**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

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**FORM 10-K**

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(MARK ONE)

**[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended October 31, 1999**

**OR**

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

**FOR THE TRANSITION PERIOD FROM ___________ TO  _____________**

**Commission file number 0-26208**

**BUSINESS RESOURCE GROUP**
(Exact name of Registrant as Specified in its Charter)



|**California**                                                 | **77-0150337**                      
|-------------------------------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number)

**2150 NORTH FIRST STREET, SUITE 101SAN JOSE, CALIFORNIA 95131**(Address of Principal Executive Offices including Zip Code)

**(408) 325-3200**(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

**COMMON STOCK $0.01 PAR VALUE**(Title of Class)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 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  [   ]

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.  [X]

The aggregate market value of the voting
stock held by non-affiliates of the
Registrant was approximately $5,882,367 as of December 31, 1999, based upon the
closing sale price on the Nasdaq National Market reported for such date. Shares
of Common Stock held by each officer and director and by each person who owns 5%
or more of the outstanding Common Stock have been excluded in that such persons
may be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

There were 5,232,549 shares of
Registrant's Common Stock outstanding as of December 31, 1999.

DOCUMENTS INCORPORATED BY REFERENCE

PORTIONS OF THE PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON MARCH 23, 2000 ARE INCORPORATED BY REFERENCE INTO PART III OF THIS REPORT
ON FORM 10-K.







**BUSINESS RESOURCE GROUP
                                   FORM 10-K**
                     FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999

**TABLE OF CONTENTS**

**PART I**

Item 1.   Business

Item 2.   Properties

Item 3.   Legal Proceedings

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

**PART II**

Item 5.   Market for Registrant's Common Stock and Related Stockholder Matters

Item 6.   Selected Financial Data

Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations

> OverviewResults of OperationsLiquidity and Capital ResourcesYear 2000 ComplianceBusiness Environment and Risk Factors

Item 7A.      Quantitative and Qualitative Disclosure About Market Risks

Item 8.   Financial Statements and Supplementary Data

Item 9.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure

**PART III**

Item 10.  Directors and Executive  Officers of the  Registrant

Item 11.  Executive  Compensation

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Item 13.  Certain  Relationships and Related  Transactions

**PART IV**

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

**Signatures**

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**INTRODUCTORY STATEMENT**

Except for the historical information contained in this Annual
Report on Form 10-K, the matters discussed herein are forward-looking
statements within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended, and are subject to certain risks and
uncertainties that could cause the actual results to differ materially
from those projected.  Such forward-looking statements include, without
limitation, statements relating to the Company's future revenue, gross
margins, operating expenses, management's plans and objectives for the
Company's future operations, Year 2000 readiness, and the sufficiency of
financial resources to support future operations and expenditures.
Factors that could cause actual results to differ materially include, but
are not limited to, the timely availability, delivery and acceptance of
new products and services, the continued strength of sales to Cisco
Systems, Inc. (one of the Company's principal customers), the impact of
competitive products and pricing, the management of growth and
acquisitions, and other risks detailed below and included from time to
time in the Company's other reports filed with the Securities and
Exchange Commission ("SEC") and press releases, copies of which are
available from the Company upon request.  Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the date hereof.  The Company undertakes no obligation to
publicly release the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

References made in this Annual Report on Form 10-K to "BRG," the
"Company" or the "Registrant" refer to Business Resource Group.

**PART I**

**Item 1. Business**

Business Resource Group, a California corporation, was organized in
1986 and is a leading provider of workspace products and services to
businesses. Headquartered in San Jose, California, the Company has
additional offices in San Francisco, Los Angeles and  San Diego,
California; Las Vegas, Nevada; Phoenix, Arizona; Dallas, Texas; and
Raleigh and Greensboro, North Carolina. Between July 1989 and June 25,
1995, the Company was an S Corporation pursuant to the Internal Revenue
Code of 1986, as amended.  Effective June 25, 1995, in conjunction with
the Company's initial public offering of its common stock, the Company
terminated its S Corporation status and became a C Corporation.

The Company markets a full range of new office workstation
products, refurbished office systems furniture and related services such
as facilities management outsourcing and consulting services, computer-
aided facilities management, computerized space planning and design,
project management, move management, installation, product specification
and order management. The Company believes that its broad scope of
services allows it to offer a customer-oriented, single-source solution
that provides for effective management of workspace requirements for
growing and changing businesses, while minimizing the involvement of
their in-house staff through outsourcing.

Financial information about the Company's business segments is
included in Note 16 of the Notes to Consolidated Financial Statements in
Item 8.

**Industry Background**

According to The Business and Institutional Furniture
Manufacturer's Association ("BIFMA"), the United States office furniture
trade association, estimated office furniture manufacturers' shipments of
new product in the United States in 1999 were approximately $12 billion.
The Company believes that on-going changes in corporate organizational
structures, technology and work processes are driving growth in office
furniture products and services. These changes are driven by several
significant factors including continued new business growth, corporate
restructuring and reorganizing, corporate relocations, new office
technology and concerns about ergonomic standards. Management also
believes recent market trends towards outsourcing in order to focus on
core business strengths have influenced the growth of the office
furniture manufacturing and service industry.

The Company believes, based on its experience with customers, that
the desire to minimize in-house facilities management headcount, reduce
overhead and improve coordination has led many companies to outsource
facilities-related tasks where feasible, including space planning, design
and project management and fulfillment services. Furthermore, customers'
use of modular office systems has increased the importance of product
functionality and layout, which have become increasingly complex due to
the need to integrate rapidly changing office technology requirements.
The Company believes that such trends have led to the demand for a
proactive workspace services and products solution.

**Customer Oriented Integrated Solution**

The Company believes that traditional approaches to the business
furnishings industry are not well suited to meet the current requirements
of growing and changing businesses.  In response, the Company has
positioned itself as the representative of the customer and as a single
source provider of a full range of integrated workspace solutions. The
Company has grown due to management's recognition and response to
customer requirements for a single source solution for facilities needs.

The Company has leveraged its knowledge of the office furniture
industry, including suppliers and business methods, to develop an
integrated approach which offers a single-source point of contact for
modern interior workspaces. This approach incorporates a consultative
selling approach in which the Company's sales representatives listen to
the customer's needs. A team of BRG professionals chosen for each account
then meets with the customer to build a partnership and reach consensus
on the solution which best suits the customers needs. The Company
believes it is able to fashion an integrated solution because of the wide
array of services and products it can provide. The Company believes it
offers customers a much broader range of value-added services and product
choices than its major competitors.

The Company believes the benefits to customers of the Company's
integrated solution approach include:

> Reduced overhead and more efficient coordination by having a
> single point of contact;More favorable pricing, product selection and delivery available
> from a multi-line representative;Accelerated design and installation through early coordination
> with a service provider; andSuperior customer communications, response and project control
> through the implementation of highly automated systems.

**Services And Products**

The Company provides integrated workspace solutions for customers
from the suite of services and products its offers:

Workspace Services

Workspace Product-Related Services.  A substantial portion of
the Company's services are initiated prior to delivery of workspace
products, including overall project management, computerized space
planning and design, product specification and order management. The
Company believes that the superior quality of its services differentiates
its services from its competitors' and contributes to the Company's
ability to win initial orders.  The Company believes that its pre-
installation services allow a close and efficient partnership with
customers, moving them from needs identification and analysis to the
development and selection of the solutions which best fit their needs.
Once the customer and the Company have identified the workspace products
best suited to the customer's needs, the Company provides additional
services to implement set-up and maintenance of these products in the
customer's facility and provides coordination and management services
both during and after the move.

Facilities Strategic Planning.  The Company provides a
systematic needs analysis based on a customer's current facility and
their future growth plans.  The resulting analysis will often yield a
strategic facility plan which allows for facility programming, site
selection, lease reviews and facilities alternatives.

Facilities Planning Outsourcing. The Company fulfills a
customer's short or long term staffing requirements by providing
experienced  facility professionals for specific temporary assignments.
This service offers the customer operational and financial flexibility in
meeting staffing requirements by allowing the customer to focus fixed
resources on its core competencies.

Facilities Automation Services. The Company, on a contract,
outsourced  or data center basis, provides efficient access to facilities
information throughout organizations by automating and standardizing
processes and data. The Company's internet and desktop based solutions
are designed to incorporate cutting-edge technology and enable
centralized data control, standardization, reporting and analysis
throughout all areas of facilities management, such as physical space,
people, properties, leases, assets, maintenance, telecommunications and
utilities.

Design Management. The Company manages a design team on
behalf of its customers, which it believes ensures that the customer's
design requirements are met while staying within time frame commitments
and budget constraints.

Move Management. The Company coordinates all components of a
customer's move to a new location, including the development of a master
move plan, communication to employees, the coordination of all vendor
activities, and the management of building activation.  This service is
provided with minimal involvement or downtime to the customer's employees
or disruption to ongoing business activities.

Workspace Products

The Company offers a broad range of office furniture products and
accessories that support the Company's strategy of providing a single
source for quality workspace management.  The Company's five basic
product categories are new office furniture systems; seating; storage and
filing cabinets; desks and casegoods; and  refurbished office furniture
systems.

**Sales and Marketing**

The Company markets its products and services through a direct
sales force consisting of approximately  58 salespeople, operating out of
the Company's offices in San Jose, San Francisco, Los Angeles and San
Diego, California; Las Vegas, Nevada; Phoenix, Arizona; Dallas, Texas;
and Raleigh and Greensboro, North Carolina.

**Customers**

The Company's client base includes companies in networking and
communications, software, electronics, financial services, life sciences
and health care industries, as well as service providers of various
types.  The Company's customers also vary widely in size, ranging from
large enterprises with over $1.0 billion in sales, to emerging companies,
which are often thinly staffed and which the Company believes are,
therefore, receptive to the Company's comprehensive solution strategy.

The Company's largest customer is Cisco Systems, Inc., which
accounted  for approximately 48%, 44% and 30% of net revenues during the
fiscal years ending October 31, 1999, 1998 and 1997 respectively. No
other single customer accounted for more than 10% of revenues in fiscal
1999, 1998 or 1997.

**Raw Materials and Suppliers**

There was no material change during fiscal 1999 in the source and
availability of workspace products. None of the products currently
offered by the Company are obtained on a sole-source basis from any
vendor, and materials are considered to be widely available. The Company
does not anticipate that the availability of materials will be a
significant factor in the Company's business. During the fiscal years
ended October 31, 1999, 1998 and 1997 respectively, the Company purchased
approximately 44%, 43% and 24% of its total workspace products purchases
from one supplier, Teknion, Inc.

