Document:

CYPOST CORP.
                       2001 CONSULTANTS STOCK OPTION PLAN

SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
------------------------------------------------

     The name of this plan is the CyPost Corp. 2001 Consultants Stock Plan (the
"Plan"). The Plan was adopted by the Board on November 15, 2001 and amended on
December 1, 2001. The purpose of the Plan is to enable the company to attract
and retain highly qualified personnel who will contribute to the Company's
success by their ability, ingenuity and industry and to provide incentives to
the participating officers, employees, directors, and advisors that are linked
directly to increases in stockholder value and will therefore inure to the
benefit of all stockholders of the Company.

     For purposes of the Plan, the following terms shall be defined as set forth
below:

     "Act" means Securities Exchange Act of 1934, as amended.

     "Administrator" means the Board, or if the Board does not administer the
Plan, the Committee in accordance with Section 2.

     "Board" means the Board of Directors of the Company.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.

     "Committee" means the Committee of the Board designated from time to time
by the Board to be the Administrator.

     "Commission" means Securities and Exchange Commission.

     "Company" means CyPost Corp., a Delaware corporation (or any successor
corporation).

     "Disability" means the inability of a Participant to perform substantially
his duties and responsibilities to the Company by reason of a physical or mental
disability or infirmity (i) for a continuous period of six months, or (ii) at
such earlier time as the Participant submits medical evidence satisfactory to
the Company that he has a physical or mental disability or infirmity which will
likely prevent him from returning to the performance of his work duties for six
months or longer. The date of such Disability shall be on the last day of such
six-month period or the day on which the Participant submits such satisfactory
medical evidence, as the case may be.

     "Effective Date" shall mean the date provided pursuant to Section 9.

     "Eligible Employee" means an employee of the Company eligible to
participate in the Plan pursuant to Section 4.

<PAGE>
     "Fair Market Value" means, as of any given date, with respect to any awards
granted hereunder, at the discretion of the Administrator and subject to such
limitations as the Administrator may impose, (A) if the Stock is publicly
traded, the closing sale price of the Stock on such date as reported in the Wall
Street Journal, or the average of the closing price of the Stock on each day on
which the Stock was traded over a period-of up to twenty trading days
immediately prior to such date, (B) the fair market value of the Stock as
determined in accordance with a method prescribed in the agreement evidencing
any award hereunder, or (C) the fair market value of the Stock as otherwise
determined by the Administrator in the good faith exercise of its discretion.

     "Incentive Stock Option" or "ISO" means any Stock Option intended to be
designated as an "incentive stock option" within the meaning of Section 422 of
the Code (and any successor provision of the Code having a similar intent).

     "Non-Qualified Stock Option" or "NQSO" means any Stock Option that is not
an Incentive Stock Option, including any Stock Option that provides (as of the
time such option is granted) that it will not be treated as an Incentive Stock
Option.

     "Parent Corporation" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.

     "Participant" means any Eligible Employee, consultant or advisor to the
Company selected by the Administrator, pursuant to the Administrator's authority
in Section 2 below, to receive grants of Stock Options.

     "Stock" means the Common Stock, $0.00l par value, of the Company.

     "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5.

     "Subsidiary" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, if each of the corporations
(other than the last corporation) in the unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.

SECTION 2.  ADMINISTRATION
--------------------------

     The Plan shall be administered by the Board or by the Committee which shall
be appointed by the Board and which shall serve at the pleasure of the Board.

<PAGE>
     The Administrator shall have the power and authority to grant Stock Options
to Eligible Employees, consultants and advisors to the Company, pursuant to the
terms of the Plan.

     In particular, the Administrator shall have the authority:

     (a)  to select those employees of the Company who shall be Eligible
Employees;

     (b)  to determine whether and to what extent Stock Options are to be
granted hereunder to Eligible Employees, consultants and advisors to the
Company;

     (c)  to determine the number of shares to be covered by each Stock Option
granted hereunder;

     (d)  to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Stock Option granted hereunder; and

     (e)  to determine the terms and conditions, not inconsistent with the terms
of the Plan, which shall govern all written instruments evidencing the Stock
Options.

     The Administrator shall have the authority, in its discretion, to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable; to interpret the terms
and provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
the Plan.

     All decisions made by the Administrator pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and the
Participants.

SECTION 3. STOCK SUBJECT TO PLAN.
---------------------------------

     The total number of shares of Stock reserved and available for issuance
under the Plan (and the total number of shares that may be granted as ISO's)
shall be 2,000,000 shares of Stock. Such shares may consist, in whole or in
part, of authorized and unissued shares or treasury shares.

     To the extent that a Stock Option expires or is otherwise terminated
without being exercised, such shares shall again be available for issuance in
connection with future awards under the Plan.  If any shares of Stock have been
pledged as collateral for indebtedness incurred by a Participant in connection
with the exercise of a Stock Option and such shares are returned to the Company
in satisfaction of such indebtedness, such shares shall again be available for
issuance in connection with future awards under the Plan.  To the extent that a
Participant is eligible to use, and uses, shares of Stock to exercise a Stock
Option, the number of Shares of Stock so used shall be available for issuance in
connection with future awards under the Plan.

<PAGE>
     In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure
affecting the Stock, an appropriate substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan as may be
determined by the Administrator, in its sole discretion.  Any other
substitutions or adjustments shall be made as may be determined by the
Administrator, in its sole discretion.  In connection with any event described
in this paragraph, the Administrator may provide, in its discretion, for the
cancellation of any outstanding awards and payment in cash or other property
therefor.

SECTION 4. ELIGIBILITY.
-----------------------

     Officers (including officers who are directors of the Company), directors,
employees of the Company, and advisors to the Company who are responsible for or
contribute to the management, growth and/or profitability of the business of the
Company shall be eligible to be granted Stock Options. The Participants under
the Plan shall be selected from time to time by the Administrator, in its sole
discretion, from among the Eligible Employees, consultants and advisors to the
Company recommended by the senior management of the Company, and the
Administrator shall determine, in its sole discretion, the number of shares
covered by each award.

