<DOCUMENT>
<TYPE>10KSB/A
<SEQUENCE>1
<FILENAME>am1k00.txt
<DESCRIPTION>FORM 10-KSB/A AM. NO. 1
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  FORM 10-KSB/A
                                 AMENDMENT NO. 1
(Mark One)
         (x) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 For the fiscal year ended December 31, 2000

         ( )  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934
         For the transition period from                 to
                                       -----------------  --------------------

            Commission file number          0-1665
                                  --------------------------------------------

                                DCAP GROUP, INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

          Delaware                                             36-2476480
   --------------------------------------------------------------------------
     (State or other jurisdiction of                    (I.R.S Employer
     incorporation or organization)                     Identification No.)

  2545 Hempstead Turnpike, East Meadow, New York                11554
-------------------------------------------------------------------------------
     (Address of principal executive offices)                 (Zip Code)

           Issuer's telephone number            (516)735-0900
                                     -----------------------------------------
         Securities registered under Section 12(b) of the Exchange Act:

 Title of each class                Name of each exchange on which registered
 -------------------                -----------------------------------------
      none
 -------------------                -----------------------------------------

         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 par value
                          ----------------------------
                                (Title of class)

     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 )

     State issuer's revenues for its most recent fiscal year: $7,815,424

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days: $2,158,585 as of March 31, 2001.

                         (ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST FIVE YEARS)
     Check whether the issuer has filed all documents and reports to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes      No    .
                                       ----   ----

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date:  11,353,402 shares as of March
31, 2001.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


<PAGE>

                                 INDEX Page No.

Forward Looking Statements....................................................1

Explanatory Note .............................................................1

PART I

Item 1.      Description of Business..........................................2

Item 2.      Description of Property..........................................9

Item 3.      Legal Proceedings...............................................10

Item 4.      Submission of Matters to a Vote of Security Holders.............11


PART II

Item 5.      Market for Common Equity and Related Stockholder Matters........12

Item 6.      Management's Discussion and Analysis or Plan of Operation.......13

Item 7.      Financial Statements............................................14

Item 8.      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure........................................15


PART III

Item 9.      Directors, Executive Officers, Promoters and Control Persons;
             Compliance with Section 16(a) of the Exchange Act...............16

Item 10.     Executive Compensation..........................................18

Item 11.     Security Ownership of Certain Beneficial Owners and Management..20

Item 12.     Certain Relationships and Related Transactions..................22


PART IV

Item 13.     Exhibits and Reports on Form 8-K................................27


Signatures


<PAGE>
                                     PART I

Forward Looking Statements

     This Annual  Report  contains  forward-looking  statements  as that term is
defined in the federal  securities laws. The events described in forward-looking
statements  contained  in this  Annual  Report  may not occur.  Generally  these
statements  relate to business  plans or  strategies,  projected or  anticipated
benefits  or  other  consequences  of our  plans  or  strategies,  projected  or
anticipated  benefits  from  acquisitions  to be  made  by  us,  or  projections
involving  anticipated  revenues,  earnings  or other  aspects of our  operating
results. The words "may," "will," "expect," "believe,"  "anticipate," "project,"
"plan,"  "intend,"  "estimate,"  and "continue," and their opposites and similar
expressions are intended to identify forward-looking  statements. We caution you
that these statements are not guarantees of future performance or events and are
subject to a number of uncertainties,  risks and other influences, many of which
are beyond our control,  that may influence the accuracy of the  statements  and
the  projections  upon which the statements are based.  Factors which may affect
our  results  include,  but are not  limited  to,  the risks  and  uncertainties
associated with undertaking different lines of business,  the lack of experience
in operating  certain new business lines, the decline in the number of insurance
companies  offering  insurance  products  in  our  markets,  the  volatility  of
insurance  premium  pricing,  government  regulation,  competition  from larger,
better financed and more established  companies,  the possibility of tort reform
and a  resultant  decrease  in the  demand for  insurance,  the  uncertainty  of
litigation  with regard to our hotel  lease,  the  dependence  on our  executive
management, and our ability to raise additional capital which may be required in
the  near  term.  Any  one or more  of  these  uncertainties,  risks  and  other
influences  could  materially  affect our  results  of  operations  and  whether
forward-looking  statements  made by us  ultimately  prove to be  accurate.  Our
actual results,  performance and achievements could differ materially from those
expressed  or implied  in these  forward-looking  statements.  We  undertake  no
obligation  to  publically  update or  revise  any  forward-looking  statements,
whether from new information, future events or otherwise.

Explanatory Note

     Throughout  this Annual  Report,  the words "DCAP  Group," "we," "our," and
"us" refer to DCAP Group,  Inc.  and the  operations  of DCAP  Group,  Inc. as a
whole.  References to "DCAP  Insurance" and the "DCAP  Companies" in this Annual
Report mean our  wholly-owned  subsidiary,  DCAP Insurance  Agencies,  Inc., and
affiliated companies, and the operations of our insurance-related subsidiaries.

                                       1

<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS

(a)  Business Development

     Background

     Prior to February 25,  1999,  our sole  business  was the  operation of the
International  Airport Hotel in San Juan, Puerto Rico. The hotel is discussed in
Item 1(b) of this Annual Report.

     DCAP Acquisition

     On February 25, 1999, we acquired the DCAP  Companies.  The business of the
DCAP Companies is discussed in Item 1(b) of this Annual Report.

     At the time of our acquisition of the DCAP  Companies,  the following other
actions occurred:

       o  The size of our Board of  Directors  was  initially  increased  to
          four, and Kevin Lang and Abraham Weinzimer, the principals of the DCAP
          Companies,  joined  Morton L.  Certilman  and Jay M. Haft as our Board
          members.

       o  Messrs.  Lang and  Weinzimer  were  appointed as our President and
          Executive Vice President,  respectively.  Messrs.  Certilman and Haft,
          formerly  President  and  Chairman  of the Board,  respectively,  were
          appointed  Chairman  of the  Board  and Vice  Chairman  of the  Board,
          respectively.

       o  Messrs. Lang, Weinzimer, Certilman and Haft acquired common shares
          from us and from one of our  principal  shareholders  as  discussed in
          Item 12 of this Annual Report.

       o  We changed our name from EXTECH Corporation to DCAP Group, Inc.

       o  Eagle  Insurance  Company  acquired  common  shares  from  us  as
          discussed  in Item 12 of this  Annual  Report.  Eagle is a New  Jersey
          insurance  company  wholly-owned  by The Robert Plan  Corporation,  an
          insurance  holding  company that is engaged in  providing  services to
          insurance companies.

       o  The size of our Board of Directors was  increased  further to five
          and Robert M.  Wallach,  Eagle's  Vice  President  and the  President,
          Chairman and Chief Executive Officer of The Robert Plan, was appointed
          as a member of our Board.

     Private Placement

     In June 1999,  we raised  gross  proceeds of  $1,675,000  through a private
placement of our securities.

                                       2

<PAGE>

     Acquisitions of Joint Venture Interests

     In December  1999, we acquired the interests of our joint venture  partners
in 15 DCAP retail insurance stores.  These acquisitions were part of our plan to
phase out joint ventures in the DCAP system and to  concentrate on  wholly-owned
and franchise operations.

     Sale of Stores; Emphasis on Franchise Operations

     Commencing in 2000 and  continuing  into 2001, we began pursuing a strategy
of shifting toward franchise  operations.  Pursuant to that strategy,  since May
2000, we have closed or sold our interest in 12 wholly-owned or  partially-owned
stores and have granted 23  franchises  to operate  DCAP stores.  We now have 11
remaining  wholly-owned or partially-owned  stores. We have agreed to sell eight
of the stores as discussed in Item 12 of this Annual Report and grant franchises
to the purchasers. We intend to sell our interest in the remaining stores in the
near future.

     Recent Developments

     Since December 31, 2000, the following events have occurred:

       o  Barry Goldstein was elected our Chief Executive Officer and a member
          of our Board of Directors. See Item 9 of this Annual Report.

       o  We  entered  into  agreements  with  Messrs.  Lang,  Weinzimer  and
          Certilman  to sell  to them a total  of  eight  of our  stores.  These
          transactions are discussed in Item 12 of this Annual Report.

       o  We  repurchased  common  shares from Messrs.  Lang and  Weinzimer as
          discussed in Item 12.

       o  We  terminated  our  employment   agreements  with  Messrs.   Lang,
          Weinzimer,  Certilman  and Haft;  our  wholly-owned  subsidiary,  DCAP
          Management Corp., which operates our franchise business,  entered into
          an employment  agreement with Mr. Lang pursuant to which he is serving
          as its President;  and each of Messrs. Lang, Weinzimer,  Certilman and
          Haft  resigned  his  position  as an  officer of DCAP  Group.  Each of
          Messrs. Lang and Weinzimer also resigned his position as a director of
          DCAP Group.  Mr. Lang's new employment  agreement is discussed in Item
          10. The termination of the employment  agreements is discussed in Item
          12.

(b)  Business of Issuer

     General

     Our DCAP  storefront  locations  serve as  insurance  agents or brokers and
place various types of insurance on behalf of customers.  The types of insurance
placed include the  following:

                                       3

<PAGE>

       o  automobile
       o  motorcycle
       o  boat
       o  livery/taxi
       o  life
       o  business
       o  homeowner
       o  excess coverage

     There are 67 DCAP locations in the New York metropolitan area. Fifty-six of
them are  franchises.  The  balance are either  wholly  owned by us or are owned
partially by the operator of the office.  We try to select  locations  that will
attract "walk-in" retail customers.

     The DCAP stores  receive  commissions  from  insurance  companies for their
services. We receive fees from the franchised locations in connection with their
use of the DCAP  name.  Neither  we nor the DCAP  stores  serve as an  insurance
company and therefore do not assume underwriting risks.

     We also offer the  following  additional  services in  connection  with the
operation of the DCAP stores:

       o  income tax return preparation services
       o  premium financing services for our customers
       o  automobile club services for roadside emergencies

     We also operate the International Airport Hotel in San Juan, Puerto Rico.

     We were  incorporated  in 1961  under the name  Executive  House,  Inc.  We
changed our name to EXTECH  Corporation  in 1991. In February  1999, we acquired
the DCAP Companies and began our insurance  operations.  At that time we changed
our name to DCAP Group, Inc.

     Our executive offices are located at 2545 Hempstead Turnpike,  East Meadow,
New York 11554;  our  telephone  number is (516)  735-0900 and our fax number is
(516) 735-2900.

     DCAP Insurance

     Insurance Brokerage

     For many years,  DCAP Insurance  specialized in offering  assigned-risk and
nonstandard   automobile  insurance  policies.   Assigned-risk  and  nonstandard
policies are issued  after an analysis of such factors as the driver's  accident
record,  the kind of car being  insured,  the age and credit risk of the driver,
where the insured  lives,  and other items.  Over the last several  years,  DCAP
Insurance has also been marketing and selling  standard and preferred  policies.
Through such preferred carriers as Travelers, Prudential,  Progressive Casualty,
and Metlife Auto and Home, serving as either brokers or agents, we can offer our
customers many carrier and premium options.

                                       4

<PAGE>

     Due to the recent lack of  profitability  experienced  by many  nonstandard
carriers, the number of insurers servicing the nonstandard market has decreased.
The effect during 2000 was particularly acute in New York City. This has created
a situation where we can no longer offer certain drivers (e.g., a driver seeking
minimum  legal  liability  limits) a choice in  carriers,  and we must place the
insured in the "assigned- risk" NY Auto Insurance Plan.

     During the fiscal year ended  December 31, 2000,  approximately  71% of our
DCAP Insurance revenues were derived from commissions and other fees received in
connection  with the  selling of  automobile  and other  property  and  casualty
insurance policies.

     We have established a presence in all five New York City boroughs,  Nassau,
Suffolk,  Westchester,  Rockland and Dutchess Counties, New York and New Jersey.
We select  locations to maximize the attraction of "walk-in"  retail  customers.
These customers  generally do not have an established  relationship  with us and
come to our stores  without  an  appointment.  These  customers  constitute  the
majority of our DCAP Insurance business.

     In addition to automobile insurance, we offer:

       o  property and casualty insurance for motorcycles, boats and
          livery/taxis;
       o  life insurance
       o  business insurance
       o  homeowner's insurance
       o  excess coverage

     We have obtained the right to receive calls placed to  "1-800-INSURANCE" in
the states of New York, New Jersey, Connecticut and Pennsylvania (except for one
area  code  in  Pennsylvania)  as a way  to  increase  our  insurance  brokerage
business.

     Franchises

     An important part of our strategy is to increase our name  recognition  and
reduce  central  office  overhead.  We have  decided that  granting  others DCAP
franchises is an important step in achieving these goals.

     During  the  year  ended  December  31,  2000,  we  granted  a total  of 26
franchises.  This increased the number of our franchises to 64. Of these, 56 are
currently in operation.  This represents  approximately 84% of our current store
locations.  We anticipate that the remaining eight  franchises will open as DCAP
stores by July 31,  2001.  In  addition,  as discussed in Item 12 of this Annual
Report,  it is  anticipated  that  eight  of our  wholly-owned  stores  will  be
converted to franchises later this year.

     Franchises  currently  pay us an initial  franchise fee of $25,000 to offer
insurance  products  under the DCAP  name.  Additional  fees are  payable if the
franchisee  desires to license software from us in the operation of its store or
to obtain  training  and  software in  connection  with  income tax  preparation
services.  Franchisees are obligated to also pay us monthly fees during the term
of the

                                       5

<PAGE>

franchise agreement.  Initial franchise fees and ongoing monthly fees payable by
franchisees constituted  approximately 23% of our DCAP Insurance revenues during
the year ended  December 31, 2000. As discussed in Item 6 of this Annual Report,
this percentage should increase significantly during 2001.

     Income Tax Return Preparation

     A  majority  of our DCAP  stores  provide  income  tax  return  preparation
services.  The tax return  preparation  service allows us to offer an additional
service to the walk-in  customers who comprise the bulk of our customer base, as
well as to existing customers.  We have also obtained the right to receive calls
placed to "1-800-INCOME TAX" nationwide as a way to increase our tax preparation
business.

     The participating DCAP stores gather information from filers and forward it
to an  unaffiliated  third party,  which  processes the  information,  generates
returns  to be  submitted  to the  Internal  Revenue  Service  and other  taxing
authorities,  manually or  electronically  files the returns and  processes  any
refunds. We use a wholly-owned subsidiary as an intermediary between the various
DCAP stores and the third party processor. We believe that the provision of this
service not only  increases our revenues,  but also enhances our presence in the
various  markets  that we serve and aids in customer  retention.  During  fiscal
2000, fees received in connection with income tax return preparation constituted
approximately 1% of our DCAP Insurance revenues.

