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                                  United States
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   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
Commission File Number:


                       SECURITY ASSET CAPITAL CORPORATION
                 (Name of small business issuer in its charter)


                  000-20039                     95-4729666
          (Commission File Number) (I.R.S. Employer Identification No.)

                                     NEVADA
         (State or other jurisdiction of incorporation or organization)


          701 B STREET, SUITE 1775, SAN DIEGO, CALIFORNIA      92101
         (Address of principal executive offices)            (Zip Code)

      Issuer's telephone number, including area code: Voice 619-232-9950,
                                Fax 619-232-9954

                           UNIVERSAL VIEW CORPORATION

                         270 N. Cannon Drive, Suite 203
                         Beverly Hills, California 90210

          (Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Common Stock, $0.001 par value                 NASDAQ OTC Bulletin Board

Securities registered pursuant to Section 12(g) of the Act:

Check whether the Issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 ()

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, 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. ( )

Revenues for the issuer's most recent fiscal year: $1,952,256

On December 31, 2000 the aggregate market value of the Common equity held by
non-affiliates (based upon the average of bid and asked price as of December 31,
2000) was $ 6,988,085

As of December 31, 2000 the Issuer has 15,573,510 Outstanding Shares of Common
Stock, $0.001 par value.

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

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Part I

Item 1. Business

THE COMPANY. The Company was founded on September 22, 1993 to build, through
acquisition and development, a team of vertically integrated companies
structured to achieve maximum economic advantage within the asset liquidation
industry. The asset liquidation industry is one of the fastest growing and most
lucrative arenas in American business today. Profits are earned in the industry
through the purchase of portfolios of both performing and non-performing loans
or assets, at low prices, and either collected at a high rate of return or sold
at the wholesale or retail level for immediate profits. Overall, management
estimates that current inventories available from financial institutions are
approximately above Six Trillion Dollars on their principal, face amount.

The Company has established itself over the past seven years within the
financial community as a reputable portfolio purchaser. Management has created
direct relationships with most of the large and medium size financial
institutions. The Company communicates with over approximately 400 different
institutional sellers of credit card loan portfolios on a monthly basis.

However, the main direction and purpose of the Company is now concentrating its
efforts on launching the Debt Registry.

ACQUISITION OR DISPOSITION OF ASSETS. Pursuant to the Acquisition Agreement the
Company acquired one hundred percent (100%) of the issued and outstanding shares
of voting securities (Common Stock) of Universal View Corporation ("Universal")
from Danilo Cacciamatta, Gary Bryant and Suzanne Kerr Bryant, together
representing all of the shareholders of issued and outstanding Common Stock of
Universal, for $125,000 and an aggregate of 400,000 shares of Common Stock of
the Company. In evaluating the Acquisition, Universal used criteria such as the
value of the Company's debt portfolio assets, business relationships, goodwill,
the Company's ability to compete in the e-commerce and technology, full motion
direct on-line video industries, the asset acquisition and liquidation
marketplace, the real estate industry, the unique nature of the Company's
structure, the Company's current and anticipated business operations, and the
Company's business name and reputation in the debt buying industry. No material
relationship exists between the selling shareholders of Universal or any of its
affiliates, any director or officer, or any associate of any such director or
officer of Universal and the Company. The consideration exchanged pursuant to
the Acquisition Agreement was negotiated between Universal and the Company at
arm's-length. The consideration paid derived from the Company's cash on hand and
unissued common stock.

SUBSIDIARIES

THE DEBT REGISTRY

The Debt Registry is an asset ownership registration and tracking system for the
asset liquidation and purchasing industry. The closest counterpart to this
system is the process of UCC filings for assets held for collateral by lending
institutions. The asset liquidation and purchasing industry is the largest
industry in which assets are bought and sold without the benefits of asset
titles or filed ownership documents. As a result, a number of problems and
issues exist, or have the potential to exist, in the industry. These include
lack of verifiable ownership of assets within the industry; difficulty of
verifying age, experience, and other important details of a particular account;
potential fraud from key data changes and multiple sales; difficulty in
reporting correct information to the credit bureaus; difficulty in obtaining
documentation from originators on a timely basis; and inability or difficulty in
locating sold accounts by debtors.

The debt buying industry will continue to grow rapidly as more financial
institutions are faced with dramatic increases in consumer debt. The industry is
the largest industry in which assets are bought and sold without the benefits of
asset titles or filed ownership documents. As a result, a number of problems and
issues exist which create potential liabilities for all of the companies in the
industry, including the originators of debt, the companies buying and collecting
the debt, and the credit bureaus reporting the status of the account. The

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implementation of The Debt Registry will provide the industry with much needed
structure that should allow the industry to continue to expand in the future
without inviting government regulation.

                              ACCOUNT REGISTRATION
                              --------------------

As banks and other originators charge off non-performing debts, they are either
placed for collection with contingency collection firms, or sold in portfolios
to the secondary market. At present, no third party tracks accounts or maintains
ownership records. The results of no supervision are potential fraud, lack of
verifiable ownership following sales, and difficulties in verifying age,
experience, and details of an account.

Under The Debt Registry process, each time an account changes ownership, a
record of that sale is forwarded to the Registry. Included in the record are
identification data for the accounts, as well as experience information (agency
placement, etc.). The buyer of the accounts pays the registration fee, and
receives a registration document relating to the accounts. Each account is
assigned a registration number that is updated and tracked as ownership changes
through the life of the account. Once the debt is sold the second time (from the
second to the third owners), the accounts are re-registered to document both the
new ownership and the new collection experience. Addresses and payment
information are updated at this time. At each successive sale, the account is
re-registered with The Debt Registry.

At the sale of the accounts, the new buyer can verify the registration by
contacting The Debt Registry and checking a sampling of the accounts. If the new
buyer chooses, he can submit the full listing of accounts for verification. As
in all sales, the buyer pays for the registration and verification processes. It
is anticipated that the price of registration will not be a hindrance to any
transaction, since registration costs will be less than 1.0% of the purchase
price.

The ability to track the ownership of a particular account is also a benefit to
the debtor. Debtors often cannot locate the current owner of their old debt, due
to a lack of information from the originator regarding successive sales. Instead
of calling each "link" in the chain of title, a debtor will need only visit
www.FindMyDebts.com for up to the minute account status information.

                              ACCOUNT DOCUMENTATION
                              ---------------------

Account statements and signed applications are the backbone of legal collection
efforts. Every collector understands the frustration of spending hours "working"
an account for which no documentation can ultimately be obtained. The Debt
Registry's proposed Documentation Clearinghouse will virtually eliminate these
types of problems.

The Registry's Clearinghouse will initially act as the hub for document requests
to various banks and credit grantors, which are overwhelmed by current industry
demands. All incoming requests for applications or statements will be sent
directly to the clearinghouse and credit grantors would need only respond to one
entity for documentation requests.

In its second phase of development, the Clearinghouse would develop a means of
maintaining all documentation for all sold debt in an electronic format, which
will significantly speed up the forwarding process.

                               SOURCES OF REVENUE
                               ------------------

     O        DOCUMENTATION REQUESTS
Charged-off credit card accounts are currently sold with little or no
documentation. Collectors who need account documents typically order them on an
account-by-account basis at roughly $5.00 to $7.00 per document. Banks and other
credit grantors price this service to recover their costs.

     O        REGISTRY MEMBERSHIPS
All regular users of The Debt Registry would be offered membership at an annual
fee. Their membership will entitle them to a monthly newsletter, access to
verification services, and to account location services. For many of the

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secondary and later owners, this service will generate significant additional
revenues, while allowing more debtors to settle accounts. The account owner will
pay a locating fee to The Debt Registry.

     O        ACCOUNT REGISTRATION FEES
Account registration will generate significant revenue for The Debt Registry.
Although charged-off debt accounts are sold in large portfolios, each individual
account will be registered, and the fees would be based on per account pricing.
However, the cost of registration will not be a significant part of the purchase
price, and will therefore not be a deterrent to the sale transaction. In
secondary and successive sales, the cost of registration will likely be a
negotiating point in the sale, similar to closing cost in a home purchase.

     O        WWW.FINDMYDEBTS.COM
Located online at www.FindMyDebts.com, this service will to allow consumers to
easily locate debts that have been sold by the original credit grantor to other
parties. This page facilitates the payment of debt and helps the debtor to
regain their good credit. Debtors enter their correct personal information and
the account numbers of the accounts that they want to resolve. The possibility
of fraud is virtually eliminated, as consumers can now ensure that they are
paying the correct party. The system is designed for consumers who intend to
both locate and settle old accounts, and debtors are forewarned that their
contact information will be shared with the account owners. The FindMyDebts.com
service is provided at no extra cost to consumers, as debt owners will pay all
fees. In the long run, this will constitute the greatest source of revenue for
The Debt Registry.

BROADBAND TECHNOLOGIES, INC.

Broadband Technologies Inc. is another wholly-owned subsidiary of the Company
dedicated to bringing full-screen, on-demand video to consumers via the
internet. Just as companies rely on express mail services to rapidly deliver
packages, business will soon rely on service providers to store and deliver
video content. Some industries that will benefit from the ability to cast video
content directly to consumers include:

    -   Movie and Pay Television
    -   Video Rental
    -   High-End Product Sales
    -   Corporate Advertising
    -   Infomercials
    -   Travel and Real Estate
    -   Auction Centers
    -   Corporate Training

The mission of Broadband Technologies, Inc. is to be an industry leader of
multimedia storage and delivery. The ultimate goals of Broadband Technologies,
Inc. are to service existing industries that would benefit from casting video to
their clients, to bring video on demand to the home through an alliance with an
established service provider, and to become the industry leader in multimedia
storage and delivery.

Broadband has thoroughly examined four industry roadblocks that currently impede
the delivery of full-motion, on-demand video to the consumer. They are:

        1. THE HIGH COST OF POWER. In recent years, the power and speed of home
computing has increased exponentially, while the cost of personal computers has
dropped dramatically. Today's personal computer is capable of showing
full-length motion pictures on DVD, and as more consumers acquire this exciting
technology Broadband Technology Inc.'s opportunities to bring video content to
the masses grows even more. Broadband Technologies, Inc.'s ultimate objective is
to deliver stored video content effectively to a consumer base via standard
personal computer platforms without the need for additional hardware.

        2. BANDWIDTH. Delivering dense content video over the Internet has long
been a problem. However, the introduction of cable and DSL computer linkups to

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the marketplace has lessened the problem associated with bandwidth. Cable and
other telecommunications companies continue to expand their services and drop
their rates for both homes and businesses. During the next years, this expansion
of Internet speed and bandwidth will continue to provide the broadband highways
required to deliver content-rich information. Broadband Technologies, Inc.
desires to be at the forefront of exploiting these technology advances as they
continue to increase their presence in homes and businesses.

        3. SERVER TECHNOLOGY. Video requires delivery that can match the
necessary frame rates that display movies seamlessly. The dense content, high
frame rates and increased client demand, create a challenge for the operation of
the current Internet server technology, which continues to gain power rapidly.
Broadband Technology Inc.'s scaled architectural approach could exploit the
power of these servers and allows us to grow as demand grows.

        4. STORAGE. A major problem surrounding on-demand video delivery is
storage. As the quality of video increases almost on a daily basis, the required
storage requirements grow with it. We view solving this problem as a unique
challenge and a significant business opportunity. We believe Broadband
Technologies, Inc.'s patent-pending approach to storing media in multiple
locations, while at the same time addressing it from a central site, is the
cornerstone of effective warehousing of dense video content.

The challenge of bringing on-demand video to the consumer hinges mainly on the
storage of dense video content. Broadband Technology Inc.'s data warehousing
methods, combined with currently available technology, could allow us to scale
infinitely for the inventory demands of the future. Broadband Technologies, Inc.
has filed five patent applications, all of which have been granted a patent
pending status. These applications cover the key proprietary features of the
video delivery system. The following is a summary of these five patent
applications:

        1. DISTRIBUTION NETWORK. This patent utilizes a very complex and
specific "Intranet" network configuration. It allows for complete redundancy of
the information contained within the network and contemplates "fail-proof"
communications.

        2. HARDWARE AND SOFTWARE CONFIGURATIONS. The configuration of hardware
and software that the system employs in its viewing centers is both specific and
very unique. This combination of software provided allows for the proper
functionality of all hardware components.

        3. DUAL MPEG STREAMING. This patent pertains to the heart of the system.
It protects the actual process of delivering MPEG video streams. In addition, it
may implement the only method known to date for allowing a single processor to
stream two different MPEG files simultaneously.

        4. GRAPHICAL USER INTERFACE. Under this patent, the "look and feel" of
the system is protected. The graphical user interface ("GUI") is created by a
unique combination of display device drivers, file types and formats, that
creates an environment extremely intricate in delivery, yet very intuitive and
user friendly.

        5. DESIGN. This patent protects design and engineering of the "viewing
center."

We anticipate that the bulk of revenue will come from storage and delivery fees,
as these will be our primary services. Companies wishing to deliver
"infomercials" or training videos, as well as those that store product content
in video format, constitute our prospective industrial market. We foresee
industries such as real estate, education, travel and tourism all depending upon
technology and services, like those that Broadband Technologies, Inc. intends to
provide, for their success.

Consumers who want to watch movies on-demand and pay "per-view" fees comprise
the private market. We operate under the assumption that the movie-watching
consumer does not want to browse the Internet on their television, nor does the
average person want to watch full-length feature films on their PC. We believe
that consumers would, however, purchase or subscribe to an Internet service via
their television if they could watch movies on demand.

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Broadband Technologies, Inc.'s short term objectives are to improve its existing
technologies through investment in qualified technical personnel. Hiring of
highly trained research and development staff to implement the capabilities of
the video delivery technology is imperative to our success.

