================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-KSB


                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                  For the Fiscal Year Ended September 30, 2001

                         Commission File Number -018515



                            SPECTRASOURCE CORPORATION
--------------------------------------------------------------------------------
             (Exact Name of Registrant as specified in its charter)


            NEVADA                                        93-0960302
-------------------------------             ------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)


               14900 WESTHEIMER, STE X, HOUSTON, TEXAS 77082-1504
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                    (Address of Principal Executive Offices)

         Company's telephone number, including area code: (713) 783-0443



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    (Former name and address of Company, if changed from last annual report.)

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

          SECURITIES REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT:
                                      None

          SECURITIES REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT:
                         ($0.001) Par Value Common Stock

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<PAGE>

Indicate by check mark whether the Company: (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 such shorter period that the Company was required to
file such reports); Yes (X) No () and (2) has been subject to such filing
requirements for the past ninety (90) days; Yes (X) No ()

The issuer's revenues for the twelve months ended September 30, 2001, were
$6,202,505

As of September 30, 2001, there were 6,015,850 shares of ($0.001) par value
Common Stock (the Company's only class of voting stock) outstanding. The
aggregate market value of the common shares of the Company on September 30,
2001, (based upon the mean of the closing bid and asked price) held by
non-affiliates of the Company, was approximately $937,920.




                      DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Registrant's Form 8-K filed November 27, 2001, relating to the
Registrant's Change in Certifying Accountant are incorporated by reference into
Part II of this Form 10-K where indicated.

































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<PAGE>
                         ==============================

                                   FORM 10-KSB

                            SPECTRASOURCE CORPORATION

                                TABLE OF CONTENTS





PART I
       Item  1.    Description of Business
       Item  2.    Description of Property
       Item  3.    Legal Proceedings
       Item  4.    Submission of Matters to a Vote of Security Holders


PART II
       Item  5.    Market for Common Equity and Related Stockholder Matters
       Item  6.    Management's Discussion and Analysis of Financial Condition
                   and Results of Operations
       Item  7.    Financial Statements
       Item  8.    Changes in and Disagreements with Accountants on Accounting
                   and Financial Disclosure


PART III
       Item  9.    Directors, Executive Officers, Promoters and Control Persons;
                   Compliance with Section 16(a) of the Exchange Act
       Item  10.   Executive Compensation
       Item  11.   Security Ownership of Certain Beneficial Owners and
                   Management
       Item  12.   Certain Relationships and Related Transactions
       Item  13.   Exhibits and Reports on Form 8-K


SIGNATURES

                         ==============================















                                       3
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PART I

ITEM 1.  BUSINESS

BUSINESS DEVELOPMENT

SpectraSource Corporation, formerly Therapy Lasers, Inc. (the Company), was
organized under the laws of the State of Nevada on September 21, 1987.
Originally, the Company had pursued the research and development of a
noninvasive therapeutic laser. The laser project was abandoned in 1996 and the
Company eventually became inactive by 1998.

Effective April 28, 2000, Charles Sheffield increased his ownership of the
Company pursuant to a reverse acquisition in which the Company exchanged its
common stock for the common stock of three corporations controlled by Mr.
Sheffield: Gulf Coast Fan & Light, Inc. (Gulf Coast); Builder Source, Inc.
(Builder Source); and Builders Lighting and Hardware, Inc (Builders Lighting),
collectively referred to as the `Acquired Subsidiaries'. As a result of the
reverse acquisition, Charles Sheffield became the Company's principal
shareholder, periodically referred to hereinafter as the `Principal
Shareholder'.

The acquisition of the Acquired Subsidiaries was accomplished by the issuance of
a an aggregate of 4,700,000 shares of the Company's common stock plus $1,440,000
of notes payable bearing interest at 8% and payable over terms ranging from 3 to
10 years. Included in these amounts, the Principal Shareholder received as
consideration for his interests in Gulf Coast a total amount of 3,255,000 shares
of Company common stock. Pursuant to the acquisition of Builder Source, the
Principal Shareholder received as consideration for his interests in Builder
Source a total amount of 166,000 shares of Company common stock, and pursuant to
the acquisition of Builders Lighting, the Principal Shareholder received a total
amount of 880,000 shares of Company common stock. Including shares held by
family members and an affiliate controlled by the Principal Shareholder, the
Principle Shareholder directly and indirectly owned 81 % of the stock of the
Company at April 28, 2000.

Upon finalization of the transactions, the Board of Directors elected Mr.
Charles Sheffield as the President and Chief Executive Officer of the Company.


The Acquired Subsidiaries have been operating, for the past 18 years, in the
sales and installation of lighting, ceiling fans and hardware to the commercial
and residential building market. Principal customers are homebuilders,
multi-family and commercial developers, commercial contractors, supply houses
and the general public.

In mid-2000, the Company's subsidiary, Connect Source Communications, Inc.,
(Connect Source) formerly Lasercare, Inc., formed a fiber optics division to
sell and install fiber optics and structured cabling products to existing and
new customers in the commercial and residential building industry.

Beginning in mid-2001, to optimize cost efficiencies and marketing synergies,
Gulf Coast and Builders Lighting have assumed the ceiling fan business line of
Builders Source.

