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

                                   FORM 10-KSB

                                   (MARK ONE)

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

                  For the fiscal year ended: December 31, 2000

                                       OR

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

  FOR THE TRANSITION PERIOD FROM __________________ TO ________________________


                        Commission File Number: 000-29217


                          ACCESSPOINT CORPORATION, INC.
        ----------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)



            Nevada                                         33-0679477
-----------------------------------------------   ------------------------------

(State or Other Jurisdiction of                        (I.R.S. Employer
 Incorporation or Organization)                   Identification No. Pre-Merger)



 38 Executive Park, Suite 350, Irvine, CA 92614             92614
-----------------------------------------------   ------------------------------

   (Address of Principle Executive Offices)               (Zip Code)


                                 (949) 852-8526
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

      Securities Registered Pursuant to Section 12(b) of the Exchange Act:

                                      None

      Securities Registered Pursuant to Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 Par Value

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]


                                      -1-

<PAGE>


Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

The issuer's revenues for its most recent fiscal year were $2,261,752.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
issuer on December  31, 2000 based upon the average bid and asked prices of such
stock on that date was  $17,074,156.  The  number of  issuer's  shares of Common
Stock outstanding as of December 31, 2000 was 16,557,560.

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


                             Accesspoint Corporation
                            Form 10-KSB ANNUAL Report
                 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2000
                                TABLE OF CONTENTS

Forward Looking Statements

PART I

Item 1.  Description of Business
Item 2.  Description of Property
Item 3.  Legal Proceedings
Item 4.  Submission of Matters to a Vote of Security Holders

PART II

Item 5.   Market for Common Equity and Related Stockholder Matters
Item 6.   Management's Discussion and Analysis of Financial Condition and
         Results of Operations or Plan of Operation
Item 7.  Financial Statements
Item 8.  Changes In and Disagreements with Accountants on Accounting and
         Financial Disclosure

PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial Owners and Management
Item 12. Certain Relationships and Related Transactions

PART IV

Item 13. Exhibits and Reports on Form 8-K

Signatures

Audit Report

Financial Data Schedule



                                      -2-


<PAGE>


               SPECIAL NOTE REGARDING FORWARD - LOOKING STATEMENTS

     This Form 10-KSB contains  forward-looking  statements  about the business,
financial  condition and prospects of our Company that reflect  assumptions made
by management and management's beliefs based on information  currently available
to it.  We can  give  no  assurance  that  the  expectations  indicated  by such
forward-looking  statements will be realized. If any of management's assumptions
should prove incorrect, or if any of the risks and uncertainties underlying such
expectations  should  materialize,  our  Company's  actual  results  may  differ
materially from those indicated by the forward-looking statements.

     The key factors that are not within our Company's control and that may have
a direct  bearing on  operating  results  include,  but are not  limited to, the
acceptance  by customers of our Company's  products and services,  our Company's
ability to develop new products and  services  cost-effectively,  the ability of
our Company to raise capital in the future,  the  development  by competitors of
products or services using improved or alternative technology,  the retention of
key employees and general economic conditions.

     There may be other risks and  circumstances  that  management  is unable to
predict.  When used in this Form 10-KSB,  words such as, "believes,"  "expects,"
"intends,"  "plans,"  "anticipates"  "estimates"  and  similar  expressions  are
intended to identify forward-looking  statements,  although there may be certain
forward-looking   statements   not   accompanied   by  such   expressions.   All
forward-looking statements are intended to be covered by the safe harbor created
by Section 21E of the Securities Exchange Act of 1934.


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

     A.  GENERAL

     Our  Company was  incorporated  in Nevada on October  11,  1995.  On March
19, 1999 we merged with  Yamahama's,  Inc., a Nevada  corporation.  On April 12,
2000 we merged with J.S.J. Capital,  III, Inc., a Nevada corporation.  Reference
to Company or  Accesspoint  Corporation  in this report refers to the historical
Accesspoint Corporation, unless the context otherwise requires.

     B.   BUSINESS OVERVIEW

     Accesspoint  Corporation is a vertically  integrated provider of electronic
transaction  processing  and  value-added  business  services.  Our  transaction
processing  service  routes,  authorizes,  captures,  and  settles  all types of
non-cash  payment   transactions   for  retailers  and  businesses   nationwide.
Accesspoint  services the payment  processing  needs of sellers by (1) providing
merchant underwriting,  risk management and account services, and (2) supporting
the network and  technology  services  necessary for both retail  (in-store) and
Internet point of sale transactions.  To this core function Accesspoint provides
sellers with a entire suite of integrated business  applications that centralize
the  management  of (A) both  in-store  and online  transaction  processing  and
accounting, (B) automated web site design, hosting services and catalog creation
and management,  (C) merchandising and benefits management, (D) order processing
and tracking services, and (E) a whole host of reporting and monitoring tools.

     Our  multi-application  e-payment and e-commerce  systems  provide a single
source solution to merchants, businesses and the sales organizations that market
our  products.  Our  clients  enjoy  the  benefits  of  a  versatile,  powerful,
multi-purpose  system that provides a comprehensive  level of payment acceptance
options  and  value-added  businesses  services  without  having to  manage  the
multiple business relationships normally required for these functions.

     C.  INDUSTRY

     Over the course of the last several years the market  opportunities for the
use  of the  Internet  as a  service  medium  have  evolved  significantly.  The
expectations  for the use of the  Internet  have  changed  from simply  enabling
business  to market and sell  online,  to the  Internet  enabling  of  virtually
all-traditional business processes. Driving this initiative is the ever-pressing
need for businesses to enhance convenience, increase sales and reduce costs.


                                      -3-
<PAGE>

     Major changes are also occurring within the payment systems that enable the
exchange of value between  buyers and sellers.  The  proliferation  of none cash
payment methods such as credit and debit card, smart card, electronic checking &
ACH, stored value,  Electronic  Benefit Transfer (EBT),  loyalty programs,  gift
card and future electronic payment systems require that merchants be prepared to
accept an array of e-payment  types subject to the demands of which ever payment
type a buyer chooses for a given purchase.

     Businesses  such as banks,  transaction  processors,  software  vendors and
ISP's  that  service  the  needs  of  businesses  in this  changing  environment
typically  provide single service  solutions,  such as Internet hosting services
from  an  ISP  or  credit  card  processing  through  a  processor.  The  narrow
relationships  in these channels are easily  replaced as  competitors  can steal
clients away simply by offering a better price. Typically, businesses are forced
to manage many  disjointed  relationships  without the benefits of a centralized
service that provides systems  management,  customer service and a multi-faceted
e-payment and e-commerce solution.

     The complexities and inherent flaws of this service environment presented a
significant business opportunity for Accesspoint and have served to increase the
need for our solutions and our value  proposition in the eyes of our prospective
clients.  Accesspoint  focuses on specific markets that have  historically  been
under served by both the transaction processing and software services industry.

     D.  SERVICE & DISTRIBUTION STRATEGY

     We have  developed  a program to better  service and capture the support of
thousands  of sales  groups  across  the  country  that  represent  a mature and
established  distribution  channel for the sale of our  services.  This program,
called the "ISO  Advantage",  has  established  a new  standard  for service and
support in the  merchant  services  industry  and  appears  to present  distinct
marketplace advantages for those re-sellers (the independent sales organizations
(ISO's),  regional and merchant banks and merchant  service  organizations  that
market Accesspoint  products),  who enter the program.  The additional  service,
convenience and revenue generating opportunities of the ISO Advantage program is
proving to be a strong motivator for re-sellers to select Accesspoint.

     Our service model enables our  distribution  channel and the merchants they
serve,  to add a virtual  infinite  number  of  applications  to their  business
systems while  simplifying  their service  management  needs and turn hard costs
into soft costs  while  spreading  out costs for a service  over  time.  It also
allows them to save costs by bundling  together only the services they need into
a user-friendly  and easily managed  environment.  Our model can provide a value
added utility in the form of:

     CENTRALIZED MERCHANT BANKING SERVICES.  Our programs provide customers with
a single  processing  relationship  which provides  support for multiple payment
acceptance  capabilities including credit and debit card, smart card, electronic
checking  & ACH,  stored  value,  Electronic  Benefit  Transfer  (EBT),  loyalty
programs and gift card.

     TURNKEY   SOLUTIONS.   We  bundle   merchants   processing   services  with
multi-application   e-payments,   e-commerce   offerings,   software   services,
transaction   processing  hardware,   systems  development,   integration,   and
management into one offering.  The result is a transfer of  responsibility.  The
role of general technology contractor shifts from the merchant/client to us. The
result is a  significant  reduction in the  decision-making  and  administrative
burden on a client. This arrangement  provides a significantly  greater level of
business  efficiency  particularly  for the  Small to  Medium  Enterprise  (SME)
merchant who is then free to concern  themselves with the day-to-day  operations
of their  business  rather than  keeping  pace with  technology  and  processing
relationships.

     PREDICTABLE COSTS AND LOWER UP-FRONT  INVESTMENT.  Our service model allows
the  clients  we serve to utilize  sophisticated  software  products  and access
various services while paying monthly access or per transaction fees for the use
of these services. The costs for systems development are spread out over a large
group of service participants.

     FASTER TIME TO MARKET.  Our product and service group is a fully integrated
offering  and can  generally  be deliver to a client more  rapidly than those of
in-house IT resources or an external systems integrator.

     EASIER  UPGRADE  CYCLES.  Clients  participating  in our system receive the
benefits of a service  that can be quickly  upgraded to support new  business or
processing requirements. In most instances individual components can be


                                      -4-

<PAGE>

modified  without the need for major  software  revisions and these upgrades are
applied to the  centralized  systems  thereby  providing  the  benefits of these
upgrades to all service participants.

     E.  ACCESSPOINT SOLUTIONS

     Three main  components  - merchant  bankcard  services,  the ISO  Advantage
System,  and  e-commerce  tools  highlight  Accesspoint  solutions.  These three
components  can each be broken down into many  individual  products and services
that can be sold in any  combination  and  customized  delivery  methods  can be
developed for their unique marketplace.

     MERCHANT ACCOUNTS (MERCHANT BANKCARD PROCESSING)

     Accesspoint,  though  its'  wholly  owned  subsidiary,   Processing  Source
International,  is a primary  processor and underwriter of electronic  financial
transactions  as a member  processor,  under the  sponsorship of Chase Manhattan
Bank,  within  the  Visa/MasterCard  association  for  the  processing  of  card
transactions and the National Association Clearing House (NACHA) network for the
processing of electronic  checks and check  conversion  under the sponsorship of
First National Bank of Omaha.

     We provide sellers with point of sale (POS) terminal equipment, transaction
routing and authorization,  settlement, Internet based processing services, risk
management,  stored value,  loyalty  program  support and  sponsorship  into all
credit card associations  (such as VISA and MasterCard) and major debit networks
(such as STAR,  Pulse, and NYCE).  This combination of products serviced through
one provider is unavailable elsewhere in the industry.

     ISO ADVANTAGE SYSTEM (SALES CHANNEL AND SERVICE MANAGEMENT)

     Developed  in  house  by  Accesspoint,   the  ISO  Advantage  system  is  a
proprietary business management system for the bankcard industry.  Using the ISO
Advantage  Console,  a sales agent or group can market to  prospective  clients,
submit merchant applications for real-time approval, real time Merchant ID (MID)
generation,  automatically activate any number of value-added business services,
track  their  entire  portfolio,  and view  residual  reports in real  time.  It
calculates  commissions  and residuals  for sales offices and their agents,  and
provides  an  unprecedented  amount of control  over the  information  about the
merchant application process,  service deployment and customer service needs. No
competitors of Accesspoint currently offer a system that provides this degree of
support and control over sales and  business  management.  Accesspoint  believes
that the ISO Advantage system presents a significant  competitive advantage over
other merchant acquirers.

     E-COMMERCE AND SOFTWARE SERVICES

     We offer a number of e-commerce and value-added  business  services to its'
resellers  in the  bankcard  industry  and the  merchants  they  support.  These
services  are  delivered  through two primary  software  products -  Transaction
Manager and Merchant Manager Enterprise.

         TRANSACTION   MANAGER   is  a  secure   web  based   merchant   account
         administration  and transaction  processing system. The system provides
         real-time,  electronic  payment solutions that enable the acceptance of
         credit cards, electronic checks,  alternative payment types, as well as
         ACH  payments.  Processing  services  support all major  credit  cards,
         including   consumer,   corporate  and  procurement  cards  and  enable
         real-time  processing of added  transaction  information  such as items
         sold, discount control,  stored value and loyalty benefits.  Our system
         provides  support  for  enterprise  wide  transaction   management  and
         processing  across multiples sales channels such as call center,  order
         desk,  Internet  and field  authorizations.  The system  also  provides
         support for fraud control,  order processing and fulfillment compliance
         features  mandated  within the  Visa/MasterCard  system.  Additionally,
         account   management  and  reporting   features   support  both  retail
         (in-store) and Internet point of sale transactions.

         MERCHANT  MANAGER  ENTERPRISE  offers  a  complete,  secure  electronic
         commerce  solution that is cost  effective and easy to use. Web browser
         based  administration  tools provide businesses with a simple interface
         for  controlling  catalog and content  creation,  accounts and discount
         management,  point of sale and  inventory  control  systems,  marketing
         tools and program administration, legacy systems information management


                                      -5-
<PAGE>

         through extensive information import and export features, reporting and
         tracking  tools,   tax  and  shipping   calculation,   and  the  secure
         transaction  processing  features of our  Transaction  manager  system.
         These  services  come  complete  with  hosting,  e-mail  and  technical
         support.  The system is virtually platform  independent and is accessed
         through a simple Internet connection.

     While there are some weaknesses inherent in our products,  the only notable
marketplace  disadvantage  is the added time and expense  required if a business
insists  that our  e-commerce  system  be fully  integrated  into the  business'
back-end  systems.  Because there is so much diversity in back-end  systems,  no
single e-commerce software product will automatically link to all existing order
entry  and  inventory  management  modules.  Full  integration  requires  either
replacing the back-end  systems or  customizing  the  e-commerce  system to work
automatically with the existing back-end systems.

     F.  COMPETITION

     We focus our business on specific markets that historically have been under
served by the transaction processing industry.  Our multi-application  e-payment
systems compete at several levels, both directly and indirectly,  with providers
of  financial  electronic  payment  processing,  settlement  services,  software
development and e-commerce business solutions. These markets in which we operate
are extremely  competitive and can be significantly  influenced by the marketing
and pricing decisions of the larger industry participants. The barriers to entry
in these various  market  segments  vary,  and we expect that  competition  will
continue to intensify in the future.

     Our current and  prospective  competitors  in the market  segments we serve
include many large companies that have substantially greater market presence and
financial,  technical,  marketing  and  other  resources  than we do.  The major
strengths  of our  competitors  in many cases  include  their  longer  operating
histories, greater installed bases and greater name recognition.

     The  markets  for  electronic  payment  processing,  credit  and debit card
payment  settlement,  check  conversion and  processing  programs are all highly
competitive. Our principal competitors include major national and regional banks
such as Wells Fargo & Co. and Bank of America Corp., local processing banks such
as Imperial Bank and Universal Savings Bank, F.A.,  non-bank  processors such as
Nova Information  Systems,  Concord EFS, Inc. and First Data Merchant  Services,
check  conversion and  authorization  processors  such as  CrossCheck,  Inc. and
TeleCheck Services, Inc. and other independent service organizations who re-sell
these payment processing services such as Electronic Exchange Systems, Retriever
Payment  Systems  and  Cardservice  International,  Inc.  In each of our payment
processing service types, we compete against other companies who have a dominant
share of each market. Our management estimates that the three largest credit and
debit card processors account for roughly 50% of the total credit and debit card
processing volumes domestically.

     Additionally,  there are  competitors  in the  processing  market who focus
exclusively on providing  electronic  payment  processing  software and hardware
services.  Our services provide web based or outsourced  transaction  processing
and  management  software  services  which compete in this market  segment in an
Application Service Provider (ASP) model. Our principal  competitors in software
services include boxed software, or merchant deployed software,  developers such
as Go Software, Inc. and Hewlett-Packard Co., outsourced or ASP model developers
and service  providers  such as Clear  Commerce  Corp.,  Signio (a subsidiary of
VeriSign, Inc.) and AuthorizeNet.

     Our multi-application  e-payment systems provide support for e-commerce and
web based business management and catalog marketing  functions.  The markets for
e-commerce  business  solutions are intensely  competitive  and subject to rapid
technology  changes  and  can be  affected  by new  product  introductions.  Our
competition  comes  from  several  principal  segments  of  this  market.  These
competitive  segments consist of companies that sell software solutions that are
typically  deployed  at  the  merchant's  place  of  business  and  may  include
consulting or custom development  services,  or supported in an outsourced model
by Application Service providers (ASP's).  Potential competitors in the software
development and sales area include  Microsoft Corp.,  IBM, Oracle Corp.,  Ariba,
Inc. and Miva Corp.  In the ASP  solutions  sector we compete with ASP's such as
CyberSource Corp., Yahoo Store, FreeMerchant.com and BigStep.com.

     Although it is the opinion of our  management  that few of our  competitors
compete  favorably in each of the market  segments we serve the potential  still
exists that our  competitors  may be able to respond more quickly than we


                                      -6-
<PAGE>

can to new or  emerging  technologies  and  changes  in  customer  requirements.
Competition  could  impede our  ability  to sell  additional  services  on terms
favorable  to  us.  Our  current  and  potential  competitors  may  develop  new
technologies that render our existing or future services obsolete,  unmarketable
or less  competitive.  Our current and potential  competitors may make strategic
acquisitions or establish  cooperative  relationships  among  themselves or with
other e-commerce  transaction service providers,  thereby increasing the ability
of their services to address the needs of our prospective customers. Our current
and potential competitors may establish or strengthen cooperative  relationships
with our current or future  channel  partners,  thereby  limiting our ability to
sell services  through these  channels.  Competitive  pressures could reduce our
potential  market share or require the  reduction of the prices of our services,
either of which could materially and adversely  affect our business,  results of
operations or financial condition.