SECTION 5. STOCK OPTIONS.
-------------------------

     Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve, and the provisions of Stock Option
awards need not be the same with respect to each optionee. Recipients of Stock
Options shall enter into a subscription and/or award agreement with the Company,
in such form as the Administrator shall determine which agreement shall set
forth, among other things, the exercise price of the option, the term of the
option and provisions regarding exercisability of the option granted thereunder.

     The Stock Options granted under the Plan may be of two types:  (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.

     The Administrator shall have the authority to grant any Eligible Employee
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options.  Consultants and advisors may only be granted Non-Qualified Stock
Options.  To the extent that any Stock Option does not qualify as an Incentive
Stock Option, it shall constitute a separate Non-Qualified Stock Option.  More
than one option may be granted to the same optionee and be outstanding
concurrently hereunder.

     Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:

     (1)  Option Price.  The option price per share of Stock purchasable under a
          ------------
Stock Option shall be determined by the Administrator in its sole discretion at
the time of grant but shall not, (i) in the case of Non-Qualified Stock Options,

<PAGE>
be less than 75% of the Fair Market Value of the Stock on such date, and (ii) in
any event, be less than the par value of the Stock.  If an employee owns or is
deemed to own (by reason of the attribution rules applicable under Section
425(d) of the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Parent Corporation and an Incentive Stock Option is
granted to such employee, the option price of such Incentive Stock Option (to
the extent required by the Code at the time of grant) shall be no less than 110%
of the Fair Market Value of the Stock on the date such Incentive Stock Option is
granted.

     (2)  Option Term.  The term of each Stock Option shall be fixed by the
          -----------
Administrator, but no Stock Option shall be exercisable more than ten years
after the date such Stock Option is granted; provided, however that if an
employee owns or is deemed to own (by reason of the attribution rules of Section
425(d) of the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Parent Corporation and an Incentive Stock Option is
granted to such employee, the term of such Incentive Stock Option (to the extent
required by the Code at the time of grant) shall be no more than five years from
the date of grant.

     (3)  Exercisability.  Stock Options shall be exercisable at such time or
          --------------
times and subject to such terms and conditions as shall be determined by the
Administrator at or after grant.  The Administrator may provide, in its
discretion, that any Stock Option shall be exercisable only in installments, and
the Administrator may waive such installment exercise provisions at any time in
whole or in part based on such factors as the Administrator may determine, in
its sole discretion.

     (4)  Method of Exercise.  Subject to Section 5(3) above, Stock Options may
          ------------------
be exercised in whole or in part at any time during the option period, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased, accompanied by payment in full of the purchase price in cash or in
such other form of consideration as is set forth in the related Stock Option
agreement as determined by the Administrator.  As determined by the
Administrator, in its sole discretion, payment in whole or in part may also be
made in the form of unrestricted Stock already owned by the optionee; provided,
however, that the right to make payment in the form of already own ed shares may
be authorized only at the time of grant.  An optionee shall generally have the
rights to dividends and any other rights of a stockholder with respect to the
Stock subject to the option only after the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has given the
representation described in paragraph (1) of Section 10.

     The Administrator may require the voluntary surrender of all or a portion
of any Stock Option granted under the Plan as a condition precedent to the grant
of a new Stock Option.  Subject to the provisions of the Plan, such new Stock
Option shall be exercisable at the price, during such period and on such other
terms and conditions as are specified by the Administrator at the time the new
Stock Option is granted.  Upon their surrender, Stock Options shall be canceled
and the shares previously subject to such canceled Stock Options shall again be
available for grants of Stock Options and other awards hereunder.

<PAGE>
     (5)  Loans.  The Company may make loans available to Stock Option holders
          -----
in connection with the exercise of outstanding options granted under the Plan,
as the Administrator, in its discretion, may determine; provided, however, that
the right to make payment in the form of loans may be authorized only at the
time of grant and the terms of such loans shall be specified in the related
Stock Option agreement.  Such loans shall (i) be evidenced by promissory notes
entered into by the Stock Option holders in favor of the Company, (ii) be
subject to the terms and conditions set forth in this Section 5(5) and such
other terms and conditions, not inconsistent with the Plan, as the Administrator
shall determine, (iii) bear interest, if any, at such rate as the Administrator
shall determine, and (iv) be subject to Board approval (or to approval by the
Administrator to the extent the Board may delegate such authority).  In no event
may the principal amount of any such loan exceed the sum of (x) the exercise
price less the-par value of the shares of Stock covered by the option, or
portion thereof, exercised by the holder, and (y) any federal, state, and local
income tax attributable to such exercise.  The initial term of the loan, the
schedule of payments of principal and interest (if any) under the loan, the
extent to which the loan is to be with or without recourse against the holder
with respect to principal or interest and the conditions upon which the loan
will become payable in the event of the holder's termination of employment shall
be determined by the Administrator.  Unless the Administrator determines
otherwise, when a loan is made, shares of Stock having a Fair Market Value at
least equal to the principal amount of the loan shall be pledged by the holder
to the Company as security for payment of the unpaid balance of the loan, and
such pledge shall be evidenced by a pledge agreement, the terms of which shall
be determined by the Administrator, in its discretion; provided, however, that
each loan shall comply with all applicable laws, regulations and rules of the
Board of Governors of the Federal Reserve System and any other governmental
agency having jurisdiction.

     (6)  Non-Transferability of Options.  Unless otherwise determined by the
          ------------------------------
Administrator, no Stock Option shall be transferable by the optionee, and all
Stock Options shall be exercisable, during the optionee's lifetime only by the
optionee.

     (7)  Termination of Employment or Service.  If an optionee' s employment
          ------------------------------------
with or service as a director of or consultant or advisor to the Company
terminates by reason of death, Disability or for any other reason, the Stock
Option may thereafter be exercised to the extent provided in the applicable
subscription or award agreement, or as otherwise determined by the
Administrator.

