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, 2001

                                       OR

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

  FOR THE TRANSITION PERIOD FROM __________________ TO ________________________


                        COMMISSION FILE NUMBER: 000-29217


                             ACCESSPOINT CORPORATION
        ________________________________________________________________
                 (Name of Small Business Issuer in its Charter)



              Nevada                                      95-4721385
_______________________________             ____________________________________
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)


      21031 Ventura Boulevard, Suite 200
          Woodland Hills, California                               91364
______________________________________________           _______________________
   (Address of Principle Executive Offices)                     (Zip Code)

                                 (818) 737-3232
                ________________________________________________
                (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 $6,344,643.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
issuer on March 28,  2002,  based upon the average bid and asked  prices of such
stock on that date  ($0.59) was  $4,460,169.  The number of  issuer's  shares of
Common Stock outstanding as of December 31, 2001 was 23,375,208.

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, 2001
                                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


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<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 non-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 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   merchant   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)
merchants who are 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.

     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.


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<PAGE>


     MERCHANT ACCOUNTS (MERCHANT BANKCARD PROCESSING)

     Accesspoint,  through  our  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  Automated  Clearing  House  Association  (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  is serviced
through one provider.

     ISO ADVANTAGE SYSTEM (SALES CHANNEL AND SERVICE MANAGEMENT)

     Developed  in-house by Accesspoint,  the ISO Advantage system is a 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 a
high  level of  control  over the  information  about the  merchant  application
process,  service  deployment and customer service needs.  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 our
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 and 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 (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,  one 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.


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<PAGE>


     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 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.


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     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 third-party software systems for the
capture and processing of financial transactions.

     In the opinion of management,  most competitors do not provide the level of
service that we offer. 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.

     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 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  100% of all  transactions  will be  Internet-based  within
several years.  Since 1984, the three 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.

     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 endeavored to position 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.

     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.


                                     - 7 -


<PAGE>


     J.  EMPLOYEES

     As of  December  31,  2001,  Accesspoint  has  approximately  26  full-time
employees and one  part-time  employee.  Our employees  consist of customer call
center   representatives,    network   engineers,    software   engineers,   and
administrative   personnel.   We  also   contract   with  other   personnel  and
subcontractors for various projects on an as-needed basis.

     As of December 31, 2001, our  subsidiary  Processing  Source  International
(PSI) has approximately 21 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 two full-time
employees and no part-time employees.

     We do not  expect  to  increase  our  employee  count in 2002.  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.  As of December 31, 2001, we 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 monthly lease
payment for this space is $15,707.  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.

     As  of  December  31,  2001,  our   subsidiary,   PSI,   subleases,   on  a
month-to-month basis, office space consisting of approximately 7,452 square feet
located at 21031 Ventura Blvd.,  Woodland Hills,  California.  The monthly lease
payment for this space is  $14,904.  The  sub-lessor  is  Employers  Reinsurance
Corporation, a Missouri corporation. The lease commenced on May 15, 2000.


ITEM 3.  LEGAL PROCEEDINGS

     The Company is subject to various claims and legal  proceedings  covering a
wide  range  of  matters  that  arise in the  ordinary  course  of its  business
activities.  Management  believes that any liability that may ultimately  result
from the resolution of these matters will not have a material  adverse effect on
the financial  condition or results of  operations of the Company.  Listed below
are only those  matters  considered  to be material to the Company by management
and its counsel.

     Citicorp - During 2001, the Company vacated office facilities it had leased
under an operating lease agreement in Chicago, Illinois. The lessor subsequently
filed suit against the Company for the remaining amount of unpaid rent and other
various  expenses.  A judgment  was filed  against  the Company in the amount of
$95,000.  As of December  31, 2001 the Company has accrued for the  liability in
full on its Balance Sheet. No payments have been made.

     Ruttenberg - During 2001, a former  employee of the Company  filed a formal
demand  for  payment  of  remaining   salary  under  an  employment   agreement,
unreimbursed  expenses and legal costs.  In November 2001,  the Company  entered
into a settlement agreement, which required a total sum of $44,500 to be paid in
$5,000  monthly  installments.  The Company is currently  in default  under this
agreement and has  appropriately  recorded all original amounts demanded under a
Stipulation for the Entry of Judgment of $92,000,  less payments that were made,
as a liability on the Balance Sheet as of December 31, 2001.

     For a more detailed  discussion of Legal Proceedings,  please refer to Note
Q, Litigation and Contingencies,  attached as a part of the financial statements
prepared by our auditors filed herewith and incorporated hereby.


                                     - 8 -


<PAGE>


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,
2001.



                                     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.


                                      2001
                         _______________________________
                          HIGH                      LOW
     ___________________________________________________

     1st Quarter         $ 3.94                   $ 0.88
     ___________________________________________________

     2nd Quarter         $ 2.00                   $ 1.08
     ___________________________________________________

     3rd Quarter         $ 1.64                   $ 0.18
     ___________________________________________________

     4th Quarter         $ 1.70                   $ 0.26
     ___________________________________________________


                                      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
     ___________________________________________________


                                     - 9 -


<PAGE>


     A.  NUMBER OF HOLDERS

     As of December 31, 2001, we had  approximately  355 common  shareholders of
record,  not including an  undetermined  number of common  shareholders  holding
their shares in "street  name" in a brokerage  account.  On March 28, 2002,  the
last reported sales price of our common stock on the OTCBB was $0.60 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 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 October 15,  2001,  we sold  100,000  shares of common  voting  stock to
Frjalst  Framtak,  an  individual.  The shares were sold at a price of $0.30 per
share for a total purchase  price of  $30,000.00.  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. Framtak
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 Frjalst Framtak.

     On  October  15,  2001,  Asha Hira,  Maria  Santacruz  and  Carmen  Davilla
converted 15,000,  4,000 and 4,000,  respectively,  preferred shares,  Series A,
into common shares of the Company. The shares issued upon conversion were issued
pursuant to the restrictions set forth in Rule 144 and pursuant to the exemption
afforded  under Rule 505 of Regulation D, and/or  Section 4(2) of the Securities
Act of 1933. 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.

     On October 16,  2001,  we sold  400,000  shares of common  voting  stock to
Corporate  Strategies,  an entity of unknown  origin.  The shares were sold at a
price of $0.25 per share for a total purchase price of  $100,000.00.  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. Corporate


                                     - 10 -


<PAGE>


Strategies  acquired the shares for its own account for investment  with no then
present  intention  of dividing  its  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
Corporate Strategies.

     On October 16,  2001,  we sold  200,000  shares of common  voting  stock to
William E. and Alice  Beifuss,  individuals.  The shares were sold at a price of
$0.25 per share for a total purchase  price of  $50,000.00.  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.  The  Beifuss's  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.  We, or our  officers or  directors  or our or their  affiliates  or
representatives,  had a  pre-existing  personal  or business  relationship  with
William E. and Alice Beifuss.

     On November 13,  2001,  we sold  115,740  shares of common  voting stock to
James Hammann c/o Sterling Trust, an individual. The shares were sold at a price
of $0.43 per share for a total purchase price of $50,000.00. 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. Hammann 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 James
Hammann c/o Sterling Trust.

     On November  16,  2001,  we sold 10,256  shares of common  voting  stock to
Dennis S. Lazuta,  an  individual.  The shares were sold at a price of $0.49 per
share for a total  purchase  price of $5,000.00.  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. Lazuta
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 Dennis S. Lazuta.

     On November 21,  2001,  we sold  102,564  shares of common  voting stock to
Douglas J.  Kornbrust,  an individual.  The shares were sold at a price of $0.49
per share for a total purchase  price of  $50,000.00.  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. Kornbrust
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 Douglas J. Kornbrust.

     On November  21,  2001,  we sold 53,671  shares of common  voting  stock to
Thomas M.  Mason,  an  individual.  The shares were sold at a price of $0.47 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  D, and
pursuant to Section  25102(f) of the  California  Corporations  Code.  Mr. Mason
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 Thomas M. Mason.


                                     - 11 -


<PAGE>


     On December 5, 2001, Al Urcuyo converted 600,000  preferred shares,  Series
A, into common  shares of the Company.  The shares issued upon  conversion  were
issued  pursuant to the  restrictions  set forth in Rule 144 and pursuant to the
exemption  afforded  under Rule 505 of Regulation D, and/or  Section 4(2) of the
Securities  Act of  1933.  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.

     On December  10, 2001,  we issued  7,500  shares of common  voting stock to
Floratos, Loll & Devine. These shares were issued in exchange for legal 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.  Floratos,  Loll & Devine acquired the shares for
its own account  for  exchange of services  with no  then-present  intention  of
dividing its 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 Floratos, Loll & Devine.

     On December 13, 2001, Scott R. Andrew  converted  10,000 preferred  shares,
Series A, into common shares of the Company.  The shares issued upon  conversion
were issued pursuant to the  restrictions  set forth in Rule 144 and pursuant to
the exemption  afforded  under Rule 505 of Regulation D, and/or  Section 4(2) of
the  Securities  Act of 1933. 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.

     During the three months ended December 31, 2001, we sold a total of 195,000
shares of common voting stock to Citizen Asia Pacific  Limited.  The shares were
sold at various prices averaging  approximately $0.28 per share and representing
a total purchase  price and proceeds to our Company of $53,980.  Pursuant to the
written agreement, Citizen Asia Pacific Limited agreed to purchase from us up to
1,600,000  shares of our Common Stock at a per share purchase price equal to 40%
of (a) the closing, or (b) the last trade price of our shares of Common Stock as
quoted on the OTC Bulletin  Board (or on such other United States stock exchange
or public  trading market on which our shares trade if, at the time of purchase,
they are not trading on the OTCBB).  As a  convenience  to Citizen  Asia Pacific
Limited,  the  certificates  representing  the above issued shares were created,
naming holders  designated by Citizen Asia Pacific Limited from time to time. We
did not publicly offer any securities. 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.

     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.


                                     - 12 -


<PAGE>


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.