     Premium Financing

     Customers  who  purchase  insurance  policies  are often  unable to pay the
premium in a lump sum or to make the  required  down  payment,  and,  therefore,
require financing. Until September 1999, we outsourced premium financing for our
customers.  Based  upon the  perceived  need for  premium  financing,  we formed
Payments,  Inc. and it became licensed by the New York State Banking  Department
as a premium finance company.

     Payments, Inc. has contracts with two other premium finance companies, each
of which has agreed to purchase  premium  finance  receivables  as originated by
Payments, Inc. Payments, Inc. is entitled to a fee with respect to the purchased
receivables,  subject to certain conditions.  Payments, Inc. retains none of the
receivables.

     During  fiscal 2000,  fees received in  connection  with premium  financing
services constituted approximately 1% of our DCAP Insurance revenues.

     Automobile Club

     As a complement to our automobile insurance operations, we offer automobile
club services for roadside emergencies.  We offer memberships for such services,
and we make arrangements with towing dispatch  companies to fulfill service call
requirements.

                                        6

<PAGE>

     During  fiscal 2000,  fees  received in  connection  with  automobile  club
services constituted approximately 2% of our DCAP Insurance revenues.

     Structure and Operations

     As stated above, we currently have 67 offices,  of which 56 are franchises,
nine are  wholly-owned,  and two are joint  ventures.  Our  franchises and joint
venture  offices consist of both  "conversion"  and "startup"  operations.  In a
conversion  operation,  an  existing  insurance  brokerage  with an  established
business becomes a DCAP office. In a startup operation,  an entrepreneur  begins
operations  as a DCAP  office.  Our  wholly-owned  offices  are  managed  by our
employees or an independent contractor;  each joint venture office is managed by
the joint venture partner; each franchise is managed by or under the supervision
of the franchisee.

     In order to promote consistency and efficiency,  all of our office managers
are trained by us. Our training program covers:

         o        marketing, sales and underwriting
         o        office and logistics
         o        computer information
         o        our DCAP Management System (as discussed below)

     We provide the administrative  services and functions of a "central office"
to our wholly-owned and joint venture  offices.  The services  provided to these
storefront offices are:

         o        sales training
         o        bookkeeping and accounting
         o        processing services

     Franchises operate without the assistance of our "central office" services.

     We also provide support services to stores such as:

         o        assistance with regard to the hiring of employees
         o        assistance with regard to the writing of local advertising
         o        advice regarding potential carriers for certain customers

     We also  manage  the  cooperative  advertising  program in which all of our
offices participate.

     In  addition  to the above  services,  we provide  to all of our  offices a
direct business  relationship with nationally-known and local insurance carriers
that  would  otherwise  be beyond  the reach of  small,  privately-owned  retail
insurance  operations.  As a result,  an individual DCAP office can offer policy
and  premium  options to its  customers  that other local  insurance  brokerages
cannot. This direct relationship is enhanced by a software system,  known as the
DCAP Management System that provides a direct link to certain carrier databases.
This system enables each DCAP office that utilizes it to access policy  coverage
and cost information,  application requirements, and other kinds

                                       7

<PAGE>

of  information.  It also enables the DCAP  offices'  brokers to search  various
databases to obtain pertinent information about potential customers.

     Strategy

     We currently have a five-pronged business strategy:

         o        place greater emphasis on franchise operations
         o        increase name recognition
         o        expand and diversify the products and services offered by our
                  offices
         o        utilize toll-free telephone numbers
         o        utilize our website

     As of December  31,  1999,  53% of the DCAP stores were  franchises.  As of
December  31,  2000,  that  percentage  had  increased  to 84%. Due to the costs
involved in providing the "central office" administrative services and functions
to our  wholly-owned  and joint venture  offices (as discussed  above),  we have
determined to sell or close all of our remaining  wholly-owned and joint venture
locations and concentrate on our franchise  operations,  including the provision
of related services such as income tax preparation and premium finance services.

     We  pursue  increased  name  recognition   through  the   establishment  of
additional  DCAP  storefront  sites (both  conversion  and  start-up  types) and
increased marketing activities. In addition, our cooperative advertising program
will  continue  to use the  aggregated  buying  power  of the  DCAP  offices  to
advertise in various  editions of directories and in automobile  sales and other
publications.  We have also utilized  television and radio  advertising and will
consider further use in the future.

     Our  strategy of  expanding  and  diversifying  the  products  and services
offered will capitalize on the nature of the typical DCAP customer. We offer our
"walk-in" customer not only a variety of automobile insurance products,  but, as
noted above,  additional types of insurance  currently offered,  including life,
business and homeowner's  insurance,  and excess  coverage,  and other services,
including  an income  tax  return  processing  program  and a premium  financing
service.

     We also utilize toll-free telephone numbers to increase business. Telephone
calls  received are routed to the DCAP office nearest the call (based on the zip
code  of the  caller)  for  handling.  We are  promoting  "1-800-INSURANCE"  and
"1-800-INCOME  TAX" in our current markets and intend to utilize such numbers in
the future as our market expands.

     Our final  strategy  entails  offering  our  products  and services via our
website,  "www.dcapinsurance.com".  Through the website, an interested potential
customer can obtain  information with regard to the various  insurance  products
and other  services we offer,  obtain the address of the nearest  DCAP store and
apply for insurance online.

                                       8

<PAGE>


     Competition

     We compete with numerous  insurance  agents and brokers in our market.  The
amount of capital  required to commence  operations  is generally  small and the
only  material  barrier to entry is the ability to obtain the required  licenses
and  appointments as a broker or agent for insurance  carriers.  Since the great
majority of the automobile  policies  issued in our market emanates from the New
York State  Assigned  Risk Plan (which  provides for fixed  premiums for a given
area),  there is  little  price  competition  between  us and other  agents  and
brokers.

     In recent years, extensive competition has come from direct sales entities,
such as GEICO Insurance,  who have  concentrated  their  advertising  efforts on
television  and radio.  In addition,  the  Internet  sales effort of some of our
competitors, such as Progressive Insurance, has shown some promise; however, the
market share currently  attributable  to the Internet is not material.  Further,
recent  legislation  that allows banks to offer insurance to their customers has
taken market share from the storefront insurance operators.

     In connection  with our income tax  preparation  services,  we compete with
well-established  companies  such as H&R  Block  and  Jackson  Hewitt as well as
smaller tax preparation companies and tax preparers.

     Our premium finance  operation  competes with many other companies that may
have  substantially  greater  financial  resources  than  we.



International Airport Hotel

         We operate the International Airport Hotel in San Juan, Puerto Rico.
The hotel is located on the site of the San Juan International Airport and
occupies the third and fifth floors of the main terminal building. In addition
to its 57 guest rooms, the hotel has a lobby area. The hotel caters generally to
commercial and tourist travelers in transit; it is marketed through brochures,
local advertising and in-airport advertising. We also operate a video game room
on the terminal level of the airport. The operations of the hotel are highly
seasonal, with a disproportionate share of its revenues generated during the
first several months of the calendar year. Approximately 14% of the total room
sales for the hotel for 2000 were attributable to one customer, American
Airlines. During 2000, the hotel's average occupancy rate was approximately 66%.
From 1996 to 1999, the average occupancy rate was approximately 62%. The hotel's
average room rate during 2000 was approximately $72.

     The hotel is the only hotel actually located on the site of the airport. As
such,  it has little  direct  competition  for the tourist  trade or  commercial
travelers seeking only sleeping  accommodations at the airport. Other hotels are
located in areas surrounding the airport.

     See Item 3 of this Annual  Report for a discussion of a lawsuit with regard
to the lease for the hotel.

                                       9

<PAGE>

     Employees

         We employ approximately 53 persons; seven of them (all of whom are
employed in connection with our hotel operations) are represented by a
collective bargaining organization. We believe that our relationship with our
employees is good.

ITEM 2.  DESCRIPTION OF PROPERTY


     Our principal  executive  offices are located at 2545  Hempstead  Turnpike,
East Meadow,  New York. We currently also have 11  wholly-owned or joint venture
DCAP stores that are located as follows:

                  Store Location                     Nature of Ownership
                  --------------                     -------------------

                  Amityville, New York (1)           Wholly-owned
                  Medford, New York (1)              Wholly-owned
                  Seaford, New York (1)              Wholly-owned
                  Hempstead, New York (2)            Wholly-owned
                  Hicksville, New York (2)           Wholly-owned
                  Jamaica, New York (2)              Wholly-owned
                  East Meadow, New York (3)          Wholly-owned
                  Flushing, New York (3)             Wholly-owned
                  White Plains, New York             Wholly-owned
                  Brentwood, New York                Joint venture (4)
                  Greenbrook, New Jersey             Joint venture (5)
----------

(1)      Subject to agreement of sale with Mr. Lang as discussed in Items 1 and
         12 of this Annual Report.
(2)      Subject to agreement of sale with Mr. Weinzimer as discussed in Items 1
         and 12 of this Annual Report.
(3)      Subject to agreement of sale with Mr. Certilman as discussed in Items 1
         and 12 of this Annual Report.
(4)      80% owned by us.
(5)      50% owned by us.



     Our 11 wholly-owned or joint venture DCAP offices and our executive offices
are operated  pursuant to lease agreements that expire from time to time through
2006.  The  current  aggregate  base  rental for the  offices  is  approximately
$438,000 per annum.  As discussed  in Items 1 and 12 of this Annual  Report,  we
have  entered  into  agreements  to sell eight of our  wholly-owned  offices and
intend to sell our  interest in the  remaining  wholly-owned  and joint  venture
stores in the foreseeable future.

     Our hotel is leased from the Puerto Rico Ports Authority. The annual rental
obligation equals the greater of $169,400 or 20% of annual gross revenues. Total
rent  expense  under the  lease  amounted  to  approximately  $197,000  for 2000
compared to approximately $196,000 for 1999.

                                       10

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     Regent

     In November,  1996, an action was  commenced in the United States  District
Court for the Eastern  District of  Pennsylvania by Regent National Bank against
DCAP  Insurance and Payments,  Inc.  alleging that DCAP  Insurance and Payments,
Inc.  breached a certain  contract in  connection  with  Regent's  agreement  to
provide funding to finance the purchase of automobile insurance for customers of
DCAP Insurance,  Payments,  Inc. and affiliated agencies.  Subsequently,  Regent
amended  its  pleading to add Kevin Lang and Abraham  Weinzimer  as  defendants.
Regent  claims  that the  defendants  are  liable  to it for the  losses  Regent
allegedly  suffered  as a result of unpaid  loans made  through  DCAP  agencies.
Regent claims damages in excess of $800,000.  DCAP Insurance and Payments,  Inc.
have interposed  several  affirmative  defenses and have asserted  counterclaims
against  Regent for breach of contract and fraud.  DCAP  Insurance and Payments,
Inc. seek damages of $40,000. This matter has been placed on the list of matters
to be scheduled for trial, but no date has been set for a trial.  DCAP Insurance
believes  that it has  meritorious  defenses to  Regent's  claims and intends to
continue to defend and pursue its counterclaim  vigorously.  In March 1997, DCAP
Insurance,  Payments,  Inc.  and their  affiliated  agencies  brought a separate
action against  Regent,  among others,  in the Supreme Court of the State of New
York alleging, among other things, breach of contract,  negligence and fraud and
seeking damages of at least $2,000,000 as well as punitive damages in the amount
of  $2,000,000.  This  action has been  stayed  pending  the  resolution  of the
Pennsylvania action.

     Dispute with Ports Authority

     On July 22, 1988,  we entered into a lease  agreement  with the Puerto Rico
Ports  Authority  pursuant  to which the Ports  Authority  granted us a lease to
operate  the hotel for five years  until June 30,  1993.  We also  received  the
option to extend the term of the lease for an  additional  five year term to end
June 30, 1998 (subject to agreement as to the rental amount  payable,  which the
parties agreed to negotiate in good faith).

     In 1992, in accordance with the lease agreement, we exercised our right for
a five year  extension  of the  lease.  At the time,  the  Ports  Authority  was
uncertain as to whether it wished to build a new hotel in the parking lot of the
airport or upgrade the hotel and, therefore, requested that we accept a 30 month
extension  of the then  existing  term.  We agreed to a 30 month  extension  and
signed a  supplemental  lease  agreement  with the Ports  Authority  in May 1992
extending the lease term to December 31, 1995. We believe that,  pursuant to the
supplemental lease agreement, we retained our option to continue the lease for a
period of five years to December 31, 2000 and  thereafter  for  additional  five
year terms.

     In July 1993, the Assistant  Director of Operations of the Ports  Authority
forwarded  to us a letter  containing  the terms of a  proposed  ten year  lease
extension  which we  approved,  signed  and  returned  to the  Ports  Authority.
Although  the  proposed  lease  extension  does not make the  Ports  Authority's
approval  conditional  upon the  approval of its Board of  Directors,  the Ports
Authority has taken that position.  The Ports  Authority  contends  that,  since
Board of Directors approval was not

                                       11

<PAGE>

obtained,  the extension is not in effect.  We believe that a ten year agreement
has been  entered  into  between  us and the  Ports  Authority  pursuant  to the
proposed  lease  extension or that,  alternatively,  we  exercised  our right to
extend the term of the lease to December  31, 2000.  We have  notified the Ports
Authority  that we believe that we have the right to further  extend the term of
the lease to December 31, 2005 and that we exercised this right.

     Based upon our refusal to acknowledge  that,  effective January 1, 1996, we
occupied  the hotel on a  month-to-month  basis,  in  February  1996,  the Ports
Authority  requested  that we vacate,  surrender  and  deliver  the  premises by
February 29, 1996.  Following the receipt of that request, on February 26, 1996,
we  brought  an  action  in the  Superior  Court of San  Juan,  Puerto  Rico for
declaratory judgment and possessory  injunction against the Ports Authority with
respect to the hotel. The action seeks a declaratory  judgment that we exercised
an option with  respect to our lease for the hotel for an  extension of the term
of five years  commencing  on January 1, 1996 or, in the  alternative,  that the
Ports Authority  executed a new lease agreement for a ten year period commencing
on that date.  Discovery  proceedings  have taken place, and the action is still
pending.  We have  continued  to operate  the hotel  during the  pendency of the
action.

     Casmalia Resource Site

     In September 2000, we received notices from the United States Environmental
Protection Agency and counsel to the Casmalia  Resources Site Steering Committee
seeking payment for certain costs  anticipated to be incurred in connection with
the cleanup of a former hazardous waste facility.  The notices relate to AG Oil,
a company with which we had no connection  and that  allegedly sent waste to the
Casmalia  Disposal Site in Santa Barbara County,  California in and around 1982.
In 1989 AG Oil merged with Aegis Industries  Incorporated,  a company with which
we also had no connection until 1990 when we obtained a 24% equity interest.  In
1992 Aegis was involuntarily dissolved by the State of Delaware.  Based upon its
acknowledgment  that AG Oil sent relatively  small amounts of waste to the site,
the EPA  offered to settle the matter  for  approximately  $110,000.  In October
2000, our counsel sent a letter to the EPA  explaining the tenuous  relationship
between AG Oil and us and indicating  our belief that we have no  responsibility
for any alleged acts of AG Oil and,  therefore,  no liability in connection with
this matter. We have received no further notices or communications  from the EPA
with regard to the matter.

