<PAGE>



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               PIPELINE DATA INC.
                                   Form 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
    For the fiscal year ended December 31, 2000

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

     For the transition period from ---------------- to -------------------

           Delaware                                 13-3953764
           --------                                 ----------
     (State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization)             Identification No.)

             250 East Hartsdale Avenue, Suite 21, Hartsdale NY 10530
         ---------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (914) 725-7028
Securities registered under Section 12(g) of the Exchange Act: NA

Check whether the issuer

     (1) filed all  reports  required  to be filed by Section 13 or 15(d) of the
Exchange  Act  during the past 12 months (or for such  shorter  period  that the
registrant was required to file such reports), and

     (2) has been subject to such filing requirements for the past 90 days.

     [X] Yes [ ] No

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X ]

     State issuer's revenues for its most recent fiscal year. -0-

     State the aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60 days.  (See  definition of affiliate in Rule
12b-2 of the Exchange Act.) As of March 28, 2001, there were 3,116,890 shares of
the registrant's  common stock,  par value $0.001 issued and outstanding.  As of
March 28,  2001,  the  market  value of  securities  held by  non-affiliates  is
$1,599,423  based on the  average of the high and low bid prices as  reported by
Yahoo.com. for the 60 day period ending March 28, 2001. These quotations reflect
inter-dealer prices, without retail mark-up,  mark-down or commissions,  and may
not reflect actual transactions. (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable  date.  3,116,890 shares of common
stock, par value $0.001, as of March 28, 2001.

                       DOCUMENTS INCORPORATED BY REFERENCE

     If the following documents are incorporated by reference,  briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act"). The listed
documents should be clearly described for identification  purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990). N/A.

     Transitional Small Business  Disclosure Format (Check one): Yes [ ]; No [X]
<PAGE>

                                TABLE OF CONTENTS

Item Number and Caption

PART I

ITEM 1. Business.............................................................. 2

ITEM 2. Properties............................................................ 6

ITEM 3. Legal Proceedings..................................................... 6

ITEM 4. Submission of Matters to a Vote of Security Holders................... 6

PART II

ITEM 5. Market for Common Equity and Related Stockholder Matters.............. 6

ITEM 6. Management's Discussion and Analysis of Financial Condition and
        Results of Operations................................................. 8

ITEM 7. Financial Statements................................................. 11

ITEM 8. Changes in and Disagreements with Accountants on
        Accounting and Financial Matters..................................... 11

PART III

ITEM 9. Directors and , Executive Officers................................... 12

ITEM 10. Executive Compensation.............................................. 12

ITEM 11. Security Ownership of Certain Beneficial Owners
         and Management...................................................... 15

ITEM 12. Certain Relationships and Related Transactions...................... 15

ITEM 13. Exhibits and Reports on Form 8-K.................................... 16
<PAGE>


               ANNUAL REPORT ON FORM 10KSB FOR PIPELINE DATA INC.

               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     To the extent that the information  presented in this Annual Report on Form
10-KSB for the year ended  December 31, 2000  discusses  financial  projections,
information  or  expectations  about the products or markets of our company,  or
otherwise   makes   statements   about  future  events,   such   statements  are
forward-looking.  We are making these forward-looking  statements in reliance on
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995.   Although  we  believe   that  the   expectations   reflected   in  these
forward-looking  statements  are based on  reasonable  assumptions,  there are a
number of risks and  uncertainties  that could  cause  actual  results to differ
materially from such forward-looking  statements.  These risks and uncertainties
are  described,  among other  places in this  Annual  Report,  in  "Management's
Discussion and  Analysis".  Readers are cautioned not to place undue reliance on
these  forward-looking  statements,  which speak only as of the date hereof.  In
addition,  we disclaim any obligations to update any forward-looking  statements
to reflect events or  circumstances  after the date of this Annual Report.  When
considering  such  forward-looking  statements,  readers should keep in mind the
risks  referenced  above  and the other  cautionary  statements  in this  Annual
Report.

                                       1

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                                     PART I

     Item 1. Business.

     a. Business Development.

     We are a Delaware,  development stage, corporation that was incorporated in
June 1997. We are presently  developing our business model. During 1998, we made
progress in  researching  and  developing  an online system to easily access and
deliver requested information from members of the healthcare, pharmaceutical and
biotechnology  industries to subscribers to our site.  This research  focused on
refining  the  process in which we receive  the  relevant  information  from the
individual,   quickly  relate  this   information   to  the  healthcare   and/or
pharmaceutical  customer,  and then  relay  back to the  customer  the  relevant
medical and pharmaceutical information he or she requested.

     We    launched    the    initial    beta-version    of   our   website   at
http:/www.healthpipeline.com  in August  1999.  This beta  version  contains the
initial collection of an on-line library of current  healthcare,  pharmaceutical
and biotechnology  information.  Our beta site has limited  functionality and we
have received very limited revenue from it through sales of  advertisements.  We
plan to continue the development of our company through various phases.

     We have commenced our next phase of development. We anticipate that we will
remain  in  this  phase  of  development  through  the  year  2001.  This  phase
contemplates the refinement and  commencement of our marketing  strategy and the
further  research and  development of our site's  operating  infrastructure.  To
complete the development of our web-site, we require:

     o a web-enabled  platform by which we can implement an Internet application
that will be scalable (capable of growing to support additional users) enough to
handle hundreds or thousands of users,  yet flexible enough to meet  continually
changing business requirements and

     o highly  defined  customization  enabling a subscriber to specify  his/her
fields of interest within the entire spectrum of health, medicine, and pharmacy.
Through this  feature,  we will be able to create a database of user profiles (a
knowledge  base  of  subscribers)  which  we  can  market  to  medical  research
companies, companies involved in clinical trials, marketers and other sources of
revenue generation.

     o To refine and commence our marketing  strategy,  we require,  among other
things:

     o a market study on the largest  recruiters of clinical trial  participants
and their  recruitment  methods in the hopes of tapping this  potential  revenue
producing source upon the commercialization of our site;

     o the execution of a consumer public relations and advertising  campaign to
raise awareness of the site and subsequently  attract visitors to the site. This
campaign will include on-line and off-line activities.  As a first step, we have
retained Rainbow Media to act as our promotional  agent.  Among their activities
will be arranging for media  interviews and press  coverage,  distributing  news
releases, and any other activity that might raise the profile of our company and
our  services.  In  addition  Rainbow  Media was  engaged to commence an updated
market study. Rainbow Media reported  consolidations and weakness in the Medical
Internet sector.  They presented a negative view of the potential for success in
this market.  However,  they reported that the  provisions of data to the public
vis-a-vis  the  Internet  has  good  business  potential.  While  we can give no
assurances,  we are  continuing  to be  diligent in our efforts to seek the best
avenue to market our  company  and  services  and to grow our  business.  We are
aiming to develop a successful Internet site and are considering  broadening its
content to seek the greatest profit potential;

                                       2
<PAGE>

     o the execution of a business-to-business  public relations and advertising
campaign; and

     o the execution of an ongoing effort to build  relationships with strategic
organizations in the healthcare and information technology sectors.

     On November 1, 2000, we loaned  $200,000 to Accu-Search  Inc., a New Jersey
corporation. The loan is evidenced by Accu-Search,  Inc.'s promissory note which
accrues  interest  at the rate of 12%  annually.  The  principal  amount  of the
promissory  note  together  with accrued  interest is due and payable on May 31,
2001. In consideration of the issuance of the loan, Accu-Search, Inc. granted us
a  perpetual,  non-transferable  and  non-sublicensable  royalty free license to
utilize  an  automated  software  process  which will  enable us to improve  the
functionality of our website.  Specifically,  we anticipate that we will be able
to employ the licensed  software process in the internal workings of our website
to enable us to receive documents in any readable form from our contributors and
convert them into an Adobe  readable  format.  We believe that this will enhance
accessibility  to our website due to the extensive  employment by Internet users
of Adobe software in order to view documents  retrieved from Internet  websites.
While no assurance can be given,  we anticipate that we will maintain an ongoing
working relationship with Accu-Search, Inc.