                                     - 13 -


<PAGE>

<TABLE>
<CAPTION>


                          STATEMENT OF OPERATIONS (1)

                                                             YEARS ENDED DECEMBER 31,
                                                         ------------------------------
                                                             2001               2000
                                                             ----               ----
<S>                                                      <C>                <C>

Revenues.............................................    $  6,344,643       $ 2,261,752
Cost of sales and services...........................       4,045,880           324,744
Selling and marketing................................         290,914           261,715
General and administrative...........................       5,041,910         5,848,805
Profit (loss) from operations .......................      (3,034,061)       (4,173,512)
Other expense, net ..................................         832,587         1,045,336
Extraordinary expense................................               0                 0
Income taxes paid....................................           2,400             2,400
                                                         ------------       -----------
Net profit (loss)....................................    $ (3,869,048)      $(5,221,248)
                                                         ============       ===========
Net loss per Common Share:
     Basic:..........................................    $      (0.20)      $     (0.33)
     Diluted:........................................    $      (0.15)      $     (0.33)
Weighted average number of Common Shares:
     Basic:..........................................      19,509,000        15,694,780
     Diluted:........................................      26,326,000        15,694,780


                         CONSOLIDATED BALANCE SHEET (2)


                                                             YEARS ENDED DECEMBER 31,
                                                         ------------------------------
                                                             2001              2000
                                                             ----              ----

Cash.................................................    $     78,229       $    31,954
Accounts receivable, net.............................         255,873           200,624
Other current assets.................................          20,173            45,022
Fixed assets, net (3)................................         401,685           719,167
Other assets.........................................         292,058           413,796
                                                         ------------       -----------
  Total assets.......................................       1,048,018         1,410,563
                                                         ============       ===========

Total current liabilities............................       4,632,601         3,552,489
Long term liabilities................................               0           283,990
                                                         ------------       -----------
  Total liabilities                                         4,632,601         3,836,479
                                                         ------------       -----------

Common stock.........................................          23,375            16,558
Preferred stock......................................           1,056                 0
Additional paid in capital...........................       8,092,519         5,390,011
Retained earnings (deficit)..........................     (11,701,533)       (7,832,485)
                                                         ------------       -----------
  Total shareholders' equity (deficit)...............      (3,584,583)       (2,425,916)
                                                         ============       ===========
  Total liabilities and stockholders' equity.........    $  1,048,018       $ 1,410,563
                                                         ============       ===========

<FN>
__________________

1  For the fiscal years ended 2001 and 2000, other than capital raised pursuant
to stock sales,  we have had no  operations  and no revenue  prior to the merger
with the 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 2001 and 2000, 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  Includes net accumulated depreciation of $936,497 and $631,646 in 2001 and
2000, respectively.

</FN>
</TABLE>


                                     - 14 -


<PAGE>


     B. OVERVIEW

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

     We have incurred losses since the inception of our operations.  At December
31, 2001, we had an accumulated  deficit of $(11,701,533).  In the past, we have
relied substantially on private placement offerings of debt and equity to offset
our losses and to fund our ongoing operations, research and development programs
and business activities.  However, as of December 14, 2001, we have entered into
a series of agreements with Net Integrated Systems, Ltd. ("NIS"), in conjunction
with a Five Million Dollar ($5,000,000) Secured Revolving Line of Credit. In the
opinion  of  management,  this Line of Credit  should be  sufficient  to sustain
Accesspoint's operations and activities for the foreseeable future.

     C.  RESULTS OF OPERATIONS

     Year Ended December 31, 2001 Compared With Year Ended December 31, 2000

     Revenues for the year ended December 31, 2001 increased to $6,344,643  from
$2,261,752 for the year ended December 31, 2001. The increase of $4,082,891,  or
180.52% is due primarily to our increased  revenues  associated with credit card
processing which resulted in an overall increase in sales.

     Cost of sales for the year ended  December 31, 2001 increased to $4,045,880
from $324,744 for the year ended  December 31, 2000.  The increase of $3,721,136
or 1145.87%  resulted  primarily  from our increase in cost of sales  associated
with credit card processing, which resulted in an overall increase in sales.

     Selling  and  marketing  expenses  for the year  ended  December  31,  2001
increased to $290,914 from $261,715 for the year ended  December 31, 2000.  This
increase of $29,199,  or 11.16% resulted  primarily from increased sales efforts
for acquisition of credit card processing accounts. 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, 2001
decreased to $5,041,910  from  $5,848,805  for the year ended December 31, 2000.
The  decrease  of  $806,895,  or 13.80%  resulted  primarily  from a decrease of
Salaries  and Wages and related  employee  costs and a decrease in  professional
costs and other efficiencies.

     Interest  expense,  net, for the year ended December 31, 2001 was $145,059,
as compared to $144,619 for the year ended  December  31, 2000.  The increase of
$440, or 0.30% in interest expense resulted  primarily from the Company's static
cost of debt.

     Other (Income)  Expense,  net of Interest expense was $670,423 for the year
ended  December 31, 2001  compared to $899,603  which  represented a decrease of
$229,180 or 25.48%.  This decrease includes  primarily the reduction of bad debt
expense and penalties and includes an  extraordinary  expense for the year ended
December 31, 2001 of $99,500,  as compared to $0 for the year ended December 31,
2000.  This  increase of $99,500 was a direct  result of payment of a settlement
amount  under a PSI lawsuit in 2001.  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.

     Net losses for the years ended December 31, 2001 and December 31, 2000 were
$(3,761,048) and $(5,221,248),  respectively. The decrease in loss of $1,460,200
or 27.97% was  primarily  related  to  increased  revenues  and a  reduction  of
development related activities.


                                     - 15 -


<PAGE>


     D.  LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash  equivalents  at December 31, 2001 were $78,229,  compared to
$31,953 at December 31, 2000 an increase of $46,275  which  represented a growth
of 144.82%.

     Net Cash used in operations  decreased  from  $3,405,357 for the year ended
December  31,  2000 to  $2,110,447  for the year ended  December  31,  2001 or a
resulted  efficiency  in cash of  $1,294,910  or  38.03%.  This  efficiency  was
primarily accomplished by increased effectiveness in operations.

     Net  Cash  used in  investing  activities  decreased  from  $218,325  as of
December 31, 2000 to $54,606 as of December.  This decease of $163,719 or 74.99%
was primarily due to a reduction of purchases in furniture and equipment.

     During the year ended December 31, 2001, the Company  generated net cash of
$2,211,328  from  financing  activities as compared to  $3,601,287  for the year
ended December 31, 2000. The decrease of $1,389,959  resulted from a decrease in
private placement fundraising activities.

     As of December 31, 2001, we lease 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 2002. We may attempt to  re-negotiate a longer term
lease  at its  present  location.  If  the  Company  moves,  the  major  capital
expenditures we could incur would be related to relocation of office  computers,
local area network hardware, office telephony and office equipment an furniture.

     We had, at December 31, 2001,  negative  working  capital.  We believe that
cash  generated from  operations  will not be sufficient to fund our current and
anticipated  cash  requirements.  However,  management  believes  that  our Five
Million  Dollar  ($5,000,000)  Secured  Revolving  Line of  Credit  through  Net
Integrated Systems should be sufficient to sustain Accesspoint's  operations and
activities  for the  foreseeable  future.  As such,  we do not believe  that our
current  operational  plans for the next  twelve  months  will be  curtailed  or
delayed  because  of the lack of  sufficient  financing.  While  there can be no
assurances that we will continue to have access to such additional financing, on
terms acceptable to us and at the times required,  or at all, we believe that we
will have access to sufficient capital for the foreseeable future.

     E.  NET OPERATING LOSS

     For federal income tax purposes,  we have net operating loss  carryforwards
of  approximately  $10,760,000  as of December  31, 2001 and  $7,010,000,  as of
December 31, 2000. These  carryforwards will expire at various dates through the
year 2015. The use of such net operating loss carryforwards to be offset against
future  taxable  income,  if  achieved,  may  be  subject  to  specified  annual
limitations (see "Risks of Our Business  Limitations on Net Operating Loss Carry
Forward").


ITEM 7.  FINANCIAL STATEMENTS

     Our  audited  consolidated  financial  statements  for  the  periods  ended
December 31, 2001 and December 31, 2000 are filed herewith.


                                     - 16 -


<PAGE>


                             ACCESSPOINT CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

                                TABLE OF CONTENTS








Independent Auditors Report                                          2

Consolidated Balance Sheets                                          3

Consolidated Statements of Income                                    4

Consolidated Statements of Cash Flow                                 5

Consolidated Statements of Changes in Stockholders' Equity           7

Notes to Consolidated Financial Statements                           8












                                     - 17 -


<PAGE>


                          INDEPENDENT AUDITOR'S REPORT






To the Board of Directors
Accesspoint Corporation
Los Angeles, California


We have audited the  accompanying  consolidated  balance  sheets of  Accesspoint
Corporation  and its  subsidiaries  ("the  Company") as of December 31, 2001 and
2000,   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, 2001 and 2000, and the results of its operations and its cash flows
for the years ended  December  31, 2001 and 2000 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 T to the
consolidated  financial  statements,  the Company has suffered recurring losses,
cash  deficiencies,  loan and capital lease defaults and current  liabilities in
excess of current assets. 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.