**Competition**

The office workspace products marketplace is highly competitive and
fragmented with a significant number of companies providing products and
services.  In the United States, the Company believes the  primary
manufacturers of office furniture products are: Haworth, Inc., Herman
Miller, Inc., HON Industries, Inc., Kimball International, Inc., Knoll,
Inc., Steelcase, Inc., and Teknion, Inc. The Company currently represents
HON Industries, Inc., Kimball International, Inc., and Teknion, Inc. All
of these manufacturers typically market their products through
independent distribution companies who are responsible for providing on-
going service to their customers. Typically these independent
distribution companies are small, privately-held organizations that vary
in size, product offering and breadth of service offering.

The Company believes that while product design, quality and price
play a part in a customer's purchasing decision, the primary purchasing
decision is based upon the independent distributor's overall service
capabilities. Independent distributors compete on the basis of: (i)
project management capabilities, (ii) strategic facilities consulting
capabilities, (iii) innovative use of technology tools, (iv) on-time
delivery and installation and (v) price. The Company believes its
comprehensive range of products and services, ability to utilize trained
company employees in the delivery of its full range of comprehensive
services, use of current technology to provide higher level solutions and
overall financial strength, provides a competitive advantage. To remain
competitive, the Company must continue to offer a broad range of services
and products to meet the needs of its customers, maintain quality levels,
offer flexible delivery schedules, deliver finished products on a
reliable basis and compete favorably on the basis of price. There can be
no assurance that other manufacturers and independent distributors will
not price their products and services, or offer other terms, to be more
competitive with the Company's products and services, or that such
actions, if taken, would not have a material adverse affect on the
Company or its results of operations.

**Employees**

As of October 31, 1999, the Company had approximately 512 full-time
employees. None of the Company's employees are represented by a
collective bargaining agreement. From time to time, installation of
workspace products require the use of union labor to comply with the
requirements of the customer or the work rules for the job location. In
these situations, the Company subcontracts the installation to other
parties that employ union labor.  To date, the Company has not
experienced difficulties obtaining subcontract installation services
where required. The Company believes its relationship with its employees
is good.

**Item 2. Properties**

The Company currently leases approximately 21,000 square feet of
office space at 2150 North First Street in San Jose, California.  The
Company leases the majority of this space under an operating lease which
runs through August 2001.  The San Jose facilities serve as the Company's
principal offices and also function as a working showroom for products
offered by the Company.  The Company also leases sales offices, which
function as working showrooms, in San Francisco, California; Phoenix,
Arizona and Dallas, Texas. In San Francisco, the sales office leases
approximately 6,800 square feet under an operating lease which runs
through December 2003; in Phoenix, the sales office leases approximately
4,200 square feet of space under an operating lease which runs through
January 2004; and in Dallas, the sales office leases approximately 11,900
square feet of space under an operating lease which runs through March
2002. The Company maintains a distribution center, in Dallas, Texas under
an operating lease for approximately 21,000 square feet of space running
through October 2002. The Company, through its subsidiary, OFN, Inc.,
also leases approximately 25,000 square feet of office and warehouse
space in San Diego, California under an operating lease which expires in
April 2002.  Through its subsidiary, Re'Nu Acquisition Corp., the Company
leases approximately 55,800 square feet of office and warehouse space in
Santa Fe Springs, California under operating leases which run through
March 2002 and maintains sales offices in Orange County and Sherman Oaks,
California, and Las Vegas, Nevada. Through its subsidiary, MOI
Acquisition Corp., the Company leases approximately 50,000 square feet of
office and warehouse space in Morrisville, North Carolina under an
operating lease running through September 2008 and maintains a sales
office in Greensboro, North Carolina. The Company leases approximately
3,400 square feet of office space in San Antonio, Texas under an
operating lease with a term running through November 2001. The Company
has entered into a sublease agreement to lease the existing San Antonio
facility to a company at the same lease rate and for the same term as the
Company has in its operating lease. The Company believes that its
existing facilities will generally be sufficient for its needs for the
foreseeable future.

**Item 3. Legal Proceedings**

The Company is not a party to any lawsuit or proceeding which, in
the opinion of management, is likely to have a material adverse affect on
the Company. The Company may from time to time become a party to various
legal proceedings arising in the normal course of its business.

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

**Item 4b.       Executive Officers of the Registrant**

Information with respect to directors of the Company is
incorporated by reference from the information under the caption
"Election of Directors--Nominees" in the Registrant's Proxy Statement.
The executive officers of the Company, and their ages as of January
27, 2000, are as follows:

`Name            Age                  Position

John W. Peth........     51  President, Chief Executive Officer and Director
Brian D. McNay......     43  Executive Vice President of Sales and Director
John M. Palmer......     41  Chief Operating Officer, Vice President, Finance and
                               Chief Financial Officer
Jeffrey Tuttle......     43  Executive Vice President of Marketing and
                             Director`

Mr. Peth has served as President and Chief Executive Officer since
December 1997 and also served as Chief Financial Officer from December
1997 to February 1998 and as a director of the Company since April 1995.
From July 1997 to December 1997, Mr. Peth was a consultant to the
Company.  From June 1996 to March 1997, Mr. Peth served as Acting
President and Chief Executive Officer of Tab Products Co. ("TAB"), an
office filing and furniture systems manufacturer and distributor.  From
April 1991 until June 1997, Mr. Peth served as Executive Vice President
and Chief Operating Officer of TAB.  From August 1984 to April 1991, Mr.
Peth served as the managing partner of the San Jose region of Deloitte &
Touche LLP and one of its predecessor accounting firms.  Mr. Peth is also
a director of Aspect Telecommunications, Inc., a provider of call
transaction processing systems.  Mr. Peth received his BA degree in
Economics in 1970 from the University of California at Santa Barbara, and
an MBA from the University of California at Los Angeles in 1972.

Mr. McNay has served as Executive Vice President of Sales since
April 1995, and as a member of the Board of Directors since its inception
in April 1987.  Mr. McNay also served as President between April 1987 and
April 1995.  Mr. McNay was also the founder and owner of Business
Interiors, a sole proprietorship sold to the Company in April 1987.  In
addition, Mr. McNay served as a sales executive at various office
furniture dealerships from 1979 to 1986, including the Contract Source
Center, the Contract Office Group and Design Performance.

Mr. Palmer has served as Chief Operating Officer since August 1999
and as Vice President, Finance and Chief Financial Officer since February
1998. From August 1994 to February 1998 Mr. Palmer served as Vice
President, Finance and Chief Financial Officer of TAB, an office filing
and furniture systems manufacturer and distributor. From September 1992
to August 1994, he served as Vice President, Finance for Tab Products of
Canada, Limited. From January 1986 to September 1992 Mr. Palmer served as
Controller of Wright Line of Canada Ltd. He received his C.G.A.
designation from the Certified General Accountants Association of Canada
in 1985.

Mr. Tuttle has served as Executive Vice President of Marketing
since April 1995, and as a member of the Board of Directors since its
inception in 1987.  Mr. Tuttle also served as Vice President of Sales
between April 1987 and April 1995.  From 1978 to 1987, Mr. Tuttle served
as a sales executive with KBM Office Furniture, an office furniture
dealership.  He received his BS degree in Marketing in 1980 from Santa
Clara University.

**PART II**

**Item 5.    Market for the Registrant's Common Stock and Related Shareholder Matters**

`High       Low
                                                    --------- ---------
Fiscal 1999:
  Fourth Quarter ended October 31, 1999...........   4 1/16    3
  Third Quarter ended July 31, 1999...............   3 3/4     2 11/16
  Second Quarter ended April 30, 1999.............   3 7/16    2 5/8
  First Quarter ended January 31, 1999............   3 5/8     2 3/8

                                                      High       Low
                                                    --------- ---------
Fiscal 1998:
  Fourth Quarter ended October 31, 1998...........   3 1/4     1 1/8
  Third Quarter ended July 31, 1998...............   3 3/8     2 3/16
  Second Quarter ended April 30, 1998.............   3 3/4     3 1/16
  First Quarter ended January 31, 1998............   3 3/4     3`

The Company estimates it had approximately 527 shareholders as of
December 31, 1999, including beneficial owners included in securities
position listings as described in Rule 17Ad-8.

The Company has never paid a cash dividend on its capital stock.
Covenants in the Company's revolving line of credit facility prohibit the
Company from paying dividends without prior approval by the lender.  The
Company currently anticipates that it will retain all available funds for
use in the operation and expansion of its business, and does not
anticipate paying any cash dividends in the foreseeable future.

The Company issued 19,100 shares of Common Stock to 191
employees of the Company on January 6, 1999, as a bonus pursuant to the 1998 Employee Stock
Bonus Plan. Only employees who were employed with the Company on October 31, 1998 and had been
in employment with the Company for at least six months prior to October 31, 1998 were eligible
to receive the bonus. The issuance did not constitute a sale of securities under the Securities
Act of 1933, as amended, and therefore did not require registration.

**Item 6.   Selected Financial Data**

**Summary Financial Data**

**(in thousands, except per share data)**

**Consolidated Statements of Income Data:**

`Year Ended October 31,
                               -------------------------------------------------
                                 1999      1998      1997      1996      1995
                               --------- --------- --------- --------- ---------

Net revenues:
  Workspace products.......... $103,511   $76,433   $58,574   $68,125   $34,509
  Workspace services..........   21,463    17,132    14,127    10,155     6,119
                               --------- --------- --------- --------- ---------
   Total net revenues.........  124,974    93,565    72,701    78,280    40,628
                               --------- --------- --------- --------- ---------
Cost of net revenues:
  Workspace products..........   81,088    60,623    47,100    55,051    26,605
  Workspace services..........   16,214    12,611    10,330     7,320     4,179
                               --------- --------- --------- --------- ---------
   Total cost of net revenues.   97,302    73,234    57,430    62,371    30,784
                               --------- --------- --------- --------- ---------
Gross profit..................   27,672    20,331    15,271    15,909     9,844
Selling, general and
  administrative expenses.....   22,449    17,498    16,622    12,870     8,143
                               --------- --------- --------- --------- ---------
Income/(loss) from operations.    5,223     2,833    (1,351)    3,039     1,701
Other income/(expense)........     (663)     (264)       66       124         7
                               --------- --------- --------- --------- ---------
Income/(loss) before
  income taxes................    4,560     2,569    (1,285)    3,163     1,708
Income taxes..................    1,885     1,066      (523)    1,309       122
                               --------- --------- --------- --------- ---------
Net income/(loss).............   $2,675    $1,503     ($762)   $1,854    $1,586
                               ========= ========= ========= ========= =========
Net income/(loss) per share
  Basic.......................    $0.52     $0.30    ($0.16)    $0.38
                               ========= ========= ========= =========
  Diluted.....................    $0.52     $0.30    ($0.16)    $0.38
                               ========= ========= ========= =========
Pro forma(1):
  Historical income before
   income taxes...............                                           $1,708
  Pro forma income taxes......                                              709
                                                                       ---------
Pro forma net income..........                                             $999
                                                                       =========
Pro forma net income per
  share(1):
  Basic.......................                                            $0.26
                                                                       =========
  Diluted.....................                                            $0.26
                                                                       =========`

> (1) Pro Forma Net Income and Net Income Per Basic and Diluted Shares -- Through
>     June 1995, the Company was not subject to federal and most state income
>     taxes since its shareholders elected that the Company be taxed as an S
>     Corporation pursuant to the Internal Revenue Code. Therefore, no provision
>     for federal income taxes has been included in the summary financial data for
>     fiscal 1994 and the portion of fiscal 1995 during which the Company was an S
>     Corporation. Although the S Corporation election is recognized for
>     California income tax purposes, the State of California requires S
>     Corporations to pay a tax of 1.5% of taxable income. Effective June 1995, in
>     conjunction with the Company's initial public offering of its common stock,
>     the Company's status as an S Corporation was terminated and the Company
>     became subject to federal and state income taxes.