     It is difficult to evaluate  our  business and  prospects.  Our revenue and
income  potential is unproven.  Our business  model as well as the nature of our
market is still emerging. While we plan to utilize the proceeds of this offering
to develop our technical and management  infrastructure,  an effective marketing
strategy  and  strategic   relationships,   we  may  never  achieve  or  sustain
profitability.

     Our principal offices are located at 250 East Hartsdale  Avenue,  Suite 21,
Hartsdale NY 10530. Our telephone number is 914-725-7028.


     b. Business of Issuer.

     1. Principal products or services and their markets;

     Pipeline  Data  intends to become an  on-line  direct  marketing  agent and
referral   site   designed  to  assist  the   healthcare,   pharmaceutical   and
biotechnology  and other information  providers  industries to target directly a
valuable  and growing  volume of  individual  consumers  who have  utilized  our
website to request specific  information in the medical and healthcare arena. We
are also interested in developing  business  concepts in all areas of health and
science.   We  actively  engage  in  discussions   with  business   persons  and
professionals in the fields of medicine, biology, chemistry,  technology and the
other sciences in the hopes of developing a successful, cutting edge business to
maximize the value of our company as well as our stockholders' investment in us.

     Our website, at http://www.healthpipeline.com,  is being designed to target
healthcare  consumers,  their  families,  friends  and  associates,  as  well as
healthcare  professionals.  We do not anticipate  significant revenue generation
until the  commercial  launch of our  website,  which we do not  expect to occur
earlier than the end of 2001.

                                       3
<PAGE>

     2. Distribution methods of the products or services;

     We intend for our method of  distribution  to be the Internet.  Through our
Internet website, we intend to deliver a branded, integrated, web-based solution
for the  healthcare  information  needs of  consumers.  We envision our website,
located  at  http://www.healthpipeline.com,  to be a single  point of  access to
electronic data interchange services,  enhanced communications services, branded
healthcare content and other relevant web-based  offerings.  We want our website
to provide  premium,  branded  content to assist  consumers  in making  informed
healthcare decisions,  personalized information about specific health conditions
targeted  according  to  the  medical  profiles  of  individual  consumers,  and
content-specific  on-line  communities  that allow  consumers to  participate in
real-time discussions and support networks via the web.

     We intend to be primarily a  "direct-to-consumer"  marketing channel with a
"virtual medical and health information  library" on the Internet and world wide
web, that will create a high quality content  destination that attracts visitors
who will find the  information  valuable.  We also intend to reach  non-Internet
users through newsletters, CD-ROMs, television and other vehicles.


     3. Status of any publicly announced new product or service.

     There have been no  publicly  announced  new  products  or  services by our
company.

     4.  Competitive   business  conditions  and  the  small  business  issuer's
competitive position in the industry and methods of competition;

          The  market  for   healthcare   information   services  is   intensely
competitive, rapidly evolving and subject to rapid technological change. Many of
our  competitors  have  greater  financial,   technical,   product  development,
marketing and other resources than we have.  These  organizations  may be better
known and have more customers than us. We may be unable to compete  successfully
against these organizations.

     Many of our competitors  have announced or introduced  Internet  strategies
that will compete  with our proposed  applications  and  services.  We have many
competitors, including:

     o healthcare  information  software  vendors,  including  McKesson HBOC and
Shared Medical Systems Corporation;

     o  healthcare  electronic  data  interchange  companies,   including  ENVOY
Corporation and National Data Corporation;

     o large information  technology  consulting  service  providers,  including
Andersen Consulting, International Business Machines Corporation and

     In addition,  we expect that major software  information  systems companies
and others  specializing  in the  healthcare  industry  will  offer  competitive
applications or services.  Some of our large customers may also compete with us.
We will also compete for subscribers,  consumers, content and service providers,
advertisers,  sponsors and acquisition  candidates with the following categories
of companies:

     o online  services or web sites  targeted to the  healthcare  industry  and
healthcare consumers generally,  including medscape.com,  pol.net, ivillage.com,
medcareonline.com,  mediconsult.com, betterhealth.com, drkoop.com, onhealth.com,
healthcentral.com, and thriveonline.com;

     o publishers and distributors of traditional offline media, including those
targeted to  healthcare  professionals,  many of which have  established  or may
establish web sites;

                                       4
<PAGE>

     o general purpose consumer online services and portals which provide access
to healthcare-related content and services;

     o  public  sector  and  non-profit   web  sites  that  provide   healthcare
information without advertising or commercial sponsorships;

     o vendors of  healthcare  information,  products and  services  distributed
through other means, including direct sales, mail and fax messaging; and

     o web search and retrieval services and other high-traffic web sites.

     Rainbow  Media was  engaged to commence an updated  market  study.  Rainbow
Media reported  consolidations and weakness in the Medical Internet sector. They
presented a negative view of the potential for success in this market.  However,
they reported that the  provisions of data to the public  vis-a-vis the Internet
has good business potential.  While we can give no assurances, we are continuing
to be  diligent in our efforts to seek the best avenue to market our company and
services and to grow our business.  However,  there can be no guarantee that our
company will ever generate substantial revenues or ever be profitable.

     5. Sources and  Availability  of Raw  Materials  and the Names of Principal
Suppliers.

     Our company does not utilize raw materials in our business.

     6. Dependence on one or a few major customers.

     We do not depend on one or a few major customers.  We will try hard toraise
awareness of our site and attract  visitors to the site.  We will also intend to
build relationships with strategic  organizations in the information  technology
sectors.

     7.  Patents,  trademarks,   licenses,  franchises,   concessions,   royalty
agreements or labor contracts, including duration;

     We have no patents, trademarks, franchises, concessions, royalty agreements
or  labor  contracts.  In  November,   2000,  the  Company  loaned  $200,000  to
Accu-Search, Inc. as evidenced by a Note Receivable which is due on May 31, 2001
with interest at 12% per annum. In consideration for the Note, Accu-Search, Inc.
granted Pipeline Data Inc. a perpetual license in an automated  software process
to convert multiple inputted documents into transmittable Adobe PDA formats.

     8. Need for any government  approval of principal products or services.  If
government  approval  is  necessary  and the small  business  issuer has not yet
received that approval, discuss the status of the approval within the government
approval process;

     We do not anticipate the need for any Government approval for our services.
In connection with the operation of our business, it may be noted that operating
costs are  affected by increases in the minimum  hourly wage,  unemployment  tax
rates,  sales  taxes and  similar  costs  over  which our  company  will have no
control.

     It may be further  noted that, as a public  company,  we are subject to the
reporting requirements, anti-fraud and other Federal and State Securities laws.

     9. Effect of existing or probable governmental regulations on the business;

     As previously stated,  increases in the minimum wage and taxes could result
in an increase of our costs and,  ultimately,  a decrease in our  revenues.  Any
such  increases  could  affect  the  profitability  of future  operations.  With
reference  to the  requirement  to comply with the Federal and State  Securities
laws, the failure to comply with any of these laws,  rules or regulations  could
have a material adverse effect on our company.


                                      5
<PAGE>

     10.  Estimate of the amount  spent during each of the last two fiscal years
on research and  development  activities,  and if applicable the extent to which
the cost of such activities are borne directly by customers;


     The company's  general and  administrative  costs aggregated  approximately
$106,420  for the year ended  December  31,  2000 as compared to $89,849 for the
year ended December 31, 1999 representing an increase of $16,571. An analysis of
expenses for the year ended  December 31, 2000 includes  spending for accounting
fees of $20,650;  consulting fees of $15,000; legal expense of $31,760;  accrued
rent of $6,000; accrued salaries of $9,000; and office expenses of $24,010.

     11. Costs and effects of compliance with environmental laws (federal, state
and local).

     Our company is not impacted directly by the costs and effects of compliance
with environmental laws.

     12.   Number of total employees and number of full time employees.

     As of the date of this  filing,  we had one  full-time  employee  and three
part-time  employees.  Our employees are not represented by any labor union, and
we  consider  our  relationship  with them to be good.  (c)  Reports to security
holders.

