The OnePoint Companies are already a success story and significant contender in the fast growing BPO sector. Founded by John D. Smith, CPA, OnePoint is one of the emerging leaders in the next generation of accounting outsource providers. Additionally, OnePoint is one of the first providers to partner flexible human resource function outsource solutions which include menu service selections (e.g. payroll processing) and professional employer organization solutions with a truly complete accounting function outsource option.

The Company's business model is designed to address a significant and growing need in the market place: the need for small to medium sized organizations to find alternative solutions to traditional internal back office functions. OnePoint provides a single-source, centralized, functional solution which can provide a small business with payroll processing; employee welfare benefit plan and retirement plan provision and administration; employer compliance and tax administration management; employee payment options; accounts payable management and bill payment; billing and collection cycle management; 24/7-real time web accessible financial reporting and accounting document image capturing, transaction link and retrieval capabilities.

OnePoint is generally focused on the 10 - 500 employee/per company market sector space. Generally, these organizations derive the most extensive

2.1 Company Ownership

OnePoint is a privately held group of entities. John D. Smith owns a majority interest in OnePoint Business Solutions, Inc. OnePoint Business Solutions, Inc. has two subsidiaries. It owns 100% of OnePoint Employer Solutions, LLC (the HR outsource provider) and 50% of OnePoint BPO Services, LLC (the accounting solution outsource subsidiary). R. Michelle Denton owns the other 50% interest in OnePoint BPO Services, LLC.

2.2 Company History

After several years with a national "big eight" accounting firm, John Smith founded a local CPA firm operating in the Denver metro area in 1983. Now recognized as one of the top ten local Denver area CPA firms, JDS Professional Group remains controlled by John Smith and is an affiliate service partner of the OnePoint Companies. Seeking to address the growing need for alternative outsource solutions for customers, Smith formed OnePoint in 1998. First addressing limited HR outsource needs, the company has grown into its present scope of service structure options.

For legal and operational reasons, the companies outsource options are conducted through two separate Colorado limited liability companies: OnePoint Employer Solutions, LLC (HRO and PEO) and OnePoint BPO Services, LLC (accounting outsourcing and some payroll processing).

2.3 Company Locations and Facilities

The company is currently headquartered at 5670 Greenwood Plaza Blvd., Suite 200, Greenwood Village, CO 80111, Telephone (303) 771-4445, Fax (303) 771-0428, and web at www.onepoint.cc. The headquarter offices consist of approximately 9,600 square feet of office space in the Denver Technology Center which is shared under a facilities sharing agreement with JDS Professional Group. OnePoint also has an operating and service office in Boulder Colorado.

3.0 Products and Services

There are a large number of single service or service type providers in the BPO market. A majority of providers are in the HRO (human resource outsourcing) space with several of those being larger, national players. There are few complete BPO providers.

OnePoint's service mix is driven by the integration of a broad prospect touch point and provision of a single source BPO solution. Its services are outlined below:

3.1 Payroll Processing Services

Paychex and ADP are the larger providers in the current space. Generally, the emphasis of their services is in the provision of payroll processing services (with limited additional HRO add-on services such as 401k plan administration). Although these companies are relatively mature, they continue to maintain both strong client, revenue and earnings growth rates.

OnePoint's payroll processing services are technology based with a continued focus on customer interactive service. Interactive, personalized service and the availability of HR support provides a strong competitive edge over larger, national providers. In fact, the national providers weakest service profile is customers with less than 50 employees. OnePoint's payroll processing technology is provided by a mature, independent provider that currently has a processing provider client base in excess of 300 companies. Providing a technology-based application with higher level of customer support and service allows customers a significant level of flexibility in the manner in which payroll information is submitted and received by the customer.

Payroll processing services are focused on the small business market (less than 200 employees). This sector contains a vast majority of the remaining growth in the space and contains the best profile fit with OnePoint's other BPO services. Payroll services have also been found to be a strong prospect generation and touch point. A good percentage of initial payroll processing client prospects eventually become HRO and accounting outsource clients.