     The major  weaknesses of our  competitors  are varied.  Some,  such as IBM,
Ariba  and  Oracle  are  expensive  and  require  the  customer  to make a major
commitment  of time and  resources to fully  integrate  e-commerce  services and
require that the customer still  establish a electronic  transaction  processing
relationship  with a processor,  and license 3rd party software  systems for the
capture and  processing of financial  transactions.  Other  competitors  such as
BigStep.com and  FreeMerchant.com  do not supply systems that, in the opinion of
our management,  are sufficiently  robust to meet the needs of businesses in the
market  segment  we target  and still  require  that the  customer  establish  a
processing  relationship  with a  processor  and pay for the use of  transaction
processing services.

     Most competitors do not provide the level of service offered by us. In most
comparisons,  our  multi-application  e-payment and e-commerce solutions provide
more features and superior  performance over competitive  products,  relative to
cost.  In most  cases,  the  number  of  differences  is  substantial.  No other
competitor's  products  provide the same  capabilities  in a  situation  where a
customer  requires  rapid  deployment  of  a  multi-application   e-payment  and
e-commerce  system,  limited  interruption of back-end  systems and a reasonable
cost.

     We are one of the  only  providers  of a  multi-application  e-payment  and
e-commerce service that services all the above referenced market segments. It is
the opinion of our management that our business model holds a distinct advantage
over our  competition  by  allowing  us to  establish  a  multi-faceted  service
relationship with our clients which in turn allows clients to enjoy the benefits
of a comprehensive level of payment options and value-added  businesses services
without having to manage the multiple business  relationships  normally required
for these functions.

     G.  CUSTOMERS AND MARKETS

     Over one billion  people  access the Internet and over five billion  people
pay for products and services each month,  where  increasingly they encounter an
electronic  point-of-sale (POS) payment terminal.  This vast reach represents an
excellent  opportunity  for our Company.  A US Bancorp Piper Jaffray Report from
October 2000 highlighted the growth of the electronic  payment industry.  "While
the  long-term  trend of converting  from paper to  electronic  payments is well
understood,  we  believe  we are on the  verge of major  changes  as  electronic
payments displace paper systems.  Although  paper-payment  methods are currently
the dominant form of retail payments, we believe electronic payment market-share
gains will be accelerating.  We predict that direct electronic  payments (credit
cards,  debit cards,  Electronic  Benefits  Transfer,  Automated Clearing House,
stored value cards,  and future  electronic  payments),  which  accounted for an
estimated 22% of PCE in 1999, will account for 32% of PCE in 2003 and 37% of PCE
in 2005."

     A recent  Forrester  Research  report  projects that the non-cash  payments
services market will reach $11.3 Billion by 2003 (with a compounded  growth rate
of 86%) and predicted that that 100% of all transactions  will be Internet based
within several years. Since 1984, the 3 main processors,  Visa, MasterCard,  and
American  Express have  experienced a 20% average annual growth in global charge
volumes.  In 1999 card  volume in the U.S.  generated  nearly  $1.1  trillion in
transaction  volume  and is growing at an annual  rate of 10%.  Electronic  Fund
Transfer and Automated Clearing House networks are expected to process more than
8 trillion transactions annually by the year 2002. Over the next two years, Visa
estimates  that the use of the  Internet  (e-commerce)  as part of an every  day
business process will grow at a rate of 81%,  raising the current  percentage of
total Internet  based charge  volumes from 1% to 10% by 2003.  That's over a $15
billion  increase.  Electronic  transactions  are more  convenient,  have  lower
transaction costs and clear more quickly than paper transactions.

                                      -7-

<PAGE>

     Management believes that the use and efficiencies of the Internet will be a
dominant  factor in the growth and  proliferation  of  e-payments  and  business
applications.  We have positioned ourselves to service and capture a significant
portion of this fast growing market sector.

     H.  INTELLECTUAL PROPERTY

     We have no patented  technology that would preclude or inhibit  competitors
from  entering  our market.  We have made  initial  inquiry  regarding  possible
registration of the trademarks  Merchant  Manager (MM) and  Transaction  Manager
(TM). We have not filed any applications for registration of any trademarks.  We
have entered into confidentiality and invention  assignment  agreements with our
employees to limit access to and disclosure of our proprietary  information.  We
intend to apply for copyrights as we develop new products and  solutions.  There
can be no  assurance  that  these  measures  will  prove  sufficient  to prevent
misappropriation   of  our  intellectual   property  or  to  deter   independent
third-party development of similar products.

     I.  REGULATION - GOVERNMENTAL APPROVALS

     Our  operations  are  not  currently   subject  to  direct   regulation  by
governmental agencies other than regulations applicable to businesses generally.
As use of the Internet continues to grow,  jurisdictions in which we operate may
adopt  regulations   relating  to  prices  charged  users,   content,   privacy,
intellectual  property  protection,  libel or other  matters.  If adopted,  such
regulations could significantly affect our results of operations

     J.  EMPLOYEES

     As of December 31, 2000, we had approximately 36 full-time  employees and 1
part-time   employee.   Our   employees   consist  of   customer   call   center
representatives,  network  engineers,  software  engineers,  and  administrative
personnel.  We also  contracted  with other  personnel  and  subcontractors  for
various projects on an as-needed basis.

     As of December 31, 2000, our  subsidiary  Processing  Source  International
(PSI) had approximately 35 full-time employees and no part-time employees. PSI's
personnel  responsibilities consist of risk management  underwriting,  sales and
marketing, sales support and customer service, as well as administrative duties.
Our  subsidiary  Blacksun  Graphics,  Inc. (BSG) had  approximately  5 full-time
employees and no part-time  employees.  All of BSG's five  employees are graphic
designers and HTML programmers.

     We do not  expect  to  increase  our  employee  count in 2001.  None of our
employees  are  represented  by a labor  union or are  subject  to a  collective
bargaining agreement, nor have we experienced any work stoppage.


ITEM 2.  DESCRIPTION OF PROPERTY

     We do not  own  any  real  property.  However,  we  currently  lease,  on a
month-to-month basis, office space consisting of approximately 6,829 square feet
located at 38 Executive Park, Suite 350, Irvine, California. Our current monthly
lease  payment  is  $15,707.00.  The lessor is The  Irvine  Company,  a Michigan
corporation.  The lease  commenced  on June 1,  2000.  We share a portion of the
above  premises  with our  subsidiary  BSG.  BSG pays no rent for the use of the
space.

     Our subsidiary PSI currently subleases,  on a month-to-month  basis, office
space  consisting  of  approximately  7,452 square feet located at 21031 Ventura
Blvd.,  Woodland  Hills,  California.  Its  current  monthly  lease  payment  is
$9,687.50.  The  sub-lessor  is Employers  Reinsurance  Corporation,  a Missouri
corporation. The lease commenced on May 15, 2000.

     Our  subsidiary,  PSI also currently  leases,  on a  month-to-month  basis,
office space consisting of approximately  9,924 square feet located at 8430 West
Bryn Mawr, Chicago,  Illinois. Its current monthly lease payment is $16,540. The
sub-lessor is Citicorp North America,  Inc., a New York  corporation.  The lease
commenced on January 12, 2000.


                                      -8-

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     We are not party to any  legal  proceeding,  which  could  have a  material
effect upon our business, financial condition or results of operations.


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

     No  matter  was  submitted  to a vote  of  security  holders,  through  the
solicitation  of proxies or  otherwise,  during the quarter  ended  December 31,
2000.


                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock is quoted on the  over-the-counter  bulletin  board system
(OTC-BB)  under the symbol "ASAP." The table below reflects the high and the low
bid and ask  quotations for each of the Company's  fiscal  quarters for the last
fiscal year. The prices reflect  inter-dealer  prices,  without retail  mark-up,
mark-down or commission and do not necessarily represent actual transactions.


                                                        2000
                                       ---------------------------------------

                                              HIGH                 LOW
                                              ----                 ---
                ---------------------- ------------------ --------------------

                1st Quarter                       $ 9.00               $ 5.25
                ---------------------- ------------------ --------------------

                2nd Quarter                       $ 6.38               $ 3.00
                ---------------------- ------------------ --------------------

                3rd Quarter                       $ 4.75               $ 2.78
                ---------------------- ------------------ --------------------

                4th Quarter                       $ 3.88               $ 0.78
                ---------------------- ------------------ --------------------


                                                        1999
                                       ---------------------------------------

                                              HIGH                 LOW
                                              ----                 ---
                ---------------------- ------------------ --------------------

                1st Quarter                       $ 5.75               $ 5.25
                ---------------------- ------------------ --------------------

                2nd Quarter                       $ 6.88               $ 4.62
                ---------------------- ------------------ --------------------

                3rd Quarter                       $ 6.00               $ 4.62
                ---------------------- ------------------ --------------------

                4th Quarter                       $ 6.12               $ 4.44
                ---------------------- ------------------ --------------------


     A.  NUMBER OF HOLDERS

     As of December 31, 2000, the approximate  number of common  shareholders of
record was 216. On March 15, 2001,  the last reported  sales price of our common
stock on the OTCBB was $ 1.69 per share.

     Our  stock has had a market  price of less  than  $5.00 per share in recent
times. The SEC has adopted  regulations  which generally define "penny stock" to
be any equity  security that has a market price (as defined) less than $5.00 per
share or an  exercise  price  less than  $5.00


                                      -9-

<PAGE>

per share,  subject to certain  exceptions.  Accordingly,  our common  stock may
become subject to rules that impose  additional  sales practice  requirements on
broker-dealers  who sell such  securities  to  persons  other  than  established
customers and  accredited  investors  (generally  those with assets in excess of
$1,000,000 or annual income exceeding $200,000,  or $300,000 together with their
spouse).  For transactions covered by these rules, the broker-dealer must make a
special  suitability  determination for the purchase of such securities and have
received  the  purchaser's  written  consent  to the  transaction  prior  to the
purchase.

     Additionally,  for any transaction  involving a penny stock, unless exempt,
the rules  require  the  delivery,  prior to the  transaction,  of a  disclosure
schedule  prepared  by  the  SEC  relating  to  the  penny  stock  market.   The
broker-dealer   also  must  disclose  the   commissions   payable  to  both  the
broker-dealer  and the  registered  representative,  current  quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must  disclose  this  fact and the  broker-dealer's  presumed  control  over the
market.  Finally,  monthly  statements  must be  sent  disclosing  recent  price
information  for the penny  stock held in the  account  and  information  on the
limited  market in penny  stocks.  Consequently,  the  "penny  stock"  rules may
restrict the ability of  broker-dealers  to sell our common stock and may affect
the ability of investors to sell our common stock in the public market.

     B.  DIVIDENDS

     The payment of dividends is within the discretion of the Board of Directors
of the  Company.  We  currently  intend to retain all  earnings,  if any, in the
foreseeable future for use in the development of our business.  We have not paid
dividends since inception. It is not anticipated that any dividends will be paid
in the  foreseeable  future and there can be no assurance  that dividends can or
will ever be paid. The payment of dividends is contingent upon future  earnings,
if any, our  financial  condition  and capital  requirements,  general  business
conditions and other factors.

     C.  SALES OF UNREGISTERED SECURITIES

     On April 4, 2000 we sold  27,000  shares of common  voting  stock to Edmund
Faison,  Jr., an individual.  The shares were sold at a price of $5.00 per share
for a total  purchase  price  of  $135,000.00.  We did not  publicly  offer  any
securities and no underwriter was utilized and we did not pay any finder's fees,
discounts or commissions in connection  with the above offer and sale. The offer
and sale was exempt  pursuant  to  Section  4(2) of the Act,  Regulation  D, and
pursuant to Section  25102(f) of the  California  Corporations  Code. Mr. Faison
acquired  the shares for his own account  for  investment  with no then  present
intention  of dividing  his  interest  with others or of  reselling or otherwise
disposing  of all or any portion of the shares.  The shares were  purchased in a
private transaction,  which was not part of a distribution of the shares. We, or
our officers or directors or our or their affiliates or  representatives,  had a
pre-existing personal or business relationship with Mr. Faison.

     On  April  15,  2000 we sold  300,000  shares  of  common  voting  stock to
Starlight International Holdings Limited ("Starlight").  The shares were sold at
a price of $3.50 per share for a total purchase price of  $1,050,000.00.  We did
not publicly offer any securities  and no  underwriter  was utilized.  We paid a
finder's fee of $42,000.00 and a commission of $63,000.00 in connection with the
above sale. We issued a total of 24,000  warrants for the purchase of our common
stock to Pacific  Continental  Securities  Corporation in  conjunction  with the
sale,  as discussed  below.  We also issued  8,000  warrants to Paul T. Chan and
8,000 warrants to Norman C. Kristoff in conjunction  with the sale, as discussed
below.  We paid no other finder's  fees,  discounts or commissions in connection
with the above  offer  and sale.  The  offer  and sale was  exempt  pursuant  to
Regulation S because  Starlight is a non U.S. company and neither  Starlight nor
any  person or entity  for whom  Starlight  was  acting as  fiduciary  is a U.S.
person.  Further,  the above offer and sale was made in an offshore  transaction
and there were no directed  selling  efforts in the United  States in connection
with the above offer and sale.

     On May 1, 2000 (and made  effective for  valuation  purposes as of April 7,
2000) we entered into an agreement  with Black Sun  Graphics,  Inc. a California
corporation ("BSG"), whereby we acquired all of the outstanding shares of BSG in
exchange for 70,000 shares of our common voting stock.  The total purchase price
for  the  BSG  shares  was  deemed  to be  $350,000.00.  For  purposes  of  this
transaction,  our shares  were  valued at $5.00 per share.  We did not  publicly
offer any  securities  and no  underwriter  was utilized and we paid no finder's
fees,  discounts or commissions in connection with the above offer and sale. The
offer and sale was exempt pursuant to Section 4(2) of the Act, Regulation D, and
pursuant  to  Section  25102(f)  of  the  California   Corporations   Code.  The
shareholders  of BSG  acquired  our shares for their own account for  investment
with no then  present  intention  of  dividing  his  interest


                                      -10-
<PAGE>

with others or of reselling or otherwise  disposing of all or any portion of the
shares. The shares were purchased in a private  transaction,  which was not part
of a  distribution  of the shares.  We, or our  officers or  directors or our or
their  affiliates or  representatives,  had a pre-existing  personal or business
relationship with the shareholders of BSG.

     On May 2, 2000 we issued to Bas Mulder 3,400 options to purchase our common
stock at an exercise  price of $4.75 per share.  On the same date we also issued
2,000 options to Richard Calkins, 1,900 options to Brad Martin, 1,280 options to
Jeffrey S. Robinson and 1,280 options to Arturo Leon,  all at an exercise  price
of $4.75 per share.  The options were issued as employee  incentive awards under
our 1999 Stock  Incentive  Plan. We did not publicly offer any securities and no
underwriter was utilized and we paid no finder's fees,  discounts or commissions
in  connection  with the above  issuance.  The issuance  was exempt  pursuant to
Section 4(2) of the Act,  Regulation D, and pursuant to Section  25102(f) of the
California  Corporations  Code. The above persons acquired the options for their
own account for  investment  with no then present  intention  of dividing  their
interests  with others or of  reselling  or  otherwise  disposing  of all or any
portion of the options. The options were issued in a private transaction,  which
was not part of a  distribution  of options or shares.  We, or our  officers  or
directors or our or their  affiliates  or  representatives,  had a  pre-existing
personal or business relationship with the above persons.

     On May 5, 2000 we issued  5,000  shares of common  voting  stock to Lincoln
Trust Co, Cust FBO & Scott Deitler, 5,000 shares of common voting stock to James
Toot,  and 5,000 shares of common  voting stock to Jeff Ploen.  The above shares
were issued as part of the purchase price for the shares of J.S.J.  Capital III,
Inc. The issuance  resulted in no proceeds to us. We did not publicly  offer any
securities and no underwriter was utilized and we did not pay any finder's fees,
discounts or commissions in connection  with the above offer and sale. The offer
and sale was exempt  pursuant  to  Section  4(2) of the Act,  Regulation  D, and
pursuant to Section  25102(f) of the  California  Corporations  Code.  The above
persons  acquired the shares for their own account for  investment  with no then
present  intention  of dividing  their  interest  with others or of reselling or
otherwise  disposing  of all or any  portion  of the  shares.  The  shares  were
purchased in a private transaction,  which was not part of a distribution of the
shares.

     On May 16, 2000, in  conjunction  with the sale of shares to Starlight,  we
issued 4,000  warrants for the purchase our common stock to Pacific  Continental
Securities  at an  exercise  price of  $6.00  per  share.  The  warrants  may be
exercised at any time from the date of issuance  until May 16, 2005.  We did not
publicly offer any  securities  and no  underwriter  was utilized and we paid no
finder's fees,  discounts or commissions in connection  with the above issuance.
The issuance was exempt  pursuant to Section 4(2) of the Act,  Regulation D, and
pursuant  to Section  25102(f)  of the  California  Corporations  Code.  Pacific
Continental  Securities acquired the warrants for his own account for investment
with no then  present  intention  of  dividing  his  interest  with others or of
reselling or  otherwise  disposing  of all or any portion of the  warrants.  The
warrants  were  issued  in a  private  transaction,  which  was  not  part  of a
distribution  of warrants or shares.  We, or our officers or directors or our or
their  affiliates or  representatives,  had a pre-existing  personal or business
relationship with Pacific Continental Securities.

