated,  then  the  estimated  liability  would  be  accrued  in the
         Company's  financial  statements.  If the  assessment  indicates that a
         potential  material loss  contingency is not probable but is reasonably
         possible,  or is probable but cannot be  estimated,  then the nature of
         the  contingent  liability,  together  with an estimate of the range of
         possible loss if determinable and material would be disclosed.

         Loss contingencies  considered to be remote by management are generally
         not  disclosed  unless  they  involve  guarantees,  in  which  case the
         guarantee would be disclosed.

         ESTIMATES
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires  management  to make certain
         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.    Significant   estimates   include
         collectibility of accounts receivable,  accounts payable, sales returns
         and recoverability of long-term assets.

         ALLOWANCE FOR DOUBTFUL ACCOUNTS
         The Company  has made an  allowance  for  doubtful  accounts  for trade
         receivables.

         FIXED ASSETS
         Property   and   equipment   are   stated  at  cost  less   accumulated
         depreciation.  Expenditures  for major additions and  improvements  are
         capitalized,  and  minor  replacements,  maintenance  and  repairs  are
         charged  to  expense  as  incurred.  Depreciation  is  provided  on the
         straight-line  method over the estimated useful lives of the assets, or
         the remaining term of the lease, as follows:

               Furniture and Fixtures       5 years
               Equipment                    5 years
               Hardware and Software        3 years

         LEASEHOLD IMPROVEMENTS
         Amortization   of  leasehold   improvements   is  computed   using  the
         straight-line  method over the shorter of the  remaining  lease term or
         the estimated useful lives of the improvements.


                                      -15-


<PAGE>


                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         CAPITAL LEASES
         Assets held under  capital  leases are recorded at the lower of the net
         present  value of the minimum  lease  payments or the fair value of the
         leased asset at the  inception of the lease.  Depreciation  is computed
         using the straight-line method over the shorter of the estimated useful
         lives of the assets or the period of the related lease.

         INVENTORY
         Inventory is valued at the lower of cost or market.  Cost is determined
         on the weighted average method. As of June 30, 2002 and 2001, inventory
         consisted only of finished goods.

         CASH AND CASH EQUIVALENTS
         The Company  considers all highly  liquid  investments  purchased  with
         initial maturities of three months or less to be cash equivalents.

         CONCENTRATION OF CREDIT RISK
         Financial  instruments,  which  subject  the  Company  to credit  risk,
         consist  primarily of cash  equivalents and trade accounts  receivable.
         Concentration of credit risk with respect to trade accounts  receivable
         is generally diversified to the large number of entities comprising the
         Company's  customer base and their geographic  dispersion.  The Company
         actively evaluates the  creditworthiness of the customers with which it
         conducts business.

         ADVERTISING
         Advertising costs are expensed in the year incurred.

         EARNINGS PER SHARE
         Earnings per share are based on the weighted  average  number of shares
         of common stock and common stock  equivalents  outstanding  during each
         period.  Earnings  per share are  computed  using  the  treasury  stock
         method.  The options to purchase  common  shares are  considered  to be
         outstanding for all periods presented but are not calculated as part of
         the earnings per share.

         STOCK-BASED COMPENSATION
         The Company accounts for stock-based employee compensation arrangements
         in  accordance  with the  provisions  of  Accounting  Principles  Board
         Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees," and
         complies  with the  disclosure  provisions  of  Statement  of Financial
         Accounting   Standards   ("SFAS")  123,   "Accounting  for  Stock-Based
         Compensation."  Under APB 25,  compensation cost is recognized over the
         vesting  period based on the  difference,  if any, on the date of grant
         between  the fair  value  of the  Company's  stock  and the  amount  an
         employee must pay to acquire the stock.

         IMPAIRMENT OF LONG-LIVED ASSETS
         The Company evaluates  long-lived assets for impairment whenever events
         or changes in  circumstances  indicate  that the  carrying  value of an
         asset  may not be  recoverable.  If the  estimated  future  cash  flows
         (undiscounted  and without  interest  charges) from the use of an asset
         are less than the carrying  value,  a  write-down  would be recorded to
         reduce the related asset to its estimated  fair value.  There have been
         no such impairments to date.


                                      -16-


<PAGE>


                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001


NOTE C - STOCK AND STOCK WARRANTS

         The  Company  has two  classes of capital  stock:  Preferred  Stock and
         Common Stock. Holders of common stock are entitled to one vote for each
         share  held.  Preferred  stock  holders  are  not  entitled  to  voting
         privileges  and  are  convertible   into  Common  Stock  under  certain
         circumstances on a share-for-share basis.