     (8)  Annual Limit on Incentive Stock Options.  To the extent that the
          ---------------------------------------
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of shares of Stock with respect to which Incentive Stock
Options granted to an Optionee under this Plan and all other option plans of the
Company or its Parent Corporation become exercisable for the first time by the
Optionee during any calendar year exceeds $100,000, such Stock Options shall be
treated as Non-Qualified Stock Options.

<PAGE>
SECTION 6. AMENDMENT AND TERMINATION.
-------------------------------------

     The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any award theretofore granted without such Participant's
consent.

     The Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Section 3 above, no such
amendment shall impair the rights of any holder without his or her consent.

SECTION 7. UNFUNDED STATUS OF PLAN.
-----------------------------------

     The Plan is intended to constitute an "unfunded" plan for incentive
compensation.  With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.

SECTION 8. GENERAL PROVISIONS.
------------------------------

     (1)  The Administrator may require each person purchasing shares pursuant
to a Stock Option to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution thereof.  The
certificates for such shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.

     All certificates for shares of Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Commission, any stock exchange upon which the Stock is then
listed, and any applicable federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.

     (2)  Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.  The adoption of the Plan shall
not confer upon any employee, director, consultant or advisor of the Company any
right to continued employment or service with the Company, as the case may be,
nor shall it interfere in any way with the right of the Company to terminate the
employment or service of any of its employees, directors, consultants or
advisors at any time.

     (3)  Each Participant shall, no later than the date as of which the value
of an award first becomes includible in the gross income of the Participant for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any federa1, state, or
local taxes of any kind required by law to be withheld with respect to the
award.  The obligations of the Company under the Plan shall be conditional on
the making of such payments or arrangements, and the Company shall, to the

<PAGE>
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.

     (4)  No member of the Board or the Administrator, nor any officer or
employee of the Company acting on behalf of the Board or the Administrator,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.

SECTION 9. EFFECTIVE DATE OF PLAN.
----------------------------------

     The Plan became effective (the "Effective Date") on August 1, 2001;
provided that, the Plan shall become effective with respect to Incentive Stock
Options on the date the Company's stockholders formally approve the Plan.

SECTION 10. TERM OF P1AN.
-------------------------

     No Stock Option shall be granted pursuant to the Plan on or after the tenth
anniversary of the Effective Date, but awards theretofore granted may extend
beyond that date.

<PAGE><PAGE>

                                                                    EXHIBIT 10.1

                   The Security Asset Capital 2001 Stock Plan

   As filed with the U.S. Securities and Exchange Commission on June 11, 2001

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                       Security Asset Capital Corporation
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

            Nevada                                        88-0199674
---------------------------------              ---------------------------------
  (State or other jurisdiction                 (IRS Employer Identification No.)
of incorporation or organization)

            2701 "B" Street, Suite 1775, San Diego, California 92101
--------------------------------------------------------------------------------
          (Address of Principal Executive Offices, including ZIP Code)

                   The Security Asset Capital 2001 Stock Plan
--------------------------------------------------------------------------------
                            (Full title of the plan)

    David R. Walton, 701 "B" Street, Suite 1775, San Diego, California 92101
--------------------------------------------------------------------------------
                     (Name and address of agent for service)

                                 (619) 232-9950
--------------------------------------------------------------------------------
          (Telephone number, including area code, of agent for service)

<PAGE>

                                       CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed                   Proposed                  Maximum           Maximum
Title of                   Amount of Shares          Offering          Aggregate Amount
Securities to              to be                     Price Per         of Offering               Registration
be Registered              Registered                Share(1)          Price(1)                  Fee
---------------            ----------------          ---------         ----------------          ------------
<S>                           <C>                    <C>                  <C>                      <C>
                                                     $.001 par value
Common                        2,500,000              $ 1.06               $2,650,000               $ 662.50
Stock
---------------            ----------------          ---------

TOTALS                        2,500,000              N/A                  $2,650,000               $ 662.50
                           ================          =========         =================         ============
</TABLE>

(1) This calculation is made solely for the purposes of determining the
registration fee pursuant to the provisions of Rule 457(h) under the Securities
Act and is calculated on the basis of the value of the common stock quotation as
reported on the NASDAQ Bulletin Board.

                                   PROSPECTUS

                       SECURITY ASSET CAPITAL CORPORATION
                           701 "B" Street, Suite 1775
                               San Diego, CA 92101
                                 (619) 232-9950

                        2,500,000 SHARES OF COMMON STOCK

            This Prospectus relates to the offer and sale by Security Asset
Capital Corporation, a Nevada corporation ("Security Asset"), of 2,500,000
shares of its $.001 par value per share common stock (the "common stock") to
certain employees and consultants (collectively, the "employees") pursuant to
The Security Asset 2001 Stock Plan (the "Plan"). Security Asset is registering
hereunder and then issuing to the persons covered by the Plan, upon receipt of
adequate consideration therefore, 2,500,000 shares of common stock for services
performed.

            The common stock is not subject to any restriction on
transferability. Recipients of shares of common stock issued pursuant to the
Plan other than persons who are "affiliates" of Security Asset, within the
meaning of the Securities Act of 1933 (the "Act"), may sell all or part of the
shares of common stock issued pursuant to the Plan in any way permitted by law,
including sales in the over-the-counter market at prices prevailing at the time
of such sale. Of the shares of common stock registered hereunder, all of the
2,500,000 shares may be issued to present affiliates of Security Asset. An
"affiliate" is, summarily, any director, executive officer or controlling
shareholder of Security Asset or any one of its subsidiaries. An affiliate of
Security Asset is subject to Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). If an employee who is not now an
affiliate becomes an affiliate of Security Asset in the future, she or he would
then be subject to Section 16(b) of the Exchange Act.

