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 SEPTEMBER 30, 2002


                                       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
 Incorporation or Organization)                              Identification No.)


   2533 N. Carson Street, Suite 5198
          Carson City, Nevada                                            89706
________________________________________                              __________
(Address of Principle Executive Offices)                              (Zip Code)


                                 (310) 846-2500
                ________________________________________________
                (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 September
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 SEPTEMBER 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
September 30, 2002 and September 30, 2001 are filed herewith.


                                      -3-


<PAGE>



                             ACCESSPOINT CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2002 AND 2001

                                TABLE OF CONTENTS








Independent Accountant's Report                                             5

Consolidated Balance Sheets                                                 6

Consolidated Statements of Operations                                       7

Consolidated Statements of Cash Flow                                        8

Consolidated Statements of Changes in Stockholders' Equity                  9

Notes to Consolidated Financial Statements                                 10


                                      -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 September 30, 2002 and
the related  consolidated  statements of  operations,  changes in  stockholders'
equity,  and cash flows for the nine month periods ended  September 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.

As  discussed  in Note O, certain  conditions  indicate  that the Company may be
unable to continue as a going concern. The accompanying  financial statements do
not include any adjustments to the financial  statements that might be necessary
should the Company be unable to continue as a going concern.


November 4, 2002
Los Angeles, California


                                      -5-


<PAGE>

<TABLE>
<CAPTION>


                             ACCESSPOINT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

                                     ASSETS

                                                                       September 30,       December, 31
                                                                           2002                2001
                                                                       ____________        ____________
<S>                                                                    <C>                 <C>

Current Assets
           Cash and cash equivalents                                   $          0        $     78,229
           Accounts receivable, net                                         444,383             255,873
           Inventory                                                              0               6,366
           Other assets                                                     359,578                   0
           Prepaid expenses                                                  19,820              13,807
                                                                       ____________        ____________
                   Total Current Assets                                     823,781             354,275
                                                                       ____________        ____________
Fixed Assets
           Furniture and equipment (net)                                    398,176             401,685
                                                                       ____________        ____________
                  Total Fixed Assets                                        398,176             401,685
                                                                       ____________        ____________
Other Assets
           Deferred financing costs (net)                                 5,340,010           6,288,967
           Intangible asset                                                 154,667                   0
           Deposits                                                         291,597             292,058
                                                                       ____________        ____________
                   Total Other Assets                                     5,786,274           6,581,025
                                                                       ____________        ____________
           Total Assets                                                $  7,008,231        $  7,336,985
                                                                       ============        ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                       September 30,       December, 31
                                                                           2002                2001
                                                                       ____________        ____________
Current Liabilities
           Accounts payable and accrued expenses                       $  2,099,436        $ 1,467,688
           Bank overdraft                                                   140,237                   0
           Accrued payroll taxes and penalties                            1,036,089           1,091,080
           Accrued loss contingencies                                       158,033             338,233
           Deferred compensation                                                  0             221,477
           Customer deposits                                                 19,465              99,465
           Line of credit                                                 1,419,595                   0
           Current portion, capitalized leases                              270,877             303,158
           Current portion, notes payable                                   732,500           1,111,500
                                                                       ____________        ____________
           Total Current Liabilities                                      5,876,232           4,632,601
Capital Lease obligations, net of current portion                                 0                   0
Notes payable, net of current portion                                             0                   0
                                                                       ____________        ____________
           Total Liabilities                                              5,876,232           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                                    14,977,251          14,418,900
           Retained deficit                                             (13,870,472)        (11,738,947)
                                                                       ____________        ____________
           Total Stockholders' Equity                                     1,131,999           2,704,384
                                                                       ____________        ____________
           Total Liabilities and Stockholders' Equity                  $  7,008,231        $  7,336,985
                                                                       ============        ============


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

</TABLE>

                                      -6-


<PAGE>

<TABLE>
<CAPTION>


                                                     ACCESSPOINT CORPORATION
                                              CONSOLIDATED STATEMENTS OF OPERATIONS
                                                           (unaudited)

                                                         Three Months Ended                   Nine Months Ended
                                                   _______________________________     ________________________________
                                                   September 30,     September 30,     September 30,      September 30,
                                                       2002              2001              2002               2001
                                                   _____________     _____________     _____________      _____________
<S>                                                 <C>               <C>              <C>                <C>