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

     There were no matters  submitted to a vote of our  stockholders  during the
last quarter of the fiscal year ended December 31, 2000.

                                       12

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

(a)  Market Information

     Our common  shares are traded  over-the-counter  and quoted on the NASD OTC
Electronic Bulletin Board under the symbol "DCAP".

     Set forth  below are the high and low bid prices for our common  shares for
the periods  indicated,  as reported on the Bulletin Board. The prices set forth
are  prices  between  broker-dealers  and  do not  include  retail  mark-ups  or
mark-downs  or  any  commissions  to  the  broker-dealer.  The  prices  may  not
necessarily reflect actual transactions.

                                          High              Low

1999 Calendar Year

First Quarter                             $2.41            $1.47
Second Quarter                             1.75             1.19
Third Quarter                              1.62             1.00
Fourth Quarter                             1.28              .75

2000 Calendar Year

First Quarter                             $1.06            $ .75
Second Quarter                              .81              .31
Third Quarter                               .47              .38
Fourth Quarter                              .38              .25

(b)  Holders

     As of March 31, 2001, there were approximately  2,327 record holders of our
common shares.

(c)  Dividends

     Holders of our common  shares are  entitled to  dividends  when,  as and if
declared by our Board of Directors out of funds legally  available.  We have not
declared  or paid any  dividends  in the past  and do not  currently  anticipate
declaring or paying any dividends in the foreseeable future. We intend to retain
earnings,  if any, to finance the  development  and  expansion of our  business.
Future  dividend  policy  will be  subject  to the  discretion  of our  Board of
Directors and will be  contingent  upon future  earnings,  if any, our financial
condition, capital requirements, general business conditions, and other factors.
Therefore,  we can give no assurance that any dividends of any kind will ever be
paid to holders of our common shares.

                                       13

<PAGE>

(d)  Recent Sales of Unregistered Securities

     Not applicable.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



     Our DCAP  storefront  locations  serve as  insurance  agents or brokers and
place various types of insurance on behalf of customers.  The types of insurance
placed include the following:

         o        automobile
         o        motorcycle
         o        boat
         o        livery/taxi
         o        life
         o        business
         o        homeowner
         o        excess coverage

     The DCAP stores  receive  commissions  from  insurance  companies for their
services. We receive fees from the franchised locations in connection with their
use of the DCAP  name.  Neither  we nor the DCAP  stores  serve as an  insurance
company and therefore do not assume underwriting risks.

     We also offer the  following  additional  services in  connection  with the
operation of the DCAP stores:

         o        income tax return preparation services
         o        premium financing services for our customers
         o        automobile club services for roadside emergencies

     We also operate the International Airport Hotel in San Juan, Puerto Rico.

     Results of Operations

     Our net  loss for the year  ended  December  31,  2000  was  $3,718,297  as
compared to a net loss of $450,042 for the year ended  December  31,  1999.  The
increased loss primarily was the result of decreased  revenues of $1,253,487 and
a write off of unamortized goodwill and other intangibles of $2,370,000, each as
discussed  below.   Excluding  the  $2,370,000  write  off,  operating  expenses
decreased $407,141 between 1999 and 2000 primarily due to the sale or closure of
DCAP stores as  discussed  below.  Included in the  decrease  was a reduction in
general and administrative  expenses of $374,454 and in lease rental expenses of
$153,883.  These  expense  reductions  offset  increases in  impairment of notes
receivable of $81,000 and depreciation and amortization expenses of $66,261.

                                       14

<PAGE>

     The results of operations for the year ended December 31, 1999 included the
results of operations of the DCAP  Companies from February 25, 1999, the date of
our acquisition of the DCAP  Companies.  On a pro forma basis (assuming that the
acquisition  of the DCAP  Companies  and  certain  interests  of  joint  venture
partners  had  occurred as of January 1, 1999),  our net loss for the year ended
December 31, 1999 would have been $873,735.

     During the year ended  December 31, 2000,  revenues from the  operations of
the DCAP Companies were $6,716,356  (including  $1,136,000 in initial  franchise
fees, i.e., from the grant of franchises). On a pro forma basis (using the above
assumption),  revenues from the operations of the DCAP Companies during the year
ended  December  31,  1999 would have been  $9,267,087  (including  $454,000  in
initial franchise fees). Therefore, on a pro forma basis, there was a decline in
revenues from the  operations of the DCAP  Companies  (net of initial  franchise
fees) of $3,232,731  between the year ended December 31, 1999 and 2000. This was
generally  due to  competitive  pressures in the industry and the sale (and,  in
general,  conversion to franchise status) or closure of certain DCAP offices. As
discussed in Items 1 and 12, we have entered  into  agreements  to sell eight of
our remaining 11  wholly-owned  and joint venture offices and intend to sell our
remaining  wholly-owned  and joint venture  offices in the  foreseeable  future.
Therefore, we anticipate that revenues from the operations of the DCAP Companies
(net of franchise fees) will further decline  substantially in 2001. However, as
a result of our shift in 2000 to a franchise  business model,  monthly franchise
fees are anticipated to increase  substantially  during 2001. Since, in general,
monthly  franchise  fees are not payable with regard to the initial 12 months of
operations,  and  since  many of the  franchises  sold in 2000 did not  commence
operations until the latter part of the year, the increase in monthly  franchise
fees is not expected to take place until the latter part of 2001. Hotel revenues
increased  approximately  $43,000  between the year ended  December 31, 1999 and
2000.

     The  operations of the DCAP  Companies  during the year ended  December 31,
2000, on a stand-alone basis,  generated a net loss of $3,556,281 as compared to
a net loss of $447,129 for the year ended  December 31, 1999.  The operations of
the hotel  during the year ended  December  31, 2000,  on a  stand-alone  basis,
generated  net income of $183,272  as  compared to a net income of $149,080  for
1999.  Accordingly,  the $3,268,255 increase in loss for the year ended December
31,  2000 as  compared  to the year  ended  December  31,  1999  was the  result
primarily  of an  increase  of  $2,657,248  in  loss  not  attributable  to  the
operations of either the DCAP  Companies or the hotel  (including a write off of
unamortized  goodwill and other  intangibles  of  $2,370,000).  The goodwill and
other intangible assets had been generated  primarily by the acquisitions of the
DCAP  Companies  and certain  interests of joint  venture  partners  (which were
accounted for under the purchase  method of  accounting).  The write off was the
result  of  various  factors,  including  our  divestiture  of  DCAP  stores,  a
significant  decrease  in the  number of key  employees  that  remained  with us
following the DCAP acquisitions,  and our inability to generate  sufficient cash
flows from operations of the remaining stores. We anticipate that the shift to a
franchise strategy with the consequential reduction of "central office" overhead
expenses should have a positive effect on our results of operations for 2001.

                                       15

<PAGE>

     Income Taxes

     We have recorded a full  valuation  allowance  against our net deferred tax
assets  because it is more likely than not that  sufficient  taxable income will
not be realized  during the  carry-forward  period to utilize the  deferred  tax
asset.



     Liquidity and Capital Resources

     As of December 31, 2000, we had $759,309 in cash and cash equivalents and a
working capital deficiency of $161,156. As of December 31, 1999, we had $943,176
in cash and cash equivalents and a working capital deficiency of $211,777.

     Cash and cash equivalents  decreased between December 31, 1999 and December
31, 2000 due to cash used to acquire  property and  equipment of $165,414 and to
repay long-term debt and capital lease obligations of $381,443,  and an increase
in notes  receivables  of  $190,519,  offset by net cash  provided by  operating
activities  in the amount of $230,509 and proceeds  from the sale of DCAP stores
of $323,000.

     Our  liquidity  at December  31, 2000 was  insufficient  to meet  operating
requirements.  In order to reduce our working  capital  deficiency and alleviate
cash flow demands, we have taken the following actions:

         o        We have continued efforts to expand franchise operations and
                  decrease the number of wholly-owned stores (by the sale of
                  stores and, in general, conversion to franchise status). This
                  has resulted in an increase in both franchise-related revenue
                  and revenue from the sale of the stores. Item 12 of this
                  Annual Report discusses agreements entered into in March 2001
                  to sell eight of our stores. Pursuant to these agreements, we
                  have received cash of approximately $739,000.

         o        We have continued efforts to reduce overhead expenses. These
                  efforts include the reduction of "central office" expenses due
                  to the shift to a franchise-oriented strategy.

         o        We have continued to seek an infusion of capital.



     Management  believes  that such actions,  if  successfully  completed,  are
reasonably  capable of removing the threat to the  continuation  of our business
during the 12 month period ended  December 31, 2001.  We can give no  assurances
that our efforts will be successful.



ITEM 7.  FINANCIAL STATEMENTS

     The  financial  statements  required  by this Item 7 are  included  in this
Annual Report on Form 10-KSB following Item 13 hereof.

                                       16

<PAGE>

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

     There were no changes in accountants due to disagreements on accounting and
financial  disclosure  during the  twenty-four  month period ended  December 31,
2000.

                                       17

<PAGE>


                                    PART III

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

      Name                       Age            Positions and Offices Held

Barry Goldstein                  48       Chairman of the Board, Chief Executive
                                          Officer and Director
Kevin Lang                       43       President of DCAP Management Corp.
Morton L. Certilman              69       Director
Jay M. Haft                      65       Director
Robert Wallach                   48       Director


     Barry Goldstein

     Mr.  Goldstein  was elected  our  Chairman  of the Board,  Chief  Executive
Officer  and a  director  in March  2001.  Since  April  1997,  he has served as
President of AIA Acquisition  Corp., which operates  insurance  agencies.  Since
1982, he has served as President of Stone Equities, a consulting firm.

     Kevin Lang

     Mr. Lang served as our President from February 1999  (concurrently with our
acquisition of DCAP Insurance)  until March 2001. He served as President of DCAP
Insurance from its inception in 1982 until March 2001. Effective March 2001, his
primary  position  became   President  of  DCAP  Management,   our  wholly-owned
subsidiary  that  operates  our  franchise  business.  He  served  as one of our
directors from February 1999 to March 2001.

     Morton L. Certilman

     Mr.  Certilman  served as our  Chairman  of the Board  from  February  1999
(concurrently  with our  acquisition of DCAP  Insurance)  until March 2001. From
October 1989 to February 1999, he served as our President.  He has served as one
of our directors  since 1989. Mr.  Certilman has been engaged in the practice of
law since 1956 and is a member of the law firm of Certilman Balin Adler & Hyman,
LLP. Mr.  Certilman is Chairman of the Long Island Regional  Planning Board, the
Nassau County Coliseum Privatization Commission, and the Northrop/Grumman Master
Planning Council. He served as a director of the Long Island Association and the
New Long Island  Partnership for a period of ten years and currently serves as a
director  of the Long Island  Sports  Commission.  Mr.  Certilman  has  lectured
extensively before bar associations, builders' institutes,

                                       18

<PAGE>

title companies,  real estate institutes,  banking and law school seminars,  The
Practicing Law Institute,  The Institute of Real Estate Management and at annual
conventions of such organizations as the National  Association of Home Builders,
the Community  Associations  Institute and the National Association of Corporate
Real  Estate  Executives.  He was a member of the  faculty of the  American  Law
Institute/American Bar Association,  as well as the Institute on Condominium and
Cluster  Developments of the University of Miami Law Center.  Mr.  Certilman has
written various articles in the condominium field, is the author of the New York
State Bar Association  Condominium  Cassette and the Condominium  portion of the
State Bar Association book on "Real Property Titles." Mr. Certilman  received an
LL.B. degree, cum laude, from Brooklyn Law School.

     Jay M. Haft

     Mr.  Haft  served as our Vice  Chairman  of the Board  from  February  1999
(concurrently  with our  acquisition of DCAP  Insurance)  until March 2001. From
October 1989 to February  1999,  he served as our Chairman of the Board.  He has
served as one of our  directors  since 1989.  Mr.  Haft has been  engaged in the
practice of law since 1959 and since 1994 has served as counsel to Parker Duryee
Rosoff & Haft.  From 1989 to 1994,  he was a senior  corporate  partner  of that
firm.  Mr.  Haft is a  strategic  and  financial  consultant  for  growth  stage
companies.  He is active in  international  corporate  finance  and  mergers and
acquisitions.  Mr.  Haft  also  represents  emerging  growth  companies.  He has
actively  participated in strategic planning and fund raising for many high-tech
companies,  leading edge medical  technology  companies and  technical  product,
service and marketing  companies.  Mr. Haft is a Managing General Partner of Gen
Am "1"  Venture  Fund,  an  international  venture  capital  fund.  He is also a
director of many  public and  private  corporations,  including  Robotic  Vision
Systems,   Inc.,   NCT   Group,   Inc.,   Encore   Medical   Corporation,   DUSA
Pharmaceuticals, Inc., Oryx Technology Corp., and Thrift Management, Inc, all of
whose securities are traded in the  over-the-counter  market. Mr. Haft is a past
member of the Florida  Commission for Government  Accountability  to the People,
and a national  trustee and Treasurer of the Miami Ballet.  He is also a trustee
of Florida  International  University  and serves on the  advisory  board of the
Wolfsonian Museum in Miami,  Florida.  Mr. Haft received B.A. and LL.B.  degrees
from Yale University.

     Robert M. Wallach

     Mr.  Wallach  has  served  since  1993 as  President,  Chairman  and  Chief
Executive Officer of The Robert Plan  Corporation,  an insurance company holding
company that provides services to insurance  companies.  He has served as one of
our directors since 1999.

     There are no family  relationships  among any of our executive officers and
directors.

     Each  director   will  hold  office  until  the  next  annual   meeting  of
stockholders  and until his  successor  is elected  and  qualified  or until his
earlier  resignation or removal.  Each executive  officer will hold office until
the initial meeting of the Board of Directors  following the next annual meeting
of  stockholders  and until his  successor is elected and qualified or until his
earlier resignation or removal.

                                       19

<PAGE>

     Section 16(a) Beneficial Ownership Reporting Compliance

     Section  16 of  the  Exchange  Act  requires  that  reports  of  beneficial
ownership  of common  shares  and  changes in such  ownership  be filed with the
Securities and Exchange Commission by Section 16 "reporting  persons," including
directors,  certain officers, holders of more than 10% of the outstanding common
shares and  certain  trusts of which  reporting  persons  are  trustees.  We are
required to disclose in this proxy statement each reporting  person whom we know
to have failed to file any required  reports  under Section 16 on a timely basis
during the fiscal year ended December 31, 2000. To our  knowledge,  based solely
on a review of written representations that no reports were required, during the
fiscal  year  ended  December  31,  2000,   our  officers,   directors  and  10%
stockholders  complied with all Section 16(a) filing requirements  applicable to
them.