THEDEBTTRADER.COM

theDebttrader.com is a wholly-owned Nevada company formed January 21, 2000 that
trades charged-off debt portfolios and notes over the Internet. Previously known
to the asset liquidation industry as The Note and Paper Trader.com, this
innovative web site is an industry-recognized forum for information and debt
portfolio exchange. Over $40 million of debt was sold through this site in 1999,
its first year of operation. TheDebtTrader.Com made history in February 2000 by
hosting the debt trading industry's first online chat session. Revenues are
earned from service fees arising out of the online sale of portfolios and notes.

TheDebtTrader.com is a free-market exchange for debt buyers and sellers. By
incorporating much of Broadband Technologies, Inc.'s expertise, the Company is
situated to play an integral role within the soon-to-be formed "Debt Registry,"
an accreditation service presently in formation for the listing of debt
portfolios to be sold by many of the nation's largest financial institutions.
This enterprise is being structured to be sold in 2001.

SECURITY ASSET PROPERTIES, INC.

Security Asset Properties Inc. is a wholly-owned Nevada subsidiary corporation.
This company was previously known as the "Four D Corporation." Founded in 1993,
Security Asset Properties, Inc. purchases cash-flowing single and multi-family
residential rental properties in San Diego and currently owns and manages 14
such properties. Revenues are earned from income-producing rental properties and
equity upon sale of the properties. Security Asset Properties, Inc. has an
experienced management team and creates an ongoing profit center for the
Company. The Company plans to expand its capital base through selling this
company. This company was sold in March 2001.

SECURITY ASSET MANAGEMENT, INC.

Security Asset Management Inc. is a wholly-owned California subsidiary of the
Company. This company was founded in 1993 to manage debt receivable portfolios,
to buy and sell these portfolios at the wholesale and retail level, and to joint
venture portfolio acquisitions with accredited investors. Its revenues come from
management and service fees arising out of these activities.

This company attempts to target portfolios for acquisition, acquire them at the
best possible price, and aid in the collection of receivables. The company and
its joint venture partners fund all purchases. Security Asset Management, Inc.
then restructures the assets into performing portfolios and resells them at a
substantial profit at a wholesale or retail level.

Management believes that the Company is one of the pioneers of the debt
collection industry. It has developed strong relationships with key financial
institutions from which it is a frequent buyer. The Company enjoys a preferred
buyer status among many selling financial institutions. These relationships
offer the Company the regular opportunity to be invited to bid on the best
portfolios.

As today's society becomes more and more dependent on technology to do business,
the Company intends to pursue the incorporation of the latest technologies into
its methods of operation. Management believes that only companies who anticipate
new market realities will be positioned at the forefront of emerging Internet
industries. Over the last century, civilization has witnessed rapid distribution
and acceptance of communications technologies such as telephones, fax machines,
and constantly evolving computer technology. The impact of these developments
has led to dramatic changes in the way the information is exchanged. These
changes have two things in common: each successive technology comes faster than
its predecessor; and, each new breakthrough comes out of developments that
preceded it. Technology advances, combined with population growth, have led to
massive market expansion in all forms of broadcast media. The personal computer

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is rapidly becoming the vehicle of choice for delivery of all forms of media.
Through the acquisition of TheDebtTrader.Com, the Company has ensured a presence
on the World Wide Web and expanded it marketing and sales efforts to an
international level. The acquisition of Broadband Technologies, Inc. represents
a quantum leap by the Company into the cutting edge of communications through
the Internet.

COMPETITION. The competition for purchasing receivable debt portfolios is high
and is expected to intensify. The Company experiences competition in acquiring
receivable debt portfolios, including from purchasers with substantially greater
resources than the Company. The Company competes with a wide range of
third-party collection companies and other financial services companies, which
may have substantially greater personnel and financial resources than the
Company. In addition, certain of its competitors may have signed "forward flow"
contracts pursuant to which certain financial institutions have agreed to
transfer receivable debt in the future, which could restrict those financing
institutions from selling portfolios to the Company. The Company seeks to
compete with these companies on the basis of its superior relationships with key
personnel in the industry and its reputation for quality and trust. Moody's
reports that the charge off rate in January 2000 (i.e., the amount of bad loans
written off as uncollectible, as an annualized percentage of total loans) was
5.60 percent, a drop from 6.00 percent in January 1999. This represents the 23rd
consecutive month of improvement, compared with the year-earlier periods. The
Company believes that an improved payment record translates into a greater
ability for the consumer to pay off debts. As the consumer's ability to pay
improves, the Company expects the return on receivable debt to improve.
Therefore, the return on portfolios is anticipated to improve, which would make
the competition for purchasing portfolios even greater. Our competitors include
companies such as Asset Funding, Charge-Off Clearinghouse, First Teleservices
and ADA Business Credit Corp who were the top four purchasers of charged-off
debt portfolios for resale.

TRADEMARK AND COPYRIGHT ISSUES

The Company has several patents and patents pending owned by the Broadband
Technologies company and one patent in the Debt Registry company. The Broadband
Technology patents are set to be expanded into the direct full motion video
arena and the Debt Registry patent pending protects the uniqueness of the
registration of the debt accounts.

GOVERNMENTAL REGULATION

The Company is not currently subject to direct federal, state, or local
regulation in the United States other than regulations applicable to businesses
generally or directly applicable to electronic commerce. However, because the
Internet is becoming increasingly popular, it is possible that a number of laws
and regulations may be adopted in the United States with respect to the
Internet. These laws may cover issues such as user privacy, freedom of
expression, pricing, content and quality of products and services, taxation,
advertising, intellectual property rights and information security. Furthermore,
the growth of electronic commerce may prompt calls for more stringent consumer
protection laws. Several states have proposed legislation to limit the use of
personal user information gathered online or require online services to
establish privacy policies. The Federal Trade Commission has indicated that it
may propose legislation on this issue to Congress in the near future and has
initiated action against at least one online service regarding the manner in
which personal information was collected from users and provided to third
parties. The adoption of such consumer protection laws could create uncertainty
in Internet usage and reduce the demand for all products and services. The
Company does not provide customer information to third parties and, therefore,
does not anticipate any current or proposed legislation relating to online
privacy to directly affect its activities to a material extent.

The Company is not certain how its business may be affected by the application
of existing laws governing issues such as property ownership, copyrights,
encryption and other intellectual property issues, taxation, libel, obscenity
and export or import matters. The vast majority of those laws were adopted prior
to the advent of the Internet. As a result, they do not contemplate or address
the unique issues of the Internet and related technologies. Changes in laws
intended to address such issues could create uncertainty in the Internet

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marketplace. That uncertainty could reduce demand for the Company's services or
increase the cost of doing business as a result of litigation costs or increased
service delivery costs.


RISK FACTORS

LIMITED OPERATING HISTORY: Although the Company was founded in 1993, its
subsidiary, Broadband Technologies, Inc., is newly-organized, in its initial
stages of development, and lacks a substantial prior operating history.
Broadband Technologies, Inc.'s prospects must be considered in light of the
risks, expenses and difficulties frequently encountered by companies in early
stages of development, particularly companies in new and rapidly evolving
markets such as the delivery of video over the Internet. Such risks include, but
are not limited to, an evolving and unproven business model and the management
of growth. To address these risks, the Company must, among other things,
maintain and significantly increase its customer base, implement and
successfully execute its business and marketing strategy, continue to develop
and upgrade its technology, provide superior customer service, respond to
competitive developments, and attract, retain and motivate qualified personnel.
There is no assurance that the Company's business strategy will be successful,
or that additional capital will not be required to continue business operations.

As of April 12, 2001, the Company had limited working capital. The Company has
limited material tangible assets. To date, Broadband Technologies, Inc. has not
created any revenues and, as a result of the signification expenditures that the
Company plans to make in sales and marketing, research and development and
general and administrative activities over the near term, the Company expects
that Broadband Technologies, Inc. will continue to incur significant operating
losses and negative cash flows from operations on both a quarterly and annual
basis for the foreseeable future. For these and other reasons, there can be no
assurance that the Company or Broadband Technologies, Inc. will ever achieve or
be able to sustain profitability.

DEPENDENCE ON KEY MANAGEMENT. The Company is highly dependent on the services of
David R. Walton, Chief Executive Officer, Darrell Musick, President, and the
Daniel J. Hill, Chairman of the Board Of Directors of Broadband Technologies,
Inc. The loss of their services could have a materially adverse impact on the
Company. The Company does not currently maintain any key-man life insurance
policy with respect to any of these key management personnel.

POSSIBLE DIFFICULTY IN RAISING ADDITIONAL EQUITY CAPITAL. There is no assurance
that the Company will be able to raise equity capital in an amount which is
sufficient to continue operations. In the event the Company requires financing,
the Company will seek such financing through bank borrowing, debt or equity
financing, corporate partnerships or otherwise. There can be no assurance that
such financing will be available to the Company on acceptable terms, if at all.
The Company does not presently have a credit line available with any lending
institution. Any additional equity financing may involve the sale of additional
shares of the Company's Common Stock or Preferred Stock on terms that have not
yet been established.

RISKS OF RAPID GROWTH. The Company anticipates a period of rapid growth, which
may place strains upon the Company's management and operational resources. The
Company's ability to manage growth effectively will require the Company to
integrate successfully its business and administrative operations into one
dynamic management structure.

POSSIBLE ISSUANCE OF ADDITIONAL SHARES. The Company has authorized 25,000,000
shares of Common Stock. The Company presently has outstanding 15,573,510 shares
of Common Stock, the only class of stock of the Company for which shares have
been previously issued. As of the Effective Date, the Company will have
authorized, but un-issued, 9,426,490 shares of Common Stock which are available
for future issuance. The Company may issue shares of Common Stock beyond those
already issued for cash, services, or as further employee incentives. To the
extent that additional shares of Common Stock or Preferred Stock are issued, the
percentage of the Company's issued and outstanding shares of stock shall be
increased and the issuance may cause dilution in the book value per share.

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DIVIDENDS NOT LIKELY. No dividends on the Company's Common Stock have been
declared or paid by the Company to date. The Company does not presently intend
to pay dividends on shares for the foreseeable future, but intends to retain all
earnings, if any, for use in the Company's business. There can be no assurance
that dividends will ever be paid on the Common Stock of the Company.

RECEIVABLES MAY NOT BE COLLECTIBLE. The Company purchases, collects and manages
previously defaulted consumer receivables generated by consumer credit card and
other consumer credit transactions. These are obligations that the individual
consumer has failed to pay when due. We purchase the receivables from credit
grantors, including banks, finance companies, and other service providers.
Substantially all of the receivables consist of account balances that the credit
grantor has deemed uncollectable and has charged off from its balance sheet.
Before we purchase the receivables, the credit grantors generally make numerous
attempts to collect on the defaulted accounts. Credit grantors typically use
their in-house collection departments, as well as third-party collection
agencies to attempt to collect on the overdue payments. We purchase the
receivables at a significant discount to the amount the customer owes. We
believe we can successfully obtain recoveries on the receivables in amounts in
excess of the amount we pay for the receivables. Despite this belief, actual
recoveries on the receivables may vary as the result of a variety of factors
within and beyond our control and may be less than the amount we expect to
recover. We cannot assure the timing or amounts to be collected on our
receivables.

POSSIBLE SHORTAGE OF RECEIVABLES FOR PURCHASE. The Company's success depends on
the continued availability of receivables that meet our requirements. The
availability of portfolios of receivables for purchase at favorable prices
depends on a number of factors outside of our control, including the
continuation of the current growth trend in consumer debt and competitive
factors affecting potential purchasers and sellers of portfolios of receivables.
Any slowing of the consumer debt growth trend could result in less credit being
extended by credit grantors. Consequently, fewer receivables could be available
at prices that we find attractive. If new competitors enter our business, our
access to additional receivables may become limited. In addition, if our
competitors raise the prices they are willing to pay for portfolios of
receivables above those we wish to pay, we may be unable to buy receivables at
prices consistent with our historic return targets.

RISKS ASSOCIATED WITH NEW PRODUCTS AND NEW MARKETS. The market for Internet
video services is characterized by rapid technological changes, changing
customer requirements, frequent service and product enhancements and
introductions, and emerging industry standards. The introduction of services or
products embodying new technologies and the emergence of new industry standards
can render existing services or products obsolete and unmarketable. The
Company's and Broadband Technologies, Inc.'s future success will depend, in
part, on its ability to develop and use new technologies, respond to
technological advances, enhance its existing services and products and, develop
new services and products on a timely and cost-effective basis. There can be no
assurance that the Company will be successful in effectively developing or using
new technologies, responding to technological advances or developing,
introducing or marketing service and product enhancements or new services and
products. In addition, the Company may enter into new markets in connection with
enhancing its existing services and products and developing new services and
products. There can be no assurance that the Company will be successful in
pursuing new opportunities or will compete successfully in any new markets.
There can be no assurance that a market for Internet video delivery services
will develop or that any such market, if developed, will offer significant
revenue opportunities for specialized video delivery service providers such as
the Company. The Company's customers have only limited experience, if any, with
Internet video as a marketing, advertisement and entertainment medium, and

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neither its customers nor their advertising agencies have devoted a significant
portion of their budgets to using Internet video. In order for the Company to
generate revenues, Web site owners, advertisers and entertainment companies must
direct a portion of their budgets to Internet-based content delivery, marketing
and advertising that incorporate video. If not, the Company's business,
prospects, financial condition and results of operations from Broadband
Technologies, Inc. would be materially adversely affected.

