<PAGE>

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

                                   FORM 10-QSB
 (Mark One)

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

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

       For the transition period from ________________ to _______________

                                     0-29627
                            (Commission file number)

                                    PSA, INC.
        (Exact name of small business issuer as specified in its charter)

             NEVADA                                            88-0212662
  (State or other jurisdiction                                (IRS Employer
of incorporation or organization)                          Identification No.)

           880 APOLLO STREET, SUITE 329, EL SEGUNDO, CALIFORNIA 90245
                    (Address of principal executive offices)

                                 (310) 640-3044
                           (Issuer's telephone number)


   (Former name, former address and former fiscal year, if changed since last
                                    report)

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. Yes [X] No [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity. As of November 19, 2001 - 72,886,362 shares of Common Stock

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


<PAGE>



                                    PSA, INC.
                                      INDEX

                                                                           Page
                                                                          Number

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

           Consolidated Balance Sheet as of September 30, 2001               2

           Consolidated Statements of Operations for
           the three months ended September 30, 2001 and 2000                3

           Consolidated Statements of Operations for
           the nine months ended September 30, 2001 and 2000                 4

           Consolidated Statements of Cash Flows for
           the nine months ended September 30, 2001 and 2000                 5

           Notes to Consolidated Financial Statements                       6-16

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                             17-19

Part II.   OTHER INFORMATION

Item 1.    Legal Proceedings                                               19-20

Item 2.    Change in Securities and Use of Proceeds                          21

Item 3.    Defaults Upon Senior Securities                                   21

Item 4.    Submission of Matters to a Vote of Security Holders               21

Item 5.    Other Information                                                 21

Item 6.    Exhibits and Reports on Form 8-K                                  21

SIGNATURES

Part III.  EXHIBITS


<PAGE>


PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

                           PSA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2001


                                     ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                       $     26,700
   Prepaid and other current assets                                           -
                                                                   -------------

     Total current assets                                                26,700

EQUIPMENT, net                                                           36,812
INVESTMENT IN UNCONSOLIDATED AFFILIATE - SMA                          6,253,845
OTHER ASSETS                                                            508,515
                                                                   -------------

     TOTAL ASSETS                                                  $  6,825,872
                                                                   =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
   Accounts payable and accrued liabilities                        $  1,792,565
   Due to officer                                                       459,162
   Loans payable                                                              -
                                                                   -------------

     Total current liabilities                                        2,251,727
                                                                   -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common Stock, $.001 par value, 75,000,000 shares
    authorized, 1,799,271 shares issued and outstanding                   1,799
   Additional paid-in capital                                        33,543,173
   Unearned compensation                                               (837,187)
   Accumulated deficit                                              (28,119,357)
   Less:  Treasury stock 4,250 shares                                   (14,283)
                                                                   -------------
     Total stockholders' equity                                       4,574,145
                                                                   -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $  6,825,872
                                                                   =============


       See the accompanying notes to the consolidated financial statements

                                       2

<PAGE>

                           PSA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

                                                         2001           2000
                                                     ------------   ------------

REVENUE - NET                                        $         -    $   344,790

OPERATING EXPENSES:
   Cost of revenues                                            -        262,262
   Selling, general and administrative                   591,790        713,908
   Software development                                        -         44,034
                                                     ------------   ------------

TOTAL OPERATING EXPENSES                                 591,790      1,020,204
                                                     ------------   ------------

INCOME (LOSS) FROM OPERATIONS                           (591,790)      (675,414)

OTHER INCOME (EXPENSE):
   Amortization of excess of cost price over net
     assets of business acquired                               -              -
   Interest income                                            28         20,982
   Other income                                                -              -
   Equity in income (loss) of
     unconsolidated affiliate - SMA                     (654,574)      (285,930)
                                                     ------------   ------------

TOTAL OTHER INCOME (EXPENSE)                            (654,546)      (264,948)
                                                     -----------    -----------

INCOME (LOSS) FROM CONTINUING
   OPERATIONS BEFORE INCOME TAXES                     (1,246,336)      (940,362)

PROVISION FOR INCOME TAXES                                     -              -
                                                     ------------   ------------

LOSS FROM CONTINUING OPERATIONS                       (1,246,336)      (940,362)

GAIN ON SALE OF DISCONTINUED OPERATIONS                4,348,432              -
LOSS FROM DISCONTINUED OPERATIONS                        (91,939)        (5,417)
                                                     ------------   ------------
NET INCOME (LOSS)                                    $ 3,010,157    $  (945,779)
                                                     ============   ============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
   From continuing operations                        $     (0.69)   $     (0.53)
   From discontinued operations                             2.36          (0.01)
                                                     ------------   ------------
                                                     $      1.67    $     (0.54)
                                                     ============   ============
WEIGHTED AVERAGE SHARES
     OUTSTANDING - BASIC AND DILUTED                   1,799,271      1,756,474
                                                     ============   ============

       See the accompanying notes to the consolidated financial statements

                                       3

<PAGE>

                           PSA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

                                                         2001           2000
                                                     ------------   ------------


REVENUE - NET                                        $    17,733    $   483,285

OPERATING EXPENSES:
   Cost of revenues                                        8,566        445,596
   Selling, general and administrative                 2,297,535      4,258,142
   Software development                                        -        133,954
                                                     ------------   ------------

TOTAL OPERATING EXPENSES                               2,306,101      4,837,692
                                                     ------------   ------------

LOSS FROM OPERATIONS                                  (2,288,368)    (4,354,407)

OTHER INCOME (EXPENSE):
   Amortization of excess of cost price over net
     assets of business acquired                          (3,000)             -
   Cost of acquisition of Canticle Corporation                 -       (700,000)
   Net realized gain (loss) on sale of securities       (162,961)       277,368
   Interest income, net                                    5,069        133,103
   Other income                                           12,916              -
   Equity in income (loss) of unconsolidated
      affiliate - SMA                                 (1,535,188)      (255,845)
                                                     ------------   ------------