/s/ Lichter, Weil & Associates



April 4, 2002
Los Angeles, California


                                     - 18 -


<PAGE>

<TABLE>
<CAPTION>

                             ACCESSPOINT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000

                                     ASSETS

                                                                       2001              2000
                                                                   -------------     -----------
<S>                                                                      <C>             <C>

Current Assets
         Cash and cash equivalents                                       $78,229         $31,954
         Accounts receivable, net                                        255,873         200,624
         Inventory                                                         6,366           1,911
         Other receivables                                                     0          16,682
         Prepaid expenses                                                 13,807          26,429
                                                                   -------------     -----------
                 Total Current Assets                                    354,275         277,600
                                                                   -------------     -----------

Fixed Assets
         Furniture and equipment (net)                                   401,685         719,167
                                                                   -------------     -----------
                Total Fixed Assets                                       401,685         719,167
                                                                   -------------     -----------

Other Assets
         Deposits                                                        292,058         413,796
                                                                   -------------     -----------
                 Total Other Assets                                      292,058         413,796
                                                                   -------------     -----------
         Total Assets                                              $   1,048,018     $ 1,410,563
                                                                   =============     ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                       2001             2000
                                                                   -------------     -----------
Current Liabilities
         Accounts payable and accrued expenses                     $   1,467,688     $ 1,420,337
         Accrued payroll taxes and penalties                           1,091,080         704,971
         Accrued loss contingencies                                      338,233               0
         Deferred compensation                                           221,477         223,977
         Customer deposits                                                99,465               0
         Current portion, capitalized
         leases                                                          303,158         210,704
         Current portion, notes payable                                1,111,500         992,500
                                                                   -------------     -----------


                                     - 19 -


<PAGE>


         Total Current Liabilities                                     4,632,601       3,552,489

Capital Lease obligations, net of current portion                              0         283,990
Notes payable, net of current portion                                          0               0
                                                                   -------------     -----------

         Total Liabilities                                             4,632,601       3,836,479
                                                                   -------------     -----------

Stockholders' Equity

         Common stock, $.001 par value, 25,000,000
              shares authorized, 23,375,208 and 16,557,560
              issued and outstanding, respectively                        23,375          16,558
         Preferred Stock, no par value, 5,000,000 shares
              authorized, 1,055,600  and  0 issued
              and outstanding, respectively                                1,056               0
         Additional paid in capital                                    8,092,519       5,390,011
         Retained deficit                                            (11,701,533)     (7,832,485)
                                                                   -------------     -----------
         Total Stockholders' Equity                                   (3,584,583)     (2,425,916)
                                                                   -------------     -----------
         Total Liabilities and Stockholders' Equity                $   1,048,018     $ 1,410,563
                                                                   =============     ===========

</TABLE>


                                     - 20 -


<PAGE>

<TABLE>
<CAPTION>

                             ACCESSPOINT CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                       2001              2000
                                                                   -------------     -----------
<S>                                                                  <C>             <C>

Sales, net                                                           $6,344,643      $ 2,261,752

Cost of sales                                                          4,045,880         324,744
                                                                   -------------     -----------
         Gross profit                                                  2,298,763       1,937,008

Selling expenses                                                         290,914         261,715

General and administrative expenses                                    5,041,910       5,848,805
                                                                   -------------     -----------
         Income (loss) from operations                                (3,034,061)     (4,173,512)
                                                                   -------------     -----------

Other (Income) Expense
         Interest income                                                 (17,105)         (1,114)
         Forgiveness of debt                                             (44,006)              0
         Other miscellaneous                                              (3,165)              0
         Penalties                                                        90,137         360,694
         Bad debt expense                                                291,846         540,023
         Loss on disposal of assets                                       45,216               0
         Loss contingencies and legal settlements                        307,500               0
         Interest expense                                                162,164         145,733
                                                                   -------------     -----------
         Total Other (Income) Expense                                    832,587       1,045,336
                                                                   -------------     -----------
              Income (loss) before income taxes                       (3,866,648)     (5,218,848)

Provision for income taxes                                                 2,400           2,400
                                                                   -------------     -----------
         Net income (loss)                                         $  (3,869,048)    $(5,221,248)
                                                                   =============     ===========


                                     - 21 -


<PAGE>



         Net loss per share (basic and diluted)
              Basic                                                       ($0.20)         ($0.33)
              Diluted                                                     ($0.15)         ($0.24)

         Weighted average number of shares
              Basic                                                   19,509,000      15,695,000
              Diluted                                                 26,326,000      21,709,000

</TABLE>


                                     - 22 -


<PAGE>

<TABLE>
<CAPTION>



                             ACCESSPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                       2001              2000
                                                                   -------------     -----------
<S>                                                                <C>               <C>

CASH FLOWS FROM OPERATING ACTIVITIES
            Net Income (loss)                                      $  (3,869,048)    $(5,221,248)

Adjustments to reconcile net loss to net cash used
   in operating activities:
            Amortization                                                       0             299
            Depreciation                                                 326,872         287,317
            Loss on disposal of assets                                    45,216               0
            Common stock issued for services                             426,518          24,000
            Decrease (Increase) in receivables                           (55,249)        360,221
            Decrease (Increase) in inventory                              (4,455)         12,096
            Decrease (Increase) in other receivables                      16,682         (15,951)
            Decrease (Increase) in prepaid expenses                       12,622          (7,850)
            Decrease (Increase) in deposits                              121,738        (383,940)
            (Decrease) Increase in accounts payable
                 and accrued expenses                                     47,351         774,325
            (Decrease) Increase in accrued payroll taxes                 386,109         704,971
            (Decrease) Increase in accrued loss contingencies            338,233
            (Decrease) Increase in deferred compensation                  (2,500)         68,257
            (Decrease) Increase in customer deposits                      99,465               0
            (Decrease) Increase in deferred revenue                            0          (7,854)
                                                                   -------------     -----------

            Total Adjustments                                          1,758,601       1,815,891
                                                                   -------------     -----------

            Net cash used in operations                               (2,110,447)     (3,405,357)
                                                                   -------------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
            Purchase of intangibles                                            0           2,182
            Purchase of furniture and equipment                          (54,606)       (220,507)
                                                                   -------------     -----------

            Net cash used in investing activities                        (54,606)       (218,325)
                                                                   -------------     -----------




                                     - 23 -



<PAGE>


CASH FLOWS FROM FINANCING ACTIVITIES
            Issuance of notes payable                                    119,000       1,434,000
            Payments on capital leases                                  (191,536)       (243,685)
            Payments on notes payable                                          0        (641,500)
            Sale of stock                                              2,283,864       3,052,472
                                                                   -------------     -----------

            Net cash provided by financing activities                  2,211,328       3,601,287
                                                                   -------------     -----------

            Net change in cash and cash equivalents                       46,275         (22,395)
                                                                   -------------     -----------

            Cash and cash equivalents at beginning of year                31,953          54,348
                                                                   -------------     -----------

            Cash and cash equivalents at end of year               $      78,229     $    31,953
                                                                   =============     ===========

</TABLE>


                                     - 24 -


<PAGE>

<TABLE>
<CAPTION>



                             ACCESSPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            SUPPLEMENTAL INFORMATION
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                       2001              2000
                                                                   -------------     -----------
<S>                                                                     <C>             <C>

  Supplemental cash flows disclosures:

       Income tax payments                                              $  2,400        $  1,600
                                                                   -------------     -----------

       Interest payments                                                $100,338        $ 92,688
                                                                   -------------     -----------

       Non cash investing and financing
           Addition of equipment on capital leases                      $      0        $333,717
                                                                   -------------     -----------

       Common stock issued for services                                 $426,518        $ 24,000
                                                                   -------------     -----------

</TABLE>


                                     - 25 -


<PAGE>

<TABLE>
<CAPTION>



                             ACCESSPOINT CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                       2001              2000
                                                                   -------------     -----------
<S>                                                                <C>               <C>

Retained (deficits)
             Balance at beginning of year                          $  (7,832,485)    $(2,611,238)
             Net income (loss)                                        (3,869,048)     (5,221,248)
                                                                   -------------     -----------

             Balance at end of year                                  (11,701,533)     (7,832,485)
                                                                   -------------     -----------

Common stock, par value $.001 (thousands of shares)
             Balance at beginning of year                                 16,558          14,832
             Common stock issued                                           6,817           1,726
                                                                   -------------     -----------

             Balance at end of year                                       23,375          16,558
                                                                   -------------     -----------

Preferred stock, no par value (thousands of shares)
             Balance at beginning of year                                      0               0
             Issuance of preferred stock                                   1,056               0
                                                                   -------------     -----------

             Balance at end of year                                        1,056               0
                                                                   -------------     -----------

Additional paid in capital
             Balance at beginning of year                              5,390,011       2,315,265
             Issuance of common stock                                  2,702,508       3,074,746
                                                                   -------------     -----------

             Balance at end of year                                    8,092,519       5,390,011
                                                                   -------------     -----------

Total stockholders' equity at end of year                          $  (3,584,583)    ($2,425,916)
                                                                   =============     ===========

</TABLE>


                                     - 26 -


<PAGE>


                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE A - NATURE OF OPERATIONS

         Incorporated  in the State of  Nevada,  Accesspoint  Corporation  ("the
         Company") is a "C" Corporation as organized under the Internal  Revenue
         Code.  As of December  31,  2001,  the Company has  combined its mature
         Internet  Application Services technology platform with its credit card
         and  check-processing  platform to provide bundled payment  acceptance,
         processing and business  management  services.  These programs  provide
         customers  with  multiple  payment  acceptance  capabilities  including
         credit card and check transaction,  a fully operational  e-commerce and
         business management Website,  and a central Web based management system
         for  servicing  both the  brick-and-mortar  and web based sides to each
         business.

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

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

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

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


                                     - 27 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


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 and providing  Internet  access and
         hosting of Internet business services and web sites.

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

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

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

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

         CONTINGENCIES
         Certain  conditions  may exist as of the date the financial  statements
         are  issued,  which may result in a loss to the  Company but which will
         only be resolved when one or more future events occur or fail to occur.
         The  Company's  management  and legal  counsel  assess such  contingent
         liabilities,  and such  assessment  inherently  involves an exercise of
         judgment.  In assessing loss contingencies related to legal proceedings
         that are  pending  against the  Company or  unasserted  claims that may
         result in such  proceedings,  the Company's legal counsel evaluates the
         perceived merits of any legal  proceedings or unasserted claims as well
         as the  perceived  merits of the amount of relief sought or expected to
         be sought.