SUBSTANTIAL COMPETITION. A number of the Company's competitors have
significantly greater financial, technical, administrative, manufacturing,
marketing and other resources than the Company. Some of the our competitors also
offer a wider range of services and products than us and have greater name
recognition and more extensive customer bases than we do. These competitors may
be able to respond more quickly to new or changing opportunities, technologies
and customer requirements than we can and may be able to undertake more
extensive promotional activities, offer more attractive terms to customers and
adopt more aggressive pricing policies than we can. Moreover, current and
potential competitors have established or may establish cooperative
relationships among themselves or with third parties or may consolidate to
enhance their services and products. We expect that new competitors or alliances
among competitors will emerge and may acquire significant market share.

The general financial success of companies within the debt collection and
Internet industries over the past several years has strengthened existing
competitors. We believe that such success will continue to attract new
competitors to these industries, such as software development companies,
insurance companies, providers of online financial and information services and
others. While it is not possible to predict the type and extent of competitive
services that other firms ultimately may offer or whether regulatory or
legislative barriers will be repealed or modified, firms such as the Company may
be adversely affected by such competition.

The bases of competition in markets for video delivery include transmission
speed, reliability of service, ease of access price/performance, ease-of-use,
content quality, quality of presentation, timeliness of content, customer
support, brand recognition, number of end-users directed to client Web sites,
data reporting and operating experience. Broadband Technologies, Inc. must
overcome significant barriers to entry into the video delivery market as a
result of its limited operation history and relatively untested operating system
on the market. Many of the Broadband Technologies, Inc.'s competitors have
substantially greater financial, technical, managerial and marketing resources,
longer operating histories, greater name recognition more established
relationships with customers and content providers. Such competitors may be able
to devote more resources to developing Internet services or online content than
Broadband Technologies, Inc. Our ability to achieve and maintain a leadership
position in the Internet video delivery market will depend, among other things,
on the Broadband Technologies, Inc.'s ability to provide high-speed,
high-quality video over the Internet, which cannot be assured. There can be no
assurance that the Company or Broadband Technologies, Inc. will be able to
compete effectively with current or future competitors or that the competitive
pressures faced by the Company or Broadband Technologies, Inc. will not have a
material adverse effect on the Company's or Broadband Technologies, Inc.'s
business, financial condition and operating results.

DEPENDENCE ON COMPUTER SYSTEMS. The Company and Broadband Technologies, Inc.
operate through a variety of electronic mediums, including the Internet,
automated touch-tone telephones, and personal computers. These methods are
heavily dependent on the integrity of the electronic systems supporting them.
Extraordinary user volumes could cause the Company's computer systems to operate
at an unacceptably low speed or even fail. Any significant degradation or
failure of the Company's computer systems or any other systems (e.g. online
service providers, record keeping and data processing functions performed by
third parties and third-party software, such as Internet browsers) could cause
customers to suffer delays in receiving services. Such delays could cause
substantial losses for customers and could subject the Company or Broadband
Technologies, Inc. to claims from customers for losses, including litigation
claiming fraud or negligence. There can be no assurance that the Company's or

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Broadband Technologies, Inc's network structure will operate appropriately in
the event of a computer systems failure or that, in the event of a tornado, fire
or any other natural disaster, power or telecommunications failure, act of god
or war, the Company or Broadband Technologies, Inc. will be able to prevent an
extended computer systems failure. Any computer systems' failure that causes
interruptions in the Company's or Broadband Technologies, Inc.'s operations
could have a material adverse effect on the Company's or Broadband Technologies,
Inc.'s business, financial condition and operating results.

DEPENDENCE ON INCREASED USAGE AND STABILITY OF THE INTERNET. Critical issues
regarding the stability of the Internet's infrastructure remain unresolved. The
rapid rise in the number of Internet users and increased transmission of audio,
video, graphical and other multimedia content over the Web has placed increasing
strains on the Internet's communications and transmission infrastructures.
Continuation of such trends could lead to significant deterioration in
transmission speeds and reliability of the Internet and could reduce the usage
of the Internet by businesses and individuals. Any failure of the Internet to
support the ever-increasing number of users due to inadequate infrastructure, or
otherwise, could materially and adversely affect the acceptance of the Company's
products and services which would, in turn, materially and adversely affect the
Company's business, prospects, financial condition and results of operations.

RISKS ASSOCIATED WITH STRATEGIC ACQUISITIONS AND RELATIONSHIPS. The Company has
pursued and may in the future pursue strategic acquisitions of complimentary
businesses and technologies. Acquisitions entail numerous risks, including
difficulties in the assimilation of acquired operations and products, diversion
of management's attention to other business concerns, amortization of acquired
intangible assets, and potential loss of key employees of acquired companies. To
date, the Company has experienced favorable results in connection with its
strategic acquisitions. Nevertheless, there can be no assurance that the Company
will be able to integrate successfully any operations, personnel, services or
products that might be acquired in the future or that any acquisition will
enhance the Company's business, financial condition or operating results. The
Company also has established a number of strategic relationships with debt
collectors. The Company's strategic relationships have been entered into only
recently and there can be no assurance that any such relationships will be
maintained, and that if such relationships are maintained, they will be
successful.

DEPENDENCE ON INTELLECTUAL PROPERTY RIGHTS; LACK OF REGISTRATION THEREOF. The
Company's and Broadband Technologies, Inc.'s success and ability to compete are
dependent to a significant degree on its proprietary technology. The Company and
Broadband Technologies, Inc. regard their technology as proprietary and attempt
to protect it with patents, copyrights, trademarks, trade secret laws,
restrictions on disclosure and other methods. The Company and Broadband
Technologies, Inc. rely primarily on state and federal copyright, trade secret
and trademark common law to protect their proprietary technology. The Company
and Broadband Technologies, Inc. have several unregistered trademarks and
various unregistered copyrights. Broadband Technologies, Inc. has patents
pending with respect to its technology. There can be no assurance that any
patent will issue from these applications or that, if issued, any claims allowed
will be sufficiently broad to protect the technology.

In addition, there can be no assurance that any patent will not be challenged,
invalidated or circumvented, or that any rights granted there under would
provide proprietary protection. It is the Company's and Broadband Technologies,
Inc.'s policy to enter into confidentiality and non-competition agreements with
their associates and generally to control access to and distribution of its
proprietary technology. Notwithstanding the precautions taken by the Company and
Broadband Technologies, Inc. to protect their intellectual property rights, it
is possible that third parties may copy or otherwise obtain and use the
Company's and Broadband Technologies, Inc.'s proprietary technology without
authorization or otherwise infringe on the Company's and Broadband Technologies,
Inc.'s proprietary rights. It is also possible that third parties may
independently develop technologies similar to those of the Company or Broadband
Technologies, Inc. Policing unauthorized use of the Company's or Broadband

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                                    Page 11
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--------------------------------------------------------------------------------


Technologies, Inc.'s intellectual property rights may be difficult, particularly
because it is difficult to control the ultimate destination or security of
information transmitted over the Internet. The Company and Broadband
Technologies, Inc. believe that due to the rapid pace of technological
innovation for Internet products and services, the Company's and Broadband
Technologies, Inc.'s ability to establish and maintain a position of technology
leadership in the industry depends more on the skills of its development
personnel than upon the legal protections afforded its existing technology. In
addition, the laws of foreign countries may afford inadequate protection of
intellectual property rights.

GOVERNMENT REGULATION. The Company is not a credit card issuer. Even so, certain
of its operations may be affected by laws and regulations applicable to credit
card issuers. The relationship of a customer and a creditor is extensively
regulated by federal and state consumer protection and related laws and
regulations. Significant laws include the Fair Debt Collection Practices Act
("FDCPA"), Federal Truth-In-Lending Act, Fair Credit Billing Act, as well as
applicable comparable statutes in the states in which customers reside or in
which the financing institutions who originated the credit account are located.
Failure to comply with applicable federal and state laws and regulations could
have a material adverse effect on the Company. Applicable laws and regulations
may limit the Company's ability to collect amounts owing with respect to
receivables, regardless of any act or omission on the part of the Company. No
assurance can be given that any indemnities received from the financial
institutions who originated the credit account will be adequate to protect the
Company from losses on the receivables or liabilities to customers. Any new laws
or rulings that may be adopted, and existing consumer protection laws may
adversely affect the Company's ability to collect the receivables. In addition,
the failure of the Company and its affiliates to comply with such requirements
could adversely affect the Company's ability to enforce the receivables and
result in liability.

The Company has carefully structured its corporate operations and business
activities in a manner which, to the degree possible, avoids the application of
United States or state securities laws. The securities industry in the United
States is subject to extensive regulation under both federal and state laws. In
addition, the SEC, the NASD, various stock exchanges, and other regulatory
bodies, such as state securities commissions, require strict compliance with
their rules and regulations. As a matter of public policy, regulatory bodies are
charged with safeguarding the integrity of the securities and other financial
markets and with protecting the interests of customers participating in those
markets, and not with protecting the interests of the Company's stockholders.
Persons functioning as broker-dealers are subject to regulations covering all
aspects of the securities business, including sales methods, trade practices
among broker-dealers, use and safekeeping of customers' funds and securities,
capital structure, record keeping and the conduct of directors, officers and
employees. Failure to comply with any of these laws, rules or regulations could
result in censure, fine, the issuance of cease-and-desist orders, or the
barring, suspension or expulsion of a broker-dealer or any of its officers or
employees, any of which could have a material adverse effect on the Company's
business, financial condition and operating results.

The Company conducts a significant portion of its business through the Internet
and other electronic mediums and intends to expand its use of such mediums. To
date, the use of the Internet has been relatively free from regulatory
restraints. The SEC and certain states, however, are beginning to address the
regulatory issues that may arise in connection with the use of the Internet.
Accordingly, new regulations or interpretations probably will be adopted that
constrain the Company's ability to transact business through the Internet or
other electronic mediums. Any additional regulation of the Company's use of
electronic mediums could render its business or operations more costly, less
efficient, or even impossible.

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                                    Page 12
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--------------------------------------------------------------------------------


ITEM 2. PROPERTIES

The Company's principal corporate offices are located at 701 B Street Suite
1775, San Diego, Ca 92101 and consist of 1,437 square feet. This facility is
leased on a long-term lease expiring February 2003.

Security Asset Properties, Inc. purchases cash-flowing single and multi-family
residential rental properties in San Diego County and currently owns and manages
14 such properties.

ITEM 3. LEGAL PROCEEDINGS

NONE

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

Not applicable.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

                                  Stock Prices

YEAR 2000                                   HIGH         LOW       CLOSE
---------                                   ----         ---       -----
FIRST QUARTER (1/31/00 -3/31/00)           2.9375        1.5       2.75
SECOND QUARTER (4/1/00 - 6/30/00)           2.25         1.62      2.00
THIRD QUARTER (7/1/00 - 9/30/00)           1.0625        .625     .65625
FOURTH QUARTER (10/31/00 -12/31/00)

YEAR 1999                                   HIGH         LOW       CLOSE
---------                                   ----         ---       -----
FIRST QUARTER (1/31/99 -3/31/99)             .50        .3125       .50
SECOND QUARTER (4/1/99 - 6/30/99)           .4375        .17        .25
THIRD QUARTER (7/1/99 - 9/30/99)           .28125       .1875       .37
FOURTH QUARTER (10/31/99 -12/31/99)          .21         .125       .21


SUCCESSOR ISSUER ELECTION. Pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, the Company elected to
become the successor issuer to Universal View Corporation for reporting purposes
under the Securities Exchange Act of 1934 and elects to report under the Act
effective April 4, 2000.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS FOR EACH OF THE YEAR ended December 2000 AND 1999.

REVENUE

Revenue for the year ended December 31, 2000 increased by $149,303 to $1,952,256
as compared to $1,802,953 for the year ended December 31, 1999. The increase is
primarily attributable to added revenues from Portfolio Revenue.

LOSS FROM OPERATION

Loss from Operations is calculated by subtracting operating expenses from net
revenue. Net Loss from Operation for the year ended December 31, 2000 increased
to $4,771,,946 as compared to $540,341 for the year ended December 31, 1999.
This increased loss was primarily attributable to increased financing costs and
expense related to development of the Debt Registry and fund raising efforts.

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


OPERATING EXPENSES

Operating expenses include administrative and management benefits and salaries,
advertising and promotion, office and general, interest, professional fees and
occupancy costs. Operating expenses for the year ended December 31, 2000
increased by $4,380,908 to $6,724,202, as compared to $2,343,294 for the year
ended December 31, 1999. This increase was primarily attributable to increase in
Portfolio activities and related increase in costs and staff.

NET LOSS

Net loss for the year ended December 31, 2000 increased by $5,838,055 from a net
loss of $1,591,181 for the year ended December 31, 1999 to a net loss of
$7,429,236 for the year ended December 31, 2000. This increase is primarily
attributable to the increase in financial costs and expenses related to
development of the Debt Registry and fund raising efforts. Of the loss
$3,527,901 is a non cash valuation of various stock for services transactions
and $675,000 write off of previously recorded goodwill.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of cash and cash flow from operations are its
short-term and long-term debt and increased gross revenues. At December 31,
2000, the Company had cash and cash equivalents of $3,443. During the year ended
December 31, 2000, the Company had cash flow deficit from operations of $26,137.

The Company plans to continue funding operations through revenue earned from its
asset portfolio purchase and sale operations, additional debt and equity capital
raises.

As of April 12, 2001, the Company had limited working capital. The Company has
limited material tangible assets. To date, Broadband Technologies, Inc. has not
created any revenues and, as a result of the signification expenditures that the
Company plans to make in sales and marketing, research and development and
general and administrative activities over the near term, the Company expects
that Broadband Technologies, Inc. will continue to incur significant operating
losses and negative cash flows from operations on both a quarterly and annual
basis for the foreseeable future. For these and other reasons, there can be no
assurance that the Company or Broadband Technologies, Inc. will ever achieve or
be able to sustain profitability.

