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

                                  FORM 10-KSB/A


                                 AMENDMENT NO. 1

                                       TO

                                   (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 Incorporation   (I.R.S. Employer Identification
           or Organization)                                No.)


            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

                                      -1-

<PAGE>

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 [ ]

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]




                                EXPLANATORY NOTE


This Annual Report on Form 10-KSB/A ("Form 10-KSB/A") is being filed as
Amendment No. 1 to the Registrant's Annual Report on Form 10-KSB filed with the
Securities and Exchange Commission on April 16, 2002 ("Form 10-KSB") for the
purpose of amending Items 6 and 7 of Part II of Registrant's Form 10-KSB. We
have no further changes to the previously filed Form 10-KSB. All information in
this Form 10-KSB/A is as of December 31, 2001, and does not reflect, unless
otherwise noted, any subsequent information or events other than the changes
mentioned above.




                             Accesspoint Corporation
                        AMENDED Form 10-KSB ANNUAL Report
                 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2001
                                TABLE OF CONTENTS


Forward-Looking Statements


PART II

Item 6.   Management's Discussion and Analysis of Financial Condition and
         Results of Operations or Plan of Operation
Item 7.   Financial Statements


Signatures

                                      -2-

<PAGE>


                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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



                                     PART II

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.

                                      -3-

<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...........................                    5,079,324                        5,848,805
Profit (loss) from operations .......................                   (3,071,475)                      (4,173,512)
Other expense, net ..................................                      832,587                        1,045,336
Extraordinary expense................................                            0                                0
Income taxes paid....................................                        2,400                            2,400
                                                         --------------------------      ---------------------------
Net income (loss)....................................           $       (3,906,462)             $        (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

<CAPTION>
                         CONSOLIDATED BALANCE SHEET (2)
                         --------------------------

                                                                           YEARS ENDED DECEMBER 31,
                                                          -----------------------------------------------------------
                                                                    2001                             2000
                                                                    ----                             ----
<S>                                                             <C>                             <C>
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.........................................                    6,581,025                          413,796
                                                          --------------------------       --------------------------
  Total assets.......................................                     7,336,985                        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...........................                   14,418,900                        5,390,011
Retained earnings (deficit)..........................                  (11,738,947)                      (7,832,485)
                                                          --------------------------       --------------------------
  Total shareholders' equity (deficit)...............                    2,704,384                       (2,425,916)
                                                          ==========================       ==========================
  Total liabilities and stockholders' equity.........           $        7,336,985              $         1,410,563
                                                          ==========================       ==========================
</TABLE>

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.

                                      -4-

<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 $(11,738,947). 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 $5,079,324 from $5,848,805 for the year ended December 31, 2000.
The decrease of $769,481, or 13.16% 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
$(3,906,462) and $(5,221,248), respectively. The decrease in loss of $1,314,786
or 25.18% was primarily related to increased revenues and a reduction of
development related activities.

                                      -5-

<PAGE>

     D.  Liquidity and Capital Resources

     Cash and cash equivalents at December 31, 2001 were $78,229, compared to
$31,954 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.

                                      -6-

<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


                                      -7-
<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.

As discussed in Note S to the financial statements, the Company's 2001 deferred
financing costs should have been $6,326,381. This discovery was made subsequent
to the issuance of the financial statements. The financial statements have been
restated to reflect this correction.




April 4, 2002, except for Note S, as to which the date is July 10, 2002.
Los Angeles, California

                                      -8-

<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
         Deferred financing costs (net)                                                 6,288,967                     0
         Deposits                                                                         292,058               413,796
                                                                            ---------------------- ---------------------

                 Total Other Assets                                                     6,581,025               413,796
                                                                            ---------------------- ---------------------

         Total Assets                                                                  $7,336,985            $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

                                      -9-

<PAGE>
<CAPTION>

<S>                                                                                  <C>                    <C>
         Current portion, notes payable                                                 1,111,500               992,500
                                                                            ---------------------- ---------------------

         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                                                    14,418,900             5,390,011
         Retained deficit                                                            (11,738,947)           (7,832,485)
                                                                            ---------------------- ---------------------

         Total Stockholders' Equity                                                     2,704,384           (2,425,916)
                                                                            ---------------------- ---------------------

         Total Liabilities and Stockholders' Equity                                    $7,336,985            $1,410,563
                                                                            ====================== =====================

</TABLE>

                                      -10-
<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                                        5,079,324                      5,848,805
                                                           --------------------------   ----------------------------

         Income (loss) from operations                                    (3,071,475)                    (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                                (3,904,062)                    (5,218,848)

Provision for income taxes                                                     2,400                          2,400
                                                           --------------------------   ----------------------------