         At June 30, 2002, the Company has 25,000,000  Common Shares  authorized
         and 24,163,965 shares issued and outstanding. The Company had 5,000,000
         Preferred Shares authorized and 1,055,600 issued and outstanding.

         At June  30,  2002,  the  Company  does not have  enough  common  stock
         reserved for the possible  exercise of options and warrants which could
         total:

                  Exercise of common stock warrants           1,752,223
                  Exercise of stock options                   3,715,916
                                                              _________
                                                              5,468,139
                                                              _________

         The Company  intends to  increase  the  authorized  number of shares by
         proxy of its shareholders subsequent to June 30, 2002.


NOTE D - EARNINGS PER SHARE

         Basic net  earnings per share is computed  using the  weighted  average
         number of common  shares  outstanding  during  the year.  The  dilutive
         effect of potential  common shares  outstanding  is included in diluted
         net  earnings  per share.  The  computations  of basic net earnings per
         share and diluted net  earnings  per share as of June 30, 2002 and 2001
         are as follows:

                                                    June 30,         June 30,
                                                      2002             2001
                                                  ____________     ____________

         Net earnings (loss) from operations      $ (1,358,586)    $ (2,140,968)
                                                  ____________     ____________

         Basic weighted average shares              23,454,200       18,401,000
         Effect of dilutive securities:
            Common stock options                     3,415,900        3,629,000
            Common stock warrants                    1,752,200        1,460,000
            Convertible debt                           360,000          360,000
            Convertible preferred stock              1,055,600        1,623,000
                                                  ____________     ____________
         Dilutive potential common shares           30,037,900       25,473,000
                                                  ____________     ____________

         Net earnings (loss) per share from
            continuing operations:
            Basic                                 $      (0.06)    $      (0.12)
            Diluted                               $      (0.05)    $      (0.08)


                                      -17-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2002 AND 2001


NOTE E - LINE OF CREDIT

         As of June 30, 2002 the Company had net  borrowings  due of  $1,168,542
         against a $5,000,000  line-of-credit  that was  established in December
         2001 with Net Integrated  Systems,  Inc. (NIS). The agreement calls for
         minimum  monthly  payments of interest  only at the rate of six percent
         (6%) per annum. NIS is a related party.


NOTE F - 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.  Management  believes that any liability that may
         ultimately  result from the resolution of these matters will not have a
         material  adverse  effect on the  financial  condition  or  results  of
         operations  of  the  Company.  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 June 30, 2002 the
         Company has accrued for the liability in full on its Balance Sheet.  No
         payments have been made to date.

         RUTTENBERG  - During  2001 a former  employee  of the  Company  filed a
         formal  demand for  payment of  remaining  salary  under an  employment
         agreement,  unreimbursed expenses and legal costs. In November 2001 the
         Company entered into a settlement agreement, which required a total sum
         of  $44,500,  be paid in $5,000  monthly  installments.  The Company is
         currently  in  default  under  this  agreement  and  has  appropriately
         recorded all original  amounts  demanded  under a  Stipulation  for the
         Entry of  Judgment  of  $92,000,  less  payments  that were made,  as a
         liability on the Balance Sheet as of June 30, 2002.

         CAPITAL LEASES - As of June 30, 2002, and subsequently, the Company has
         stopped making payments on all of its capital leases.  Thus,  under the
         lease agreements,  the Company is in default.  This default accelerates
         all  future  payments  due and gives the lessor the right to obtain the
         property.

         The Company is currently in  negotiations  with all lessors for revised
         terms  for the  remaining  life of the  leases.  As of this date no new
         terms have been finalized.  The Company has appropriately  recorded all
         amounts due for the remaining life of the leases as a current liability
         on its Balance Sheet at June 30, 2002.

         In June, 2002 the Company settled and paid two of the capital leases.

         ROYCAP - As of June 30,  2002 the  Company  was in  default on its loan
         agreement  with Roycap for repayment of a $450,000  loan,  plus accrued
         interest,  which was due on October 16, 2001.  The Company is currently
         in  negotiations  with the lender on new loan  terms.  The  Company has
         shown  the  $450,000  loan in its  liabilities  as well as all  accrued
         interest. In addition, the Company has accrued registration rights fees
         of $108,000  related to this matter as of June 30,  2002.  In June 2002
         Roycap filed formal suit on its claim.