FORWARD-LOOKING STATEMENTS

Certain information set forth herein (other than historical data and
information) may constitute forward-looking statements regarding events and
trends which may affect the Company's future operating results and financial
trends which may affect the Company's future operating results and financial
position. The words "believe," "endeavor," "expect," "anticipate," "estimate,"
"intends," and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks, uncertainties and
assumptions, including, without limitation, the risks and uncertainties
concerning technological changes, increased competition, and general economic
conditions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, or projected. The Company cautions
potential investors not to place undue reliance on any such forward-looking
statements, all of which speak only as of the date of this Annual Report on Form
10-KSB. It is not possible to foresee or identify all such factors. The Company
disclaims any intention, commitment or obligation to revise or update any
forward-looking statement, or to disclose any facts, events or circumstances
that occur after the date hereof, which may affect the accuracy of any
forward-looking statement.

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


ITEM 7. FINANCIAL STATEMENTS

See F section.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

NONE

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth information about our directors and executive
officers.


DAVID R. WALTON, 52, has been the Chairman of the Board and Chief Executive
Officer of the Company since 1993. From 1987 until 1993, Mr. Walton was
Executive Vice President of El Dorado Asset Management, a financial services
firm, and President of Desert Financial Services, Inc., a company that developed
over 3,000 condominiums in California. Mr. Walton received his bachelor's degree
from United States International University and Juris Doctorate from California
Western School of Law.

DARRELL MUSICK, 65, has been the President of the Company since 1993. Since
1997, Mr. Musick has been on the Board of Directors of the Debt Buyers
Association, and maintains direct relationships with credit grantors from the
credit card, financing, banking and commercial industries. Previously, Mr.
Musick was Regional Manager of Fedmart, now known as Costco, where he worked
from 1958 through 1964. From 1964 to 1982, he was General Manager of Crocker
Capital Corporation, an investment company. Mr. Musick received his bachelor's
degree from San Diego State University.

DANIEL J. HILL, 48, has been a Director of the Company since 1998. Mr. Hill has
over 20 years management experience in the high technology electronics business.
>From 1992 until 1995, Mr. Hill was the Chief Executive Officer of Micro
Component Technology, Inc. (MCTI). Since 1995, Mr. Hill has been the Executive
Director, Semiconductor Industry at PriceWaterhouseCoopers. From 1980 until
1992, Mr. Hill was Vice President and Division General Manager of National
Semiconductor, where he was responsible for over 6,000 employees. Mr. Hill is an
industry speaker and publisher in the semi-conductor field. He has served on 20
different boards of directors of technology companies in eight countries.

RICHARD GARTRELL, 53, has been the Chief Financial Officer and a Director of the
Company since 1999. Mr. Gartrell was a Senior Tax Accountant at Arthur Andersen
& Co from 1974 until 1978. He became a Certified Public Accountant in the State
of Colorado in 1975. From 1981 until 1989, Mr. Gartrell was the Corporate Vice
President of Operations and Finance of the Bill L. Walters Company, Inc., with
responsibilities including financial reporting and management of 110 diverse
entities. From 1991 and 1998, Mr. Gartrell was an independent consultant to
various companies in the real estate, investment, banking and online business.
Mr. Gartrell is a recognized expert in the preparation and implementation of
project feasibility plans, marketing, financial controls, loan negotiations and
joint venture structuring. Mr. Gartrell has worked extensively as a forensic
accountant in civil and family law litigation and has been qualified in the
California court system as an expert witness in real estate, finance, and
accounting. Mr. Gartrell received his bachelor's degree from Colorado State
University.

DAVID S. WALTON, 74, has been the Secretary, Treasurer and a Director of the
Company since 1996. Mr. Walton is David R. Walton's father. Mr. David S. Walton
has substantial experience in internal controls and auditing. Mr. Walton was
President of Transeastern Commodities, Inc., as well as the internal auditor and
a consultant for James Copley of the Copley newspaper chain. Additionally, Mr.
Walton consulted for the Loomis Armored Car and Courier Services, the James
White Oil Company, and the Eleventh Naval Headquarters in San Diego. Mr. Walton
is the founder and an owner of the San Diego Athletic Club. Mr. Walton received
his bachelor's degree from the University of Southern California.

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                                    Page 15
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--------------------------------------------------------------------------------


The Directors named above will serve until the next annual meeting of the
shareholders of the Company in the year 2001. Directors will be elected for
one-year terms at each annual shareholder's meeting. Officers hold their
positions at the appointment of the Board of Directors.

Each Director holds office until his successor is elected and qualified or until
his earlier resignation in the manner provided in the bylaws of the Company. The
Board of Directors has established an Audit Committee, consisting of Mr. David
S. Walton, Mr. Gartrell, and Mr. Musick and a Compensation Committee, consisting
of Mr. David R. Walton and Mr. Musick. The Audit Committee reviews the Company's
independent auditors, the scope and timing of the audit services, and other
services they are asked to perform, the Auditor's Report on the Company's
financial statements following completion of the audit, and the Company's
policies and procedures, with respect to internal accounting and financial
controls. In addition, the Audit Committee makes annual recommendations to the
Board of Directors for the appointment of independent auditors for the ensuing
year. The Compensation Committee reviews and recommends to the Board of
Directors the compensation and benefits of all officers of the Company and
reviews general policy matters relating to compensation and stock issuance and
benefits of employees and consultants of the Company.

Effective March 2001, the Board accepted the resignation of Daniel Smith and
Daniel Dallenbach from the Board of Directors. Both Mr. Dallenbach and Mr. Smith
resigned when Security Asset Properties was sold and their respective time was
needed to be spent elsewhere.

No directors have resigned due to a disagreement with the Company since the date
of the last annual meeting of shareholders.


ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth all annual and long-term compensation for
services in all capacities to the Company for the last fiscal year in respect of
each of the individuals who were, as of December 31, 2000, considered executive
officers.


<TABLE>
<CAPTION>
                                           SUMMARY COMPENSATION TABLE

                                                                          LONG TERM
                                   ANNUAL                               COMPENSATION         SECURITIES
                                C0MPENSATION                          RESTRICTED STOCK       UNDERLYING
NAME AND PRINCIPAL POSITION         YEAR           SALARY & FEES           AWARDS             OPTIONS
<S>                                 <C>               <C>                 <C>                  <C>
David R Walton                      2000              $66,250             $273,593               0
Chief Executive Officer
Darrell Musick                      2000              $62,500                $0                  0
President
Richard Gartrell                    2000              $10,000             $382,500             $7,407
Chief Financial
Officer
David S Walton                      2000              $35,750             $260,312               0
Secretary
</TABLE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information about our directors and executive
officers.

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                                    Page 16
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SECURITY ASSET CAPITAL CORPORATION - 10KSB - Annual Report  Date Filed:4/17/2001
--------------------------------------------------------------------------------


                          NAME OF           SHARES OF
    TITLE OF CLASS    BENEFICIAL OWNER     COMMON STOCK     PERCENT OF CLASS(h)
    --------------    ------------------   ------------     -------------------

    Common            Cede & Company(a)     3,515,473             22.57%

                      Darrell Musick(b)     1,750,000             11.24%

                      David R. Walton(c)    1,100,000              7.06%
Directors and
Officers as a
Group                                       4,925,000             31.62%

(a) Cede & Company is a holding company for private investors. Cede & Company
does not hold any shares of the Company's Common Stock for the benefit of any of
the Company's officers or directors.

(b) Mr. Musick and his wife, Marie A. Musick, are the beneficial owners of Tonda
Corporation, a Nevada corporation, that owns 1,400,000 shares of the Company's
Common Stock. Although Mr. Musick does not beneficially own more than the shares
listed, his son, Daniel Warren Musick, owns 883 shares, his mother, Esther G.
Musick, owns 333 shares, and his wife, Marie A. Musick, owns 333 additional
shares.

(c) Mr. David R. Walton is the beneficial owner of Jade Corporation, a Nevada
corporation, that owns 1,100,000 shares of the Company's Common Stock. Although
Mr. Walton does not beneficially own more than the shares listed, his brother,
Jeffrey Walton, owns 333 shares, his sister, Christina Walton, owns 333 shares,
and his mother, Julianne Teichmann, owns 100,000 shares.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

Index to Exhibits


        1       Certificate of Incorporation of the Company - Nevada

        2       Bylaws of the Company+

        3       Stock Option Plan (1997)+

        (b) Report on Form 8-K - None.

Universal View 1998 and 1999 audited financial statements included by reference.


                                   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 hereunto duly authorized.

                                     Security Asset Capital Corporation,
                                     a Nevada corporation


DATED:  April 16, 2001               /s/ DAVID R. WALTON
                                     ------------------------------------------
                                     David R. Walton, Chief Executive Officer

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                                    Page 17
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                        AND INDEPENDENT AUDITORS' REPORT

                 For The Years Ended December 31, 2000 and 1999


<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES


                                TABLE OF CONTENTS
                                -----------------

INDEPENDENT AUDITORS' REPORT.................................................F-1

FINANCIAL STATEMENTS

      Consolidated Balance Sheets......................................F-2 - F-3

      Consolidated Statements of Operations..................................F-4

      Consolidated Statements of Shareholders' (Deficit) Equity........F-5 - F-6

      Consolidated Statements of Cash Flows............................F-7 - F-8

      Notes to Consolidated Financial Statements......................F-9 - F-27

<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------



To the  Shareholders
Security Asset Capital Corporation and Subsidiaries
San Diego, California

We have audited the consolidated balance sheets of Security Asset Capital
Corporation and Subsidiaries (the "Company") as of December 31, 2000 and 1999
and the related consolidated statements of operations, shareholders' (deficit)
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Security Asset Capital Corporation and Subsidiaries as of December 31, 2000 and
1999, and the consolidated results of their operations and their cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 20 to
the financial statements, the Company has suffered recurring losses from
operations, significant negative working capital and no guaranteed access to
capital resources. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 20. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.




San Diego, California                               PANNELL KERR FORSTER
April 12, 2001                                      Certified Public Accountants
                                                    A Professional Corporation

                                       F-1
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999


                                     ASSETS
                                     ------

                                                         2000           1999
                                                     ------------   ------------
Current assets:
      Cash                                           $     3,443    $    29,580
      Cash in transit                                         --      1,649,972
      Loan portfolio assets                            1,949,598      3,243,864
      Related party receivables - directors               46,289         14,000
      Accounts receivable                                 21,571         36,149
                                                     ------------   ------------

            Total current assets                       2,020,901      4,973,565
                                                     ------------   ------------

Rental real estate, net                                3,093,404      4,069,663
Furniture and equipment, net                              72,107         49,489

Other assets:
      Patent and patents pending                       1,552,500      1,552,500
      Goodwill, net of accumulated
            amortization of $150,000                   1,100,628             --
      Deferred financing costs, net                      273,160        404,247
      Miscellaneous assets                                 2,845         15,800
                                                     ------------   ------------

                                                       2,929,133      1,972,547
                                                     ------------   ------------

            Total assets                             $ 8,115,545    $11,065,264
                                                     ============   ============

        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                       F-2
<PAGE>

                            SECURITY ASSET CAPITAL CORPORATION
                                     AND SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS
                                December 31, 2000 and 1999

                      LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
                      ----------------------------------------------

<TABLE>
<CAPTION>
                                                                     2000             1999
                                                                 -------------   -------------
<S>                                                              <C>             <C>
Current liabilities:
      Bank overdraft                                             $      7,042    $         --
      Accounts payable                                                306,470          97,882
      Loan sales payable to third parties                                  --         999,428
      Loan portfolio payable                                               --         732,736
      Due to related parties                                               --          18,066
      Accrued expenses and other liabilities                           44,041          46,578
      Notes payable (including accrued interest of
            $309,833 and $170,795 at December 31, 2000
            and 1999, respectively)                                 7,051,542       4,987,110
      Note payable                                                     50,000              --
      Current portion of long term debt                                38,326         119,513
                                                                 -------------   -------------

            Total current liabilities                               7,497,421       7,001,313
                                                                 -------------   -------------

Long term debt, net of current portion                              2,336,745       2,908,780
Deferred income taxes                                                      --         250,000
                                                                 -------------   -------------

            Total liabilities                                       9,834,166      10,160,093
                                                                 -------------   -------------

Commitments and contingencies (Notes 13 and 19)

Shareholders' (deficit) equity:
      Common stock, $0.001 par value, 25,000,000
         shares authorized; 15,573,510 and 9,901,000
         shares issued in 2000 and 1999, respectively;
         925,000 shares issuable at December 31, 1999                  15,573          10,826
      Additional paid-in capital                                    8,746,056       3,422,274
      Accumulated deficit                                          (9,957,165)     (2,527,929)
      Less treasury stock at cost, 328,850 and 0 common
         shares at December 31, 2000 and 1999                        (523,085)             --
                                                                 -------------   -------------

      Total shareholders' (deficit) equity                         (1,718,621)        905,171
                                                                 -------------   -------------

      Total liabilities and shareholders' (deficit) equity       $  8,115,545    $ 11,065,264
                                                                 ============    ============

    The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                          F-3
<PAGE>

                            SECURITY ASSET CAPITAL CORPORATION
                                     AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF OPERATIONS
                      For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                      2000            1999
                                                                  -------------   -------------
<S>                                                               <C>             <C>
Revenues:
      Portfolio revenue                                           $  1,533,504    $  1,728,367
      Rental revenue                                                   418,752          74,586
                                                                  -------------   -------------

      Total revenues                                                 1,952,256       1,802,953
                                                                  -------------   -------------