TOTAL OTHER INCOME (EXPENSE)                          (1,683,164)      (545,374)
                                                     ------------   ------------

INCOME (LOSS) FROM CONTINUING
   OPERATIONS BEFORE INCOME TAXES                     (3,971,532)    (4,899,781)

PROVISION FOR INCOME TAXES                                     -              -
                                                     ------------   ------------

LOSS FROM CONTINUING OPERATIONS                       (3,971,532)    (4,899,781)

GAIN ON SALE OF DISCONTINUED OPERATIONS                4,348,432              -
LOSS FROM DISCONTINUED OPERATIONS                       (695,905)       (67,592)
                                                     ------------   ------------

NET INCOME (LOSS)                                    $  (319,005)   $(4,967,373)
                                                     ============   ============

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
   From continuing operations                        $     (2.21)   $     (2.88)
   From discontinued operations                             2.03          (0.04)
                                                     ------------   ------------
                                                     $     (0.18)   $     (2.92)
                                                     ============   ============
WEIGHTED AVERAGE SHARES
     OUTSTANDING - BASIC AND DILUTED                   1,799,289      1,701,704
                                                     ============   ============


       See the accompanying notes to the consolidated financial statements

                                       4

<PAGE>
<TABLE>

                           PSA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
<CAPTION>

                                                                   2001            2000
                                                              -------------   -------------
<S>                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                   $   (319,005)   $ (4,967,373)
   Adjustments to reconcile net loss
   to net cash used in operating activities
   from continuing operations:
     Equity (income) loss in unconsolidated affiliate - SMA      1,535,188         255,845
     (Gain) loss from discontinued operations                   (3,652,527)         67,592
     Cost of acquisition of Canticle Corporation                         -         700,000
     Depreciation and amortization                                   8,500           4,283
     Amortization of unearned compensation                         213,750         213,750
     Amortization of excess of cost price over net
       assets of business acquired
     Write-off of asset                                            517,500               -
     (Gain) loss on sale of marketable securities                  162,961        (277,368)
   (Increase) decrease in:
     Other non-current assets                                     (197,500)              -
   Increase (decrease) in:
     Accounts payable and accrued liabilities                       86,133          42,436
     Due to/from officers                                          459,162          (6,158)
                                                              -------------   -------------
Net cash used in operating activities                           (1,185,838)     (3,966,993)
                                                              -------------   -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment                                           (10,804)        (21,254)
   Equity investment in SMA                                              -      (5,050,000)
   Expenditures for acquisition                                          -        (612,000)
   Payments for capitalized software costs                               -        (517,500)
   Purchase of marketable securities                                     -      (1,397,305)
   Proceeds from sale of marketable securities                     289,005       2,112,447
   Other assets                                                          -        (201,515)
                                                              -------------   -------------
Net cash provided by (used in) investing activities                278,201      (5,687,127)
                                                              -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of common stock                                -      10,434,456
   (Payments of) proceeds from loans payable, net                  (88,686)              -
   Purchase of treasury stock                                      (14,283)              -
                                                              -------------   -------------
Net cash provided by financing activities                         (102,969)     10,434,456
                                                              -------------   -------------

CASH USED IN DISCONTINUED OPERATIONS                                98,452        (784,488)
                                                              -------------   -------------
NET (DECREASE) INCREASE IN CASH
   AND CASH EQUIVALENTS                                           (912,154)         (4,152)
CASH AND CASH EQUIVALENTS -
   BEGINNING OF PERIOD                                             938,854       1,183,289
                                                              -------------   -------------
   END OF PERIOD                                              $     26,700    $  1,179,137
                                                              =============   =============

       See the accompanying notes to the consolidated financial statements
</TABLE>

                                        5
<PAGE>


                           PSA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The unaudited consolidated financial statements have been prepared by PSA, Inc.
and subsidiaries (the "Company"), pursuant to the rules and regulations of the
Securities and Exchange Commission. The information furnished herein reflects
all adjustments (consisting of normal recurring accruals and adjustments) that
are, in the opinion of management, necessary to fairly present the operating
results for the respective periods. Certain information and footnote disclosures
normally present in annual consolidated financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations. The results of the nine months ended
September 30, 2001 are not necessarily indicative of the results to be expected
for the full year ending December 31, 2001. These consolidated financial
statements should be read in conjunction with the Company's consolidated audited
financial statements and related footnotes for the year ended December 31, 2000
included in the Company's annual report on Form 10-KSB.

The Company was incorporated in the state of Nevada in 1985. Formerly known as
American Telecommunications Standard International, Inc. ("ATSI"), the Company
completed its merger with PSA, Inc., a California corporation ("PSA of
California"), in April 1998. In connection with the merger, ATSI changed its
name to the Company's present name.

The Company is a holding company for entities comprising its proposed
broad-based global electronic commerce ("E-Commerce") and Internet television
broadcast ("T-Commerce"), video and television production and post production
services, and airport and airline contract manpower services. The Company
intends to acquire entertainment and aviation safety/security related companies
that fit its acquisition portfolio criteria..

In conjunction with its business plan, the Company acquired a 34% equity
interest of SMA Real Time Inc. during May 2000. SMA is a provider of a wide
range of production and post-production services to companies that produce
commercials, television programs, music videos and feature films.

On March 14, 2000, the Company completed the sale of 100% of the issued and
outstanding stock of Pacific States Airline Services, Inc. ("PSAS") to a former
member of the Board of Directors of the Company. PSAS is an airport/airline
service company providing skycap services at various airports in the United
States.

Also during the year ended December 31, 2000, the Company acquired 100% of the
outstanding stock of three travel companies for cash and shares of its common
stock. However, general economic conditions and the impact of the terrorist
attacks of September 11th on the travel industry, resulted in the divesture of
the Company's tour and airline subsidiaries in September 2001.