<PAGE>

          THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
        SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
      UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
                     TO THE CONTRARY IS A CRIMINAL OFFENSE.

                  The date of this Prospectus is June 11, 2001

            This Prospectus is part of a Registration Statement which was filed
and became effective under the Securities Act of 1933, as amended (the
"Securities Act"), and does not contain all of the information set forth in the
Registration Statement, certain portions of which have been omitted pursuant to
the rules and regulations promulgated by the United States Securities and
Exchange Commission (the "Commission") under the Securities Act. The statements
in this Prospectus as to the contents of any contracts or other documents filed
as an exhibit to either the Registration Statement or other filings by Security
Asset with the Commission are qualified in their entirety by the reference
thereto.

            A copy of any document or part thereof incorporated by reference in
this Prospectus but not delivered herewith will be furnished without charge upon
written or oral request. Requests should be addressed to Security Asset Capital
Corporation, 701 "B" Street, Suite 1775, San Diego, California 92101, (619)
232-9950.

            Security Asset is subject to the reporting requirements of the
Exchange Act and in accordance therewith files reports and other information
with the Commission. These reports, as well as the proxy statements, information
statements and other information filed by Security Asset under the Exchange Act
may be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies may be
obtained at the prescribed rates. Security Asset stock is traded on the
over-the-counter market and is currently reported by the National Quotation
Bureau Electronic Bulletin Board.

            No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given or
made, such other information or representation must not be relied upon as having
been authorized by Security Asset. This Prospectus does not constitute an offer
or a solicitation by anyone in any state in which such is not authorized or in
which the person making such is not qualified or to any person to whom it is
unlawful to make an offer or solicitation.

            Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has not been a
change in the affairs of Security Asset since the date hereof.

<PAGE>

                                TABLE OF CONTENTS

Information Required in the Section 10(a) Prospectus..........................6

Item 1.  Plan Information.....................................................6

Item 2.  Registrant Information and Employee Plan Annual Information..........9

Information Required in the Registration Statement...........................10

Item 3.  Incorporation of Documents by Reference.............................10

Item 4.  Description of Securities...........................................10

Item 5.  Interests of Named Experts and Counsel..............................10

Item 6.  Indemnification of Directors and Officers...........................10

Item 7.  Exemption from Registration Claimed.................................11

Item 8.  Exhibits............................................................11

Item 9.  Undertakings........................................................11

Signatures...................................................................13

Exhibit Index................................................................14

<PAGE>

                                     PART I

                    INFORMATION REQUIRED IN THE SECTION 10(a)

                                   PROSPECTUS

ITEM 1.     PLAN INFORMATION

The Company

            Security Asset Capital Corporation ("Security Asset") has its
principal executive offices at 701 "B" Street, Suite 1775, San Diego, California
92101, where its telephone number is (619) 232-9950.

Purpose

            Pursuant to The Security Asset 2001 Stock Plan (the "Plan"), which
has been approved by the Board of Directors, Security Asset is issuing common
stock to certain employees and consultants (collectively "employees") in
exchange for services rendered. The Plan grants such employees or advisors
shares of common stock or the right to acquire shares of common stock pursuant
to the Plan. The Plan is intended to provide a method whereby Security Asset can
induce greater interest of the employees and advisors in Security Asset's future
prosperity, thereby advancing the interests of Security Asset and all of its
shareholders. A copy of the Plan has been filed as an exhibit to this
Registration Statement.

General Plan Information

            Pursuant to the Plan, the Board can authorize the issuance of up to
an aggregate of 2,500,000 shares of common stock of Security Asset over a
maximum of a one year period, although the Board may shorten this period.

            The Board adopted the Plan on June 11, 2001. The Plan is intended to
aid Security Asset in maintaining and continuing the development of a quality
management team, in attracting qualified employees who can contribute to the
future success of Security Asset, and in providing such individuals with an
incentive to use their best efforts to promote the growth and profitability of
Security Asset.

            The Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), nor qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code").
Administration of the Plan is the exclusive province of the Board. Board members
are elected at each annual meeting of shareholders. Each Board member serves a
term of one year. If an annual meeting is not held the member shall serve until
the next submission of matters to a vote of Company's shareholders.

            As ultimate administrators of the Plan, the Board should be
contacted with requests for additional Plan information. The Board has
authorized the Compensation Committee, comprised of David R. Walton and Darrell
Musick, to administer the Plan. The address of the Board is The Board of
Directors, Security Asset Capital Corporation, 701 "B" Street, Suite 1775, San
Diego, California 92101. Its telephone number is (619) 232-9950.

            In the event a vacancy in the Board arises, the vote of a majority
of remaining directors may select a successor, or, if the vacancy is not filled
by the remaining Board, the vote of shareholders may also elect a successor to
fill such vacancy. Board members may be removed from office by the vote of
shareholders representing not less than two-thirds of the shares entitled to
vote on such removal. Plan administrators who are not Board members can be
removed or appointed at any time for any reason by the majority vote of Board
members.

            The Plan administrators shall interpret the Plan, which
interpretation is binding on the participants absent demonstrable error, to
determine which employees or others shall receive shares, decide the number of
shares and establish other terms of the options not already established in
Security Asset's Plan. Information concerning changes in the Plan administrators
will be provided in the future either in Security Asset's proxy statements,
annual or other reports, or in amendments to this document.

<PAGE>

Securities to be Offered

            The Plan provides for the issuance of a maximum of 2,500,000 shares
of common stock to be issued in exchange for services.

Those Who May Participate in the Plan

            The Board or the Plan's administrators shall determine which of
Security Asset's employees or advisors are eligible to receive shares as
compensation under the Plan. The term "employee" includes any employee,
director, officer, or consultant or advisor of Security Asset or any of its
subsidiaries. "Services" shall include any and all bonafide professional or
individual advice or effort rendered for the benefit of Security Asset, provided
that such services must not be in connection with the offer or sale of
securities in a capital-raising transaction.