                                      -18-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2002 AND 2001


NOTE F - LITIGATION AND CONTINGENCIES (CONTINUED)

         BENTLEY, DJOKOVICH - In March 2002, a shareholder of the Company, James
         M. Bentley filed a suit against the Company and other various officers,
         directors and entities.  The suit contains eleven (11) Causes of Action
         including:  Breach of Contract,  Misappropriation,  Unfair Competition,
         Unfair Business Practices and the imposition of a Constructive Trust.

         On June 26, 2002 all parties entered into a settlement  agreement.  The
         substantive part of the agreement changes the term for releasing shares
         held by NIS  pursuant  to  proxy  rights  (under a  separate  agreement
         entered  into  in  December  2001)  which  are  owned  by  Bentley  and
         Djokovich,  requires  Djokovich to transfer to NIS 2,605,257  shares of
         stock of the Company and  options to purchase an  additional  2,000,000
         shares  of stock  of the  Company,  provides  for  NIS'  assumption  of
         approximately  $500,000 in short-term loans owed to James W. Bentley by
         the Company and  requires the Company to pay up to $60,000 of Bentley's
         legal  fees by March 31,  2003.  Djokovich's  shares  are to be held in
         escrow as collateral until the above short-term loans are repaid.

         DJOKOVICH - In February 2002, Mr. Djokovich resigned as Chief Executive
         Officer of the Company.  Mr. Djokovich gave up his employment contract,
         signed a mutual  release and relieved the Company from paying  deferred
         compensation  owed to him and a related  Promissory  Note and  Security
         Agreement.  In June  2002,  Mr.  Djokovich  resigned  from the Board of
         Directors as part of the above settlement agreement.

         URCUYO - In January  2002 Alfred  Urcuyo  resigned as President of PSI.
         Mr.  Urcuyo gave up his  employment  contract  and released the Company
         from  paying any amounts  owed to him for  unreimbursed  expenses.  Mr.
         Urcuyo signed a Mutual Release.

         MULDER - In 2002,  a former  employee of the Company  filed a claim for
         payment of credit card debt he incurred on behalf of the Company to pay
         expenses and various  loans he states were made to the  Company.  These
         items  amount to  approximately  $65,000.  The Company is  currently in
         negotiations  with Mr.  Mulder but has  accrued as a  liability  on its
         Balance Sheet at June 30, 2002 the full amount of $65,000.

         PARISH  - In 2002 a  former  Consultant  of the  Company  filed a claim
         stating  that he is owed  33,336  shares  of common  stock  and  20,000
         options  to  purchase  shares  of  common  stock at $5 per  share,  for
         services  rendered under a contract with the Company.  The Company does
         not  believe  that this  claim is valid  under the  contract  terms and
         intends to defend  itself in this matter.  No action has been filed and
         no amounts have been accrued.

         VERVE - In 2002,  a  shareholder  of the Company  submitted a letter of
         demand to recover their original investment of $40,000. No amounts have
         been  accrued for this item,  and the Company does not intend to return
         the amount invested. (See Subsequent Events Note K).


                                      -19-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2002 AND 2001


NOTE F - LITIGATION AND CONTINGENCIES (CONTINUED)

         MERCHANTWAREHOUSE.COM  - In April  2002 a former  agent of the  Company
         initiated  arbitration  against  the  Company.  The  firm  is  claiming
         improper   termination  of  its  agency  agreement  and  has  requested
         $1,000,000.  The Company intends to defend the claim vigorously.  It is
         not possible at this time to  determine  the outcome of the case or the
         possible loss,  but  management  does not believe that the outcome will
         have a material  adverse  effect on the  Company.  No amounts have been
         accrued in this matter.

         BIGGOTT - On May 29, 2002 Mr. Biggott filed a lawsuit  against  various
         entities   including  the  Company,   charging  them  with   wrongfully
         terminating his employment with an unrelated  company,  and with unfair
         competition,  negligence,  intentional  interference  with  prospective
         economic advantage and unfair business practices in connection with the
         use of a certain product. Mr. Biggott claims $400,000 in actual damages
         plus interest and attorney fees. The action alleges that the Company is
         the alter ego of the other entities  named and is therefore  liable for
         their alleged  wrongdoing.  The Company denies the  allegations and any
         wrongdoing and intends to vigorously defend the action. No amounts have
         been accrued in the financial statements.