     As a  reporting  company,  we are  required  to file  annual and  quarterly
reports, proxy and information  statements,  and other information regarding our
company with the  Securities  and Exchange  Commission.  The public may read and
copy any  materials we file with the SEC at the SEC's Public  Reference  Room at
450  Fifth  Street,  N.W.,  Washington,   D.C.  20549.  The  public  may  obtain
information on the operation of the Public  Reference Room by calling the SEC at
1-800-SEC-0330.  The SEC maintains an Internet site that contains reports, proxy
and information  statements,  and other information  regarding issuers, like us,
that file electronically with the SEC at (http://www.sec.gov).

     Item 2. Properties.

          Our principal place of business is at 250 East Hartsdale Avenue, Suite
21,  Hartsdale,  New York, in space provided to us by Mr. Jack  Rubinstein,  our
President,  pursuant to a tenancy at will,  for which we pay $500 per month plus
associated expenses. We believe that we could readily secure office space in the
future should we need to, although we would be required to pay prevailing rental
rates.

     Item 3. Legal Proceedings.

     The  are no  material  legal  proceedings  pending  or,  to our  knowledge,
threatened against us.

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

     No matters  were  submitted  during the fourth  quarter of the fiscal  year
covered by this report to a vote of security  holders,  through the solicitation
of proxies or otherwise.

                                       6
<PAGE>


                                     PART II

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

     (a) Market information.

     Our  common  stock is quoted on the OTC  Bulletin  Board  under the  symbol
"PPDA." Our stock commenced  quotation on the OTC Bulleting Board on October 19,
2000 at $0.375.  The  following  table sets forth the high and low bid prices as
reported by Yahoo.com,  Inc. for the period ending  December 31, 2000 and prior.
These quotations reflect inter-dealer prices, without retail mark-up,  mark-down
or commissions, and may not reflect actual transactions. As of December 31, 2000
there were 85 shareholders of Common Stock.

                                               High            Low
                                               -----           ----
2000

Fourth Quarter                                 2.625            0.71

     (b) Holders.

     As of December 31, 2000 there were 85 holders of shares of common stock.

     (c) Dividends.

     Our company has never  declared or paid any cash  dividends  on its capital
stock. We currently intend to retain all available funds and any future earnings
of our business for use in the  operation of our business and do not  anticipate
paying any cash dividends in the foreseeable  future.  The declaration,  payment
and amount of future  dividends,  if any, will depend upon the future  earnings,
results of  operations,  financial  position  and  capital  requirements  of our
company, among other factors, and will be at the sole discretion of our board of
directors.

     Under the  Delaware  General  Corporation  Law,  our  company  may only pay
dividends  out of capital and  surplus,  or out of certain  enumerated  retained
earnings,  as those terms are defined in the Delaware  General  Corporation Law.
The  payment of  dividends  on our common  stock is,  therefore,  subject to the
availability  of capital  and  surplus or  retained  earnings as provided in the
Delaware General Corporation Law.

     (d) Recent sales of securities.

     Mr.  Scott  Barter  gifted  20,000  shares of his common  stock to a family
member with whom he does not reside and 20,000  shares of his common  stock to a
family member with whom he does reside.

                                       7
<PAGE>


     Item 6. Management's Discussion and Analysis or Plan of Operation.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS FOR THE YEAR ENDING
                            DECEMBER 31, 1999 AND 2000

     The following  discussion relates to the results of our operations to date,
and our financial condition:

     This  prospectus  contains  forward  looking  statements  relating  to  our
Company's  future economic  performance,  plans and objectives of management for
future operations, projections of revenue mix and other financial items that are
based  on the  beliefs  of,  as well  as  assumptions  made  by and  information
currently  known to, our  management.  The words  "expects,  intends,  believes,
anticipates,  may, could, should" and similar expressions and variations thereof
are intended to identify forward-looking  statements.  The cautionary statements
set forth in this  section are  intended to  emphasize  that actual  results may
differ materially from those contained in any forward looking statement.

Development stage activities.

     The company has been a development stage enterprise from its inception June
23, 1997 through  December 31, 2000. The company is in the process of developing
a web site on the World Wide Web for the purpose of selling health care products
and sharing its expertise by doing consulting.

     During  this  period,  management  devoted  the  majority of its efforts to
initiating  the process of the web site design and  development,  obtaining  new
customers  for  sale of  consulting  services,  developing  sources  of  supply,
developing and testing its marketing  strategy and finding a management  team to
begin the process of:  completing its marketing  goals;  furthering its research
and development for its products;  completing the  documentation for and selling
initial  shares  through the company's  private  placements;  and completing the
documentation for the company's  initial public offering.  These activities were
funded by the  company's  management  and  investments  from  stockholders.  The
company has not yet generated  sufficient  revenues during its limited operating
history to fund its ongoing operating expenses, repay outstanding  indebtedness,
or fund  its web  site  and  product  development  activities.  There  can be no
assurance that development of the web site will be completed and fully tested in
a timely manner and within the budget  constraints  of  management  and that the
company's  marketing  research  will  provide a  profitable  path to utilize the
company's  marketing  plans.  It should  be noted  that  Rainbow  Media has been
engaged to commence more than one market  study.  In a recently  updated  market
study,  Rainbow  Media  reported  consolidations  and  weakness  in the  Medical
Internet sector.  They presented a negative view of the potential for success in
this market.  However,  they reported that the  provisions of data to the public
vis-a-vis the Internet has good business  potential.  No assurances can be given
that the company will be successful in their efforts.

     During this  developmental  period,  the company has been financed  through
officer's  loans  with a balance  of $43,672  from Jack  Rubinstein,  which were
converted to  additional  paid in capital as of June 30, 1999.  The company also
financed its activities  through an initial public  offering of its common stock
and common stock  purchase  warrants and sold 789,890 shares of common stock and
785,210 class A redeemable warrants for aggregate proceeds for $473,466.


     Results of Operations  for the year ended  December 31, 2000 as compared to
the year ended December 31, 1999.

                                       8

<PAGE>


     For the year ended December 31, 1999, the company generated net revenues of
$-0- as compared to $30,000 for the year ended December 31, 1999 representing an
decrease  of  $30,000.  The  company's  cost of goods  sold  for the year  ended
December  31, 2000 was $-0- as compared to $-0- for the year ended  December 31,
1999. The company's  gross profit on sales was  approximately  $-0- for the year
ended  December 31, 2000 as compared to $30,000 for the year ended  December 31,
1999.  The decrease in gross  profit is the result of the Company  concentrating
its efforts on corporate  development,  research,  website  design and strategic
alliances  for  merchendise  and  computer  programming  talent to complete  the
Company's website and marketing goals.

     The company's  general and  administrative  costs aggregated  approximately
$106,420  for the year ended  December  31,  2000 as compared to $89,849 for the
year ended December 31, 1999 representing an increase of $16,571. An analysis of
expenses for the year ended  December 31, 2000 includes  spending for accounting
fees of $20,650;  consulting fees of $15,000; legal expense of $31,760;  accrued
rent of $6,000; accrued salaries of $9,000; and office expenses of $24,010.

     Results of  Operations  for the period from  inception  (June 23,  1997) to
December 31, 2000.

     For the  period  from  the  company's  inception,  June 23,  1997,  through
December 31, 2000, a period of  approximately 42 months,  the company  generated
net sales of $52,500  (an average of $1,250 per month).  The  company's  cost of
goods sold on sales was  approximately  $-0- for the period  from the  company's
inception June 23, 1997,  through December 31, 2000. The gross profit from sales
for this 42 month period is $52,500.  Management believes the gross profit of an
average of  approximately  $1,250 per month for the period from inception,  June
23,  1997,  through  December  31, 2000,  will  improve and  stabilize  once the
company's web site  facilities  become  realized at the completion of the public
offering and its marketing plans become fully implemented.

     The company's  general and  administrative  costs aggregated  approximately
$695,301  for the period from  inception,  June 23, 1997,  through  December 31,
2000. Of these initial  startup  costs,  approximately  $41,500 is attributed to
wages, telephone of $15,175, professional fees of $125,697, rent of $26,625, and
office and computer  expenses of $65,804,  $395,000 in consulting  expenses paid
with shares of common stock and $25,500 in officer compensation.

     Results of  Operations  for the three  months  ended  December  31, 1999 as
compared to the three months ended December 31, 2000.