     On May 16, 2000, in  conjunction  with the sale of shares to Starlight,  we
issued  8,000  warrants  for the purchase our common stock to Paul T. Chan at an
exercise  price of $6.00 per share.  The  warrants  may be exercised at any time
from the date of issuance  until May 16,  2005.  We did not  publicly  offer any
securities  and no  underwriter  was  utilized  and we  paid no  finder's  fees,
discounts or commissions in connection with the above issuance. The issuance was
exempt  pursuant  to Section  4(2) of the Act,  Regulation  D, and  pursuant  to
Section  25102(f) of the  California  Corporations  Code.  Mr. Chan acquired the
warrants for his own account for  investment  with no then present  intention of
dividing his interest with others or of reselling or otherwise  disposing of all
or  any  portion  of  the  warrants.  The  warrants  were  issued  in a  private
transaction,  which was not part of a distribution of warrants or shares. We, or
our officers or directors or our or their affiliates or  representatives,  had a
pre-existing personal or business relationship with Mr. Chan.

     On May 16, 2000, in  conjunction  with the sale of shares to Starlight,  we
issued 8,000 warrants for the purchase our common stock to Norman C. Kristoff at
an exercise price of $6.00 per share.  The warrants may be exercised at any time
from the date of issuance  until May 16,  2005.  We did not  publicly  offer any
securities  and no  underwriter  was  utilized  and we  paid no  finder's  fees,
discounts or commissions in connection with the above issuance. The issuance was
exempt  pursuant  to Section  4(2) of the Act,  Regulation  D, and  pursuant  to
Section 25102(f) of the California  Corporations Code. Mr. Kristoff acquired the
warrants for his own account for  investment  with no then present  intention of
dividing his interest with others or of reselling or otherwise  disposing of all
or  any  portion  of  the  warrants.  The  warrants  were  issued  in a  private
transaction,  which was not part of a distribution of warrants or shares. We, or
our officers or directors or our or their affiliates or  representatives,  had a
pre-existing personal or

                                      -11-

<PAGE>

business relationship with Mr. Kristoff.

     On July 10, 2000 we issued 1,000 shares of common voting stock to Mark Deo,
an  individual.  These  shares were issued in exchange for  consulting  services
rendered to the Company  pursuant to the  Accesspoint  Stock Purchase  Agreement
dated July 10,  2000.  This  agreement  is included in this  document as Exhibit
1.15. We did not publicly offer any  securities and no underwriter  was utilized
and we did not pay any finder's  fees,  discounts or  commissions  in connection
with the above offer.  The offer was exempt pursuant to Section 4(2) of the Act,
Regulation D, and pursuant to Section  25102(f) of the  California  Corporations
Code.  Mr. Deo  acquired the shares for his own account for exchange of services
with no then  present  intention  of  dividing  his  interest  with others or of
reselling or otherwise disposing of all or any portion of the shares. The shares
were offered in a private  transaction,  which was not part of a distribution of
the shares.  We, or our  officers or  directors  or our or their  affiliates  or
representatives,  had a pre-existing  personal or business relationship with Mr.
Deo.

     On July  10,  2000 we  issued  1,000  shares  of  common  voting  stock  to
Maxamilian  Parker,  an  individual.  These  shares were issued in exchange  for
consulting  services  rendered to the Company pursuant to the Accesspoint  Stock
Purchase  Agreement  dated July 10,  2000.  This  agreement  is included in this
document  as Exhibit  1.16.  We did not  publicly  offer any  securities  and no
underwriter  was  utilized and we did not pay any  finder's  fees,  discounts or
commissions in connection with the above offer. The offer was exempt pursuant to
Section 4(2) of the Act,  Regulation D, and pursuant to Section  25102(f) of the
California Corporations Code. Mr. Parker acquired the shares for his own account
for exchange of services with no then present intention of dividing his interest
with others or of reselling or otherwise  disposing of all or any portion of the
shares. The shares were offered in a private transaction,  which was not part of
a distribution  of the shares.  We, or our officers or directors or our or their
affiliates  or  representatives,   had  a  pre-existing   personal  or  business
relationship with Mr. Parker.

     On August 10, 2000 we sold 8,000  shares of common  voting stock to Randall
S. Sword, an individual.  The shares were sold at a price of $2.50 per share for
a total purchase  price of $20,000.00.  We did not publicly offer any securities
and no underwriter was utilized and we did not pay any finder's fees,  discounts
or commissions  in connection  with the above offer and sale. The offer and sale
was exempt  pursuant to Section 4(2) of the Act,  Regulation  D, and pursuant to
Section  25102(f) of the  California  Corporations  Code. Mr. Sword acquired the
shares for his own account for  investment  with no then  present  intention  of
dividing his interest with others or of reselling or otherwise  disposing of all
or  any  portion  of  the  shares.  The  shares  were  purchased  in  a  private
transaction,  which was not part of a  distribution  of the  shares.  We, or our
officers or  directors  or our or their  affiliates  or  representatives,  had a
pre-existing personal or business relationship with Mr. Sword.

         On August 25, 2000 we issued  34,000  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  68,000  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  80,000  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  80,000  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  13,200  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution

                                      -12-

<PAGE>

dated August 25, 2000. The issuance of shares on conversion was made pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  20,000  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  24,000  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  40,000  shares of common  voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

         On August 25, 2000 we issued  148,368  shares of common voting stock to
Pacific  Capital Group,  Ltd. These shares were issued in relation to short-term
convertible  debt from Pacific Capital Group,  Ltd. as per the Resolution  dated
August 25,  2000.  The  issuance of shares on  conversion  was made  pursuant to
Regulation S promulgated under the Act.

     On August  30,  2000 we issued  1,000  shares  of  common  voting  stock to
Corporate Strategies c/o James L. Bartlett. These shares were issued in exchange
for consultant  services rendered to the Company.  We did not publicly offer any
securities and no underwriter was utilized and we did not pay any finder's fees,
discounts or  commissions  in  connection  with the above  offer.  The offer was
exempt  pursuant  to Section  4(2) of the Act,  Regulation  D, and  pursuant  to
Section 25102(f) of the California  Corporations Code. Mr. Bartlett acquired the
shares  for his own  account  for  exchange  of  services  with no then  present
intention  of dividing  his  interest  with others or of  reselling or otherwise
disposing  of all or any  portion of the shares.  The shares  were  offered in a
private transaction,  which was not part of a distribution of the shares. We, or
our officers or directors or our or their affiliates or  representatives,  had a
pre-existing personal or business relationship with Mr. Bartlett.

     On October 5, 2000 we sold 14,637  shares of common voting stock to Pacific
Capital Group,  Ltd., a  corporation.  The shares were sold at a price of $1.708
per share for a total purchase  price of  $25,000.00.  We did not publicly offer
any securities  and no underwriter  was utilized and we did not pay any finder's
fees,  discounts or commissions in connection with the above offer and sale. The
offer and sale was exempt pursuant to Section 4(2) of the Act, Regulation S, and
pursuant  to Section  25102(f)  of the  California  Corporations  Code.  Pacific
Capital Group,  Ltd acquired the shares for his own account for investment  with
no then present  intention of dividing his interest  with others or of reselling
or  otherwise  disposing  of all or any portion of the  shares.  The shares were
purchased in a private transaction,  which was not part of a distribution of the
shares.  We,  or  our  officers  or  directors  or our or  their  affiliates  or
representatives,  had a  pre-existing  personal  or business  relationship  with
Pacific Capital Group, Ltd.

     On October 11, 2000 we sold 39,474 shares of common voting stock to Pacific
Capital  Group,  Ltd.  The shares  were sold at a price of $1.52 per share for a
total purchase price of $60,000.00. We did not publicly offer any securities and
no underwriter  was utilized and we did not pay any finder's fees,  discounts or
commissions in connection  with the above offer and sale. The offer and sale was
exempt  pursuant  to Section  4(2) of the Act,  Regulation  S, and  pursuant  to
Section  25102(f) of the California  Corporations  Code.  Pacific Capital Group,
Ltd. acquired the shares for his own account for investment with no then present
intention  of dividing  his  interest  with others or of  reselling or otherwise
disposing  of all or any portion of the shares.  The shares were  purchased in a
private transaction,  which was not part of a distribution of the shares. We, or
our officers or directors or our or their affiliates or  representatives,  had a
pre-existing personal or business relationship with Pacific Capital Group, Ltd.

     On October 18, 2000 we sold 33,500 shares of common voting stock to Pacific
Capital  Group,  Ltd.  The shares were sold at a price of $1.374 per share for a
total purchase price of $46,042.50. We did not publicly offer any securities and
no underwriter  was utilized and we did not pay any finder's fees,  discounts or
commissions in connection  with the above offer and sale. The offer and sale was
exempt  pursuant  to Section  4(2) of the Act,

                                      -13-

<PAGE>

Regulation S, and pursuant to Section  25102(f) of the  California  Corporations
Code.  Pacific Capital Group,  Ltd.  acquired the shares for his own account for
investment  with no then present  intention of dividing his interest with others
or of reselling or otherwise  disposing of all or any portion of the shares. The
shares  were  purchased  in a  private  transaction,  which  was  not  part of a
distribution  of the shares.  We, or our  officers or  directors or our or their
affiliates  or  representatives,   had  a  pre-existing   personal  or  business
relationship  with Pacific  Capital Group,  Ltd.  Subject to  authorization  and
request on the part of Pacific  Capital  Group,  Ltd.,  the subject  shares were
issued in the name of Ed Van Maanen.

     On October 21, 2000 we sold 26,666  shares of common  voting stock to Verve
Ventures,  a Nevada  corporation.  The shares  were sold at a price of $1.50 per
share for a total purchase  price of  $40,000.00.  We did not publicly offer any
securities and no underwriter was utilized and we did not pay any finder's fees,
discounts or commissions in connection  with the above offer and sale. The offer
and sale was exempt  pursuant  to  Section  4(2) of the Act,  Regulation  D, and
pursuant to Section 25102(f) of the California Corporations Code. Verve Ventures
acquired  the shares for their own account for  investment  with no then present
intention  of dividing  his  interest  with others or of  reselling or otherwise
disposing  of all or any portion of the shares.  The shares were  purchased in a
private transaction,  which was not part of a distribution of the shares. We, or
our officers or directors or our or their affiliates or  representatives,  had a
pre-existing personal or business relationship with Verve Ventures.

     On  November 7, 2000 we sold 15,000  shares of common  voting  stock to Ken
Nagel,  an individual.  The shares were sold at a price of $2.75 per share for a
total purchase price of $41,250.00. We did not publicly offer any securities and
no underwriter  was utilized and we did not pay any finder's fees,  discounts or
commissions in connection  with the above offer and sale. The offer and sale was
exempt  pursuant  to Section  4(2) of the Act,  Regulation  D, and  pursuant  to
Section  25102(f) of the  California  Corporations  Code. Mr. Nagel acquired the
shares for his own account for  investment  with no then  present  intention  of
dividing his interest with others or of reselling or otherwise  disposing of all
or  any  portion  of  the  shares.  The  shares  were  purchased  in  a  private
transaction,  which was not part of a  distribution  of the  shares.  We, or our
officers or  directors  or our or their  affiliates  or  representatives,  had a
pre-existing personal or business relationship with Mr. Nagel.

     On November 13, 2000 we issued 15,000 shares of common voting stock to John
Dupont,  an  individual.  The shares  were  issued in  exchange  for  consulting
services  valued at a price of $3.00 per share for a total valuation of $45,000.
We did not publicly offer any securities and no underwriter  was utilized and we
did not pay any finder's fees,  discounts or commissions in connection  with the
above issuance,  offer or sale. The issuance,  offer or sale was exempt pursuant
to Section 4(2) of the Act,  Regulation S, Regulation D promulgated  thereunder,
and pursuant to Section 25102(f) of the California Corporations Code. Mr. Dupont
acquired the shares for his own account in exchange for services rendered to the
Company with no then present  intention of dividing his interest  with others or
of  reselling or  otherwise  disposing of all or any portion of the shares.  The
shares  were  issued  in  a  private  transaction,  which  was  not  part  of  a
distribution  of the shares.  We, or our  officers or  directors or our or their
affiliates  or  representatives,   had  a  pre-existing   personal  or  business
relationship with Mr. Dupont.

     On  December  21,  2000 we sold  18,805  shares of common  voting  stock to
Citizen  Asia  Pacific  Limited.  The shares  were sold at a price of $0.593 per
share for a total purchase  price of  $11,160.68.  We did not publicly offer any
securities  and no  underwriter  was utilized.  We paid no other  finder's fees,
discounts or commissions in connection  with the above offer and sale. The offer
and sale was exempt  pursuant  to  Regulation  S because  Citizen  Asia  Pacific
Limited is a non U.S.  company and neither  Citizen Asia Pacific Limited nor any
person or entity for whom Citizen  Asia Pacific  Limited was acting as fiduciary
is a U.S.  person.  Further,  the above  offer and sale was made in an  offshore
transaction  and there were no directed  selling efforts in the United States in
connection with the above offer and sale.

     On  December  21, 2000 we sold  400,000  shares of common  voting  stock to
Citizen  Asia  Pacific  Limited.  The shares  were sold at a price of $0.438 per
share for a total purchase price of  $175,000.00.  We did not publicly offer any
securities  and no  underwriter  was utilized.  We paid no other  finder's fees,
discounts or commissions in connection  with the above offer and sale. The offer
and sale was exempt  pursuant  to  Regulation  S because  Citizen  Asia  Pacific
Limited is a non U.S.  company and neither  Citizen Asia Pacific Limited nor any
person or entity for whom Citizen  Asia Pacific  Limited was acting as fiduciary
is a U.S.  person.  Further,  the above  offer and sale was made in an  offshore
transaction  and there were no directed  selling efforts in the United States in
connection with the above offer and sale.  Subject to authorization  and request
on the part of Citizen Asia Pacific  Limited,  the subject shares were issued in
the name of Ed Van Maanen.

                                      -14-

<PAGE>

     D.  USES OF PROCEEDS FROM SALES OF UNREGISTERED SECURITIES

     The  proceeds  from the above sales of  unregistered  securities  were used
primarily to fund the day-to-day operations of the Company.


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

     The following  discussion and analysis  should be read in conjunction  with
the financial statements and related notes contained elsewhere in this document.
The discussion contained herein relates to the financial statements,  which have
been prepared in accordance with GAAP.

THE  DISCUSSION IN THIS SECTION AND OTHER PARTS OF THIS  REGISTRATION  STATEMENT
CONTAINS CERTAIN FORWARD-LOOKING  STATEMENTS SUCH AS STATEMENTS OF THE COMPANY'S
PLANS, OBJECTIVES,  EXPECTATIONS AND INTENTIONS.  THESE STATEMENTS INVOLVE RISKS
AND UNCERTAINTIES.  THEY ARE MADE AS OF THE DATE OF THIS REGISTRATION STATEMENT,
AND THE COMPANY ASSUMES NO OBLIGATION TO UPDATE THEM.

         A.       Summary of Financial Data

     The  following  summary  financial  data should be read  together with this
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" and the Financial Statements included herein.
























                                      -15-

<PAGE>

<TABLE>
<CAPTION>


                           STATEMENT OF OPERATIONS(1)
                           -----------------------

                                                                          YEARS ENDED DECEMBER 31,
                                                         -----------------------------------------------------------
                                                                   2000                             1999
                                                                   ----                             ----
<S>                                                             <C>                             <C>
Revenues.............................................           $        2,261,752              $         2,479,770

Cost of sales and services...........................                      324,744                          426,902

Selling and marketing................................                      261,715                          603,461

General and administrative...........................                    5,561,488                        2,879,103

Depreciation.........................................                      287,317                          161,071

Profit (loss) from operations .......................                   (4,173,512)                      (1,590,767)

Other expense, net ..................................                    1,045,336                           72,603

Extraordinary expense................................                            0                          169,875

Income taxes paid....................................                        2,400                            1,600
                                                         --------------------------      ---------------------------
Net profit (loss)....................................          $        (5,221,248)             $        (1,834,845)
                                                         ==========================      ===========================
Net loss per Common Share:
     Basic:..........................................          $            (0.33)              $             (0.12)
     Diluted:........................................          $            (0.33)              $             (0.12)
Weighted average number of Common Shares:
     Basic:..........................................                   15,694,780                       14,704,000
     Diluted:........................................                   15,694,780                       14,704,000
</TABLE>


<TABLE>

                         CONSOLIDATED BALANCE SHEET(2)
                         --------------------------

                                                                           YEARS ENDED DECEMBER 31,
                                                          ----------------------------------------------------------
                                                                    2000                             1999
                                                                    ----                             ----
<S>                                                            <C>                              <C>
Cash.................................................          $             31,954             $             54,348
Accounts receivable, net.............................                       200,624                          560,845
Other current assets.................................                        45,022                           33,317
Fixed assets, net(3).................................                       719,167                          452,259
Other assets.........................................                       413,796                           32,337
                                                          --------------------------       --------------------------
  Total assets.......................................                     1,410,563                        1,133,106
                                                          ==========================       ==========================

Total current liabilities............................                     3,552,489                        1,035,322
Long term liabilities................................                       283,990                          378,925
                                                          --------------------------       --------------------------
  Total liabilities                                                       3,836,479                        1,414,247
                                                          --------------------------       --------------------------

Common stock.........................................                        16,558                           14,832
Additional paid in capital...........................                     5,390,011                        2,315,265
Retained earnings (deficit)..........................                    (7,832,485)                      (2,611,238)
                                                          --------------------------       --------------------------
  Total shareholders' equity (deficit)...............                   (2,425,916)                         (281,141)
                                                          ==========================       ==========================
  Total liabilities and stockholders' equity.........          $         1,410,563              $          1,133,106
                                                          ==========================       ==========================
<FN>
-----------------------------
(1)  For the fiscal years, 2000 and 1999, other than capital raised purusant to
stock sales,  we have had no operations  and no revenue prior to the merger with
our predecessor,  Accesspoint Corporation. However, our predecessor, Accesspoint
Corporation  has had prior  revenue.  The  merger  has been treated as a pooling
transaction for accounting purposes.
(2)  For the fiscal years ended, 2000 and 1999, other than capital raised
pursuant to stock sales,  the Company has had no operations and no revenue prior
to the merger with the Company's predecessor, Accesspoint Corporation.
(3)  Net accumulated depreciation of $631,636 and $344,329 in 2000 and 1999,
respectively.
</FN>
</TABLE>
                                      -16-

<PAGE>

     B...OVERVIEW

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

     We have incurred losses since the inception of its operations.  At December
31, 2000, we had an accumulated deficit of $(7,832,485). To date, we have relied
substantially  on private  placement  offerings of debt and equity to offset its
losses and to fund its ongoing operations, research and development programs and
business activities.