                                       6
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 1 - BASIS OF PRESENTATION, CONTINUED

On September 26, 2001, the Company completed the sale of 100% of the issued and
outstanding stock of Royal International Tours, Inc.("Royal"), a wholly-owned
subsidiary of PSA. Royal is a travel tour operator specializing in tours for
Europeans visitors to the United States. The purchaser of Royal was John D.
Williams, a former member of the board of directors of PSA. Pursuant to the
terms of the agreement, the Company is to receive $250,000 payable within 18
months after September 26, 2001 and to be secured by 312,500 shares of the
Company's Common Stock otherwise issuable to Mr. Williams for the purchase by
the Company of 100% of PSAS, see Note 10. The Company has established a 100%
allowance against this $250,000 receivable.

On September 28, 2001, the Company amended the sale of Royal to include the sale
of 100% of the issued and outstanding stock of Jet Vacations International, Inc.
("Jet"), a travel tour operator that sold western European vacations. Pursuant
to the terms of the amendment, the sale of the Jet shares shall be included in
the consideration and obligations of the Royal transaction, as described above.

On September 26, 2001, the Company completed the sale of 80% of the issued and
outstanding stock of PSAZZ Air, Inc. ("PSAZZ Air"), an inactive airline
majority-owned subsidiary. The purchaser of PSAZZ Air was John D. Williams, a
former member of the board of directors of PSA. Pursuant to the terms of the
agreement, PSA is to receive $1,000,000 payable within 18 months after September
26, 2001 and to be secured (along with Mr. Williams' obligation to pay to the
Company $250,000 for Royal and Jet, as describe above) by 312,5000 shares of the
Company's Common Stock otherwise issuable to Mr. Williams for the purchase by
the Company of 100% of PSAS, (see Note 10). The Company has established a 100%
allowance against this $1,000,000 receivable.

Accordingly, the Company has accounted for the operations of Royal, Jet and
PSAZZ Air as discontinued operations.


Going Concern
-------------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, for the nine months ended September 30
2001, the Company incurred net loss from continuing operations of $3,971,532 and
as of September 30, 2001, had an accumulated deficit of $28,119,357 and a
working capital deficiency of $2,225,027. The Company is in arrears on a
majority of its payables and accrued liabilities. The Company has limited
finances and requires additional funding in order to accomplish its growth
objectives and marketing of its products and services. There is no assurance
that the Company can reverse its operating losses or that it can raise
additional capital to allow it to expand its planned television and Internet
operations. There is also no assurance that even if the Company manages to
obtain adequate funding to complete any contemplated acquisition, such
acquisition will succeed in enhancing the Company's business and will not
ultimately have an adverse effect on the Company's business and operations.
These factors raise substantial doubt about the Company's ability to continue as
a going concern.

                                       7
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 1 - BASIS OF PRESENTATION, CONTINUED

The Company funded its operations during 1999 and 2000 through sales of its
common stock resulting in net proceeds to the Company of $2,901,025 in 1999 and
$11,232,668 in 2000. The common stock was sold in private transactions in
reliance on various exemptions from the registration requirements of the
Securities Act. The Company is exploring other financing alternatives, including
private placements and public offerings. On July 13, 2001 the Company extended a
Rights Offering to its existing investors who had previously purchased shares of
Common Stock from the Company pursuant to exemptions under provisions of the
Securities Act of 1933, as amended. The Rights Offering provides for the
subscription of up to 31 million Units at $0.50 per Unit, each Unit consisting
of one share of the Company's common stock and one warrant to purchase one share
of the Company's common stock. The Rights Offering concluded on September 28,
2001. The Company has issued 22,000,000 shares of Common stock to be held in
escrow pending completion of Rights Offering transaction.

The Company's ability to continue as a going concern is dependent upon obtaining
additional financing and restructuring its existing liabilities. These financial
statements do not include any adjustments relating to the recoverability of
recorded asset amounts that might be necessary as a result of the above
uncertainty.

NOTE 2 - STOCK SPLITS AND STOCK DIVIDEND

On September 8, 1998, the Board of Directors authorized, and a majority vote of
the shareholders approved, a one-for-fifty reverse split of its issued and
outstanding common stock as of September 1, 1998 to be effective upon the filing
date, September 16, 1998.

On March 12, 1999, the Board of Directors declared, and a majority vote of the
shareholders approved, a stock dividend for issuance to each of the shareholders
of the common stock who was a shareholder of record on May 14, 1999, as a stock
dividend, two shares of restricted common stock for each outstanding share of
the common stock owned by each shareholder.

On June 28, 2001, the Board of Directors authorized, and a majority vote of the
shareholders approved, a one-for-twenty reverse split of its issued and
outstanding common stock to be effective August 1, 2001.

The accompanying consolidated financial statements, notes and other references
to share and per share data have been retroactively restated to reflect the
reverse stock split and stock dividend for all periods presented.



                                       8
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 3 - EARNINGS PER SHARE

In 1997, the Financial Accounting Standard Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS No.
128 replaced the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants, and convertible securities. Diluted earnings per share is very similar
to the previously reported fully diluted earnings per share. Basic earnings per
share is computed using the weighted-average number of common shares outstanding
during the period. Common equivalent shares are excluded from the computation if
their effect is anti-dilutive. As of September 30, 2001, the Company had no
potentially dilutive securities outstanding.

NOTE  4 - ACQUISITIONS

Canticle Corporation
--------------------
Pursuant to an Agreement and Plan of Reorganization, effective February 18,
2000, the Company acquired all the outstanding shares of common stock of
Canticle Corporation ("Canticle"), a Delaware corporation, from the shareholders
thereof, in an exchange for $200,000 in cash and 2,800 shares of common stock of
the Company valued at $500,000. As a result of this transaction, Canticle has
become a wholly-owned subsidiary of PSA effective on February 18, 2000. The
acquisition is intended to qualify as a reorganization within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.