         ACCOUNTS  PAYABLE - The Company is  currently in arrears in payments to
         its vendors in the normal  course of business.  Management is currently
         working  on  negotiating  compromised  amounts  with all  vendors.  The
         Company has recorded as a liability on its Balance Sheet the full value
         of amounts owed to the vendors. When and if amounts are compromised,  a
         gain on forgiveness of debt will be recognized accordingly.


NOTE G - PAYROLL TAXES

         The  Company  is  currently  in  negotiations  with the  United  States
         Department of the Treasury,  Internal  Revenue Service (IRS) in regards
         to unpaid  employment  taxes. The IRS has made formal demand of amounts
         due and unpaid, including interest and penalties, from the Company, and
         has  appropriately  filed tax liens  against all assets of the Company.
         The Company entered into  installment  agreements with the IRS and made
         payments as required. The Company has hired independent  accountants to
         assist  them in this  matter  and has filed a request  for an "Offer in
         Compromise"  of all amounts owed by the  Company.  The IRS has recorded
         the request and halted all payment  requirements  under the installment
         agreements and any other  collection  activity until it has had time to
         review the  matter.  The  Company  has  requested  that the IRS look at
         Accesspoint  Corporation and its  Subsidiaries as one unit for terms of
         the  Offer in  Compromise.  As of the date of this  report  the IRS has
         responded to the Company and is  reviewing  its offer and request to be
         treated as one unit.


                                      -20-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2002 AND 2001


NOTE G - PAYROLL TAXES (CONTINUED)

         The  Company  has always  recorded  its  liability  in full to the IRS,
         including penalties and interest, on its Balance Sheet.

         The  Company  also  owes  unpaid  employment  taxes  to the  California
         Employment  Development  Department (EDD). The Company has entered into
         installment  agreements  with the EDD and has been making all  required
         payments.  The Company has always recorded in full, including penalties
         and  interest,  its  liability to the EDD as a liability on its Balance
         Sheet.


NOTE H - EXTRAORDINARY INCOME

         In February 2002 Tom Djokovich, former President of the Company, signed
         a  release  as part of his  termination  of  employment  (see  Note F),
         relieving  the Company  from  paying his  deferred  compensation.  This
         amount totaled $221,477.  The Company reduced the liability recorded on
         its books and recorded extraordinary income for the total amount.


NOTE I - PORTFOLIO PURCHASE

         On  February  25, 2002 the  Company  purchased a portfolio  of residual
         compensation  identified  as a  merchant  base  held by Chase  Merchant
         Services  from another  corporation.  The purchase  price was $500,000,
         payable in installments  starting February 27, 2002 and ending November
         25, 2002. (See subsequent events Note K.)


NOTE J - PORTFOLIO SALE

         On June 10, 2002 the  Company  sold to another  corporation  a residual
         compensation  stream,  identified  as a  merchant  base held with Chase
         Merchant Services,  for $101,250. The Company received $75,000 in June,
         2002 and is to receive the remaining  $26,250 on or before  October 31,
         2002.


                                      -21-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2002 AND 2001


NOTE K - SUBSEQUENT EVENTS


         PORTFOLIO  PURCHASE - In July 2002 the Company  rescinded  its purchase
         agreement   related  to  the   purchase  of  a  portfolio  of  residual
         compensation  identified  as a  merchant  base  held by Chase  Merchant
         Services from another corporation . Accordingly the Company will book a
         receivable  for its  initial  $200,000  payment  under the terms of the
         agreement  and  reverse  its  original  entry to record  the  purchase.
         According  to   management,   the  seller  is  in  agreement  with  the
         rescission.

         VERVE - In July 2002 the Company  made a  settlement  proposal to Verve
         with respect to its claim (see  Litigation  Note F) which  proposal was
         accepted  and  signed by  Verve.  Under the  settlement  proposal,  the
         Company  will issue  40,000 new shares of  restricted  stock and 60,000
         warrants to purchase additional stock at $1 per share,  exercisable for
         three years.


NOTE L - DEFERRED FINANCING COSTS

         In  accordance  with  APB 21 and  SAB 79 the  Company  has  recorded  a
         deferred  financing cost asset of  $6,326,381.  This amount is based on
         the number of shares that three  shareholders  directly  transferred to
         Net  Integrated  Systems,  Inc. (NIS) as an inducement for NIS to enter
         into the Revolving Line of Credit Agreement.

         This  amount  is  calculated  by  multiplying   the  4,486,795   shares
         transferred by $1.41 per share.  The share price represents the closing
         market value of the  Company's  stock on December 20, 2001 reduced by a
         ten percent (10%)  discount due to the Rule 144 stock  restrictions  on
         these shares.