     C.  RESULTS OF OPERATIONS

     Year Ended, December 31, 2000 Compared With Year Ended, December 31, 1999

     Revenues for the year ended, December 31, 2000 decreased to $2,261,752 from
$2,479,770 for the year ended,  December 31, 1999. The decrease of $218,018,  or
8.8%  is due  primarily  to our  focus  on the  development  of our  transaction
processing and underwriting platform over a nine month period which diverted key
management  and  employee  time from the sale and  promotion  of retail  web and
merchant services which resulted in an overall decrease in retail sales.

     Cost of sales for the year ended,  December 31, 2000  decreased to $324,744
from $426,902 for the year ended, December 31, 1999. The decrease of $102,158 or
23.9%  resulted  primarily  from  our  reduction  in sales  associated  with the
diversion of key  management  and employee  time from the sale and  promotion of
retail web and  merchant  services,  which  resulted  in an overall  decrease in
retail sales.

     Selling  and  marketing  expenses  for the year  ended,  December  31, 2000
decreased to $261,715 from $603,461 for the year ended,  December 31, 1999. This
decrease  of  $341,746,  or  56.6%  resulted  primarily  from  the  decrease  in
commissions associated with the decline in sales from the retail division of our
subsidiary, PSI. Moreover, we have focused on reducing overhead costs, including
the reduction in trade show expenses, advertising consulting costs, and printing
costs for brochure  and  promotional  materials  during the  development  of our
processing and underwriting platform.

     General and administrative  expenses for the year ended,  December 31, 2000
increased to $5,848,805 from  $3,040,174 for the year ended,  December 31, 1999.
The increase of  $2,808,631,  or 92.4%  resulted  primarily  from an increase in
legal  and  accounting  expenses,  an  increase  in  total  payroll  expense  of
$1,722,127  from  $1,511,520 in 1999 to  $3,233,647 in 2000,  and an increase in
travel  expenses  primarily  due  to  business   development  needs  during  the
development of our processing and underwriting  platform.  Depreciation  expense
also  increased in the amount of $126,246  from  $161,071 in 1999 to $287,317 in
2000 due to the increase in fixed assets.

     Interest expense,  net, for the year ended, December 31, 2000 was $144,619,
as compared to $72,603 for the year ended,  December 31,  1999.  The increase of
$72,016,  or 99.2% in interest expense  resulted  primarily from the addition of
furniture  & fixtures  and  computer  equipment  financed  under  capital  lease
agreements.

     Other  expense,  net, for the year ended,  December 31, 2000 was  $900,717.
This  includes  primarily the write-off of bad debt and the accrual of penalties
associated with unpaid payroll taxes.

     Extraordinary  expense  for the year  ended,  December  31, 2000 was $0, as
compared to $169,875  for the year ended,  December  31,  1999.  The decrease of
$169,875,  or 100.0% was a direct result of payment of a settlement amount under
a lawsuit in 1999. PSI vigorously contested the action and concluded that it was
in the best  interests of PSI to resolve the matter  without  incurring  further
attorney's fees. The expense was a one-time charge.

                                      -17-

<PAGE>

     Net loss for the year ended, December 31, 2000 and the year ended, December
31, 1999 was $(5,221,248) and $(1,834,845), respectively.

     D.  Liquidity and Capital Resources

     Working capital (deficit) at December 31, 2000 was $(3,274,889) as compared
to $(386,812) at December 31, 1999.

     We have funded our operations and working capital needs through a series of
private  equity and debt  offerings  including  Regulation  D and  Regulation  S
private placements and loans.

     Cash and cash equivalents at December 31, 2000 were $31,954,  a decrease of
$22,394 from December 31, 1999.  During the year ended,  December 31, 2000,  the
Company used  $3,429,357  net cash in operating  activities as compared to using
$1,820,110 for the year ended,  December 31, 1999. This increase of cash used in
operations of $1,609,247  was primarily a result of the increase in the net loss
for 2000,  coupled  with an increase in payroll tax  liabilities  for the fiscal
year 2000.

     During the year ended,  December 31, 2000,  we used  $218,325 for investing
activities as compared to $28,844,  for the year ended,  December 31, 1999.  The
increased use of cash for investing  activities resulted from an increase in the
acquisition of fixed assets.

     During  the  year  ended,  December  31,  2000,  we  generated  net cash of
$3,625,287  from  financing  activities as compared to  $1,896,018  for the year
ended,  December 31, 1999. The increase of $1,729,269 resulted from funds raised
in a Regulation  D, Rule 504, and  Regulation  S, Rule 144 private  placement of
common stock.

     We currently  leases  office space on a short-term  twelve-month  sub-lease
basis and could be required  to move after the  expiration  of the  twelve-month
period in June 2001. We may attempt to  re-negotiate a longer-term  lease at its
present location.  The major capital expenditures we could incur if it needed to
move would be related to  relocation  of office  computers,  local area  network
hardware, office telephony and office equipment and furniture. However, we house
our Internet  computer servers and Internet network  equipment and components at
the Exodus  Communications  Center located in Irvine, CA. We do not anticipate a
foreseeable need to re-locate its Internet  computer  servers,  Internet network
equipment and components.

     We had, at December 31, 2000,  working capital of $(3,274,889).  We believe
that cash generated from operations  will not be totally  sufficient to fund our
current  and  anticipated  cash  requirements.  We  plan  to  obtain  additional
financing  from equity and debt  placements.  We do not believe that our current
operational  plans for the next  twelve  months  will be  curtailed  or  delayed
because of the lack of sufficient financing.  We have been able to raise capital
in a series of equity  and debt  offerings  in the past.  While  there can be no
assurances  that we will be able to obtain such additional  financing,  on terms
acceptable  to us and  at  the  times  required,  or at  all,  we  believe  that
sufficient capital can be raised in the foreseeable future.

     E.  Net Operating Loss

     For federal income tax purposes,  we have net operating loss  carryforwards
of  approximately  $1,792,600  as of  December  31, 1999 and  $7,010,000,  as of
December 31, 2000. These  carryforwards will expire at various dates through the
year and 2015.  The use of such net operating  loss  carryforwards  to be offset
against future taxable income,  if achieved,  may be subject to specified annual
limitations (see "Risks of Our Business  Limitations on Net Operating Loss Carry
Forward")


ITEM 7.  FINANCIAL STATEMENTS

     Our audited consolidated financial statements for the period ended December
31, 2000 are filed herewith.


                                      -18-

<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

     None.
                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     A.  DIRECTORS AND EXECUTIVE OFFICERS

     The following table and text sets forth the names and ages of all directors
and  executive  officers of our Company and the key  management  personnel as of
December  31,  2000.  The Board of Directors of our Company is comprised of only
one class.  All of the  directors  will serve until the next  annual  meeting of
stockholders  and until their  successors  are elected and  qualified,  or until
their earlier  death,  retirement,  resignation or removal.  Executive  officers
serve at the  discretion of the Board of  Directors,  and are appointed to serve
until the first  Board of  Directors  meeting  following  the annual  meeting of
stockholders. Except as otherwise noted, there are no family relationships among
directors and executive  officers.  Also provided is a brief  description of the
business  experience  of  each  director  and  executive  officer  and  the  key
management   personnel   during  the  past  five  years  and  an  indication  of
directorships  held by each director in other companies subject to the reporting
requirements under the Federal securities laws.

<TABLE>
<CAPTION>

                         DIRECTORS & EXECUTIVE OFFICERS


        NAME                      AGE                         POSITION
  <S>                              <C>         <C>
                                               Chairman of the Board of Directors, Chief Executive Officer,
  Tom M. Djokovich                 43          Secretary

  James W. Bentley                 54          President, Director

  Tamara A. Djokovich              37          Treasurer, Director
                                               Chief Executive Officer, PSI & Office of the President and
  Alfred Urcuyo                    37          Director, Accesspoint Corporation
                                               Chief Executive Officer, BSG & Vice President of Graphic &
  Bas Mulder                       45          HTML Technologies, Accesspoint Corporation

  Mark Deo                         44          Director

</TABLE>

<TABLE>
<CAPTION>

                            KEY MANAGEMENT PERSONNEL


        NAME                      AGE                         POSITION
<S>                                <C>         <C>
 Eric Odegard                      31          Senior Vice President of Business Development

 Dave Vargha                       38          Vice President of Business Development

 Walter Burch                      46          Vice President of Operations

 Kyle Waltz                        27          Vice President of Software Engineering

 Richard B. Anderson               31          Controller

 Travis Williams                   32          Director of Customer Care
</TABLE>


                                      -19-

<PAGE>

     B.  BACKGROUND AND EXPERIENCE - DIRECTORS AND EXECUTIVE OFFICERS

     TOM M. DJOKOVICH, CHAIRMAN AND CEO

     Mr.  Djokovich  is the founder of our Company and served as Chairman of the
Board and Chief  Executive  Officer from  inception  until October 1997.  Tom M.
Djokovich  is married  to Tamara A.  Djokovich  who serves as a Director  of the
Company.  Mr.  Djokovich was elected to the Board of Directors on March 19, 1999
and his term expires at the next  election of Directors.  Prior to  establishing
the Company,  Mr.  Djokovich was the owner and operator of TMD  Construction and
Development,  a real estate  construction and development  management company he
founded in 1979.  TMD provided  commercial,  industrial  and custom  residential
construction  services  as  a  licensed  contractor  in  California,   including
effective cost management of multimillion-dollar projects incorporating hundreds
of  employees,  subcontractors  and  international  materials  acquisition.  Mr.
Djokovich was responsible for the direct management of projects,  operations and
client  development.  In 1994, the concrete industry awarded Mr. Djokovich their
highest  recognition  for "Best  Custom  Home  Project"  in their  national  and
international  competitions.   Mr.  Djokovich  has  also  provided  construction
management and real estate  deposition  services as a court appointed  receiver,
consulting on 15 projects to date.

     JAMES W. BENTLEY

     Mr.  Bentley  serves  as  our  President  and  as  a member of our Board of
Directors.  James W.  Bentley is married to Mary Ann  Bentley  who serves as our
Operations  Manager and Vice President.  Mr. Bentley was elected to the Board of
Directors  on March  19,  1999  and his term  expires  at the next  election  of
Directors.  Mr.  Bentley  also  serves as  Chairman  of the  Board  for  Bentley
Simonson,  an  independent  oil and gas production  and  exploration  company he
co-founded in 1987.  Prior to joining the Company,  Mr. Bentley was a consulting
engineer for Little Chemical Company, a specialty chemical company, from 1992 to
1996. In 1992, Mr. Bentley founded  Bentley Marine Video, a technology  company,
which supplied the U.S.  military with computer  hardware,  underwater video and
night vision technology,  where his flagship product received the Testers Choice
Award from Scuba Diver  Magazine.  Bentley Marine Video was recently sold by Mr.
Bentley.  In 1988, Mr. Bentley  co-founded Quest Marine Video, a manufacturer of
underwater  video  equipment,  serving  as its  Chairman  of the Board and Chief
Executive  Officer until its sale in 1992. In 1971, Mr. Bentley  founded Bentley
Ranches,  Inc., a  50,000-acre  cattle ranch with  interests in cattle,  hay and
timber,  serving as its President until its sale in 1993. From 1963 to 1970, Mr.
Bentley  helped  his  father  launch  Bentley  Laboratories,  a  medical  device
manufacturer,  which went public in 1969 and was  subsequently  sold to American
Hospital and Supply in 1980.

     TAMARA A. DJOKOVICH

     Mrs.  Djokovich was elected to the Board of Directors on March 19, 1999 and
her term  expires at the next  election of  Directors.  Tamara A.  Djokovich  is
married to Tom M.  Djokovich who serves as a Chairman of the Board of Directors,
Chief  Executive  Officer and  Secretary of the Company.  From  1995-1999,  Mrs.
Djokovich  served as the  Assistant  City  Attorney  for the City of Santa  Ana,
working primarily with the Public Works Agency, specializing in construction law
and solid waste law. From 1991 to 1994, Mrs. Djokovich served as General Counsel
for the Central  Orange County Fixed Guideway  Agency.  Prior to working for the
City of Santa Ana, Mrs.  Djokovich was an Associate Attorney for the Law Offices
of Bowie,  Arneson, Kadi & Dixon, where she represented various water and school
districts  throughout  Southern  California.  Mrs.  Djokovich holds a Bachelor's
Degree from the University of California,  Irvine, and a Law Degree from Western
State University.

     ALFRED URCUYO

     Mr.  Urcuyo was elected to the Board of Directors on March 19, 1999 and his
term  expires at the next  election of  Directors.  Mr.  Urcuyo is a  successful
entrepreneur  and business  executive.  In 1999, Mr. Urcuyo  founded  Processing
Source   International   (PSI)  to  provide  merchants  with  fully  integrated,
one-stop-shop   e-commerce  solutions.   He  successfully  negotiated  strategic
alliances  with Internet  companies  such as Sage  Networks,  IdeaCenter and Las
Vegas  Internet.  Prior to founding PSI, Mr. Urcuyo,  recognizing the tremendous
market opportunities in the transaction processing industry, founded Cardservice
America as an independent

                                      -20-

<PAGE>

agent of Cardservice International.  In the first year, his company produced the
second  highest  sales of  debit  transactions  in the  nation  for  Cardservice
International.  In 1997,  Mr.  Urcuyo  founded Home Loan Mortgage and within one
year, he successfully sold the business. In 1996, Mr. Urcuyo founded Marketplace
Consulting,  Inc. Marketplace  Consulting served several major clients,  such as
Peter Foy &  Associates,  whose client list  includes  J.D.  Power & Associates,
Dewey Pest Control, and Hughes Supermarkets. In 1992, Mr. Urcuyo joined Southern
California  Construction  Consultants as General/Sales  Manager.  He recruited a
sales staff of over 60 people and helped  build a  successful  home  improvement
company.  In  1988,  Mr.  Urcuyo  entered  into a  distribution  agreement  with
Multi-Flavor, a small manufacturer of yogurt machines. Over the next four years,
he built a successful  national sales  distribution  organization  and increased
sales over 600%. Prior to Multi-Flavor,  Mr. Urcuyo joined Poolsaver, an Anthony
Industry  company,  where he set  several  sales  records  and was  offered  the
position of General Manager for the Northern California Division.

     BAS MULDER

     Mr. Mulder  serves as Vice  President of Graphics & HTML  Technologies  for
Accesspoint  and as  CEO/President  of Black  Sun  Graphics.  Bas  Mulder is the
founder of Black Sun  Graphics,  which  merged with  Accesspoint  in April 2000.
Black Sun Graphics  specializes in the design of Internet  graphics and web site
creation,  including  3D design and  modeling,  animation,  streaming  audio and
video, Macromedia Flash, Java Scripting and e-commerce.  Client industries range
from software/hardware, dental, manufacturing and construction to make-up school
for the movie industry.

     Since 1997 Mr.  Mulder has worked  closely  together  with  Accesspoint  to
design  websites,  software  interfaces  for  Merchant  Manager and  Transaction
Manager and  collateral  materials.  Prior to founding  Black Sun Graphics,  Bas
Mulder  worked as an adviser and  consultant  for  advertising  companies in the
Netherlands  to establish  Computer  Graphic  Departments.  From 1993 Bas Mulder
worked in association  with several  Internet  Service  Providers in the U.S. to
create web sites and Internet  based programs like  e-commerce  packages and web
site creation programs.

     Mr. Mulder  completed his Masters  in  Garden & Landscape  Architecture and
Town & Country Planning at the University of Wageningen, The Netherlands. He has
traveled  extensively in Europe,  North and Central America.  Mr. Mulder and his
family reside in Laguna Niguel, California.

     MARK DEO

     Mr. Deo serves as a member of our Board of  Directors.  Mr. Deo was elected
to the Board of  Directors  on March 19,  1999 and his term  expires at the next
election of  Directors.  Mr. Deo also has served as a consultant  to our Company
since June 1998.  He is the founder and senior  partner in I.T.  Advertising,  a
full service  marketing  and  management  firm founded in 1991.  Mr. Deo assists
clients in strategic planning and direction in both marketing and management. In
addition he was senior VP of The Elite Group,  an  international  marketing  and
management-consulting  group.  With the Elite Group,  Mr. Deo led the consulting
relationship for American Express and consulted the Yamaha  Corporation in their
Hamamatsu  offices.  Mr. Deo is also a dual course  instructor for Dale Carnegie
training worldwide.

     C.  BACKGROUND AND EXPERIENCE - KEY MANAGEMENT

     ERIC ODEGARD, SENIOR VICE PRESIDENT OF BUSINESS DEVELOPMENT

     Eric Odegard joins PSI after several successful tenures in the underwriting
and  risk  management  industries.   As  National  Sales  Manager  for  the  LMA
Underwriting Agency of Minneapolis, MN, Eric created a successful national sales
campaign  insuring  acquiring banks as well as Independent  Sales  Organizations
against chargeback liability.

     More recently,  Eric has served as Vice  President of Business  Development
for  creditcards.com  (formerly  Electronic  Card Systems,  ECS) of Los Angeles,
California primarily  responsible for the recruitment,  support and servicing of
outside sales  organizations  on a national  basis.  Mr. Odegard holds degree in
Business

                                      -21-
<PAGE>

Administration from the University of North Dakota with majors in both Financial
Management and Economics.