DESCRIPTION OF THE COMPANY'S BUSINESS

Through its four subsidiaries, the Company provides products and services to the
telecommunications market, commercial business applications, building owners,
residential and commercial builders and

                                       4
<PAGE>
developers, and the general consumer market. These products and services include
fiber optics, structured cabling, electrical components, lighting, ceiling fans,
and associated hardware

The Company's subsidiaries and their respective lines of business are as
follows:

CONNECT SOURCE COMMUNICATIONS, INC.
Fiber Optic Risers
Fiber Optic Backbone
Local Area Networks
Structured Cabling

BUILDERS SOURCE
Electrical Components
Lighting
Fans

BUILDERS LIGHTING & HARDWARE, INC.
Electrical Components
Interface Panels
Lighting
Hardware

GULF COAST FAN & LIGHT, INC.
Ceiling Fans Design and Import
Ceiling Fan Distribution
Ceiling Fan Installation

DESCRIPTION OF TECHNOLOGY

In 2000, the Company's subsidiary Connect Source began operations in the
commercial fiber optics industry. Connect Source sells and installs fiber optics
and structured cabling products to existing and new customers in the commercial
building industry. In 2001, Connect Source expanded its target market to include
the residential building market. Subsequent to year
 end, the Company announced an agreement with a residential homebuilder to
install structured cabling and home networks in a 135 home residential
development and an additional agreement to be the sole source provider of
structured cabling and home networks to another residential homebuilder.

Gulf Coast designs and is the sole distributor of the Old Jacksonville Ceiling
Fan brand under a licensing agreement with U.S. Ceiling Fan Corp., a company
controlled by the Company's Principal Shareholder.

Builders Source and Builders Lighting distribute and wholesale lighting,
hardware, and electrical components to the residential and commercial building
industry. The products of the two subsidiaries are branded and commodity items,
many of which are available though competing companies.

FEDERAL REGULATION

All of the products marketed by the Company meet Underwriters Laboratory ("UL")
standards, as required by Federal regulations. There are no other significant
regulations that affect the business apart from those regulations affecting
commercial enterprises in general. Compliance with environmental laws is an
insignificant cost to the Company.

                                       5
<PAGE>
MARKETING

Through its subsidiaries, the Company markets its products through direct sales,
retail stores, the internet, telephone sales, and other marketing techniques.
The Acquired Subsidiaries have competed in the commercial and residential
building industry for 18 years, and benefit from a very good reputation in their
respective markets. The Company cross-markets to the customer bases of its
respective subsidiaries.

The Old Jacksonville brand ceiling fan is marketed primarily to residential
homebuilders for installation during original construction and remodeling. The
Company plans to market the brand through third party retail outlets that
support price points that allow the Company to maintain the high quality
components and engineering currently employed in the fan's manufacture.
Subsequent to year end, the Company engaged a manufacturer's representative to
effect these plans, beginning with the Southwest region of the U.S.

The Company is focused on expanding its market niche of combining the sales,
installation and service of lighting, ceiling fans, hardware, electrical
components, and structured cabling into one turnkey product package, thereby
reducing the overall cost to its customer.

RETURNS AND WARRANTIES

The Company offers a limited lifetime warranty on its products under the
licensed name Old Jacksonville and a one-year warranty on all installation work.
It passes through whatever warranty is in existence from the manufacturer of
other products sold. The Company allows credit on items from which it receives
credit from the manufacturers. No significant returns and warranty losses have
been experienced.

EMPLOYEES

At fiscal year end, the Company and its subsidiaries had approximately 46 full
time employees.

CUSTOMERS AND SUPPLIERS

The Company's principal customers are homebuilders, multi-family and commercial
developers, commercial contractors, supply houses and the general public. The
Company sells and distributes to a customer network of over 150 of the largest
homebuilders nationwide, with a predominant presence in Texas. No single
customer accounts for a significant percentage of the Company's revenue.

The Company purchases its inventory from a number of national and international
manufacturers and distributors, none of which account for a significant
percentage of the Company's purchases.

COMPETITION

There is substantial competition in the wholesale electrical components and
hardware, many of which competitors have more resources than the Company. The
Company's success depends on marketing precision built products with industry
leading technical quality to a broad repeat customer base, offering a
continually expanding line of goods and services to its target market at
attractive prices, providing prompt delivery and service, while maintaining a
low-cost overhead structure. National economic conditions impacting the
construction industry may affect the Company's performance. The Acquired
Subsidiaries enjoy repeat business from a customer base developed over 18 years.

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ITEM 2.  PROPERTIES

As of September 30, 2001, the Company and its subsidiaries lease four locations
in Houston, Dallas and San Antonio totaling approximately 33,000 square feet of
office and warehouse space. All leases are at current market rates. The
properties are adequately insured, and are suitable and adequate for their
intended use.

To improve its business processes, the Company has initiated plans to physically
consolidate the Houston operations of the Acquired Subsidiaries into one leased
office and warehouse space. Such plans will be completed in the first or second
quarter of fiscal year 2002.

The Company has no current or planned direct or indirect investments in real
estate, real estate mortgages, or real estate activities. Any such investment is
subject to approval by the Board of Directors.


ITEM 3.  LEGAL PROCEEDINGS

None.


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

None.



PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The table below sets forth the high and low bid price of common stock through
September 30, 2001, as reported by the PinkSheets (formerly National Quotation
Bureau). Such over-the-counter market quotations reflect inter-dealer prices
without retail mark-up, markdown, or commissions, and may not necessarily
represent actual transactions.


















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Fiscal Year Ending September 30, 2000               High           Low
   2ndQuarter                                       0.10           0.03125
   3rd Quarter (Before 1 for 10 reverse split)      0.10           0.10
   3rd Quarter (After 1 for 10 reverse split)       0.25           0.125
   4th Quarter                                      0.375          0.25

Fiscal Year Ending September 30, 2001               High           Low
   1st Quarter                                      1.063          1.063
   2nd Quarter                                      0.625          0.625
   3rd Quarter                                      0.80           0.80
   4th Quarter                                      0.80           0.795


As of September 30, 2001, the Company had approximately 485 shareholders of
record. The Company has never paid any cash dividends and has no plans to pay
any cash dividends in the foreseeable future.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

For the twelve months ended September 30, 2001, consolidated revenue was
$6,200,505 as compared to $5,351,657 for the nine months ended September 30,
2000. Consolidated net income for September 30, 2001 and the nine months ended
September 30, 2000 was $107,917 and $92,616, respectively. The Company allocated
significant internal resources to Connect Source during fiscal year 2001 to
ensure successful entry into the commercial fiber optics and structured cabling
market. For 2001, Connect Source's revenues were $246,925, compared to $0 for
the nine months ended September 30, 2000. Management expects Connect Source to
contribute a proportionally greater share of the Company's revenues in the
future as Connect Source matures from a start-up operation and gains market
share in its product line.