3.2  Professional Employer (PEO) and Compete HRO Services

Through a co-employment service structure, OnePoint provides integrated HR services to effectively manage critical human resource responsibilities and employer risks for clients. The bundled PEO services include payroll processing; wage and tax compliance and reporting; garnishments and benefit withholding and administration; master employee benefit plan administration (including 401(k) plan and flexible cafeteria plan); welfare benefit plan administration, assistance with EEOC, COBRA, wage and hour compliance; workers' compensation administration and loss control; and overall HR administration and communications management.

This co-employment arrangement allows for significant service delivery centralization and efficiency. As a result, clients can significantly reduce human resource, benefit and related costs. OnePoint's client cost structure is well below that of its national competitors which produce high performance in net margin and net income.

Under the co-employment service structure, clients can realize significant cost savings by entry into OnePoint's master multi-employer 401(k) and cafeteria flexible spending (Section 125) plans. The plans are supported by national administrative and custodian partners.

For those clients who either choose to not enter into a co-employment relationship or who cannot due to legal or contractual restrictions, OnePoint offers a parallel service structure (complete HRO) which consist of outsourcing of the same functions under a non-co-employment structure.

The current market space is occupied by larger providers (Administaff) who are not cost effective for smaller employers (under 100 employees) and local providers who tend to limit their service structure to only PEO services.

3.3  Additional HR Support Services

OnePoint provides additional HR support tools and services to its clients including employment screening; employment prospect identification; employment advertising and response management; compensation research and advisement; and candidate testing and profile matching for the defined job description.

OnePoint also provides general HR support and assistance arrangements (normally purchased by payroll processing clients). This on-call assistance is targeted to payroll processing clientele who do not maintain any internal HR positions. Services include toll-free HR support helpdesk; assistance with hiring, firing, disciplinary action and crisis management; unemployment claims management; performance appraisals; new hire compliance documentation; and employee grievance procedures and exit interviews. Pricing is determined by the number of client site employees and is billed on a fixed quarterly arrangement.

3.4  Accounting Outsource Services

Today there are millions of small, mid-size and growing businesses and organizations that are ignoring their financial and accounting systems, cannot find and retain competent help, are generating inaccurate or no financial reports at all, or are overpaying for an inadequate product. Lack of timing, relevant financial reporting and analysis is a key factor in many business failures.

OnePoint has developed a web-based outsource accounting service to provide real-time accounting services to small, medium-size and fast-growing businesses. This web-based solution is state-of-the-art and utilizes an easy to use online interface to provide secure 24/7 financial reporting and rivals the software used by fortune 500 companies. Accounting functions are performed by trained, specialized OnePoint accountants while the business or organization has complete control of finances, financial reporting and document management. The Outsource client has no need for accounting software investment, implementation, maintenance or training. Outsourcing the accounting function allows a business to improve company focus, re-direct resources to revenue production and reduce internal costs.

The OnePoint solution includes general financial reporting (accessible 24/7 by web access); key financial indicator measurement and monitoring; customized financial reporting; document image, retention and transaction link for online viewing; bill payment and AP management; purchasing and inventory control; job costing; payroll posting; revenue posting; account reconciliation; fixed asset accounting and management; budgeting; and, special accounting projects and resourcing.

3.5  Business Processing Outsource Service Integration

The OnePoint BPO menu allows companies and organizations to select a service integration that meets individual needs. An accounting outsource client may use HR payroll processing services. selected HR services or outsource the entire back office including accounting, HR and related admin activities.

Integration allows for a seamless link that addresses the overlapping areas of HR and accounting functions including benefit withholding and payment, payroll processing and access to individual employee HR data.

No other providers in the BPO space currently provide this scope of service options and integration to the under 200-employee market. The under 200-employee client sector is the largest and fastest growing outsource market.