         If the assessment of a contingency indicates that it is probable that a
         material  loss has been incurred and the amount of the liability can be
         estimated,  then  the  estimated  liability  would  be  accrued  in the
         Company's  financial  statements.  If the  assessment  indicates that a
         potential  material loss  contingency is not probable but is reasonably
         possible,  or is probable but cannot be  estimated,  then the nature of
         the  contingent  liability,  together  with an estimate of the range of
         possible loss if determinable and material would be disclosed.


                                     - 28 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Loss contingencies  considered to be remote by management are generally
         not  disclosed  unless  they  involve  guarantees,  in  which  case the
         guarantee would be disclosed.

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

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

         FIXED ASSETS
         Property   and   equipment   are   stated  at  cost  less   accumulated
         depreciation.  Expenditures  for major additions and  improvements  are
         capitalized,  and  minor  replacements,  maintenance  and  repairs  are
         charged  to  expense  as  incurred.  Depreciation  is  provided  on the
         straight-line  method over the estimated useful lives of the assets, or
         the remaining term of the lease, as follows:

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

         LEASEHOLD IMPROVEMENTS
         Amortization   of  leasehold   improvements   is  computed   using  the
         straight-line  method over the shorter of the  remaining  lease term or
         the estimated useful lives of the improvements.

         CAPITAL LEASES
         Assets held under  capital  leases are recorded at the lower of the net
         present  value of the minimum  lease  payments or the fair value of the
         leased asset at the  inception of the lease.  Depreciation  is computed
         using the straight-line method over the shorter of the estimated useful
         lives of the assets or the period of the related lease.

         INVENTORY
         Inventory is valued at the lower of cost or market.  Cost is determined
         on the  weighted  average  method.  As of  December  31, 2001 and 2000,
         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.


                                     - 29 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         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.

         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.


                                     - 30 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE C - BUSINESS COMBINATIONS (CONTINUED)

         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.

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

                                                2001                    2000
                                                ----                    ----
         Sales
                  Accesspoint               $  1,172,963            $   695,736
                  PSI                          4,934,541              1,217,158
                  Black Sun Graphics             247,556                590,463
                  Eliminations                  (141,217)              (241,605)
                                            ------------            -----------
                  Combined                  $  6,344,643            $ 2,261,752
                                            ------------            -----------

         Net Income (loss)
                  Accesspoint               $ (2,747,971)           $(4,029,561)
                  PSI                         (1,031,316)            (1,350,608)
                  Black Sun Graphics             (89,761)               158,921
                                            ------------            -----------
                  Combined                  $ (3,869,048)           $(5,221,248)
                                            ------------            -----------


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, 2001 and 2000,  there
         were no uninsured balances held at these banks.


                                     - 31 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE E - FIXED ASSETS

         Fixed assets consist of the following:

                                                     2001              2000
                                                     ----              ----

              Furniture and fixtures              $  71,364         $   71,364
              Office equipment                      244,623            243,634
              Computer hardware and software      1,022,195            968,578
              Leasehold improvements                      0             67,236
                                                  ---------         ----------
                                                  1,338,181          1,350,812
              Accumulated depreciation             (936,497)          (631,645)
                                                  ---------         ----------
              Total                               $ 401,685         $  719,167
                                                  ---------         ----------


         At  December  31, 2001 and 2000  included in fixed  assets are costs of
         $737,996 of assets recorded under capital leases.

         For the years ended December 31, 2001 and 2000, included in accumulated
         depreciation  are  $494,030  and  $295,474,  recorded  on assets  under
         capital leases, respectively.


NOTE F- COMMITTMENTS

         CAPITAL  LEASES - The Company  leases  certain  machinery and equipment
         under  agreements  that are classified as capital  leases.  The cost of
         equipment  under  capital  leases is included in the Balance  Sheets as
         fixed assets,  see Note E regarding  related  amounts.  Future  minimum
         payments under capital leases as of December 31, 2001, are as follows:


                  2002        $ 217,773
                  2003           73,791
                  2004           11,594
                              ---------
                              $ 303,158

         Total minimum lease payments                            $ 338,856
         Less amount representing interest                         (35,698)
                                                                 ---------
         Present value of minimum lease payments                   303,158
         Less current maturities of capital lease obligations     (303,158)
                                                                 ---------
         Long-term capital lease obligations                     $       0
                                                                 ---------

         See Litigation and Contingencies Note Q.


                                     - 32 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE F - COMMITMENTS (CONTINUED)

         OPERATING  LEASES  -  The  Company  leases  its  operating  and  office
         facilities  and some of its equipment  under  non-cancelable  operating
         leases.  These  leases  expire at various  dates  through  2004 and may
         contain  renewal  options.  The leases  provide for increases in future
         minimum  annual  rental  payments  based on  defined  increases  in the
         Consumer  Price  Index.  Also,  the  agreements  generally  require the
         Company to pay executory costs (real estate taxes, insurance, repairs).
         Future  minimum  rental  payments  under  leases  that have  initial or
         remaining non-cancelable lease terms in excess of one year are:


                  2002              $ 211,500
                  2003                 56,800
                  2004                 21,600
                                    ---------
                                    $ 289,900

         Lease  expense  for the  years  ended  December  31,  2001 and 2000 was
         $526,580 and $404,612, respectively.

         See Litigation and Contingencies Note Q.

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

         On November 12, 2001, 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 the current
         closing  price.  The  agreement  terminates  on November 13, 2003.  See
         Subsequent Events Note S.

         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  extended
         through  July  31,  2006,  but was  terminated  in  January  2002.  See
         Subsequent Events Note S.

         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. Subsequent to December 31, 2001 the employees
         terminated  all  agreements.   No  payments  were  required  under  the
         agreements.


                                     - 33 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000

NOTE F - COMMITMENTS (CONTINUED)

         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 had issued  66,664  shares of stock with a value of $324,466 to
         this  individual.  The Company  issued no further  shares or options to
         this individual. Subsequent to December 31, 2001 the individual filed a
         demand for the  remaining  shares and  options.  Please see  Subsequent
         Events Note S.

         The Company  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 $3,700 to this  individual.  No further  stock or options have
         been  issued  to this  individual  and  the  consulting  agreement  was
         terminated during 2001.

         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, 2001 3,125  shares have been issued under
         this  agreement  with  a  value  of  $4,900.  This  contract  was  also
         terminated in 2001 and no further stock issuance will be required under
         the 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, 2001
         71,380  shares had been  issued  under this  agreement  with a value of
         $131,300.

         In January 2001, the Company  entered into a consulting  agreement with
         another corporation for media relations.  This agreement stipulated for
         the  payment of 20,000  shares of common  stock per month for the first
         three months and 16,666 shares of stock per month for an additional six
         months for payment of services. The corporation was also granted 30,000
         stock options for the purchase of common stock at $1.00 per share for a
         period of twelve months.  As of December 31, 2001,  170,000 shares have
         been issued with a value of $261,200.


                                     - 34 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE G - STOCK AND STOCK WARRANTS

         The  Company  has two  classes of capital  stock:  Preferred  Stock and
         Common Stock. Holders of common stock are entitled to one vote for each
         share  held.  Preferred  stock  holders  are  not  entitled  to  voting
         privileges  and  are  convertible   into  Common  Stock  under  certain
         circumstances on a share-for-share basis.

         At  December  31,  2001,  the  Company  has  25,000,000  Common  Shares
         authorized and 23,375,200  shares issued and  outstanding.  The Company
         had 5,000,000  Preferred  Shares  authorized  and 1,055,600  issued and
         outstanding.

         In  addition,  the  Company  had  outstanding  at  December  31,  2001,
         1,772,223  warrants  convertible  into common shares at various  prices
         ranging from $0.34 to $7.50,  with  expirations  dates through November
         2006.

<TABLE>
<CAPTION>
                                                  WEIGHTED AVERAGE     WEIGHTED AVERAGE
         EXERCISE PRICE RANGE        AMOUNT       CONTRACTUAL LIFE     EXERCISE PRICE
         --------------------        -------      ----------------     ----------------
         <S>                       <C>            <C>                        <C>

         $0.01 - $0.34               100,000      33 months                  $0.34
         $0.71 - $0.81               312,223      58 months                  $0.78
         $5.25 - $6.00                90,000      35 months                  $5.96
         $7.00 - $7.50             1,270,000       9 months                  $7.50

</TABLE>

         Reconciliation of stock warrants from December 31, 2000 to December 31,
         2001 is as follows:

                  Balance at December 31, 2000                1,735,000
                  Warrants exercised                           (275,000)
                  Warrants issued                               312,223
                                                              ---------
                  Balance at December 31, 2001                1,772,223
                                                              ---------


         At December  31, 2001,  the Company  does not have enough  common stock
         reserved for the possible  exercise of options and warrants which could
         total:

                  Exercise of common stock warrants           1,772,223
                  Exercise of employee stock options          3,486,000
                                                              ---------
                                                              5,258,223

         The Company  intends to  increase  the  authorized  number of shares by
         proxy of its shareholders subsequent to December 31, 2001.