During the fourth quarter of fiscal year ended September 30, 2001, the Company
made year-end adjustments to capitalize, net of amortization, $52,531 related to
internally developed software and other intangible assets.

The Company incurred $146,708 in non-recurring legal and accounting costs during
2000 in connection with the acquisition.

The Acquired Subsidiaries have had 18 years of profitability with positive cash
flows creating the ability to sustain operations and to finance the new
operations of other subsidiaries. This is reflected in the earnings generated
from several product lines for which the Company has achieved aggressive profit
margins by sustaining minimal costs and high efficiency in both purchasing and
delivery and installation of the various product lines. The Company expects that
the cash requirements for operations for the next fiscal year will be provided
from its subsidiaries. There is no present assurance, however, that these
activities will sustain their respective levels of cash flow over the long-term.
Through expansion as well as acquisitions, the Company plans to open several new
locations over the next three years and begin the process of acquiring market
shares in new territories. A number of the customers of the Company are among
the largest builders in the Texas market as well as nationally. The Company
plans to utilize this base, coupled with the cross marketing of its product
lines and the Fiber Optics Division to optimize this expansion. It is
management's intention to utilize this increased cash flow, supplemented with
funds

                                       8
<PAGE>

expected to be raised from outside investors, to continue to grow the Company's
fiber optics and structured cabling/ home network division as well as the
existing mainstay product lines.

Investment in capital assets is not significant since labor is the material cost
of delivery and installation of products. The Company plans no significant
investment in capital assets.

Liquidity is expected to increase substantially as the funded start-ups are
capitalized and should only require short-term cash advances as market share is
gained. Due to curtailment of substantial shareholder/owner compensation and
bonuses paid in the past, net earnings are expected to increase, improving
liquidity in the next year.

Safe Harbor Statement Under Private Securities Litigation Reform Act of 1995:
The above statements in regard to SpectraSource Corporation and its affiliates
and subsidiaries which are not purely historical are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
including SpectraSource Corporation's beliefs, expectations, hopes or intentions
regarding the future. All forward-looking statements are made as of the date
hereof and are based on information available to the parties as of such date. It
is important to note that actual outcome and the actual results could differ
materially from those in such forward-looking statements. Factors that could
cause actual results to differ materially include risks and uncertainties such
as technological, legislative, corporate and marketplace changes.


ITEM 7.  FINANCIAL STATEMENTS

The information required by this item is included in a separate section of this
Annual Report beginning after Part IV.


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

The Company hereby incorporates by reference its Form 8-K filed November 24,
2000 and November 28, 2001, relating to the Company's Change in Certifying
Accountant.


















                                       9
<PAGE>
PART III

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

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS


BUSINESS EXPERIENCE

      NAME               AGE                       POSITION
      ----               ---                       --------
Charles E. Sheffield     48     Chief Executive Officer. Mr. Sheffield is a
                                graduate of the University of Houston with a BBA
                                in Finance. In 1973 he founded Sheffield
                                Construction Co., Inc., which became U. S.
                                Design & Construction Corp. when he marketed
                                this company national in the early and
                                mid-1980's. In the 20 years he headed this
                                company, Mr. Sheffield took it from a small
                                local firm to a leading national contractor.
                                During this period, Mr. Sheffield also founded
                                Gulf Coast Fan & Light, Inc. (1984), a major
                                supplier of ceiling fans and electrical
                                components. This base was expanded into a group
                                of companies that provide a host of electrical,
                                hardware, fiber optics, and structured cabling
                                products to the residential and commercial
                                markets.

Steven Seifert           37     President, Gulf Coast Fan & Light, Inc. Mr.
                                Seifert graduated from Stephen F. Austin
                                University with a BBA in Marketing and
                                Management. Prior to joining the Company in
                                1995, Mr. Seifert held positions in sales and
                                marketing and retail management for Eckerd
                                Drugs. His main duties during this period were
                                to take over problem stores and turn them into
                                profitable ones. Since joining the Company, he
                                has directed several divisions and has been
                                president of the Gulf Coast Fan & Light
                                subsidiary since 1997. He has been instrumental
                                in the consolidation of various divisions and
                                production systems.

Bruce Reeves             41     Operations Manager of Connect Source
                                Communications. Mr. Reeves has spent most of his
                                career in the field of fiber optics. His
                                positions have included project manager,
                                operations manager, and regional manager. He has
                                been responsible for engineering and bidding,
                                training and procurement, acquiring all
                                equipment and manpower necessary to provide
                                outside and inside plant fiber optic cable,
                                splicing, certification and documentation,
                                underground fiber optic backbone LAN, and
                                process control cables. He has been responsible
                                for the development of fiber optics installation
                                departments as well as opening, maintaining, and
                                project implementation of branch offices
                                throughout his region.

                                       10
<PAGE>
David Bero               43     Vice President of Products. Mr. Bero is
                                President and CEO of the SpectraSource
                                subsidiary, Builders Lighting & Hardware, Inc.
                                He was educated at the University of New Mexico
                                in Business Management. Prior to his joining the
                                Company, he spent 7 years as District Manager of
                                Swiss Colony Stores and owned and operated the
                                Light House, Inc., a lighting company that he
                                founded in 1986 and continued to operate until
                                joining BL&H in 1997. In the 3 years BL&H has
                                been under his direction, it has grown almost
                                tenfold with commensurate profits.

Beruk Zewdie             44     Vice President and Controller. Mr. Zewdie holds
                                a degree in business and accounting from the
                                University of Houston. Prior to his joining the
                                Company in 1987, he held various positions in
                                accounting and operations.