Expenses:
      Portfolio expenses                                             1,251,527       1,375,928
      Rental expenses                                                  236,855          49,535
      General and administrative                                     5,235,820         917,831
                                                                  -------------   -------------

      Total expenses                                                 6,724,202       2,343,294
                                                                  -------------   -------------

            Loss from operations                                    (4,771,946)       (540,341)

Other income (expense):
      Other income                                                      29,280           4,273
      Loss on sale of assets                                           (84,296)             --
      Interest expense (including amortization of deferred
        financing costs of $1,079,154 and $572,732 in
        2000 and 1999, respectively)                                (2,041,806)       (925,425)
      Other expenses                                                  (135,468)        (23,438)
      Impairment of acquired goodwill                                 (675,000)             --
                                                                  -------------   -------------

      Total other expense                                           (2,907,290)       (944,590)
                                                                  -------------   -------------

            Loss before income taxes and extraordinary item         (7,679,236)     (1,484,931)

Income tax benefit (expense)                                           250,000        (250,000)
                                                                  -------------   -------------

            Loss before extraordinary item                          (7,429,236)     (1,734,931)

Extraordinary item - debt forgiveness, net of tax
   effect of $0 (Note 14)                                                   --         143,750
                                                                  -------------   -------------

            Net loss                                              $ (7,429,236)   $ (1,591,181)
                                                                  =============   =============

Basic and diluted loss before extraordinary item per share        $      (0.61)   $      (0.21)
                                                                  =============   =============

Basic and diluted net loss per share                              $      (0.61)   $      (0.19)
                                                                  =============   =============

Shares used to compute basic and diluted net loss per
   share and loss before extraordinary item per share               12,247,066       8,391,500
                                                                  =============   =============

    The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                          F-4
<PAGE>

<TABLE>
                                      SECURITY ASSET CAPITAL CORPORATION
                                               AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY
                                For the Years Ended December 31, 2000 and 1999

<CAPTION>
                                          Common Stock          Treasury Stock       Additional
                                     ----------------------  ---------------------    Paid-In     Accumulated
                                        Stock       Amount     Stock      Amount      Capital       Deficit        Total
                                     ------------  --------  ---------  ----------  ------------  ------------  ------------

<S>                                   <C>          <C>             <C>  <C>         <C>           <C>           <C>
Balance, December 31, 1998             6,910,000   $ 6,910         --   $      --   $   545,367   $  (936,748)  $  (384,471)

Issuances of common stock:
   Consulting services:
      May 1999                         1,700,000     1,700         --          --       157,675            --       159,375

      December 1999                       75,000        75         --          --         9,300            --         9,375

   Acquisition of asset,
      Broadband technology  patent
      and patents pending (Note 14)      810,000       810         --          --     1,511,690            --     1,512,500

   Acquisition of asset technology
      (Note 14)                            6,000         6         --          --         5,994            --         6,000

   Acquisition of subsidiary
      (Note 14)                          900,000       900         --          --     1,066,910            --     1,067,810

   Conversion of note payable
      (Note 14)                          250,000       250         --          --        31,000            --        31,250

   Settlement of legal disputes
      (Note 14)                          175,000       175         --          --        20,138            --        20,313

Issuance of common stock options
   for consulting services                    --        --         --          --        67,200            --        67,200

Contributed services of
   executive officers                         --        --         --          --         7,000            --         7,000

Net loss for the year ended
   December 31, 1999                          --        --         --          --            --    (1,591,181)   (1,591,181)
                                     ------------  --------  ---------  ----------  ------------  ------------  ------------

Balance, December 31, 1999            10,826,000   $10,826         --   $      --   $ 3,422,274   $(2,527,929)  $   905,171
                                     ============  ========  =========  ==========  ============  ============  ============

            The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                                     F-5
<PAGE>

<TABLE>
                                      SECURITY ASSET CAPITAL CORPORATION
                                               AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY (Continued)
                              For the Years Ended December 31, 2000 and 1999

<CAPTION>
                                          Common Stock          Treasury Stock       Additional
                                     ----------------------  ---------------------    Paid-In     Accumulated
                                        Stock       Amount     Stock      Amount      Capital       Deficit        Total
                                     ------------  --------  ---------  ----------  ------------  ------------  ------------

<S>                                   <C>          <C>        <C>       <C>         <C>           <C>           <C>
Balance, December 31, 1999            10,826,000   $10,826         --   $      --   $ 3,422,274   $(2,527,929)  $   905,171

Issuances of common stock:

   Consulting services:

      February and March 2000            331,500       332         --          --       625,269            --       625,601

      April 2000                         200,000       200         --          --       382,300            --       382,500

      July and August 2000               237,500       237         --          --       255,907            --       256,144

      October, November and
        December 2000                  1,555,000     1,555         --          --       941,414            --       942,969

   Acquisition of subsidiary,
      Universal View Corp.
      (Note 7)                           400,000       400         --          --       899,600            --       900,000

   Acquisition of subsidiary,
      The Debt Registry (Note 7)       1,100,000     1,100         --          --       899,528            --       900,628

   Settlement of legal dispute
      (Note 14)                           75,000        75         --          --       135,394            --       135,469

   Services of executive officers
      (Note 14)                          750,000       750         --          --       533,156            --       533,906

   Various consulting services            98,510        98         --          --        78,872            --        78,970

   Issuance of common stock options
      for consulting services
      (Note 15)                               --        --         --          --       572,342            --       572,342

Purchase of treasury shares
   (Note 14)                                  --        --    328,850    (523,085)           --            --      (523,085)

Net loss for the year ended
   December 31, 2000                          --        --         --          --            --    (7,429,236)   (7,429,236)
                                     ------------  --------  ---------  ----------  ------------  ------------  ------------

Balance, December 31, 2000            15,573,510   $15,573    328,850   $(523,085)  $ 8,746,056   $(9,957,165)  $(1,718,621)
                                     ============  ========  =========  ==========  ============  ============  ============

            The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                                     F-6
<PAGE>

                            SECURITY ASSET CAPITAL CORPORATION
                                     AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                      For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                              2000           1999
                                                                          ------------   ------------
<S>                                                                       <C>            <C>
Cash flows from operating activities:
      Net loss                                                            $(7,429,236)   $(1,591,181)
      Adjustments to reconcile net loss to net cash flows
         used in operating activities:
            Extraordinary gain on debt forgiveness                                 --       (143,750)
            Depreciation and amortization                                     261,471         17,740
            Amortization of technology acquired                                    --          6,000
            Amortization of deferred financing costs                        1,079,154        572,732
            Loss on sale of property and equipment                             84,296             --
            Increase in accrued interest on notes payable                     375,829        169,044
            Issuances of common stock for settlement of legal disputes        135,469         20,313
            Issuances of common stock for consulting and other services     2,286,184         60,938
            Issuances of common stock for consulting and other
               services of executive officers                                 533,906        107,812
            Contributed services of executive officers                             --          7,000
            Impairment of acquired goodwill                                   675,000             --
            Issuance of common stock options for consulting and
               other services                                                 572,342         67,200
      Changes in operating assets and liabilities:
            (Increase) decrease in:
                  Cash in transit                                           1,649,972     (1,649,972)
                  Loan portfolio assets                                     1,294,266     (3,243,864)
                  Related party receivables - directors                      (213,361)       (48,402)
            Increase (decrease) in:
                  Payables, accrued expenses and other liabilities         (1,530,095)     1,955,079
                  Deferred income taxes payable                              (250,000)       250,000
                                                                          ------------   ------------

                  Net cash flows used in operating activities                (474,803)    (3,443,311)
                                                                          ------------   ------------

Cash flows from investing activities:
      Acquisition/additions to rental properties                              (46,704)       (95,354)
      Purchase of property and equipment                                      (32,698)       (53,361)
      Purchase of patent and patents pending technology                            --        (40,000)
      Proceeds from sale of rental properties, net                            837,276        324,427
      Acquisition of subsidiary                                              (125,000)         9,630
                                                                          ------------   ------------

                  Net cash flows provided by investing activities             632,874        145,342
                                                                          ------------   ------------

     The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                            F-7
<PAGE>

                                 SECURITY ASSET CAPITAL CORPORATION
                                          AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                           For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                              2000           1999
                                                                          ------------   ------------
<S>                                                                       <C>            <C>
Cash flows from financing activities:
      Increase in bank overdraft                                          $    (7,042)   $        --
      Increase in deferred financing costs                                   (948,067)      (901,577)
      Purchase of treasury stock                                             (314,480)            --
      Repayments of notes payable                                          (6,915,548)      (101,227)
      Borrowings of notes payable                                           8,604,151      4,451,520
      Borrowing of note payable                                                50,000             --
      Repayments of long-term debt                                           (653,222)      (211,529)
      Repayment of notes payable - related parties                                 --        (24,776)
                                                                          ------------   ------------

                  Net cash flows (used in) provided by
                       financing activities                                  (184,208)     3,212,411
                                                                          ------------   ------------

Net decrease in cash                                                          (26,137)       (85,558)

Cash at beginning of year                                                      29,580        115,138
                                                                          ------------   ------------

Cash at end of year                                                       $     3,443    $    29,580
                                                                          ============   ============


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for:
      Interest                                                            $   622,391    $ 1,049,404
                                                                          ============   ============
      Income taxes                                                        $        --    $        --
                                                                          ============   ============

Supplemental disclosure of noncash investing and financing activities:

      Issuance of common stock for patent and patents
            pending technology, other technology and the
            acquisition of Universal View Corporation and
            The Debt Registry                                             $ 1,800,628    $ 1,518,500
                                                                          ============   ============

      Settlement and conversion of note payable
            for common stock                                              $        --    $    31,250
                                                                          ============   ============

      Fair value of assets in excess of liabilities
            acquired upon acquisition of SAP
            common stock via the issuance of
            SACC common stock                                             $        --    $ 1,067,810
                                                                          ============   ============

      Acquisition of treasury stock in exchange for
            note receivable - executive officer                           $   208,605    $        --
                                                                          ============   ============

          The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                                F-8
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------------

         ORGANIZATION AND BUSINESS

         Security Asset Capital Corporation ("SACC"), a Nevada corporation,
         traded under the symbol ("SCYA"), operates through the following wholly
         owned subsidiaries:

              Security Asset Management, Inc. ("SAM"), a California corporation,
              which, together with SACC, acquires, manages, collects and markets
              distressed consumer credit portfolios for their own account and
              third parties.

              Security Asset Properties, Inc. ("SAP"), a Nevada corporation,
              owns and operates fourteen income producing residential properties
              in San Diego County, California. This corporation, formerly known
              as Four D Corporation, was acquired in a stock swap on October 31,
              1999, whereby SACC acquired 100% of the outstanding common stock
              of Four D Corporation in exchange for 900,000 shares of Security
              Asset Capital Corporation's common stock. This transaction has
              been recorded as a purchase. The excess fair value of assets
              acquired over liabilities assumed of $1,067,810 was allocated to
              rental real estate. The results of operations of the acquired
              business have been included in Security Asset Capital Corporation
              and subsidiaries' consolidated results of operations from the date
              of acquisition. Had the acquisition occurred on January 1, 1999,
              the proforma net rental real estate at December 31, 1999 would
              have been $4,025,228, a decrease of $25,500, and the proforma net
              loss and basic and diluted net loss per share for the year ended
              December 31, 1999 would have been $(1,738,987) and $(0.19),
              respectively, an increase of $147,806 and no change, respectively.

              Broadband Technologies, Inc. ("Tech"), a Nevada corporation, was
              formed in 1999. Tech was capitalized by the contribution from SACC
              of a patent and certain patents pending and licensing for direct
              on-line full screen video technology which was acquired for cash
              and stock in 1999 by SACC. Tech will continue development of its
              capability for video streaming on-line and enhanced distributive
              database management on the Internet.

              The Debt Trader holds certain technology and rights related to an
              online market place for buyers and sellers of distressed debt
              portfolios, internally known as theDebtTrader.com.

              The Debt Registry, a Nevada corporation uses the acquired
              broadband technology, develops it further, and applies it to the
              registration and tracking of individual debt accounts sold by
              lending institutions to third parties. The CUSIP type tracking
              system will bring order and accountability to the buying and
              selling of debt portfolios in a manner similar to what the title
              companies did for the real estate industry. The Company has
              tentative agreements with five major banks and companies to
              require the registration of their credit card accounts when they
              are sold to third parties. The Company anticipates The Debt
              Registry will be operating prior to the end of the second quarter
              of 2001. (See Note 7)

              Universal View Corp., a development stage reporting public shell
              corporation was acquired by the Company during 2000 through a
              reverse merger for $1,025,000 consisting of cash in the amount of
              $125,000 and 400,000 shares of the Company's common stock.
              Universal View Corp. had no activity during the year ended
              December 31, 2000. (See Note 7)

                                      F-9
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
---------------------------------------------------------

         The consolidated group, collectively referred to as the "Company", has
         incurred losses from operations since inception. During 1999, the
         Company acquired a real estate property and management company with
         rental income properties. In addition, the Company also acquired a
         broadband and distributive storage technology patent, and certain
         patents pending and proprietary technology rights.

         The Company had limited operating revenue until 1999. Its debt division
         realized gross revenues in excess of $1,500,000 and $1,700,000 from the
         sale and collection of loan portfolio assets for the years ended
         December 31, 2000 and 1999, respectively. The Company intends to fund
         future operations through developing revenue sources and with
         additional capital raises through both public and private placement of
         its common stock and debt. Subsequent to year end, the Company began
         the process of raising $5 million through a private placement offering
         to fund operations and the development of The Debt Registry, Tech and
         theDebtTrader.com.