                                     - 35 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE H - EARNINGS PER SHARE

         Basic net  earnings per share is computed  using the  weighted  average
         number of common shares  outstanding.  The dilutive effect of potential
         common  shares  outstanding  is included in diluted  net  earnings  per
         share. The computations of basic net earnings per share and diluted net
         earnings per share for 2001 and 2000 are as follows:


                                                     2001              2000
                                                     ----              ----

         Net earnings(loss) from operations     $(3,869,048)      $(5,221,248)
                                                -----------       -----------

         Basic weighted average shares           19,509,000        15,695,000
         Effect of dilutive securities:
            Common stock options                  3,629,000         3,842,000
            Common stock warrants                 1,772,000         1,735,000
            Convertible debt                        360,000           437,000
            Convertible preferred stock           1,056,000                 0
                                                -----------       -----------
         Dilutive potential common shares        26,326,000        21,709,000
                                                -----------       -----------

         Net earnings(loss) per share from
           continuing operations:
             Basic                                   ($0.20)           ($0.33)
             Diluted                                 ($0.15)           ($0.24)


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 maximum number of shares of the Company's
         common  stock  available  for  issuance  under the Plan is six  million
         (6,000,000)  shares.  Proceeds received by the Company from exercise of
         stock  options  are  credited  to common  stock and  additional-paid-in
         capital. Additional information with respect to the Plan's stock option
         activity is as follows:


                                     - 36 -


<PAGE>



                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


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

<TABLE>
<CAPTION>


                                                                NUMBER OF       WEIGHTED AVERAGE
                                                                  SHARES         EXERCISE PRICE
                                                               ----------       ----------------
<S>                                                             <C>                <C>

         Outstanding at December 31, 1999                       5,608,000          $  1.20
         Granted                                                  118,000          $  3.16
         Exercised                                                 (9,000)         $   .43
         Canceled                                              (1,875,000)         $  3.00
                                                               ----------          -------
         Outstanding December 31, 2000                          3,842,000          $   .81
         Granted                                                  264,000          $   .72
         Exercised                                                 (1,000)         $   .43
         Cancelled                                               (476,000)         $  2.50
                                                               ----------          -------
         Outstanding at December 31, 2001                       3,629,000          $   .59
                                                               ----------          --------

         Options exercisable at December 31, 2000               3,384,000          $   .47
                                                               ----------          --------
         Options exercisable at December 31, 2001               3,486,000          $   .55
                                                               ----------          --------

</TABLE>

         The  following  table  summarizes   information   about  stock  options
         outstanding and exercisable at December 31, 2001:

<TABLE>
<CAPTION>

                                               WEIGHTED AVERAGE
                               NUMBER          REMAINING YEARS        WEIGHTED
            RANGE OF         OUTSTANDING        OF CONTRACTUAL         AVERAGE
         EXERCISE PRICES     (THOUSANDS)            LIFE            EXERCISE PRICE
         ---------------     -----------       ----------------     --------------
<S>                           <C>              <C>                    <C>

         $0.32-0.37           3,056,000        2.2 years              $ 0.35
         $0.43-0.88             315,000        2.1 years              $ 0.54
         $1.050-2.50             91,000        3.8 years              $ 1.48
         $3.12-5.56             167,000        2.9 YEARS              $ 4.62
                             -----------       ---------              ------
                              3,629,000        2.3 YEARS              $ 0.59
                             -----------       ---------              ------
</TABLE>


         Stock Options Exercisable at December 31, 2001:

         RANGE OF                    NUMBER OF                  WEIGHTED
         EXERCISE                     SHARES                     AVERAGE
          PRICES                    EXERCISABLE               EXERCISE PRICE
         ----------                 -----------               --------------

         $0.32-0.37                  3,056,000                 $  0.35
         $0.43-0.88                    291,000                 $  0.54
         $3.12-5.56                    139,000                 $  4.20
                                     ---------                 -------
                                     3,486,000                 $  0.52
                                     ---------                 -------


                                     - 37 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


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


         The Company has  elected to follow APB Opinion No. 25  (Accounting  for
         Stock  Issued  to  Employees)  in  accounting  for its  employee  stock
         options.  Accordingly,  no  compensation  expense is  recognized in the
         Company's  financial  statements  because  the  exercise  price  of the
         Company's  employee  stock  options  equals  the  market  price  of the
         Company's  common  stock  on the  date of  grant.  If  under  Financial
         Accounting  Standards  Board  Statement No. 123  (accounting  for Stock
         Based Compensation) the Company determined  compensation costs based on
         the fair value at the grant date for its stock  options,  net  earnings
         and  earnings per share would have been  reduced to the  following  pro
         forma amounts:

                                                      2001           2000
                                                      ----           ----
         Net earnings (loss):
            As reported                         $(3,869,048)     $(5,221,248)
            Pro forma                           $(4,172,954)     $(5,660,782)

         Basic earnings (loss) per share:
            As reported                              ($0.20)          ($0.33)
            Pro forma                                ($0.21)          ($0.36)

         Diluted earnings (loss) per share:
            As reported                              ($0.15)          ($0.26)
            Pro forma                                ($0.16)          ($0.26)

         The weighted  average  estimated  fair value of stock  options  granted
         during  2001 and 2000 was  $0.084  and $0.12 per  share,  respectively.
         These amounts were determined  using the  Black-Scholes  option-pricing
         model, which values options based on the stock price at the grant date,
         the expected life of the option, the estimated volatility of the stock,
         the expected dividend  payments,  and the risk-free  interest rate over
         the  expected  life  of  the  option.   The  assumptions  used  in  the
         Black-Scholes  model were as follows for stock options  granted in 2001
         and 2000:

                                                     2001              2000
                                                     ----              ----
         Risk-free interest rate                     5.50%             6.20%
         Expected volatility of stock                350%              370%
         Dividend yield                              0.0%              0.0%
         Expected life of options                    36 months         31 months

         The Black Scholes option valuation model was developed for estimating
         the fair value of traded options that have no vesting restrictions and
         are fully transferable. Because option valuation models require the use
         of subjective assumptions, changes in these assumptions can materially
         affect the fair value of the options, and the Company's options do not
         have the characteristics of traded options, the option valuation models
         do not necessarily provide a reliable measure of the fair value of its
         options.


                                     - 38 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE J - DEBT

         At December 31, 2001 and 2000, the Company had notes payable
         outstanding in the aggregate amount of $1,414,658 and $1,487,194,
         respectively. Payable as follows:

                                                               2001       2000

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

         Notes payable to a partnership, 10% per annum,
         due December 6, 2002, to a related party             160,000    160,000

         Note payable to a corporation, interest at 5%
         per annum, due on demand                             167,500    167,500

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

         Various notes payable to a related party,
         interest rates from 8% to 10% per annum,
         due in 2002                                          119,000          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, currently in default, secured by
         $250,000 deposit of the Company's                    450,000    450,000

         Capitalized lease obligations, interest at
         varying rates, payments through May 2004             303,158    494,694

                                                            1,414,658  1,487,194

                   Current portion                          1,414,658  1,203,204

                   Long-term portion                       $        0  $ 283,990


                                     - 39 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE K - SECURITES 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.

         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 Agreement required the Company to register the Warrants.

         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.

         The Company is currently in default under this  agreement for repayment
         of  the  loan  on  October  16,  2001.  The  Company  is  currently  in
         negotiations with the lender regarding this matter.


NOTE L - COMPENSATED ABSCENSES

         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, 2001
         and 2000 the total  vacation  liability  totaled  $73,466 and  $51,441,
         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.


                                     - 40 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE N - INCOME TAXES

         Total Federal and State income tax expense for the years ended December
         31, 2001 and 2000  amounted to $2,400 and $2,400,  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,
         2001 and 2000, there is no difference between the federal statutory tax
         rate and the effective  tax rate. At years ended  December 31, 2001 and
         2000 the Company had  available net operating  loss  carry-forwards  of
         approximately $10,900,000 and $7,010,000 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.


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 - NET INTEGRATED SYSTEMS, LTD.

         On December 14, 2001 the Company  entered into several  agreements with
         Net Integrated  Systems,  Ltd. (NIS) in conjunction with a Five Million
         Dollar ($5,000,000) Secured Revolving Line of Credit.

         STOCK TRANSFER  AGREEMENT - As partial inducement for NIS to enter into
         the  agreement  three  shareholders  agreed to  transfer  ownership  of
         4,486,795 shares of common stock collectively owned by them to NIS.

         STOCK  OPTION  AGREEMENT - In addition  to the above  shares,  the same
         three  shareholders  granted an option to NIS to purchase an additional
         7,131,418 shares of common stock  collectively  owned by them at $2 per
         share until December 14, 2006.

         IRREVOCABLE VOTING PROXY - An irrevocable voting proxy was given to NIS
         from the three shareholders on the 7,131,418 shares  collectively owned
         by them. The  shareholders  retain the right to vote on certain matters
         including, but not limited to, liquidation of the Company,  bankruptcy,
         merger,  reorganizations  and disposition of Company assets.  The Proxy
         extends until the end of all other agreements.


                                     - 41 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE P - NET INTEGRATED SYSTEMS, LTD. (CONTINUED)

         PLEDGE  AGREEMENT - As further  collateral  for the  Revolving  Line of
         Credit  certain   shareholders   agreed  to  Pledge  7,131,418  shares,
         collectively owned by them, for the Secured Loan Agreement.

         REVOLVING  LINE OF CREDIT AND  SECURED  LOAN  AGREEMENT  - The  Company
         entered  into a  Revolving  Line of Credit  and  related  Secured  Loan
         Agreement with NIS which calls for the lender to make credit  extension
         advances when requested by the Company and its Board of Directors.

         The terms of the  Agreement  are for credit  advances not to exceed the
         cumulative total principal sum of Five Million Dollars  ($5,000,000) at
         an interest  rate of six percent (6%) per annum on the unpaid  balance.
         The note requires  minimum monthly payments of interest only and is due
         on  December  14,  2006.  At December  31,  2001 no  advances  had been
         requested under this Agreement.

         All assets of the Company and  7,131,418  shares of common stock of the
         Company pledged under the above Pledge  Agreement  secure the Revolving
         Line of Credit.

         MANAGEMENT  AGREEMENT - In  connection  with the above  agreements  the
         Company  entered into a Management  Agreement with NIS to assist in the
         day-to-day  operations  of  the  business.  This  includes,  but is not
         limited to, hiring and  terminating  personnel,  enter into,  modify or
         terminate agreements and contracts, manage Company finances, compromise
         debts and obligations,  acquire assets and make  investments.  However,
         the Board of  Directors  retain all rights to approve,  disapprove  and
         oversee the activities of the Manager.

         The terms of the  agreement  are for a monthly  fee of  $10,000,  which
         accrues until paid from current  operating  profits.  The period is for
         five years,  early  termination  by the manager  with ten days  written
         notice for any reason.  Termination by the Company for any reason other
         then cause shall  require all accrued and unpaid sums to become due and
         payable as well as the sum of One Million Dollars ($1,000,000).