Michael Newman           56     Director. Mr. Newman graduated from Clemson
                                University with a degree in mathematics. He
                                served as a management consultant with Deloite
                                and Touche in Washington, D.C. before buying an
                                oil and gas trucking firm in Mississippi, which
                                he expanded and sold to a public exploration
                                company and continued to serve as President
                                until l991. He returned to Texas where he
                                purchased and operated several Texas and
                                California franchises of the New Horizons
                                Computer Learning Centers. He subsequently sold
                                the built-up business back to the franchisor and
                                continued to serve as President. He recently
                                purchased a Florida Region Franchise of New
                                Horizons Computer Learning Centers.

Catherine Cullen         78     Director. Ms. Cullen has been active in civic
                                affairs in Houston for many years.

Mark A. Chapman          58     Director. Mr. Chapman graduated from Kansas
                                State University in 1965 with a major in
                                Political Science-History. Mr. Chapman also
                                graduated from the University of Texas Law
                                School. He is a member of the State Bar of Texas
                                (inactive). Mr. Chapman serves as President of
                                Broughton Petroleum, Inc., a company he founded
                                in the early 1980's.

Leon D. Hogg             81     Director. Mr. Hogg has been a Director of the
                                Company since February 27, 1995. Mr. Hogg is a
                                retired commercial banker who served as
                                President of Therapy Lasers, Inc. from 1995 to
                                April, 2000. He holds a bachelor's degree in
                                business from the University of North Texas.



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COMPLIANCE WITH SECTION 16 (A) OF THE SECURITIES EXCHANGE ACT

Section 16 (a) of the Securities Exchange Act of 1934 as amended, (the "Exchange
Act") requires the Company's officers and directors, and persons who own more
than ten percent of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than ten-percent
shareholders are required by the Securities and Exchange Commission regulations
to furnish the Company with copies of all Section 16 (a) forms they file.

Management believes that during the period from September 30, 2000 to September
30, 2001, all Section 16 (a) filing requirements applicable to its current
officers, directors and greater than ten-percent beneficial owners were complied
with.


ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

No executive of the Company was paid more than $65,000 during the fiscal year
ended September 30, 2001.

OPTION AND LONG-TERM COMPENSATION TABLES

On July 31, 2000, the Company adopted an incentive stock option plan. As of
September 30, 2001, under this incentive stock option plan, 32,245 shares have
been awarded to 49 employees according to the following schedule:

Name                         Position                                  Shares
----                         --------                                  ------
Charles Sheffield            President, Chief Executive                     0
                             Officer, Director
Leon Hogg                    Executive Vice President                       0
Steven Siefert               Vice President                             2,000
David Bero                   Vice President                             3,000
Beruk Zewdie                 Vice President                             1,500
All Other Employees                                                    20,745
                                                                       ------
     Total                                                             32,245
                                                                       ------















                                       12
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PENSION PLANS AND OTHER BENEFIT OR ACTUARIAL PLANS

The Company has a 401k plan in which employees contribute a portion of their
salaries. The Company then has the option to match a portion of the employee
contribution. In the past, the Company has typically matched, within certain
restrictions, 25% of the employee contribution.

The Company has a medical insurance plan in which it pays 75% of covered
employees' cost of insurance coverage for the covered individual.

EMPLOYMENT CONTRACTS AND TERMINATION AGREEMENTS

The Company has no employment contracts or termination agreements with any
officer, director or key employee.

DIRECTOR COMPENSATION

The Company has no standard arrangement by which its directors are compensated.
However, it is anticipated that the directors will receive options under the
Stock Incentive Plan adopted July 31, 2000.

COMPENSATION COMMITTEE REPORT

The Company's Compensation Committee consists of Catherine Cullen and Leon D.
Hogg. There were no items to report.

STOCK PERFORMANCE CHART

A graph comparing the Company's commutative total return to stockholders in
terms of stock price appreciation plus dividends during the previous five years
to a broad market index, such as the S&P 500, has not been presented due to the
Company's inactivity in recent years and the resulting lack of any significant
stock price appreciation or dividends.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the stock ownership of each person known by the
Company to be the beneficial owner of five percent or more of the Company's
common stock as of September 30, 2001. Unless otherwise indicated, each person
has beneficial voting and investment power with respect to the shares owned.

Name and Address
of Beneficial Owner                  Number of Shares    Percentage of Total
-------------------                  ----------------    --------------------
Charles Sheffield
10450 Westoffice
Houston, Texas 77042                    4,734,876 (A)             78.7%

(A) Includes shares owned directly and shares owned indirectly by related
entities, as follows:

Name and Address
of Beneficial Owner                  Number of Shares    Percentage of Total
-------------------                  ----------------    --------------------
Charles Sheffield
U.S. Design & Construction, Inc.            4,720,499             78.5%
                                               14,377               .2%
                                            ---------         ---------
   Total                                    4,734,876             78.7%
                                            =========         =========

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<PAGE>
The following table sets forth as of September 30, 2000, the common stock
ownership of all officers and directors of the Company:

Name and Address
of Beneficial Owner                  Number of Shares    Percentage of Total
-------------------                  ----------------    --------------------
Catherine Cullen
4529 Tonawande
Houston, Texas 77035                           46,000               .8%

Leon D. Hogg
6701 Sands Point, Suite 15
Houston, Texas 77074                          100,400              1.7%

Mark A. Chapman
4102 University
Houston, Texas 77005                          193,030              3.2%

Charles Sheffield
10450 Westoffice
Houston, Texas 77042                        4,735,876             78.7%

All Officers Not Listed Above                  21,500              0.3%
                                            ---------         ---------
All Officers and Directors as a Group       5,095,806             84.7%
                                            =========         =========


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective April 28, 2000, the Principal Shareholder acquired control of the
Company pursuant to the acquisition as described in Item 1 above.