Purchase of Securities Pursuant to the Plan and Payment for Securities Offered

            The Plan is not subject to ERISA and the securities are being issued
by Security Asset and not purchased on the open market or otherwise. Shares
issued under the Plan shall be issuable as determined by the Plan
administrators. Shares granted under the Plan shall equal the fair market value
of services rendered, or to be rendered to, or on behalf of, Security Asset.

            The shares of common stock subject to the Plan are subject to
proportionate adjustment in the event of a stock dividend on the common stock or
a change in the number of issued and outstanding shares of common stock as a
result of a stock split, consolidation, or other recapitalization. Options, if
any, and all other interests under the Plan shall be non-transferable, except by
means of a will or the laws of descent and distribution.

Amendments and Termination

            The Plan may be abandoned or terminated at any time by the Plan
administrators except with respect to any shares then issued and outstanding
under the Plan. The Plan shall otherwise terminate on the earlier of the date
that is three years from the date first appearing in the Plan or the date on
which the two million five thousandth share is either issued under the Plan or
on which the two million five thousandth share is deregistered on a
post-effective amendment on Form S-8 filed with the Securities and Exchange
Commission (the "SEC"). No shares may be issued under the terms of the Plan
after the Plan has been terminated. The Board may alter or amend the Plan only
once during any six (6) month period, except as to comply with changes to the
Code. No termination, suspension, alteration or amendment may adversely affect
the rights of an employee entitled to receive shares under the Plan without the
consent of that employee.

Registrant Information and Employee Plan Annual Information

            Security Asset will provide to any employee upon request a copy,
without charge, of Security Asset's periodic reports filed with the SEC,
including its latest annual report on Form 10-KSB and its quarterly reports on
Form 10-QSB. Security Asset will also provide any employee upon written or oral
request a copy, without charge, of the documents incorporated by reference in
Item 3 of Part II of the Form S-8 registration statement. Requests for such
information should be directed to Security Asset Capital Corporation at 701 "B"
Street, Suite 1775, San Diego, California 92101.

Common Stock

            The Board has authorized the issuance of up to 2,500,000 shares of
the common stock to the employees upon effectiveness of this Registration
Statement.

Employees

            Employees engaged, retained and employed by Security Asset have or
shall be required to provide their expertise and advice to Security Asset for
the purposes set forth in written agreements with Security Asset.

<PAGE>

No Restrictions on Transfer

            The employees will become the record and beneficial owners of the
shares of common stock upon issuance and delivery pursuant to the Plan, and they
shall be entitled to all of the rights of ownership, including the right to vote
any shares of common stock awarded and to receive ordinary cash dividends on the
common stock and the right to transfer or resell the common stock.

Tax Treatment to the Employees

            The common stock is not qualified under Section 401(a) of the
Internal Revenue Code. The employees, therefore, will be required for federal
income tax purposes to recognize ordinary income during the taxable year in
which the first of the following events occurs: (a) the shares become freely
transferable, or (b) the shares cease to be subject to a substantial risk of
forfeiture. Accordingly, absent a specific contractual provision to the
contrary, the employees will receive compensation taxable at ordinary rates
equal to the fair market value of the shares on the date of receipt since there
will be no substantial risk of forfeiture or other restrictions on transfer. The
employees are urged to consult each of their tax advisors on this matter.
Further, if any recipient is an affiliate, Section 16(b) of the Exchange Act is
applicable and may affect the issue of taxation.

Tax Treatment to Security Asset

            The amount of income recognized by any recipient hereunder in
accordance with the foregoing discussion will be an expense deductible by
Security Asset for federal income tax purposes in the taxable year of Security
Asset during which the recipient recognizes income.

Restrictions on Resales

            In the event that an affiliate of Security Asset acquires shares of
common stock hereunder, the affiliate will be subject to Section 16(b) of the
Exchange Act. Further, in the event that any affiliate acquiring shares
hereunder has sold or sells any shares of common stock in the six months
preceding or following the receipt of shares hereunder, any so called "profit,"
as computed under section 16(b) of the Exchange Act, would be required to be
disgorged from the recipient to Security Asset. Services rendered have been
recognized as valid consideration for the "purchase" of shares in connection
with the "profit" computation under Section 16(b) of the Exchange Act. Security
Asset has agreed that for the purpose of any "profit" computation under 16(b)
the price paid for Security Asset's common stock issued hereunder to affiliates
is equal to the value of services rendered, as determined by the price such
affiliates receive in any subsequent sale of the shares. Shares of Security
Asset's common stock acquired hereunder by persons other than affiliates are not
subject to Section 16(b) of the Exchange Act.

Item 2.     Registrant Information And Employee Plan Annual Information

            A copy of any document or part thereof incorporated by reference in
this Registration Statement but not delivered with this Prospectus or any
document required to be delivered pursuant to Rule 428(b) under the Securities
Act will be furnished without charge upon written or oral request. Requests
should be addressed to: Security Asset Capital Corporation, 701 "B" Street,
Suite 1775, San Diego, California 92101; (619) 232-9950.

<PAGE>

                                     PART II

                             INFORMATION REQUIRED IN
                           THE REGISTRATION STATEMENT

Item 3.     Incorporation of Documents by Reference

            Security Asset hereby states that (i) all documents set forth in (a)
through (c), below, are incorporated by reference in this registration
statement, and (ii) all documents subsequently filed by registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which de-registers all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.

                  (a)      Security Asset's latest annual report, whether filed
                           pursuant to Section 13(a) or 15(d) of the Exchange
                           Act;

                  (b)      All other reports filed pursuant to Section 13(a) or
                           15(d) of the Exchange Act since the end of the fiscal
                           year covered by the annual report referred to in (a),
                           above; and

                  (c)      The latest prospectus filed pursuant to Rule 424(b)
                           under the Securities Act.