         After the  effect  of the  above  transactions  NIS  beneficially  owns
         11,618,213 shares of common stock, or approximately fifty percent (50%)
         of the outstanding shares at December 31, 2001.


                                     - 42 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000



NOTE Q - LITIGATION AND CONTINGENCIES

         The Company is subject to various claims and legal proceedings covering
         a wide  range of  matters  that  arise in the  ordinary  course  of its
         business  activities.  Management  believes that any liability that may
         ultimately  result from the resolution of these matters will not have a
         material  adverse  effect on the  financial  condition  or  results  of
         operations  of  the  Company.  Listed  below  are  only  those  matters
         considered to be material to the Company by management and its counsel.

         CITICORP - During 2001 the Company  vacated  office  facilities  it had
         leased under an operating  lease  agreement in Chicago,  Illinois.  The
         lessor  subsequently  filed suit against the Company for the  remaining
         amount of unpaid rent and other various expenses.  A judgment was filed
         against the Company in the amount of $95,000.  As of December  31, 2001
         the Company has accrued for the liability in full on its Balance Sheet.
         No payments have been made.

         IRVINE - In February  2002,  the Company  vacated  office  space it had
         leased under an operating  lease agreement in Irvine,  California.  The
         lessor  subsequently filed a formal demand of payment for the remaining
         amount of unpaid rent. The Company entered into a settlement  agreement
         with the  lessor  subsequent  to  December  31,  2001 in the  amount of
         $75,000 less a security  deposit being held by lessor.  The Company has
         not paid this amount  according  to the terms of the  agreement  and is
         currently in default.  As of December 31, 2001 the Company has recorded
         the full  amount  of the  remaining  payments  due,  less the  security
         deposit,  due to the  default of the above  agreement.  This  amount is
         approximately $20,000.

         RUTTENBERG  - During  2001 a former  employee  of the  Company  filed a
         formal  demand for  payment of  remaining  salary  under an  employment
         agreement,  unreimbursed expenses and legal costs. In November 2001 the
         Company entered into a settlement agreement, which required a total sum
         of  $44,500,  be paid in $5,000  monthly  installments.  The Company is
         currently  in  default  under  this  agreement  and  has  appropriately
         recorded all original  amounts  demanded  under a  Stipulation  for the
         Entry of  Judgment  of  $92,000,  less  payments  that were made,  as a
         liability on the Balance Sheet as of December 31, 2001.

         CAPITAL LEASES - As of December 31, 2001, and subsequently, the Company
         has stopped making payments on all of its capital leases.  Thus,  under
         the  lease  agreements,   the  Company  is  in  default.  This  default
         accelerates  all future  payments due and gives the lessor the right to
         obtain the property.

         The Company is currently in  negotiations  with all lessors for revised
         terms  for the  remaining  life of the  leases.  As of this date no new
         terms have been finalized.  None of the lessors have filed formal suits
         or complaints with the court.  The Company has  appropriately  recorded
         all  amounts  due for the  remaining  life of the  leases  as a current
         liability on its Balance Sheet at December 31, 2001.


                                     - 43 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINTUED)
                           DECEMBER 31, 2001 AND 2000


NOTE Q - LITIGATION AND CONTINGENCIES (CONTINUED)

         ROYCAP - As of December 31, 2001 the Company was in default on its loan
         agreement  with Roycap for repayment of a $450,000  loan,  plus accrued
         interest,  which was due on October 16, 2001.  The Company is currently
         in  negotiations  with the lender on new loan  terms.  The  Company has
         shown  the  $450,000  loan in its  liabilities  as well as all  accrued
         interest. In addition, the Company has accrued registration rights fees
         of $108,000 related to this matter.

         ACCOUNTS  PAYABLE - The Company is  currently in arrears in payments to
         its vendors in the normal  course of business.  Management is currently
         working  on  negotiating  compromised  amounts  with all  vendors.  The
         Company has recorded as a liability on its Balance Sheet the full value
         of amounts owed to the vendors. When and if amounts are compromised,  a
         gain on forgiveness of debt will be recognized accordingly.


NOTE R - PAYROLL TAXES

         The  Company  is  currently  in  negotiations  with the  United  States
         Department of the Treasury,  Internal  Revenue Service (IRS) in regards
         to unpaid  employment  taxes. The IRS has made formal demand of amounts
         due and unpaid, including interest and penalties, from the Company, and
         has  appropriately  filed tax liens  against all assets of the Company.
         The Company entered into  installment  agreements with the IRS and made
         payments as required. The Company has hired independent  accountants to
         assist  them in this  matter and have filed a request for an "Offer and
         Compromise"  of all amounts owed by the  Company.  The IRS has recorded
         the request and halted all payment  requirements  under the installment
         agreements and any other  collection  activity until it has had time to
         review  the  matter.  As of the  date  of this  report  the IRS has not
         responded to the Company.

         The  Company  has always  recorded  its  liability  in full to the IRS,
         including penalties and interest, on its Balance Sheet. At December 31,
         2001 the approximate amounts owed by each Company is as follows:

                  Accesspoint                         $  328,000
                  PSI                                    674,000
                  BSG                                     38,000
                                                      ----------
                                                      $1,040,000

         The  Company  also  owes  unpaid  employment  taxes  to the  California
         Employment  Development  Department (EDD). The Company has entered into
         installment  agreements  with the EDD and has been making all  required
         payments.  The Company has always recorded in full, including penalties
         and  interest,  its  liability to the EDD as a liability on its Balance
         Sheet.  At December  31, 2001 the  remaining  amount owed to the EDD is
         approximately $51,000.


                                     - 44 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE S - SUBSEQUENT EVENTS

         BENTLEY - In March  2002,  a  shareholder,  former  Officer  and former
         Director  of the  Company  filed a suit  against  the Company and other
         various officers, directors and entities. The suit contains eleven (11)
         Causes  of Action  including:  Breach  of  Contract,  Misappropriation,
         Unfair  Competition,  Unfair Business Practices and the imposition of a
         Constructive Trust.

         The Plaintiff is seeking undetermined  compensatory damages and special
         and resulting damages all to be determined at trial.  Plaintiff is also
         seeking a temporary and permanent injunction on various matters.

         An Ex Parte  hearing was held on March 22, 2002 at which time the Judge
         did not grant the  temporary or permanent  injunctions  that were being
         sought and did not put a receiver in place as the plaintiff  requested.
         The parties have a hearing date set for April 18, 2002.

         At this time it is not possible to determine the outcome of the case or
         to quantify  possible  damages.  No amounts  have been  recorded in the
         financial  statements  regarding  this  matter.  The  Company  does not
         believe the causes have merit and intends to vigorously defend itself.

         DJOKOVICH - In February 2002, Tom Djokovich resigned as Chief Executive
         Officer of the Company,  effective  immediately.  Mr. Djokovich gave up
         his  employment  contract  (see  Commitments  Note F),  signed a mutual
         release and relieved the Company from a payment of $267,000 in deferred
         compensation and a related Promissory Note and Security Agreement.

         Mr.  Djokovich  also  resigned as Chairman of the Board of Directors in
         March 2002.

         URCUYO - In January  2002 Alfred  Urcuyo  resigned as President of PSI,
         effective immediately.  Mr. Urcuyo gave up his employment contract (see
         Commitments  Note F) and  released  the Company from paying any amounts
         owed to him for  unreimbursed  expenses.  Mr.  Urcuyo  signed  a Mutual
         Release.

         MULDER - In 2002,  a former  employee of the Company  filed a claim for
         payment of credit card debt he incurred on behalf of the Company to pay
         expenses and various  loans he states were made to the  Company.  These
         items  amount to  approximately  $65,000.  The Company is  currently in
         negotiations  with Mr.  Mulder but has  accrued as a  liability  on its
         Balance Sheet at December 31, 2001 the full amount of $65,000.

         PARISH - In 2002 a former  Consultant  of the Company has filed a claim
         stating  that he is owed  33,336  shares  of common  stock  and  20,000
         options  to  purchase  shares  of  common  stock at $5 per  share,  for
         services  rendered  under a  contract  (see  Commitments  Note F).  The
         Company  does not believe  that this claim is valid under the  contract
         terms and intends to defend itself in this matter. No amounts have been
         accrued.


                                     - 45 -


<PAGE>


                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                           DECEMBER 31, 2001 AND 2000


NOTE S - SUBSEQUENT EVENTS (CONTINUED)

         VERVE - In 2002,  a  shareholder  of the Company  submitted a letter of
         demand to recover their original investment of $40,000. No amounts have
         been  accrued for this item,  the Company does not intend to return the
         amount invested.

         MERCHANTWAREHOUSE.COM  - In 2002, the Company  terminated a firm as one
         of its agents.  The firm  subsequently  filed a formal demand  claiming
         improper  termination  of agency  agreement,  but has not specified any
         damage  claim at this time.  The Company has not had time to respond to
         the demand,  however,  it does not believe  that  allegations  have any
         merit.  It is not possible at this time to determine the outcome of the
         case or the possible  loss due to the  unspecified  demand.  No amounts
         have been accrued in this matter.

         SALE OF FIXED ASSETS - In March 2002 the Company sold various furniture
         and fixtures from its Irvine  facility  after  closing the office.  The
         majority of Fixed Assets were transferred to other Company  facilities,
         however there were some remaining items that were sold for $3,000.  The
         loss on the sale is  immaterial  to the Company as most assets had been
         depreciated in value.


NOTE T - GOING CONCERN

         The Company has suffered recurring losses, cash deficiencies,  loan and
         capital  lease  defaults,  and  current  liabilities  far in  excess of
         current  assets.  These  issues  raise  substantial  concern  about its
         ability to continue as a going concern.

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

         The Company has made  substantial  investments  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 and
         cash deficiencies.

         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.


                                     - 46 -


<PAGE>


                             ACCESSPOINT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE T - GOING CONCERN (CONTINUED)

         Prior to achieving this goal in November  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.  As of December 31, 2001,
         the Company generates revenues through the aforementioned services.