     For the three months ended  December 31, 2000,  the company  generated  net
sales of $-0- as compared to $-0- for the three months ended  December 31, 1999.
The  company's  cost of goods sold on sales for the three months ended  December
31, 2000, was approximately  $-0- as compared to $-0- for the three months ended
December 31, 1999.  The company  believes  sales will improve and stabilize once
the company's website facilities become realized as the completion of the public
offering and its marketing plans become more fully realized.

     The company's  general and  administrative  costs aggregated  approximately
$47,785 for the three months ended December 31, 2000, as compared to $20,330 for
the three months ended December 31, 1999, representing a increase of $27,455. An
analysis of expenses  for the three  months  ended  December  31, 2000  includes
spending for  professional  fees of $20,325,  rent of $1,500,  office expense of
$14,173 and officer compensation of $2,250.

                                       9

<PAGE>

Liquidity and Capital Resources.

     The company  increased  its cash  position to $301,013 at December 31, 2000
from a cash  balance of $-0- at June 23, 1997.  Working  capital at December 31,
2000 was  positive  at  $470,929.  The  company  continued  to be funded in part
through officer loans  aggregating  $72,622 for the period from inception,  June
23, 1997, to December 31, 2000, of which, an officer loan balance of $43,672 was
converted  to  additional  paid in capital at June 30,  1999 and the  balance of
$28,950  was paid  off by the  company.  In  addition,  the  company  also  sold
1,247,500  shares of common  stock for an  aggregate  of $311,875  and  received
$105,172 as additional capital  contributions from stockholders.  As of December
31, 2000,  the Company sold an additional  789,890 shares of common stock for an
aggregate consideration of $473,715.

     As of December  31,  2000,  we  expended  cash for the  development  of the
business  and  absorbed  cash  losses  aggregating  $97,654  for the year  ended
December  31, 2000 and  $637,457  for the period from  inception to December 31,
2000 and issued  752,500  shares of common stock in  consideration  for non cash
expenses of $395,000 for the period from  inception,  June 23, 1997, to December
31, 2000. In November, 2000, the Company loaned $200,000 to Accu-Search, Inc. as
evidenced by a Note Receivable which is due on May 31, 2001 with interest at 12%
per  annum.  This  loan  served  as an  inducement  to  enter  into a  perpetual
royalty-free  license  agreement with Accu-Search a perpetual,  non-transferable
and  non-sublicensable  royalty free  license to utilize an  automated  software
process  which  will  enable us to improve  the  functionality  of our  website.
Specifically, we anticipate that we will be able to employ the licensed software
process  in the  internal  workings  of our  website  to  enable  us to  receive
documents in any readable  form from our  contributors  and convert them into an
Adobe readable  format.  We believe that this will enhance  accessibility to our
website due to the extensive  employment by Internet  users of Adobe software in
order to view documents retrieved from Internet websites. While no assurance can
be given, we anticipate  that we will maintain an ongoing  working  relationship
with Accu-Search, Inc.

     Management  believes  that it will be able to fund the company  through its
present cash position and the continuation of offering  consulting  services and
the receipt of additional capital  contributions until the company's web site is
developed and on-line and the process of a public offering is completed.

Capital Commitments and Future Expenditures

     Our  web  site  located  at   http://www.healthpipeline.com   is  currently
operational  and may be "clicked on" for  inspection.  We believe that expansion
and modification of the web site and business will occur in several stages.

     The first stage consists of initial web site construction and collection of
health-related  data from existing web sites and service providers and equipping
our facility with  hardware,  primarily  workstations  and  dedicated  data feed
supply lines. This has been partially completed.  To complete the development of
our web-site, we require:

     o a web-enabled  platform by which we can implement an Internet application
that will be scalable (capable of growing to support additional users) enough to
handle hundreds or thousands of users,  yet flexible enough to meet  continually
changing business requirements and

     o highly  defined  customization  enabling a subscriber to specify  his/her
fields of interest within the entire spectrum of health, medicine, and pharmacy.

                                       10
<PAGE>

     This phase of development has commenced.  Neither the purchase/installation
of  workstations  and  dedicated T-1 supply lines nor the  development  of a web
enabled  platform with highly defined  customization  has taken place.  Hardware
requirements  require  approximately  $30,000  of capital  expenditures  and T-1
supply  lines can be leased  for  approximately  $1500-$2000  per  month.  Thus,
completion of workstation/T-1  supply lines portion would require  approximately
$54,000 and to complete the development of the web-site would require a total of
approximately $175,000 during the next twelve (12) months.

     The next stage of  operation/expansion  consists  of  marketing/advertising
expenditures for market studies and public relations and advertising  campaigns.
We  estimate  that  approximately  $175,000  may be  needed  for  this  stage of
operation/expansion.

     The next stage of  operation/expansion  consists  of  attempts to engage in
assembling a high quality  management  team and strategic  alliances with health
care  professionals  and  organizations  having synergies with our company.  The
exact  details of this stage are  difficult to predict and a number of different
strategies  have  evolved in the current  dynamic  information  marketplace.  In
addition,  web site development has increased  rapidly and web site capabilities
maybe achieved by purchasing future,  existing sites rather than developing them
internally.  Several  existing  health  care web sites have been able to recruit
health  professionals  through  the use of  stock  options  and  other  forms of
incentive  compensation which require little current, out of pocket expenditure.
We are unable to predict whether we can replicate this strategy. Accordingly, we
estimate  that   approximately   $175,000  may  be  needed  for  this  stage  of
operation/expansion.

     Taken together and using these cost  estimates,  approximately  $525,000 of
capital  expenditures/development  costs can be expected in order to  effectuate
the three step process outlined above.

Item 7. Financial Statements.

     The financial statements of our company and supplementary data are included
beginning  immediately  following the signature page to this report. See Item 13
for a  list  of the  financial  statements  and  financial  statement  schedules
included.

     Item 8. Changes In and  Disagreements  With  Accountants  on Accounting and
Financial Disclosure.

     There have been no changes in, and no  disagreements  with,  our  company's
public accountants.

                                       11
<PAGE>


                                    PART III

     Item 9. Directors, Executive Officers, Promoters and Control Personst.

     (a) Executive Officers and Directors

     The names,  ages,  positions  and offices  held by each of our officers and
directors are shown on the following table.

                               Age               Position
                               ---               --------

Jack Rubinstein                51               Chairman of the Board, Secretary

Richard Cohen                  50               President and Treasurer

Douglas Harrison-Mills         49               Director

     Our board of directors  is  comprised  of only one class of director.  Each
director is elected to hold office until the next annual meeting of shareholders
and until his  successor  has been elected and  qualified.  Officers are elected
annually by our board of  directors  and hold office until  successors  are duly
elected and  qualified.  Our  president,  Jack  Rubinstein has held office since
inception.  Richard Cohen has held office since January 2, 2001. R. Scott Barter
resigned from the board of directors on February 28, 2001 due to  commitments to
other  business  ventures.  The  following  is a brief  account of the  business
experience  during the past five years of each director and executive officer of
our company.


Jack Rubinstein, CEO, Secretary and Board Chairman

     Mr.  Rubinstein,  age 51, is, since commencement of its operations in 1991,
the  General  Partner of DICA  Partners,  an  investment  hedge fund  located in
Hartsdale,  New York.  Mr.  Rubinstein  also acts as a management  and financial
consultant to various public companies in the  telecommunications  industry.  He
was a founding public board member of CD Radio, Inc. and aided in the funding of
the Molloy  Group,  a help desk  software  developer.  Mr.  Rubinstein is also a
founding  member  of The  Capital  Market  Advisors  Network,  a  consortium  of
consultants  aiding the capital  market  needs of  emerging  private and smaller
public companies.

     Mr.  Rubinstein  began his  business  career as a  securities  analyst with
Shearson  Hammill & Co.,  specializing in the electrical  equipment and business
services  industries.  After seven years as an analyst, he joined Bear Stearns &
Co.  where  he was a  Director,  managing  the  proceeds  of  corporate  insider
securities sales. At Bear Stearns,  he also managed the derivatives  investments
of several senior officers, as well as a few select individual clients. In 1988,
Mr.  Rubinstein  joined  Morgan  Stanley & Co.  where,  in  addition  to serving
corporate officers and select individual  clients,  he provided his expertise to
private  investment  partnerships.  Mr.  Rubinstein  is a  graduate  of  Cornell
University and received an MBA in Finance from New York University.