     DAVE VARGHA

     Mr.Vargha brings to the Company over 15 years of extensive sales management
expertise. Mr. Vargha, previously an employee of Processing Source International
(PSI),  who helped in the formation of PSI,  recently  became an employee of the
Company as Vice President of Business Development.  Prior to PSI, Mr. Vargha was
acting Chief Financial  Officer and Vice President of Operations for Cardservice
America, a merchant bankcard sales  organization.  From 1994 to 1997, Mr. Vargha
started and ran his own painting and home improvement business, Home Improvement
Specialists.  Mr.  Vargha  holds a  Bachelor's  Degree  from the  University  of
California, Santa Barbara.

     WALTER BURCH, VICE PRESIDENT OF OPERATIONS

     Walter Burch joins Processing Source  International  after more than twenty
years experience consulting in the areas of Corporate  Communications,  Business
Development, Marketing, Advertising, and Media Production. As the Vice President
of Webco,  Inc., Mr. Burch  developed  print and electronic  media and corporate
development  strategies  for Fortune  500  companies  such as Xerox  (Enterprise
Technical  Operations,  Orange County,  CA),  Computer  Science  Corporation and
Merisel,  Inc.  (El  Segundo,  CA),  Experian  Corporation,  Nestle  Corporation
(Glendale, CA), and Enron Energy (Houston, TX).

     Mr. Burch has also served as a writer and  announcer for  commercial  radio
and  television  as  well  as  a  producer  for  independent  documentaries  for
organizations and businesses.

     KYLE WALTZ, VICE PRESIDENT, SOFTWARE ENGINEERING

     Mr.  Waltz  Senior  joined our  Company as  Senior Programmer in June 1996.
Since that time,  he has  established  himself as a team  leader and an integral
part in the development of the Merchant Manager system.  Mr. Waltz has extensive
knowledge  and  background  in the areas of HTML,  DHTML,  ASP,  COM,  data base
programming and various programming  languages necessary for product development
within  the  Company's  core  group  of  business   offerings.   Mr.  Waltz  has
successfully  completed  courses in Object  Oriented  C++,  Visual  Basic,  Data
Structures and ADA.

     RICHARD B. ANDERSON

     Mr.  Anderson  brings  over six years of senior  accounting  and  financial
experience  to  Accesspoint.  Prior to  joining  our  Company,  he held a senior
financial position for Rainmaker Systems, Inc., where he was an integral part in
their Initial Public Offering due diligence  process  associated with the filing
of their S-1 document with the Securities and Exchange Commission.  Mr. Anderson
has extensive  experience  in both  financial  reporting and analysis.  Prior to
working  for  Rainmaker  Systems,  he  was  a  Financial  Analyst  for  Computer
Marketplace,  Inc. Mr. Anderson  received his Bachelor's  Degree in Finance from
Arizona State University.

     TRAVIS WILLIAMS

     Mr. Williams came to Accesspoint  from AT&T Wireless  Services where he had
been a  Customer  Care  Supervisor  in a  state-of-the-art  call  center  of 400
employees  for  nearly  five  years.  While with AT&T,  Mr.  Williams  completed
extensive courses and training in the management of customer relation  services.
He also  worked in  customer  service  management  for  Nintendo  of America for
several years. Mr. Williams holds an MBA from the University of Phoenix.

     D.  BOARD OF ADVISORS

     The Board of Advisors  advises our Company's  management team, with respect
to  technological  and  commercial  issues  concerning  the  Company's  areas of
interest. Our Company's practice has been, and is expected to continue to be, to
consult with members of the Board of Advisors on an individual  basis as needed.

                                      -22-
<PAGE>

All of the members of the Board of Advisors  have entered  into  confidentiality
agreements  with our  Company,  and  subject  to this  constraint,  the Board of
Advisors are entitled to accept employment with, or provide consulting  services
to others, including competitors or potential competitors of the Company.

     GREG S. TOLLESON, CPA

     Mr.  Tolleson  is  the  managing  partner  of  Tolleson  &  Associates,  an
accountancy firm providing  consulting,  accounting and income taxation services
to  over  three  hundred  clients  in  varied  businesses,   including  numerous
technology  and  telecommunications  companies.  Prior  to  forming  Tolleson  &
Associates,  Mr. Tolleson spent eleven years with the  international  accounting
firm of Deloitte & Touche, LLP, providing consulting,  accounting and income tax
services  for a variety of clients  ranging  from small  businesses  and wealthy
individuals  to  multinational  corporations.  Mr.  Tolleson  was  a  designated
specialist in the area of hi-tech  companies as well as the lead  specialist for
the Orange  County  office in the  taxation  of  international  operations.  Mr.
Tolleson holds a Masters Degree in income  taxation.  He is also a member of the
American Institute of Certified Public Accountants and the California Society of
Certified Public Accountants.

     E.  Compliance with Section 16(a) of the Exchange Act

     Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers and persons who own more than ten percent of a registered
class of our  equity  securities,  to file  with  the  Securities  and  Exchange
Commission  initial  reports of ownership and reports of changes in ownership of
common stock and other equity securities of our Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulations to furnish
us with copies of Section 16(a) forms they file.

     To our  knowledge,  based  solely on review of the  copies of such  reports
furnished to us, we believe that,  during the year ended  December 31, 2000, all
of our officers,  directors and greater- than-ten percent stockholders  complied
with all Section 16(a) filing  requirements,  except that reports on Form 3 were
filed  late  by Tom M.  Djokovich  (and  Tamara  Djokovich),  James  W.  Bentley
(including  Bentley Family 1995 Trust and Bentley Trust "C"),  Alfred Urcuyo and
David  Vargha with  respect to their first  required  disclosure  upon  becoming
subject to the  requirements of Section 16(a),  and one (1) Form 4 which has not
been filed by Alfred  Urcuyo with respect to a grant of options that occurred in
the Fiscal Year 2000.











                                      -23-

<PAGE>


                                    PART III

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth information  regarding  compensation  earned
for the Company's  fiscal year ended  December 31, 2000, by its Chief  Executive
Officer and other covered persons:

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

----------------------------------------------------------------------------------------------------------------------
                                            Annual Compensation                     Long-Term Compensation
                                     --------------------------------- -----------------------------------------------
                                                                                Awards           Payouts
                                                                       ------------------------ ----------
   Name and Principal        Year       Salary     Bonus        Other   Restricted   Securities   LTIP      All other
        Position                          ($)       ($)          ($)       Stock      Underlying  Payouts     compen-
                                                                          Award(s)     Options               sation
                                                                            ($)         (#)         ($)        ($)
           (a)                (b)        (c)         (d)         (e)        (f)         (g)         (h)        (i)
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
<S>                          <C>      <C>         <C>          <C>               <C> <C>            <C>        <C>
Tom M. Djokovich, CEO &      2000(4)  $ 150,000   $ 50,000     $    0            0           0      $   0      $    0
Chairman of the Board of
Directors
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1999(5)    150,000     50,000   $ 55,153            0   1,932,693          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1998(6)     65,430          0     54,570            0           0          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
James W. Bentley,            2000             0          0          0            0           0          0           0
President, Director(7)
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1999             0          0          0            0           0          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1998             0          0          0            0     993,725          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
Alfred Urcuyo,               2000       134,484          0          0            0      32,051          0           0
Office of the President
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1999       128,881          0          0            0  1,424,5308          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1998        77,212          0          0            0           0          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
Bas Mulder,                  2000        53,942      2,032          0            0       3,400          0           0
Vice President of
Graphic & HTML
Technologies
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1999             0          0          0            0           0          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1998             0          0          0            0           0          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
David Vargha,                2000       105,840          0          0            0           0          0           0
Vice President of
Business Development
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1999       104,443          0          0      157,500     315,000          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------
                             1998        60,071          0          0            0           0          0           0
-------------------------- --------- ----------- ---------- ---------- ------------ ----------- ---------- -----------

<FN>
-----------------------------
(4)  Bonus represents compensation earned in 2000 and 1999 but which was
deferred and remains currently unpaid.  Other  compensation  represents  amounts
paid to executive for deferred compensation from prior periods.
(5)  Other compensation represents amounts paid to Executive for deferred
compensation from prior periods.
(6)  Other compensation represents amounts paid to Executive for deferred
compensation from prior periods.
(7)  James W. Bentley, President and a Director of the Company does not have
Employement  Agreement with the Company, nor was he compensated as the President
nor as a  Director  in each of the last  three (3)  fiscal  years.  Included  in
Securities  Underlying  Options are options  issued to Bentley Family 1995 Trust
and the  Bentley  Family  Trust  "C" in the  amounts  of  415,980  and  577,745,
respectively, where James W. Bentley is a beneficiary.
(8)  In Fiscal Year 1999, Al Urcuyo was granted 1,400,000 options to purchase
our common stock. This grant was forfeited by Mr. Urcuyo in Fiscal Year 2000.
</FN>
</TABLE>

                                      -24-

<PAGE>


     A.  INDIVIDUAL EXECUTIVE COMPENSATION

     TOM M. DJOKOVICH

     Tom M.  Djokovich  is CEO and  Chairman  of the Board of  Directors  of our
Company.  We entered into an employment  Agreement with Tom M.  Djokovich  dated
January 4, 1999.  The term of the  Agreement  is for a period of three (3) years
and commenced on the date of execution  and continues to and including  December
31, 2001. The Employment Agreement provides for a base annual salary of $200,000
and  other  benefits.  The base  salary  may be  increased  in an  amount  to be
determined by the Board of Directors of the Company. Such increase amount may be
an amount equal to the compensation  then in effect  multiplied by a fraction of
not less then ten (10%) percent.  The adjustments cannot reduce the base salary.
The  employment  agreement  also  provides  for the deferral of up to 25% of Mr.
Djokovich's  base salary for the first two (2) years without the prior  approval
of Mr. Djokovich. Furthermore, at any time during the balance of the term of the
Agreement, the Company may defer up to $1,500 monthly of the Base Salary without
Mr. Djokovich's  consent.  In such case, salary deferred will be exchanged for a
note payable equal to the amount of salary deferred, and will accrue interest at
a rate of eight (8%)  percent  per annum,  and shall be due and  payable  within
twelve  (12)  months  of the  execution  of the  note  and/or  immediately  upon
termination  of the agreement.  Mr.  Djokovich and the Company may negotiate and
mutually  agree to repay any  outstanding  note payable in shares or options for
shares of Common Stock in lieu of cash.  The Employment  Agreement  provides for
the payment of cash bonuses based on the gross revenue attainment of the Company
during the term of each full fiscal year.

     The  Employment  Agreement  with Mr.  Djokovich  also provides for non-cash
compensation.  In addition to the cash  compensation  set forth  above,  we have
granted,  to Mr.  Djokovich an option to purchase 50,000 shares of our Company's
Common Stock per year during the term of the  Agreement,  with an exercise price
of $2.00 each, which will vest at the rate of 1/12th (4,166.66) per month during
the  first and each  subsequent  year of the  Agreement.  The  options  shall be
exercisable for a period of five (5) years from the grant date (January 4, 1999)
and shall carry the same registration rights granted to members of our Company's
executive management team. As of December 31, 2000, Mr. Djokovich has elected to
defer such  granting of additional  options to purchase  shares of our Company's
common stock.

     JAMES W. BENTLEY

     James W.  Bentley is President  and a Director of our  Company.  We did not
enter into an Employment Agreement with James W. Bentley. We does not compensate
James W. Bentley as the President nor as a Director.  Furthermore,  Mr.  Bentley
does not have a stock option agreement with our Company.

     TAMARA DJOKOVICH

     Tamara  Djokovich  is Treasurer  and a Director of our Company.  We did not
enter into an Employment  Agreement with Tamara Djokovich.  We do not compensate
Tamara Djokovich as the Treasurer nor as a Director. Furthermore, Mrs. Djokovich
does not have a stock option agreement with our Company.

     ALFRED URCUYO

     Alfred Urcuyo is President and Chief Executive Officer of Processing Source
International,  Inc. (PSI), a wholly owned subsidiary of our Company,  and holds
the Office of the President and serves as a Director of our Company. PSI entered
into an employment  Agreement  with Alfred Urcuyo on July 30, 1999.  The term of
the  Agreement  is for a period of five (5) years and  commenced  on the date of
execution and continues to and including July 30, 2004. The Employment Agreement
provides for an annual  salary of $134,484 and other  benefits.  The base salary
may be increased in an amount to be  determined by the Board of Directors of our
Company.  It is proposed  that such  increase  amount be an amount  equal to the
compensation then in effect multiplied by a fraction of not less then seven (7%)
percent. The Employment Agreement provides for the payment of cash bonuses based
on the gross  revenue  attainment  of the  Company  during the term of each full
fiscal year.


                                      -25-

<PAGE>

     The  Employment  Agreement  with Mr.  Urcuyo  also  provides  for  non-cash
compensation.  In addition to the cash compensation set forth above, the Company
granted  to Mr.  Urcuyo an option to  purchase  19,530  shares of our  Company's
Common Stock per year during the term of the  Agreement,  with an exercise price
of $3.00 each,  which vest at a rate of 1/12th  (1,627.50)  per month during the
first and each subsequent  year of this  Agreement.  The options are exercisable
for a  period  of five  (5)  years  from  the  grant  date  and  carry  the same
registration  rights  granted to members  of PSI's and our  Company's  executive
management team.

     DAVID VARGHA

     David  Vargha was, as of December  31,  2000,  Vice  President  of Business
Development of our Company.  PSI entered into an employment Agreement with David
Vargha on July 30, 1999. We had no employment agreement with Mr. Vargha.

     The following  table sets forth  information  on grants of stock options by
the Company to the Named  Executive  Officers  during its last completed  fiscal
year:

<TABLE>
<CAPTION>

                        OPTION GRANTS IN LAST FISCAL YEAR
                               [Individual Grants]

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

                                       Number of        Percent of
                                      Securities      Total Options
              Name                    Underlying        Granted to
                                    Options Granted    Employees in   Exercise Price       Market      Expiration Date
                                          (#)          Fiscal Year        ($/Sh)        Price ($/Sh)
               (a)                        (b)              (c)              (d)             (e)              (f)
---------------------------------- ------------------ --------------- ---------------- --------------- ----------------
<S>                                          <C>              <C>                <C>             <C>              <C>
Tom M. Djokovich, CEO, Chairman
of Board of Directors                              0           0.0 %                0            0.00             N/A
---------------------------------- ------------------ --------------- ---------------- --------------- ----------------
James W. Bentley, President,
Director                                           0           0.0 %             0.00            0.00              N/A
---------------------------------- ------------------ --------------- ---------------- --------------- ----------------
Alfred Urcuyo, Office of the
President                                     32,051          38.8 %             3.12            3.12         08/14/05
---------------------------------- ------------------ --------------- ---------------- --------------- ----------------
Bas Mulder, Vice President of
Graphic & HTML Design                          3,400           4.1 %             4.75            4.75         05/01/05
---------------------------------- ------------------ --------------- ---------------- --------------- ----------------
David Vargha, Vice President of
Business Development                               0           0.0 %             0.00            0.00              N/A
---------------------------------- ------------------ --------------- ---------------- --------------- ----------------
</TABLE>







                                      -26-



<PAGE>


     The  following  table sets forth  information  regarding  exercise of stock
options by the Named Executive  Officers during its last completed  fiscal year.
There were no options exercised by the Named Executive Officers during 2000:

<TABLE>
<CAPTION>

              AGGREGATE OPTIONS EXERCISES IN LAST FISCAL YEAR
                     AND FISCAL YEAR-END OPTION VALUES

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

       Name                 Shares       Value      Number of Securities Underlying        Value of unexercised
                         Acquired on    Realized    Unexercised Options at FY-End    In-the-Money Options at FY-End
                           Exercise
                             (#)          ($)                 (#)                               ($)(9)
                                                   --------------------------------- --------------------------------
                                                     Exercisable     Unexercisable    Exercisable     Unexercisable
------------------------- ------------ ----------- --------------------------------- --------------------------------
       (a)                   (b)          (c)                     (d)                              (e)
------------------------- ------------ ----------- ---------------- ----------------- -------------- ----------------
<S>                                 <C>   <C>            <C>                 <C>         <C>              <C>
Tom M. Djokovich, CEO,
Chairman of Board of                0     $  0.00          231,100                 0     $  152,803       $     0.00
Directors                           0        0.00        1,882,693                 0      1,282,490             0.00
------------------------- ------------ ----------- ---------------- ----------------- -------------- ----------------
                                    0        0.00          138,660                 0         98,615             0.00
                                    0        0.00          277,320                 0        188,910             0.00
                                    0        0.00          115,550                 0         61,380             0.00
                                    0        0.00          154,065                 0        101,868             0.00
James W. Bentley,                   0        0.00          154,065                 0        101,868             0.00
President, Director                 0        0.00          154,065                 0        101,868             0.00
------------------------- ------------ ----------- ---------------- ----------------- -------------- ----------------
                                    0        0.00            2,778             2,222           0.00             0.00
Alfred Urcuyo, Office               0        0.00            6,510            13,020           0.00             0.00
of the President                    0        0.00                0            32,051           0.00             0.00
------------------------- ------------ ----------- ---------------- ----------------- -------------- ----------------

Bas Mulder, Vice
President of Graphic &
HTML Design                         0        0.00                0             3,400           0.00             0.00
------------------------- ------------ ----------- ---------------- ----------------- -------------- ----------------

David Vargha, Vice
President of Business               0        0.00           15,000                 0           0.00             0.00
Development                         0        0.00                0           300,000(10)       0.00             0.00
------------------------- ------------ ----------- ---------------- ----------------- -------------- ----------------



<FN>
-------------------------
(9)  Based on the closing stock price of $1.0312 at December 31, 2000.
(10) These options, as of December 31, 2000, were terminated by subsequent
action.
</FN>
</TABLE>



                                      -27-


<PAGE>


     The following table sets forth information regarding each award made to the
Named  Executive  Officers by the Company of stock  options  under any Long-Term
Incentive Plan during its last completed fiscal year:

<TABLE>
<CAPTION>

                               LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR

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

                                                       Performance            Estimated Future Payouts Under
                                                         of Other              Non-Stock Price-Based Plans
                                         Number of        Period      -----------------------------------------------
                Name                   Shares, Units      Until
                                      or Other Rights   Maturation      Threshold        Target          Maximum
                                            (#)         or Payout       ($ or #)        ($ or #)        ($ or #)
                (a)                         (b)            (c)            (d)            (e)              (f)
------------------------------------- ---------------- ------------- -------------- --------------- ----------------

<S>                                             <C>            <C>            <C>            <C>               <C>
Tom M. Djokovich, CEO and Chairman
of the Board of Directors                           0          N/A            N/A             N/A              N/A
------------------------------------- ---------------- ------------- -------------- --------------- ----------------

James W. Bentley, President,
Director                                           0           N/A            N/A             N/A              N/A
------------------------------------- ---------------- ------------- -------------- --------------- ----------------
Alfred Urcuyo, Office of the
President                                           0          N/A            N/A             N/A              N/A
------------------------------------- ---------------- ------------- -------------- --------------- ----------------

Bas Mulder, Vice President of
Graphic & HTML Design                           3,400          N/A            N/A             N/A              N/A
------------------------------------- ---------------- ------------- -------------- --------------- ----------------

David Vargha, Vice President of
Business Development                                0          N/A            N/A             N/A              N/A
------------------------------------- ---------------- ------------- -------------- --------------- ----------------
</TABLE>












                                      -28-


<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain  information as of December 31, 2000
with respect to (i) the beneficial  ownership of the Common Stock of the Company
by each  beneficial  owner of more than 5% of the  outstanding  shares of Common
Stock of the Company,  each director,  each executive  officer and all executive
officers and  directors of the Company as a group,  (ii) the number of shares of
Common  Stock  owned by each such  person and group and (iii) the percent of the
Company's Common Stock so owned. Share ownership is based upon 16,557,560 shares
of common stock outstanding on December 31, 2000.