         PRINCIPLES OF CONSOLIDATION

         The accompanying financial statements consolidate the accounts of
         Security Asset Capital Corporation and its wholly-owned subsidiaries,
         Security Asset Management, Inc., Security Asset Properties, Inc.,
         Broadband Technologies, Inc., the DebtTrader.com and The Debt Registry.
         All significant intercompany accounts and transactions have been
         eliminated in consolidation.

         FINANCIAL INSTRUMENTS

         The carrying amounts reported in the consolidated balance sheets for
         cash, cash in transit, bank overdraft, accounts payable, loan sales
         payable to third parties, loan portfolio payable, accrued expenses and
         notes payable approximate fair value due to the immediate short-term
         maturity of these financial instruments. The fair value of the
         Company's long-term obligations approximates the carrying amount based
         on the current rates offered to the Company for debt of the same
         remaining maturities with similar collateral requirements.

         FAIR VALUE OF LOAN PORTFOLIO ASSETS

         The fair value of the Loan Portfolio Assets as evaluated by management
         is estimated by using available market information and other valuation
         methodologies. The fair value of the Company's Loan Portfolio Assets is
         estimated to exceed the related book value, unless otherwise indicated.

         Management estimates that the gross margin on resales of loan portfolio
         assets approximates 10% and that the gross potential collections from
         the Loan Portfolio Assets held as of December 31, 2000 will be in the
         range of $5,000,000 to $6,000,000, with estimated related collection
         costs of approximately 50% or $2,500,000 to $3,000,000, for an
         estimated net value of $2,500,000 to $3,000,000. These assets are
         carried on the books of the Company at cost, which approximates
         $1,950,000 at December 31, 2000. During 2000, the Company sold
         approximately $1,321, 000 and collected approximately $232,000.
         Management believes that the proceeds from the sale and collections of
         existing loan portfolio assets exceeds the carrying amount at December
         31, 2000.

                                      F-10
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
---------------------------------------------------------

         CONCENTRATIONS

         During 1999, the Company purchased a substantial portion of its debt
         portfolios from and jointly with one company, Exterra Credit. The
         Company has access to multiple sellers of debt portfolios and does not
         believe the reliance on Exterra Credit limits its ability to acquire
         debt portfolios economically in the future. The Company did not make
         any debt portfolio purchases during 2000.

         CASH AND CASH EQUIVALENTS

         The Company considers all cash accounts, which are not subject to
         withdrawal restrictions or penalties, and certificates of deposit and
         money market funds purchased with an original maturity of three months
         or less to be cash equivalents.

         The Company maintains its primary checking and savings accounts at two
         financial institutions located in California. Accounts at these banks
         are insured by the Federal Deposit Insurance Corporation (FDIC) up to
         $100,000. The Company has not experienced any losses in such accounts
         and management believes it places its cash on deposit with financial
         institutions which are financially stable.

         LOAN PORTFOLIO ASSETS AND REVENUE RECOGNITION

         Loan Portfolio Assets ("Portfolio Assets") represent liquidating loan
         portfolios of delinquent accounts which have been purchased by SACC for
         resale and collection and are stated at cost. The cost of the Loan
         Portfolio Assets are the actual dollars spent for the purchase of the
         portfolio, including related brokerage commissions, if any. Management
         believes that the proceeds from resale and collections exceed the
         carrying value of approximately $1.9 million.

         Loan Portfolio Asset costs are written off by a percentage of cash
         collections on a portfolio-by- portfolio basis. Management presently
         estimates that Portfolio Assets in collection will realize gross
         collections equal to approximately three times the purchase price of
         the Portfolio Assets. The Company, therefore, writes off one dollar of
         cost of Portfolio Assets for every three dollars in gross collection.

         Certain Loan Portfolio Assets are sold in part or in whole by the
         Company. Gains and losses from the sale of all or part of Loan
         Portfolio Assets are recorded as appropriate when Loan Portfolio Assets
         are sold. The amount of the portfolio cost written off is the cost of
         percentage of the face amount sold using the experiences, if any, in
         sales of the specific loan portfolio assets. As a number of sales have
         and will in the future occur, with any one portfolio, various sales
         prices are considered in determining the write off of the portfolio
         costs against the sales proceeds.

         The Company considers a sale to have taken place when there has been a
         transfer of Loan Portfolio Assets and where the Company surrenders
         control over the Loan Portfolio Assets to the extent that consideration
         other than beneficial interests in the transferred Loan Portfolio
         Assets is received in exchange for the Loan Portfolio Assets.

                                      F-11
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
---------------------------------------------------------

         FURNITURE AND EQUIPMENT

         Furniture and equipment is recorded at cost. Depreciation is calculated
         on the straight-line basis over the estimated useful life of five
         years.

         INVESTMENTS IN REAL ESTATE AND REVENUE RECOGNITION

         Real estate is carried as cost, net of accumulated depreciation.
         Improvements, major renovations and certain costs directly related to
         the acquisition, improvement and leasing of real estate are
         capitalized. Expenditures for maintenance and repairs are charged to
         operations as incurred. Depreciation for buildings and improvements is
         computed using the straight line method over the estimated useful lives
         of the assets, which is estimated to be 27.5 years. Depreciation for
         furniture and equipment is computed using the declining balance method
         over the estimated useful lives of the assets which is estimated to be
         7 years.

         An impairment loss is recognized, on a property by property basis, when
         expected undiscounted cash flows are less than the carrying value of
         the asset. In cases where the Company does not expect to recover its
         carrying costs, the Company reduces its carrying costs to fair value.
         No such reductions have occurred to date.

         SAP, a wholly owned subsidiary owns and operates fourteen (14) rental
         real estate properties located in San Diego County, California. The
         properties include ten (10) single-family dwellings, three (3)
         residential duplexes and one (1) apartment property consisting of 24
         units. All rental property units are rented as of December 31, 2000
         with current monthly rents of approximately $35,000. Several of the
         single-family dwellings are leased with an option granted to the tenant
         to purchase the properties. The appraised value of the properties held
         as of December 31, 2000 is based on the appraisal at the acquisition
         date of October 31, 1999, the date of acquisition, is approximately
         $3,455,000. The properties are encumbered by various notes payable
         secured by deeds of trust totaling approximately $2,375,000 and
         $3,028,000 as of December 31, 2000 and 1999, respectively. The
         cumulative debt service for the properties is approximately $18,000 per
         month. The individual properties are security for their related
         long-term notes payable. Certain of the notes payable were taken out
         and remain in the name of an executive of SAP.

         As of December 31, 2000, SAP has liabilities to tenants of
         approximately $27,000 for security deposits. These funds are not
         segregated as most are applied to the final months rental payments.

         The Company, as a lessor, has retained substantially all of the risks
         and benefits of ownership of the rental properties and accounts for its
         leases as operating leases. Income on leases, which includes scheduled
         increases in rental rates during the lease term is recognized on a
         straight-line basis.

         DEFERRED FINANCING COSTS

         Deferred financing costs represent debt financing costs which have been
         capitalized and are being amortized on a straight-line basis over the
         terms of the respective loans.

                                      F-12
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
---------------------------------------------------------

         NET LOSS PER SHARE

         Basic net loss per share excludes dilution and is computed by dividing
         net loss by the weighted average number of common shares outstanding
         during the reported periods. Diluted net loss per share reflects the
         potential dilution that could occur if stock options and other
         commitments to issue common stock were exercised. During the years
         ended December 31, 2000 and 1999, options to purchase 1,780,000 and
         1,350,000 common shares, respectively, were anti-dilutive and have been
         excluded from the weighted average share computation.

         INCOME TAXES

         The Company accounts for income taxes using the asset and liability
         method. Under the asset and liability method, deferred income taxes are
         recognized for the tax consequences of "temporary differences" by
         applying enacted statutory tax rates applicable to future years to
         differences between the financial statement carrying amounts and the
         tax bases of existing assets and liabilities. Deferred tax assets are
         reduced by a valuation allowance when, in the opinion of management, it
         is more likely than not that some portion or all of the deferred tax
         assets will not be realized.

         STOCK BASED COMPENSATION

         The Financial Accounting Standards Board (FASB) issued Statement of
         Financial Accounting Standards (SFAS) No. 123, "Accounting for
         Stock-Based Compensation." This statement encourages, but does not
         require, companies to recognize compensation expense for grants of
         stock, stock options, and other equity instruments based on a
         fair-value method of accounting.

         Companies that do not choose to adopt the expense recognition rules of
         SFAS No. 123 will continue to apply the existing accounting rules
         contained in Accounting Principles Board Opinion (APB) No. 25, but will
         be required to provide proforma disclosures of the compensation expense
         determined under the fair-value provisions of SFAS No. 123. APB No. 25
         requires no recognition of compensation expense for most of the
         stock-based compensation arrangements provided by the Company, namely,
         broad-based employee stock purchase plans and option grants where the
         exercise price is equal to the market price at the date of the grant.

         The Company has adopted the disclosure provisions of SFAS No. 123,
         effective January 1, 1998. The Company has opted to follow the
         accounting provisions of APB No. 25 for stock-based compensation and to
         furnish the pro forma disclosures required under SFAS No. 123. (See
         Note 15)

         TREASURY STOCK

         The Company has elected to record treasury stock at cost in accordance
         with APB No. 6.

                                      F-13
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
---------------------------------------------------------

         USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosure of contingent assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenues and expenses during the reporting period.
         Significant estimates include the estimation of the fair value of
         rental real estate acquired, the fair value of the Broadband technology
         acquired and the Debt Registry. Actual results could materially differ
         from those estimates.

         COMPREHENSIVE INCOME

         The FASB issued Statement of Financial Accounting Standards (SFAS) No.
         130, "Reporting Comprehensive Income." This statement establishes
         standards for reporting and display of comprehensive income and its
         components. The Company adopted this statement effective January 1,
         1998. For the years ended December 31, 2000 and 1999, the Company had
         no material items that were required to be recognized as components of
         comprehensive income.

         ACCOUNTING FOR INTERNAL COSTS RELATING TO REAL ESTATE PROPERTY
         ACQUISITIONS

         In March 1998, the Emerging Issues Task Force ("EITF") of the FASB
         issued EITF 97-11, "Accounting for Internal Costs Relating to Real
         Estate Property Acquisitions," which provides that internal costs of
         identifying and acquiring operating property should be expensed as
         incurred. This pronouncement was effective March 19, 1998.

         SEGMENT INFORMATION

         The FASB issued SFAS No. 131, "Disclosures about Segments of an
         Enterprise and Related Information." This statement requires companies
         to report certain information about operating segments. The Company
         adopted this statement effective January 1, 1998. For the years ended
         December 31, 2000 and 1999, the Company had three operating
         segments;(i) consumer credit portfolio, (ii) rental real estate
         portfolio, and (iii) broadband technology. The Company's rental real
         estate operations are located in only one geographic area, the County
         of San Diego, California.

         DERIVATIVE INSTRUMENTS

         In November 1998, the FASB issued SFAS No. 133, "Accounting For
         Derivative Instruments And Hedging Activities." SFAS No. 133
         establishes accounting and reporting standards for derivative
         instruments and hedging activities. It requires that entities recognize
         all derivatives as either assets or liabilities in the statement of
         financial position and measure those instruments at fair value.
         Depending on the intended use of the derivatives, changes in its fair
         value will be reported in the period of change as either a component of
         earnings or a component of other comprehensive income.

                                      F-14
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
---------------------------------------------------------

         In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
         Instruments and Hedging Activities - Deferral of the Effective Date of
         FASB Statement No. 133," ("SFAS No. 137"). SFAS No. 137 delays the
         effective date of implementation of SFAS No. 133 for one year making
         SFAS No. 133 effective for all fiscal quarters of all fiscal years
         beginning after June 15, 2000. Retroactive application to periods prior
         to adoption is not allowed. The Company will adopt SFAS No. 137 in the
         first quarter of 2001 and management believes adoption will not have a
         material impact on the consolidated financial statements.

         RECLASSIFICATIONS

         Certain prior year amounts presented on the statement of cash flows
         have been reclassified to conform to the current year's presentation.

NOTE 2 - CASH IN TRANSIT
------------------------

         On December 30, 1999, the Company sold portions of certain loan
         portfolios totaling $1,649,972. As of December 31, 1999, the proceeds
         from this sale were held in escrow. The Company received these funds on
         January 4, 2000. See Note 9.

NOTE 3 - LOAN PORTFOLIO ASSETS
------------------------------

         Loan portfolio assets is comprised of liquidating loan portfolios which
         have been purchased by the Company for resale and collection. As
         discussed in Note 1, the Loan Portfolio Assets are recorded at
         $1,949,598 and $3,243,864 at December 31, 2000 and 1999. Management
         believes that the proceeds from resale and collections exceed the
         carrying value.

NOTE 4 - INVESTMENTS IN RENTAL REAL ESTATE
------------------------------------------

                                                     December 31,   December 31,
                                                        2000           1999
                                                    -------------  -------------

                  Land                              $  1,302,192   $  1,719,050
                  Buildings and improvements           2,003,023      2,502,416
                  Furniture and equipment                 27,046         30,234
                                                    -------------  -------------
                                                       3,332,261      4,251,700

                  Less: accumulated depreciation        (238,857)      (182,037)
                                                    -------------  -------------

                                                    $  3,093,404   $  4,069,663
                                                    =============  =============

                                      F-15
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 5 - FURNITURE AND EQUIPMENT
--------------------------------
                                                     December 31,   December 31,
                                                        2000           1999
                                                    -------------  -------------

                  Furniture and equipment           $     89,709   $     57,011

                  Less: accumulated depreciation         (17,602)        (7,522)
                                                    -------------  -------------

                                                    $     72,107   $     49,489
                                                    =============  =============


NOTE 6 - PATENTS AND PATENTS PENDING
------------------------------------

         During 1999, the Company acquired a patent, certain patents pending and
         licensing for direct on-line full screen video technology in exchange
         for stock. The patent and patents pending have been recorded at fair
         market value at the date of acquisition based on an appraisal obtained
         by management. The Company will begin amortizing these intangible
         assets when the product pertaining to the patents is available for use
         by outside parties.