An affiliated company, controlled by the Principal Shareholder, competes
directly with the Company in ceiling fan sales.

The Company leases two lease spaces at one of its locations in Houston from its
Principal Shareholder. Total lease payments to the Principal Shareholder for the
year ended September 30, 2001 were $33,492. Such lease is expected to terminate
in the first or second quarter of fiscal year 2002.

Under a licensing agreement with a company controlled by the Principal
Shareholder, one of the Acquired Subsidiaries is the exclusive licensee of the
Old Jacksonville brand of ceiling fan. Payments made under the license agreement
for fiscal years ended 2001, 2000, and 1999 were $0, $170,000, and $300,000,
respectively.










                                       14
<PAGE>

PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K


         (A) EXHIBITS:

             LISTING OF SUBSIDIARIES OF REGISTRANT:

                        Name                           Percentage Owned
                        ----                           ----------------
             Connect Source Communications, Inc.
             (Formerly LaserCare, Inc.)
             (Acquired March 12, 1996)                      100.00%

             Gulf Coast Fan & Light, Inc.
             (Acquired April 28, 2000)                      100.00%

             Builder Source, Inc.
             (Acquired April 28, 2000)                      100.00%

             Builders' Lighting and Hardware, Inc.
             (Acquired April 28, 2000)                      100.00%



         (B) REPORTS FILED ON FORM 8-K:

         On November 24, 2000, the Company filed a Form 8-K announcing the
change in the Company's certifying accountant and to report the change in fiscal
year end from February 28 to September 30. On November 27, 2001, the Company
filed a Form 8-K announcing the change in the Company's certifying accountant.

                                       15
<PAGE>


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report on Form 10-KSB to be signed on its behalf
by the undersigned, thereunto duly authorized, on this 20th day of December,
2001.

SPECTRASOURCE CORPORATION

By:  /s/ CHARLES E. SHEFFIELD
     ----------------------------------------------
     Charles E. Sheffield, Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the
following persons, in the capacities and on the dates indicated, have signed
this Report on Form 10-KSB below.

           NAME                           TITLE                     DATE
        ---------                       ---------                 --------
/s/ CHARLES E. SHEFFIELD                President,            December 20, 2001
-----------------------------    Chief Executive Officer,
Charles E. Sheffield                     Director


/s/ BERUK ZEWDIE                     Vice President           December 20, 2001
-----------------------------    Principal Financial and
Beruk Zewdie                        Accounting Officer


/s/ LEON D. HOGG                Chairman of the Board and     December 20, 2001
-----------------------------           Director
Leon D. Hogg


/s/ CATHERINE CULLEN                    Director              December 20, 2001
-----------------------------
Catherine Cullen


SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE ACT BY REGISTRANT WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT:

NOT APPLICABLE.









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<PAGE>
                   SPECTRASOURCE CORPORATION AND SUBSIDIARIES
                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
                         REQUIRED BY ITEMS 8 AND ITEM 13

                                      INDEX








A.       FINANCIAL STATEMENTS
         ------------------------------------

         Report of independent certified public accountants

         Consolidated Balance sheet - September 30, 2001, and 2000

         Consolidated Statements of Income for the year ended September 30, 2001
         and the nine months ended September 30, 2000

         Consolidated Statements of Shareholders' Equity for the year ended
         September 30, 2001 and the nine months ended September 30, 2000

         Consolidated Statements of Cash Flows for the year ended September 30,
         2001 and the nine months ended September 30, 2000

         Notes to Consolidated Financial Statements




B.       FINANCIAL STATEMENT SCHEDULES
         -----------------------------------------------------

         Schedules are omitted because of the absence of the conditions under
         which they are required, or because the information required by such
         omitted schedule is contained in the financial statements or the notes
         thereto.















                                       17
<PAGE>

Yartz & Rabalais
800 Bering, Suite 310
Houston, Texas 77057
713-839-8200





                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
of SpectraSource Corporation and its Subsidiaries

We have audited the accompanying consolidated balance sheets of SpectraSource
Corporation and its subsidiaries as of September 30, 2001, and the related
consolidated statements of income, of cash flows and of changes in stockholders'
equity for the year then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of SpectraSource Corporation as of September 30, 2000 were audited by
other auditors whose report dated February 5, 2001 expressed an unqualified
opinion on those statements.

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

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of SpectraSource
Corporation and its subsidiaries at September 30, 2001 and the results of their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States.


/s/ Yartz & Rabalais
    Yartz & Rabalais

Houston, Texas

December 20, 2001








                                       18
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
of SpectraSource Corporation and its Subsidiaries

We have audited the accompanying combined balance sheets of SpectraSource
Corporation and its subsidiaries as of September 30, 2000, and December 31,
1999, and the related combined statements of income, of cash flows and of
changes in stockholders' equity for the nine months and year then ended,
respectively. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of SpectraSource
Corporation and its subsidiaries at September 30, 2000, and December 31, 1999,
and the results of their operations and their cash flows for nine months and
year then ended, respectively, in conformity with accounting principles
generally accepted in the United States.


/s/ S.L. LEE
    S.L. Lee

Houston, Texas

February 5, 2001















                                       19
<PAGE>
                            SPECTRASOURCE CORPORATION
                           CONSOLIDATED BALANCE SHEET

<TABLE><CAPTION>
                                                     September 30,     September 30,
                                                         2001              2000
                                                     ------------      ------------
<S>                                                  <C>               <C>
ASSETS
   Current Assets
     Cash                                            $    165,414      $    219,257
     Accounts Receivable, less allowances of
     $24,080 and 18,653, respectively                     905,601         1,047,047
     Prepaid Expenses                                      35,863            64,997
     Inventory                                            897,323           918,052
                                                     ------------      ------------
   Total Current Assets                              $  2,004,201      $  2,249,353