<TABLE>
<CAPTION>


-----------------------------------------------------------------------------------------------------------------
(1)                (2)                            (3)                              (4)                (5)
                                                                                      AMOUNT AND
                                                                                       NATURE OF
                              NAME OF                                                 BENEFICIAL       PERCENT
 TITLE OF CLASS          BENEFICIAL OWNER           ADDRESS OF BENEFICIAL OWNER        OWNERSHIP       OF CLASS
------------------ ------------------------------ -------------------------------- ------------------ -----------
<S>                <C>                            <C>                               <C>                  <C>
                                                  23332 Vista Carillo
Common             Tom M. Djokovich(11)           Laguna Niguel, CA 92677            9,479,306(12)        57.3 %
------------------ ------------------------------ -------------------------------- ------------------ -----------
                   (James W.) Bentley Family
                   Trust, dated June 20, 1995 &   26482 Valpariso
Common             Bentley Family Trust "C"(13)   Mission Viejo, CA 92691            3,433,345(14)        20.7 %
------------------ ------------------------------ -------------------------------- ------------------ -----------
                                                  22729 Baltar St.
Common             Alfred Urcuyo(15)              West Hills, CA 91304                  48,712(16)       < 1.0 %
------------------ ------------------------------ -------------------------------- ------------------ -----------
                                                  30401 Via Alcazar
Common             Bas Mulder                     Laguna Niguel, CA 92677               42,000(17)       < 1.0 %
------------------ ------------------------------ -------------------------------- ------------------ -----------
                                                  2771 Plaza Del Amo, #807
Common             Mark Deo                       Torrance, CA 90503                     1,000           < 1.0 %
------------------ ------------------------------ -------------------------------- ------------------ -----------
                                                  447 Appleton Rd.
Common             David Vargha                   Simi Valley, CA 93065                 40,972(18)       < 1.0 %
------------------ ------------------------------ -------------------------------- ------------------ -----------
                   All Directors & Executive
Common             Officers as a group            N/A                               13,045,335            78.8 %
------------------ ------------------------------ -------------------------------- ------------------ -----------


<FN>
------------------
(11) Owned in conjunction with Tamara A. Djokovich

(12) Includes the right to acquire within 60 days 2,113,793 shares of common
voting stock from options,  warrants,  rights,  conversion privileges or similar
obligations.

(13) Benefiting James W. Bentley and Mary Ann Bentley.

(14) Includes the right to acquire within 60 days 993,725 shares of common
voting stock from options,  warrants,  rights,  conversion privileges or similar
obligations.

(15) Alfred Urcuyo is Chief Executive Officer of Processing Source Interntional,
Inc., a wholly owned subsidiary of the Company.

(16) Includes the right to acquire within 60 days 22,308 shares of common voting
stock  from  options,   warrants,   rights,  conversion  privileges  or  similar
obligations.

(17) Includes the right to acquire within 60 days 0 shares of common voting
stock  from  options,   warrants,   rights,  conversion  privileges  or  similar
obligations.

(18) Includes the right to acquire within 60 days 15,000 shares of common voting
stock  from  options,   warrants,   rights,  conversion  privileges  or  similar
obligations.
</FN>
</TABLE>



                                      -29-
<PAGE>


     A.  OUTSTANDING OPTIONS

     As of December 31, 2000, we had granted a total of 3,851,281  options under
our 1999 Plan, of which  3,842,308 are  outstanding  as of December 31, 2000. Of
the options  issued,  2,182,693  non-qualified  options and 1,572,947  qualified
options were issued to  employees  to purchase  shares of our Common Stock under
our 1999 Plan. In addition to the options  granted to  employees,  we had issued
95,641 qualified options and 1,735,000  warrants to consultants and non-employee
Directors.  Of  the  3,851,281  options  issues,  23,122  options  expired  when
employees' employment with the Company terminated.

     B.  COMPENSATION OF DIRECTORS

     We provide  Directors with options to purchase 5,000 shares of common stock
for  each  calendar  year  of  service  as  a  Director.  The  Company  provides
compensation to Directors of our Company,  who are also officers or employees of
our Company, for services rendered as officers or employees of our Company. Only
Tom M.  Djokovich,  James W.  Bentley are  Directors of our Company who are also
officers and employees of our Company.  In the reporting  period no options were
issued to directors.

     C.  DESCRIPTION OF SECURITIES

     Our Company's  authorized capital stock as of December 31, 2000 consists of
30,000,000  shares  divided into  25,000,000  shares of Common Stock,  par value
$0.001 per share and 5,000,000  shares of Preferred  Stock, par value $0.001 per
share. There were 16,557,560 Common Shares issued and outstanding as of December
31, 2000. Our Company had issued no Preferred Stock as of December 31, 2000.

     Common  Stock  has  equal  voting  rights  and,  when  validly  issued  and
outstanding  are  entitled to one vote per share in all matters to be voted upon
by  shareholders.  The shares of Common Stock have no preemptive,  subscription,
conversion  or  redemption  rights  and may be  issued  only as  fully-paid  and
non-assessable  shares.  Cumulative  voting in the  election of directors is not
permitted,  which  means  that the  holders  of a  majority  of the  issued  and
outstanding  shares of Common Stock represented at any meeting at which a quorum
is present will be able to elect the entire Board of Directors if they so choose
and, in such event, the holders of the remaining shares of Common Stock will not
be able to elect any directors. In the event of liquidation of the Company, each
shareholder is entitled to receive a proportionate share of the Company's assets
available for distribution to shareholders  after the payment of liabilities and
after  distribution in full of preferential  amounts,  if any. All shares of the
Company's Common Stock issued and outstanding are fully-paid and  nonassessable.
Holders of the Common  Stock are  entitled  to share pro rata in  dividends  and
distributions  with respect to the Common Stock, as may be declared by the Board
of Directors out of funds legally available therefore.

     D.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Except for acts or omissions which involve intentional misconduct, fraud or
known  violation  of law or for the payment of  dividends in violation of Nevada
Revised Statutes,  there shall be no personal liability of a director or officer
to the Company,  or its stockholders for damages for breach of fiduciary duty as
a director  or  officer.  The  Company  may  indemnify  any person for  expenses
incurred,  including attorneys fees, in connection with their good faith acts if
they  reasonably  believe such acts are in and not opposed to the best interests
of the Company and for acts for which the person had no reason to believe his or
her conduct was  unlawful.  The Company may indemnify the officers and directors
for  expenses  incurred  in  defending  a  civil  or  criminal  action,  suit or
proceeding  as they are  incurred  in  advance of the final  disposition  of the
action,  suit or  proceeding,  upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount of such expenses if it is ultimately
determined by a court of competent  jurisdiction  in which the action or suit is
brought  determined  that such  person  is fairly  and  reasonably  entitled  to
indemnification for such expenses which the court deems proper.

     a) Statutes Regarding Indemnification of Directors, Officers, Employees and
Agents

     So far as permitted by the Nevada Business Corporation Act, the Company may
indemnify its directors and officers against expenses and liabilities they incur
to defend,  settle or satisfy any civil or criminal  action brought


                                      -30-

<PAGE>

against  them on account of their  being or having  been  Company  directors  or
officers unless, in any such action,  they are adjudged to have acted with gross
negligence or to have engaged in willful misconduct.

     Section  78.751(1)  of the Nevada  Revised  Statutes  ("NRS")  authorizes a
Nevada corporation to indemnify any director,  officer,  employee,  or corporate
agent  "who  was or is a  party  or is  threatened  to be  made a  party  to any
threatened,  pending or completed  action,  suit or  proceeding,  whether civil,
criminal,  administrative or investigative,  except an action by or in the right
of the corporation" due to his or her corporate role.  Section 78.751(1) extends
this protection "against expenses,  including attorneys' fees, judgments,  fines
and  amounts  paid in  settlement  actually  and  reasonably  incurred by him in
connection with the action,  suit or proceeding if he acted in good faith and in
a manner  which  he  reasonably  believed  to be in or not  opposed  to the best
interests  of the  corporation,  and,  with  respect to any  criminal  action or
proceeding, had no reasonable cause to believe his conduct was unlawful."

     Section  78.751(2)  of  the  NRS  also  authorizes  indemnification  of the
reasonable  defense or  settlement  expenses of a corporate  director,  officer,
employee or agent who is sued, or is threatened  with a suit, by or in the right
of the  corporation.  The party must have been acting in good faith and with the
reasonable  belief that his of her actions were not opposed to the corporation's
best interests.  Unless the court rules that the party is reasonable entitled to
indemnification,  the party  seeking  indemnification  must not have been  found
liable to the corporation.

     To the extent that a corporate  director,  officer,  employee,  or agent is
successful  on the merits or  otherwise in  defending  any action or  proceeding
referred to in Section  78.751(1)  or  78.751(2),  Section  78.751(3) of the NRS
requires that he or she be indemnified  "against expenses,  including attorneys'
fees, actually and reasonably incurred by him in connection with the defense."

     Section 78.751(4) of the NRS limits indemnification under Section 78.751(1)
and  78.751(2)  to  situations  in which either (i) the  stockholders;  (ii) the
majority of a  disinterested  quorum of directors;  or (iii)  independent  legal
counsel determine that indemnification is proper under the circumstances.

     Pursuant to Section  78.175(5) of the NRS, the  corporation  may advance an
officer's or director's  expenses incurred in defending any action or proceeding
upon receipt of an undertaking. Section 78.751(6)(a) provides that the rights to
indemnification and advancement of expenses shall not be deemed exclusive of any
other  rights  under  any  bylaw,   agreement,   stockholder  vote  or  vote  of
disinterested   directors.   Section   78.751(6)(b)   extends   the   rights  to
indemnification  and  advancement  of  expenses to former  directors,  officers,
employees and agents, as well as their heirs, executors, and administrators.

     Regardless of whether a director,  officer, employee or agent has the right
to indemnity,  Section  78.752 allows the  corporation  to purchase and maintain
insurance  on his or her  behalf  against  liability  resulting  from his or her
corporate role.

     Insofar as indemnification  for liabilities  arising under the 1933 Act may
be permitted to officers,  directors or persons controlling the Company pursuant
to the foregoing,  the Company has been informed that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is therefore unenforceable.

     E.  Articles of Incorporation

     Article Twelve of the Articles of Incorporation  provides that "No director
or officer of the Corporation  shall be personally  liable to the Corporation or
any of its  stockholders  for damages for breach of fiduciary duty as a director
or officer  involving  any act or  omission  of any such  director  or  officer;
provided however,  that the foregoing provision shall not eliminate or limit the
liability  or a director  or officer  (i) for acts or  omissions  which  involve
intentional misconduct, fraud or a knowing violation of law, or (ii) the payment
of dividends in violation of Section 78.300 of the Nevada Revised  Statues.  Any
repeal or  modification  of this Article by the  stockholders of the Corporation
shall be prospective  only and shall not adversely  affect any limitation on the
personal  liability  of a director  or officer  of the  Corporation  for acts of
omissions prior to such repeal or modification.


                                      -31-

<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In 1996 and 1997  James  W.  Bentley  loaned  Accesspoint  Corporation  the
cumulative sum of $200,000. In February 1999, Accesspoint Corporation negotiated
a  forgiveness  of $100,000 and an extension  of the balance  until  October 31,
2000. The Company currently pays Mr. Bentley the sum of approximately $1,610 per
month until maturity. The loan proceeds were used for working capital.

     On March 10, 1998 Bentley  Simonson,  Inc. loaned  Accesspoint  Corporation
$60,000.  James W.  Bentley is Chairman of Bentley  Simonson,  Inc.  and owns in
excess of 10% of the equity interests in the company. The subordinated note bore
interest at the rate of 20% per annum. The note became due on March 9, 1999. The
note was paid in full prior to or at maturity.  The loan  proceeds were used for
working capital.

     On June 5, 1998 Bentley Trust "C" loaned Accesspoint  Corporation  $10,000.
James W. Bentley is a trustee of Bentley Trust "C." The  subordinated  note bore
interest at the rate of 12% per annum.  The note became due on December 5, 1998.
On December 4, 1998  Accesspoint  Corporation  renegotiated  an extension to the
note whereby the note was extended  until December 4, 1999. The note was paid in
full prior to or at maturity. The loan proceeds were used for working capital.

     On  September  24, 1998 James W.  Bentley  loaned  Accesspoint  Corporation
$3,000.  The note straight  became due April 24, 1999. The straight note bore no
interest and was paid in full prior to or at maturity.  The loan  proceeds  were
used for working capital.

     On October 16, 1998 James W. Bentley loaned Accesspoint Corporation $2,000.
The straight  note became due May 16, 1999.  The straight  note bore no interest
and was paid in full prior to or at maturity.  The loan  proceeds  were used for
working capital.

     On  October  27,  1998  James W.  Bentley  loaned  Accesspoint  Corporation
$10,000.  The straight  note became due May 27, 1999.  The straight note bore no
interest and was paid in full prior to or at maturity.  The loan  proceeds  were
used for working capital.

     On December 3, 1998 James W. Bentley loaned Accesspoint Corporation $2,000.
The straight  note became due June 3, 1999.  The straight  note bore no interest
and was paid in full prior to or at maturity.  The loan  proceeds  were used for
working capital.

     On January  30,  1998  Accesspoint  Corporation  issued  Bentley  Trust "C"
options to purchase 124,999 shares of common voting stock for partial  reduction
in the  amount  of  $54,299.88  of a note  made  on  September  24,  1997 in the
principal  amount of $100,000.  Accesspoint  Corporation paid the balance of the
note in full prior to or at maturity.

     On  February  23,  1999 James W.  Bentley  loaned  Accesspoint  Corporation
$28,000.  The straight  note became due May 23, 1999.  The straight note bore no
interest and was paid in full prior to or at maturity.  The loan  proceeds  were
used for working capital.

     On July 7, 2000 the Bentley Family Limited  Partnership  loaned Accesspoint
Corporation $50,000. The straight note is due on demand. The straight note bears
an interest  rate of 10% and is  outstanding  as of December 31, 2000.  The loan
proceeds were used for working capital.

     On October 2, 2000 the Bentley  Trusty "C" loaned  Accesspoint  Corporation
$50,000.  The  convertible  note becomes due on October 2, 2001. The convertible
note  bears  an  interest  rate of 10% and may be  converted,  in-full  into the
Company's  common stock at a rate of $1.25 per share.  The  convertible  note is
outstanding  as of December 31, 2000.  The loan  proceeds  were used for working
capital.

     On  November  8,  2000  the  Bentley  Family  Limited   Partnership  loaned
Accesspoint  Corporation  $60,000.  The  straight  note  is due on  demand.  The
straight  note bears an interest rate of 10% and is  outstanding  as of December
31, 2000. The loan proceeds were used for working capital.

                                      -32-

<PAGE>

                                     PART IV


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     A.  Exhibits

     The following  Exhibits are  incorporated  herein by reference or are filed
with this report as indicated below.