ITEM 10.          EXECUTIVE COMPENSATION

     Summary Compensation Table

     The  following  table  sets  forth  certain   information   concerning  the
compensation  for the fiscal years ended  December  31, 2000,  1999 and 1998 for
each of our  executive  officers as of December  31, 2000 who had a total salary
and bonus for that year in excess of $100,000.

<TABLE>
<CAPTION>

                                                                        Long-Term Compensation
Name and                                        Annual Compensation             Awards                      All Other
Principal Position                    Year           Salary            Shares Underlying Options           Compensation
--------------------                  ----      -------------------    -------------------------           ------------
<S>                                   <C>                <C>                  <C>                            <C>

Morton L. Certilman                   2000           $125,000                   -                               -0-*
Chairman of Board(1)                  1999            129,167                225,000                            -0-*
                                      1998            150,000                   -                               -0-*

Kevin Lang                            2000           $250,000                   -                                -
 President(2)                         1999            208,000(3)             200,000                             -
                                      1998               -                      -                                -

Abraham Weinzimer                     2000           $250,000                   -                                -
 Executive Vice President(4)          1999            208,000(3)             200,000                             -
                                      1998               -                      -                                -

</TABLE>

*    Excludes fees payable during 1998, 1999 and 2000 by us to Certilman Balin
     Adler & Hyman, LLP, a law firm of which Mr. Certilman is a member.

(1)  Effective  March 28, 2001, Mr.  Certilman  resigned his position as our
     Chairman of the Board.

(2)  Effective  March 28,  2001,  Mr.  Lang  resigned  his  position as our
     President and a director, and he became President of DCAP Management Corp.,
     our wholly-owned subsidiary that operates our franchise business.

(3)  Represents  salary  paid  from  February  25,  1999,  the  date of our
     acquisition  of the DCAP  Companies.  Messrs.  Lang and Weinzimer  were the
     principals of these companies.

                                       20

<PAGE>

(4)  Effective  March 28, 2001, Mr.  Weinzimer  resigned his position as our
     Executive Vice President and a director.

     Options

     No grants of stock options were made to any of Messrs.  Certilman,  Lang or
Weinzimer during the fiscal year ended December 31, 2000.

                   AGGREGATED OPTION EXERCISES IN FISCAL YEAR
            ENDED DECEMBER 31, 2000 AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>

                                                               Number of Shares
                               Number of                    Underlying Unexercised          Value of Unexercised
                                Shares                            Options at                In-the-Money Options
                               Acquired        Value           December 31, 2000            at December 31, 2000
Name                          on Exercise     Realized     Exercisable/Unexercisable      Exercisable/Unexercisable
----                          -----------     --------     -------------------------      -------------------------
<S>                               <C>          <C>                          <C>                 <C>
Morton L. Certilman                -            N/A             112,500/112,500                      0/0

Kevin Lang                         -            N/A             100,000/100,000                      0/0

Abraham Weinzimer                  -            N/A             100,000/100,000                      0/0

</TABLE>

     Long-Term Incentive Plan Awards

     No awards were made to any of Messrs.  Certilman,  Lang or Weinzimer during
the fiscal year ended December 31, 2000 under any long-term incentive plan.

     Compensation of Directors

     Our  directors  are not  entitled  to receive  any  compensation  for their
services as directors.

     Employment  Contracts,  Termination  of  Employment  and  Change-in-Control
Arrangements

     Effective March 28, 2001, our subsidiary, DCAP Management,  entered into an
employment  agreement  with Mr.  Lang  pursuant  to which he is  employed as its
President.

     Term

     The term of the employment agreement is six months.

     Devotion of Time

     During the term of the employment agreement, Mr. Lang is required to expend
all of his  working  time for DCAP  Management,  except that he may expend up to
eight hours per week in  connection  with the operation of the three DCAP stores
he has agreed to purchase.

                                       21

<PAGE>

     Compensation

     During the employment period, Mr. Lang will be entitled to receive a salary
of $125,000 per annum. In addition,  in connection with each franchise agreement
approved by the DCAP Management  Board of Directors and entered into solely as a
result of Mr. Lang's efforts, he will be entitled to receive $2,000.

     Termination

     In the event of termination of Mr. Lang's  employment  without  "cause," he
will be entitled to receive,  as liquidated  damages, a lump sum amount equal to
all  compensation  that he would have been entitled to receive for the remainder
of the term, as if his employment had not terminated.

     Restrictive Covenants

     Prior to the second  anniversary of the  expiration  date of the employment
agreement,  without our prior written consent, Mr. Lang is restricted,  within a
radius of five  miles of any of our  offices or  franchises,  from  engaging  or
participating in a business which is similar to or competitive with our business
activities. He may, however, operate his DCAP stores.

ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT

     The  following  table sets forth certain  information  as of March 31, 2001
regarding the  beneficial  ownership of our common shares by (i) each person who
we believe to be the beneficial owner of more than 5% of our outstanding  common
shares,  (ii) each  present  director,  (iii) each person  listed in the Summary
Compensation  Table under "Executive  Compensation," and (iv) all of our present
executive officers and directors as a group.

  Name and Address           Number of Shares             Approximate
 of Beneficial Owner         Beneficially Owned         Percent of Class
 -------------------         ------------------         ----------------

Jay M. Haft                   1,788,893(1) (2)                    15.5%
1001 Brickell Bay Drive
Miami, Florida

Eagle Insurance Company       1,486,893(3)                        13.1%
c/o The Robert Plan
  Corporation
999 Stewart Avenue
Bethpage, New York

                                       22

<PAGE>

Robert M. Wallach             1,486,893(4)                        13.1%(4)
c/o The Robert Plan
  Corporation
999 Stewart Avenue
Bethpage, New York



Morton L. Certilman           1,336,005(1)(5)                     11.5%
The Financial Center at
  Mitchel Field
90 Merrick Avenue
East Meadow, New York

Kevin Lang                      851,460(1)(6)                      7.4%
3789 Merrick Road
Seaford, New York

Abraham Weinzimer               783,924(1)                         6.9%
418 South Broadway
Hicksville, New York

All executive officers
and directors as a group      5,463,251(1)(2)(5)                  45.5%
(5 persons)                            (6)(7)


(1)  Based upon  Schedule  13D filed under the  Securities  Exchange  Act of
     1934.

(2)  Includes  225,000  shares  issuable  upon the  exercise  of  currently
     exercisable  options and 15,380  shares held in a retirement  trust for the
     benefit of Mr. Haft.

(3)  Eagle is a  wholly-owned  subsidiary of The Robert Plan. See Item 12 of
     this Annual Report.

(4)  Represents  shares owned by Eagle,  of which Mr.  Wallach,  one of our
     directors,  is a Vice President.  Eagle is a wholly-owned subsidiary of The
     Robert  Plan,  of which  Mr.  Wallach  is  President,  Chairman  and  Chief
     Executive Officer.

(5)  Includes  225,000  shares  issuable  upon the  exercise  of  currently
     exercisable  options and 902,452 shares held in a retirement  trust for the
     benefit of Mr. Certilman.

(6)  Includes  200,000  shares  issuable  upon the  exercise  of  currently
     exercisable options.

(7)  Includes  shares  owned by  Eagle,  of  which  Mr.  Wallach  is a Vice
     President.  Mr.  Wallach is also  President,  Chairman and Chief  Executive
     Officer of The Robert Plan, Eagle's parent.

                                       23


<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     DCAP Agreement


     On February 25, 1999, pursuant to the terms of an Agreement dated as of May
8, 1998 between Messrs. Lang, Weinzimer,  Certilman and Haft and us, as amended,
we acquired DCAP Insurance. Prior to our acquisition of DCAP Insurance,  Messrs.
Lang and Weinzimer were its principals.  Messrs. Certilman and Haft were parties
to the  agreement  since  they  acquired  shares of DCAP Group  concurrently  as
described  below.  The  following  is a  summary  of the  material  terms of the
agreement:



     Acquisition of Common Shares

     Pursuant to the agreement,  we acquired DCAP  Insurance.  At the closing of
the acquisition, we issued the following common shares:

      o   3,300,000 shares to Messrs.  Lang and Weinzimer  (1,650,000 shares
          to each) in  consideration  for their  transfer  of the shares of DCAP
          Insurance.

      o   950,000 shares to Messrs.  Lang and Weinzimer  (475,000  shares to
          each)  at a  purchase  price  of  $.25  per  share  (an  aggregate  of
          $237,500), paid as follows:

          o   an  amount  in cash  equal to the par  value  of the  950,000
              shares (an aggregate of $9,500); and

          o    the  balance  by the  delivery  by each of  Messrs.  Lang and
               Weinzimer  of a  promissory  note  in  the  principal  amount  of
               $114,000 (an  aggregate of $228,000).  These notes  provided for,
               among other things, the following:

               o  interest at the rate of 6% per annum; and

               o  payment of  principal  and  interest in six equal annual
                  installments   commencing  April  15,  2001  and  continuing
                  through  April 15,  2006,  subject  to  acceleration  to the
                  extent that Mr. Lang or Mr. Weinzimer  received any proceeds
                  from the sale or other disposition of any common shares; and

      o   452,000  shares to Messrs.  Certilman  and Haft or their  designees
          (208,500  shares  to  each  of  Messrs.  Certilman  and  Haft  or  his
          retirement  trust and an aggregate  of 35,000  shares to a designee of
          Mr.  Certilman) at a purchase price of $.25 per share (an aggregate of
          $113,000), paid in cash.

     At the closing of our acquisition of DCAP Insurance,  each of Messrs. Haft,
Lang and Weinzimer and Mr.  Certilman's  retirement trust also purchased 450,000
of our common shares (1,800,000 shares in the aggregate)  beneficially  owned by
Sterling  Foster  Holding  Corp.  and held

                                       24

<PAGE>


by Mr.  Certilman as voting  trustee  pursuant to a Voting Trust  Agreement with
Sterling  Foster,  at a purchase price of $.25 per share.  Mr. Certilman did not
receive any portion of such purchase price. Upon such purchase, the Voting Trust
Agreement was terminated.

     At the  closing of the  acquisition,  we also  loaned  $112,500  to each of
Messrs. Lang and Weinzimer (an aggregate of $225,000). The proceeds of the loans
were used by Messrs.  Lang and  Weinzimer  solely for the purpose of  purchasing
their  shares  from  Sterling  Foster.  Each of the  loans  was  evidenced  by a
promissory note that provided for, among other things, the following:

     o interest at the rate of 6% per annum;

     o payment of  principal  and  interest in six equal  annual  installments
       commencing April 15, 2001 and continuing through April 15, 2006, subject
       to acceleration to the extent that Mr. Lang or Mr. Weinzimer received any
       proceeds from the sale or other disposition of any common shares;

     o non-recourse against Messrs. Lang and Weinzimer, i.e., Messrs. Lang and
       Weinzimer  would not be  personally liable  for the payment of the notes;
       instead, in the event of a default, our sole remedy would be pursuant to
       a pledge by Messrs. Lang and Weinzimer of their Sterling Foster shares,
       as discussed below; and

     o the right of each of Messrs.  Lang and Weinzimer to satisfy the amounts
       due under his respective note by delivering our common shares valued at
       the greater of (i) $.25 per share or (ii) the average market price of our
       common shares for the 20 trading days immediately  preceding  the date of
       delivery of the shares.

     The payment of all amounts  due under the  $114,000  notes was secured by a
pledge by each of Messrs. Lang and Weinzimer to us of 570,000 common shares. The
payment of all amounts due under the  $112,500  notes was secured by a pledge by
each of Messrs.  Lang and  Weinzimer  to us of the shares  acquired  by him from
Sterling Foster.



     The $.25 per share purchase price for the shares,  as described  above, was
based upon a share valuation performed by Margolin, Winer & Evans LLP, certified
public accountants.



     See "March 2001  Transactions"  for a discussion of our  reacquisition of a
portion of the shares issued to Messrs.  Lang and Weinzimer and the cancellation
of the notes discussed above.

     Restrictive Covenant Agreements

     At the  closing of our  acquisition  of DCAP  Insurance,  Messrs.  Lang and
Weinzimer  executed  and  delivered  to  us a  restrictive  covenant  agreement.
Pursuant to this  agreement,  each agreed that for five years he will not engage
or participate in a business that is similar to or competitive with our business
anywhere  within five miles of the  location  of any of our  offices  (including
franchises).

                                       25

<PAGE>

     The restrictive  covenants contained in the restrictive  covenant agreement
are separate and  independent  from the restrictive  covenants  contained in the
employment and franchise agreements entered into with them.

     Sale of Company Shares

     Pursuant to an  employment  agreement  we entered into with Mr. Lang at the
time of our acquisition of the DCAP Companies, we have loaned him $36,000. While
such loan is outstanding, Mr. Lang will be obligated to sell, as soon as legally
permissible, the maximum number of our common shares that he is permitted by law
to sell,  and to use the  proceeds to satisfy his  obligations  under his notes.
Until  the  above  loan has been  satisfied  in full,  Mr.  Lang may not sell or
otherwise  dispose  of any of his  common  shares  for less  than $.25 per share
(subject to adjustment  for stock splits and the like) without our prior written
consent.

     Eagle



     Concurrently with our acquisition of the DCAP Companies, we issued and sold
to Eagle  1,486,893 of our common shares for an aggregate cash purchase price of
approximately $1,000,000, or $.67 per share.



     Eagle is a New Jersey  insurance  company  wholly-owned by The Robert Plan,
one of the  largest  insurers  of  assigned-risk  drivers in the United  States.
Pursuant  to  separate  agency  agreements  between  some of our DCAP stores and
certain insurance company  subsidiaries of The Robert Plan, the DCAP stores have
been appointed agents of the insurance  companies with regard to the offering of
automobile and other insurance products.

     Pursuant to our  agreement  with Eagle,  the size of our Board of Directors
was  increased to five and Robert M.  Wallach,  Eagle's Vice  President  and the
President,  Chairman  and  Chief  Executive  Officer  of The  Robert  Plan,  was
appointed as a member of our Board of Directors. We agreed that, during the five
year period  following the closing,  provided that Eagle remains the  beneficial
owner of at least  1,000,000 of our common  shares  (subject to  adjustment  for
stock  splits and the like),  we shall  continue  to nominate  Mr.  Wallach as a
director.