Sales, net                                          $ 4,025,465       $ 1,690,498      $10,436,498        $ 3,595,409

Cost of sales                                         3,377,684           950,185        8,431,244          1,716,086
                                                    ___________       ___________      ___________        ___________
       Gross profit                                     647,781           740,313        2,005,254          1,879,323

Selling expenses                                         14,563            85,573            9,518            303,785

General and administrative expenses                     985,074         1,110,209        2,919,083          3,919,258
                                                    ___________       ___________      ___________        ___________
       Income (loss) from operations                  (351,856)          (455,469)        (923,347)        (2,343,720)
                                                    ___________       ___________      ___________        ___________
Other (Income) Expense
       Interest income                                        0            (3,978)         (13,254)            (6,825)
       Gain on sale of asset                                  0                 0         (100,000)                 0
       Impairment loss                                   45,333                 0           45,333            108,375
       Bad debt expense                                 215,876            82,157          528,041            119,568
       Miscellaneous                                     (4,955)           (9,216)          (2,343)            (9,325)
       Litigation expenses                             (195,069)                0         (133,515)                 0
       Amortization of deferred financing costs         316,319                 0          948,957                  0
       Debt forgiveness                                       0            (7,598)               0             (7,598)
       Interest expense                                  43,579            22,523          154,036            132,411
                                                    ___________       ___________      ___________        ___________
       Total Other (Income) Expense                     421,083            83,888        1,427,255            336,606
                                                    ___________       ___________      ___________        ___________
       Income (loss)  before income taxes
            and extraordinary items                    (772,939)         (539,357)      (2,350,602)        (2,680,326)

       Extraordinary items
            Gain on forgiveness of deferred
            compensation                                      0                 0         (221,477)                 0
                                                    ___________       ___________      ___________        ___________
       Income (loss) before income taxes               (772,939)         (539,357)      (2,129,125)        (2,680,326)
                                                    ___________       ___________      ___________        ___________
Provision for income taxes                                    0             2,400            2,400              2,400
                                                    ___________       ___________      ___________        ___________
       Net income (loss)                              ($772,939)        ($541,757)     ($2,131,525)       ($2,682,726)
                                                    ===========       ===========      ===========        ===========

       Net loss per share (basic and diluted)
            Basic                                        ($0.03)           ($0.03)          ($0.09)            ($0.15)
            Diluted                                      ($0.03)           ($0.02)          ($0.07)            ($0.11)

       Weighted average number of shares
            Basic                                    24,163,965        18,992,955       23,690,815         18,401,042
            Diluted                                  30,747,706        26,377,178       30,274,556         25,516,100


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

</TABLE>

                                      -7-


<PAGE>

<TABLE>
<CAPTION>


                             ACCESSPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                                                        Nine Months Ended
                                                                 _______________________________
                                                                 September 30,     September 30,
                                                                     2002              2001
                                                                 _____________     _____________
<S>                                                               <C>               <C>

CASH FLOWS FROM OPERATING ACTIVITIES
           Net Income (loss)                                      ($2,131,525)      ($2,682,726)

Adjustments to reconcile net loss to net cash
used in operating activities:
           Amortization                                               948,957                 0
           Depreciation                                               169,675           247,211
           Impairment loss                                             45,333                 0
           Services paid by stock issuance                                  0           393,703
           Decrease (Increase) in receivables                        (188,510)          (31,848)
           Decrease (Increase) in inventory                             6,366           (18,229)
           Decrease (Increase) in other receivables                  (359,578)           10,185
           Decrease (Increase) in prepaid expenses                     (6,013)            3,504
           Decrease (Increase) in deposits                                461            47,120
           (Decrease) Increase in accounts payable
                and accrued expenses                                  662,465            81,058
           (Decrease) Increase in bank overdraft                      140,237                 0
           (Decrease) Increase in accrued payroll taxes               (54,991)           58,592
           (Decrease) Increase in loss contingencies                 (180,200)                0
           (Decrease) Increase in customer deposits                   (80,000)          113,428
           (Decrease) Increase in deferred compensation              (221,477)           (2,500)
                                                                  ___________       ___________
           Total Adjustments                                          882,725           902,224
                                                                  ___________       ___________
           Net cash used in operations                             (1,248,800)       (1,780,502)
                                                                  ___________       ___________
CASH FLOWS FROM INVESTING ACTIVITIES
           Purchase of portfolio                                     (200,000)                0
           Purchase of fixed assets                                  (166,167)          (56,653)
                                                                  ___________       ___________
           Net cash used in investing activities                     (366,167)          (56,653)
                                                                  ___________       ___________
CASH FLOWS FROM FINANCING ACTIVITIES
           Issuance of notes payable                                        0            74,000
           Payments on notes payable                                        0                 0
           Payments on capital leases                                 (32,281)         (140,976)
           Line of credit                                           1,419,595                 0
           Sale of stock                                              149,424         1,954,547
                                                                  ___________       ___________
           Net cash provided by financing activities                1,536,738         1,887,571
                                                                  ___________       ___________
           Net change in cash and cash equivalents                    (78,229)           50,416
                                                                  ___________       ___________
           Cash and cash equivalents at beginning of year              78,229            31,954
                                                                  ___________       ___________
           Cash and cash equivalents at end of period             $         0       $    82,370
                                                                  ===========       ===========
           Supplemental cash flows disclosures:
                Income tax payments                               $     2,400       $     2,400
                                                                  ___________       ___________
                Interest payments                                 $     3,194       $    73,806
                                                                  ___________       ___________
                Non cash investing and financing activities:

                     Debt assumed by major shareholder            $   409,716       $         0
                     Stock issued for services                    $         0       $   393,703


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

</TABLE>



                                      -8-


<PAGE>

<TABLE>
<CAPTION>


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


                                                                 September 30,      December 31,
                                                                     2002               2001
                                                                 _____________      ____________
<S>                                                              <C>                <C>

Retained (deficits)
           Balance at beginning of period                        ($11,738,947)      ($7,832,485)
           Net income (loss)                                       (2,131,525)       (3,906,462)
                                                                  ___________       ___________
           Balance at end of period                               (13,870,472)      (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                                   148,635         2,702,508
           Transfer of notes payable                                  409,716                 0
           Transfer of common stock                                         0         6,326,381
                                                                  ___________       ___________
           Balance at end of period                                14,977,251        14,418,900
                                                                  ___________       ___________
Total stockholders' equity at end of period                       $ 1,131,999       $ 2,704,384
                                                                  ===========       ===========


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

</TABLE>

                                      -9-


<PAGE>


                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 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.


                                      -10-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 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 nine  months  ended  Se[timber  30,  2002  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,
         licensing 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.


                                      -11-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 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.

         INTANGIBLE ASSETS
         The Company  evaluates  intangible  assets for  impairment on an annual
         basis.  If  the  estimated  fair  value  based  on  generally  accepted
         valuation  methods is less then the carrying  value, an impairment loss
         would be recorded to reduce the asset to its estimated fair value.


                                      -12-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 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  September  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.


                                      -13-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 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  September  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 shares issued
         and outstanding.

         At September  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 September 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 September  30, 2002 and
         2001 are as follows:

                                                 September 30,     September 30,
                                                       2002            2001
                                                 _____________     _____________

         Net earnings (loss) from operations     $(2,131,525)      $(2,682,726)
                                                 ___________       ___________

         Basic weighted average shares            23,690,800        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         1,666,100
         Dilutive potential common shares         30,274,500        25,516,100

         Net earnings(loss) per share from
           continuing operations:
            Basic                                     ($0.09)           ($0.15)
            Diluted                                   ($0.07)           ($0.11)


                                      -14-


<PAGE>


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


NOTE E - LINE OF CREDIT

         As of  September  30,  2002,  the  Company  had net  borrowings  due of
         $1,419,595 against a $5,000,000  line-of-credit that was established in
         December 2001 with Net  Integrated  Systems Ltd.  (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, see Note N.


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 September 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
         defaulted  on this  agreement  after  making  some  payments  leaving a
         balance due of $37,500. The Company appropriately recorded all original
         amounts  demanded  under a  Stipulation  for the Entry of  Judgment  of
         $92,000, less payments that were made, due to the default.

         In August 2002, the Company entered into a second settlement  agreement
         regarding  the  unpaid  original  balance  from  the  first  settlement
         agreement.  The terms  stipulate  that the unpaid  balance is  $37,500,
         which is to be paid in monthly  installments  commencing  in  September
         2002.  The  Company has  adjusted  its books to  correctly  reflect the
         amount due under this agreement.