                                     12


<PAGE>

Richard M. Cohen, President, Treasurer

     Mr. Cohen, age 49, will serve our president  commencing on January 2, 2001.
He has been president of Richard M. Cohen Consultants,  which provides financial
consulting services primarily in the multimedia industry,  since 1996. From 1993
to 1995 he was  president of General  Media,  Inc.,  a  publishing  company with
international  market  presence.  Mr. Cohen serves on the Boards of Directors of
Greg Manning Auctions, Inc., Directrix, Inc., Symposium Corp. and Dey & Co.


Douglas Harrison-Mills, Director

     Mr. Harrison-Mills,  age 49, is a Director of Unifund Financial Group, Inc.
since August 1994 and Unifund  America,  Inc.  since  September  1995 and has an
extensive  background in financial services and communications,  working both in
the City of London  and on Wall  Street.  He is also  currently  a  Director  of
Haversham Consulting Ltd, a UK-based consulting firm and has been since December
1991. Prior to founding Haversham, he was Marketing Manager of Elders Investment
Management  Ltd. (a European  subsidiary  of the  investment  banking arm of the
international  conglomerate,  formerly known as Elders IXL) and was  responsible
for the marketing of EIM's  products and services  throughout the UK, Europe and
North America.

     He has been registered as a Representative with the UK National Association
of  Securities  Dealers  and  Investment  Managers  (now  FSA),  has held both a
Principal's  and a  Representative's  license to deal in securities  from the UK
Department  of  Trade  and  Industry  and has been  registered  with  IMRO  (the
Investment Managers Regulatory Organization).

         Mr.  Harrison-Mills  has  advised  clients  from a variety of  business
sectors in England,  Europe,  the United States and Australia;  and his work has
won a number  of  international  creative  awards:  a  "Clio"  plus  eight  Clio
Certificates of Excellence; a Federation of Commercial Television Stations Award
and a National Retail  Merchants  Association  Award.  His business  development
experience,  on both the client and consultancy side, has spanned most facets of
strategic planning,  corporate  communications and corporate finance,  involving
him in a number of new product launches and company start-up situations.

     (b) Significant Employees.

     The  participation  of Mr. Jack  Rubinstein  and Mr.  Richard  Cohen in our
company is  significant to our success.  Our company  presently does not have an
employment  agreement  with  Mr.  Rubinstein.  We are  presently  completing  an
agreement with Mr. Cohen.

     (c) Family relationships. None.

     (d) Involvement in certain legal proceedings

     To our  knowledge,  none of our  officers  and  directors is a party to any
legal proceedings.

                                       13
<PAGE>

     Item 10. Executive Compensation.

     The following table sets forth the compensation paid during the fiscal year
ended December 31, 2000, to our company's  Chief  Executive  Officer and each of
our company's officers and directors.  No person received  compensation equal to
or exceeding  $100,000 in fiscal 2000 and no bonuses were awarded  during fiscal
2000.

                           SUMMARY COMPENSATION TABLE


                                                        Long Term Compensation

                           Anual Compensation   Awards                   Payouts
<TABLE>
<CAPTION>


 (a)          (b)    (c)     (d)   (e)          (f)        (g)            (h)         (i)
===============================================================================================

                                                Restricted  Securities
Name and                           Other Annual Stock       Underlying    LTIP     All Other
Principal             Salary Bonus Compensation Award(s)    Options/SARs  Payouts  Compensation
Position        Year  ($)    ($)   ($)          ($)         (#)          ($)       ($)
--------        ----  ------ ----- ------------ ---------- -------------  -------  -------------
<S>             <C>   <C>    <C>   <C>          <C>        <C>            <C>      <C>

Jack
Rubinstein#     2000  -0-    -0-   -0-          -0-         -0-           -0-      -0-
Chief Executive
Officer,
Secretary and
Director        1999  -0-    -0-   -0-          -0-         -0-           -0-      -0-
                1998  -0-    -0-   -0-          -0-         -0-           -0-      -0-

Richard         2000  -0-    -0-   -0-          -0-         -0-           -0-      -0-
Cohen#
President and
Treasurer       1999    Not Applicable


Douglas
Harrison-Mills# 2000  -0-    -0-   -0-          -0-         -0-           -0-      -0-
Director        1999  -0-    -0-   -0-          -0-         -0-           -0-      -0-
                1998  -0-    -0-   -0-          -0-         -0-           -0-      -0-

R. Scott
Barter#*        2000  -0-    -0-   -0-          -0-         -0-           -0-      -0-
Director        1999  -0-    -0-   -0-          -0-         -0-           -0-      -0-
                1998  -0-    -0-   -0-          -0-         -0-           -0-      -0-

</TABLE>

--------------------------

     # No Board of Directors' fees have been paid.

     * On February 28,  2001,  Mr. R. Scott  Barter  resigned  from the Board of
Directors.

                                       14

<PAGE>

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

                           Shares Beneficially Owned

                           -------------------------
<TABLE>
<CAPTION>
                                                              Percentage
Directors and Executive Officers        Shares Held(1)        Owned
--------------------------------        --------------       -----------
<S>                                     <C>                  <C>

Jack Rubinstein                         748,750              24.02%
Unifund Financial Group, Inc.2          998,750              32.04%
R. Scott Barter3                        330,000              10.30%
Douglas Harrison-Mills                   50,000               1.60%
(All officers and directors as a
group - 4 persons)
       Totals                         2,127,500              67.96%

     --------------------------

     (1) All shares held are of our common stock.
     (2) This entity is controlled  by Mr. Barter and its share  ownership in us
is attributed to him.
     (3) Mr.  Barter  resigned as our director on February 28, 2001.  Initially,
Mr.  Barter owned 350,000  shares of our common  stock.  In the first quarter of
2001,  Mr. Scott  Barter  gifted  20,000  shares of his common stock to a family
member with whom he does not reside and 20,000  shares of his common  stock to a
family  member  with whom he does  reside.  The share  ownership  of the  family
member, a minor, with whom Mr. Barter resides is attributed to him.

     Item 12. Certain Relationships and Related Transactions.

     There have been no material  transactions,  series of similar transactions,
currently proposed transactions, or series of similar transactions, to which our
company or any of its  subsidiaries was or is to be a party, in which the amount
involved exceeds $60,000 and in which any director or executive officer,  or any
security  holder who is known to our  company  to own of record or  beneficially
more than five  percent  of our  company's  Common  Stock,  or any member of the
immediate family of any of the foregoing persons, had a material interest.

                                       15
<PAGE>

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

     (a) The following documents are filed as part of this report.

     1. Financial Statements

     Report of Thomas P. Monahan, Independent Certified Public Accountant

     Balance Sheet as of December 31, 2000

     Statement of Operations for the years ended December 31, 2000, and 1999

     Statement of Cash Flows for the years ended December 31, 2000 and 1999

     Statement of Stockholders' Equity for the years ended December 31, 2000 and
1999

     Notes to Financial Statements

     2. Exhibits

     (a) The following exhibits are included as part of this report:


EXHIBIT
NUMBER DESCRIPTION LOCATION
---------------------------------------------------------


     (3) Articles of Incorporation and Bylaws:

     3(i) Articles of Incorporation*

     3(ii) Bylaws*

     (8) Consents - Experts:

     (8)(i) Consent of Thomas P. Monahan Filed electronically herewith


     * Previously filed.

                                       16
<PAGE>


                                Thomas P. Monahan
                           Certified Public Accountant
                              208 Lexington Avenue
                           Paterson, New Jersey 07502
                                 (973) 790-8775
                               Fax (973) 790-8845

To The Board of Directors and Shareholders
of Pipeline Data, Inc. (a development stage company)

     I have audited the  accompanying  balance sheet of Pipeline  Data,  Inc. (a
development stage company) as of December 31, 2000 and the related statements of
operations, cash flows and shareholders' equity for the years ended December 31,
1999 and 2000 and for the period from  inception,  June 23, 1987 to December 31,
2000.  These  financial  statements  are  the  responsibility  of the  company's
management.  My  responsibility  is to express  an  opinion  on these  financial
statements based on my audit.