     Sale of Interests in Stores

     Prior to May 31, 2000,  four of the DCAP stores were owned  one-half by the
daughter of Mr. Certilman and one-half by us. Effective May 31, 2000 we sold our
50% interest in each of the stores to Mr. Certilman upon the following  material
terms and conditions:

     o  The  purchase  price for our  interest  in the stores was  approximately
        $141,000, after certain credits.

     o The purchase price was payable as follows:

                                       26

<PAGE>

          o $66,000  was payable at the rate of $6,000 per month,  starting on
            the first anniversary of the closing, and

          o the  balance of the  purchase  price was  payable  over five  years,
            together with 6% interest, in equal monthly installments commencing
            on the second anniversary of the closing.



     o We agreed to waive all  indebtedness  owing by the  stores to us. As of
       the closing, the approximate amount of such indebtedness, which related
       to advances made by us on behalf of the stores, was $210,000.



     o As part of the transaction,  the stores became conversion  franchisees,
       and the first annual franchise charge of $18,000 per store was paid in
       full at the  closing  in  consideration  for a waiver  of the  annual
       franchise charges during the second year.

     o The stores entered into franchise agreements with us, which are similar
       in most respects to our standard conversion  franchise agreement
       (including standard territorial rights), except that

          o the stores have a right of first  refusal with regard to franchise
            locations  to be  offered  in zip codes  adjoining  those in which
            the stores are located, and

          o in the  event  we sell  another  franchise  to be  located  in the
            territory  with respect to which a store  currently has certain
            rights (which is more  expansive  than the rights  granted  pursuant
            to the franchise  agreements),  the annual  franchise fee for the
            particular store will be waived for six months.

          o These  rights  were  granted  in  consideration  of the  waiver of
            certain other geographic rights not granted to other franchisees.

     o Certain  license  fees  totaling  $40,000  previously  prepaid  by Mr.
       Certilman will be retained by us, to be applied generally against
       franchise fees for any new franchises granted to Mr. Certilman or his
       designee.



     The terms of sale were the result of arm's length negotiations  between Mr.
Certilman  and us.  No  independent  appraisal  or  valuation  was  received  in
connection with the sale.

     The  purchase  price for the 50%  interest  in the stores  acquired  by Mr.
Certilman (prior to the credits applied) was equal to approximately  one-half of
the aggregate  commissions  for the stores for the year ended December 31, 1999.
We believe that a purchase price for a 50% interest in a store equal to one-half
of the store's annual commissions represented fair market value at that time.



     See "March 2001  Transactions"  for a discussion of the cancellation of the
above amount due by Mr.  Certilman as well as of  agreements to sell DCAP stores
to Messrs. Lang, Weinzimer and Certilman.

                                       27

<PAGE>

     March 2001 Transactions

     In March 2001, the following transactions occurred:



     o  We entered into  agreements with Messrs.  Lang,  Weinzimer and Certilman
        that  provide for our sale to them of a total of eight of our DCAP
        stores.  Pursuant to the agreements, Mr. Lang is to acquire three of the
        stores for a total  purchase  price of  approximately  $257,000,  Mr.
        Weinzimer is to acquire three of the stores for a total  purchase  price
        of $285,000 and an entity owned by Mr. Certilman (we refer to the entity
        as "Mr. Certilman") is to acquire two of the stores for a total purchase
        price of approximately $225,000. The locations of the stores are as
        follows:

        o    Lang:             Amityville, New York
                               Medford, New York
                               Seaford, New York

        o    Weinzimer:        Hempstead, New York
                               Hicksville, New York
                               Jamaica, New York

        o    Certilman:        East Meadow, New York
                               Flushing, New York

                  At the time of execution of the agreements with Messrs. Lang
                  and Weinzimer, each of them paid to us the total amount of his
                  respective purchase price. At the time of execution of the
                  agreement with Mr. Certilman, we received approximately
                  $197,000 of the purchase price. The balance of $28,000 is
                  payable at the closing of the acquisition through the
                  assumption of our obligation to an unaffiliated third party in
                  that amount. The obligation was incurred in May 2000 in
                  connection with our acquisition of the third party's interest
                  in one of the stores being acquired by Mr. Certilman. The
                  closing of the sales is subject to the receipt of approval by
                  our stockholders of the sales (either individually, as a group
                  or as part of a sale of our assets that may constitute a sale
                  of substantially all of our assets). Pending the closing, each
                  of Messrs. Lang, Weinzimer and Certilman is managing his
                  respective stores and will be entitled to receive a management
                  fee equal to the net profits of the stores. Each of them will
                  also be responsible for all losses incurred during this
                  interim period.

     o   As  security  for the return of the  amounts  paid to us at the time of
         execution of the agreements, we granted to Messrs.  Lang and  Weinzimer
         a lien in the outstanding shares of the respective stores they have
         agreed to acquire  and to Mr.  Certilman  a lien in the  assets of the
         stores he has agreed to acquire.  In the event  stockholder approval is
         not received by October 24, 2001, each of Messrs. Lang, Weinzimer and
         Certilman may demand a return of their respective

                                       28

<PAGE>

          payments.  We have the option to require that, instead of repaying the
          sums,  they foreclose upon their  respective  liens. In this event, in
          order to foreclose upon his lien, Mr.  Certilman  would have to assume
          the $28,000 liability discussed above.



     o    We agreed with Messrs.  Lang,  Weinzimer and  Certilman  that,  at the
          closing of the store sales,  we would enter into franchise  agreements
          with them on terms  similar to those entered into by Mr.  Certilman in
          May 2000 (as described  above under "Sale of Interests in Stores"),
          except that, in general,  none  of the  franchisees  will be  allowed
          to  terminate  their respective  franchise  agreements  prior to March
          31, 2003.  Messrs.  Lang, Weinzimer and Certilman have agreed that,
          pending the closing,  they would be  responsible  for  charges  as if
          the  franchise  agreements  had  been executed.

     o    We reacquired a total of 3,714,616 of the shares issued to Messrs.
          Lang and  Weinzimer  (see  "DCAP  Agreement  -  Acquisition  of Common
          Shares") in consideration of the cancellation of indebtedness  owed to
          us by them in the aggregate amount of $928,654.



     o    We agreed with Mr. Lang to terminate his employment agreement that
          was scheduled to expire in February  2004,  and DCAP  Management,  our
          wholly-owned subsidiary that operates our franchise business,  entered
          into a new  employment  agreement  with him as discussed in Item 10 of
          this  Annual  Report.  Based upon Mr.  Lang's  agreement  to forgo the
          compensation  otherwise payable to him for the balance of the original
          employment term  ($667,000,  net of the amount payable to him pursuant
          to his new  employment  agreement),  we  granted  to Mr.  Lang a price
          concession of approximately $85,000 in connection with his purchase of
          his three stores.  This price concession  resulted in a purchase price
          of $257,000 for Mr. Lang.

     o    We agreed with Mr. Weinzimer to terminate his employment  agreement
          that  was  scheduled  to  expire  in  February  2004.  Based  upon Mr.
          Weinzimer's  agreement to forgo the compensation  otherwise payable to
          him for the balance of the employment term  ($729,000),  we granted to
          Mr.  Weinzimer  a  price   concession  of  approximately   $85,000  in
          connection  with  his  purchase  of  his  three  stores.   This  price
          concession resulted in a purchase price of $285,000 for Mr. Weinzimer.

     o    We agreed with Mr. Certilman to terminate his employment  agreement
          that was  scheduled to expire in February  2004.  Concurrently,  based
          upon Mr. Certilman's agreement to forgo the compensation otherwise due
          him  for  the  balance  of  the  term  of  the  employment   agreement
          ($365,000), we agreed to cancel indebtedness of approximately $141,000
          that Mr. Certilman owed to us pursuant to his purchase of our interest
          in four DCAP stores as  discussed  above under "Sale of  Interests  in
          Stores."

     o    We agreed with Mr. Haft to terminate his employment  agreement that
          was scheduled to expire in February 2004.

                                       29

<PAGE>

     o    Each of Messrs. Lang, Weinzimer, Certilman and Haft resigned as an
          officer of DCAP Group. Messrs. Lang and Weinzimer also resigned as our
          directors.


     The terms of the above  sales  agreements  were the result of arm's  length
negotiations  between us and each of Messrs.  Lang, Weinzimer and Certilman that
were based upon the terms of other recent sales of our stores to persons who are
not affiliated  with us, then current market  conditions and the  termination of
the employment  agreements with each of them, as discussed above. No independent
appraisal or valuation was received in connection  with the  agreements.  We did
not utilize a special independent committee of our Board of Directors to perform
an analysis of the fairness of the transactions or to negotiate the terms of the
sales on our behalf.



     Relationship

     Certilman Balin Adler & Hyman,  LLP, a law firm of which Mr. Certilman is a
member,  serves as our counsel. It is presently  anticipated that such firm will
continue to  represent us and will receive fees for its services at rates and in
amounts not greater than would be paid to unrelated law firms performing similar
services.  Certilman  Balin has also served as counsel to DCAP Insurance and The
Robert  Plan with  respect  to  certain  matters;  however,  it did not serve as
counsel to DCAP Insurance or Messrs.  Lang and Weinzimer in connection  with our
acquisition of DCAP Insurance,  to Messrs.  Lang or Weinzimer in connection with
the transactions with them discussed under "March 2001 Transactions" or to Eagle
in connection with the issuance of shares to Eagle. In addition, Certilman Balin
did not serve as counsel to either us or Mr.  Certilman in  connection  with the
transactions  with him discussed  under "Sale of Interests in Stores" and "March
2001 Transactions" above.

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a)      Exhibits

Exhibit
Number            Description of Exhibit
-------           ----------------------

 3(a)    Certificate of Incorporation, as amended(1)

  (b)    By-laws, as amended(2)

10(a)    Agreement, dated July 22, 1988, between the Ports Authority and IAH(3)

10(b)    Resolution of Board of Directors of Ports Authority, dated August 10,
         1994, regarding rental obligation of the Hotel(4)

10(c)    1998 Stock Option Plan(2)

10(d)    Agreement, dated as of May 8, 1998, by and among DCAP Group, Inc. and
         Morton L. Certilman, Jay M. Haft, Kevin Lang and Abraham Weinzimer, as
         amended(2)

                                       30

<PAGE>

10(e)    Stock Option Agreement, dated February 25, 1999, between DCAP Group,
         Inc. and Morton L. Certilman(2)

10(f)    Stock Option Agreement, dated February 25, 1999, between DCAP Group,
         Inc. and Jay M. Haft(2)

10(g)    Stock Option Agreement, dated February 25, 1999, between DCAP Group,
         Inc. and Kevin Lang(2)

10(h)    Stock Option Agreement, dated February 25, 1999, between DCAP Group,
         Inc. and Abraham Weinzimer(2)

10(i)    Subscription Agreement, dated as of October 2, 1998, between DCAP
         Group, Inc. and Eagle Insurance Company and amendments thereto(2)

10(j)    Form of Subscription Agreement with regard to private offering of
         Units, dated June 2, 1999(5)

10(k)    Form of Registration Rights Agreement with regard to private offering
         of Units, dated June 2, 1999(5)

10(l)    Form of Warrant Agreement with regard to private offering of Units,
         dated June 2, 1999(5)

10(m)    Sale and Assignment Agreement, dated as of September 1, 1999, among
         Payments, Inc., Flatiron Credit Company, Inc. and Westchester Premium
         Acceptance Corp.(5)

10(n)    Stock Purchase Agreement dated May 17, 2000 by and between DCAP Group,
         Inc., Dealers Choice Automotive Planning, Inc., Alyssa Greenvald,
         Morton Certilman, DCAP Ridgewood, Inc., DCAP Bayside, Inc., DCAP
         Freeport, Inc. and MC DCAP, Inc.(6)

10(o)    Agreement, dated as of March 28, 2001, between DCAP Group, Inc. and
         Kevin Lang with respect to sale of DCAP Bayshore, Inc., DCAP Medford,
         Inc. and DCAP Seaford, Inc.

10(p)    Agreement, dated as of March 28, 2001, between DCAP Group, Inc. and
         Abraham Weinzimer with respect to sale of Diversified Coverage Asset
         Planning, Inc., ADCAP Brokerage, Inc. and DCAP Hicksville, Inc.

10(q)    Asset Purchase Agreement, dated as of March 28, 2001, between East
         Meadow Agency, Inc., DCAP Flushing, Inc. and MLC East Meadow/Flushing
         LLC.

10(r)    Agreement, dated as of March 28, 2001, between DCAP Group, Inc. and
         Kevin Lang with respect to repurchase of shares.

10(s)    Agreement, dated as of March 28, 2001, between DCAP Group, Inc. and
         Abraham Weinzimer with respect to repurchase of shares.

                                       31

<PAGE>

10(t)    Letter agreement, dated as of March 28, 2001, between DCAP Group, Inc.
         and Abraham Weinzimer.

10(u)    Letter agreement, dated as of March 28, 2001, between DCAP Group, Inc.
         and Morton L. Certilman.

10(v)    Letter agreement, dated as of March 28, 2001, between DCAP Group, Inc.
         and Jay M. Haft.

10(w)    Employment Agreement, dated as of March 28, 2001, between DCAP
         Management, Inc. and Kevin Lang.

21       Subsidiaries

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

(1)      Denotes document filed as exhibits to our Annual Reports on Form 10-KSB
         for the years ended December 31, 1993 and 1998 and incorporated herein
         by reference.

(2)      Denotes document filed as an exhibit to our Annual Report on Form
         10-KSB for the year ended December 31, 1998 and incorporated herein by
         reference.

(3)      Denotes document filed as an exhibit to our Annual Report on Form
         10-KSB for the year ended December 31, 1993 and incorporated herein by
         reference.

(4)      Denotes document filed as an exhibit to our Annual Report on Form
         10-KSB for the year ended December 31, 1994 and incorporated herein by
         reference.

(5)      Denotes document filed as exhibits to our Annual Report on Form 10-KSB
         for the fiscal year ended December 31, 1999 and incorporated herein by
         reference.

(6)      Denotes document filed as an exhibit to our Quarterly Report on Form
         10-QSB for the period ended June 30, 2000 and incorporated herein by
         reference.

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

(b)      Reports on Form 8-K

     No report on Form 8-K was filed by us during the last quarter of the fiscal
year ended December 31, 2000.

                                       32


<PAGE>

                                   SIGNATURES


     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934,  the  registrant  caused this  amendment to the report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                                                DCAP GROUP, INC.


Dated:   July 27, 2001                          By:/s/ Barry Goldstein
                                                   -----------------------------
                                                   Barry Goldstein
                                                   Chief Executive Officer



<PAGE>









                       DCAP GROUP, INC. AND SUBSIDIARIES
                              REPORT ON AUDITS OF
                       CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999


<PAGE>


Item 7 - Consolidated Financial Statements



                                      INDEX

                                                           Page

Independent auditors' report                                F-2


Consolidated balance sheet                                  F-3


Consolidated statements of operations                       F-4


Consolidated statement of stockholders' equity              F-5


Consolidated statements of cash flows                       F-6


Notes to consolidated financial statements              F-7 - F-19



<PAGE>


                        CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>


                          Independent Auditors' Report



Board of Directors and Stockholders
DCAP Group, Inc.
East Meadow, New York


We have audited the accompanying  consolidated balance sheet of DCAP Group, Inc.
and Subsidiaries as of December 31, 2000 and the related consolidated statements
of operations,  stockholders' equity and cash flows for each of the years in the
two-year period ended December 31, 2000. These consolidated financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an  opinion  on these  consolidated  financial  statements  based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit 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 DCAP Group, Inc. and
Subsidiaries  as of December  31, 2000 and the results of their  operations  and
their cash flows for each of the years in the two-year period ended December 31,
2000 in conformity with accounting  principles  generally accepted in the United
States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated   financial   statements,   the  Company's  recurring  losses  from
operations  raise  substantial  doubt  about its  ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 1. The  consolidated  financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.