Canticle had no operating history nor any revenues or earnings from operations.
Canticle had no significant assets and no financial resources. In evaluating
Canticle as a candidate for the proposed acquisition, the Company placed a
primary emphasis on Canticle's status as a reporting company under Section 12(g)
of the Securities Exchange Act of 1934, as amended, and Canticle's facilitation
of the Company becoming a reporting company under the Act. Accordingly, the cost
of the acquisition, $700,000, has been charged to operations during the three
months ended March 31, 2000.

Royal International Tours, Inc.
-------------------------------
On March 6, 2000, the Company completed the acquisition of 100% of the issued
and outstanding stock of Royal International Tours, Inc. ("Royal"), a travel
tour operator, specializing in tours for European visitors to the United States.
Royal's office is currently located in El Segundo, California. Pursuant to the
terms of the Acquisition Agreement, the former sole shareholder of Royal
received 3,919 shares of restricted common stock of the Company valued at
$391,850 and cash of $382,000. On September 26, 2001, the Company sold 100% of
the issued and outstanding stock of Royal. See Note 1.

The acquisition was accounted for as a purchase, under which the purchase price
was allocated to the acquired assets and assumed liabilities based upon fair
values at the date of the acquisition.

Travel Treasures, Inc.
----------------------
On March 15, 2000, the Company completed the acquisition of 100% of the issued
and outstanding stock of Travel Treasures, Inc. ("Travel"), a travel tour
operator. Travel is a California corporation currently located in El Segundo,
California. Pursuant to the terms of the Acquisition Agreement, the former
shareholders of Travel received $30,000.



                                       9
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE  4 - ACQUISITIONS, CONTINUED

The acquisition was accounted for as a purchase, under which the purchase price
was allocated to the acquired assets and assumed liabilities based upon fair
values at the date of the acquisition. The excess of the purchase price over the
fair value of the net assets acquired amounted to $30,000 and is being amortized
on a straight-line basis over 5 years. The accompanying consolidated financial
statements include the operations of Travel from the date of acquisition, March
15, 2000

Jet Vacations International Inc.
--------------------------------
On November 30, 2000, the Company completed the acquisition of 100% of the
issued and outstanding stock of Jet Vacations International, Inc. ("Jet"). Jet,
a Florida corporation, is a wholesaler of travel products specializing in
Western European destinations. Pursuant to the terms of the acquisition
agreement, the former shareholders of Jet received 12,130 shares of restricted
common stock of the Company. On September 26, 2001, the Company sold 100% of the
issued and outstanding stock of Royal. See Note 1.

The merger with Jet constituted tax-free reorganizations and has been accounted
for as pooling-of-interests transaction.

New York Network, LLC - Pending Acquisition
-------------------------------------------
On August 25, 2000, the Company entered into a purchase agreement to acquire
100% of the membership units of New York Network, LLC ("NYN"). Pursuant to the
terms of the purchase agreement, the former members of NYN will receive common
stock equal to $5,000,000. The number of shares of common stock to be issued in
consideration to the members will be based on the five-day average stock closing
price of the Company's common stock preceding consummation of the acquisition.
Subject to certain conditions of the acquisition agreement, the Company shall
provide a loan to NYN to be used for operational expenses up to a maximum of
$388,000. As of September 30, 2001, the Company advanced NYN $362,000 and is
reflected in other assets on the accompanying balance sheet. Consummation of the
acquisition is subject to, among other things, the approval of the Federal
Communications Commission ("FCC") to this transaction which was granted on June
23, 2001, the transfer to the Company of all FCC licenses currently owned by
NYN, completion of an audit of NYN's financial statements and the completion of
a due diligence review. As of September 30, 2001, the agreement has not been
consummated.

NYN is a cellular network of ten low-power television licenses and construction
permits that are linked by a high capacity fiber optic cable. The network
currently serves as a dynamic regional market that spans Vermont, New York, New
Hampshire and Montreal, Canada. Operating under the call sign WBVT-TV, NYN is an
affiliate of the United Paramount Network.

When complete the acquisition will be accounted for as a purchase under which
the purchase price will be allocated to the acquired assets and assumed
liabilities based upon the fair values the date of the acquisition is
consummated.


                                       10
<PAGE>


                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE  4 - ACQUISITIONS, CONTINUED

Victory Entertainment Corp. - Pending Acquisition
-------------------------------------------------
On October 4, 2001, the Company executed a Letter of Intent to acquire Victory
Entertainment Corp, ("Victory"). Pursuant to the terms of Letter of Intent, The
Company plans to acquire 100% of the issued and outstanding stock of Victory and
assume certain debts in exchange for registered Common Stock shares of the
Company. Total consideration, including debt assumption, is $25 million, subject
to materiality adjustments. A formula for determining the exchange ratio of
stock will be included in the acquisition agreement. Consummation of the
acquisition is subject to, among other things, the approval of this transaction
the Federal Trade Commission ("FTC"). As of November 19, 2001, the agreement has
not been consummated.

Victory Entertainment Corp. is a diversified, global multimedia company
specializing in live action and animated television productions, special
effects, graphic design and worldwide television distribution. Current projects
include THE DOOLEY AND PALS SHOW, a children's television series, SK8RATZ, an
animated show for children, and ED MCMAHON'S NEXT BIG STAR program, that has
integrated McMahon's NEXTBIGSTAR.COM website with a series of television talent
competitions.

The acquisition of Victory is part of the Company's television production, post
production and content distribution business concept. When complete the
acquisition will be accounted for as a purchase under which the purchase price
will be allocated to the acquired assets and assumed liabilities based upon the
fair values the date of the acquisition is consummated.