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

     In my opinion,  the financial  statements referred to above present fairly,
in all material  respects,  the  financial  position of Pipeline  Data,  Inc. (a
development  stage  company)  as of  December  31,  2000 and the  results of its
operations, shareholders' equity and cash flows for the years ended December 31,
1999 and 2000 and for the period from  inception,  June 23, 1997 to December 31,
2000 in conformity with generally accepted accounting principles.

     The  accompanying  financial  statements  have been prepared  assuming that
Pipeline  Data,  Inc. (a  development  stage  company)  will continue as a going
concern.  As more fully described in Note 2, the company has incurred  operating
losses  since the date of  reorganization  and  requires  additional  capital to
continue  operations.   These  conditions  raise  substantial  doubt  about  the
company's ability to continue as a going concern. Management's plans as to these
matters are  described in Note 2. The  financial  statements  do not include any
adjustments  to  reflect  the  possible  effects  on  the   recoverability   and
classification of assets or the amounts and  classifications of liabilities that
may result from the possible  inability of Pipeline  Data,  Inc. (a  development
stage company) to continue as a going concern.



Thomas P. Monahan, CPA

March 20, 2001
Paterson, New Jersey


                                       F-1
<PAGE>


                               PIPELINE DATA, INC.
                          (A development stage company)

                                  BALANCE SHEET


                                               December 31,
                                                   2000
                                               -----------

                                     Assets
Current assets
  Cash and cash equivalents                       $  301,013
  Note receivable                                    206,000
                                                     -------
Total current assets                                 507,013

Property and equipment                                 -0-
                                                     -------


Total assets                                     $   507,013
                                                     =======

                      Liabilities and Stockholders' Equity
Current liabilities
  Accrued expenses                               $    36,084
                                                      ------
         Total current liabilities                    36,084

Stockholders' Equity
Preferred  stock  authorized
 5,000,000  shares,  $.001 par value each.
 At December 31, 2000 there are -0-
 shares outstanding

Common  stock  authorized  20,000,000
 shares,  $.001  par value  each.  At
 December 31, 2000 there are 3,116,890
 shares outstanding, respectively                      3,117

Additional paid in capital                         1,105,269
Deficit accumulated during development stage     (   637,457)
                                                   ---------
Total stockholders' equity                           470,929
                                                   ---------
Total liabilities and stockholders' equity       $   507,013
                                                   =========


                 See accompanying notes to financial statements

                                       F-2
<PAGE>
                                PIPELINE DATA, INC.
                          (A development stage company)
                             STATEMENT OF OPERATIONS


                                                        For the period
                                For the      For the    from inception,
                               year ended  year ended   June 23, 1997,
                              December 31, December 31, to December 31,
                                 1999        2000           2000
                              ----------- ------------  --------------


Revenue                       $30,000        $   -0-         $52,500

Cost of goods sold               -0-             -0-            -0-
                               ------          ------        -------

Gross profit                   30,000            -0-          52,500


Operations
General and administrative     89,849         106,420        297,449

Non cash compensation legal
and consulting fee            205,875           1,000        395,000
Depreciation and
 amortization                   -0-              -0-           2,852
                             --------       ---------     ----------

Total expense                 295,724         107,420        695,301
                               ------       ---------     ----------

Income (loss) from
 operations                  (265,724)       (107,420)      (642,801)


Other income and
 expenses
 Interest income                -0-             9,766          9,766
  Interest expense              -0-              -0-      (    4,422)
                              ------         --------       ---------

Total other
  expenses                      -0-             9,766          5,344
                              ------         --------       ---------

Income (loss)               $(264,674)       $(97,654)     $(637,457)
                              =======         =======       ========
Net income (loss)
 per share - basic            $(0.21)           $(0.04)
                             =====             ========
Number of
 shares outstanding
 - basic                     1,250,000         2,522,472
                             =========           =======



                 See accompanying notes to financial statements

                                       F-3
<PAGE>
                               PIPELINE DATA, INC.
                          (A development stage company)
                             STATEMENT OF OPERATIONS


                             For the three            For the three
                             months Ended              months  Ended
                             December 31,             December 31,
                                 1999                    2000
                             -----------              ------------

Revenue                           $-0-                    $-0-

Cost of goods sold                 -0-                     -0-

Gross profit                       -0-                     -0-
                                ----------              ----------

Operations
General and administrative         20,330                  47,785

Non  cash   compensation   legal
and consulting fee                205,875                   1,000
Depreciation and amortization       -0-                     -0-
                                ---------               ----------

Total expense                     226,205                 48,785
                                   ------                  ------

Income (loss) from operations    (226,205)                (48,785)

Other income and expenses
     Interest income                2,100                   7,293
     Interest expense                -0-                     -0-
                                ----------              ------------

Total other expenses                 -0-                   7,293
                                  ----------            ------------

Income (loss)                   $(224,105)               $(41,492)
                                  ========                 ======

Net income (loss) per share -
  basic
                                 $   (0.18)               $  (0.02)
                                 ============            ============

Number of shares outstanding -
  basic
                                 1,250,000               2,522,472
                                 =========               =========

                 See accompanying notes to financial statements

                                       F-4
<PAGE>
                               PIPELINE DATA, INC.
                          (A development stage company)
                             STATEMENT OF CASH FLOWS
                                                       For the period
                                For the      For the    from inception,
                               year ended  year ended   June 23, 1997,
                              December 31, December 31, to December 31,
                                 1999        2000           2000
                              ----------- ------------  --------------
Cash Flows From
   Operating Activities
   Net income (loss)              $(264,674) $  (97,654)  $ (637,457)
     Add items not affecting cash
     Non cash compensation    -
     consulting  fees paid
  with shares of common stock       205,875       1,000     395,000
     Depreciation                    -0-            -0-       2,852
     Changes in non cash
     Operating accounts
     Accrued interest receivable                 (6,000)     (6,000)
     Accrued expenses                12,000      15,084      36,084
                                  ---------     ---------  ---------
     Total Cash Flows From
      Operations                   (46,799)     (87,570)  (209,521)
Cash Flows From
   Investing Activities
     Note receivable                           (200,000)  (200,000)
     Purchase of office equipment    -0-           -0-      (2,852)
                                   -------      --------- ---------
     Total Cash Flows From
      Investing Activities           -0-       (200,000)  (202,852)
Cash Flows From
   Financing Activities

    Officer loans payable        (72,622)         -0-       -0-
     Sale of common stock         124,750      473,715     598,465
     Capital contribution         105,172         -0-      114,921
                               ----------      -------     -------
    Total Cash Flows From
      Financing Activities        157,300      473,715     713,386

Net increase (decrease) in
   Cash                           110,501      186,145     301,013
Cash balance -
 beginning of period                4,367      114,868       -0-
                                 --------      -------    --------
Cash balance - end of period     $114,868     $301,013    $301,013
                                  =======      =======    ========
Non cash activities
     Issuance  of  common   stock  in
     consideration   for   consulting
     services                          $118,125         -0-
</TABLE>

                 See accompanying notes to financial statements
                                       F-5
<PAGE>
                               PIPELINE DATA, INC.
                          (A development stage company)
                        STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
                                                       Deficit
                                                     accumulated
                        Common  Common  Additional     during
  Date                  Stock   Stock     paid in   development
                                          capital      stage        Total
 ----                 --------- -------- ---------- -----------     -----
<S>                   <C>       <C>      <C>        <C>             <C>


June 24, 1997                 100   $ 1   $  9,748       -          $ 9,749
                              ===    ===   =======   =======     ==========

Forward split of shares
December 18, 1998      1,000,000 $ 1,000 $    8,749       -          $ 9,749
Cancellation of shares
December 18, 1998      (750,000)   (750)       750
Net (loss)                                             (38,620)     (38,620)
                    -----------   ------ ---------   ---------     --------
December 31, 1997
 restated               250,000     250    $ 9,499  $  (38,620)   $ (28,871)