         The entry to record this transaction is to debit the deferred financing
         cost asset and to credit  additional  paid in  capital.  The Company is
         amortizing  the  deferred  financing  cost over the life of the line of
         credit, which is five years. For the six months ended June 30, 2002 the
         Company recorded amortization expense of $632,638.


NOTE M - GOING CONCERN

         The Company has suffered recurring losses, cash deficiencies,  loan and
         capital  lease  defaults,  and  current  liabilities  far in  excess of
         current  assets.  These  issues  raise  substantial  concern  about its
         ability to continue as a going concern.

         Management  has  prepared the  following  statement in order to address
         these and other concerns:

         The Company has made  substantial  investments  in the  development  of
         infrastructure  to support  its  transaction  processing  and  business
         automation  services.  These  investments  in  both  fixed  assets  and
         strategic  banking  agreements  have provided the Company with expanded
         revenue generating capabilities.


                                      -22-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2002 AND 2001


NOTE M - GOING CONCERN (CONTINUED)

         The investment in these assets during the Company's  transition  from a
         third party software and web services provider to a primary provider of
         financial transaction underwriting,  processing and business management
         services have in large part  contributed  to the  Company's  losses and
         cash deficiencies.

         The  purpose  of  these  investments  was  to  develop   infrastructure
         necessary  to position  and  prepare  the Company and its wholly  owned
         subsidiary,  Processing  Source  International,  Inc.  (PSI),  so  that
         revenues could be generated as a primary  processor and  underwriter of
         electronic  financial  transactions.  As a result of these investments,
         PSI became a member processor, under the sponsorship of Chase Manhattan
         Bank, within the Visa/MasterCard association for the processing of card
         transactions  and  the  Company  received   sponsorship  through  First
         National  Bank of Omaha for the  processing  of  electronic  checks and
         check  conversion   within  the  National   Automated   Clearing  House
         Association (NACHA) network.

         Prior to achieving this goal in November  2000,  the Company  typically
         generated revenues through the licensing of its business management and
         transaction  processing  software  technologies and the monthly service
         fees for hosting these business applications.  As of June 30, 2002, the
         Company generates revenues through the aforementioned services.

         In December 2001, the Company  entered into a Management  Agreement and
         related Revolving Line of Credit Agreement for up to $5,000,000. In the
         first two quarters of 2002 the Company has also  significantly  reduced
         its  overhead  by  closing  two  office  facilities  and  consolidating
         administrative and sales efforts. In addition, the Company is currently
         renegotiating its lease commitments, notes payable and accounts payable
         to further reduce its current liabilities and improve its cash flow.



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.

     A.  OVERVIEW

     Our primary software  products consist of Merchant  Manager  Enterprise,  a
complete  and  secure  fully-hosted  e-commerce  solution  for small to  midsize
businesses,  which provides an on-line store, catalog and credit card processing
abilities;  Transaction  Manager,  an  on-line  credit  card and ACH  processing
solution  for  small to  midsize  businesses;  and  Merchant  Manager,  a hosted
e-commerce  solution providing a simple-to-learn  and simple-to-use set of tools
derived  from  Merchant  Manager  Enterprise.  We provide  hosting  services  in
conjunction with our software products.


                                      -23-


<PAGE>


     B.  RESULTS OF OPERATIONS

     Three and Six Months Ended June 30, 2002 Compared With Three and Six Months
Ended June 30, 2001

     Revenues  for the three and six months  ended June 30,  2002  increased  to
$3,261,131 and $6,263,494  from  $1,001,633 and $1,904,911 for the three and six
months ended June 30, 2001.  The  increases of  $2,259,498  and  $4,358,583,  or
225.58% and 228.81%,  respectively,  are due primarily to our increased revenues
associated with credit card processing  which resulted in an overall increase in
sales.

     Cost of sales for the three and six months ended June 30, 2002 increased to
$2,837,491  and  $5,072,264  from  $508,370  and  $765,901 for the three and six
months ended June 30, 2001.  The  increases of  $2,329,121  and  $4,306,363,  or
458.15% and 562.26%, respectively,  resulted primarily from our increase in cost
of sales  associated with credit card  processing,  which resulted in an overall
increase in sales.

     Selling and marketing  expenses for the three and six months ended June 30,
2002  decreased to $4,522 and $4,946 from $77,154 and $218,212 for the three and
six months ended June 30, 2001.  These  decreases  of $72,632 and  $213,266,  or
94.14% and  97.73%,  respectively,  resulted  primarily  from the  reduction  of
overhead  costs,  including  the reduction in trade show  expenses,  advertising
consulting  costs,  and printing  costs for brochure and  promotional  materials
during the development of our processing and underwriting platform.