   Fixed Assets, net of accumulated depreciation
   of $321,692 and $256,851, respectively                 431,953           229,465
   Deferred Tax Asset                                     470,244           511,897
   Other Assets and Investments                            13,000            48,335
                                                     ------------      ------------
Total Assets                                         $  2,919,398      $  3,039,050
                                                     ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
   Current Liabilities
     Accounts payable and accrued expenses           $    341,785      $    811,720
     Short Term Debt                                      847,143           700,155
     Current Maturities of Long Term Debt                  87,430           177,027
     Due To Affiliates                                    127,792           150,819
                                                     ------------      ------------
   Total Current Liabilities                            1,404,150         1,839,721

   Long Term Debt
     Notes Payable, Banks                                 114,743            43,109
     Notes Payable, Shareholder                         1,374,313         1,236,947
                                                     ------------      ------------
   Total Long Term debt                                 1,489,056         1,280,056

   Stockholders' Equity (Deficit)
     Common stock, $.001 par value, 100,000,000
     shares authorized, 6,015,850 shares issued
     and outstanding at September 30, 2000 and
     September 30, 2001                                    16,188            16,188
     Capital in excess of par value                     3,338,045         3,339,043
     Accumulated Deficit                               (3,328,041)       (3,435,958)
                                                     ------------      ------------
   Total Stockholders' Equity                              26,192           (80,727)
                                                     ------------      ------------
Total Liabilities and Stockholders' Equity           $  2,919,398      $  3,039,050
                                                     ============      ============
</TABLE>


        The Accompanying Notes are an integral part of these statements.

                                       20
<PAGE>
                            SPECTRASOURCE CORPORATION
                    CONSOLIDATED STATEMENT OF INCOME FOR THE


<TABLE><CAPTION>
                                                      Year Ended    Nine Months Ended
                                                     September 30,     September 30,
                                                         2001              2000
                                                     ------------      ------------
<S>                                                  <C>               <C>
Sales                                                $  6,200,506      $  5,351,657
Cost of Sales                                           3,808,857         3,027,662
                                                     ------------      ------------
Gross Profit                                            2,391,649         2,323,995

Other Operating Costs
   Selling and administrative expenses                     45,581            76,413
   Depreciation                                           102,930            53,724
   Other costs and operating expenses                   2,097,939         2,053,051
                                                     ------------      ------------
Total Other Operating Costs                             2,246,450         2,183,188

                                                     ------------      ------------
Income from operations                                    145,199           140,807

Other Income:
   Interest Income                                          2,927             3,799
   Miscellaneous Other Income (Expense)                     1,444               926
                                                     ------------      ------------
Total Other Income                                          4,371             4,725

                                                     ------------      ------------
Income before income taxes                                149,570           145,532

Provision for income taxes (Note 8)                        41,653            52,916
                                                     ------------      ------------
Net Income                                           $    107,917      $     92,616
                                                     ============      ============

Basic earnings per common share                      $       0.02      $       0.02

Weighted average number of common shares                6,015,850         5,898,780
</TABLE>











        The Accompanying Notes are an integral part of these statements.

                                       21
<PAGE>
                            SPECTRASOURCE CORPORATION
                       CONSOLIDATED STATEMENT OF CASH FLOW
<TABLE><CAPTION>
                                                               Nine Months
                                                                  Ended           Year Ended
                                                               September 30,     September 30,
                                                                   2001              2000
                                                               ------------      ------------
<S>                                                            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income from operations                                     $    107,917      $     92,616
Adjustments to reconcile net income:
   Depreciation                                                     102,930            53,724
   Bad debt expense                                                  12,800             5,582
   Deferred taxes                                                    41,653            52,916
   Net Reduction in operating expenses from forgiveness of
   liabilities by related parties (Note 9)                                            (60,550)
   Increase in Accounts Receivable                                  128,646          (369,418)
   Increases in Inventory                                            20,730          (171,326)
   Increase (Decrease) in Prepaid Expenses                           29,134           (44,135)
   Increase (Decrease) in Accounts Payable                         (469,935)          259,070
   Increase in Due to Related Parties                               (23,029)          103,944
   Decrease in Due from Affiliates                                                       --
                                                               ------------      ------------
Net cash used in operating activities                               (49,154)          (77,577)
                                                               ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Payments for purchase of equipment                              (305,417)          (71,285)
   Increase in Long Term Deposits                                    35,335           (17,721)
                                                               ------------      ------------
Net cash used in investing activities                              (270,082)          (89,006)
                                                               ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Issuance of common stock                                            (998)          129,017
   Proceeds from short term debt                                    146,988            80,848
   Proceeds from long term debt                                     119,403           (34,334)
   Withdrawals against lines of credit                                                 40,455
   Payments of Notes Payable to Shareholders                                          (48,512)
                                                               ------------      ------------
Net cash provided by financing Activities                           265,393           167,474
                                                               ------------      ------------

Net Increase (Decrease) in cash and cash equivalents                (53,843)              891
Cash and equivalents, beginning of period                           219,257           218,366
                                                               ------------      ------------
Cash and equivalents, end of period                            $    165,414      $    219,257
                                                               ============      ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid for Interest                                      $    101,497      $     76,799

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
   Note Payable, Shareholders (Note 3)                                           $  1,440,000
   Additional Paid In Capital                                                      (1,440,000)
</TABLE>
        The Accompanying Notes are an integral part of these statements.