                                                    HOLTZ RUBENSTEIN & CO., LLP
Melville, New York
March 30, 2001

                                       F-2


<PAGE>


                        DCAP GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2000

<TABLE>
<CAPTION>

                 ASSETS
<S>                                                                             <C>

CURRENT ASSETS:
   Cash and cash equivalents                                            $     759,309
   Accounts receivable, net of allowance for
     doubtful accounts of $53,000                                             388,341
   Notes receivable (Notes 3 and 5)                                         1,143,869
   Prepaid expenses and other current assets                                   56,991
                                                                        -------------
       Total current assets                                                 2,348,510

PROPERTY AND EQUIPMENT, net (Note 6)                                          937,194
GOODWILL, net (Note 3)                                                        800,000
OTHER INTANGIBLES, net (Note 3)                                               271,974
DEPOSITS AND OTHER ASSETS                                                      72,945
                                                                        -------------

                                                                        $   4,430,623
                                                                        =============

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable and accrued expenses (Note 7)                       $   1,850,727
   Current portion of long-term debt (Note 9)                                  38,831
   Current portion of capital lease obligations (Note 10)                     156,041
   Deferred revenue                                                           309,867
   Debentures payable (Note 8)                                                154,200
                                                                        -------------
       Total current liabilities                                            2,509,666
                                                                        -------------

LONG-TERM DEBT (Note 9)                                                       236,355
                                                                        -------------

CAPITAL LEASE OBLIGATIONS (Note 10)                                           226,433
                                                                        -------------

DEFERRED REVENUE                                                               43,221
                                                                        -------------

MINORITY INTEREST                                                              22,424
                                                                        -------------

COMMITMENTS (Note 13)

STOCKHOLDERS' EQUITY: (Notes 3 and 14)
   Common stock, $.01 par value; authorized 25,000,000 shares;
     issued and outstanding 15,068,018 shares                                 150,680
   Capital in excess of par                                                 9,752,409
   Deficit                                                                 (8,282,565)
                                                                        -------------
                                                                            1,620,524
   Subscription receivable                                                   (228,000)
                                                                        -------------
                                                                            1,392,524
                                                                            ---------

                                                                        $   4,430,623
                                                                        =============
</TABLE>

                 See notes to consolidated financial statements

                                       F-3


<PAGE>


                        DCAP GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                         Years Ended
                                                                                         December 31,
                                                                             -----------------------------------
                                                                                   2000                1999
<S>                                                                                 <C>                <C>
                                                                             ----------------    ---------------
REVENUES:
   Commissions and fees                                                      $      6,716,356    $     8,045,737
   Rooms                                                                              970,195            967,744
   Other operating departments                                                        128,873             55,430
                                                                             ----------------    ---------------

       Total revenues                                                               7,815,424          9,068,911
                                                                             ----------------    ---------------

OPERATING EXPENSES:
   General and administrative expenses (Note 17)                                    6,933,522          7,307,976
   Impairment of intangible assets (Note 4)                                         2,370,000                 -
   Impairment of notes receivable                                                      81,000                 -
   Provision for bad debts                                                              5,400             44,497
   Departmental                                                                       382,683            396,872
   Depreciation and amortization                                                      788,259            721,998
   Lease rentals (Notes 11 and 13)                                                    858,764          1,012,647
   Property operation and maintenance                                                  61,040             33,819
                                                                             ----------------    ---------------

       Total operating expenses                                                    11,480,668          9,517,809
                                                                             ----------------    ---------------

OPERATING LOSS                                                                     (3,665,244)          (448,898)
                                                                             ----------------    ---------------

OTHER (EXPENSE) INCOME:
   Interest income (Note 5)                                                            78,660             80,998
   Interest expense                                                                  (144,173)          (135,715)
   Gain on sale of DCAP stores (Note 5)                                                32,319                 -
                                                                             ----------------    ---------------

                                                                                      (33,194)           (54,717)
                                                                             ----------------    ---------------

LOSS BEFORE INCOME TAXES
   AND MINORITY INTEREST                                                           (3,698,438)          (503,615)

INCOME TAXES (Note 12)                                                                 25,000              7,239
                                                                             ----------------    ---------------

LOSS BEFORE MINORITY INTEREST                                                      (3,723,438)          (510,854)

MINORITY INTEREST                                                                       5,141             60,812
                                                                             ----------------    ---------------

NET LOSS                                                                     $     (3,718,297)   $      (450,042)
                                                                             ================    ================

NET LOSS PER COMMON SHARE (Note 14)

   Basic                                                                                $(.25)             $(.04)
                                                                                        =====              =====

   Diluted                                                                              $(.25)             $(.04)
                                                                                        =====              =====

WEIGHTED AVERAGE NUMBER
   OF SHARES OUTSTANDING

   Basic                                                                           14,751,832         11,729,970
                                                                              ===============     ==============

   Diluted                                                                         14,751,832         11,729,970
                                                                              ===============     ==============

</TABLE>

                 See notes to consolidated financial statements

                                       F-4


<PAGE>


                        DCAP GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                         Capital
                                                 Common Stock           in Excess                      Subscription
                                             Shares        Amount         of Par          Deficit      Receivable         Total
                                        --------------   -----------   ----------      ------------    -----------       -------

<S>                                             <C>          <C>          <C>              <C>             <C>             <C>
Balance, January 1, 1999                    5,591,367    $  55,914     $ 5,264,950     $ (4,114,226)   $         -      $ 1,206,638

Securities issued in connection
    with business acquisitions
    (Notes 3 and 14)                        6,188,893       61,889       2,109,829                -       (228,000)       1,943,718

Securities issued to acquire
    intangible property                       150,000        1,500         195,375                -              -          196,875

Securities issued in private
    placement, net of expenses
    (Note 14)                               1,522,684       15,227       1,344,673                -              -        1,359,900

Securities issued in connection
    with acquisition of shares of
    affiliates (Note 3)                       846,232        8,462         837,770                -              -          846,232

Net loss for the year                               -            -               -         (450,042)             -         (450,042)
                                        -------------    ---------      ----------       -----------     ---------      ------------

Balance, December 31, 1999                 14,299,176      142,992       9,752,597       (4,564,268)      (228,000)       5,103,321

Securities issued to private
    placement investors (Note 14)             761,342        7,613          (7,613)               -              -                -

Securities issued to acquire
    intangible property                         7,500           75           7,425                -              -            7,500

Net loss for the year                               -            -               -       (3,718,297)             -       (3,718,297)
                                        -------------    ---------      ----------       -----------     ---------      ------------

Balance, December 31, 2000                 15,068,018    $ 150,680      $9,752,409      $(8,282,565)    $ (228,000)     $ 1,392,524
                                        =============    =========      ==========      ============    ===========     ============
</TABLE>

                 See notes to consolidated financial statements

                                       F-5


<PAGE>


                        DCAP GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                                         Years Ended
                                                                                         December 31,
                                                                                 --------------------------------
                                                                                       2000               1999
                                                                                 ----------------   -------------
<S>                                                                                     <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                   $    (3,718,297)      $   (450,042)
   Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
       Depreciation and amortization                                                  788,259            721,998
       Bad debt expense                                                                   600              8,000
       Impairment of intangible assets                                              2,370,000                  -
       Impairment of notes receivable                                                  81,000                  -
       Gain on sale of DCAP stores                                                    (32,319)                 -
       Minority interest                                                               (5,141)           (60,812)
       Changes in operating assets and liabilities:
         (Increase) decrease in assets:
           Accounts receivable                                                        (19,690)          (127,092)
           Prepaid expenses and other assets                                           (9,165)          (111,065)
           Deposits and other assets                                                   30,783             40,545
         Increase (decrease) in liabilities:
           Accounts payable and accrued expenses                                      431,178             73,570
           Deferred revenue                                                           313,301           (101,662)
                                                                             ----------------      -------------
       Net cash provided by (used in) operating activities                            230,509             (6,560)
                                                                             ----------------      -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                                (165,414)          (124,528)
   Notes receivable - net                                                            (190,519)        (1,468,173)
   Proceeds from sale of DCAP stores                                                  323,000                  -
   Net cash acquired from business combinations                                             -             39,065
                                                                             ----------------      -------------
       Net cash used in investing activities                                          (32,933)        (1,553,636)
                                                                             ----------------      -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Principal payments of long-term debt                                              (381,443)          (328,677)
   Proceeds from issuance of stock                                                          -          2,478,618
                                                                             ----------------      -------------
       Net cash (used in) provided by financing activities                           (381,443)         2,149,941
                                                                             ----------------      -------------

Net (decrease) increase in cash and cash equivalents                                 (183,867)           589,745

Cash and cash equivalents, beginning of year                                          943,176            353,431
                                                                             ----------------      -------------

Cash and cash equivalents, end of year                                       $        759,309      $     943,176
                                                                             ================      =============

</TABLE>

                 See notes to consolidated financial statements

                                       F-6


<PAGE>


                        DCAP GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999

1. Organization and Nature of Business:

     DCAP Group,  Inc. and  Subsidiaries  (the "Company")  operates a network of
retail  offices  and  franchise  operation  engaged in the sale of retail  auto,
motorcycle, boat, business, and homeowner's insurance. The Company also provides
tax preparation services, automobile club services for roadside emergencies, and
premium financing services. In addition,  the Company operates the International
Airport Hotel in San Juan,  Puerto Rico (the "Hotel")  through its  wholly-owned
subsidiary,  IAH,  Inc. The Hotel caters  generally  to  commercial  and tourist
travelers in transit.

     On February 25, 1999, the Company acquired all of the outstanding  stock of
Dealers Choice Automotive Planning, Inc. (later renamed DCAP Insurance Agencies,
Inc.)  ("DCAP")  as well as  interests  in the other  related  companies  ("DCAP
Companies").  The Company's  consolidated  statements of operations  include the
results of  operations of the DCAP  Companies  from the date of  acquisition  to
December 31, 1999.

     The Company's consolidated financial statements for the year ended December
31, 2000 have been  prepared on a going  concern  basis which  contemplates  the
realization  of assets and the settlement of liabilities in the normal course of
business.  The  Company  incurred  net losses of  approximately  $3,718,000  and
$450,000 in the years ended December 31, 2000 and 1999, respectively, and has an
accumulated  deficit at December  31, 2000 of  approximately  $8,283,000.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going concern. (See Note 20 for further discussion.)


     The Company is actively pursuing additional equity funding.  Further, it is
continuing to sell the remaining DCAP stores in order to reduce recurring costs.
Management also plans to continue opening new DCAP Insurance franchises in order
to generate  additional  revenues.  Management  believes that such  actions,  if
successfully  completed,  are  reasonably  capable of removing the threat to the
continuation of the Company's business during the 12 month period ended December
31,  2001.  The  Company  can  give  no  assurances  that  its  efforts  will be
successful. The consolidated financial statements do not include any adjustments
that might be  necessary  should the  Company be unable to  continue  as a going
concern.


2.   Summary of Significant Accounting Policies:

     a. Principles of consolidation
        ---------------------------

     The accompanying  consolidated financial statements include the accounts of
all  subsidiaries  and joint  venture  interests in which the Company  exercises
significant  influence  over all decision  making  related to the ongoing  major
operations.  All significant  intercompany  accounts and transactions  have been
eliminated.


     b. Revenue recognition
        -------------------

     The Company  recognizes  commission  revenue from insurance policies at the
beginning of the contract  period,  on income tax preparation  when the services
are  completed  and on  automobile  club dues equally over the contract  period.
Franchise  fee  revenue  is  recognized  when  substantially  all the  Company's
contractual requirements under the franchise agreement are completed. Refunds of
commissions on the cancellation of insurance  policies are reflected at the time
of cancellation.

                                       F-7


<PAGE>

2. Summary of Significant Accounting Policies: (Cont'd)

     Premium  financing fee revenue is earned based upon the  collection of loan
installments  by third  party  financing  companies.  The Company  records  this
revenue upon the receipt of fees from the  financing  companies,  as the Company
does not have the  ability to  determine  whether it has earned  fees during the
term of the financing agreement.

     Revenues from room sales are recorded at the time services are performed.

     The Company adopted Staff Accounting  Bulletin 101, Revenue  Recognition in
Financial Statements,  in the fourth quarter of 2000, which had no impact on the
financial condition or results of operations


     c. Goodwill and intangible assets
        ------------------------------

     The excess of the fair value  paid over the net assets  from the  Company's
acquisitions of DCAP and interests in other DCAP Companies has been allocated to
goodwill and other  intangible  assets,  including  its  workforce,  restrictive
covenants and customer lists. Accordingly, a significant portion of the purchase
price of each  acquisition  is considered to relate to goodwill.  In determining
the period in which to amortize goodwill,  management  considered the effects of
obsolescence,  demand,  competition,  the rate of technological change, expected
changes in  distribution  channels  and  barriers to entry.  Goodwill  and other
intangibles recorded in connection with the Company's  acquisitions is amortized
on a straight-line basis over a period of five to fifteen years. Amortization of
goodwill and intangible assets approximated  $367,000 and $273,000 for the years
ended December 31, 2000 and 1999, respectively. The Company reviews goodwill and
certain  identifiable  intangibles  for  impairment as described in Note 2j (see
Note 4).

     d. Property and equipment
        ----------------------

     Property and equipment are stated at cost.  Depreciation  is provided using
the straight-line  method over the estimated useful lives of the related assets.
Leasehold  improvements are being amortized using the straight-line  method over
the estimated  useful lives of the related  assets or the remaining  term of the
lease.

     e. Concentration of credit risk
        ----------------------------

     The Company  invests its excess cash in deposits and money market  accounts
with major  financial  institutions  and has not  experienced  losses related to
these investments.