U.S.Dental, Inc. - Pending Acquisition
--------------------------------------
On September 28, 2001, the Company entered into a purchase agreement to acquire
100% of the issued and outstanding shares of U. S. Dental, Inc. ("US Dental").
Pursuant to the terms of the purchase agreement, the shareholders of US Dental
will receive 750,000 shares of common stock of the Company in exchange for
5,131,250 shares of common stock of US Dental. The total consideration is equal
to $3,000,000. Consummation of the acquisition is subject to, among other
things, completion of an audit of US Dental's financial statements and the
completion of a due diligence review. As of November 19, 2001, the agreement has
not been consummated.

US Dental is a holding company created to acquire, consolidate and manage an
integrated network of affiliated general and specialized dental practices. US
Dental currently provides management services for dental practices in New York,
with expansion plans in other geographically targeted markets in the United
States and Europe. The marketing and advertising of US Dental affiliated
practices are chiefly provided by television commercials.

The acquisition of US Dental is also part of the Company's television
production, post production and content distribution business concept. When
complete the acquisition will be accounted for as a purchase under which the
purchase price will be allocated to the acquired assets and assumed liabilities
based upon the fair values the date of the acquisition is consummated.


                                       11
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE  5 - INVESTMENT IN UNCONSOLIDATED AFFILIATE - SMA

Pursuant to an agreement on May 4, 2000, the Company acquired a 34% interest in
S.M.A. Real Time Inc. ("SMA") for $5 million in cash and 51,774 shares of its
common stock, valued at approximately $5 million. The Company's investment in
SMA has been accounted for under the equity method of accounting commencing with
May 4, 2000. Included in the carrying amount of the SMA investment is goodwill,
net of accumulated amortization, totaling $6,045,442 at September 30, 2001,
which is being amortized over 10 years.

SMA provides a wide range of production and post-production services to
companies that produce commercials, television programs, music videos and
feature films. SMA's principal activities include studio videotape recording,
film to videotape transfer, computer generated visual effects and the coloring,
creation of customized virtual studio sets, editing and dubbing of various form
of emerging media, including film and video. Most of SMA's services are
performed at its headquarters in lower Manhattan, New York.

Summarized balance sheet as of September 30, 2001 is as follows:

                  Total assets                           $     6,059,114
                  Total liabilities                      $     4,527,247
                  Total stockholders' equity             $     1,531,867

Summarized results of operation for the nine months ended September 30, 2001 are
as follows:

                  Revenue                                $     5,412,681
                  Loss from operations                   $    (2,957,510)
                  Net loss                               $    (3,073,580)


NOTE  6 - CAPITALIZED SOFTWARE COSTS

On March 30, 2000, the Company entered into a software license and services
agreement with Datalex Limited, a company located in Dublin, Ireland. The
agreement calls for the Company to license certain computer software pertaining
to its tour and travel operations for Internet reservations for a five-year
period. During the three months ended September 30, 2001, the Company wrote off
the capitalized software costs of $1,725,000, including a deposit of $517,500
and accrued costs of $1,207,500. This resulted in a charge to earnings of
$517,500. On July 30, 2001, the Company sent a breach of contract notice to
Datalex (see Note 9).



                                       12
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE  7 - OTHER ASSETS

Other assets as of September 30, 2001 consisted of the following:


         Investment in Execute Direct.com, Inc. ("EDC") (i)         $ 120,009
         Advances to NYN (ii)                                         362,000
         Excess of the cost of Travel Treasures, Inc.
           over the net assets acquired - net of
           accumulated amortization of $10,500                         20,000
         Deposits                                                       6,506
                                                                    ----------
              Total                                                 $ 508,515
                                                                    ==========

(i) On September 14, 2000, the Company entered into a stock sale and purchase
agreement to transfer to EDC 77,778 shares of common stock in exchange for 80%
of the issued and outstanding shares of EDC. EDC, a Nevada corporation, is an
on- line direct access level I and level II trading firm with a number of
operating divisions, including an investment in a broker/dealer, a direct access
trading floor, and a trading academy to instruct level II direct access trading.

The agreement was cancelled and the Company converted advances made of $120,009
to 52,500 shares of common stock of EDC. The investment is being accounted under
the cost method of accounting.

(ii) In connection with the acquisition discussed in Note 4, the Company
advanced NYN $362,000 as of September 30, 2001.

NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at September 30, 2001 consist of the
following:


         Accounts payable                                    $     1,044,706
         Accrued claims and litigation settlements                   245,000
         Other                                                       502,859
                                                             ----------------
                                                             $     1,792,565
                                                             ================


                                       13
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 9 - COMMITMENTS AND CONTINGENCIES

As of September 30, the Company was involved in the following legal disputes.

PSA, INC.
---------

HAWKINS V. PSA, INC. ET AL., Superior Court of Los Angeles County, California,
Case No. YC033477. On October 16, 1998, Frankie and Harry Hawkins filed a
complaint against the Company and others, alleging breach of contract and fraud,
and rescission of the Company's agreement to purchase Frankie Hawkins'
controlling share of Pacific States Airlines Services, Inc. (PSAS). PSAS filed
for bankruptcy protection in April 2000. The complaint against the Company was
previously dismissed by the court, but reinstated in February 2001. The Court
has similarly allowed the Company's cross-complaint against Frankie Hawkins for
misrepresentations and resultant damages in connection with the acquisition of
PSAS. A confidential settlement was reached in this matter on September 26,
2001.

MEYER GROUP LTD., ET AL., V. DOUGLAS T. BEAVER, ET AL., Superior Court of Orange
County, California, Case No. 775680. Defendant Robert E. Thompson filed a
cross-complaint against multiple individuals and entities, including American
Telecommunications Standards International, Inc. (ATSI), with whom the Company
entered into a stock exchange agreement and plan of reorganization on March 13,
1998. Mr. Thompson alleges that he was fraudulently induced by ATSI and others
to invest money in various ventures, both related and unrelated to ATSI. In July
1998, Mr. Thompson amended his cross-complaint to include the Company as
successor to ATSI. The Company believes this claim is without merit, and is
vigorously defending the cross-complaint. On November 7, 2000, Mr. Thompson
filed a separate, but related action against the Company in the Orange County
Superior Court, alleging substantially identical causes of action as those found
in the cross-complaint in the Meyer v. Beaver case. Since the claims therein are
redundant, the Company expects that case to be dismissed in the near future.
Trial is set for November 27, 2001.