                                       22
<PAGE>
                            SPECTRASOURCE CORPORATION
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY




<TABLE><CAPTION>
                                              Common Stock           Additional                          Total
                                        ------------------------       Paid in       Accumulated     Stockholders'
                                           Shares       Amount         Capital         Deficit          Equity
                                        -----------  -----------     -----------     -----------     -----------
<S>                                     <C>          <C>             <C>             <C>             <C>
BALANCE, DECEMBER 31, 1999                5,830,265       16,003       3,210,211      (3,528,574)       (302,360)

   Service and expenses contributed                                        1,921                           1,921

   Shares issued under Incentive
   Stock Option Plan (Note 6)                32,245           32          12,059                          12,091
   Shares issued for sale                   153,340          153         114,852                         115,005
   Net Income                                                                             92,616          92,616
                                        -----------  -----------     -----------     -----------     -----------
BALANCE, SEPTEMBER 30, 2000               6,015,850  $    16,188     $ 3,339,043     $(3,435,958)    $   (80,727)


   Net Income                                                                            107,917         107,917
                                        -----------  -----------     -----------     -----------     -----------
BALANCE, SEPTEMBER 30, 2001               6,015,850  $    16,188     $ 3,338,043     $(3,328,041)    $    26,190
                                        ===========  ===========     ===========     ===========     ===========
</TABLE>

























        The Accompanying Notes are an integral part of these statements.

                                       23
<PAGE>
                            SPECTRASOURCE CORPORATION
                   NOTES TO THE COMBINED FINANCIAL STATEMENTS




NOTE 1.   ORGANIZATION AND NATURE OF OPERATIONS

SpectraSource Corporation (the Company), formerly Therapy Lasers, Inc., through
its four subsidiaries, provides products and services to the telecommunications
market, commercial business applications, building owners, residential and
commercial builders and developers, and the general consumer market. These
products and services include fiber optics, structured cabling, electrical
components, lighting, ceiling fans, and associated hardware.

On April 28, 2000, the Company acquired all of the stock of three corporations
that are engaged in supplying fixtures to the residential and commercial
construction industry: Gulf Coast Fan & Light, Inc. (Gulf Coast); Builder
Source, Inc. (Builder Source); and Builders Lighting and Hardware, Inc.
(Builders Lighting) (collectively referred to as the "Acquired Companies").

As a result of these acquisitions, the Company's Principal Shareholder received
as consideration for his interests in the Acquired Companies a total amount of
4,301,000 shares of the Company's common stock. Upon consummation of these
acquisitions, the Principal Shareholder, directly and indirectly through his
control of a corporation that owns stock in the Company, owned 4,734,876 shares
which represents approximately 81% of the Company's outstanding common stock as
of April 28, 2000.

The transaction between the Company and the Acquired Companies has been
reflected in the accompanying financial statements as a reorganization of
entities under common control whereby the historical basis of assets and
liabilities of the Acquired Companies are carried forward as the recorded basis
for the Company.

Prior to consummating these acquisitions, the Company's fiscal year ended on
February 28. In November, 2000, the Company changed its fiscal year end to
September, 30, effective for the SEC Form 10-KSB due on December 30, 2000.

COMMON STOCK REVERSE SPLIT
These financial statements and notes thereto reflect retroactively the decrease
in the number of shares issued of common stock giving effect for a Board of
Directors approved 1 for 10 reverse split on April 24, 2000.














                                       24
<PAGE>

NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries after elimination of all significant inter-company
transactions.

USE OF ESTIMATES
The preparation of these financial statements requires the use of certain
estimates by management in determining the Company's' combined assets,
liabilities, revenues and expenses. Actual results could differ from those
estimates.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of highly liquid investments that are readily
convertible into cash and have a maturity of three months or less.

REVENUE RECOGNITION
The Company recognizes revenue at the time of sale. The Company accrues for
allowances for doubtful accounts based on its experience.

INVENTORIES
Inventories are carried at the lower of cost, on a first-in first-out basis, or
market.

PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation. Property
and equipment is depreciated on an accelerated depreciation method over their
estimated useful lives, which in the opinion of management is adequate to
allocate the cost of the property and equipment over their estimated useful
lives. Expenditures for renewals, replacements, and betterments are capitalized.
Maintenance and repairs are charged to operating expenses as incurred. Upon sale
or other disposition, the applicable amounts of asset cost and accumulated
depreciation are removed from the accounts and the net amount, less proceeds
from disposal, is charged against or credited to income.

INCOME TAXES
The Company follows the asset and liability approach to account for income
taxes. Under this method, deferred taxes are recognized for temporary
differences between the book and tax basis of assets and liabilities. These
temporary differences are measured using the applicable enacted tax rates and
provisions of the enacted tax laws.

COMPREHENSIVE INCOME
Financial Accounting Standards Board ("FASB") Statement No. 130, "Reporting
Comprehensive Income", became effective for fiscal years beginning after
December 15, 1997, and establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. This Statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. The Company
had no comprehensive income other than net income during the periods included in
the accompanying financial statements.


                                       25
<PAGE>

EARNINGS PER COMMON SHARE
Earnings per common share is computed by dividing net income by the weighted
average number of common shares outstanding during the year.

RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133").
SFAS 133, as amended, establishes accounting and reporting standards for
derivative instruments and hedging activities. It requires an entity to
recognize all derivatives as either assets or liabilities on the balance sheet
and measure those instruments at fair value. Management does not expect the
pronouncement to have a material effect on the Company's financial statements in
the near future.


NOTE 3.   ACQUISITIONS

On April 28, 2000, the Company acquired all the stock of the Acquired Companies
as described below:

The acquisition of Gulf Coast was accomplished by the issuance of an aggregate
of 3,500,000 shares of the Company's Common Stock and a $1,000,000 10-year
promissory note, a $390,000 5-year promissory note and a $50,000 3-year
promissory note. Gulf Coast was incorporated in 1984 and designs and distributes
the Old Jacksonville Ceiling Fans under a licensing agreement with U.S. Ceiling
Fan Corp., a company controlled by the Company's Principal Shareholder.

The acquisition of Builders' Lighting was accomplished by the issuance of an
aggregate of 1,000,000 shares of the Company's Common Stock. Builders' Lighting
was incorporated in 1997 and distributes and wholesales lighting, hardware, and
electrical components to the residential and commercial building industry.

The acquisition of Builder Source was accomplished by the issuance of an
aggregate of 200,000 shares of the Company's Common Stock. Builder Source was
incorporated in 1996 and distributes and wholesales hardware and electrical
components to the residential and commercial building industry.