         In December 2001, the Company  entered into a Management  Agreement and
         related  Revolving  Line of  Credit  Agreement  (See  Note P) for up to
         $5,000,000.  Hence,  subsequent  to December 31, 2001,  the Company has
         significantly reduced its overhead by closing two office facilities and
         consolidating  administrative  and  sales  efforts.  In  addition,  the
         Company is currently renegotiating its lease commitments, notes payable
         and  accounts  payable to further  reduce its current  liabilities  and
         improve its cash flow.


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,  2001.  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,  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.


                                     - 47 -


<PAGE>


                         DIRECTORS & EXECUTIVE OFFICERS


      NAME              AGE                     POSITION


Tom M. Djokovich         44     Chairman of the Board of Directors, Chief
                                Executive Officer, Secretary

Alfred Urcuyo            38     Chief Executive Officer, PSI & Office of the
                                President and Director, Accesspoint Corporation

Bas Mulder               46     Chief Executive Officer, BSG & Vice President of
                                Graphic & HTML Technologies, Accesspoint
                                Corporation


                            KEY MANAGEMENT PERSONNEL


      NAME              AGE                     POSITION

Eric Odegard             32     Senior Vice President of Business Development

Dave Vargha              39     Vice President of Business Development

Walter Burch             47     Vice President of Operations

Kyle Waltz               28     Vice President of Software Engineering

Richard B. Anderson      32     Controller

Travis Williams          33     Director of Customer Care


     B. BACKGROUND AND EXPERIENCE - DIRECTORS AND EXECUTIVE OFFICERS

     TOM M. DJOKOVICH, CHAIRMAN AND CEO

     Tom  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 previously  served as a Director
of the Company. Mr. Djokovich was elected to the Board of Directors on March 19,
1999.  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.

     ALFRED URCUYO, OFFICE OF THE PRESIDENT AND DIRECTOR

     Alfred Urcuyo was elected to the Board of Directors on March 19, 1999.  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


                                     - 48 -


<PAGE>

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 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, VICE PRESIDENT OF GRAPHICS & HTML TECHNOLOGIES

     Bas Mulder  serves as Vice  President of Graphics & HTML  Technologies  for
Accesspoint  and as  CEO/President  of Black  Sun  Graphics.  Mr.  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.

     C. BACKGROUND AND EXPERIENCE - KEY MANAGEMENT

     ERIC ODEGARD, SENIOR VICE PRESIDENT OF BUSINESS DEVELOPMENT

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

     DAVE VARGHA, VICE PRESIDENT OF BUSINESS DEVELOPMENT

     Dave  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


                                     - 49 -



<PAGE>


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 joined 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 OF SOFTWARE ENGINEERING

     Kyle 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, CONTROLLER

     Richard  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, DIRECTOR OF CUSTOMER CARE

     Travis  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.

     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, 2001, all
of our officers,  directors and greater-than-ten  percent stockholders  complied
with all Section 16(a) filing requirements.


                                     - 50 -


<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, 2001, by its Chief  Executive
Officer and other covered persons:

<TABLE>
<CAPTION>


                           SUMMARY COMPENSATION TABLE

                                            Annual Compensation                    Long-Term Compensation
                                      _______________________________  _______________________________________________
                                                                                Awards            Payouts
                                                                       ________________________   _______
                                                                                     Securities
                                                                       Restricted      Under-                 All Other
                                                                        Stock          lying        LTIP      compen-
    Name and Principal                 Salary      Bonus       Other   Award(s)       Options      Payouts    sation
        Position            Year        ($)         ($)        ($)         ($)         ($)          ($)
           (a)               (b)        (c)         (d)        (e)         (f)         (g)         (h)        (i)
______________________________________________________________________________________________________________________
<S>                        <C>        <C>          <C>         <C>             <C>           <C>    <C>       <C>

Tom M. Djokovich, CEO &    2001 (4)   $ 143,032    $     0     $    0          0             0      $   0     $     0
Chairman of the Board of
Directors
______________________________________________________________________________________________________________________
                           2000 (5)     150,000     50,000          0          0             0          0           0
______________________________________________________________________________________________________________________
                           1999 (6)     150,000     50,000     55,153          0     1,932,693          0           0
______________________________________________________________________________________________________________________
James W. Bentley,          2001               0          0          0          0             0          0           0
former President and
Director (7)
______________________________________________________________________________________________________________________
                           2000               0          0          0          0             0          0           0
______________________________________________________________________________________________________________________
                           1999               0          0          0          0             0          0           0
______________________________________________________________________________________________________________________
Alfred Urcuyo,             2001         152,251          0          0          0     2,000,000          0           0
Office of the President
______________________________________________________________________________________________________________________
                           2000         134,484          0          0          0        32,051          0           0
______________________________________________________________________________________________________________________
                           1999         128,881          0          0          0     1,424,530 (8)      0           0
______________________________________________________________________________________________________________________
Bas Mulder,                2001          76,656          0          0          0             0          0           0
Vice President of
Graphics & HTML
Technologies
______________________________________________________________________________________________________________________
                           2000          53,942      2,032          0          0         3,400          0           0
______________________________________________________________________________________________________________________
                           1999               0          0          0          0             0          0           0
______________________________________________________________________________________________________________________
David Vargha,              2001          37,501          0          0          0             0          0           0
Vice President of
Business Development
______________________________________________________________________________________________________________________
                           2000         105,840          0          0          0             0          0           0
______________________________________________________________________________________________________________________
                           1999         104,443          0          0    157,500       315,000          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, former President and Director of the Company,  did not have
an  Employment  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 the 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>


                                     - 51 -


<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
November  12, 2001.  The term of the  Agreement is for a period of two (2) years
and commenced on the date of execution  and continues to and including  November
13, 2003. 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 the Company's
Common  Stock per year  during the term of the  Agreement,  at the  then-current
market price,  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 and shall  carry
the same  registration  rights  granted to members  of our  Company's  executive
management  team.  As of December 31, 2001,  Mr.  Djokovich has elected to defer
such granting of additional  options to purchase shares of our Company's  common
stock.

     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.

     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,  2001,  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.


                                     - 52 -


<PAGE>


     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         Employees in   Exercise Price       Market        Expiration
                                      Granted (#)     Fiscal Year        ($/Sh)        Price ($/Sh)        Date
               (a)                        (b)              (c)              (d)             (e)            (f)
_______________________________________________________________________________________________________________________
<S>                                            <C>         <C>            <C>             <C>               <C>

Tom M. Djokovich, CEO, Chairman
of Board of Directors                          0           0.0 %          0.00            0.00              N/A
_______________________________________________________________________________________________________________________
James W. Bentley, former
President & Director                           0           0.0 %          0.00            0.00              N/A
_______________________________________________________________________________________________________________________
Alfred Urcuyo, Office of the
President                                      0           0.0 %          0.00            0.00              N/A
_______________________________________________________________________________________________________________________
Bas Mulder, Vice President of
Graphic & HTML Design                          0           0.0 %          0.00            0.00              N/A
_______________________________________________________________________________________________________________________
David Vargha, Vice President of
Business Development                      25,000          18.0 %          1.00            1.00         2/6/2006
_______________________________________________________________________________________________________________________

</TABLE>


                                     - 53 -


<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 2001:

<TABLE>
<CAPTION>


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

_____________________________________________________________________________________________________________________
                                                          Number of Securities
                           Shares                         Underlying Unexercised        Value of unexercised In-the-
                           Acquired                       Options at FY-End             Money Options at FY-End
                           on             Value           (#)                           ($) (9)
                           Exercise       Realized     ____________________________     ____________________________
          Name                 (#)        ($)          Exercisable    Unexercisable     Exercisable    Unexercisable
_____________________________________________________________________________________________________________________
           (a)                 (b)         (c)                    (d)                               (e)
_____________________________________________________________________________________________________________________
<S>                                 <C>   <C>              <C>                    <C>    <C>              <C>

Tom M. Djokovich, CEO,            0      $  0.00          231,100              0        $  203,830       $   0.00
Chairman of Board of
Directors                         0         0.00        1,776,445              0         1,605,906           0.00
_____________________________________________________________________________________________________________________
                                  0         0.00          138,660              0           128,261           0.00
                                  0         0.00          277,320              0           250,697           0.00
                                  0         0.00          115,550              0            86,431           0.00
James W. Bentley,                 0         0.00          154,065              0           135,885           0.00
former President,                 0         0.00          154,065              0           135,885           0.00
Director                          0         0.00          154,065              0           135,885           0.00
_____________________________________________________________________________________________________________________
                                  0         0.00            4,583            417              0.00           0.00
Alfred Urcuyo, Office             0         0.00           19,530              0              0.00           0.00
of the President                  0         0.00           32,051              0              0.00           0.00
_____________________________________________________________________________________________________________________
Bas Mulder, Vice
President of Graphic &
HTML Design                       0         0.00            1,794          1,506              0.00           0.00
_____________________________________________________________________________________________________________________
David Vargha, Vice                0         0.00           25,000              0             6,250           0.00
President of Business
Development
_____________________________________________________________________________________________________________________


<FN>

__________________

9  Based on the closing stock price of $1.25 at December  31, 2001. * A director
and/or executive officer of the Company as of December 31, 2001

</FN>
</TABLE>

                                     - 54 -


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

Tom M. Djokovich, CEO and Chairman              0           N/A            N/A             N/A              N/A
of the Board of Directors
________________________________________________________________________________________________________________
James W. Bentley, President,                    0           N/A            N/A             N/A              N/A
Director
________________________________________________________________________________________________________________
Alfred Urcuyo, Office of the                    0           N/A            N/A             N/A              N/A
President
________________________________________________________________________________________________________________
Bas Mulder, Vice President of                   0           N/A            N/A             N/A              N/A
Graphic & HTML Design
________________________________________________________________________________________________________________
David Vargha, Vice President of                0           N/A            N/A             N/A              N/A
Business Development
________________________________________________________________________________________________________________

</TABLE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain  information as of December 31, 2001
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 23,375,208 shares
of common stock issued and outstanding on December 31, 2001.