OKOTURO, ET AL. V. PSA, INC., ET AL., Superior Court of Los Angeles County,
California, Case No. BC 233822. In August 2000, a suit was filed against the
Company by Richard Okoturo, an individual, and Richard Okoturo, doing business
as Sammoric Financial Co., alleging breach of contract for accounting services
allegedly provided and claiming $27,100, plus 100,000 shares of the Company's
stock for services rendered. A confidential settlement was reached in this
matter on October 19, 2001.

STOCK V. PSA, INC., District Court of Clark County, Nevada, A424877. In
September 2000, James Stock d/b/a Stock Enterprises filed a complaint against
the Company, claiming unspecified damages. The Company is negotiating a
resolution of Mr. Stock's claim.

ROBERT ROSEN ETC. V. PSA, INC., ET AL., Superior Court of Los Angeles County,
California, Case No. BC246441. A complaint was filed in March 2001 against PSA
for unpaid legal fees allegedly incurred in defending the Company in several
pieces of litigation. That action has been transferred to mediation and binding
arbitration before Judicial Arbitration and Mediation Services (JAMS). The
Company has filed a counterclaim against the claimant. An arbitration hearing is
currently scheduled for December 11, 2001.


                                       14
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 9 - COMMITMENTS AND CONTINGENCIES, CONTINUED

PSAZZ AIR, INC. (PSAZZ)

A suit was filed by the Trustee for Air 21 Bankruptcy Estate against PSAZZ in
the U.S. Bankruptcy Court, Eastern District of California, Case No.
97-10084-B-7. During September 1999, this case was reduced to a judgment of
approximately $46,000. The trustee filed a release of judgment lien on November
14, 2001.

PSAZZ.COM, INC. V. DATALEX, The Company, through legal counsel, made a written
demand against Datalex that it breached a written agreement whereby Datalex was
to provide several booking engines for PSAZZ.com's reservation systems. The
Company has demanded that Datalex return, at a minimum, $517,500 paid for the
first installment under the contract since the booking engines did not work and
have not functioned for the purposes Datalex marketed them to the Company.
Datalex has not responded to PSA's demand. Subsequently, the Company learned
that Datalex has filed an action in the United States District Court for the
Central District of California against the Company for breach of contract
claiming that the Company owes the balance of the contract price (of
approximately $1.3 million). The Company filed a counterclaim for the fees
previously paid to Datalex and for damages the Company has suffered as a result
of the failure of Datalex's software. The Company is awaiting Datalex's response
to the counterclaim.

OTHER
-----
The Company and its subsidiaries are also involved in a number of smaller
litigations and claims. The Company has interposed answers in all cases, except
where an answer is not yet due. The Company has established provisions for most
of the liabilities represented by these smaller claims, and where provisions
have not been established, management believes it will prevail on the merits and
intends to vigorously contest the claims. Based on its past experience dealing
with such claims, the Company anticipates it will be able to settle most of
these smaller litigations with provisions to pay over periods of time, which are
manageable for the Company.


NOTE 10 - SUBSEQUENT EVENTS

On October 5, 2001, we completed the acquisition of 100% of the issued and
outstanding stock of Pacific States Airline Services, Inc. an airport/airline
services company currently providing skycap services at various airports in the
United States. We had previously owned PSAS and sold 100% of the issued and
outstanding stock of PSAS on March 14, 2000. PSAS's office is located in El
Segundo, California. Pursuant to the terms of the Acquisition Agreement, the
former shareholder of PSAS received 625,000 shares of our restricted common
stock as consideration for 100% of PSAS. Of the 625,000 shares of our common
stock issued in this transaction, 312,500 shares are being retained by us as
security for Mr. Williams' obligation to pay an aggregate $1,250,000 to us for
the purchase of 100% of Royal, Jet and PSAZZ Air, (see Note 1).

An established airline and airport service company with prior experience in
security and operational functions, PSAS will initiate a marketing and service
expansion program, which will adapt to the changes in airport and airline
security arising from the September 11, 2001 tragedy. The acquisition of PSAS is
part of our restructuring, consolidation and diversification plans.

                                       15
<PAGE>

                           PSA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

NOTE 10 - SUBSEQUENT EVENTS, CONTINUED

On October 5, 2001, the Company completed the acquisition of the remaining 20%
of the issued and outstanding stock of seven (7) of its subsidiaries and 100% of
David E. Walsh's rights, title and interest in and to his intellectual and
property rights that Mr. Walsh owns in the technology of integrating broadband
television content and distribution with interactive Internet capabilities and
applications, (collectively, the "Walsh Technology Rights") in exchange for
49,087,091 restricted shares the Company's Common Stock. Pursuant to the terms
of the Stock and Asset Exchange Agreement, David E. Walsh, Chairman and CEO of
the Company exchanged his 482,000 shares of the subsidiaries and the Walsh
Technology Rights for 49,087,091 restricted shares of the Company's Common
Stock.





                                       16
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations

GENERAL

The following discussion and analysis should be read in conjunction with the our
consolidated financial statements and related footnotes for the year ended
December 31, 2000 included in this Annual Report on Form 10-KSB. The discussion
of results, causes and trends should not be construed to imply any conclusion
that such results or trends will necessarily continue in the future.

BACKGROUND AND OVERVIEW

This management's discussion and analysis of financial condition and results of
operations contain, in addition to historical information, forward-looking
statements that involve risks and uncertainties. Our actual results could differ
materially. Factors that could cause or contribute to such differences include,
without limitation, our liquidity and capital resources, changes in consumer
preferences and relationships, new product introductions, timing of our
technological advances.