The pro forma information presented with the summary financial data reflect
a provision for income taxes at an effective rate of 41% for fiscal 1995. Pro
forma financial information is provided to show what the significant effects on
the historical financial information might have been had the Company been
treated as a C Corporation for income tax purposes for all of fiscal 1995.

**Consolidated Balance Sheet Data:**

`October 31,
                               -------------------------------------------------
                                 1999      1998      1997      1996      1995
                               --------- --------- --------- --------- ---------
                                                  (in thousands)

Working capital...............  $10,187    $9,075    $9,279   $10,063    $9,470
Total assets..................   50,813    27,978    20,760    22,560    16,053
Long-term obligations.........    1,552       733       --        --        120
Shareholders' equity..........   17,455    14,396    12,452    13,002    11,020`

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

The following discussion should be read in conjunction with the

Financial Statements and Notes thereto included elsewhere in this Annual

Report on Form 10-K.

**Overview**

Most of the Company's net revenues are derived from billings for
workspace products, including new office furniture systems, seating,
storage and filing cabinets, desks and casegoods, and refurbished office
furniture systems. The Company's experience is that its success in
generating product revenues is dependent upon providing a full range of
related services

The Company has leveraged its knowledge of the office furniture
industry, including suppliers and business methods, to develop an
integrated approach which offers a single source point of contact for
modern interior workspaces. This approach incorporates a consultative
selling approach in which the Company's sales representatives listen to
the customer's needs. A team of BRG professionals chosen for each account
then meets with the customer to build a relationship and reach consensus
on the solution which best suits the customers needs. The Company
believes it is able to fashion an integrated solution because of the wide
array of services and products it can provide. The Company believes it is
able to offer customers a much broader range of value-added services and
product choices than its major competitors.

**Results of Operations:**

Net Revenues

Net revenues increased $31.4 million, or 34%, to $125.0 million in
fiscal 1999 from $93.6 million in fiscal 1998. The increase in net
revenues was attributable to increased revenues of $20.3 million from
Cisco Systems and $11.1 million from other customers. Fiscal 1999 product
revenues of $103.5 million increased $27.1 million, or 35%, over fiscal
1998 product revenues of $76.4 million. Increased product revenues were
attributable to a $19.1 million increase in new product revenue and a
$8.0 million increase in refurbished product revenue.  Services revenues
in fiscal 1999 were $21.5 million, an increase of $4.4 million, or 26%,
as compared to services revenues of $17.1 million in fiscal 1998. The
increase in services revenues was attributable to increased product-
related services revenues of $2.6 million as a result of higher product
sales, in addition to increased revenues of $1.7 million from facilities
planning and automation services.

Net revenues increased $20.9 million, or 29%, to $93.6 million in
fiscal 1998 from $72.7 million in fiscal 1997. The increase in net
revenues was attributable to increased revenues of $18.6 million from
Cisco Systems and $2.3 million from other customers. Fiscal 1998 product
revenues of $76.4 million increased $17.8 million, or 30%, over fiscal
1997 product revenues of $58.6 million, primarily due to the increased
Cisco Systems business. Services revenues in fiscal 1998 were $17.1
million, an increase of $3.0 million, or 21%, as compared to services
revenues of $14.1 million in fiscal 1997. The increase in services
revenues was attributable to increased revenue from product-related
services of $2.0 million as a result of higher product sales, in addition
to increased services revenues of $1.0 million from facilities planning
and automation services.

Gross Profit

Gross profit as a percentage of net revenues increased to 22.1% in
fiscal 1999 from 21.7% in fiscal 1998. The improved overall gross profit
is the result of  product margins improving from 20.7% in fiscal 1998 to
21.7% in fiscal 1999, primarily due to a change in the sales mix toward
higher margin refurbished products,  partially offset by a  decline in
services gross margins during the year to 24.5% in  fiscal 1999 from
26.4% in  fiscal 1998.

Gross profit as a percentage of net revenues increased to 21.7% in
fiscal 1998 from 21.0% in fiscal 1997. The improved overall gross profit
is the result of new product margins improving from 19.6% in fiscal 1997
to 19.9% in fiscal 1998 and a change in sales mix with the introduction
of refurbished products which generally sell at higher gross margins,
which were partially offset by a slight decline in services gross margins
during the year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for fiscal 1999 were
$22.4 million, an increase of approximately $4.9 million over the $17.5
million reported in fiscal 1998. The increase in selling, general and
administrative expense was primarily attributable to incremental expenses
as a result of acquisitions completed during fiscal 1998 and fiscal 1999.
As a percentage of revenue, selling, general and administrative expenses
were 18.0% of revenues in fiscal 1999, as compared to 18.7% in fiscal
1998.

Selling, general and administrative expenses for fiscal 1998 were
$17.5 million, an increase of approximately $900,000 over the $16.6
million reported in fiscal 1997. The increase in selling, general and
administrative expense was primarily attributable to incremental expenses
as a result of the acquisition of OFN, Inc. in May 1998. As a percentage
of revenue, selling, general and administrative expenses were 18.7% of
revenues in fiscal 1998, as compared to 22.9% in fiscal 1997.

Other income (expense) - net

Other income (expense) for fiscal 1999 consisted of interest expense
of $678,000 as compared to interest expense of $319,000 in fiscal 1998.
The increase in interest expense is the result of increased use of the
Company's bank line of credit as a result of the acquisition of Re'Nu
Office Systems, Inc. and MOI Inc. and increased in-transit inventories
during the year.

Other income (expense) for fiscal 1998 consisted of interest expense
of $319,000 as compared to interest income of $66,000 in fiscal 1997. The
increase in interest expense is the result of increased use of the
Company's bank line of credit as a result of the acquisition of OFN, Inc.
and increased in-transit inventories during the year. The gain on sale of
assets was primarily the result of the sale of certain assets from the
Company's former San Antonio operations.

Income Taxes

Income tax expense, as a percentage of pre-tax income, was 41.3%
for the year ended October 31, 1999, compared to income tax expense of
41.5% of  pre-tax income for  the year ended October 31, 1998.

**Liquidity and Capital Resources**

Working capital at October 31, 1999 was $10.2 million, an increase
from the working capital of $9.1 million reported at October 31, 1998.
The current ratio of 1.3 at October 31, 1999 decreased from the current
ratio of 1.7 at October 31, 1998. During fiscal 1999, net cash used  by
operating activities was $1,436,000, an increased use of cash from the
$313,000 in net cash used by operating activities in fiscal 1998.
Accounts receivable at October 31, 1999 was $18.0 million, an increase of
$7.3 million from accounts receivable of $10.7 million reported at
October 31, 1998. The increased accounts receivable is  primarily a
result of increased sales volume in the fourth quarter of fiscal 1999 as
compared to the fourth quarter of fiscal 1998. Inventories at October 31,
1999 were $20.1 million, an increase of $11.8 million over the $8.3
million in inventories reported at October 31, 1998. The increased
inventories were the result of an increase in in-transit inventories at
October 31, 1999 by approximately $8.8 million, representing payments
made to vendors on new office workstation product that is either in-
transit to customers or awaiting installation at the customer's facility.
In addition, inventories increased as a result of  incremental
inventories of approximately $3.0 million in refurbished product
associated with the Company's subsidiaries, MOI Acquisition Corp., RN
Acquisition Corp. and OFN, Inc. Accounts payable at October 31, 1999 were
$15.1 million, an increase of approximately $11.7 million from accounts
payable of $3.4 million reported at October 31, 1998, reflecting the
increased in-transit Inventories at October 31, 1999. Accrued liabilities
at October 31, 1999 were $6.3 million, an increase of $1.2 million from
accrued liabilities of $5.1 million at October 31, 1998. The increase in
accrued liabilities is primarily attributable to increased sales taxes
payable and accrued sales commissions, partially offset by a decrease in
customer deposits.

During fiscal 1999, the Company invested approximately $2.3 million
in property and equipment, which represented investments in management
information systems, leasehold improvements, and furniture and equipment
of approximately $1.7 million, and includes $0.6 million of equipment
related to the acquisitions of Re'Nu Office Systems, Inc. and Modern
Office Interiors, Inc. Capital expenditures for fiscal 2000, which will
consist primarily of investments in showroom furniture replacements and
information technology, are expected to be in the range of $0.5 million
to $1.0 million.

The Company has a $15.0 million credit facility with a bank which
expires in February 2001. The Company maintains an irrevocable stand-by
letter of credit in the amount of $3.0 million against this facility. At
October 31, 1999, the Company had bank borrowings of $9.2 million under
such credit facility.

The Company believes its existing cash, together with cash
generated from operations and the Company's available borrowing capacity
will provide sufficient funds to meet the Company's anticipated working
capital requirements for the foreseeable future.

**Year 2000**

The Company's overall goal was and remains, to be prepared for the
year 2000, meaning that critical systems, devices, applications or
business relationships have been evaluated and are expected to be
suitable for continued use into and beyond the year 2000, or when
contingency plans are put into place. The Company's assessments to date
of the impact of the year 2000 upon its critical systems, devices,
applications or business relationships have not identified any material
issues with respect to their ability to function appropriately.  The
Company continues to monitor and assess any potential impact. If, as a
result of ongoing assessment, a business function is determined to be at
risk, contingency plans will be developed on an as needed basis. Based on
assessment efforts to date, the Company does not believe that the year
2000 issue will have a material adverse effect on its financial condition
or results of operations. The Company's beliefs and expectations,
however, are based on certain assumptions and expectations that
ultimately may prove to be inaccurate.

Even though the date is now past January 1, 2000, and the Company
has not experienced any immediate adverse impact from the transition to
the Year 2000, it cannot provide assurance that its suppliers and
customers have not been affected in a manner that is not yet apparent. In
addition, certain computer programs which were date sensitive to the Year
2000 may not have been programmed to process the Year 2000 as a leap
year, and any negative consequential effects remain unknown. As a result,
the Company will continue to monitor its Year 2000 compliance and the
Year 2000 compliance of its suppliers and customers.