                                     - 55 -


<PAGE>

<TABLE>
<CAPTION>

_________________________________________________________________________________________________________________
                                                                                      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>

Common             Net Integrated Systems,        Sofia House                      4,486,79511            19.2 %
                   Ltd.10                         48 Church Street
                                                  Hamilton HM GX, Bermuda
_________________________________________________________________________________________________________________
                                                  23332 Vista Carillo
Common             *Tom M. Djokovich12            Laguna Niguel, CA 92677          5,834,37813            25.0 %
_________________________________________________________________________________________________________________
Common             (James W.) Bentley Family      26482 Valpariso                  3,482,22615            14.9 %
                   Trust, dated June 20, 1995 &   Mission Viejo, CA 92691
                   Bentley Family Trust "C"14
_________________________________________________________________________________________________________________
Common             *Alfred Urcuyo16               22729 Baltar St.                 1,911,80117             8.2 %
                                                  West Hills, CA 91304
_________________________________________________________________________________________________________________
Common             *Bas Mulder                    30401 Via Alcazar                   45,40018             0.2 %
                                                  Laguna Niguel, CA 92677
_________________________________________________________________________________________________________________
                                                  447 Appleton Rd.
Common             *David Vargha                  Simi Valley, CA 93065               55,00019             0.2 %
_________________________________________________________________________________________________________________
Common             All Directors & Executive                                         7,846,579            33.6 %
                   Officers as a group
_________________________________________________________________________________________________________________

<FN>
__________________

* A director and/or executive officer of the Company as of December 31, 2001

10 Net Integrated  Systems,  Ltd. acquired its shares as a result of a series of
transactions  and agreements  consummated  on or about December 14, 2001,  which
transactions  are  described in detail in the Company's  Current  Report on Form
8-K, filed on January 14, 2002, and incorporated herein by reference.

11 Includes  the right to  acquire  within 60 days  7,131,418  shares of common
voting stock from options,  warrants,  rights,  conversion privileges or similar
obligations.  (See Exhibits 10.38 and 10.39,  incorporated herein by reference).
Upon  exercise of such  options,  NIS would  beneficially  own an  aggregate  of
11,618,213 shares of Accesspoint common stock.

12 Owned in conjunction with Tamara A. Djokovich and Milan Djokovich.

13  Includes  the right to  acquire  within 60 days  2,035,277  shares of common
voting stock from options,  warrants,  rights,  conversion privileges or similar
obligations.

14 Benefiting James W. Bentley and Mary Ann Bentley and family.

15  Includes  the right to  acquire  within 60 days  1,277,725  shares of common
voting stock from options,  warrants,  rights,  conversion privileges or similar
obligations.

16 Alfred Urcuyo is a Director of  Accesspoint  and Chief  Executive  Officer of
Processing Source International, Inc., a wholly-owned subsidiary of the Company.

17 Includes the right to acquire  within 60 days 56,581  shares of common voting
stock  from  options,   warrants,   rights,  conversion  privileges  or  similar
obligations.

18 Includes the right to acquire  within 60 days 3,400  shares of common  voting
stock  from  options,   warrants,   rights,  conversion  privileges  or  similar
obligations.

19 Includes the right to acquire  within 60 days 25,000  shares of common voting
stock  from  options,   warrants,   rights,  conversion  privileges  or  similar
obligations.

</FN>
</TABLE>


                                     - 56 -


<PAGE>


     A. OUTSTANDING OPTIONS

     As of December 31, 2001, we had granted a total of 3,639,000  options under
our 1999 Plan, of which  3,629,000 are  outstanding  as of December 31, 2001. Of
the options issued, 9,375 non-qualified  options and 3,629,625 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  240,000
qualified  options  and  1,772,000  warrants  to  consultants  and  non-employee
Directors.  Of the 3,639,000  options  issues,  10,000 options were exercised by
employees.

     B. COMPENSATION OF DIRECTORS

     At December 31, 2001, we provided  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 and James W. Bentley were  Directors of our
Company who were also officers and employees of our Company.

     C. DESCRIPTION OF SECURITIES

     Our Company's  authorized capital stock as of December 31, 2001 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 23,375,208 Common Shares issued and outstanding as of December
31, 2001.  There were 1,055,600 shares of Preferred Stock issued and outstanding
as of December 31, 2001.

     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


                                     - 57 -


<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.


                                     - 58 -


<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 Note calls for the Company to pay Mr. Bentley the sum of approximately
$1,610  per month  until  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, 2001.  The loan
proceeds were used for working capital.

     On October 2, 2000 the  Bentley  Trust "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, 2001.  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, 2001. The loan proceeds were used for working capital.

     Between May 2, 2001 and November 16,  2001,  the Bentley  Family 1995 Trust
loaned  Accesspoint  Corporation  the cumulative  sum of $119,000.  The straight
notes are due one year from  issuance.  The straight  notes all bear interest at
the rate of 8% per annum. No interest has been paid as of December 31, 2001. The
loan proceeds were used for working capital.

     On December 14, 2001 the Company  entered into several  agreements with Net
Integrated  Systems,  Ltd.  (NIS)  in  conjunction  with a Five  Million  Dollar
($5,000,000)  Secured Revolving Line of Credit. As partial inducement for NIS to
enter into the agreements  three  shareholders  agreed to transfer  ownership of
4,486,795 shares of common stock  collectively owned by them to NIS. In addition
to the share ownership transfer,  the same three shareholders  granted an option
to NIS to purchase an additional  7,131,418 shares of common stock  collectively
owned by them at $2 per share until  December 14, 2006.  An  irrevocable  voting
proxy was  given to NIS from the  three  shareholders  on the  7,131,418  shares
collectively owned by them. The shareholders retain the right to vote on certain
matters including,  but not limited to, liquidation of the Company,  bankruptcy,
merger,  reorganizations  and disposition of Company  assets.  The Proxy extends
until the end of all other agreements.  As further  collateral for the Revolving
Line  of  Credit  certain   shareholders  agreed  to  Pledge  7,131,418  shares,
collectively owned by them, for the Secured Loan Agreement.

     The  Company  also  entered  into a  Revolving  Line of Credit and  related
Secured  Loan  Agreement  with NIS  which  calls for the  lender to make  credit
extension advances when requested by the Company and its Board of Directors. The
terms of the  Agreement  are for credit  advances  not to exceed the  cumulative
total principal sum of Five Million Dollars  ($5,000,000) at an interest rate of
six percent  (6%) per annum on the unpaid  balance.  The note  requires  minimum
monthly  payments of interest  only and is due on December 14, 2006. At December
31, 2001 no advances had been requested under this Agreement.  All assets of the
Company and the  7,131,418  shares of common stock of the Company  pledged under
the above Pledge Agreement secure the Revolving Line of Credit.

     In  connection  with  the  above  agreements  the  Company  entered  into a
Management  Agreement  with NIS to assist in the  day-to-day  operations  of the
business.  This  includes,  but  is  not  limited  to,  hiring  and  terminating
personnel,  enter into,  modify or terminate  agreements and  contracts,  manage
Company  finances,  compromise  debts and  obligations,  acquire assets and make
investments.  However,  the Board of  Directors  retain all  rights to  approve,
disapprove  and  oversee  the  activities  of  the  Manager.  The  terms  of the
Management Agreement are for a monthly fee of $10,000,  which accrues until paid
from  current  operating  profits.  The  period is for five  years,  with  early
termination  by the  manager  upon  ten  days  written  notice  for any  reason.
Termination  by the  Company for any reason  other than cause shall  require all
accrued  and  unpaid  sums to become  due and  payable as well as the sum of One
Million Dollars ($1,000,000).


                                     - 59 -


<PAGE>


     After the effect of the above transactions NIS beneficially owns 11,618,213
shares of common stock, or approximately  fifty percent (50%) of the outstanding
shares at December 31, 2001.



                                     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.

     Exhibit No.  Description
     -----------  -----------

       9.0        **Form of Irrevocable Voting Proxy in favor of Net Integrated
                  Systems, Ltd.
     10.37        **Form of Stock Transfer Letter between shareholder and Net
                  Integrated Systems, Ltd.
     10.38        **Form of Stock Option Agreement between shareholder and Net
                  Integrated Systems, Ltd.
     10.39        **Form of First Amendment to Stock Option Agreement between
                  shareholder and Net Integrated Systems, Ltd.
     10.40        **Form of Stock Pledge Agreement between shareholder and Net
                  Integrated Systems, Ltd.
     10.41        **Management Agreement between Accesspoint Corporation,
                  Processing Source International, Inc. and Net Integrated
                  Systems, Ltd.
     10.42        **Revolving Line of Credit Agreement
     10.43        **Secured Loan Agreement
     21.00        *List of Subsidiaries
     23.00        Consent of Independent Certified Public Accountants


     *   Incorporated by reference from the exhibit to the Current Report on
         Form 8-K filed by us on January 14, 2002
     **  Incorporated by reference form the exhibit to the Annual Report on Form
         10-KSB filed by us on April 16, 2001


     B.  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed in the fourth quarter of 2001.


                                     - 60 -


<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Los Angeles, State
of California, on the 15th day of April, 2002.


Dated:  April 15, 2002                    ACCESSPOINT ORPORATION


                                          By:  /s/ MARCIA ALLEN
                                          ----------------------------
                                          Marcia Allen,
                                          President and Director


                                          By:  /s/ CHRISTINE CROCKER
                                          ----------------------------
                                          Christine Crocker,
                                          Secretary 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/ MARCIA ALLEN           President & Director      April 15, 2002
----------------------
Marcia Allen


/s/ CHRISTINE CROCKER      Secretary & Director      April 15, 2002
----------------------
Christine Crocker


/s/ MICHAEL SAVAGE         Director                  April 15, 2002
----------------------
Michael Savage


                                     - 61 -