         CAPITAL LEASES - As of December 31, 2001, 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.  The Company  renegotiated
         and  paid-off  two  capital  leases  in  June  2002.  The  Company  has
         appropriately recorded all amounts due for the remaining capital leases
         as a current liability on its balance sheet as of September 30, 2002.

         ROYCAP - As of September  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 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.  In June 2002 Roycap filed formal
         suit on its claim in Orange County Superior Court.


                                      -15-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 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's  assumption  of
         approximately  $409,000 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.

         According to the above terms of the  settlement  agreement  the Company
         has removed the $409,000 liability from its books and, accordingly, has
         recorded an increase in  additional-paid-in-capital  of  $409,000.  See
         related party transactions Note M.

         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 filed a claim with the Company for
         payment of credit card debt he incurred on behalf of the Company and to
         pay  expenses  and various  loans he states  were made to the  Company.
         These items  amount to  approximately  $65,000 and are  recorded in the
         financial statements as a current liability.

         In October  2002,  Mr.  Mulder filed a complaint  in the Orange  County
         Superior  Court  alleging  breach of  written  and oral  contracts  and
         claiming damages of $430,250 plus attorney fees.  Management intends to
         vigorously  defend  itself  against  this claim and  believes  that the
         $65,000 previously accrued is adequate. See subsequent events Note L.

         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.  In July 2002
         the Company settled with the shareholder and agreed to issue 40,000 new
         shares of restricted  stock and 60,000 warrants to purchase  additional
         stock at $1 per share,  exercisable  in three  years,  to settle  their
         demand.  As of November 4, 2002 these shares and warrants have not been
         issued by the Company.


                                      -16-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 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.


                                      -17-


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           SEPTEMBER 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. As of September
         30, 2002, the Company has accrued liability of approximately $1,028,700
         to the IRS.

         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.  As of September 30, 2002, the Company has accrued  liability of
         approximately $51,200 to the EDD.


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.

         In July 2002, the terms of the purchase agreement were amended changing
         the purchase price to $200,000 to more accurately  reflect the residual
         compensation  revenue  stream  purchased.  The Company has recorded the
         purchase as an intangible asset on its books and in accordance with FAS
         142 "Goodwill and Other  Intangible  Assets" has  subsequently  written
         down  the  purchase  price  to its  current  estimated  fair  value  of
         $154,700.


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 received the remaining $26,250 in August 2002.


NOTE K - COMMITMENTS

         In August 2002, the Company  entered into an operating  lease agreement
         for  office  facilities.  The lease  commences  on  October 1, 2002 and
         terminates  on March 30,  2011.  The basic  terms of the lease  require
         payments of $12,289 per month for the first year. Every year thereafter
         the rent  increases by  approximately  $550 per month.  See  Subsequent
         Events Note L and Related Party Transactions Note N.


                                      -18-


<PAGE>


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


NOTE L - SUBSEQUENT EVENTS

         In  October  2002,  a former  employee  filed a claim in Orange  County
         Superior Court for alleged  damages of $430,250.  Please see Litigation
         and Contingencies Note F.

         In October 2002, the Company entered into a Support Services  Agreement
         with Merchants  Billing  Services,  Inc. (MBS) (a related  party).  The
         terms of the  agreement  contracts  MBS as the  exclusive  provider  of
         underwriting,  customer, technical and administrative support services.
         MBS agrees to provide all above services at its cost and is granted the
         right to use the  Company's  fixed  assets,  at no charge,  as they are
         needed.  The term of the  agreement  is for  five  years,  with  annual
         renewal clauses.

         In November  2002,  the Company  assigned its rights under an operating
         lease  (See  Commitments  Note K) for  office  facilities  to  Merchant
         Billing Services, Inc. See Related Party Transactions, Note N.

NOTE M - 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 Ltd.  (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 nine months ended  September 30,
         2002 the Company recorded amortization expense of $948,957.