Costs: The Company estimates that the total cost of replacing its
information systems and achieving year 2000 readiness for its internal
systems and equipment will range from $1.7 to $2.0 million, of which $1.7
million has been incurred by October 31, 1999. Based on its current
estimates and information currently available, the Company does not
anticipate that the costs associated with this project will have a
material adverse affect on the Company's consolidated financial position,
results of operations or cash flows in future periods. The Company's
aggregate cost estimate does not include time and costs that may be
incurred by the Company as a result of the failure of any third parties,
including suppliers, to be prepared for the year 2000 or costs to
implement any contingency plans.

Based upon assessments to date, the Company believes the most
reasonably likely worst case scenario would be the possible malfunction
of personal computer equipment or non- system critical applications
software . In the event of such malfunction the Company would replace the
equipment or software.

**Business Environment and Risk Factors**

The Company's future results of operations may be adversely
affected by various factors, including those discussed below. The
Company's revenues and operating results may fluctuate from period to
period depending on such factors as the timing of customer orders, the
timing of revenue and cost recognition, variations in contract service
and product mix, changes in customer buying patterns, changes in vendor
lead times and trends in the economy of the geographic region in which
the Company operates.  Any unfavorable changes in these or other factors
could have a material adverse effect on the Company's business and
results of operations.  Given the variability of these factors, the
Company expects that quarter to quarter performance may fluctuate and
that results in any single quarter may therefore not be indicative of
future results.

A large portion of the Company's net revenues for any period are
frequently dependent on a few large customer projects involving
relocation, including a move to a new facility or an upgrade of an
existing facility.  At the conclusion of a major project, that customer
may not have an immediate need for additional services or products on the
same scale.  The Company does not enter into long term or volume purchase
contracts with its customers, and customers may discontinue further
purchases of the Company's services or products at any time without
notice.  There can be no assurance that any of the Company's customers
will expand their operations, relocate their offices or facilities or
otherwise require the Company's services or products in the future.  To
maintain or increase existing levels of revenues and profits, the Company
must identify and book major projects within its existing base of
customers or with new customers. There can be no assurance that any of
the Company's current customers will engage the Company for major
projects in the future or that the Company will be able to obtain
additional new customers.

A large portion of the Company's revenues are derived from projects
involving relocation to new facilities; additions, moves and changes to
existing facilities; and outsourcing of facilities personnel to Cisco
Systems, Inc. While the Company's relationship with Cisco  Systems, Inc.
remains strong, there can be no assurances that Cisco Systems, Inc. will
continue to expand  its operations, relocate its offices or facilities or
otherwise require the Company's services or products in the future. In
addition, there can be no assurances that Cisco Systems, Inc. will
continue to engage the Company for major projects in the future.

While the Company's strategy is to maintain multiple sources of
supply for each of its workspace product lines, the Company is dependent
upon these suppliers for timely delivery and product quality once orders
are placed.  The Company has, from time to time, experienced delays in
product delivery from a number of suppliers. These delays have adversely
affected the timing of customer deliveries and installations.  Delays by
suppliers have also resulted in increased costs to the Company and in
certain cases lost revenues.  Almost all of the Company's purchases from
its vendors are made on a purchase order basis, and liabilities of such
vendors to the Company for late deliveries are therefore principally
based on the terms and conditions set forth in the applicable purchase
order and the supplier's confirming document (if any).  The Company
customarily enters into negotiations with its vendors for price
adjustments and late fees as may be appropriate in the event of late
deliveries.  Future delays in delivery by suppliers or poor product
quality could have a material adverse effect on the Company's ability to
meet customer requirements and thereby adversely affect revenues or
increase costs.

The market for workspace services and products is influenced by
economic conditions, including consumer behavior and consumer confidence,
the level of discretionary spending, interest rates and credit
availability.  Purchases of these services and products are often
discretionary and tend to be deferred in times of economic stress.
During economic downturns, the furniture industry tends to experience
longer and deeper periods of recession than the general economy.
Although the economy in the United States, and in particular those
markets in which the company has offices, has been strong in recent
years, there can be no assurance that it will continue to be strong or
that it will not decline in the future.

The Company has made acquisitions during prior fiscal years and may
continue to make acquisitions in the future. The expansion of corporate
operations in addition to managing acquired operations in new geographic
areas entails numerous operational and financial risks, including
difficulties in assimilating acquired operations, diversion of
management's attention to other business concerns, amortization of
acquired intangible assets, potential loss of employees or customers of
acquired operations and difficulties in developing a local market for the
Company's services and products.  There can be no assurance that the
Company will be able to achieve growth, or effectively manage any such
growth, and failure to do so could have a material adverse effect on the
Company's operating results.

The Company will require significant capital for the expansion of
its existing business, expansion into other geographic markets and
acquisition of other businesses, each of which are key elements of the
Company's strategy.  There are no assurances that this capital will be
available at all or available on terms which will not have a material
adverse effect on the Company or its financial results.

**Recent Accounting Pronouncements**

In June 1998, SFAS No. 133,  Accounting for Derivative Instruments
and Hedging Activities,  which defines derivatives, requires all
derivatives be carried at fair value, and provides for hedging accounting
when certain conditions are met, was issued. The Company will adopt this
statement November 1, 2000. Although the Company has not yet fully
assessed the effect of this statement, the Company does not believe
adoption of this statement will have a material impact on the Company's
financial statements.

In December 1999, the Securities and Exchange Commission (SEC)
released Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in
Financial Statements.  This bulletin summarizes certain interpretations
and practices followed by the Division of Corporation Finance and the
Office of the Chief Accountant of the SEC in administering the disclosure
requirements of the Federal securities laws in applying generally
accepted accounting principles to revenue recognition in financial
statements.  Although the Company has not fully assessed the implications
of SAB No. 101, the Company does not believe adoption of this bulletin
will have a material impact on the Company's financial statements.

**Item 7.a.       Quantitative and Qualitative Disclosures About Market Risk**

The Company is exposed to interest rate risk primarily through its
borrowing activities.  The Company has not used derivative financial
instruments to hedge such risks.  There is inherent roll-over risk for
borrowings as they mature and are renewed at current market rates.  The
extent of this risk is not quantifiable or predictable because of the
variability of future interest rates and business financing requirements.
A hypothetical 100 basis point increase in market interest rates from
levels at October 31, 1999 would not materially affect the Company's
future earnings, the fair value of its borrowings, or its cash flows.

**Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

**INDEX TO FINANCIAL STATEMENTS**

`Page


Independent Auditors' Report                                            17

Consolidated Financial Statements:

        Consolidated Balance Sheets at October 31, 1999 and 1998        18

        Consolidated Statements of Operations
         for the Years Ended October 31, 1999, 1998 and 1997            19

        Consolidated Statements of Shareholders' Equity
        for the Years Ended October 31, 1999, 1998 and 1997             20

        Consolidated Statements of Cash Flows
        for the Years Ended October 31, 1999, 1998 and 1997             21

        Notes to Consolidated Financial Statements                      22`

---

**INDEPENDENT AUDITORS' REPORT**

To the Board of Directors and Shareholders of Business Resource Group:

We have audited the accompanying consolidated balance sheets of Business
Resource Group and Subsidiaries (collectively the "Company") as of
October 31, 1999 and 1998, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three
years in the period ended October 31, 1999.  Our audits also included the
financial statement schedule listed at Item 14(a) (2).  These
consolidated financial statements and financial statement schedule are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements and
financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
consolidated financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company at October
31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended October 31, 1999 in
conformity with generally accepted accounting principles.  Also, in our
opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.

DELOITTE & TOUCHE LLP 
San Jose, California 
December 8, 1999

---

**BUSINESS RESOURCE GROUP AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                     (in thousands, except share and per share data)**

`October 31,
                                                          ---------------------
                                                             1999       1998
                                                          ---------- ----------
                            ASSETS
Current assets:
  Cash and equivalents..................................       $479       $412
  Accounts receivable, less allowance for doubtful
     accounts of $500 in 1999 and $400 in 1998..........     18,026     10,662
  Inventories...........................................     20,080      8,279
  Prepaids and other current assets.....................      3,251      2,411
                                                          ---------- ----------
          Total current assets..........................     41,836     21,764
Property and equipment -- net...........................      3,609      3,107
Other assets............................................      5,368      3,107
                                                          ---------- ----------
                                                            $50,813    $27,978
                                                          ========== ==========

             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Line of credit........................................     $9,165     $3,858
  Accounts payable......................................     15,119      3,369
  Accrued liabilities...................................      5,690      4,789
  Income taxes payable..................................        615        337
  Current portion of long-term debt.....................      1,060        336
                                                          ---------- ----------
          Total current liabilities.....................     31,649     12,689
Long-term debt..........................................      1,552        733
Deferred Lease Liability                                         98       --
Deferred income tax liability...........................         59        160
Shareholders' equity:
  Preferred stock, par value $0.01 per share; 2,000,000
     shares authorized; no shares outstanding...........       --         --
  Common stock, par value $0.01 per share;
     50,000,000 shares authorized; outstanding:
     5,170,524 shares in 1999 and 5,023,778 shares in
      1998..............................................         52         50
  Additional paid-in capital............................     11,719     11,337
  Retained earnings.....................................      5,684      3,009
                                                          ---------- ----------
          Total shareholders' equity....................     17,455     14,396
                                                          ---------- ----------
                                                            $50,813    $27,978
                                                          ========== ==========`

**See notes to consolidated financial statements.**
 .

---

**BUSINESS RESOURCE GROUP AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)**

`Year Ended October 31,
                                                --------------------------------
                                                   1999       1998       1997
                                                ---------- ---------- ----------
Net revenues:
  Workspace products...........................  $103,511    $76,433    $58,574
  Workspace services...........................    21,463     17,132     14,127
                                                ---------- ---------- ----------
          Total net revenues...................   124,974     93,565     72,701
                                                ---------- ---------- ----------
Cost of net revenues:
  Workspace products...........................    81,088     60,623     47,100
  Workspace services...........................    16,214     12,611     10,330
                                                ---------- ---------- ----------
          Total cost of net revenues...........    97,302     73,234     57,430
                                                ---------- ---------- ----------
Gross profit...................................    27,672     20,331     15,271
Selling, general and administrative expenses...    22,449     17,498     16,622
                                                ---------- ---------- ----------
Income(loss) from operations..................      5,223      2,833     (1,351)
Other income(expense):
  Interest income/(expense)....................      (678)      (319)        66
  Gain on sale of assets.......................        15         55       --
                                                ---------- ---------- ----------
          Total other income/(expense).........      (663)      (264)        66
                                                ---------- ---------- ----------
Income/(loss) before income taxes..............     4,560      2,569     (1,285)
Income taxes...................................     1,885      1,066       (523)
                                                ---------- ---------- ----------
Net income/(loss)..............................    $2,675     $1,503      ($762)
                                                ========== ========== ==========
Net income/(loss) per share
  Basic........................................     $0.52      $0.30     ($0.16)
                                                ========== ========== ==========