Shares issued
 for consulting fees    752,500     752    187,373        -         188,125
Net (loss)                                            (236,509)    (236,509)
                   -----------   ------  ---------    -------       -------
December 31, 1998     1,002,500   $1,002 $  196,872   $(275,129)   $ (77,255)

Sale of shares       1,247,500    1,248    310,627                  311,875
Capital contribution                       105,172                  105,172
Cancellation of shares (25,000)     (25)    (6,225)                  (6,250)
Shares issued
for legal fees         100,000     100      24,900                   25,000
Net (loss)                                            (264,674)    (264,674)
                   -----------    ----     -------     -------     --------
December 31, 1999    2,325,000   $2,325 $  631,346   $(539,803)   $  93,868

Shares issued for
 services                2,000        2       998                     1,000
Sale of shares and
 warrants              789,890      790   472,925                   473,715
Net (loss)                                           (  97,654)   (  97,654)
                  -----------    -----   --------     --------     --------
Balances
 December 31,
2000                3,116,890   $3,117 $1,105,269   $ (637,457)  $  470,929

                   =========     =====  =========      =======      =======

</TABLE>

                 See accompanying notes to financial statements

                                       F-6
<PAGE>







                               PIPELINE DATA, INC.
                          (A development stage company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000

     a.  Organization of company and issuance of common stock

     Pipeline Data,  Inc., (the "company") was formed under the laws of Delaware
on June 23, 1997 and was  originally  authorized to issue 2,000 shares of common
stock,  $0.001 par value each and 1,000  shares of preferred  stock,  $0.001 par
value each. In May, 1999, the company amended its  certificate of  incorporation
increasing the authorized number of shares of common stock to 20,000,000, $0.001
par value each and increasing the authorized number of shares of preferred stock
to 5,000,000, $0.001 par value each.

     b.  Description of the company

     The company is considered to be a development stage business that is in the
process  of  developing  a web site on the  World  Wide Web for the  purpose  of
selling health care products and sharing its expertise by doing consulting.

     c.  Issuance of shares of common stock

     On June 24, 1997, the company sold 1,000,000  shares to Mr. Jack Rubinstein
in consideration for $100 cash.

     Between June 20, 1997 and August 20, 1997,  Mr.  Rubinstein  contributed to
the  company's  capital an  additional  $9,649 in expenses paid on behalf of the
company.

     On December 18, 1998, Mr.  Rubinstein  remitted back to the company 750,000
shares of common stock for cancellation.

     On December 18, 1998, the company issued 752,500 shares of common stock for
consulting  services  valued at  $188,125  or $0.25  per share to the  following
individuals and companies and in the following  amounts:  123,750 shares to Jack
Rubinstein; 100,000 to R. Scott Barter; 50,000 shares to Douglas Harrison-Mills;
50,000 shares to Brad Smith; 25,000 shares to Alan Scott; and 403,750 to Unifund
Financial Group, Inc.


    The  company  sold an  aggregate  of 247,500  shares of common  stock for an
aggregate  consideration  of $61,875 which  includes  partial  payment with cash
aggregating  $24,750 or $0.10 per share and in  consideration  of the payment of
consulting fees aggregating $37,125 or $.15 per share.

     For the period April 1, 1999 to September 30, 1999, the company received an
aggregate  of  $105,172  as  an  additional   contribution  to  capital  from  a
shareholder of the company.

     On October 1, 1999,  Sheila Corvino was awarded 50,000 shares of our common
stock in partial  consideration of legal services rendered to our company valued
at $12,500 or $.25 per share.

                                       F-7
<PAGE>

     The company has  canceled  the  issuance of 25,000  shares of common  stock
issued  to  Alan  Scott  and  has  adjusted   operations  for  the  cancellation
aggregating $3,125 or $.25 per share.

     On December 31, 1999,  Kaplan  Gottbetter & Levenson LLP was awarded 50,000
shares of our common stock in partial  consideration of legal services  rendered
to our company aggregating $12,500 or $.25 per share.

     As of December 31, 1999, the company sold an aggregate of 1,000,000  shares
of common  stock for an  aggregate  consideration  of  $250,000  which  includes
partial  payment  of  cash  aggregating  $100,000  or  $0.10  per  share  and in
consideration  of the payment of consulting fees,  aggregating  $150,000 or $.15
per share.

     As of September 30, 2000,  the Company  issued 2,000 shares of common stock
for $1,000 or $0.50 per share for printing services.

         The company  conducted an initial  public  offering of its common stock
and common stock  purchase  warrants and has sold 789,890 shares of common stock
and 785,210 class A redeemable warrants for aggregate proceeds for $473,715.  No
class B redeemable warrants were sold.

      Note 2- Summary of Significant Accounting Policies

     a.  Basis of Financial Statement Presentation

     The  accompanying  unaudited  financial  statements have been prepared on a
going concern basis of accounting  principles  applicable to a "going  concern",
which  assumes that the company will continue in operation for at least one year
and will be able to realize  its assets and  discharge  its  liabilities  in the
normal course of operations.

     Several  conditions and events cast doubt about the Company's  ability as a
"going  concern".  The Company has incurred  losses before  interest  expense of
$633,035 for the period from  inception June 23, 1997, to December 31, 2000, has
a  working  capital  deficiency  and  requires  additional   financing  for  its
operations  and to  complete  web site  development.  The company  conducted  an
initial public  offering of its common stock and common stock purchase  warrants
and has sold  789,890  shares of common  stock and  785,210  class A  redeemable
warrants for aggregate  proceeds for $473,715.  The company is anticipating that
with the  completion  of this initial  public  offering and with the increase in
working  capital,  the  company  will be  able to  complete  its  web  site  and
experience an increase in sales. The company will require substantial additional
funds to finance its  business  activities  on an ongoing  basis and will have a
continuing long-term need to obtain additional  financing.  The company's future
capital requirements will depend on numerous factors including,  but not limited
to,  continued  progress  developing  its  source of  inventory  of health  care
products, regulations relating to the Internet marketing business and initiating
marketing  penetration.  The company  plans to engage in such ongoing  financing
efforts on a continuing basis.

     These  financial  statements  do not  reflect  adjustments  that  would  be
necessary  if the Company  were unable to continue as a "going  concern".  While
management  believes  that the  actions  already  taken or planned as  described
above,  will mitigate the adverse  conditions and events which raise doubt about
the validity of the "going concern  assumption used in preparing these financial
statements, there can be no assurance that these actions will be successful.
                                       F-8
<PAGE>

     The  financial  statements  presented  consist of the balance  sheet of the
company as at December 31, 2000 and the related  statements  of  operations  and
cash flows for the years  ending  December  31, 1999 and 2000 and for the period
from  inception,  June 23,  1997 to  December  31,  2000 and for the period from
inception, June 23, 1997 to December 31, 2000.


    b.  Cash and cash equivalents

     The company treats temporary investments with a maturity of less than three
months as cash.

     c.  Revenue recognition

     Revenue is recognized when products are shipped or services are rendered.

     d.  Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  effect 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.

     e.  Asset Impairment

         The company adopted the provisions of SFAS No. 121,  Accounting for the
impairment  of long lived  assets and for  long-lived  assets to be  disposed of
effective  January  1,  1996.  SFAS No.  121  requires  impairment  losses to be
recorded on long-lived  assets used in operations  when indicators of impairment
are present and the estimated  undiscounted  cash flows to be generated by those
assets are less than the assets'  carrying  amount.  SFAS No. 121 also addresses
the accounting for long-lived  assets that are expected to be disposed of. There
was no effect of such adoption on the company's financial position or results of
operations.

     f.  Research and Development Expenses

     Research and development expenses are charged to operations when incurred.

     g.  Property and Equipment

     Property and  equipment are stated at cost less  accumulated  depreciation.
Depreciation is computed over the estimated useful lives using the straight line
methods  over a period of seven  years.  Maintenance  and  repairs  are  charged
against operations and betterment's are capitalized.