NOTE N - RELATED PARTY TRANSACTIONS

         As of September,  30, 2002, the following  related party  relationships
         existed between the Company, its shareholders, officers and directors:

         Ameropa Ltd.  serves as the agent for payment of funds against the line
         of credit which has been established  with Net Integrated  Systems Ltd.
         (NIS). Additionally,  Ameropa provides cash management, liquidity and a
         source  of  financing  for the  Company.  On a daily  basis,  all  cash
         balances in bank  accounts held by the Company,  and its  subsidiaries,
         are  transferred  to  Ameropa.  Ameropa  transfers  funds  back  to the
         operating  accounts of the Company as items are  presented  for payment
         against its  accounts.  Due the  inability  of the Company to access or
         establish  credit with  vendors,  leasing  organizations  or  potential
         customers,  Ameropa and its related  entities,  pay standard  operating
         expenses on behalf of the Company and then  invoice the Company for the
         goods or services  paid on its  behalf.  There were a total of 166 cash
         management and operating expense transactions between the two companies
         for the nine months ended September 30, 2002. As of September 30, 2002,
         Ameropa has provided a total of  $1,419,595.  The  financing  calls for
         minimum  monthly  payments of interest only, at the rate of six percent
         (6%) per annum.  As of September  30,  2002,  unpaid  accrued  interest
         totaled  $26,544.   Ameropa  Ltd.  is  a  Bahamian  registered  foreign
         corporation.  Ameropa Ltd.'s  majority owner is Mr. William  Barber,  a
         major stockholder in Net Integrated  Systems Ltd. and Merchants Billing
         Services,   Inc.  (see  below)  and  the  current  CEO  of  Accesspoint
         Corporation.


                                      -19-


<PAGE>


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



NOTE N - RELATED PARTY TRANSACTIONS (CONTINUED)

         Merchants Billing Services, Inc. ("MBS"), a Nevada "C" corporation, has
         provided the Company  with a source of  liquidity  by paying  operating
         expenses on the Company's behalf.  MBS is majority owned by Mr. William
         Barber, a major stockholder of NIS and Ameropa Ltd. and the current CEO
         of  Accesspoint  Corporation.  As of September 30, 2002,  approximately
         $86,900  is owed to MBS for rent  payments  advanced  on  behalf of the
         Company and a $73,375  standby  letter of credit  issued by MBS for the
         benefit of the lessor on behalf of the Company.

         On June 26, 2002, a Settlement Agreement and Mutual Release was reached
         between  Mr.  Djokovich,   former  President  and  CEO  of  Accesspoint
         Corporation, James M. Bentley, former member of the Board of Directors,
         the Bentley  Family  Trusts et al and the  Company,  its  officers  and
         employees.  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 et
         al and  Mr.  Djokovich,  requires  Mr.  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's
         assumption of approximately  $409,000 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. Mr.  Djokovich's  shares are
         to be held in escrow as collateral until the above short-term loans are
         repaid.


NOTE O - GOING CONCERN

         The Company has suffered recurring losses, cash deficiencies,  loan and
         capital  lease  defaults,  and  current  liabilities  far in  excess of
         current assets.  Additionally,  the Company has payroll tax liabilities
         from  prior  years  in  excess  of   $1,000,000.   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 and significant changes in
         the  development of the  infrastructure  which supports its transaction
         processing software and business automation  services.  The Company has
         restructured its risk management procedures, retained a Visa/MasterCard
         consultancy  group to ensure  regulation  compliance,  streamlined  its
         merchant  approval  process to increase  the  success  rate of boarding
         approved  merchants,  reassessed merchant pricing and terms to increase
         profitability  and decrease  risk,  and sharpened its focus on merchant
         customer  service.  These changes have stabilized the Company's monthly
         recurring residual income stream by 48% and increased gross credit card
         processing revenue by 50%.

         In the first two quarters of 2002,  the Company  significantly  reduced
         its  overhead  by  closing  two  office  facilities  and  consolidating
         administrative  and  sales  efforts.  In  addition,   the  Company  has
         negotiated its lease  commitments to reduce its monthly space rental by
         $11,000.  To address its ongoing tax issue, the Company has retained an
         experienced   and  respected  tax  attorney  to  present  an  offer  in
         compromise  with the IRS  regarding  its payroll tax  liabilities.  The
         attorney  has advised the Company  that  significant  progress has been
         achieved regarding the IRS debt.

         As noted  previously,  in December  2001,  the Company  entered  into a
         Management Agreement and related Revolving Line of Credit Agreement for
         up to $5,000,000. The Company has used approximately $1,500,000 of this
         credit facility as of September 30, 2002.


                                      -20-


<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.

     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.