  Diluted......................................     $0.52      $0.30     ($0.16)
                                                ========== ========== ==========
Shares used in computation
  Basic........................................     5,122      4,963      4,902
                                                ========== ========== ==========

  Diluted......................................     5,162      4,965      4,902
                                                ========== ========== ==========`

**See notes to consolidated financial statements.**

---

**BUSINESS RESOURCE GROUP AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                     (in thousands, except share data)**

`Common Stock    Additional
                          --------------------   Paid-in    Retained
                            Shares     Amount    Capital    Earnings    Total
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1996...................   4,858,864      $49     $10,685     $2,268   $13,002

Employee stock
  purchase program......      54,848      --          212        --        212
Net loss................         --       --         --         (762)     (762)
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1997...................   4,913,712       49      10,897      1,506    12,452
Employee stock
  purchase program......      10,066      --           24        --         24
Issuance of warrants....         --       --          167        --        167
Issuance of common
  stock in connection
  with acquisition......     100,000        1         249        --        250
Net income..............         --       --         --        1,503     1,503
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1998...................   5,023,778       50      11,337      3,009    14,396
Employee stock
  purchase program......      15,789      --           37        --         37
Employee stock issuance       17,400        1          54        --         55
Stock options exercised       13,557      --           42        --         42
Issuance of common
  stock in connection
  with acquisition......     100,000        1         249        --        250
Net income..............         --       --         --        2,675     2,675
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1999...................   5,170,524      $52     $11,719     $5,684   $17,455
                          =========== ======== =========== ========== =========`

**See notes to consolidated financial statements.**

---

**BUSINESS RESOURCE GROUP AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)**

`Year Ended October 31,
                                              --------------------------------
                                                 1999       1998       1997
                                              ---------- ---------- ----------
Cash flows from operating activities:
  Net income (loss).........................     $2,675     $1,503      ($762)
Adjustments to reconcile to net cash
  provided (used) by operating activities:
    Depreciation and amortization...........      1,692      1,060        766
    Gain on sale of property and equipment..        (15)       (55)       --
    Warrants issued for services............        --         167        --
    Deferred income taxes...................       (101)      (211)      (292)
    Deferred lease                                    5        --         --
    Changes in operating assets and
     liabilities (net of effect of
     acquisitions):
        Accounts receivable -- net..........     (5,814)     3,554      2,358
        Inventories...........................  (10,120)    (6,391)      (424)
        Prepaids and other current assets...       (825)       (12)      (449)
        Accounts payable....................     10,516       (704)    (1,938)
        Accrued liabilities.................        551        776      1,216
                                              ---------- ---------- ----------
          Net cash provided (used) by
            operating activities............     (1,436)      (313)       475
                                              ---------- ---------- ----------
Cash flows from investing activities:
  Purchase of property and equipment.........    (1,667)    (1,562)      (928)
  Proceeds from sales of property and
    equipment................................        79         55        --
  Cash paid for acquisitions.................    (2,146)    (1,926)       --
  Other assets...............................      (228)         2        (20)
                                              ---------- ---------- ----------
          Net cash used by investing
             activities.............             (3,962)    (3,431)      (948)
                                              ---------- ---------- ----------
Cash flows from financing activities:
  Bank overdraft increase (decrease).........       --         819       (476)
  Repayment of notes payable and
    capital lease obligations                      (870)       --         --
  Issuance of notes payable                       1,840      1,069        --
  Issuance of common stock...................       134         24        212
  Borrowings on line of credit -- net........     4,361      1,970        --
                                              ---------- ---------- ----------
          Net cash provided (used) by
             financing activities............     5,465      3,882       (264)
                                              ---------- ---------- ----------
Increase (decrease) in cash and equivalents..        67        138       (737)
Cash and equivalents balances:
  Beginning of period........................       412        274      1,011
                                              ---------- ---------- ----------
  End of period..............................      $479       $412       $274
                                              ========== ========== ==========
Supplemental disclosures of cash flow
 information --
  Cash paid during the period for:
     Interest................................      $690       $319     $  --
                                              ========== ========== ==========
     Income taxes............................    $2,134       $200       $470
                                              ========== ========== ==========
Noncash investing and financing transactions:
 Acquisitions:
  Tangible assets acquired...................     3,490     $1,030     $  --
  Intangible assets acquired.................     2,380      2,407        --
  Liabilities assumed........................    (3,474)      (192)       --
  Notes payable issued.......................       --      (1,069)       --
  Common stock issued........................      (250)      (250)       --
                                              ---------- ---------- ----------
          Cash paid for acquisitions.........    $2,146     $1,926     $  --
                                              ========== ========== ==========`

**See notes to consolidated financial statements.**

---

**BUSINESS RESOURCE GROUP AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.  Significant Accounting Policies**

Nature of Business - Business Resource Group markets a full range of
new office workstation products, refurbished office systems furniture
and related services such as facilities management outsourcing and
consulting services, computer-aided facilities management,
computerized space planning and design, project management, move
management, installation, product specification and order management.

Principles of Consolidation - The consolidated financial statements
include the accounts of Business Resource Group and its wholly-owned
subsidiaries (collectively the "Company"). Intercompany transactions
have been eliminated in consolidation.

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 at the date of the financial statements and
the reported amounts of revenues and expenses for the periods
presented. Such management estimates include the allowance for
doubtful accounts, Inventories reserves and certain accruals.  Actual
results could differ from those estimates.

Concentrations of Credit Risk - Financial instruments which
potentially subject the Company to concentration of credit risk
principally consist of cash, cash equivalents and trade accounts
receivable.  The Company places its cash and cash equivalents with
what it believes are high credit quality financial institutions. The
Company sells its products and services primarily to companies in
California, Nevada, Arizona, Texas and North Carolina.  The Company
maintains reserves for potential credit losses.

Fair Value of Financial Instruments - The Company believes that
the carrying amount for cash and cash equivalents, accounts
receivable, accounts payable, and long-term debt approximated fair
values at the date of the financial statements.

Cash and equivalents are highly liquid investments purchased with a
maturity of three months or less when acquired.

Inventories are valued at the lower of cost or market and consist
primarily of in-transit products shipped directly to customers by
suppliers and refurbished product.

Property and equipment are stated at cost. Depreciation is provided
using the straight-line method over the estimated useful lives of
three to ten years for computer equipment, office furniture, and
equipment. Leasehold improvements are amortized over the shorter of
their estimated useful lives or the term of the lease.

Other Assets - Goodwill represents the excess of the purchase price
over the estimated fair value of net assets of acquired businesses.
Goodwill is being amortized on a straight-line basis over periods not
exceeding twenty years. Goodwill amortization amounted to $346,000,
$215,000, and $167,000 in fiscal years 1999, 1998 and 1997,
respectively. The Company evaluates its long-lived assets for
impairment whenever events or changes in circumstances indicate that
the carrying value of an asset may not be recoverable. Impairments
are recognized when the net book value of assets exceeds the future
undiscounted cash flows attributable to such assets.

Revenue Recognition - Revenues from workspace product sales and
vendor commissions are recognized at the start of installation of
products at the customers facility. Service revenues are recognized
upon customer acceptance of the project.

Stock Based Compensation - The Company accounts for stock-based
awards to employees using the intrinsic value method in accordance
with Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees.

Income Taxes - Deferred income taxes are provided for temporary
differences between financial statements and income tax reporting.
Earnings per Share - Earnings per share (EPS) are computed as basic
EPS using the average number of common shares outstanding and diluted
EPS using the weighted average number of common and dilutive common
equivalent shares outstanding, in accordance with SFAS 128 (see Note
13).

Recently Issued Accounting Standards - The Company adopted Statement
of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income,  during fiscal 1999. SFAS No. 130 establishes
standards for reporting comprehensive income and its components in
financial statements. Total comprehensive income is comprised of net
income and all changes to shareholders' equity, except those related
to investments by and distributions to owners. Other comprehensive
income typically includes foreign currency translation adjustments,
unrealized gain or loss on investments, minimum pension liabilities,
and changes in the market value of futures contracts. The Company's
comprehensive income is equal to its reported net income for all
years presented.

In fiscal 1999, the Company adopted SFAS No. 131, Disclosures About
Segments of an Enterprise and Related Information, which establishes
annual and interim reporting standards for an enterprise's business
segments and related disclosures about its products, services,
geographic areas and major customers. The Company operates in two
reportable segments (see Note 16).

In June 1998, SFAS No. 133,  Accounting for Derivative Instruments
and Hedging Activities,  which defines derivatives, requires all
derivatives be carried at fair value, and provides for hedging
accounting when certain conditions are met, was issued. The Company
will adopt this statement November 1, 2000. Although the Company has
not yet fully assessed the effect of this statement, the Company does
not believe adoption of this statement will have a material impact on
the Company's financial statements.

In December 1999, the Securities and Exchange Commission (SEC)
released Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition
in Financial Statements.  This bulletin summarizes certain
interpretations and practices followed by the Division of Corporation
Finance and the Office of the Chief Accountant of the SEC in
administering the disclosure requirements of the Federal securities
laws in applying generally accepted accounting principles to revenue
recognition in financial statements.  Although the Company has not
fully assessed the implications of SAB No. 101, the Company does not
believe adoption of this bulletin will have a material impact on the
Company's financial statements.

2.Inventories (in thousands)

`1999       1998
                                             ---------- ----------
New office workstation products in-transit     $16,335     $7,517
Refurbished products and Raw Materials....       3,745        762
                                             ---------- ----------
Total inventories..........................    $20,080     $8,279
                                             ========== ==========`

3.Property and Equipment (in thousands)

`1999       1998
                                             ---------- ----------
Computer equipment.........................     $4,322     $3,581
Office furniture and equipment.............      1,732      1,412
Leasehold improvements.....................        562        146
                                             ---------- ----------
                                                 6,616      5,139
Accumulated depreciation and amortization..     (3,007)    (2,032)
                                             ---------- ----------
    Total property and equipment -- net....     $3,609     $3,107
                                             ========== ==========`

4. Long-term Debt and Line of Credit (in thousands)

`1999       1998
                                             ---------- ----------
Unsecured term loans.......................       $733     $1,069
Secured term loans                               1,879
                                             ---------- ----------
                                                 2,612      1,069
Less current portion.......................     (1,060)      (336)
                                             ---------- ----------
Long-term debt.............................     $1,552       $733
                                             ========== ==========`

The Company has a $733,000 unsecured term loan outstanding, bearing
interest at the rate of 6% per annum with principal payments through
fiscal 2001.