NOTE 7 - GOODWILL
-----------------

         During March 2000, the Company acquired 100% of the outstanding common
         stock of Universal View Corporation. The Company acquired all of the
         outstanding shares of Universal View Corporation in exchange for
         400,000 shares of Company common stock. At the time of purchase
         goodwill was recorded based on the excess of the fair market value of
         the cash given and the Company's common shares at the date of
         acquisition. Goodwill was recorded in the amount of $1,025,000.

         As of December 31, 2000 the goodwill associated with the acquisition of
         Universal View Corporation (a non operating shell corporation) has been
         reduced to $350,000 in accordance with FASB No. 121. The amount of
         impairment loss recognized for this item is $675,000. At December 31,
         2000, the net book value of goodwill associated with the purchase of
         Universal View Corporation is $200,000.

         During 2000, the Company issued approximately 1,100,000 shares of
         common stock in exchange for 100% of the outstanding common stock and
         the "domain names" associated with The Debt Registry. The Company has
         recorded goodwill in the amount of $900,628 based on the fair market
         value of the common stock on the dates issued. Amortization is
         calculated on the straight-line basis over the estimated useful life of
         5 years and will begin when operations commence. No amortization was
         recorded during 2000.

                                      F-16
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 8 - DEFERRED FINANCING COSTS
---------------------------------

         Deferred financing costs consist of the following at December 31, 2000
         and 1999:

                                                        2000           1999
                                                    -------------  -------------
         Deferred financing costs on notes payable
         (See Note 11)                              $  1,866,548   $    930,111

         Deferred financing costs associated with
         long-term mortgages secured by rental
         real estate                                      62,854         51,224

         Less: accumulated amortization               (1,656,242)      (577,088)
                                                    -------------  -------------

                                                    $    273,160   $    404,247
                                                    =============  =============


NOTE 9 - LOAN SALES PAYABLE TO THIRD PARTIES
--------------------------------------------

         The Company closed the sale of portions of certain loan portfolios on
         December 30, 1999 for $1,649,972. The loan portfolios sale included
         portfolios owned by the Company and portfolios owned by third parties.
         The entire proceeds from the portfolio sale were received by the
         Company resulting in the recording of loan sales payable to third
         parties, including commission owing on the sale, totaling $999,428.
         These amounts were paid in January 2000.

NOTE 10 - LOAN PORTFOLIO PAYABLE
--------------------------------

         The Company purchased three loan portfolios from Exterra Credit in
         August, September and October 1999. The total cost of the three
         portfolios was $1,072,736 of which $732,736 of the purchase price
         remained to be paid as of December 31, 1999. Subsequent to December 31,
         1999 Exterra Credit reduced the debt portfolios purchase price by
         $50,000 and the Company recognized the reduction in the cost of the
         portfolio.

NOTE 11 - NOTES PAYABLE
-----------------------

         In December 1998, the Company entered into a funding agreement with
         Secure Investments, Inc. in which Secure Investments, Inc. has agreed
         to provide up to $24,000,000 in notes payable ("Investor Notes") to be
         used for the purchase of debt portfolios and related note expenses.
         During 2000, significant increases in the Notes Payable balance was
         used to pay interest on the existing notes and commissions on new and
         renewed notes. The Investor Notes are structured as nine (9) month
         notes carrying interest at 12% per annum. The investor has a choice of
         being paid interest quarterly or at the end of the term. The agreement
         with Secure Investments, Inc. provides that any notes that are not
         renewed at the end of nine (9) months, will be replaced by Secure
         Investments, Inc. with a new investor of like or greater amount.

                                      F-17
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 11 - NOTES PAYABLE (Continued)
-----------------------

         At December 31, 2000 and 1999 respectively, the Company had outstanding
         liabilities of approximately $7,052,000 and $4,987,000 for 495 and 189
         nine-month notes to various individuals, family trusts, retirement
         accounts and a Peace organization. 197 and 72 of the Investor Notes
         totaling approximately $3,019,000 and $2,127,000 required quarterly
         payments of interest. The remaining 298 and 117 Investor Notes totaling
         $4,033,000 and $2,860,000, respectively accrue interest and are paid at
         maturity, if not converted into new Investor Notes. At December 31,
         2000, notes payable in the amount of approximately $1,423,000 were past
         due.

         The Investor Notes carry an annual interest rate of 12%. The Company
         pays significant commissions to various entities and individuals for
         arranging the funding of the Investor Notes (See Note 8).

         Funds from the Investor Notes have been used primarily to fund
         acquisitions of distressed consumer loan portfolios and pay costs
         related to notes including commissions and interest.

         Through April 12, 2001, the Company's experience has been that
         approximately 92 percent of the principal amount of the Investor Notes
         and approximately 28 percent of the accrued interest related to the
         Investor Notes are converted into new Investor Notes.

         During 1999, notes payable in the amount of $200,000 was converted into
         common stock. (See Note 14)

NOTE 12 - LONG-TERM DEBT
------------------------

         Long-term debt consists of the following as of December 31, 2000 and
         1999:

<TABLE>
<CAPTION>
         <S>                                                       <C>            <C>
         Fixed rate first trust deeds payable with interest
         ranging from 7.02% to 14.00% per annum, maturing
         through February 2029; the loans are secured by the
         subject properties.                                       $    776,663   $  1,020,387

         Variable rate first trust deeds payable with interest
         ranging from 7.16% to 8.25% per annum (the interest
         rates on these loans are subject to adjustment based
         on certain indices; the maximum rates under these
         loans can range from 11.95% to 15.75%), maturing through
         December 2035; the loans are secured by the subject
         properties.                                                  1,510,369      1,884,684

         Fixed rate second trust deeds payable with interest
         ranging from 8.00% to 15.00% per annum, maturing through
         May 2002; the loans are secured by the subject properties.      88,039        123,222
                                                                   -------------  -------------

                                                                      2,375,071      3,028,293

         Less: Current portion                                          (38,326)      (119,513)
                                                                   -------------  -------------

                                                                   $  2,336,745   $  2,908,780
                                                                   =============  =============
</TABLE>

                                      F-18
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 12 - LONG-TERM DEBT (Continued)
------------------------

         Aggregate maturities of long-term obligations at December 31 are as
         follows:

                        Year Ending                               Amount
                        -----------                           -------------
                           2001                               $     38,326
                           2002                                     27,152
                           2003                                     30,045
                           2004                                     31,318
                           2005                                     32,601
                           Thereafter                            2,215,629
                                                              -------------

                                                              $  2,375,071
                                                              =============

         TRANSFER OF PROPERTY TITLE AND ASSUMPTION OF OBLIGATIONS

         Properties acquired and the related borrowings against these properties
         were originally obtained in the name of the shareholders of SAP. At the
         time of acquisition of each property, the shareholder transferred each
         property and the related borrowing to SAP. As of December 31, 2000, the
         obligations associated with SAP's rental properties were in the
         original borrower's name. Additionally, many of these borrowings
         contain "due on sale" terms. Prior to and during the year ended
         December 31, 2000, the title transfer to several of the properties was
         recorded with the County Recorders Office of San Diego. All of the
         properties but one (1) have had the title transferred to SAP. SAP has
         not been notified by any of the lenders of their desire to demand
         repayment of the loan. Management believes that any loans which are
         required to be repaid can be replaced with loans of similar terms.


NOTE 13 - COMMITMENTS AND CONTINGENCIES
---------------------------------------

         LITIGATION

         The Company is involved in litigation arising in the normal course of
         business. The outcome of such matters is not considered to be material
         in relation to the financial statements of the Company.

         LEASES

         The Company rents office space under various lease agreements through
         February 2003 with monthly lease payments of approximately $6,200.
         Rental expense for the years ended December 31, 2000 and 1999 totaled
         $68,645 and $27,691 respectively. At December 31, 2000, the future
         minimum lease payments under these leases are as follows:

                            Year Ended
                            ----------

                              2001                            $     64,858
                              2002                                  40,092
                              2003                                   6,725
                                                              -------------

                                                              $    111,675
                                                              =============

                                      F-19
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 13 - COMMITMENTS AND CONTINGENCIES (Continued)
---------------------------------------

         RENTAL RECEIPTS UNDER OPERATING LEASES

         The Company receives rental income from the leasing of single family
         residences and apartments under operating leases. The majority of the
         Company's properties are leased on a month-to-month basis. For
         noncancellable operating leases that were in effect as of December 31,
         2000, future minimum rentals for 2001 (the end of the lease term) was
         approximately $36,000.

         OPTIONS TO PURCHASE PROPERTY GRANTED TO TENANTS

         SAP grants certain tenants the option to purchase the property being
         leased in exchange for an option deposit paid by the tenant. SAP
         recognizes these deposits as income upon the termination of the lease
         and the election of the tenant not to exercise the option.

         CONSULTING FEE PAYMENTS

         As part of the sale of SAP, The Debt Registry is obligated to make
         contingent consulting fee payments to the purchasers of SAP to the
         extent the proceeds from the sale of the Company's stock are
         insufficient to extinguish the face amount of a note payable to the
         Company. (See Note 19)

NOTE 14 - SHAREHOLDERS' (DEFICIT) EQUITY
----------------------------------------

         CONTRIBUTED SERVICES OF EXECUTIVE OFFICERS

         During 1999 SAP occupied office space in a building owned by one of the
         shareholders. The shareholders used this building to house the office
         of related business entities owned by the shareholders. In addition,
         the executive officers of SAP contributed services at no cost. The fair
         value of the space occupied and the contributed services amounted to
         $7,000. These amounts are included in additional paid-in capital and in
         general and administrative expenses for the year ended December 31,
         1999.

         STOCKHOLDERS' EQUITY

         In 2000 and 1999, the Company committed to issue a total of 4,747,510
         and 3,916,000 and acquired 328,850 and 0 shares of common stock. The
         shares were granted and acquired in the amount and for the purposes
         described below:

<TABLE>
<CAPTION>
                        Purpose                                       Number of Shares
                        -------                                       ----------------

               2000
               ----
               <S>                                                       <C>
               Acquisition of The Debt Registry (Note 1)                 1,100,000
               Acquisition of Universal View Corp. (Note 1)                400,000
               Issued to officers for services (See below)                 750,000
               Issued to third parties for services (See below)          2,422,510
               Issued in settlement (See below)                             75,000
               Purchase of treasury stock (See below)                      153,850
               Acquisition of treasury stock for extinguishment
                 of officer note receivable (See below)                    175,000

                                      F-20
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 14 - SHAREHOLDERS' (DEFICIT) EQUITY (Continued)
----------------------------------------

               1999
               ----
               Acquisition of Security Assets Properties, Inc. (Note 1)    900,000
               Acquisition of Broadband patent pending rights
                 (Notes 1 and 6)                                           810,000
               Acquisition of "theDebtTrader" technology (Note 1)            6,000
               Issued to officers for services (See below)               1,150,000
               Issued to third parties for services (See below)            625,000
               Issued in settlements (See below)                           175,000
               Issued in payment of debt (See below)                       250,000
</TABLE>

         During April 2000, the Company issued a total of 750,000 shares of
         common stock to officers of the Company as compensation for services
         provided to the Company. For the year ended 2000, the Company
         recognized $533,906 as compensation expense associated with these
         grants, based on the fair value of the stock at the time of grant.

         During 2000, the Company issued 2,422,510 shares of common stock to
         third parties as compensation for services provided to the Company. For
         the year ended 2000, the Company recognized $2,286,184 as compensation
         expense associated with these issuances, based on the fair value of the
         stock at the time of issuance.

         During 2000, the Company issued 75,000 shares of common stock in
         conjunction with a legal settlement for the year ended December 31,
         2000. The Company recognized $135,469 as compensation expense
         associated with the settlement.

         During 2000, the Company purchased a total of 153,850 shares of common
         stock on the open market as authorized by the Board of Directors. The
         cost of this repurchase amounted to $314,480.

         During December 2000, the Company acquired 175,000 shares of common
         stock in exchange for a note receivable from an officer in the amount
         of $208,605.

         During May 1999, the Company issued a total of 1,150,000 shares of
         common stock to officers of the Company as compensation for consulting
         services provided to the Company. For the year ended 1999, the Company
         recognized $107,812 as compensation expense associated with these
         grants, based on the fair value of the stock at the time of grant.

         During May and December 1999, the Company issued a total of 625,000
         shares of common stock to third parties as compensation for consulting
         services provided to the Company. For the year ended 1999, the Company
         recognized $60,938 as compensation expense associated with these
         grants, based on the fair value of the stock at the time of grant.

                                      F-21
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 14 - SHAREHOLDERS' (DEFICIT) EQUITY (Continued)
----------------------------------------

         In April and May 1999, the following shares were issued to obtain
         general releases from legal issues. The Company recognized expense
         totaling approximately $20,300 as a result of these issuances.

                  Douglas Seaver              125,000     Shares of Common Stock
                  Neal Moyer                   25,000     Shares of Common Stock
                  Harlene Moyer                25,000     Shares of Common Stock

         STOCK FOR DEBT

         The Company, in November 1999, paid $25,000 cash and issued 250,000
         shares of stock to Douglas Pierson in conversion of a $200,000 debt of
         Security Asset Management, Inc. Based on the fair market value of the
         stock at the settlement date, Security Asset Management, Inc. has
         recorded $143,750 as debt forgiveness income, net of the applicable
         taxes.