     B.  RESULTS OF OPERATIONS

     Three and Nine Months Ended September 30, 2002 Compared With Three and Nine
Months Ended September 30, 2001

     Revenues for the three and nine months ended  September 30, 2002  increased
to $4,025,465 and  $10,436,498  from $1,690,498 and $3,595,409 for the three and
nine  months  ended   September  30,  2001.  The  increases  of  $2,334,967  and
$6,841,089,  or 138% and 190%, 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 nine  months  ended  September  30,  2002
increased to $3,377,684  and  $8,431,244  from $950,185 and  $1,716,086  for the
three and nine months ended  September 30, 2001. The increases of $2,427,499 and
$6,715,158, or255% and 391%, 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  nine  months  ended
September 30, 2002 decreased to $14,563 and $9,518 from $85,573 and $303,785 for
the three and nine months ended  September 30, 2001.  These decreases of $71,010
and  $294,267,  or 83%  and  96%,  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 nine months  ended
September 30, 2002  decreased to $985,074 and  $2,919,083  from  $1,110,209  and
$3,919,258 for the three and nine months ended  September 30, 2001. The decrease
of $125,135 and $1,000,175 or 11% and 31% 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 nine months ended  September 30,
2002 was $43,579 and $154,036, as compared to $22,523 and $132,411 for the three
and nine months ended  September 30, 2001. The increases of $21,056 and $21,625,
or 93% and 16%, respectively,  resulted primarily from the Company's static cost
of debt.

     Other (Income) Expense, net of Interest expense was $377,504 and $1,273,219
for the three and nine months ended  September  30, 2002, as compared to $61,365
and  $234,195  for the three and nine months ended  September  30,  2001.  These


                                      -21-


<PAGE>


increases of $316,139 and $1,039,024,  or 515% and 444%, respectively,  resulted
primarily from the increases of amortization of deferred financing costs and bad
debt expense for the three and nine months ended September 30, 2002, as compared
to the three and nine months ended September 30, 2001.

     Net losses for the three and nine  months  ended  September  30,  2002 were
$(772,939) and $(2,131,525),  as compared to $(541,757) and $(2,682,726) for the
three and nine months  ended  September  30,  2001.  The  difference  in loss of
$231,182 and $(551,201), or 43% and (21%), respectively,  were primarily related
to increased revenues and a reduction of development-related activities.

     C.  LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents at September 30, 2002 were  $(140,237),  compared
to $78,229 at September 30, 2001, a decrease of $(218,466),  which represented a
decline of 279%.

     Net Cash used in operations  decreased from  $1,780,502 for the nine months
ended  September 30, 2001 to $1,248,800 for the nine months ended  September 30,
2002 or a resulted  efficiency in cash of $531,702 or 43%. This  efficiency  was
primarily accomplished by increased effectiveness in operations.

     Net  Cash  used  in  investing  activities  increased  from  $56,653  as of
September  30, 2001 to $366,167  as of  September  30,  2002.  This  increase of
$309,514,  or 546%, was primarily due to the purchase of a portfolio of residual
compensation,  which purchase was subsequently  rescinded (see Note I, Portfolio
Purchase,  attached  as a  part  of the  financial  statements  prepared  by our
auditors filed herewith and incorporated hereby).

     During the nine months ended September 30, 2002, the Company  generated net
cash of $1,536,738  from financing  activities as compared to $1,887,571 for the
nine months ended September 30, 2001. The decrease of $350,833, or 19%, resulted
from a decrease in private placement fundraising activities.

     We had, at September 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 September 30, 2002 and  $7,010,000,  as of
September 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.


                                      -22-


<PAGE>


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 September 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 defaulted on this agreement after making some payments
leaving a  balance  due of  $37,500.  The  Company  appropriately  recorded  all
original  amounts  demanded  under a  Stipulation  for the Entry of  Judgment of
$92,000, less payments that were made, due to the default.

     In August  2002,  the Company  entered into a second  settlement  agreement
regarding the unpaid original balance from the first settlement  agreement.  The
terms  stipulate  that the  unpaid  balance is  $37,500,  which is to be paid in
monthly installments  commencing in September 2002. The Company has adjusted its
books to correctly reflect the amount due under this agreement.

ROYCAP - As of  September  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 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.  In June
2002 Roycap filed formal suit on its claim in Orange County Superior Court.

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's
assumption  of  approximately  $409,000  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.

     According to the above terms of the  settlement  agreement  the Company has
removed the $409,000 liability from its books and, accordingly,  has recorded an
increase  in   additional-paid-in-capital   of  $409,000.   See  related   party
transactions Note M.