                                       F-9
<PAGE>

     h.  Significant Concentration of Credit Risk

     At December  31,  2000,  the company  has  concentrated  its credit risk by
maintaining deposits in several banks. The maximum loss that could have resulted
from this risk  totaled  $201,013  which  represents  the excess of the  deposit
liabilities  reported by the banks over the amounts that would have been covered
by the federal insurance.

     i.  Recent Accounting Pronouncements

     In March,  1998,  the American  Institute of Certified  Public  Accountants
issued  Statements  of  Position  98-1 (SOP 98-1),  Accounting  for the Costs of
Computer Software  Developed or Obtained for Internal Use. SOP 98-1 is effective
for financial  statements for years  beginning after December 15, 1998. SOP 98-1
provides  guidance over accounting for computer  software  developed or obtained
for internal use including the  requirement  to capitalize  specified  costs and
amortization  of such  costs.  The  implementation  of SOP 98-1  does not have a
material  impact on the Company's  financial  position or results of operations.
Computer  software costs that are incurred in the preliminary  project stage are
expensed as incurred. Once the capitalization criteria of the SOP have been met,
costs incurred when developing computer software for internal are capitalized.

     Note 3 - Related Party transactions

     a.  Issuance of shares of common stock

     On June 24, 1997, the company sold 1,000,000  shares to Mr. Jack Rubinstein
in consideration for $100 cash.

     Between June 20, 1997 to August 20, 1997, Mr. Rubinstein contributed to the
company's  capital  an  additional  $9,649  in  expenses  paid on  behalf of the
company.

     On December 18, 1998, Mr.  Rubinstein  remitted back to the company 750,000
shares of common stock for cancellation.

     On December 18, 1998, the company issued 752,500 shares of common stock for
consulting  services  valued at  $188,125  or $0.25  per share to the  following
individuals and companies and in the following  amounts:  123,750 shares to Jack
Rubinstein; 100,000 to R. Scott Barter; 50,000 shares to Douglas Harrison-Mills;
50,000 to Brad  Smith;  25,000  shares to Alan  Scott;  and  403,750  to Unifund
Financial Group, Inc.

     For the period April 1, 1999 to September  30, 1999,  the company  received
$105,172 as an  additional  contribution  to capital from a  shareholder  of the
company.

     Mr. Jack  Rubinstein,  converted  the balance of his officer  loan  payable
aggregating $43,672 to additional paid in capital.

     b.  Office Location

     The company  occupies  office  space at the office of the  President at 250
East Hartsdale Avenue, Hartsdale, New York, 10530 at a monthly rental of $500.

         For the period from inception,  June 23, 1997, to December 31, 2000 and
for the year  ending  December  31,  2000,  rent  expense was $27,148 and $9,000
respectively.

                                  F-10

<PAGE>

     c.  Officer Compensation

     For the period from  inception,  June 23, 1997,  to December 31, 2000,  the
company has accrued a minimal  compensation of $500 per month as compensation to
Mr.  Rubinstein  as  consideration  for  services  while the  company  is in the
development stage of development as follows: $15,000 and $6,000 respectively.

         Note 4 - Note Receivable

             In November,  2000, the Company  advanced  $200,000 to Accu-Search,
Inc.  as  evidenced  by a Note  Receivable  which  is due on May 31,  2001  with
interest at 12% per annum.  As a further  inducement for the Note,  Accu-Search,
Inc.  gave  Pipeline  Data Inc.  a  perpetual  non  transferrable  license in an
automated   software  process  to  convert  multiple  inputted   documents  into
transmittable  Adobe PDA  formats.  The  software  may only be use the  Licensed
Technology  to increase the  functionality  of its own web-site by being able to
convert any documentation it receives into Adobe PDF format. The Company has not
placed a valuation on this asset.


     Note 5 - Commitments and Contingencies

     At December  31, 2000,  the company has not entered  into any  contracts or
commitments.

     Note 6 - Income Taxes

     The company  provides for the tax effects of  transactions  reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences  between the basis of assets and
liabilities for financial and income tax reporting.  The deferred tax assets and
liabilities,  if any  represent  the  future tax  return  consequences  of those
differences,  which will  either be taxable  or  deductible  when the assets and
liabilities  are recovered or settled.  As of December 31, 2000, the company had
no material current tax liability, deferred tax assets, or liabilities to impact
on the company's  financial  position  because the deferred tax asset related to
the  company's  net  operating  loss  carryforward  and was  fully  offset  by a
valuation allowance.

     At December 31, 2000, the company has net operating loss carry forwards for
income tax purposes of $637,457 respectively.  This carryforward is available to
offset  future  taxable  income,  if any,  and  expires  in the year  2010.  The
company's  utilization  of this  carryforward  against future taxable income may
become subject to an annual  limitation due to a cumulative  change in ownership
of the company of more than 50 percent.

     The components of the net deferred tax asset as of December 31, 2000 are as
follows:

              Deferred tax asset:
                  Net operating loss carry forward                $ 216,735
                  Valuation allowance                             $(216,735)
                                                                    -------
                  Net deferred tax asset                      $         -0-
                                                                -----------

     The company  recognized no income tax benefit for the loss generated in the
period from inception, June 23, 1997, to December 31, 2000.

                                      F-11
<PAGE>

     SFAS No. 109 requires that a valuation  allowance be provided if it is more
likely  than not that some  portion or all of a  deferred  tax asset will not be
realized.  The  company's  ability to realize  benefit of its deferred tax asset
will depend on the generation of future taxable income.  Because the company has
yet to recognize significant revenue from the sale of its products,  the company
believes that a full valuation allowance should be provided.

     Note 7 - Property and Equipment

     Capital Assets consisted of the following at December 31,2000:

                                    Asset        Accumulated
                                    Cost         Depreciation        Total

         Office equipment           $2,582            $2,852        $  -0-

     Note 8 - Preferred Stock

     The  company's  authorized  capital stock  consists of 5,000,000  shares of
preferred stock, par value $.001 per share.

     The board of  directors of the company has the  authority to establish  and
designate any shares of stock in series or classes and to fix any  variations in
the designations, relative rights, preferences and limitations between series as
it deems appropriate, by a majority vote.

     The  preferred  stock may be issued in series,  each of which may vary,  as
determined by the board of directors, as to the designation and number of shares
in such series,  voting power of the holders thereof,  dividend rate, redemption
terms  and  prices,  voluntary  and  involuntary  liquidation  preferences,  and
conversion rights and sinking fund requirements, if any, of such series.

     As of December 31, 2000, the number of shares outstanding is -0-.


     Note 9 - Business and Credit Concentrations

     The amount reported in the financial  statements for cash approximates fair
market  value.  Because  the  difference  between  cost and the lower of cost or
market is immaterial,  no adjustment has been  recognized  and  investments  are
recorded at cost.

     Financial  instruments that potentially  subject the company to credit risk
consist principally of trade receivables. Collateral is generally not required.

     Note 10 - Public Offering

     The company  conducted an initial  public  offering of its common stock and
common stock  purchase  warrants and has sold 789,890 shares of common stock and
785,210  class A redeemable  warrants for aggregate  proceeds for  $473,476.  No
class B redeemable warrants were sold.

     As of December 31, 2000 the company has reserved  785,210  shares of common
stock pending the conversion of the warrants into shares of common stock.

     class A redeemable  warrants are exercisable into shares of common stock at
$1.50  per  share  until  the third  anniversary  of the  effective  date of the
offering  (April 25, 2000).  class B redeemable  warrants are  exercisable  into
shares of common  stock at $2.50 per share  until the fifth  anniversary  of the
effective date of the offering.

                                      F-12
<PAGE>

     The company also  registered  the sale of 1,250,000  shares of common stock
owned by prior shareholders. Any proceeds and profits from their sale will go to
these  shareholders and not to the company.  They have agreed not to sell any of
their  shares  until  one  year  from  the  effective  date of the  registration
statement, April 26, 2001.

                                      F-13
<PAGE>



                                   SIGNATURES

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

                             PIPELINE DATA INC.


Date: March 30, 2001
                              By: /s/ Richard Cohen
                                    --------------------
                                  Richard Cohen
                                   President, Treasurer and Director

Date: March 30, 2001


                               By: Jack Rubinstein
                                     ------------------
                                    Jack Rubinstein,
                                    Chairman of the Board and Secretary

Date: March 30, 2001

                             By: /s/ Douglas Harrison-Mills
                                         --------------------
                                         Douglas Harrison-Mills
                                         President, Treasurer and Director
<PAGE>