     General and administrative expenses for the three and six months ended June
30, 2002 decreased to $877,631 and $1,922,233 from $1,274,319 and $2,809,050 for
the three and six months  ended June 30,  2001.  The  decrease of  $396,688  and
$886,817, or 31.13% and 31.57%, respectively, resulted primarily from a decrease
of Salaries and Wages and related  employee costs and a decrease in professional
costs and other efficiencies.

     Interest expense, net, for the three and six months ended June 30, 2002 was
$54,633 and  $97,203,  as compared to $51,835 and $107,041 for the three and six
months ended June 30, 2001. The differences of $2,798 and $(9,838), or 5.40% and
(9.19%),  respectively,  resulted  primarily  from the Company's  static cost of
debt.

     Other (Income)  Expense,  net of Interest expense was $291,837 and $712,650
for the three and six months  ended June 30,  2002,  as  compared to $47,225 and
$139,628 for the three and six months ended June 30,  2001.  These  increases of
$244,612 and $573,022, or 517.97% and 410.39%, respectively,  resulted primarily
from the  increases of  amortization  of deferred  financing  costs and bad debt
expense  for the three and six months  ended June 30,  2002,  as compared to the
three and six months ended June 30, 2001.

     Net losses for the three and six months ended June 30, 2002 were $(832,880)
and  $(1,358,586),  as compared to $(961,401) and $(2,140,968) for the three and
six months ended June 30, 2001.  The decreases in loss of $128,521 and $782,382,
or 13.37% and 36.54%, respectively, were primarily related to increased revenues
and a reduction of development-related activities.

     C.  LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash  equivalents  at June 30,  2002 were  $195,975,  compared  to
$173.468 at June 30, 2001, an increase of $22,507, which represented a growth of
12.97%.

     Net Cash used in operations  decreased  from  $1,531,937 for the six months
ended June 30,  2001 to  $828,391  for the six months  ended June 30,  2002 or a
resulted efficiency in cash of $703,546 or 45.93%. This efficiency was primarily
accomplished by increased effectiveness in operations.

     Net Cash used in investing activities increased from $53,959 as of June 30,
2001 to $539,329 as of June 30, 2002. This increase of $485,370, or 899.52%, was
primarily  due to the  purchase of a portfolio of residual  compensation,  which
purchase was subsequently rescinded (see Note K, Subsequent Events,  attached as
a part of the financial  statements  prepared by our auditors filed herewith and
incorporated hereby).

     During the six months ended June 30, 2002,  the Company  generated net cash
of $1,485,466  from  financing  activities as compared to $1,727,410 for the six
months ended June 30, 2001. The decrease of $241,944, or 14.01%, resulted from a
decrease in private placement fundraising activities.


                                      -24-


<PAGE>


     As of June 30, 2002,  we lease  office  space on a short-term  twelve-month
sub-lease  basis and could be  required  to move  after  the  expiration  of the
twelve-month  period  during  the  fourth  quarter  of 2002.  We may  attempt to
re-negotiate a longer-term lease at our present location.  If the Company moves,
the major capital  expenditures we would incur would be related to relocation of
office  computers,  local area network  hardware,  office  telephony  and office
equipment and furniture.

     We had, at June 30, 2002,  negative working  capital.  We believe that cash
generated  from  operations  will  not be  sufficient  to fund our  current  and
anticipated  cash  requirements.  However,  management  believes  that  our Five
Million  Dollar  ($5,000,000)  Secured  Revolving  Line of  Credit  through  Net
Integrated Systems should be sufficient to sustain Accesspoint's  operations and
activities  for the  foreseeable  future.  As such,  we do not believe  that our
current  operational  plans for the next  twelve  months  will be  curtailed  or
delayed  because  of the lack of  sufficient  financing.  While  there can be no
assurances that we will continue to have access to such additional financing, on
terms acceptable to us and at the times required,  or at all, we believe that we
will have access to sufficient capital for the foreseeable future.

     D.  NET OPERATING LOSS

     For federal income tax purposes,  we have net operating loss  carryforwards
of approximately  $10,760,000 as of June 30, 2002 and $7,010,000, as of June 30,
2001.  These  carryforwards  will expire at various dates through the year 2015.
The use of such net operating  loss  carryforwards  to be offset  against future
taxable income, if achieved, may be subject to specified annual limitations (see
"Risks of Our Business Limitations on Net Operating Loss Carry Forward").