MULDER - In 2002, a former  employee  filed a claim with the Company for payment
of credit card debt he incurred on behalf of the Company and to pay expenses and
various  loans he  states  were  made to the  Company.  These  items  amount  to
approximately  $65,000 and are recorded in the financial statements as a current
liability.

     In October 2002, Mr. Mulder filed a complaint in the Orange County Superior
Court  alleging  breach of written and oral  contracts  and claiming  damages of
$430,250  plus attorney  fees.  Management  intends to vigorously  defend itself
against this claim and believes that the $65,000 previously accrued is adequate.
See subsequent events Note L.

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.


                                      -23-


<PAGE>


VERVE - In 2002, a  shareholder  of the Company  submitted a letter of demand to
recover their original  investment of $40,000.  In July 2002 the Company settled
with the shareholder  and agreed to issue 40,000 new shares of restricted  stock
and 60,000 warrants to purchase additional stock at $1 per share, exercisable in
three  years,  to settle their  demand.  As of November 4, 2002 these shares and
warrants have not been issued by the Company.

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

     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,
2002.


ITEM 5.           OTHER INFORMATION

     Mr. Eric J.  Odegard was  terminated  as  President  of  Processing  Source
International,  Inc.  effective  October 31, 2002 due to the  elimination of his
position,  and he has since been removed from the Accesspoint  Corporation Board
of  Directors.  Mr.  William R. Barber was elected  Chief  Executive  Officer of
Accesspoint  Corporation  by  unanimous  decision of the Board of  Directors  on
November 4, 2002. In addition, Mr. Barber has been appointed to fill the vacancy
on the Board of  Directors.  Mr. Barber is the majority  shareholder  of Ameropa
Ltd. and Merchants Billing  Services,  Inc. and holds a major equity position in
Net Integrated Systems Ltd.

     In October  2002,  Processing  Source  International,  Inc.  entered into a
Support Services Agreement with Merchants Billing Services, Inc. whereby MBS was
contracted to be the exclusive provider of underwriting, customer, technical and
administrative  support  services  for PSI.  MBS has  agreed  to  provide  these
services at its cost and is granted the right to use the Company's fixed assets,
at no charge,  as they are needed.  The term of the agreement is for five years,
with annual renewal clauses.


                                      -24-


<PAGE>


     In November 2002, the Company  assigned its rights under an operating lease
for office facilities in Los Angeles,  California to Merchants Billing Services,
Inc. As of the date of this filing,  Accesspoint has  consolidated its corporate
and operational offices and moved them to Carson City, Nevada.


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

        99.1      Certification-CEO

        99.2      Certification-CFO


     *   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.


                                      -25-


<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, thereunto duly authorized, in the City of Los Angeles, State
of California, on the 18th day of November, 2002.


Dated:  November 18, 2002                     ACCESSPOINT CORPORATION


                                              By:  /s/ WILLIAM R. BARBER
                                              __________________________
                                              William R. Barber,
                                              Chief Executive Officer and
                                              Chief Financial Officer


     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/ WILLIAM R. BARBER           CEO, CFO & Director          November 18, 2002
______________________
William R. Barber



/s/ CHRISTINE CROCKER           Secretary                    November 18, 2002
______________________
Christine Crocker


                                      -26-


<PAGE>




                             ACCESSPOINT CORPORATION


I, WILLIAM R. BARBER, certify that:
   _________________

1. I have reviewed this quarterly report on Form 10-QSB of Accesspoint
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a.) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b.) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "EVALUATION DATE"); and
                                     _______________

         c.) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

         a.) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b.) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


DATED:  NOVEMBER 18, 2002                      ACCESSPOINT CORPORATION
_________________________             __________________________________________
                                                  (Registrant)



                                      /s/ WILLIAM R. BARBER
                                      __________________________________________
                                      William R. Barber
                                      Chief Executive Officer


                                      -27-


<PAGE>


                             ACCESSPOINT CORPORATION


I, WILLIAM R. BARBER, certify that:
   _________________

1. I have reviewed this quarterly report on Form 10-QSB of Accesspoint
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a.) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b.) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "EVALUATION DATE"); and
                                     _______________

         c.) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

         a.) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b.) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


DATED:  NOVEMBER 18, 2002                      ACCESSPOINT CORPORATION
_________________________             __________________________________________
                                                  (Registrant)



                                      /s/ WILLIAM R. BARBER
                                      __________________________________________
                                      William R. Barber
                                      Chief Financial Officer


                                      -28-