<TABLE>
<CAPTION>
Exhibit No.  Description
-----------  -----------
<S>          <C>
10.3         *RoyCap Securities Purchase Agreement
10.4         *RoyCap Registration Rights Agreement
10.5         *RoyCap Convertible Note Security Agreement
10.6         *RoyCap Convertible Note
10.7         *RoyCap Callable Warrant
10.8         *RoyCap Common Warrant
10.9         *Randall S. Sword Stock Purchase Agreement
10.10        *Pacific Capital Group, Ltd. Reg. S Stock Purchase Agreement
10.11        *Verve Ventures Stock Purchase Agreement
10.12        *Ken Nagel Stock Purchase Agreement
10.13        *John Dupont Consulting Agreement
10.14        *Citizen Asia Pacific Limited Regulation S Stock Purchase Agreement
10.15        *Citizen Asia Pacific Limited Amendment to Regulation S Stock Purchase Agreement
10.16        ** Mark Deo Stock Purchase Agreement
10.17        ** Maxamilian Parker Stock Purchase Agreement
10.18        ** Pacific Capital Group, Ltd. Loan Resolution
10.19        ** Pacific Capital Group, Ltd. Loan Resolution
10.20        ** Pacific Capital Group, Ltd. Loan Resolution
10.21        ** Pacific Capital Group, Ltd. Loan Resolution
10.22        ** Pacific Capital Group, Ltd. Loan Resolution
10.23        ** Pacific Capital Group, Ltd. Loan Resolution
10.24        ** Pacific Capital Group, Ltd. Loan Resolution
10.25        ** Pacific Capital Group, Ltd. Loan Resolution
10.26        ** Pacific Capital Group, Ltd. Loan Resolution
10.27        *** Edmund Faison, Jr. Stock Purchase Agreement
10.28        *** Starlight International Holdings, Ltd. Stock Purchase Agreement
10.29        *** Black Sun Graphics, Inc. Plan and Agreement of Reorganization
10.30        *** Option to Purchase Common Stock of Accesspoint Corporation - Bas Mulder
10.31        *** Option to Purchase Common Stock of Accesspoint Corporation - Richard Calkins
10.32        *** Option to Purchase Common Stock of Accesspoint Corporation - Brad Martin
10.33        *** Option to Purchase Common Stock of Accesspoint Corporation - Jeffrey S. Robinson
10.34        *** Option to Purchase Common Stock of Accesspoint Corporation - Arturo Leon
10.35        *** Warrant to Purchase Common Stock of Accesspoint Corporation - Pacific Continental
             Securities Corporation
10.36        *** Warrant to Purchase Common Stock of Accesspoint Corporation - Paul T. Chan
10.37        *** Warrant to Purchase Common Stock of Accesspoint Corporation - Norman C. Kristoff

21.00        List of Subsidiaries
</TABLE>


     * Attached to this Form 10-KSB.
     ** Incorporated by reference from the exhibit to the Current Report on Form
     10-QSB filed by us on November 20, 2000
     ***  Incorporated by reference form the exhibit to the Current  Report on
     Form 10-QSB filed by us on August 21, 2000


                                      -33-
<PAGE>

     B.  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed in the fourth quarter of 2000.
































                                      -34-


<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements  of Section 13 or 15(d) of the Securities Act
of 1934,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned,  thereunto duly authorized,  in the City of Irvine, State of
California, on the 13th day of April 2001.

Dated:  April 13, 2001                            ACCESSPOINT CORPORATION


                                                  By: /s/Tom M. Djokovich
                                                  ------------------------------
                                                  Tom M. Djokovich,
                                                  Chairman of the Board and
                                                  Chief Executive Officer


                                                  By: /s/James W. Bentley
                                                  ------------------------------
                                                  James W. Bentley,
                                                  President and Director


     Pursuant to the requirements of the Securities Act of 1934, this report has
been  signed  by the  following  persons  in  the  capacities  and on the  dates
indicated:


     Signature                               Title                     Date
--------------------------------    --------------------------    --------------
/s/ TOM M. DJOKOVICH                Chairman of the Board and     April 13, 2001
---------------------               Chief Executive Officer
Tom M. Djokovich

/s/ JAMES W. BENTLEY                President & Director          April 13, 2001
---------------------
James W. Bentley

/s/ TAMARA DJOKOVICH                Treasurer                     April 13, 2001
---------------------               & Director
Tamara Djokovich

/s/ AL URCUYO                       Office of the President       April 13, 2001
---------------------               & Director
Al Urcuyo

/s/ MARK DEO                        Director                      April 13, 2001
----------------------
Mark Deo




                                      -35-

<PAGE>







                             ACCESSPOINT CORPORATION

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999




























<PAGE>





                             ACCESSPOINT CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

                                TABLE OF CONTENTS








Independent Auditors Report                                                 F-2

Consolidated Balance Sheets                                                 F-3

Consolidated Statements of Income                                           F-4

Consolidated Statements of Cash Flow                                        F-5

Consolidated Statements of Changes in Stockholders' Equity                  F-6

Notes to Consolidated Financial Statements                                  F-7















                                      F-1

<PAGE>






                          INDEPENDENT AUDITOR'S REPORT






To the Board of Directors
ACCESSPOINT CORPORATION
Irvine, California


We have audited the  accompanying  consolidated  balance  sheets of  Accesspoint
Corporation  and its  subsidiaries  ("the  Company") as of December 31, 2000 and
1999,   and  the  related   consolidated   statements  of  income,   changes  in
stockholders'  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  generally   accepted  auditing
standards. 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 financial  position of the Company as of
December 31, 2000 and 1999, and the results of its operations and its cash flows
for the years ended  December  31, 2000 and 1999 in  conformity  with  generally
accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note P to the
consolidated financial statements, the Company has suffered recurring losses and
cash  shortages.  These  issues  raise  substantial  doubt  about its ability to
continue  as a going  concern.  The  consolidated  financial  statements  do not
include any adjustment that might result from the outcome of this uncertainty.






March 14, 2001
Los Angeles, California


                                      F-2

<PAGE>
<TABLE>
<CAPTION>


                            ACCESSPOINT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

                                     ASSETS
                                     ------

                                                                      2000                 1999
                                                                ------------------   -----------------
<S>                                                                    <C>                 <C>
Current Assets
         Cash and cash equivalents                                        $31,954             $54,348
         Accounts receivable, net                                         200,624             560,845
         Inventory                                                          1,911              14,007
         Other receivables                                                 16,682                 731
         Prepaid expenses                                                  26,429              18,579
                                                                ------------------   -----------------

                Total Current Assets                                      277,600             648,510
                                                                ------------------   -----------------

Fixed Assets
         Furniture and equipment (net)                                    719,167             452,259
                                                                ------------------   -----------------

                Total Fixed Assets                                        719,167             452,259
                                                                ------------------   -----------------

Other Assets
         Deposits                                                         413,796              29,856
         Intangibles, net                                                       0               2,481
                                                                ------------------   -----------------

                Total Other Assets                                        413,796              32,337
                                                                ------------------   -----------------

         Total Assets                                                  $1,410,563          $1,133,106
                                                                ==================   =================
<CAPTION>


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

                                                                      2000                 1999
                                                                ------------------   -----------------
<S>                                                                    <C>                 <C>
Current Liabilities
         Accounts payable and accrued expenses                         $1,420,337            $646,011
         Accrued payroll taxes and penalties                              704,971                   0
         Deferred compensation                                            223,977             155,720
         Deferred revenue                                                       0               7,854
         Current portion, capitalized leases                              210,704             125,737
         Current portion, notes payable                                   992,500             100,000
                                                                ------------------   -----------------

         Total Current Liabilities                                      3,552,489           1,035,322

Capital Lease obligations, net of current portion                         283,990             278,925
Notes payable, net of current portion                                           0             100,000
                                                                ------------------   -----------------

         Total Liabilities                                              3,836,479           1,414,247
                                                                ------------------   -----------------

Stockholders' Equity

         Common stock, $.001 par value, 25,000,000
              shares authorized, 16,557,560 and 14,832,000
              issued and outstanding, respectively                         16,558              14,832
         Preferred Stock, no par value, 5,000,000 shares
              authorized, no shares issued and outstanding                      0                   0
         Additional paid in capital                                     5,390,011           2,315,265
         Retained deficit                                              (7,832,485)         (2,611,238)
                                                                ------------------   -----------------

         Total Stockholders' Equity                                    (2,425,916)           (281,141)
                                                                ------------------   -----------------

         Total Liabilities and Stockholders' Equity                    $1,410,563          $1,133,106
                                                                ==================   =================


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

                                      F-3


<PAGE>
<TABLE>
<CAPTION>

                             ACCESSPOINT CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2000 AND 1999




                                                                      2000                 1999
                                                                ------------------   -----------------

<S>                                                                   <C>                 <C>
Sales, net                                                             $2,261,752          $2,479,770

Cost of sales                                                             324,744             426,902
                                                                ------------------   -----------------

         Gross profit                                                   1,937,008           2,052,868

Selling expenses                                                          261,715             603,461

General and administrative expenses                                     5,848,805           3,040,174
                                                                ------------------   -----------------

         Income (loss) from operations                                 (4,173,512)         (1,590,767)
                                                                ------------------   -----------------

Other (Income) Expense
         Interest income                                                   (1,114)             (8,269)
         Penalties                                                        360,694                   0
         Bad debt expense                                                 540,023                   0
         Interest expense                                                 145,733              80,872
                                                                ------------------   -----------------

         Total Other (Income) Expense                                   1,045,336              72,603
                                                                ------------------   -----------------

         Income (loss)  before extraordinary
              expense and income taxes                                 (5,218,848)         (1,663,370)

Extraordinary expense, net of income tax effect of $0
         Legal settlement                                                       0             169,875
                                                                ------------------   -----------------

         Income (loss) before income taxes                             (5,218,848)         (1,833,245)

Provison for income taxes                                                   2,400               1,600
                                                                ------------------   -----------------

         Net income (loss)                                            ($5,221,248)        ($1,834,845)
                                                                ==================   =================


         Net loss per share (basic and diluted)
              Basic                                                        ($0.33)             ($0.12)
              Diluted                                                      ($0.33)             ($0.12)

         Weighted average number of shares
              Basic                                                    15,694,780          14,704,000
              Diluted                                                  15,694,780          14,704,000

         Extraordinary expense per share
              Basic                                                         $0.00               $0.01
              Diluted                                                       $0.00               $0.01


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


                                      F-4

<PAGE>

<TABLE>
<CAPTION>

                             ACCESSPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999


                                                                      2000                 1999
                                                                ------------------   -----------------

<S>                                                                   <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
         Net Income (loss)                                            ($5,221,248)        ($1,834,845)

Adjustments to reconcile net loss to net cash
used in operating activities:
         Amortization                                                         299                 503
         Depreciation                                                     287,317             160,568
         Decrease (Increase) in receivables                               360,221            (490,335)
         Decrease (Increase) in inventory                                  12,096             (10,728)
         Decrease (Increase) in other receivables                         (15,951)               (731)
         Decrease (Increase) in prepaid expenses                           (7,850)            (18,579)
         Decrease (Increase) in deposits                                 (383,940)            (22,960)
         (Decrease) Increase in accounts payable
              and accrued expenses                                        774,325             440,085
         (Decrease) Increase in accrued payroll taxes                     704,971                   0
         (Decrease) Increase in deferred compensation                      68,257             (45,436)
         (Decrease) Increase in deferred revenue                           (7,854)              2,349
                                                                ------------------   -----------------

         Total Adjustments                                              1,791,891              14,736
                                                                ------------------   -----------------

         Net cash used in operations                                   (3,429,357)         (1,820,110)
                                                                ------------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
         Purchase of intangibles                                            2,182              (2,597)
         Purchase of furniture and equipment                             (220,507)            (26,247)
                                                                ------------------   -----------------

         Net cash used in investing activities                           (218,325)            (28,844)
                                                                ------------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
         Issuance of notes payable                                      1,434,000             100,000
         Payments on capital leases                                      (243,685)           (102,781)
         Payments on notes payable                                       (641,500)           (162,000)
         Sale of stock                                                  3,076,472           2,060,799
                                                                ------------------   -----------------

         Net cash provided by financing activities                      3,625,287           1,896,018
                                                                ------------------   -----------------

         Net change in cash and cash equivalents                          (22,395)             47,064
                                                                ------------------   -----------------

         Cash and cash equivalents at beginning of year                    54,348               7,284
                                                                ------------------   -----------------

         Cash and cash equivalents at end of year                         $31,954             $54,348
                                                                ==================   =================

         Supplemental cash flows disclosures:
              Income tax payments                                          $1,600              $1,600
                                                                ------------------   -----------------

              Interest payments                                           $92,688             $80,346
                                                                ------------------   -----------------

              Non cash investing and financing
                  Addition of equipment on capital leases                $333,717            $359,822
                                                                ------------------   -----------------

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


                                      F-5

<PAGE>

<TABLE>
<CAPTION>

                                       ACCESSPOINT CORPORATION
                     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                               YEARS ENDED DECEMBER 31, 2000 AND 1999






                                                                      2000                 1999
                                                                ------------------   -----------------


<S>                                                                   <C>                  <C>
Retained (deficits)
         Balance at beginning of year                                 ($2,611,238)          ($776,393)
         Net income (loss)                                             (5,221,247)         (1,834,845)
                                                                ------------------   -----------------

         Balance at end of year                                        (7,832,485)         (2,611,238)
                                                                ------------------   -----------------

Common stock, par value $.001 (thousands of shares)
         Balance at beginning of year                                      14,832              14,576
         Common stock issued in reverse acquisition                             0                   0
         Common stock issued                                                1,726                 256
                                                                ------------------   -----------------

         Balance at end of year                                            16,558              14,832
                                                                ------------------   -----------------

Additional paid in capital
         Balance at beginning of year                                   2,315,265             292,176
         Sale of common stock                                           3,074,746           2,023,089
                                                                ------------------   -----------------

         Balance at end of year                                         5,390,011           2,315,265
                                                                ------------------   -----------------

Total stockholders' equity at end of year                             ($2,425,916)          ($281,141)
                                                                ==================   =================

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


                                      F-6
<PAGE>

                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


Note A - NATURE OF ACTIVITIES

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

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

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

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

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






                                      F-7

<PAGE>



                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

         ESTIMATES
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires  management  to make certain
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities and disclosure of contingent  assets and liabilities at
         the  date of the  financial  statements  and the  reported  amounts  of
         revenues and expenses during the reporting period. Actual results could
         differ   from   those   estimates.    Significant   estimates   include
         collectibility of accounts receivable,  accounts payable, sales returns
         and recoverability of long-term assets.

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






                                      F-8


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         FIXED ASSETS
         Property   and   equipment   are   stated  at  cost  less   accumulated
         depreciation. Depreciation is provided on the straight-line method over
         the estimated useful lives of the assets,  or the remaining term of the
         lease, as follows:

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

         INVENTORY
         Inventory is valued at the lower of cost or market;  cost is determined
         on the  weighted  average  method.  As of  December  31, 2000 and 1999,
         inventory consisted only of finished goods.

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

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

         ADVERTISING
         Advertising costs are expensed in the year incurred.

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

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


                                      F-9

<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


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

Note C - BUSINESS COMBINATIONS

         In May  2000  the  Company  completed  the  acquisition  of  Black  Sun
         Graphics,  Inc.  (a  California  Corporation),   and  accordingly,  the
         operating  results of the acquired  company  have been  included in the
         accompanying condensed consolidated financial statements since the date
         of acquisition.  The aggregate  purchase price of this  acquisition was
         approximately $350,000, comprised of 70,000 shares of restricted common
         stock.

         In April 2000 the Company completed the acquisition by JSJ Capital III,
         Inc.  ( a  Nevada  Corporation),  with  Accesspoint  as  the  surviving
         corporation. The separate existence of JSJ Capital III ceased as of the
         date of  completion  of the  acquisition.  All issued  and  outstanding
         shares of JSJ  Capital  III were  converted  into the right to  receive
         shares  of  Accesspoint  upon  completion  of  the   acquisition.   The
         transaction  has  been  accounted  for as a  reverse  acquisition.  The
         transaction  is a merger of a public  non-reporting  operating  company
         (old   Accesspoint)   into  a  non-operating   reporting  public  shell
         corporation  with nominal  assets.  The owners of Accesspoint  obtained
         operating  control of the combined company after the transaction.  This
         transaction has been recorded as a capital  transaction,  rather than a
         business combination, equivalent to the issuance of stock by the public
         non-reporting  company  for  the  net  monetary  assets  of  the  shell
         corporation,  accompanied  by a  recapitalization.  The  accounting  is
         identical to that resulting from a reverse acquisition,  except that no
         goodwill or other intangible has been recorded.

         In March 1999 the Company completed a reverse acquisition by Yamahamas,
         Inc.  (a  Nevada   Corporation),   with   Yamahamas  as  the  surviving
         corporation.  The separate  existence of  Accesspoint  ceased as of the
         date of  completion  of the  acquisition.  A total of 2,271,763  common
         shares were  exchanged in a 1:4.62  ratio.  All issued and  outstanding
         shares of  Accesspoint  Corporation  were  converted  into the right to
         receive shares of Yamahamas,  Inc. upon completion of the  acquisition.
         Subsequent  to the  completion of the reverse  acquisition,  Yamahamas,
         Inc.  changed  its name to  Accesspoint  Corporation  and trades on the
         NASDAQ Bulletin Board Market under the symbol ASAP.

         The  transaction has been accounted for as a reverse  acquisition.  The
         transaction   is  a  merger  of  a  private   operating   company  (old
         Accesspoint) into a non-operating public shell corporation with nominal
         assets. The owners of old Accesspoint obtained operating control of the
         combined company after the transaction.



                                      F-10


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note C - BUSINESS COMBINATIONS ( CONTINUED)

         In July 1999, the Company acquired PSI by exchanging  516,062 shares of
         its common  stock for all the issued and  outstanding  common  stock of
         PSI. The acquisition  has been accounted for as a  pooling-of-interests
         under APB No. 16. Accordingly,  all prior period consolidated financial
         statements presented have been restated to include the combined results
         of  operations,  financial  position and cash flows of PSI as though it
         has always been a part of the Company.

         The results of operations  for the separate  companies and the combined
         amounts  presented  in the  consolidated  financial  statements  are as
         follows:

                                                 2000              1999
                                                 ----              ----
         Sales
                  Accesspoint               $   695,736       $   764,508
                  PSI                         1,217,158         1,868,005
                  Black Sun Graphics            590,463                 0
                  Eliminations                 (241,605)         (152,743)
                                            ------------      ------------
                  Combined                  $ 2,261,752       $ 2,479,770
                                            ------------      ------------

         Net Income (loss)
                  Accesspoint               $(4,029,561)      $(1,432,185)
                  PSI                        (1,350,608)       (  402,660)
                  Black Sun Graphics            158,921                 0
                                            ------------      ------------
                  Combined                  $(5,221,248)      $(1,834,845)
                                            ------------      ------------

Note D - CASH

         The Company  maintains its cash balances at various banks in the United
         States.  The  balances  are  insured by the Federal  Deposit  Insurance
         Corporation  up to $100,000.  As of December  31, 2000 and 1999,  there
         were no uninsured balances held at these banks.