Item 4.     Description of Securities

            Security Asset' common stock is registered under section 12 of the
Exchange Act.

Item 5.     Interests of Named Experts and Counsel

            Robert Blair Krueger II, Esq. has rendered an opinion on the
validity of the securities being registered. Mr. Krueger is not an affiliate of
Security Asset Capital Corporation.

            The financial statements of Security Asset Capital Corporation
incorporated by reference in this prospectus for the year ended December 31,
2000 have been audited by Pannel, Kerr & Forster Accountancy Corporation,
independent certified public accountants, as set forth in their report
incorporated herein by reference, and are incorporated herein in reliance upon
such report given upon the authority of said firms as experts in auditing and
accounting.

Item 6.     Indemnification of Directors and Officers

            Nevada Revised Statute Section 78.7502 provides for the elimination
or limitation of liability for directors and officers who acted in good faith
and in a manner not reasonably believed to be opposed to the best interests of
the company. Section 78.037 provides that indemnification is not authorized for
(a) acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law; or (b) the payments of distributions in violation of Nevada
Revised Statute Section 78.300.

            The effect of these provisions will be to eliminate the rights of
Security Asset and its stockholders, through shareholders' derivative suits of
behalf of Security Asset, to recover monetary damages against a director for
breach of fiduciary duty as a director, except in situations described in
clauses (a) - (b) of the preceding paragraph.

Item 7.     Exemption from Registration Claimed

            Not applicable.

<PAGE>

Item 8.     Exhibits

            (a)   The following exhibits are filed as part of this registration
                  statement pursuant to Item 601 of Regulation S-K and are
                  specifically incorporated herein by this reference:

Exhibit No.       Title

         5.1      Opinion of The Krueger Group, LLP, regarding the legality of
                  the securities registered

         10.1     The Security Asset 2001 Stock Plan.

         23.1     Consent of The Krueger Group, LLP, special counsel to
                  registrant, to the use of his opinion with respect to the
                  legality of the securities being registered hereby and to the
                  references to Robert Blair Krueger II and The Krueger Group,
                  LLP in the Prospectus filed as a part hereof.

         23.2     Consent of Pannel, Kerr & Forster Accountancy Corporation.

         99.1     Nevada Revised Statutes Sections 78.037 and 78.7502

Item 9.    Undertakings

            Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of registrant pursuant to the foregoing provisions, or otherwise, registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by registrant of expenses incurred or paid
by a director, officer or controlling person of registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
registrant will, unless in the opinion of its counsel, and the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such
issue.

            Security Asset hereby undertakes:

            (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to:

            (i) include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1933;

            (ii) reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represents a
fundamental change in the information set forth in the registration statement;

            (iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

            provided, however, paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs are incorporated by reference from periodic reports filed by the
registrant small business issuer under the Exchange Act.

            (2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment to the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

            (3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

<PAGE>

            (4) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14e-3
under the Exchange Act; and, where interim financial information require to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.

            Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of registrant's annual report
pursuant to Section 13(a) of the Securities Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

                                   SIGNATURES

            Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of San Diego, State of California on the 11th day of
June, 2001.

                                             Security Asset Capital Corporation
                                             (Registrant)

                                             By: /s/ David R. Walton
                                             ----------------------------------
                                             David R. Walton
                                             Chief Executive Officer and
                                             Chairman of the Board of Directors

            Pursuant to the requirements of the Securities Act, this
registration statement or amendment has been signed by the following persons in
the capacities and on the dates indicated:

         Signatures              Title                             Date

/s/   David R. Walton            Chief Executive Officer           June 11, 2001
----------------------------     and Chairman of the
                                 Board of Director

/s/   Darrell Musick             Director and President            June 11, 2001
----------------------------

<PAGE>

                         FORM S-8 REGISTRATION STATEMENT

                                  EXHIBIT INDEX

            The following Exhibits are filed as part of this registration
statement pursuant to Item 601 of Regulation S-K and are specifically
incorporated herein by this reference:

   Exhibit
  Number in
 Registration                                                          Numbered
  Statement                  Description                                 Page
 ------------    ---------------------------------------------------   ---------
     5.1         Opinion of Counsel                                       15
    10.1         The Security Asset 2001 Stock Plan                       18
    23.1         Consent of The Krueger Group, LLP to Use of Opinion      21
    23.2         Consent of Independent Auditors                          22
    99.1         Nevada Revised Statutes Sections 78.037 and 78.7502      23

<PAGE>

EXHIBIT 5.1

                               OPINION OF COUNSEL

                             THE KRUEGER GROUP, LLP

                            701 "B" STREET, SUITE 240
                           SAN DIEGO, CALIFORNIA 92101
                TELEPHONE (619) 234-1600 FACSIMILE (619) 234-1610

                                  June 11, 2001

Board of Directors
Security Asset Capital Corporation
701 "B" Street, Suite 1775
San Diego, California  92101

         Re:  Form S-8 Registration Statement Opinion of Counsel

Gentlemen:

            I have acted as a special counsel for Security Asset Capital
Corporation, a Nevada corporation (the "Company"), in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, (the "Act") of a
registration statement on Form S-8 (the "Registration Statement"), relating to
the offer and sale of Two Million Five Hundred Thousand (2,500,000) shares of
Common Stock, $.001 par value (the "Common Stock") to Employees and Consultants
of the Company, under the terms and conditions of The Security Asset 2001 Stock
Plan.

            As special counsel for the Company, I have examined the Company's
articles of incorporation, bylaws, minute book, and certain other corporate
records. For the purpose of the opinions expressed below, I have also examined
the Registration Statement on Form S-8 to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, covering the
Common Stock in this offering.

            In arriving at the opinions set forth below, I have examined and
relied upon originals or copies, certified or otherwise identified to my
satisfaction, of corporate records (including the Registration Statement with
its exhibits) provided by the officers of the Company. I have made such
investigations of law as I have considered necessary or appropriate as a basis
for my opinions.