The following is a discussion of our financial condition, results of our
operations and liquidity. This discussion should be read together with our
financial statements and notes included in this Form 10-QSB.

Prior to September 30, 2001, we disposed of our tour operating subsidiaries and
airline subsidiary due to economic conditions that were exacerbated by the
terrorist attacks of September 11. As a result of the Datalex litigation (see
Note 9), we wrote off our contract. We have accounted for the disposition of
these subsidiaries as discontinued operations and, accordingly, all prior period
financial statements have been restated.

On September 26, 2001, we completed the sale of 100% of the issued and
outstanding stock of Royal International Tours, Inc., a wholly-owned subsidiary.
Royal is a travel tour operator specializing in tours for Europeans visitors to
the United States. The purchaser of Royal was John D. Williams, a former member
of our board of directors. Pursuant to the terms of the agreement, we are to
receive $250,000 payable within 18 months after September 26, 2001 and to be
secured by 312,500 shares of our common stock otherwise issuable to Mr. Williams
for the purchase by us of 100% of Pacific States Airline Services, Inc. We have
established a 100% allowance against this $250,000 receivable.

On September 28, 2001, the Company amended the sale of Royal to include the sale
of 100% of the issued and outstanding stock of Jet Vacations International, Inc.
("Jet"), a major tour operator that sold western European vacations. Pursuant to
the terms of the amendment, the sale of the Jet shares shall be included in the
consideration and obligations of the Royal transaction. See Note 1.

The operations conducted by Royal and Jet had recently experienced significant
loss of revenues and increased operating losses. These conditions were further
exacerbated by the September 11, 2001 tragedy. The sale of these tour operations
allow us to focus on our entertainment content and distribution plans.


                                       17
<PAGE>


On September 26, 2001, we completed the sale of 80% of the issued and
outstanding stock of PSAZZ Air, Inc., an inactive airline majority-owned
subsidiary. The purchaser of PSAZZ Air was John D. Williams, a former member of
our board of directors. Pursuant to the terms of the agreement, we are to
receive $1,000,000 payable within 18 months after September 26, 2001 and to be
secured (along with Mr. Williams' obligation to pay to us $250,000 for Royal, as
describe above) by 312,5000 shares of our common stock otherwise issuable to Mr.
Williams for the purchase by PSA of 100% of Pacific States Airline Services,
Inc. We have established a 100% allowance against this $1,000,000 receivable.

Our ability to implement our PSAZZ Air business plan has been delayed for the
last two years due to continuing legal issues with Mr. Michael Dupont, an
airline shareholder. The impact of the September 11, 2001 tragedy on the airline
industry has further inhibited activation of PSAZZ Air. The sale will enable us
to concentrate on our restructuring, consolidation and diversification plans.

On October 5, 2001, we completed the acquisition of 100% of the issued and
outstanding stock of Pacific States Airline Services, Inc. an airport/airline
services company currently providing skycap services at various airports in the
United States. We had previously owned PSAS and sold 100% of the issued and
outstanding stock of PSAS on March 14, 2000. PSAS's office is located in El
Segundo, California. Pursuant to the terms of the Acquisition Agreement, the
former shareholder of PSAS received 625,000 shares of our restricted common
stock as consideration for 100% of PSAS. Of the 625,000 shares of our common
stock issued in this transaction, 312,500 shares are being retained by us as
security for Mr. Williams' obligation to pay an aggregate $1,250,000 to us for
the purchase of 100% of Royal, Jet and PSAZZ Air, as described above.

An established airline and airport service company with prior experience in
security and operational functions, PSAS will initiate a marketing and service
expansion program, which will adapt to the changes in airport and airline
security arising from the September 11, 2001 tragedy. The acquisition of PSAS is
part of our restructuring, consolidation and diversification plans.

On October 5, 2001, we completed the acquisition of the remaining 20% of the
issued and outstanding stock of seven (7) of our subsidiaries and 100% of David
E. Walsh's rights, title and interest in and to his intellectual and property
rights that Mr. Walsh owns in the technology of integrating broadband television
content and distribution with interactive Internet capabilities and
applications, (collectively, the "Walsh Technology Rights") in exchange for
49,087,091 shares of our restricted common stock. Pursuant to the terms of the
Stock and Asset Exchange Agreement, David E. Walsh, our Chairman and CEO
exchanged his 482,000 shares of the subsidiaries and the Walsh Technology Rights
for 49,087,091 shares of our restricted common stock.

As part of our restructuring, consolidation and diversification plans, our board
of directors approved the consolidation of ownership to simplify and facilitate
pending and future merger and acquisition activity, and to implement and utilize
the Walsh Technology Rights in future plans.

We have accounted for the disposition of our operating subsidiaries as
discontinued operations in the accompanying financial statements and the prior
year financial statements have been restated to reflect these discontinued
operations. The operating expenses of our continuing operations consist
principally of legal and other professional fees and salaries of employees of
the holding company. During the quarter ended September 30, 2001 we also took a
charge of $517,500 offset by a reduction in the reserve for litigation.

                                       18
<PAGE>


On March 30, 2000, we entered into a software license and services agreement
with Datalex Limited, a company located in Dublin, Ireland. The agreement calls
for us to license certain computer software pertaining to our tour and travel
operations for Internet reservations for a five-year period. During the three
months ended September 30, 2001, we wrote off the capitalized software costs of
$1,725,000, including a deposit of $517,500 and accrued costs of $1,207,500.
This resulted in a charge to earnings of $517,500. On July 30, 2001, we sent a
breach of contract notice to Datalex (see Part II, Item 1. Legal Proceedings).

LIQUIDITY AND CAPITAL RESOURCES

We funded our operations principally by slowing payments to vendors and by
advances from our CEO. In order for us to continue in existence, we plan to
raise additional capital from the sale of equity through the Rights Offering and
other private placements.