Note E - FIXED ASSETS

         Fixed assets consist of the following:

                                                       2000              1999
                                                       ----              ----
               Furniture and fixtures              $   71,364        $   20,011
               Office equipment                       243,634            93,709
               Computer hardware and software         968,578           682,868
               Leasehold improvements                  67,236                 0
                                                    ----------       -----------
                                                    1,350,812           796,588
               Accumulated depreciation              (631,645)         (344,329)
                                                   -----------       -----------
               Total                               $  719,167        $  452,259
                                                   -----------       -----------




                                      F-11

<PAGE>



                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note E - FIXED ASSETS (CONTINUED)

         At  December  31, 2000 and 1999  included in fixed  assets are costs of
         $737,996 and $321,353,  respectively,  of assets recorded under capital
         leases.

         For the years ended December 31, 2000 and 1999, included in accumulated
         depreciation  are  $295,474  and  $116,931,  recorded  on assets  under
         capital leases, respectively.

Note F - COMMITMENTS AND CONTINGENCIES

         Capital  Leases - The Company  leases  certain  machinery and equipment
         under capital leases. Future minimum payments under capital leases are:

                  2001                               $ 210,704
                  2002                                 217,314
                  2003                                  63,167
                  2004                                   3,508

         OPERATING  LEASES - The Company  leases  certain of its  facilities and
         equipment under non-cancelable  operating leases. Future minimum rental
         payments  under leases that have  initial or  remaining  non-cancelable
         lease terms in excess of one year are:

                  2001                               $ 514,326
                  2002                                  34,475
                  2003                                  34,475
                  2004                                  12,591


         Rent  expense  for the  years  ended  December  31,  2000  and 1999 was
         $404,612 and $157,524, respectively.

         EMPLOYMENT AGREEMENTS - The Company has entered into certain employment
         agreements as follows for the retention of key employees:

         Dated January 4, 1999 the Company entered into an employment  agreement
         for the services of Tom M.  Djokovich as Chief  Executive  Officer at a
         base  salary of two  hundred  thousand  dollars  ($200,000)  per annum,
         increasing  by at least ten percent  per annum for the  duration of the
         agreement.  The  agreement  also calls for the payment of cash  bonuses
         based on revenue and net income,  and the granting of stock  options to
         purchase fifty thousand  (50,000)  shares of the Company stock per year
         for the  duration of the  agreement  at an exercise  price of $2.00 per
         share. The agreement terminates on December 31, 2001.



                                      F-12

<PAGE>



                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note F - COMMITMENTS AND CONTINGENCIES (CONTINUED)

         Dated August 1, 2000 the Company  entered into an employment  agreement
         for the services of Alfred  Urcuyo as President of PSI at a base salary
         of two hundred  thousand  dollars  ($200,000) per annum.  The agreement
         calls for  escalations  of base salary on  attainment  of certain gross
         revenue levels.  The agreement also calls for stock incentive  options,
         based on revenue attainment levels, of up to $100,000 annually based on
         the then current market value of the stock. The agreement terminates on
         July 31, 2006.

         The Company has also  entered into several  employment  contracts  with
         employees of PSI at varying  salary  levels for two-year  periods.  The
         agreements call for cash and stock incentive bonuses based on levels of
         gross revenue attainment.

         CONSULTING AGREEMENTS - During the year 2000 the Company entered into a
         consulting  agreement  with  an  individual  in an  advisory  capacity.
         Compensation  for  services is 100,000  shares of common  stock  issued
         pro-rata over a twelve-month period and 20,000 options for the purchase
         of common  stock at an  exercise  price of $5.00 per  share.  The stock
         options  also  vest  pro-rata  over  twelve  months.  The  terms of the
         agreement  also include the payment to the individual of a referral fee
         for any  funding  or  capital  formation  transactions  from  resources
         referred to the Company by the individual.  As of December 31, 2000 the
         Company has issued  66,664  shares of stock with a value of $324,466 to
         this individual.

         The Company has entered into a consulting  agreement with an individual
         in an advisory  capacity.  Compensation for services is 6,000 shares of
         common stock issued pro-rata over twelve months and 2,400 stock options
         for the  purchase  of common  stock at an  exercise  price of $3.37 per
         share.  The stock options also vest pro-rata over twelve months.  As of
         December  31,  2000 the  Company has issued 1000 shares of stock with a
         value of $3,688 to this individual.

         The  Company has  entered  into a  consulting  agreement  with  another
         company for their marketing  services.  The contract stipulates payment
         of 3,125 shares of stock for each of eight  agreed upon  projects for a
         total of 25,000 shares. Payment is to be made at the completion of each
         project.  As of December  31, 2000 no stock has been issued  under this
         agreement.

         The Company has entered into a consulting  agreement with an individual
         for  services.  The agreement  stipulates  payment of 15,000 shares for
         services from  November 2000 to February  2001. As of December 31, 2000
         15,000 shares had been issued under this agreement.



                                      F-13

<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note G - LITIGATION

         In October 1997,  the Company filed suit in Superior Court of the State
         of  California   County  of  Orange  against  Steven  Son  Van  Le,  an
         individual,  SVL Holding  Corporation,  a  corporation,  Medical Center
         Hospital,  Inc.,  a  corporation,   (collectively,   "the  Defendants")
         alleging  breach of  contract  and breach of implied  covenant  of good
         faith and fair  dealing,  and  demanding  return  of  shares  issued in
         advance for services to be rendered.  The Defendants  counter sued also
         alleging  breach of  contract  and breach of implied  covenant  of good
         faith and fair  dealing.  In  September  1998 all  parties  agreed to a
         settlement  agreement  calling for mutual release and dismissal of both
         complaints upon  performance by the Company.  The settlement  agreement
         requires  the  payment  of thirty  thousand  dollars  ($30,000)  by the
         Company in exchange for the return of all shares  aforementioned issued
         to the defendants. In 1999, the terms of this settlement agreement were
         fulfilled.

         In February 1999, the Company's subsidiary, PSI ("Defendant"), was sued
         by Cardservice International,  Inc. ("Plaintiff") in the Superior Court
         of the  State of  California,  County  of Los  Angeles  for  breach  of
         contract and breach of implied covenant of good faith and fair dealing.
         In April 1999 Defendant  cross-complained  alleging  breach of contract
         and related damages. In June 1999, Defendant settled both complaints by
         entering  into  a  settlement  agreement  and  mutual  general  release
         ("Agreement").  The  Agreement  calls for the payment by  Defendant  of
         $169,875  in order to bring all  actions  to a close.  The terms of the
         Agreement call for the payment of $95,000 by June 15, 1999 and payments
         of $6,514 for twelve  months.  In 1999, the terms of the Agreement were
         satisfied.  Pursuant to certain  terms of the  Agreement,  Defendant is
         permanently enjoined and restrained from disclosing or disseminating to
         others or using for their own benefit the client lists of Plaintiff.

Note H - STOCK AND WARRANTS

         At December 31, 2000, the Company has 25,000,000  shares authorized and
         16,557,560  shares issued and outstanding of common stock.  The Company
         had 5,000,000 shares authorized and no issued and outstanding preferred
         stock.

         In  addition,  the  Company  had  outstanding  at  December  31,  2000,
         1,735,000  warrants  convertible  into common shares at various  prices
         ranging from $0.34 to $7.50,  with  expirations  dates through  October
         2005.

                                              WEIGHTED AVERAGE  WEIGHTED AVERAGE
         EXERCISE PRICE RANGE      AMOUNT     CONTRACTUAL LIFE  EXERCISE PRICE
         --------------------      -------    ----------------  --------------
         $0.01 - $0.34             375,000    45 months                  $0.34
         $5.25 - $6.00              90,000    35 months                  $5.96
         $7.00                   1,270,000    23 months                  $7.00




                                      F-14

<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note H - STOCK AND WARRANTS (CONTINUED)

         At December  31, 2000,  the Company has common  stock  reserved for the
         following reasons:

                  Exercise of common stock warrants           1,735,000
                  Exercise of employee stock options          3,851,101
                                                              ---------
                                                              5,586,101
                                                              ---------

Note I - EMPLOYEE STOCK OPTIONS AND BENEFIT PLANS

         In March 1999,  the  Company's  stockholders  approved the  Accesspoint
         Corporation  1999 Stock Incentive Plan ("the Plan"),  which  superseded
         and  incorporated,  in all respects,  the Accesspoint  Corporation 1997
         Stock Option Plan.  Under the Plan,  incentive or  non-statutory  stock
         options may be granted to employees,  directors,  and consultants.  The
         options,  option prices, vesting provisions,  dates of grant and number
         of shares granted under the plans are determined primarily by the Board
         of Directors or the  committee  authorized by the Board of Directors to
         administer  such  plans.  The Plan also  permits  payment  for  options
         exercised in shares of the  Company's  common stock and the granting of
         incentive stock options.

         The Company  applies APB 25 and related  interpretations  in accounting
         for its plans.  Accordingly,  compensation  cost is recognized  for the
         Plan in its results of operations in those  instances  wherein  options
         were granted at a price below the  prevailing  market price on the date
         of grant. For the years ended December 31, 2000 and 1999, there were no
         instances of option  grants,  which would  require the  recognition  of
         compensation expense. Outstanding options have one to five year terms.

         In 2000 and 1999, had the Company  recorded a charge for the fair value
         of options  granted  consistent  with SFAS 123,  there  would have been
         charges in the amounts of $439,534 and  $669,846,  respectively  to net
         income.  Assuming  full  dilution,  the  effect on net income per share
         would have been, $(.03) and $(.04) per share, respectively.

         The fair value of each option grant for the Company's plan is estimated
         on the date of the grant using the Black-Scholes  option pricing model,
         with the  following  weighted  average  assumptions  used for grants in
         2000:

         Risk-free interest rate               6.20%
         Expected option lives                31 months
         Expected volatility                    370%
         Expected dividend yield                0.0%


                                      F-15

<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note I - EMPLOYEE STOCK OPTIONS AND BENEFIT PLANS (CONTINUED)
         ----------------------------------------------------

         The following is a schedule of the weighted  average exercise price and
         weighted average fair value in accordance with SFAS 123:

                                            WEIGHTED AVERAGE   WEIGHTED AVERAGE
                                            EXERCISE PRICE     FAIR VALUE

                  Exercise price:
                  Equals market price       $5.09              $4.93
                  Exceeds market price      $0.58              $0.37
                  Less than market price    $3.37              $3.09

         A summary of the status of the  Company  stock  option plan at December
         31, 2000 as follows:
                                                                WEIGHTED AVERAGE
         (THOUSANDS OF SHARES)                     SHARES       EXERCISE PRICE
         ---------------------                     ------       --------------
         Outstanding at beginning of year           5,608       $ 1.20
         Granted                                      118         3.16
         Exercised                                     (9)         .43
         Canceled                                  (1,875)        3.00
                                                   -------
         Outstanding at year-end                    3,842
                                                   ======

         Options exercisable at year-end             3,383,878

         Weighted average fair value of options
         granted during the year                     $3.79

         The following table  summarizes  information  about fixed stock options
         outstanding at December 31, 2000.

                                NUMBER REMAINING              WEIGHTED AVERAGE
         RANGE OF                   OUTSTANDING               YEARS OF
         EXERCISE PRICES            (THOUSANDS)               CONTRACTUAL LIFE
         ------------------         -----------               ----------------
         $.35-1.00                      3,328                 2.4 years
         $3.00-3.99                       337                 3.7 years
         $4.00-4.99                        33                 4.2 years
         $5.00-5.99                       132                 3.6 years
         $6.00                             12                 4.2 years





                                      F-16

<PAGE>



                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note J - DEBT

         At  December  31,  2000  and  1999,   the  Company  had  notes  payable
         outstanding  in  the  aggregate  amount  of  $1,487,494  and  $604,660,
         respectively. Payable as follows:
<TABLE>
<CAPTION>

                                                                 2000             1999
                                                                 ----             ----

         <S>                                                 <C>              <C>
         Note payable to a trust of a related party,
         interest at 12% per annum, due on demand            $  100,000       $  100,000

         Note payable to a corporation, 8% per annum,
         due December 6, 2002                                         0          100,000

         Note payable to a corporation, interest at 5%
         per annum, due on demand                               127,500                0

         Note payable to an individual, interest at
         5% per annum, due on demand                            115,000                0

         Note payable to a related party, interest at
         10% per annum, due on demand                           160,000                0

         Note payable to a corporation, interest at
         5% per annum, due on demand                             40,000                0

         Note payable to a corporation, interest at
         8% per annum,  due October 16,  2001,
         convertible  at the option of the holder
         into common  stock equal to the face value of
         the note                                               450,000                0

         Capitalized lease obligations, interest at
         varying rates, payments through May 2004               494,694          404,660
                                                              ----------       ----------

                                                              1,487,194          604,660

                   Current portion                            1,203,204          225,737
                                                              ----------       ----------

                   Long-term portion                         $  283,990       $  378,925
                                                              ----------       ----------
</TABLE>

Note K - SECURITIES AGREEMENT

         On October  16,  2000,  the  Company,  in  conjunction  with a $450,000
         convertible  note (see Note I), issued a Callable  Common Stock Warrant
         and a Common Stock Warrant to another corporation.



                                      F-17


<PAGE>



                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note K - SECURITIES AGREEMENT (CONTINUED)

         The Callable  Common Stock  Warrant's  term is from October 16, 2000 to
         October 16, 2002 for the purchase of up to  1,200,000  shares of common
         stock at $7.50 per share. The Company may elect to call this warrant at
         any time for $.0001 per warrant share, or $120 for the entire warrant.

         The Common Stock Warrant's term is from October 16, 2000 to October 16,
         2005. This warrant allows the holder to purchase up to 70,000 shares of
         common stock for 110% of the volume weighted average price per share on
         the day prior to exercise.

Note L - COMPENSATED ABSENCES

         Employees can earn annual  vacation  leave at the rate of five (5) days
         per year for the first  year.  Upon  completion  of the  first  year of
         employment, employees can earn annual vacation leave at the rate of ten
         (10) days per year for years two through seven.  Upon completion of the
         eighth year of employment,  employees can earn annual vacation leave at
         the rate of fifteen (15) days per year. At  termination,  employees are
         paid for any accumulated annual vacation leave. As of December 31, 2000
         and 1999 the total  vacation  liability  totaled  $51,441 and  $23,123,
         respectively.

Note M - RELATED PARTY TRANSACTIONS

         Throughout the history of the Company,  certain members of the Board of
         Directors,  members of the immediate family of management,  and general
         management have made loans to the Company to cover  operating  expenses
         or operating deficiencies.

Note N - INCOME TAXES

         Total Federal and State income tax expense for the years ended December
         31, 2000 and 1999  amounted to $2,400 and $1,600,  respectively.  These
         represent the minimum annual tax liability  under  California tax code.
         No  future   benefit  for  the   realization   of  an  operating   loss
         carry-forward,  in the form of an asset, has been recognized due to the
         ongoing  nature  of the  losses  and the  potential  inability  for the
         Company to ever realize their benefit. For the years ended December 31,
         2000 and 1999, there is no difference between the federal statutory tax
         rate and the effective  tax rate. At years ended  December 31, 2000 and
         1999 the Company had  available net operating  loss  carry-forwards  of
         approximately $7,010,000 and $1,792,600  respectively,  after adjusting
         for  limitation,  to be  offset  against  future  taxable  income.  The
         operating  loss carry forwards will expire at various dates through the
         year 2015.



                                      F-18


<PAGE>




                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note O - FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying amounts of cash and cash equivalents, accounts receivable,
         deposits and accounts payable  approximate  their fair value because of
         the short maturity of those instruments.

         The carrying amounts of the Company's  long-term debt and capital lease
         obligations  approximate their fair value because of the short maturity
         and/or interest rates which are comparable to those currently available
         to the Company on obligations with similar terms.

Note P - GOING CONCERN

         The Company has suffered recurring losses and cash deficiencies.  These
         issues may raise substantial concern about its ability to continue as a
         going concern.

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

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

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

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

         Prior to achieving this goal in November of 2000 the Company  typically
         generated revenues through the licensing of its business management and
         transaction  processing  software  technologies and the monthly service
         fees  for  hosting  these  business  applications.  Today  the  Company
         generates  revenues  through  the  afore  mentioned  services  and  its
         transaction  settlement  services  which  combined  is  anticipated  to
         increased per client average  monthly gross  revenues  during the first
         full year of operations by nearly 500% from approximately $20 to $100.



                                      F-19

<PAGE>




                             ACCESSP0INT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2000 AND 1999


Note P - GOING CONCERN (CONTINUED)

         The Company experienced a decrease in gross revenues for the year ended
         December  31, 2000 as compared to the year ended  December  31, 1999 of
         approximately  9%. This decrease is due to the  Company's  focus on the
         development of its  processing  platform over a nine month period which
         diverted key  management  and employee time from the sale and promotion
         of retail  web and  merchant  services  which  resulted  in an  overall
         decrease in retail sales and cash shortage.

         The Company anticipates that the successful  completion of its expanded
         role as a primary  processor in November of 2000 with the  potential to
         service  hundreds of sales groups will  contribute to both  predictable
         and  increased  revenues  during the first full year of operations as a
         processor.  As a result of these expanded revenue generating operations
         the Company anticipates to be able to finance operations through direct
         revenues  near the end of its second  quarter to the  beginning  of its
         third quarter of operations of the current year.

         Additionally, since the launch of its processing operations the Company
         has  successfully  reduced the cost of overall  operations  by over 40%
         while  experiencing  a 47% increase in revenues  from  December 2000 to
         January 2001 and is  continuing  to plan  additional  operational  cost
         reductions through continued automation and service development.

         In the near term, the Company is currently  engaged in on going capital
         formation  efforts.  The Company is in discussions for the placement of
         debt and equity in an amount or amounts  sufficient  to fund the amount
         or amounts of the Company's projected deficits in the current year

















                                      F-20