                                     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.  Management  believes that any liability that may ultimately  result
from the resolution of these matters will not have a material  adverse effect on
the financial  condition or results of  operations of the Company.  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 June 30, 2002 the Company has accrued for the  liability in full
on its Balance Sheet. No payments have been made to date.

     Ruttenberg - During 2001, a former  employee of the Company  filed a formal
demand  for  payment  of  remaining   salary  under  an  employment   agreement,
unreimbursed  expenses and legal costs.  In November 2001,  the Company  entered
into a settlement agreement, which required a total sum of $44,500 to be paid in
$5,000  monthly  installments.  The Company is currently  in default  under this
agreement and has  appropriately  recorded all original amounts demanded under a
Stipulation for the Entry of Judgment of $92,000,  less payments that were made,
as a liability on the Balance Sheet as of June 30, 2002.

     Capital  Leases - As of June 30, 2002,  and  subsequently,  the Company has
stopped  making  payments on all of its capital  leases.  Thus,  under the lease
agreements,  the  Company is in default.  This  default  accelerates  all future
payments due and gives the lessor the right to obtain the property.  The Company
is  currently  in  negotiations  with all  lessors  for  revised  terms  for the
remaining life of the leases.  In June 2002, the Company settled and paid two of
the capital leases.  The Company has appropriately  recorded all amounts due for
the remaining life of the leases as a current  liability on its Balance Sheet at
June 30, 2002.


                                      -25-


<PAGE>


     Roycap  - As of June 30,  2002,  the  Company  was in  default  on its loan
agreement with Roycap for repayment of a $450,000 loan,  plus accrued  interest,
which was due on October 16, 2001. The Company is currently in negotiations with
the lender on new loan terms.  The Company  has shown the  $450,000  loan in its
liabilities  as well as all  accrued  interest.  In  addition,  the  Company has
accrued  registration  rights fees of $108,000 related to this matter as of June
30, 2002. In June 2002, Roycap filed formal suit on its claim.

     Bentley,  Djokovich - In March 2002, a shareholder of the Company, James M.
Bentley,  filed suit against the Company and other various  officers,  directors
and entities.  The suit contains eleven (11) causes of action including:  breach
of contract, misappropriation, unfair competition, unfair business practices and
the imposition of a  constructive  trust.  On June 26, 2002 all parties  entered
into a settlement agreement. The substantive part of the agreement:  changes the
term for releasing shares held by NIS pursuant to proxy rights (under a separate
agreement  entered  into in  December  2001)  which  are  owned by  Bentley  and
Djokovich;  requires  Djokovich to transfer to NIS 2,605,257  shares of stock of
the Company and options to purchase an additional  2,000,000  shares of stock of
the  Company;   provides  for  NIS'  assumption  of  approximately  $500,000  in
short-term  loans owed to James W.  Bentley by the  Company;  and  requires  the
Company  to pay up to  $60,000  of  Bentley's  legal  fees by  March  31,  2003.
Djokovich's  shares  are to be held in  escrow  as  collateral  until  the above
short-term loans are repaid. In June 2002, Mr. Djokovich resigned from the Board
of Directors as part of the above settlement agreement.

     Mulder - In 2002,  a  former  employee  of the  Company  filed a claim  for
payment of credit card debt he incurred on behalf of the Company to pay expenses
and various  loans he states  were made to the  Company.  These items  amount to
approximately  $65,000. The Company is currently in negotiations with Mr. Mulder
but has  accrued as a liability  on its Balance  Sheet at June 30, 2002 the full
amount of $65,000.

     MerchantWarehouse.com  - In  April  2002 a  former  agent  of  the  Company
initiated  arbitration  against  the  Company.  The  firm is  claiming  improper
termination of its agency  agreement and has requested  $1,000,000.  The Company
intends  to defend  the claim  vigorously.  It is not  possible  at this time to
determine the outcome of the case or the possible loss, but management  does not
believe that the outcome will have a material adverse effect on the Company.  No
amounts have been accrued in this matter.

     Biggott - On May 29, 2002,  Mr.  Biggott  filed a lawsuit  against  various
entities  including the Company,  charging them with wrongfully  terminating his
employment with an unrelated company,  and with unfair competition,  negligence,
intentional interference with prospective economic advantage and unfair business
practices in connection  with the use of a certain  product.  Mr. Biggott claims
$400,000 in actual damages,  plus interest and attorney fees. The action alleges
that the Company is the alter ego of the other  entities  named and is therefore
liable for their alleged wrongdoing.  The Company denies the allegations and any
wrongdoing  and intends to  vigorously  defend the action.  No amounts have been
accrued in the financial statements.