         Net income (loss)                                               ($3,906,462)                   ($5,221,248)
                                                           ==========================   ============================


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

                                      -11-

<PAGE>
<CAPTION>
<S>                                                                      <C>                            <C>
              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>

                                      -12-


<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)                                                    ($3,906,462)               ($5,221,248)

Adjustments to reconcile net loss to net cash
used in operating activities:
            Amortization                                                              37,414                        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                                                      1,796,015                  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)
                                                                  ------------------------------------------------------

                                      -13-

<PAGE>
<CAPTION>
<S>                                                                              <C>                        <C>
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                            31,954                     54,348
                                                                  ------------------------------------------------------

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


</TABLE>

                                      -14-

<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
                                                             ----------------------------- --------------------------

       Common stock transfer (see note S)                                      $6,326,381                         $0
                                                             ----------------------------- --------------------------
</TABLE>

                                      -15-


<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)                                          (3,906,462)                    (5,221,248)
                                                       ----------------------------    ---------------------------

             Balance at end of year                                    (11,738,947)                    (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
             Transfer of common stock (see note S)                       6,326,381                              0
                                                       ----------------------------    ---------------------------

             Balance at end of year                                     14,418,900                      5,390,011
                                                       ----------------------------    ---------------------------

Total stockholders' equity at end of year                             ($2,704,384)                   ($2,425,916)
                                                       ============================    ===========================

</TABLE>

                                      -16-

<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.

                                      -17-

<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.

                                      -18-

<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.

                                      -19-

<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.

                                      -20-

<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.

                                      -21-

<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.


                                      -22-

<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.

                                      -23-

<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.

                                      -24-

<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.

                                      -25-

<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:

<TABLE>
<CAPTION>

                                                                  2001              2000
                                                                  ----              ----
         <S>                                                  <C>               <C>
         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)
</TABLE>


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:

                                      -26-

<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>                       <C>
         $0.32-0.37                  3,056,000                2.2 years                 $   0.35
         $0.43-0.88                    315,000                2.1 years                 $   0.35
         $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                 $   0.57
                                    ----------                ---------                 --------
</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                 $    .35
         $0.43-0.88                    291,000                 $    .35
         $3.12-5.56                    139,000                 $   4.20
                                    ----------                 --------
                                     3,486,000                 $    .50
                                    ----------                 --------

                                      -27-

<PAGE>



                             ACCESSPOINT CORPORATION
             NOTES TO CONSOLIDALTED 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.

                                      -28-

<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:
<TABLE>
<CAPTION>

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

         <S>                                                           <C>              <C>
         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
                                                                       ---------        ---------
</TABLE>

                                      -29-
<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 ABSENCES

         Employees can earn annual vacation leave at the rate of five (5) days
         per year for the first year. Upon completion of the first year of
         employment, employees can earn annual vacation leave at the rate of ten
         (10) days per year for years two through seven. Upon completion of the
         eighth year of employment, employees can earn annual vacation leave at
         the rate of fifteen (15) days per year. At termination, employees are
         paid for any accumulated annual vacation leave. As of December 31, 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.

                                      -30-

<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 20, 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.

                                      -31-

<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.

                                      -32-

<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.

                                      -33-

<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.

                                      -34-

<PAGE>


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


NOTE S - DEFERRED FINANCING COSTS

         In accordance with APB 21 and SAB 79 the Company has recorded a
         deferred financing cost asset of $6,326,381. This amount is based on
         the number of shares that three shareholders directly transferred to
         Net Integrated Systems Ltd. (NIS) as an inducement for NIS to enter
         into the Revolving Line of Credit Agreement (see note P).

         This amount is calculated by multiplying the 4,486,795 shares
         transferred by $1.41 per share. The share price represents the closing
         market value of the Company's stock on December 20, 2001 reduced by a
         ten percent (10%) discount due to the Rule 144 stock restrictions on
         these shares.

         The entry to record this transaction is to debit the deferred financing
         cost asset and to credit additional paid in capital. The Company will
         amortize the deferred financing cost over the life of the line of
         credit, which is five years. For the year ended December 31, 2001 the
         Company recorded amortization expense of $37,414.


NOTE T - 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.

                                      -35-

<PAGE>


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


NOTE T - SUBSEQUENT EVENTS (CONTINUED)

         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.

         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, as 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 U - 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:

                                      -36-

<PAGE>



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


NOTE U - GOING CONCERN (CONTINUED)

         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.

         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.


                                      -37-
<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 18th day of July, 2002.


Dated:  July 18, 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       July 18, 2002
----------------------
Marcia Allen


/s/ Christine Crocker             Secretary & Director       July 18, 2002
----------------------
Christine Crocker

                                      -38-