NOTE 15 - STOCK OPTION PLAN
---------------------------

         The Company has adopted a stock option plan (the Plan) under which
         options to purchase up to 10,000,000 shares of common stock may be
         granted to officers, employees or directors of the Company, as well as
         consultants, independent contractors or other service providers of the
         Company. "Nonqualified" options may be granted under the Plan.
         Nonqualified options may be granted at an exercise price determined by
         the Board of Directors. Individual option agreements will contain such
         additional terms as may be determined by the Board of Directors at the
         time of the grant. The Plan provides for grants of options with a term
         of up to ten years.

         STOCK OPTIONS

         The Company has elected to account for nonqualified grants and grants
         under its Plan following APB No. 25 and related interpretations.
         Accordingly, $15,625 and $0 compensation costs have been recognized for
         nonqualified options for the years ended December 31, 2000 and 1999,
         respectively. Under FASB Statement No.123, Accounting for
         Stock-Compensation, the fair value of each option granted during the
         years ended December 31, 2000 and 1999 was estimated on the measurement
         date utilizing the then current fair value of the underlying shares
         less the exercise price discounted over the average expected life of
         the options of ten years, with an average risk-free interest rate of
         4.88% to 6.29%, price volatility of 1 and no dividends. Had
         compensation cost for all awards been determined based on the fair
         value method as prescribed by FASB Statement No.123, reported net
         (loss) and net (loss) per common share would have been as follows:

                                                     December 31,   December 31,
                                                         2000           1999
                                                     ------------   ------------
         Net (loss):
            As reported                              $(7,429,236)   $(1,591,181)
            Proforma                                 $(7,447,690)   $(1,591,181)
         Basic and diluted net (loss) per share:
            As reported                              $     (0.61)   $     (0.19)
            Proforma                                 $     (0.61)   $     (0.19)

                                      F-22
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 15 - STOCK OPTION PLAN  (Continued)
---------------------------

         A summary of the activity of the stock options for the years ended
         December 31, 2000 and 1999 is as follows:

                                            Year ended            Year ended
                                         December 31, 2000    December 31, 1999
                                        ----------------------------------------
                                                   Weighted             Weighted
                                                   Average               Average
                                                   Exercise             Exercise
                                          Shares    Price    Shares      Price
                                        ----------------------------------------

Outstanding at beginning of period      1,350,000   $0.19     450,000   $  0.08
Granted                                   630,000    0.76     900,000      0.25
Forfeited                                      --      --          --        --
Expired                                        --      --          --        --
                                        ----------------------------------------

Outstanding at end of period            1,980,000   $0.37   1,350,000   $  0.19
                                        ========================================

Exercisable at end of period            1,780,000   $0.37   1,350,000   $  0.19
                                        ========================================

Weighted-average fair value of options
   granted during the period                        $2.48               $  0.75
                                                    ======              ========


         A further summary of options outstanding at December 31, 2000 is as
         follows:

                             Options Outstanding          Options Exercisable
               -----------------------------------------------------------------
                                  Weighted
                                   Average    Weighted                Weighted
                                  Remaining   Average                 Average
                 Number          Contractual  Exercise     Number     Exercise
               Outstanding           Life      Price     Exercisable   Price
               -----------------------------------------------------------------

                   20,000         2.00 years   $ 0.75        20,000   $ 0.75
                  450,000         7.90 years     0.08       450,000     0.08
                  100,000         8.50 years     0.25       100,000     0.25
                  500,000         8.75 years     0.25       500,000     0.25
                  400,000         9.00 years     0.25       400,000     0.25
                  265,000         9.40 years     0.91       265,000     0.91
                  245,000         9.75 years     0.80        45,000     0.80
               -----------                               -----------

                1,980,000                                 1,780,000
               ===========                               ===========

         Included in the 630,000 options granted during 2000 are 200,000 options
         which become exercisable at the time the Company's share price reaches
         $5.00 per share. At such time, the Company will record an expense of
         approximately $973,000.

                                      F-23
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 16 - INCOME TAXES
----------------------

         Deferred income taxes reflect the net tax effects of the temporary
         differences between the carrying amounts of assets and liabilities for
         financial reporting and the amounts used for income tax purposes. The
         tax effect of temporary differences consisted of the following as of
         December 31:

                                                           2000         1999
                                                        -----------  -----------
              Deferred tax assets:
                 Net operating loss carryforwards       $3,020,000   $  704,000
                 Compensation element of
                  stock options issued                     258,000       34,800
                 Cash to accrual adjustment
                  of subsidiary                                  -        7,600
                                                        -----------  -----------

                    Gross deferred tax assets            3,278,000      746,400

              Less valuation allowance                   2,879,000)    (481,300)
                                                        -----------  -----------

              Net deferred tax assets                      399,000      265,100

              Deferred tax liabilities, difference in
               basis on rental real estate between
               financial and tax purposes                 (399,000)    (515,100)
                                                        -----------  -----------

                  Net deferred tax liability            $        -   $  250,000
                                                        ===========  ===========


         Realization of deferred tax assets is dependant upon sufficient future
         taxable income during the period that deductible temporary differences
         and carryforwards are expected to be available to reduce taxable
         income. As the achievement of required future taxable income is
         uncertain, the Company recorded a valuation allowance. The valuation
         allowance increased by $2,397,700 and $292,000 for the years ended
         December 31, 2000 and 1999, respectively. The Company will continue to
         assess the valuation allowance and to the extent it is determined that
         such allowance is no longer required, the tax benefit of the remaining
         net deferred tax assets will be recognized in the future.

         As of December 31, 2000, the Company has net operating loss
         carryforwards for both federal and state income tax purposes. Federal
         net operating loss carryforwards totaling approximately $8,180,000
         (approximately $220,000 available solely to SAP) expire in the years
         2008 through 2020. State net operating loss carryforwards totaling
         approximately $4,112,000 expire in the years 2001 through 2005. Due to
         Internal Revenue Service regulations, the availability of the operating
         loss carryforwards may be limited upon a substantial change in
         ownership. During 1999 such a change occurred with respect to SAP.
         Therefore the utilization of SAP's operating loss carryforwards will be
         limited to approximately $64,000 a year and can only be offset against
         future SAP taxable income.

                                      F-24
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 16 - INCOME TAXES (Continued)
----------------------

         Due to the limited availability of SAP's operating loss carryforwards
         in 1999 to offset the financial reporting and tax basis difference
         associated with its rental real estate, the Company recorded a net
         deferred tax liability and related tax expense of $250,000. Due to the
         net operating losses for 2000 the net deferred tax liability reverses
         itself resulting in a tax benefit of $250,000 for the year ended
         December 31, 2000.

         A reconciliation of the effective tax rates with the federal statutory
         rate is as follows as of December 31:

                                                           2000         1999
                                                        -----------  -----------
         Income tax benefit (expense)
              at 35% statutory rate                     $2,676,700   $ (473,700)
         Nondeductible expenses                           (328,000)          --
         Change in valuation allowance                  (2,397,700)     292,000
         State income taxes, net                           457,300      (78,500)
         Other                                            (158,300)      10,200
                                                        -----------  -----------

                                                        $  250,000   $ (250,000)
                                                        ===========  ===========


NOTE 17 - RELATED PARTY TRANSACTIONS
------------------------------------

         SAP paid commissions on the sale of its properties to its executive
         officers and their affiliated companies of approximately $57,000 and
         $20,000 for the years ended December 31, 2000 and 1999.

         During 2000 and 1999, the Company made payments for consulting services
         to the CEO, President, CFO, and the Secretary of the Corporation.
         Payments for consulting services made to these individuals were,
         $66,250, $62,500, $10,000 and $35,750 and $160,510, $37,526, $-0- and
         $28,000, respectively. Also during 2000 and 1999, these individuals
         received common stock valued at $273,593, $0, $382,500 and $260,312 and
         $32,813, $32,813, $32,813, and $9,375, respectively. These shares have
         been valued based on the fair value of the shares on the date of grant.

NOTE 18 - SEGMENT INFORMATION
-----------------------------

         The Company has three reportable segments: consumer credit portfolio,
         rental real estate portfolio and broadband technology. The consumer
         credit portfolio segment acquires, manages, collects and markets
         distressed consumer credit portfolios. The rental real estate portfolio
         acquires, manages and sells residential properties located in San Diego
         County, California. The broadband segment holds a patent, certain
         patents pending and licensing for direct on-line full screen video
         technology.

         The accounting policies of the segments are the same as those described
         in the summary of significant accounting policies. The Company
         evaluates performance based on income or loss from operations before
         income taxes not including nonrecurring gains and losses. The Company's
         reportable segments are strategic business units that offer different
         products or services. They are managed separately because each business
         requires different marketing strategies.

                                      F-25
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 18 - SEGMENT INFORMATION (Continued)
-----------------------------

         Information about reported segment profit or loss and segment assets
         for the years ended December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                    Consumer        Rental
                                     Credit       Real Estate    Broadband
                                   Portfolio       Portfolio     Technology        Total
                                 -------------   -------------  -------------  -------------
         <S>                     <C>             <C>            <C>            <C>

         2000 Revenues           $  1,533,504    $    418,752   $         --   $  1,952,256
         1999 Revenues              1,728,367          74,586             --      1,802,953

         2000 Interest expense      1,791,062         250,744             --      2,041,806
         1999 Interest expense        887,770          37,655             --        925,425

         2000 Profit (loss)        (7,366,605)         29,177             --     (7,337,428)
         1999 Profit (loss)        (1,465,733)         29,322             --     (1,436,411)

         2000 Assets                8,571,111       2,223,686      1,552,500     12,347,297
         1999 Assets                8,884,978       2,876,223      1,552,500     13,313,701
</TABLE>


         Reconciliations of reportable segment profit or loss, and assets to
         consolidated totals for the years ended December 31, 2000 and 1999 are
         as follows:
<TABLE>
<CAPTION>
                                                                    2000           1999
                                                               -------------  -------------
         Profit or Loss
         --------------

         <S>                                                   <C>            <C>
         Total loss for reportable segments                    $ (7,337,428)  $ (1,436,411)
         Consolidating entries:
            Additional depreciation and elimination of
            gain on sale on properties based on increase
            in fair value at date of acquisition                   (341,808)       (48,520)
                                                               -------------  -------------

            Loss before income taxes and extraordinary item    $ (7,679,236)  $ (1,484,931)
                                                               =============  =============

         Assets
         ------

         Total assets for reportable segments                  $ 12,547,297   $ 13,313,701
         Eliminations:
            Intercompany receivables                             (1,174,421)      (695,858)
            Investment in subsidiaries                           (4,213,819)    (2,846,442)
         Unallocated amounts:
            Increase in fair value of properties at date of
            acquisition                                             956,488      1,293,863
                                                               -------------  -------------

            Consolidated total assets                          $  8,115,545   $ 11,065,264
                                                               =============  =============
</TABLE>

                                      F-26
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999


NOTE 19 - SUBSEQUENT EVENT
--------------------------

         On March 28, 2001, the Company sold SAP, its wholly subsidiary, to
         Western Asset Limited Partnership (Western) and El Dorado Properties,
         Inc. (El Dorado), entities owned by the former owners of SAP for
         $1,450,000 consisting of a note receivable in the amount of $1,200,000
         and $250,000 in cash. The owners of Western and El Dorado hold 900,000
         shares of the Company's stock received in 1999 at the time of the SAP
         acquisition. The note which bears interest at 5% per annum, with
         interest payable in arrears, with all principal and accrued interest
         due on or before March 28, 2003 is collateralized by the 900,000 shares
         held by Western and El Dorado. It is anticipated that the note will be
         paid with the proceeds from the sale of the Company's shares
         collateralizing the note. To the extent the proceeds are insufficient
         to extinguish the note in its entirety, The Debt Registry, a wholly
         owned subsidiary, is obligated to pay consulting fees to Western and El
         Dorado to reduce, offset and pay off the note. The Company has
         guaranteed the contingent consulting fees. To the extent the proceeds
         from the sale of the Company's stock exceed the amount payable under
         the note, the excess shall be the sole property of the Company. As of
         March 28, 2001, the market price of the Company's stock was
         insufficient to extinguish the face value of the note. It is uncertain
         as to whether the stock price will reach a price during the term of the
         note to extinguish the face value of the note.


         In conjunction with the sale, the Company borrowed $50,000 from Western
         and El Dorado under an unsecured note payable. The note bears interest
         at 7% interest per annum and all principal and accrued interest is due
         on March 28, 2002.

         During March 2001, the Company issued 400,000 options each to the CEO
         and President to purchase shares of the Company's common stock for
         $0.50 per share. The options are immediately exercisable and expire ten
         years from the date of grant. In addition, the Company issued 100,000
         options to a consultant to purchase shares of the Company's common
         stock for $1.00 per share. The options are immediately exercisable and
         expire ten years from the date of grant.


NOTE 20 - MANAGEMENT'S PLANS FOR FUTURE OPERATIONS AND FINANCING
----------------------------------------------------------------

         The accompanying consolidated financial statements have been prepared
         assuming that the Company will continue as a going concern. The Company
         has suffered recurring losses from operations, significant negative
         working capital and no guaranteed access to capital resources. At
         present, the Company's working capital plus limited capital resources
         will not be sufficient to meet the Company's objectives as structured.
         The Company estimates it needs substantial new capital to achieve its
         operations as planned and place The Debt Registry in service, and is
         seeking $5 million in equity financing through a private placement
         offering. In the event financing is not obtained the Company will
         adjust its corporate infrastructure to reflect current operations.

                                      F-27