     For a more detailed  discussion of Legal Proceedings,  please refer to Note
F, Litigation and Contingencies,  attached as a part of the financial statements
prepared by our auditors filed herewith and incorporated hereby.


ITEM 2.           CHANGES IN SECURITIES

     During the three months  ended June 30, 2002,  we issued a total of 630,694
shares of voting  common  stock to two  entities.  We issued  615,384  shares of
restricted  Accesspoint  Corporation  common stock to ATS, LLC ("ATS"), a former
client  of  Processing  Source   International,   Inc.  ("PSI"),  the  Company's
wholly-owned  subsidiary,  pursuant to an agreement by ATS to convert an $80,000
deposit owed to ATS by PSI into common  stock of the  Company.  The $80,000 debt
was  converted at $0.33 per share,  allowing for a discount to market due to the
restricted  nature of the shares  being  issued to ATS.  We also  issued  15,310
shares of restricted Accesspoint  Corporation common stock to Juno International
Limited ("Juno") pursuant to a Net Issue Exercise of 20,000 warrants,  issued to
Juno in 1999, at an exercise price of $0.34 per share.


                                      -26-


<PAGE>


     We did not publicly offer any  securities,  no underwriter was utilized and
we did not pay any other finder's  fees,  discounts or commissions in connection
with the above  offers and sales.  The offers and sales  described  herein  were
exempt  pursuant  to  Sections  4(2)  and 5 of  the  Act,  Regulations  D and S,
respectively,  promulgated  there under, and pursuant to Section 25102(f) of the
California  Corporations Code. The purchasers  acquired the shares for their own
account with no then-present intention of dividing their interest with others or
of  reselling or  otherwise  disposing of all or any portion of the shares.  The
options  underlying  the shares were  offered  and sold in private  transactions
which were not part of a distribution  of the shares,  and, in the case of those
shares sold pursuant to Regulation S, the offers and sales were made in offshore
transactions  and there were no directed selling efforts in the United States in
connection  therewith.  We,  or our  officers  or  directors  or  our  or  their
affiliates  or  representatives,   had  a  pre-existing   personal  or  business
relationship with each of the individuals and/or entities acquiring shares.


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 June 30, 2002.


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
___________     ___________

  9.0           **Form of Irrevocable Voting Proxy in favor of Net Integrated
                  Systems, Ltd.
10.37           **Form of Stock Transfer Letter between shareholder and Net
                  Integrated Systems, Ltd.
10.38           **Form of Stock Option Agreement between shareholder and Net
                  Integrated Systems, Ltd.
10.39           **Form of First Amendment to Stock Option Agreement between
                  shareholder and Net Integrated Systems, Ltd.
10.40           **Form of Stock Pledge Agreement between shareholder and Net
                  Integrated Systems, Ltd.
10.41           **Management Agreement between Accesspoint Corporation,
                  Processing Source International, Inc. and Net Integrated
                  Systems, Ltd.
10.42           **Revolving Line of Credit Agreement
10.43           **Secured Loan Agreement
10.44          ***Merchant Portfolio Purchase Agreement between Processing
                  Source International, Inc. and Northwest Systems, LLC
21.00            *List of Subsidiaries


                                      -27-


<PAGE>


     *   Incorporated by reference from the exhibit to the Annual Report on Form
         10-KSB filed by us on April 16, 2001
     **  Incorporated  by  reference  from the exhibit to the Current  Report on
         Form 8-K filed by us on January 14, 2002
     *** Incorporated  by  reference  from the  exhibit  to the  Second  Amended
         Quarterly Report on Form 10-QSB filed by us on August 2, 2002


     B.  REPORTS ON FORM 8-K

         None.




                                   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, thereunto duly authorized, in the City of Los Angeles, State
of California, on the 9th day of August, 2002.


Dated:  August 9, 2002                             ACCESSPOINT CORPORATION


                                                   By:  /s/ CHRISTINE CROCKER
                                                   __________________________
                                                   Christine Crocker,
                                                   Secretary and Director


     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:


      Signature                          Title                         Date
      _________                          _____                         ____


/s/ CHRISTINE CROCKER             Secretary & Director            August 9, 2002
_____________________
Christine Crocker


                                      -28-