            My opinions are qualified in all respects by the scope of the
document examination and I make no representation as to the sufficiency of my
investigation for your purpose. I have not made any document examination or
rendered any other advice other than as described herein and I at all times have
assumed and relied upon the truth and completeness of the information,
statements and representations which have been given by the Company to me. I do
not express any opinion with respect to the completeness, adequacy, accuracy or
any other aspect of the financial statements incorporated by reference in the
Registration Statement.

<PAGE>

            In rendering this opinion, I have assumed, without independently
verifying such assumptions, and this opinion is based and conditioned upon the
following: (i) the genuineness of the signatures on and the enforceability of
all instruments, documents and agreements examined by me and the authenticity of
all documents furnished for my examination as originals and the conformity to
the original documents of all documents furnished to me as copies; (ii) where an
executed document has been presented to me for my review, that such document has
been duly executed on or as of the date stated and that execution and delivery
was duly authorized on the part of the parties thereto; (iii) each of the
foregoing certificates, instruments and documents being duly authorized,
executed and delivered by or on behalf of all the respective parties thereto,
and such instruments and documents being legal, valid binding obligations of
such parties; (iv) the truth and accuracy of presentations and statements made
in the documents received from the State of Nevada; and (v) Security Asset
Capital Corporation will be operated in accordance with the terms of its charter
documents and the laws of the States of Nevada and California and the terms of
the instruments or documents referred to above.

            Based upon the foregoing, I am of the opinion that:

            1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Nevada, the
jurisdiction of its incorporation.

            2. The terms and provisions of the Common Stock conform to the
description thereof contained in the Registration Statement, and the form of the
stock certificates used to evidence the Common Stock are in good and proper form
and no stockholder is entitled to preemptive rights to subscribe for or purchase
any of the Common Stock.

            3. The issuance and the sale of the shares of Common Stock in this
offering has been duly and validly authorized, and subject to compliance with
the provisions of the written agreements, the Common Stock issuable under the
Agreements will be duly authorized and validly issued as fully paid and
non-assessable shares of Common Stock.

            I am admitted to practice in the State of California only. I am not
admitted to practice in Nevada, the state of incorporation of the Company, or in
any other jurisdictions other than California, in which the Company may own
property or transact business. My opinions herein are with respect to federal
law only and, to the extent my opinions are derived from the laws of other
jurisdictions, are based upon an examination of all relevant authorities and the
documents referenced herein and are believed to be correct. However, except for
pending litigation or claims matters, I have not directly obtained legal
opinions as to such matters from attorneys licensed in such other jurisdictions.
No opinion is expressed upon any conflict of law issues. My opinions are
qualified to the extent that enforcement of rights and remedies are subject to
bankruptcy, insolvency, fraudulent conveyance, moratorium, and other laws of
general application or equitable principles affecting the rights and remedies of
creditors and security holders and to the extent that the availability of the
remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding may be brought.

            This opinion is limited to matters existing as of this date, and no
responsibility is assumed to advise you of changes (factual or legal) which may
hereafter occur, whether deemed material or not.

            This opinion is furnished by me to you as special counsel for the
Company and it is solely for your benefit. This opinion is not to be used,
circulated, quoted or otherwise referred to in whole or in part for any purpose,
other than as set forth in my written consent.

                                                 Very truly yours,

                                                 /S/ ROBERT BLAIR KRUEGER II
                                                 ---------------------------
                                                 ROBERT BLAIR KRUEGER II

<PAGE>

EXHIBIT 10.1

                       THE SECURITY ASSET 2001 STOCK PLAN

1.          Purpose of the Plan

            The purpose of The Security Asset 2001 Stock Plan ("Plan") is to
provide a means by which Security Asset Capital Corporation, a Nevada
corporation ("Company"), may compensate key employees, advisors, and consultants
by issuing to them shares of its capital stock in exchange for services, and to
thereby conserve the Company's cash resources. In addition, equity ownership
will provide increased incentive for such individuals to render services to the
Company in the future and to exert maximum effort for the success of the
Company's business.

2.          Definitions

            The following definitions apply the provisions of this Plan:

            A.       "Board" means the Company's Board of Directors

            B.       "Common Stock" means the Company's $.001 par value
                     common stock

            C.       "Committee" means the Committee appointed by the
                     Board in accordance with paragraph A of Section 3 of
                     this Plan. If no Committee is appointed, "Committee"
                     refers to the Board

            D.       "Employee" means any person, including officers,
                     directors, employees, advisors, and consultants
                     employed by the Company or any Subsidiary on either a
                     full-time or part-time basis

            E.       "Plan" means this 2001 Stock Plan

            F.       "Share" means a share of Common Stock.

3.          Administration of the Plan

            A. Procedure. The Compensation Committee (the "Committee") appointed
by the Board shall administer the Plan. The Board may appoint a Committee of not
less than two (2) Board members to administer the Plan, subject to such terms
and conditions as the Board may prescribe. Once appointed, the Committee shall
continue to serve until the Board otherwise directs. From time to time, the
Board may increase the Committee size and appoint additional members, fill
vacancies, however caused, and remove all members and thereafter directly
administer the Plan. Members of the Committee who are either eligible for Shares
under this Plan or have been granted Shares under this Plan may vote on any
matters affecting the Plan administration or granting any Shares under the Plan;
provided that no such member shall act upon the granting of Shares to himself or
herself, but any such member may be counted in determining the existence of a
quorum at any meeting during which such action is taken.

            B. Powers of the Committee. The Committee shall have the authority
to (i) based on relevant information, to determine the fair market value of the
Common Stock; (ii) to determine the value of the services rendered or to be
rendered to the Corporation, (iii) the Employees or Consultants to whom and the
time or times when Common Stock shall be granted and the number of Shares to be
issued; (iv) to interpret the Plan; (v) to prescribe, amend and rescind rules
and regulations relating to the Plan; (vi) to authorize any person to execute on
the Company's behalf any instrument required to effectuate a grant of Common
Stock; and (vii) to make all other determinations deemed necessary or advisable
for administering the Plan.