The Company has a $1,834,000 secured term loan outstanding from a
bank with principal payments through September 2002. Interest on the
bank loan is at the bank's base rate (8.25% at October 31, 1999). The
Company, at its discretion, can select other interest rate methods
for this bank loan. These interest rate methods include the base rate
option currently in effect, an offshore rate option, and an option
related to the bank's cost of funds-overnight rate.

The Company also has $45,000 of other secured term loans outstanding.
The first of these notes bears interest at the rate of 12.5% per
annum with principal payments through September 2000. The second of
these notes bears interest at the rate of 11.7% per annum with
principal payments through March 2002.

The Company has a $15,000,000 revolving line of credit with a bank
which expires in February 2001. The line bears interest at the bank's
base rate (8.25% at October 31, 1999) and is secured by substantially
all of the Company's assets.  The line of credit contains
restrictions with respect to certain payments, including dividends,
additional debt, and the maintenance of minimum quick assets and
stockholders equity. The Company currently maintains an irrevocable
stand-by letter of credit in the amount of $3.0 million against this
facility.

Required principal payments of long-term debt are payable as follows:
Year ending October 31, 2000 - $1,060,000; 2001 - $1,050,000; and
2002 - $502,000.

5. Accrued Liabilities (in thousands)

`October 31,
                                             ---------------------
                                                1999       1998
                                             ---------- ----------
Sales taxes payable........................     $1,494       $284
Commissions payable........................      1,029        667
Customer deposits..........................        999      1,867
Other liabilities..........................      2,168      1,971
                                             ---------- ----------
          Total accrued liabilities........     $5,690     $4,789
                                             ========== ==========`

6. Commitments

The Company is obligated under certain operating leases expiring at
various dates through 2008. Future minimum lease payments under these
lease agreements at October 31, 1999 are as follows (in thousands):

`Years Ending October 31,
  2000................................................     $1,963
  2001................................................      1,941
  2002................................................      1,107
  2003................................................        604
  2004................................................        317
  Thereafter                                                1,003
                                                        ----------
Total future minimum payments.........................     $6,935
                                                        ==========`

Total rent charged to expense amounted to $1,551,000, $955,000 and
$803,000 for the years ended October 31, 1999, 1998 and 1997,
respectively.

**7.      Employee Benefit Plan**

The Company and some of its subsidiaries have 401(k) plans (tax
deferred savings plans) ("the plans") which cover substantially all
full-time employees. The plans require that the Company make cash
contributions ranging from 0% to 25% of contributions made by
participating employees. In fiscal 1999, 1998 and 1997, the Company
contributed $124,000, $107,000, and $93,000 to the plans.

**8. Income Taxes**

The provisions for income taxes consisted of the following (in
thousands):

`Year Ended October 31,
                                             --------------------------------
                                                1999       1998       1997
                                             ---------- ---------- ----------
Current:
  Federal..................................     $1,903     $1,035      ($229)
  State....................................        470        242         (2)
                                             ---------- ---------- ----------
                                                 2,373      1,277       (231)
                                             ---------- ---------- ----------
Deferred:
  Federal..................................       (392)      (195)      (207)
  State....................................        (96)       (16)       (85)
                                             ---------- ---------- ----------
                                                  (488)      (211)      (292)
                                             ---------- ---------- ----------
          Total............................     $1,885     $1,066      ($523)
                                             ========== ========== ==========`

The components of the actual deferred tax assets and liabilities at October
31, 1999 and 1998 were as follows (in thousands):

`October 31,
                                                        ---------------------
                                                           1999       1998
                                                        ---------- ----------
Deferred tax assets:
  Accruals recognized in different periods for tax
     purposes..........................................    $1,197       $810
  Amortization of intangibles..........................        61        104
  Deferred tax liabilities -- accelerated depreciation.      (120)      (264)
                                                        ---------- ----------
Net deferred tax assets................................    $1,138       $650
                                                        ========== ==========`

Current deferred income tax assets of $1,197,000 and $767,000 at
October 31, 1999 and 1998, respectively, are included in prepaids and
other current assets.

The following is a reconciliation of the effective income tax rates,
for financial statement purposes:

`Year Ended October 31,
                                             --------------------------------
                                                1999       1998       1997
                                             ---------- ---------- ----------
Tax computed at federal statutory rate.....       34.0%      34.0%    (35.0%)
State income taxes, net of federal effect..        5.3%       5.8%     (6.1%)
Other......................................        2.0%       1.7%       0.4%
                                             ---------- ---------- ----------
Effective income tax rate..................       41.3%      41.5%    (40.7%)
                                             ========== ========== ==========`

**9.      Major Customers and Vendors**

One customer, Cisco Systems, Inc., represented 48%, 44%, and 30% of
net revenues for the years ended October 31, 1999, 1998 and 1997,
respectively.

One vendor, Teknion, Inc., represented 44%, 43% and 24% of total
purchases for the years ended October 31, 1999, 1998 and 1997,
respectively.  In response to customer orders for new office
furniture, the Company issues purchase orders to Teknion for the
corresponding product, which is delivered directly to the customer
for installation by Company personnel.

**10.     Warrants**

The Company issued warrants in fiscal year 1995 to purchase 110,000
shares of common stock, at an exercise price per share of 120% of the
initial offering price ($8.40 per share), to the underwriters who
managed the initial public offering of the Company's common stock.
The warrants are exercisable over a period of five years beginning
from the date of the initial public offering  (June 1995).  The
Company also issued a warrant in fiscal 1997 to purchase 60,000
shares of common stock, at an exercise price per share of $5.50 per
share, to an advisor.  Such warrant is exercisable at any time from
April 1997 until it expires in April 2002.  As of October 31, 1999,
no warrants had been exercised.

**11.     Stock Option Plans and Stock Purchase Plans**

Under the 1995 Stock Option Plan (the 1995 Plan), the Company may
grant stock options at an exercise price of not less than 100% of
fair market value on the date of the grant and non-statutory stock
options at not less than 85% of the fair market value on the date of
the grant.  Stock options granted under the 1995 Plan for new
employees generally become exercisable at the rate of 1/8 of the
total shares granted six months after the date of the grant and 1/48
of the total number of shares granted each month thereafter.
Generally, stock options granted for existing employees become
exercisable at a rate of 1/48 of the total shares granted each month
after the date of the grant. During fiscal 1998 and 1997, the Company
increased the number of shares of common stock reserved for issuance
under the 1995 Stock Option Plan (the 1995 Plan) from 1,700,000 to
2,200,000 and from 1,200,000 to 1,700,000, respectively. At October
31, 1999, 969,201 shares are available for future grant under the
1995 Plan.

In March 1998, the Company canceled stock options to acquire 361,992
shares of the Company's common stock price at prices ranging from
$3.375 to $7.000 and exchanged them for options to purchase 361,992
shares of the Company's common stock at the then current market value
of $3.187 per share with new vesting periods. The vesting for
exchanged options was 50% of the shares on the one year anniversary
of the date of grant pursuant to the exchange and 1/24th of the total
number of shares granted each month thereafter. No options held by
the Company's directors or executive officers were included in these
pricing actions taken by the Company.

Under the 1995 Directors' Stock Option Plan (the Directors' Plan)
non-employee directors of the Company receive an initial grant of
non-statutory stock options on the date they join the Board and
automatic annual grants of non-statutory stock options issued on the
first day of each fiscal year to all non-employee directors of the
Company who have served at least three months as of such grant date.
Options are granted under the Directors' Plan at an exercise price
equal to the fair market value on the grant date.  Initial grants
become exercisable ratably over four years and automatic grants
become exercisable four years after the date of grants. A total of
175,000 shares of common stock have been reserved for issuance under
the Directors' Plan. At October 31, 1999, 90,000 shares are available
for future grant under the Directors' Plan.

Option activity under the plans is as follows:

`1999                 1998                 1997
                    -------------------- -------------------- -------------------
                               Weighted             Weighted            Weighted
                                Average              Average             Average
                               Exercise             Exercise            Exercise
                     Options     Price    Options     Price    Options    Price
                    ---------- --------- ---------- --------- --------- ---------
Outstanding --
 beginning of year. 1,271,376     $3.28    737,863     $4.75   865,844     $5.12
Granted............   233,600     $2.98  1,177,086     $3.10   295,742     $4.24
Exercised..........   (13,557)    $3.12       --        --     (34,051)    $4.00
Canceled...........  (175,680)    $3.21   (643,573)    $4.70  (389,672)    $5.43
                    ----------           ----------           ---------
Outstanding --
 end of year....... 1,315,739     $3.24  1,271,376     $3.28   737,863     $4.65
                    ==========           ==========           =========
Exercisable at
 end of year.......   739,178     $3.33    293,695     $3.53   243,315     $4.89
                    ==========           ==========           =========`

`Options Outstanding             Options Exercisable
                  -----------------------------------  ----------------------
                                Weighted
                                 Average    Weighted                Weighted
                                Remaining    Average                 Average
  Range of          Number     Contractual  Exercise     Number     Exercise
 Exercise Prices  Outstanding  Life (Years)   Price    Exercisable    Price
----------------- -----------  -----------  ---------  -----------  ---------
 $2.375 - $5.000   1,265,799          3.4     $3.117      689,178     $3.119
 $5.001 - $7.000      50,000          5.8     $6.225       50,000     $6.225
                  -----------                          -----------
 $2.375 - $7.000   1,315,799          3.5     $3.235      739,178     $3.329
                  ===========                          ===========`

Under the 1995 Employee Stock Purchase Plan (Purchase Plan) eligible
employees may purchase common stock through payroll deductions of up
to 10% of their compensation at a purchase price equal to the lower
of 85% of the fair market value of the Company's common stock at the
beginning or end of each six-month offering period. A total of
200,000 shares of common stock have been reserved for issuance under
the Purchase Plan. There were 15,789 and 10,066 shares issued under
the Employee Stock Purchase Plan in fiscal 1999 and 1998,
respectively.

**Additional Stock Plan Information**

The Company accounts for its stock-based awards using the intrinsic
value method in accordance with Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees, and its related
interpretations. Accordingly, no compensation cost has been
recognized in the financial statements for its stock plans.

SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"),
requires the disclosure of pro forma net income (loss) and net income
(loss) per share had the Company used the fair value method to
account for its stock-based compensation awards granted subsequent to
October 31, 1995. Under SFAS 123, the fair value of stock-based
awards to employees is calculated through the use of option pricing
models. The Black-Scholes model used by the Company to calculate
option values for purposes of this note, as well as other currently
accepted option valuation models, were developed to estimate the fair
value of stock options that are freely tradable and fully
transferable and that have no vesting restrictions.  These models
also require highly subjective assumptions, including future stock
price volatility and expected term until exercise, which greatly
affect the calculated values.  Accordingly, management believes that
this model does not necessarily provide a reliable measure of the
fair value of the Company's option awards.