     A majority of the Company's receivables are derived from commissions earned
from  insurance  companies.  Concentration  of credit  risk with  respect to its
receivables is considered to be limited due to its regulated customer base.

     f. Statement of cash flows
        -----------------------

     For  purposes of the  consolidated  statement  of cash  flows,  the Company
considers all highly liquid debt  instruments with a maturity of three months or
less, as well as bank money market accounts, to be cash equivalents.

     g. Estimates
        ---------

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

                                       F-8


<PAGE>

Summary of Significant Accounting Policies:  (Cont'd)


     h. Loss per share
        --------------

     The Company's net loss per share was calculated by dividing net loss by the
weighted average number of common shares outstanding.

     i. Advertising costs:
        -----------------

     Advertising  costs are charged to  operations  when the  advertising  first
takes place.



     j. Impairment of long-lived assets
        -------------------------------

     The Company reviews long-lived assets and certain identifiable  intangibles
to be held and used for impairment  whenever events or changes in  circumstances
indicate  that the  carrying  amount of an asset  exceeds  the fair value of the
asset.  If other events or changes in  circumstances  indicate that the carrying
amount  of an  asset  that  the  Company  expects  to  hold  and  use may not be
recoverable,  the  Company  will  estimate  the  undiscounted  future cash flows
expected to result from the use of the asset or its  eventual  disposition,  and
recognize  an  impairment  loss.  The  impairment  loss,  if  determined  to  be
necessary,  would be measured as the amount by which the carrying  amount of the
assets  exceeds the fair value of the assets.  A similar  evaluation  is made in
relation to goodwill,  with any impairment  loss measured as the amount by which
the carrying  value of such goodwill  exceeds the expected  undiscounted  future
cash flows.


     k. Website Development Costs
        -------------------------

     Technology and content costs are generally expensed as incurred, except for
certain costs relating to the  development of internal-use  software,  including
those  relating to operating the Company's  website,  that are  capitalized  and
depreciated over two years. No costs were incurred during 2000 or 1999.


     l. Reclassifications
        -----------------

     Certain  reclassifications  have  been made to the  consolidated  financial
statements   for  the  year  ended   December  31,  1999  to  conform  with  the
classifications used in 2000.


3.     Business Combinations:

     a.  Acquisition of DCAP - See Note 20 in  conjunction  with sale of certain
         DCAP stores
         -----------

     On February 25, 1999, the Company acquired all of the outstanding  stock of
DCAP, as well as interests in DCAP  Companies.  The aggregate  purchase price of
DCAP was  approximately  $1,055,000,  consisting  of the  issuance of  3,300,000
shares of the Company's common stock, valued at $825,000,  plus related expenses
of approximately $230,000. This acquisition was accounted for under the purchase
method of accounting.

     The  historical  carrying  amounts of the assets  acquired and  liabilities
assumed approximated their fair values on the date of acquisition. Approximately
$3,242,000 and $450,000 of intangible  assets  generated by the acquisition were
allocated to goodwill and other intangible  assets,  respectively.  These assets
are being  amortized  over their  estimated  useful  lives.  The  components  of
goodwill and other intangible assets are as follows:



                                                   Amount                Life
                                                -------------        ----------

          Workforce                             $     250,000           8 years
          Restrictive Covenants                       100,000          10 years
          Customer Lists                              100,000           2 years
          Goodwill - Insurance Business             3,215,000          15 years
          Goodwill - Income Tax Business               27,000           5 years

                                       F-9

<PAGE>

3.   Business Combinations: (Cont'd)

     Additionally,  the Company  issued  950,000 common shares to certain of the
DCAP  shareholders  in exchange  for $9,500 in cash and  $228,000 in  promissory
notes.  These  notes bear  interest at 6% per annum and are payable in six equal
annual commencing April 15, 2001.

     Additionally,   the  Company   received   non-recourse   promissory   notes
aggregating  $225,000 from the DCAP  shareholders in consideration of loans made
to them in such  aggregate  amount.  The notes bear interest at 6% per annum and
are payable in six equal annual  installments  commencing  April 15,  2001.  The
proceeds  of the loans  were used to  purchase  900,000  common  shares  from an
existing  shareholder.  Interest  income  accrued  on these  loans  approximated
$27,000  and  $23,000  for  the  years  ended   December   31,  2000  and  1999,
respectively.

     The  promissory  notes  received at the closing of the DCAP  agreement  are
secured by 2,040,000 common shares of the Company.

     An  independent   valuation  was  performed   primarily   using  the  asset
accumulation method for valuing the stock exchanged in the acquisition.

     b. Acquisitions of joint venture interests
        ---------------------------------------

     During  1999,  the Company  acquired  the  interests in various DCAP Retail
Insurance  Stores in exchange  for  846,232  shares of common  stock,  valued at
$846,232, plus $57,400 in cash. These transactions have been accounted for under
the purchase method of accounting.

     The  historical  carrying  amounts of the tangible  assets and  liabilities
approximated  their  fair  values  on the  date  of  acquisition.  Approximately
$730,000 of the aggregate  purchase price was allocated to goodwill and is being
amortized over its estimated useful life of fifteen years.

4.   Impairment of Goodwill and Other Intangibles:

     As discussed in Note 2j, the Company reviews  long-lived assets and certain
identifiable intangibles to be held and used, including goodwill, for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset exceeds the fair value of the asset. During the fourth quarter of 2000,
the Company  evaluated the carrying value of the goodwill and other  intangibles
related to the acquisition of DCAP Companies and joint venture  interests.  As a
result,  unamortized  goodwill and other  intangibles of $2,370,000,  related to
such  acquisitions  as described in Note 3 were written off. This  write-off was
the result of various factors  including the  divestiture of its DCAP stores,  a
significant  decrease  in the number of key  employees  that  remained  with the
Company  following  the  acquisitions,  as well  as the  inability  to  generate
sufficient cash flows from operations  generated from the remaining stores.  See
Note 20 for a further discussion.

5.  Notes Receivable:

     a. Due from franchises
        -------------------

     Included in notes receivable at December 31, 2000 are $155,000 of notes due
from  various  DCAP  franchises.  The notes are  payable  in  aggregate  monthly
installments of approximately $21,000, including interest, ranging from 9.25% to
18.37%, through December 2001.

     b. Sale of DCAP Stores
        -------------------

     During 2000, the Company recognized a net gain of approximately  $32,300 on
the sale of 14 of its DCAP stores.  Eight of the stores sold were converted into
franchises.   Certain  of  the  stores  were  sold  to  one  of  the   Company's
stockholders. The aggregate selling price of the 14 stores approximated $577,000
of which $323,000 was received in cash with the remaining balance of $254,000 in
the form of various notes. The notes consist of the following:

                                      F-10

<PAGE>


5.    Notes Receivable:  (Cont'd)
      ----------------

       Non-interest bearing note receivable
          payable upon demand                                      $    112,500

       Non-interest bearing note receivable from a
       shareholder payable in eleven equal monthly
       installments commencing May 2001 - See Note 20                    66,000

       6% note receivable from a shareholder, payable in 60
          equal monthly installment of $1,636 including
          interest commencing May 2002 - (See Note 20)                   75,454
                                                                   ------------
                                                                   $    253,954
                                                                   ============

     c. Other officers/shareholders notes receivable
        --------------------------------------------

     Included  in notes  receivable  at  December  31, 2000 are amounts due from
officers/stockholders  approximating  $509,000  including accrued interest.  The
notes are due at various dates through 2003,  together with accrued  interest at
rates ranging from 6.0% to 7% per annum.  Interest  income accrued on such notes
for the years ended December 31, 2000 and 1999 approximated $24,000 and $22,000,
respectively.

6.   Property and Equipment:

     At December 31, 2000 property and equipment consists of the following:

       Furniture, fixtures and equipment                         $      683,011
       Office equipment                                                 461,735
       Leasehold improvements                                           287,110
       Operating equipment                                                8,933
       Computer hardware and software                                 1,175,395
       Transportation equipment                                          31,047
       Entertainment facility                                           200,538
                                                                 --------------
                                                                      2,847,769
       Less accumulated depreciation and amortization                 1,910,575
                                                                 --------------
                                                                 $      937,194
                                                                 ==============

7.   Accounts Payable and Accrued Expenses:

     At December 31, 2000 accounts  payable and accrued  expenses consist of the
following:

       Accounts payable                                          $    1,024,746
       Payroll and related costs                                        142,954
       Professional fees                                                206,631
       Premiums payable                                                 236,884
       Other                                                            239,512
                                                                 --------------
                                                                 $    1,850,727
                                                                 ==============

8.   Debentures Payable:

     In 1971, the Company, pursuant to a plan of arrangement, issued a series of
debentures  which  matured in 1977.  As of December 31, 2000,  $154,200 of these
debentures  have not been presented for payment.  Accordingly,  this balance has
been included as a current  liability in the accompanying  consolidated  balance
sheet.  Interest has not been accrued on the remaining  debentures  payable.  In
addition, no interest,  penalties or other charges have been accrued with regard
to any escheat obligation of the Company.

                                      F-11


<PAGE>

<TABLE>
<CAPTION>

9.   Long-Term Debt:

<S>                                                                                        <C>
     At December 31, 2000, long-term debt is comprised of the following:

       Note payable to former stockholder, due in monthly installments
          aggregating $3,178, including interest at rates ranging from 6% to
          10%, maturing at varying dates through September 2002.                     $   20,346


       Note payable to franchisee, due in varying monthly installments ranging
          from $1,700 to $2,000 per month through April 2003, including interest
          at approximately 24% per annum.                                                43,487


       Mortgage payable, due in monthly installments of $1,803, including
          interest at 9%, per annum through May 2017. The obligation is
          collateralized by the Company's entertainment facility having a
          book value of $150,000.                                                       184,353

       Other                                                                             27,000
                                                                                      ---------
                                                                                        275,186
       Less current maturities                                                           38,831
                                                                                      ---------
                                                                                      $ 236,355
                                                                                      =========

</TABLE>

       Long-term debt matures as follows:

                      Years Ended
                     December 31,
                     ------------

                        2001                                 $    38,000
                        2002                                      48,000
                        2003                                      21,000
                        2004                                       7,000
                        2005                                       7,000
                     Thereafter                                  154,000

10.  Capitalized Lease Obligations:

     Included in computer  and office  equipment  are certain  assets  having an
acquisition  cost of  approximately  $1,109,000,  leased under  capital  leases.
Accumulated  amortization  at December  31, 2000  totaled  $738,000.  The future
minimum lease  payments of these capital leases and the present value of the net
minimum lease payments as of December 31, 2000 are as follows:

                     Years Ended
                     December 31,
                     ------------

                        2001                                 $   210,000
                        2002                                     122,000
                        2003                                      85,000
                        2004                                      58,000
                        2005                                       7,000
                                                             -----------
                Minimum lease payment                            482,000
          Less amount representing interest                      100,000
                                                             -----------
     Present value of net minimum lease payments                 382,000
          Less current maturities                                156,000
                                                             -----------
Long-term portion of capitalized lease obligations           $   226,000
                                                             ===========

11.  Related Party Transaction:

     During the years ended  December 31, 2000 and 1999,  the Company leased its
corporate office facility from a partnership of which a stockholder/officer is a
member. Rent expense amounted to $6,000 for each of the years ended December 31,
2000 and 1999.

                                      F-12
<PAGE>

12.  Income Taxes:

     The  Company  files a  consolidated  U.S.  Federal  Income Tax return  that
includes  all  wholly-owned  subsidiaries.  State  tax  returns  are  filed on a
consolidated, or separate basis depending on applicable laws.

     The 2000 and 1999 income of IAH, Inc., a wholly-owned subsidiary,  has been
calculated  excluding the loss of DCAP Group,  Inc.,  as it is separately  taxed
under the laws of Puerto Rico.  For 2000 and 1999, a provision of  approximately
$6,000 and $7,000 has been made for this tax liability, respectively.

     The provision for income taxes is comprised of the following:

                                                          Years Ended
                                                          December 31,
                                                  -------------------------
                                                      2000           1999
                                                  ------------    ---------

       Benefit at federal statutory rates         $ (1,274,532)  $ (171,229)
       Loss in excess of available benefit           1,299,532      178,468
                                                  ------------    ---------
                                                  $     25,000   $    7,239
                                                  ============   ==========

     At December 31, 2000 the Company had net operating loss  carryforwards  for
tax purposes of approximately  $4,400,000.  The tax loss carryforwards expire at
various dates through 2020.

     Internal Revenue Code Section 382 places a limitation on the utilization of
federal net  operating  loss and other  credit  carryforwards  when an ownership
change, as defined by the tax law occurs.  Generally, this occurs when a greater
than 50 percentage  point change in ownership  occurs.  Accordingly,  the actual
utilization of the net operating loss and  carryforwards for tax purposes may be
limited annually to a percentage  (approximately 6%) of the fair market value of
the Company at the time of any such ownership change.

       Deferred tax assets at December 31, 2000 consist of the following:

       Deferred tax assets:
          Net operating loss carryovers                $     1,753,800
          Other                                                 55,000
                                                       ---------------
          Total deferred tax asset                           1,808,800
          Less valuation allowance                          (1,808,800)
                                                       ---------------
       Net deferred tax assets                         $            -
                                                       ===============

     The  Company  has  recorded  a full  valuation  allowance  against  its net
deferred tax assets because it is more likely than not that  sufficient  taxable
income  will not be  realized  during the  carry-forward  period to utilize  the
deferred tax asset.

13.  Commitments:

     a. Leases

     IAH, Inc.  leases the  International  Airport Hotel (the "Hotel")  property
pursuant  to an  operating  lease  with the Ports  Authority,  which  expired in
December  1995.  As  discussed  below,  IAH is of the belief that  pursuant to a
supplemental lease agreement, it retained the option to continue the lease for a
period  of five  years to  December  31,  2000,  which  right it  exercised,  or
alternatively, that the Ports Authority executed a new lease agreement for a ten
year term  commencing on January 1, 1996. The lease  agreement  provides for the
annual  rental  payments  to be equal to the  greater of  $169,400 or 20% of the
annual gross revenues, as defined, effective January 1, 1994. Total rent expense
under this lease  amounted to  approximately  $197,000 for 2000 and $196,000 for
1999.

                                      F-13

<PAGE>


13.  Commitments:  (Cont'd)

     a. Leases (cont'd)
        ------

     Based upon IAH's refusal to acknowledge that, effective January 1, 1996, it
occupied  the Hotel on a  month-to-month  basis,  in  February  1996,  the Ports
Authority  requested  that IAH vacate,  surrender  and  deliver the  premises by
February 29, 1996.  Following the receipt of such request, IAH brought an action
in the  Superior  Court of San Juan,  Puerto Rico for  declaratory  judgment and
possessory injunction against the Ports Authority with respect to the Hotel. The
action  seeks  a  declaratory  judgment  that,  among  other  alternatives,  IAH
exercised  an option with respect to its lease for the Hotel for an extension of
the term of five years commencing on January 1, 1996 or that the Ports Authority
executed a new lease  agreement  for a ten year period  commencing on such date.
Certain discovery proceedings have taken place, and the action is still pending.
Management  is of the opinion that the Company  will prevail on the  declaratory
judgment; therefore, management will vigorously defend its position.