FORWARD LOOKING STATEMENTS

This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Stockholders are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, the ability of us develop our technology and execute our business
plan. Although we believe the assumptions underlying the forward-looking
statements contained herein are reasonable, any of the assumptions could be
inaccurate, and therefore, there can be no assurance that the forward-looking
statements contained in the report will prove to be accurate.


Part II.   OTHER INFORMATION

Item 1.    Legal Proceedings

As of September 30, the Company was involved in the following legal disputes.

PSA, INC.
---------

HAWKINS V. PSA, INC. ET AL., Superior Court of Los Angeles County, California,
Case No. YC033477. On October 16, 1998, Frankie and Harry Hawkins filed a
complaint against the Company and others, alleging breach of contract and fraud,
and rescission of the Company's agreement to purchase Frankie Hawkins'
controlling share of Pacific States Airlines Services, Inc. (PSAS). PSAS filed
for bankruptcy protection in April 2000. The complaint against the Company was
previously dismissed by the court, but reinstated in February 2001. The Court
has similarly allowed the Company's cross-complaint against Frankie Hawkins for
misrepresentations and resultant damages in connection with the acquisition of
PSAS. A confidential settlement was reached in this matter on September 26,
2001.

MEYER GROUP LTD., ET AL., V. DOUGLAS T. BEAVER, ET AL., Superior Court of Orange
County, California, Case No. 775680. Defendant Robert E. Thompson filed a
cross-complaint against multiple individuals and entities, including American
Telecommunications Standards International, Inc. (ATSI), with whom the Company
entered into a stock exchange agreement and plan of reorganization on March 13,
1998. Mr. Thompson alleges that he was fraudulently induced by ATSI and others
to invest money in various ventures, both related and unrelated to ATSI. In July
1998, Mr. Thompson amended his cross-complaint to include the Company as
successor to ATSI. The Company believes this clam is without merit, and is
vigorously defending the cross-complaint. On November 7, 2000, Mr. Thompson
filed a separate, but related action against the Company in the Orange County
Superior Court, alleging substantially identical causes of action as those found
in the cross-complaint in the Meyer v. Beaver case. Since the claims therein are
redundant, the Company expects that case to be dismissed in the near future.
Trial is set for November 27, 2001.

                                       19
<PAGE>

OKOTURO, ET AL. V. PSA, INC., ET AL., Superior Court of Los Angeles County,
California, Case No. BC 233822. In August 2000, a suit was filed against the
Company by Richard Okoturo, an individual, and Richard Okoturo, doing business
as Sammoric Financial Co., alleging breach of contract for accounting services
allegedly provided and claiming $27,100, plus 100,000 shares of the Company's
stock for services rendered. A confidential settlement was reached in this
matter on October 19, 2001.

STOCK V. PSA, INC., District Court of Clark County, Nevada, A424877. In
September 2000, James Stock d/b/a Stock Enterprises filed a complaint against
the Company, claiming unspecified damages. The Company is negotiating a
resolution of Mr. Stock's claim.

ROBERT ROSEN ETC. V. PSA, INC., ET AL., Superior Court of Los Angeles County,
California, Case No. BC246441. A complaint was filed in March 2001 against PSA
for unpaid legal fees allegedly incurred in defending the Company in several
pieces of litigation. That action has been transferred to mediation and binding
arbitration before Judicial Arbitration and Mediation Services (JAMS). The
Company has filed a counterclaim against the claimant. An arbitration hearing is
currently scheduled for December 11, 2001.

PSAZZ AIR, INC. (PSAZZ)
-----------------------

A suit was filed by the Trustee for Air 21 Bankruptcy Estate against PSAZZ in
the U.S. Bankruptcy Court, Eastern District of California, Case No.
97-10084-B-7. During September 1999, this case was reduced to a judgment of
approximately $46,000. The trustee filed a release of judgment lien on November
14, 2001.

PSAZZ.COM, INC. V. DATALEX, The Company, through legal counsel, made a written
demand against Datalex that it breached a written agreement whereby Datalex was
to provide several booking engines for PSAZZ.com's reservation systems. The
Company has demanded that Datalex return, at a minimum, $517,500 paid for the
first installment under the contract since the booking engines did not work and
have not functioned for the purposes Datalex marketed them to the Company.
Datalex has not responded to PSA's demand. Subsequently, the Company learned
that Datalex has filed an action in the United States District Court for the
Central District of California against the Company for breach of contract
claiming that the Company owes the balance of the contract price (of
approximately $1.3 million). The Company filed a counterclaim for the fees
previously paid to Datalex and for damages the Company has suffered as a result
of the failure of Datalex's software. The Company is awaiting Datalex's response
to the counterclaim.

OTHER
-----
The Company and its subsidiaries are also involved in a number of smaller
litigations and claims. The Company has interposed answers in all cases, except
where an answer is not yet due. The Company has established provisions for most
of the liabilities represented by these smaller claims, and where provisions
have not been established, management believes it will prevail on the merits and
intends to vigorously contest the claims. Based on its past experience dealing
with such claims, the Company anticipates it will be able to settle most of
these smaller litigations with provisions to pay over periods of time, which are
manageable for the Company.


                                       20
<PAGE>

Item 2.    Change in Securities and Use of Proceeds

None

Item 3.    Defaults Upon Senior Securities

None

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

Not applicable

Item 5.    Other Information

Not applicable

Item 6.    Exhibits and Reports on Form 8-K

(a)      Exhibits

None

(b)      Reports on Form 8-K

Current Report on Form 8-K dated September 26, 2001 filed with the Securities
and Exchange Commission on October 11, 2001.


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           PSA, INC.



                                           By: /s/ David E. Walsh
                                              ----------------------------------
                                           David E. Walsh
                                           President and Chief Executive Officer


Date:  November 27, 2001