The Company's calculations were made using the Black-Scholes multiple
option-pricing model. The following weighted average assumptions were
used: expected option life of 12 months beyond each respective
vesting period; risk-free interest rates of 5.49% in fiscal 1999,
4.6% in fiscal 1998 and 6.0% in fiscal 1997; expected stock
volatility of  70% in fiscal 1999 and 1998,  88% in fiscal 1997 and a
dividend yield of zero. If the computed fair values of the awards had
been amortized to expense over the vesting period of the awards, pro
forma net income (loss) would have been as follows:

`1999       1998       1997
                                               ---------- ---------- ----------
                                               (in thousands, except per share)

Net income/(loss):
  As reported................................     $2,675     $1,503      ($762)
  Pro forma..................................     $2,336     $1,183    ($1,241)
Basic & Diluted income(loss) per share:
  As reported................................      $0.52      $0.30     ($0.16)
  Pro forma..................................      $0.45      $0.24     ($0.25)`

**12. Acquisitions**

In August 1999, the Company acquired, in a purchase transaction,
certain assets and assumed certain liabilities of Modern Office
Interiors, Inc. ("MOI") for $132,000 in cash. MOI is a Morrisville,
North Carolina-based seller of new and refurbished office
workstations.

In February 1999, the Company acquired, in a purchase transaction,
certain assets and assumed certain liabilities of Re'Nu Office
Systems, Inc. ("Re'Nu") in exchange for $2,000,000 in cash and
100,000 shares of the Company's Common Stock. Re'Nu is a Los Angeles-
based seller of new and refurbished office workstations.

In May 1998, the Company acquired, in a purchase transaction, certain
assets and assumed certain liabilities of OFN, Inc. ("OFN") in
exchange for $2,093,000 in cash, the Company's promissory note in the
aggregate principal amount of $1,069,000, and 100,000 shares of the
Company's Common Stock. OFN is a San Diego-based seller of new and
refurbished office workstations.

Results of operations include those operations relating to the
acquired companies' assets and liabilities from the date of
acquisition.  In connection with these acquisitions, the Company
recorded intangible assets consisting primarily of goodwill, totaling
$2,407,000 for OFN, $98,000 for MOI and $3,540,000 for Re'Nu, which
will be amortized over twenty years.

Had these acquisitions taken place at the beginning of fiscal 1999,
1998 and 1997, unaudited pro forma net revenues would have been
approximately $130.7 million, $108.3 million and $90.5 million,
respectively. Pro forma unaudited net earnings (loss) would have been
approximately $2.7 million, $1.6 million and $(316,000) for fiscal
1999, 1998 and 1997, respectively.  Basic and diluted net earnings
(loss) per share would have been approximately $0.53 per share for
fiscal 1999, $0.32 per share for fiscal 1998 and $(0.06) per share
for fiscal 1997.

**13.     Per Share Information**

Basic earnings per share is computed by dividing net income by the
weighted average common shares outstanding for the period while
diluted earnings per share includes the dilutive effects of stock
options. Basic and diluted earnings per share for the fiscal years
ended October 31, 1999, 1998 and 1997, respectively, are calculated
as follows:

`1999       1998       1997
                                               ---------- ---------- ----------
                                                          (IN THOUSANDS)

Basic weighted average shares outstanding....      5,122      4,963      4,902
Dilutive effect of options...................         40          2        --
                                               ---------- ---------- ----------
Diluted weighted average shares outstanding..      5,162      4,965      4,902
                                               ========== ========== ==========`

**14. SELECTED QUARTERLY DATA (UNAUDITED)**

The following presents unaudited quarterly operating results for fiscal
years ended October 31, 1999 and 1998:

(In thousands, except per share data)

`January 31,  April 30,   July 31,   October 31,
                                 ----------- ----------- ----------- -----------

Fiscal 1999
  Net revenues.................     $26,017     $29,370     $33,404     $36,183
  Gross profit.................       5,373       6,851       7,448       8,000
  Net income...................         361         563         869         882

  Basic earnings per share.....       $0.07       $0.11       $0.17       $0.17
  Diluted earnings per share...       $0.07       $0.11       $0.17       $0.17




FISCAL 1998
  Net revenues.................     $18,283     $21,810     $26,281     $27,191
  Gross profit.................       3,799       4,729       5,850       5,953
  Net income...................         137         313         517         536

  Basic earnings per share.....       $0.03       $0.06       $0.10       $0.11
  Diluted earnings per share...       $0.03       $0.06       $0.10       $0.11`

**15.  Subsequent Events**

On November 8th, 1999, the Company, pursuant to a Stock Purchase
Agreement dated  November 8, 1999 by and among the Company, Baquet-Pastirjak, Inc., a
California corporation ("BPI" and the "Seller"), and
William H. Baquet, Jr. and Robert G. Pastirjak  (collectively, the
"Selling Shareholders"), purchased all the outstanding capital stock of
BPI. BPI is primarily engaged in the contract furniture business. The
Selling Shareholders were the sole shareholders of BPI.  The purchase
price paid by the Company consisted of (i) $2,071,000 in cash; (ii)
50,000 shares of common stock of the Company at a fair value of $3.50 per
share and (iii) an earn out of up to the aggregate amount of $2,600,000
in cash to be paid over four years based upon annual net income of BPI
("collectively, the "Purchase Price"). The cash paid to the Seller was
obtained from a draw down on the Company's $15,000,000 line of credit.

On January 6, 2000, the Company announced that it had retained the
services of an investment banking firm to explore various strategic and
financial alternatives for maximizing shareholder value. Such
alternatives may include, but are not limited to, a merger, a strategic
alliance, the infusion of additional equity, or an affiliation with a
strategic partner

**16. Segment Reporting**

During fiscal 1999, the Company adopted SFAS No. 131, Disclosure about
Segments of an Enterprise and Related Information, during fiscal 1999.
SFAS No. 131 establishes standards for reporting information about
operating segments in financial statements. Operating segments are
defined as components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in
assessing performance. By this definition, the Company has two operating
segments, workspace products and workspace services. Workspace products
include new office furniture systems, seating, storage and filing
cabinets, desks and casegoods, and refurbished office furniture systems.
Workspace service offerings include workspace products installation,
facilities strategic planning, facilities planning outsourcing,
facilities automation services, design management and move management.

The Company does not analyze these segments below the gross profit line.
Segment assets are not presented as all assets of the Company are
commingled and are not available by segment.

The following information by segment is for the fiscal years ended
October 31 (in thousands):

`1999      1998      1997
                                    --------- --------- ---------

Revenues (1):
  Workspace products                $103,511   $76,433   $58,574
  Workspace services                  21,463    17,132    14,127
                                    --------- --------- ---------
Consolidated Revenues               $124,974   $93,565   $72,701
                                    --------- --------- ---------


                                       1999      1998      1997
                                    --------- --------- ---------

Gross Profit (1):
  Workspace products                 $22,423   $15,810   $11,474
  Workspace services                   5,249     4,521     3,797
                                    --------- --------- ---------
Consolidated Gross Profit            $27,672   $20,331   $15,271
                                    --------- --------- ---------`

(1)  The presentation of revenues and gross profit is consistent with the
Company's internal presentation of financial information to management.

**Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure**

Not applicable.

**PART III**

Certain information required by Part III is omitted from this
report because the Registrant will file a definitive proxy statement
within 120 days after the end of its fiscal year pursuant to
Regulation 14A (the "Proxy Statement") for its annual meeting of
shareholders to be held March 23, 2000 and the information included
therein is incorporated herein by reference.

**Item 10.        Directors and Executive Officers of the Registrant**

Incorporated by reference from the information under the caption
"Executive Officers of the Registrant" in the Registrant's Proxy Statement.

**Item 11.        Executive Compensation**

Incorporated by reference from the information under the caption
"Compensation Committee Report on Executive Compensation" in the
Registrant's Proxy Statement.

**Item 12.        Security Ownership of Certain Beneficial Owners and Management**

Incorporated by reference from the information under the caption
"Common Stock Ownership of Certain Beneficial Owners and Management" in
the Registrant's Proxy Statement.

**Item 13.        Certain Relationships and Related Transactions**

Incorporated by reference from the information under the captions
"Compensation Committee Report on Executive Compensation" and
"Transactions with Management and Others" in the Registrant's Proxy
Statement.

**Part IV**

**Item 14.        Exhibits, Financial Statement Schedule and Reports on Form 8-K**

**(1)     Financial Statements**

See index to Financial Statements at Item 8 of this report.

**(2)     Financial Statement Schedule**

Schedule II - Valuation and Qualifying Accounts (see page
38).