     The  Company  and  each  of  its   affiliates   lease  office  space  under
noncancellable operating leases expiring at various dates through the year 2006.
Many of the leases are  renewable  and include  additional  rent for real estate
taxes and other operating expenses. The minimum future rentals under these lease
commitments for leased facilities and office equipment are as follows:

                      Years Ended
                     December 31,
                     ------------
                        2001                     $  438,000
                        2002                        374,000
                        2003                        245,000
                        2004                        158,000
                        2005                        122,000
                     Thereafter                      27,000

     Rental  expense  approximated  $662,000  and  $816,000  for the years ended
December 31, 2000 and 1999.

     b. Employment agreement
        --------------------

     In connection with the sale of DCAP stores  subsequent to December 31, 2000
(see Note 20), the Company  terminated  its employment  agreements  with certain
directors/officers.  Effective  March 28, 2001,  the Company  entered into a six
month employment agreement with an officer. This agreement provides compensation
of $125,000 per annum,  with a bonus for each franchise sold as a result of this
employee's efforts.

     c. Litigation
        ----------

     The Company is involved in various  lawsuits and claims  incidental  to its
business.  In the  opinion of  management,  the  ultimate  liabilities,  if any,
resulting  from  such  lawsuits  and  claims  will  not  materially  affect  the
consolidated financial statements of the Company taken as a whole.


14.  Stockholders' Equity:

     a. Private placement of securities
        -------------------------------

     On June 2, 1999, the Company sold, through a private placement,  33.5 Units
(each  consisting of 45,453 common shares and 15,151 Class A, 15,151 Class B and
15,151  Class C  warrants)  at a  purchase  price  of  $50,000  per Unit for net
proceeds of $1,360,000 net of closing costs approximating  $315,000.  Each Class
A, B and C warrant is exercisable at $1.10,  $1.37 and $1.65,  respectively  and
expires  June 2,  2004.  All  warrants  issued in  connection  with the  private
placement are outstanding at December 31, 2000.



     On June 2, 2000,  the Company  issued  761,342 common shares to the private
placement  investors  pursuant to price protection  provisions  contained in the
offering  agreement.  Pursuant  to those  provisions,  the Company had agreed to
issue to the  investors  additional  shares  based upon the market  price of the
Company's  common shares one year after the June 2, 1999 offering date (if lower
than the market price at the time of the offering).  As a result,  the per share
price was  reduced  from $1.10 to $.73 (the floor  price  provided  for) and the
additional shares were issued.

                                      F-14


<PAGE>

14.  Stockholders' Equity:  (Cont'd)

     b. Stock options
        -------------

     In  November  1998,  the Company  adopted the 1998 Stock  Option Plan which
provides for the  issuance of incentive  stock  options or  non-statutory  stock
options.  Under this plan, options to purchase not more than 2,000,000 shares of
common  stock  may be  granted,  at a price  to be  determined  by the  Board of
Directors or the Stock Option  Committee at the time of grant.  Incentive  stock
options granted under this plan expire ten years from date of grant (except five
years for a grant to a 10%  stockholder of the Company).  The Board of Directors
or the Stock Option Committee will determine the expiration date with respect to
non-statutory options granted under this plan.

     A summary of the status of the Company's stock option plans of December 31,
2000 and 1999, and changes during the years then ended is presented below:

<TABLE>
<CAPTION>


                                                                                 Years Ended
                                                                                December 31,
                                                            ----------------------------------------------------
                                                                      2000                        1999
                                                            ------------------------    ------------------------
                                                                          Weighted                     Weighted
                                                                           Average                      Average
                                                                          Exercise                     Exercise
       Fixed Stock Options                                    Shares        Price         Shares         Price
       -------------------                                    ------     -----------    ---------    -----------
        <S>                                                  <C>             <C>           <C>            <C>

       Outstanding, beginning of year                         950,000      $ 2.51              -        $   -
       Granted                                                    -             -         950,000         2.51
       Expired                                                    -             -              -            -
       Forfeited                                                  -             -              -            -
                                                            ---------                   ---------
       Outstanding, end of year                               950,000      $ 2.51         950,000       $ 2.51
                                                            =========                   =========

       Weighted-average fair value
         of options granted during year                                    $    -                       $  .28
                                                                           =======                      ======

</TABLE>

       The following table summarizes information about stock options
outstanding at December 31, 2000:
<TABLE>
<CAPTION>


                                                     Options Outstanding          Options Exercisable
                                     ----------------------------------------- --------------------------
                                                     Weighted
                                                     Average        Weighted                   Weighted
                                                    Remaining        Average                   Average
                                   Number          Contractual      Exercise     Number        Exercise
           Exercise Price        Outstanding          Life            Price    Outstanding      Price
           --------------        -----------       -----------     ---------   -----------    -----------
                <S>                 <C>               <C>            <C>          <C>             <C>

           $1.00 - $2.69         950,000             2.85 yrs.       $2.51      525,000         $2.37

</TABLE>

     The Company has elected the  disclosure-only  provisions  of  Statement  of
Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation"
("FASB 123") in  accounting  for its employee  stock  options.  Accordingly,  no
compensation expense has been recognized.  Had the Company recorded compensation
expense  for the stock  options  based on the fair  value at the grant  date for
awards in the years  ended  December  31,  2000 and  1999,  consistent  with the
provisions  of SFAS 123, the Company's net loss and net loss per share would not
have been impacted.

                                      F-15

<PAGE>


14.  Stockholders' Equity: (Cont'd)

     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes  option-pricing model. The following range of weighted-average
assumptions were used for grants during the year ended December 31, 1999:

                   Dividend yield                        0.00%
                   Volatility                            8.00%
                   Risk-free interest rate               5.50%
                   Expected life                       2-5 years

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.   Because  the   Company's   stock   options  have   characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its stock options.

     c. Eagle insurance agreement
        -------------------------

     On February 25, 1999, the Company issued  1,486,893  common shares to Eagle
Insurance Company for proceeds of approximately $1,000,000.

     d. Common shares reserved
        ----------------------

          Warrants                                                2,740,898
                                                                  =========

          Stock Option Plans                                      2,000,000
                                                                  =========

15.  Business Segments:

     The Company currently has two reportable  business segments:  Insurance and
Hotel.  The  Insurance  segment  sells  retail  auto,  motorcycle,  boat,  life,
business,  and homeowner's insurance and franchises.  In addition,  this segment
offers  tax  preparation   services,   automobile  club  services  for  roadside
emergencies,  services with regard to obtaining insurance premium financing, and
automobile   loans  from  third   parties.   The  Hotel  segment   operates  the
International Airport Hotel in San Juan, Puerto Rico. The Hotel caters generally
to commercial and tourist travelers in transit.  Insurance  revenues are derived
from activities within the United States,  and all long-lived assets are located
within the United States.

     Revenue,  operating  income,  capital  expenditures,  and  depreciation and
amortization  pertaining  to the  industries  in which the Company  operates are
presented below.

<TABLE>
<CAPTION>

                Year Ended
             December 31, 2000                   Insurance          Hotel           Other (1)            Total
       -----------------------------           -------------    ------------     --------------   ----------------
        <S>                                          <C>          <C>               <C>                    <C>
       Revenues from external
          customers                            $   6,716,356   $   1,057,723     $       41,345   $      7,815,424
       Interest income                                31,297              -              47,363             78,660
       Interest expense                              144,173              -                  -             144,173
       Depreciation and amortization                 751,228          37,031            -                  788,259
       Segment profit (loss)                      (3,556,281)        183,272           (345,388)        (3,718,297)
       Segment assets                              3,468,109         302,012            660,502          4,430,623
       Expenditures for segment assets               235,552          20,222                 -             255,774
       Impairment of intangible assets             2,370,000              -                  -           2,370,000

</TABLE>

                                      F-16


<PAGE>

15.  Business Segments:  (Cont'd)

     The following is a reconciliation  of reportable  segment  expenditures for
segment assets to consolidated totals:


          Expenditures for Segment Assets

       Total expenditures for segment assets          $     255,774
       Non-cash acquisitions of assets                      (90,360)
                                                      -------------

       Consolidated total                             $     165,414
                                                      =============

     (1) Column represents corporate-related items and, as it relates to segment
     profit  (loss),  income,  expense and assets not  allocated  to  reportable
     segments.

<TABLE>
<CAPTION>


                Year Ended
             December 31, 1999                   Insurance          Hotel           Other (1)            Total
       -----------------------------           -------------    ------------     --------------   ----------------
                <S>                                <C>            <C>             <C>               <C>
       Revenues from external
          customers                            $   8,045,737   $   1,014,950     $        8,224   $   9,068,911
       Interest income                                25,850              -              55,148          80,998
       Interest expense                              135,715              -                  -          135,715
       Depreciation and amortization                 676,840          45,158                 -          721,998
       Segment profit (loss)                        (447,129)        149,080           (151,993)       (450,042)
       Segment assets                              5,808,979         307,580          2,099,203       8,215,762
       Expenditures for segment assets               450,892          52,239                 -          503,431

</TABLE>

     The following is a reconciliation  of reportable  segment  expenditures for
segment assets to consolidated totals:


          Expenditures for Segment Assets

       Total expenditures for segment assets               $     503,431
       Non-cash acquisitions of assets                          (378,903)
                                                           -------------

       Consolidated total                                  $     124,528
                                                           =============

          (1) Column  represents  corporate-related  items and, as it relates to
          segment  profit  (loss),  income,  expense and assets not allocated to
          reportable segments.

16.  Fair Value of Financial Instruments:

     The  methods  and  assumptions  used to  estimate  the  fair  value  of the
following classes of financial instruments were:

       Current Assets and Current Liabilities: The carrying amount of cash,
       current receivables, notes receivable and payables and certain other
       short-term financial instruments approximate their fair value.

       Long-Term Debt: The fair value of the Company's long-term debt, including
       the current portion, was estimated using a discounted cash flow analysis,
       based on the Company's assumed incremental borrowing rates for similar
       types of borrowing arrangements. The carrying amount of variable and
       fixed rate debt at December 31, 2000 approximates fair value.

17.  Advertising Costs:

     Included in selling,  general and  administrative  expenses are advertising
costs approximating  $866,000 and $760,800 for the years ended December 31, 2000
and 1999, respectively.

                                      F-17

<PAGE>


18.      Supplementary Information - Statement of Cash Flows:

       Cash paid during the years for:

<TABLE>
<CAPTION>

                                                                         Years Ended
                                                                        December 31,
                                                           -----------------------------------
                                                                2000                  1999
                                                           -------------         -------------
                <S>                                              <C>                  <C>
       Supplemental disclosures:
          Interest                                         $     117,983         $     211,911
                                                           =============         =============

          Income Taxes                                     $      15,461         $      64,660
                                                           =============         =============
       Non-cash financing and investment activities:
          Common stock issued for acquisitions and
             intangible property                           $       7,500         $   2,096,107
                                                           =============         =============
          Acquisitions of property and equipment
             through capital leases                        $      90,360         $     378,903
                                                           =============         =============

</TABLE>

19.  Fourth Quarter Adjustment:

     A fourth  quarter  adjustment  was made in the year ended December 31, 2000
that is significant to the quarter and to comparisons  between quarters.  During
the fourth quarter of 2000, the Company  recorded an impairment  charge relating
to goodwill and other intangibles of $2,370,000 (See Note 4).

20.  Subsequent Event:

     In March 2001, the Company entered into agreements with three  stockholders
that provide for the sale of a total of eight DCAP stores for cash consideration
of an aggregate of $767,000. At the time of execution of the agreements with two
of the  shareholders,  they each paid to the Company  the total  amount of their
respective  purchase  price.  At the time of execution of the agreement with the
remaining  shareholder,  the  Company  received  approximately  $197,000  of the
purchase price. The balance is payable at the closing of the acquisition through
the  assumption  of a  liability.  The  closing  of the sales is  subject to the
receipt of approval by the stockholders of the sales (either individually,  as a
group or as part of a sale of the Company's assets that may constitute a sale of
substantially  all of the Company's  assets).  Pending the closing,  each of the
respective  shareholders is managing his respective  stores and will be entitled
to receive a management fee equal to the net profits of the stores. Each of them
will also be responsible for all losses incurred during this interim period.



     As security  for the return of the amounts  paid to the Company at the time
of execution of the agreements,  the Company  granted two of the  shareholders a
lien in the  outstanding  shares of the  respective  stores  they have agreed to
acquire and to the remaining shareholder,  a lien in the assets of the stores he
has agreed to acquire. In the event stockholder approval is not received by July
26,  2001,  each of the  shareholders  may  demand a return of their  respective
payments.  The Company has the option to require  that,  instead of repaying the
sums,  they foreclose upon their  respective  liens. In this event, in order for
one of the  shareholders to foreclose upon his lien, he would have to assume the
liability discussed above.

     The Company agreed with the three  shareholders that, at the closing of the
store sales,  the Company  would enter into  franchise  agreements  with them on
terms  similar  to those  previously  entered  into by one of the  shareholders,
except that, in general,  none of the  franchisees  will be allowed to terminate
their  respective  franchise  agreements  prior to March  31,  2003.  The  three
shareholders  have agreed that,  pending the closing,  they would be responsible
for charges as if the franchise agreements had been executed.

     The Company  reacquired a total of 3,714,616 of the shares issued to two of
these  shareholders in consideration of the cancellation of indebtedness owed to
the Company by them in the aggregate amount of $928,654.  The remaining notes in
the original  principal amount of $33,000 are still owed to the Company from its
former President.

                                      F-18

<PAGE>

20.  Subsequent Event:  (Cont'd)


     The Company agreed with one of the shareholders to terminate his employment
agreement  that was  scheduled  to expire in February  2004.  Concurrently,  the
Company agreed to cancel  indebtedness of $141,454 that the shareholder  owed to
the Company  pursuant to his purchase of the Company's  interest in certain DCAP
stores as discussed in Note 5b.

     As described  above, and as disclosed in Notes 3 and 5b to the consolidated
financial statements, at December 31, 2000, certain  officers/shareholders  owed
approximately  $1,104,000 including principal and accrued interest.  The details
to such notes and related  cancellation of indebtedness  owed to the Company are
as follows:

<TABLE>
<CAPTION>

                                                         Amounts
                                                         Owed at                Amounts                Amounts
                                                      December 31,           Subsequently               Still
                                                          2000                 Cancelled                Owed
                                                   ------------------      ---------------         -------------
                <S>                                         <C>                   <C>                     <C>

       Acquisition of DCAP (Note 3)                  $     453,000          $     453,000          $          -
       Other officers/shareholders
          notes receivable (Note 3)                        370,297                337,297                 33,000
       Accrued interest on related notes                   139,257                138,357                    900
                                                     -------------          -------------          -------------
                                                           962,554                928,654                 33,900

       Sale of DCAP Stores (Note 5b)                       141,454                141,454                     -
                                                     -------------          -------------          -------------

                                                     $   1,104,008          $   1,070,108          $      33,900
                                                     =============          =============          =============

</TABLE>









                                      F-19


</TEXT>
</DOCUMENT>