            C. Effect of Committee's Decision. All decisions, determinations,
and interpretations of the Committee shall be final and binding on any and all
holders of Common Stock granted under the Plan.

<PAGE>

4.          Shares Reserved.

            A total of Two Million Five Hundred Thousand (2,500,000) shares of
Common Stock shall be subject to the Plan and shall be and are hereby reserved
for issuance under the Plan. Such Shares shall be unissued or previously issued
shares reacquired and held by the Company. Any such shares which remain unsold
when the Plan terminates shall cease to be reserved for the Plan but, until
termination, the Company shall at all times reserve a sufficient number of
shares to meet the Plan's requirements.

5.          Eligibility

            Common Stock may be issued under this Plan only to Employees or
Consultants for services rendered to the Company or on the Company's behalf as
determined by the Board or the Committee. Common stock may not be issued under
this Plan for services in connection with a capital raising transaction and do
not directly or indirectly promote or maintain a market for the Company's
securities. An Employee or Consultant, who has been issued Common Stock under
the Plan, if he or she is otherwise eligible, may be granted additional Common
Stock.

6.          Continuation of Employment

            Neither the Plan or the issuance of any Common Stock under the Plan
shall confer upon any Employee any right with respect to continuing employment
with the Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or other position at anytime.

7.          Fair Market Value Limitation

            The Company's Board of Directors or Committee shall grant the right
to receive Common Stock to Employees or Consultants for services rendered to, or
to be rendered to, or on behalf of, the Company such that the fair market value
of the Shares approximates the fair market value of the services. Determination
of fair market value shall be within the business discretion of the Board of
Directors and/or Committee.

8.          Investment Representation

            Each Employee or Consultant granted Shares under this Plan shall
represent in writing that she/he is acquiring the shares for investment and not
for resale or to distribute the Shares to the public. Upon demand, delivery of
such a representation prior to the delivery of any shares issued shall be a
condition precedent to the right of the Employee or Consultant to receive Shares
under the Plan.

9.          Amendments or Termination

            The Board of Directors may amend, alter or discontinue the Plan.

10.         Compliance with Other Laws and Regulations

            The Plan, the grant, and issuance of Shares under the Plan shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by the governmental or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for shares of
Common Stock prior to the completion of any registration or qualification of
such shares under any federal or state law, or any ruling or regulation of any
governmental body which the Company shall, in its sole discretion, determine to
be necessary or advisable. Further, it is the intention of the Company that the
Plan comply in all respects with the provisions of Rule 16b-3 of the Securities
and Exchange Act of 1934, as amended. If any Plan provision is found not to be
in compliance with Rule 16b-3, the provision shall be deemed null and void.

11.         Effectiveness and Expiration of the Plan

            The Plan shall be effective on June 11, 2001, and continue to June
11, 2004, three years after the effective date of the Plan, and thereafter no
Shares shall be granted under the Plan.

<PAGE>

APPROVED THIS EFFECTIVE DAY THE 11TH DAY OF JUNE BY A MAJORITY OF THE BOARD OF
DIRECTORS.

/s/      David S. Walton
-------------------------------
Director

/s/      Richard Wensel
-------------------------------
Director

/s/      Darrell Musick
-------------------------------
Director

/s/      David R. Walton
-------------------------------
Director

<PAGE>

EXHIBIT 23.1

            CONSENT OF THE KRUEGER GROUP, LLP TO USE OF OPINION

                             THE KRUEGER GROUP, LLP

                            701 "B" Street, Suite 240
                           San Diego, California 92101
                            Telephone: (619) 234-1600
                            Facsimile: (619) 234-1610

                                  June 11, 2001

Board of Directors
Security Asset Capital Corporation
701 "B" Street, Suite 1774
San Diego, California  92101

         Re:  Form S-8

Gentlemen:

            I hereby consent to the filing of my opinion dated even date
herewith as an Exhibit to the Form S-8 Registration Statement to be filed by
Security Asset Capital Corporation

            I further consent to the reference to me and my opinion under the
caption "Legal Opinion and Experts" in the Prospectus.

                                                   Very truly yours,

                                                   /s/ Robert Blair Krueger II
                                                   ---------------------------
                                                   ROBERT BLAIR KRUEGER II

<PAGE>

EXHIBIT 23.2

                         CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Registration Statement of
Security Asset Capital Corporation on Form S-8 of our report, appearing in the
Annual Report on Form 10-KSB of Security Asset Capital Corporation for the year
ended December 31, 2000, and to the reference to us under the heading "Experts"
in the Prospectus which is part of this Registration Statement.

                              /s/ PANNEL, KERR & FORSTER ACCOUNTANCY CORPORATION

San Diego, California
June 11, 2001

<PAGE>

EXHIBIT 99.1

               NEVADA REVISED STATUTES SECTIONS 78.037 and 78.7502

NRS 78.037 Articles of incorporation: Optional provisions. The articles of
incorporation may also contain: 1. A provision eliminating or limiting the
personal liability of a director or officer to the corporation or its
stockholders for damages for breach of fiduciary duty as a director or officer,
but such a provision must not eliminate or limit the liability of a director or
officer for: (a) Acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law; or (b) The payment of distributions in violation
of NRS 78.300.

2. Any provision, not contrary to the laws of this state, for the management of
the business and for the conduct of the affairs of the corporation, and any
provision creating, defining, limiting or regulating the powers of the
corporation or the rights, powers or duties of the directors, and the
stockholders, or any class of the stockholders, or the holders of bonds or other
obligations of the corporation, or governing the distribution or division of the
profits of the corporation.

Section 78.7502. Discretionary and mandatory indemnification of officers,
directors, employees and agents: General provisions

            1. A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.

            2. A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.

            3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.

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