**(3)     Exhibits (numbered in accordance with Item 601 of Regulation S-K**

Exhibit

Number  Description

> 3.1     Amended and Restated Articles of Incorporation of Registrant. (1)3.2     Amended and restated bylaws of Registrant. (1)4.1     Buy and Sell Agreement dated October 31, 1987, as amended on
>         March 15, 1988, August 17, 1994, October 27, 1994 and April 22,
>         1995 among the Registrant, Brian McNay, Charles Winter, Jeffrey
>         Tuttle, Alison Lazarus and Jeffrey Bernstein. (1)10.1    1995 Stock Option Plan, as amended and forms of agreements
>         thereunder. (8)10.2    1995 Directors' Stock Option Plan and form of option agreement
>         thereunder. (1)10.3    1995 Employee Stock Purchase Plan and form of subscription
>         agreement thereunder. (1)10.4    Form of Directors' and Officers' Indemnification Agreement. (1)10.5    Form of Common Stock Purchase Warrant. (1)10.6    North First Street Plaza Lease Agreement dated May 28, 1991, as
>         amended on December 21, 1993, between the Registrant and Wells
>         Fargo Bank, N.A. (1)10.6A   Second Amendment to Lease between the Registrant and Wells Fargo
>         Bank, NA, dated November 30, 1995 with respect to premises at
>         2150 N. First Street, San Jose, CA 95131. (3)10.7    Sublease Agreement dated January 15, 1995, as amended on April
>         20, 1995, by and between the Registrant and First Franklin
>         Financial Corporation. (1)10.8    Lease Agreement dated June 10, 1994 between the Registrant and
>         Alexander M. Maisin, Trustee of the Alexander M. and June L.
>         Maisin Revocable Trust. (1)10.9    Business Loan Agreements between the Registrant and Silicon
>         Valley Bank, including related promissory notes and amendments
>         thereto. (1)10.9A   Business Loan Modification Agreement between the Registrant and
>         Silicon Valley Bank, dated January 16, 1996. (3)10.9B   Business Loan Modification Agreement between the Registrant and
>         Silicon Valley Bank, dated March 6, 1996. (3)10.9C   Business Loan Modification Agreement between the Registrant and
>         Silicon Valley Bank, dated March 13, 1996. (3)10.10   Commercial Security Agreement dated March 15, 1988, as amended on
>         February 25, 1993, between the Registrant and Silicon Valley
>         Bank. (1)10.11   Direct Sales Representative Agreement dated October 5, 1994
>         between the Registrant and TAB Products Co. (1)10.12   Letter Agreement dated April 28, 1995 between the Registrant and
>         Landmark Pacific Group, Inc. (1)10.13   Letter Agreement dated April 30, 1995 between the Registrant and
>         Refurbished Panel Systems. (1)10.14   Asset Purchase Agreement dated September 27, 1995 between the
>         Registrant and RST & Associates, Inc. (4)10.15   Assignment and Assumption of Lease between RST & Associates, Inc.
>         and the Registrant dated September 1, 1995 with respect to
>         premises at 2010 East University, Tempe, Arizona. (4)10.16   Assignment and Assumption of  Lease between  RST & Associates
>         Inc. and the Registrant dated September 27, 1995 with respect to
>         premises at 3957 East Speedway, Tucson, Arizona. (4)10.17   Assignment and Assumption of  Lease between  RST & Associates
>         Inc. and the Registrant dated September 27, 1995 with respect to
>         premises at 5140 South Rogers, Las Vegas, Nevada. (4)10.18   Purchase Agreement between Cisco Systems, Inc., Teknion, Inc.,
>         Teknion International and the Registrant effective as of
>         September 1, 1995.  (4)10.19   Master Lease and Lease Renewal Agreement between the Registrant
>         and OMI Properties Inc., dated July 21, 1995 and February 1,
>         1996, respectively, for facilities located at 130 Andover Park
>         East, Suite 204, Tukwila, WA 98188. (3)10.20   Master Lease Agreement between the Registrant and IM Joint
>         Venture, dated June 23, 1995, for facilities located at Infomart
>         Suite 5001, 1950 Stemmons Freeway, Dallas, Texas 75207. (3)10.21   Asset Purchase Agreement dated January 25, 1996 between the
>         Registrant and Dartmouth Group, Inc. d/b/a Corporate Source. (3)10.22   Assignment and Assumption of  Lease between the Registrant and
>         Corporate Source, dated January 25, 1996 with respect to premises
>         at 2811 McKinney Avenue, Suite 18, Dallas, Texas 75204. (3)10.23   Assignment and Assumption of  Lease between the Registrant and
>         Corporate Source, dated January 25, 1996 with respect to premises
>         at 1367 & 1369 Glenville Drive, Richardson,  Texas 75081. (3)10.24   Vehicle Lease Service Agreement between the Company and Penske
>         Truck Leasing Co., L.P., dated January 23, 1996. (3)10.25   Master Lease Agreement between the Registrant and Southwestern
>         Bell Telephone Company Inc., dated May 2, 1996 for facilities
>         located at 105 Auditorium Circle, San Antonio, Texas 78209. (5)10.26   Third Amendment to Lease between the Registrant and Wells Fargo
>         Bank, NA, dated August 5, 1996 with respect to premises at 2150
>         N. First Street, San Jose, CA 95131. (5)10.27   Amended and Restated Loan and Security Agreement between the
>         Registrant and Silicon Valley Bank, dated July 3, 1996. (5)10.28   Master Lease Agreement between the Registrant and Centennial
>         Plaza, LLC, dated October 4, 1996 for facilities located at
>         Centennial Airport Plaza Building, 12200 E. Briarwood Avenue,
>         Suite 199, Englewood, Colorado 80112. (4)10.29   Master Lease Agreement between the Registrant and Amberjack Ltd.,
>         dated December 16, 1996 for facilities located at 1515 E.
>         Missouri, Phoenix, AZ 85014. (4)10.30   Common Stock Purchase Warrant Agreement between the Company and
>         Gateway Advisors dated April 21, 1997. (6)10.31   Revolving Credit Loan and Security Agreement between the Company
>         and Comerica Bank dated August 8, 1997. (7)10.32  Severance and Mutual Release Agreement between the Company and
>        Charles J. Winter dated December 17, 1997. (8)10.33  Stand by Letter of Credit with Comerica Bank. (9)10.34  Amended Stand by Letter of Credit with Comerica Bank. (9)10.35  Collateral Security Agreement with Teknion, Inc. (9)10.36  Asset Purchase Agreement dated May 22, 1998 between the
>        Registrant, OFN, Inc., BRG Acquisition Corp. and David & Rebecca
>        Nagorski, Husband and Wife as Joint Tenants. (10)10.37  Assignment and Assumption of  Lease between the Registrant and
>        OFN Inc., dated May 22, 1998 with respect to premises at 8060
>        Arjons Drive, San Diego, California. (2)10.38  Consulting Services  Agreement between the Registrant and
>        Hewlett-Packard Company dated May 1998. (2)10.39  Commercial Lease Agreement between the Registrant and Crow
>        Carrara No.2 dated October 8, 1997 with respect to premises at
>        2015 Surveyor Boulevard, Carrollton, Texas . (2)10.40  Retail Lease Agreement between the Registrant and Blue Jean
>        Equities West dated August 11, 1998 with respect to premises at
>        1225 Battery Street, San Francisco, California. (2)10.41  Office Lease Agreement between the Registrant and Scottsdale
>        Spectrum, L.L.C. dated October 7, 1998 with respect to premises
>        at 6720 North Scottsdale Road, Scottsdale, Arizona. (2)10.42  Revolving Credit Loan and Security Agreement between the Company
>        and Comerica Bank dated February 15, 1999.10.43  Asset Purchase Agreement dated February 1, 1999 between the
>        Registrant, RN Acquisition Corp., Re'Nu Office Systems, Inc.,  a
>        California corporation, Re'Nu South, Inc., a California
>        corporation and wholly owned subsidiary of Re'Nu Office Systems,
>        Inc., Re'Nu Office Systems, Inc.,  a Nevada corporation and
>        wholly owned subsidiary of Re'Nu Office Systems, Inc.,  and Fred
>        Cook. (11)10.44  Asset Purchase Agreement dated August 3, 1999 between the
>        Registrant, Modern Office Interiors, Inc., a  North Carolina
>        corporation, MOI Acquisition Corp., a California corporation,
>        and Richard Nellis, Craig Parr, and Mark Baldwin.10.45  Lease Agreement Number BU061698 between the Registrant and
>        Winthrop Resources Corporation dated June 16, 1998 with respect
>        to information technology equipment.10.46  Employment Agreement dated August 3, 1999 between the Registrant and Richard Nellis.10.47  Employment Agreement dated August 3, 1999 between the Registrant and Craig Parr.22.1   Subsidiaries of Registrant (2)23.1   Independent Auditor's Consent. (2)24.1   Power of Attorney (see page 37). (2)_________________(1)  Incorporated by reference to exhibits filed in response to Item
>      16(a), "Exhibits," of the Registrant's Registration Statement on
>      Form S-1 and Amendment No. 1, Amendment No. 2 and Amendment No. 3
>      thereto (File No. 33-46527), which became effective on June 27,
>      1995.(2)  Filed herewith.(3)  Incorporated by reference to the Registrant's Form 10-Q dated
>      March 14, 1996.(4)  Incorporated by reference to the Registrant's Form 10-K dated
>      January 22, 1996.(5)  Incorporated by reference to the Registrant's Form 10-Q dated
>      September 13, 1996.(6)  Incorporated by reference the Registrant's Form 10-Q dated June
>      13, 1997.(7)  Incorporated by reference to the Registrant's Form 10-Q dated
>      September 13, 1997.(8)  Incorporated by reference to the Registrant's Form 10-K dated
>      January 26, 1998.(9)  Incorporated by reference to the Registrant's Form 10-Q dated
>      March 11, 1998.(10) Incorporated by reference to the Registrant's Form 8-K/A dated
>      July 31, 1998.(11) Incorporated by reference to the Registrant's Form 8-K dated
>      February 16, 1999.

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**BUSINESS RESOURCE GROUP**

**SIGNATURES**

Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized.



| |                        
| | -----------------------
| | BUSINESS RESOURCE GROUP

| |             
| | ------------
| | (Registrant)

Date: January 27, 2000



| |     |                 
| | --- | ----------------
| | By: | /s/ JOHN W. PETH

| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| |                                                                                              
| | John W. Peth                                                                                 
| | President, Chief Executive Officer
                                              and Director
| | (Principal Executive Officer)                                                                

**POWER OF ATTORNEY**

KNOW ALL PERSONS BY THESE PRESENTS, that
each person whose signature appears below constitutes and appoints John W. Peth
and John M. Palmer, his attorney-in-fact, with the power of substitution, for
him in any and all capacities, to sign any amendments to this Report on Form
10-K, and to file the same, with exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact, or his substitute or
substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the
Securities Exchange Act of 1934, this Report has been signed below by the
following persons in the capacities and on the dates indicated.

`Signature                       Title                     Date
-------------------------  -------------------------------  -----------------
/s/ JOHN W. PETH           President, Chief Executive       January 27, 2000
-------------------------    Officer and Director
(John W. Peth)             (Principal Executive
                           Officer)


/s/ BRIAN D. MCNAY         Executive Vice President of      January 27, 2000
-------------------------    Sales and Director
(Brian D. McNay)


/s/ JEFFREY TUTTLE         Executive Vice President of      January 27, 2000
-------------------------    Marketing, Secretary and
(Jeffrey Tuttle)           Director


/s/ JOHN M. PALMER         Vice President, Finance and      January 27, 2000
-------------------------    Chief Financial Officer
(John M. Palmer)           (Principal Financial and
                           Accounting Officer)


/s/ HARRY S. ROBBINS       Director                         January 27, 2000
-------------------------
(Harry S. Robbins)


/s/ GEORGE KELLY           Director                         January 27, 2000
-------------------------
(George Kelly)`

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**BUSINESS RESOURCE GROUP AND SUBSIDIARY

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                     (in thousands)**

`Additions
                                   ---------------------
                        Balance at Charged to Charged to              Balance at
                        Beginning  Costs and    Other                   End of
      Description        of Year    Expenses   Accounts  Deductions(1)   Year
----------------------- ---------- ---------- ---------- ------------ ----------
Allowance for doubtful
 accounts:
  Fiscal 1997..........       $57        $33        --         --           $90
  Fiscal 1998..........        90        397        --           (87)       400
  Fiscal 1999..........       400        142        146         (188)       500`

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

(1) Charge off of accounts, net of recoveries.

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