In connection with the acquisitions, the Company incurred $146,708 in operating
expenses directly pertaining to the acquisition. These costs consisted primarily
of fees for attorneys, accountants and other related charges.


NOTE 4.   SHORT TERM DEBT

At September 30, 2001, and September 30, 2000, the Company had short-term debt
of $847,143 and $700,155, respectively. Short-term debt consists of lines of
credit with commercial banks on a revolving basis bearing interest at the
current prime rate. These lines of credit expire within twelve months from the
date of issuance with options to renew with similar terms. These lines of credit
are secured by a blanket U.C.C. security filing on inventory, accounts
receivable, furniture and fixed assets, and are personally guaranteed by the
Principal Shareholder.




                                       26
<PAGE>
NOTE 5.   LONG TERM DEBT

Long-term debt and the amount due within one year at September 30, 2001, and
2000 consist of the following:
<TABLE><CAPTION>
                                                                  Balance at        Balance at
                                                                 September 30,     September 30,
                                              Interest Rate          2001              2000
                                              -------------      ------------      ------------
<S>                                           <C>                <C>               <C>
                                              Ranges between
Notes payable - Banks                            2% - 9%         $    190,458      $     65,595
Notes payable - Shareholders                        8%              1,386,030         1,391,488
                                                                 ------------      ------------
Total long-term debt                                                1,576,488         1,457,083
Less: Current maturities of long term debt                             87,430           177,027
                                                                 ------------      ------------
Net long-term debt                                               $  1,489,056      $  1,280,056
                                                                 ============      ============
</TABLE>
Notes Payable to banks are borrowings from commercial banks to finance vehicle
and equipment purchases and are secured by the assets purchased. On April 28,
2000, the Company issued $1,440,000 of principal amount of Notes Payable to
Shareholders to effect the acquisition of Gulf Coast as described in Note 2
above. The Notes Payable to Shareholders is collateralized by the common stock
of the Acquired companies. The Company, with the consent of the Principal
Shareholder, is not currently accruing interest expense on the notes payable to
the Principal Shareholder, and is deferring the payment of $317,066 of principal
due the Principal Shareholder under the original terms of the notes.

The principal payments required to be made on long-term debt during the next
five years are shown below:

            Fiscal Year                       Amount
            -----------                     ---------
               2003                         $ 557,602
               2004                           218,340
               2005                           150,686
               2006                           104,813
        2007 and thereafter                   457,615


NOTE 6.   INCENTIVE STOCK OPTION PLAN

On July 31, 2000, the Company adopted a Stock Incentive Plan (the Plan). The
Company may grant incentive stock options (ISOs), non-qualified stock options
(NSOs), restricted stock options, performance units and bonus stock to officers,
directors, consultants, or key-employees. The number of shares of Common Stock
authorized for issuance under the Plan is 1,500,000. Options have a maximum life
of 10 years and a minimum exercise value of no less than 100% of the fair market
value of the stock at the grant date, except that an employee with more than 10%
of the combined voting power of all classes of stock, whether directly or
indirectly, the option price shall be not be less than 110% of such fair market
value on the date of grant. The Option price for each non-qualified stock option
shall not be less than 50% of the fair market value on the date the option is
granted. ISOs may have a vesting period from immediate to 3 years at the
discretion of the Committee charged with issuing the options. Options may
terminate if employment is terminated and only the employee, officer, and or
director may then exercise the vested portion.

                                       27
<PAGE>
At September 12, 2001, the Company's Board of Directors had granted a total of
32,245 share of bonus stock to 49 employees under the Plan. In relation to the
grant of bonus stock, the Company recognized $12,091 in employee compensation
expense in the fiscal year ended September 30, 2000.


NOTE 7.   EMPLOYEE 401(K) PLAN

The Company has an Employee 401(k) Plan for all full-time employees. The plan
provides a tax deferred contribution by the Company, at the Company's option, of
up to 100% of the current year contributions for each employee with one year of
vesting service, to the extent that such contribution does not exceed 10% of the
total annual compensation. The Company typically matches 25% of the employee
contribution. Total pre-tax contributions per employee are limited each year by
the Internal Revenue Service. For the nine months ended September 30, 2000 and
the year ended September 30, 2000, the Company incurred $15,342 and $,
respectively, of compensation expense related to this plan.


NOTE 8.   FEDERAL INCOME TAX

The provision for federal income taxes consisted of:

                            September 30, 2001            September 30, 2000
                            ------------------            ------------------
Deferred tax provision           $ 41,653                      $ 52,916

The Company's deferred income tax asset at the federal statutory rate of 34% are
composed of the following differences between financial and tax reporting:

                                            September 30,    September 30,
                                                2001             2000
                                            ------------     ------------
    Allowance for doubtful accounts         $      8,668     $      2,028
    Net operating loss carryforwards (NOLs)      412,247          460,540
    Capital loss carryforwards                    49,329           49,329
    Other
                                            ============     ============
    Total deferred tax asset                $    470,244     $    511,897
                                            ============     ============

Based on historical performance, the Company believes that sufficient future
taxable income will be generated to realize the entire deferred tax asset prior
to expiration of any NOLs and that the realization of the deferred tax asset is
more likely than not and therefore no valuation allowance has been established
for deferred tax assets.

As of September 30, 2001, the Company's federal consolidated NOLs for income tax
purposes were $1,596,795. If not utilized, the Company's federal consolidated
NOLs will expire as follows:

          Year                Amount
          ----              ---------
          2004              $ 113,400
          2007                421,395
          2008                542,000
          2010                389,000
          2012                 78,000
          2019                 35,000
          2020                 18,000

                                       28
<PAGE>

NOTE 9.   RELATED PARTY TRANSACTIONS

At September 30, 2001 and September 30, 2000, the balance due to related parties
controlled by the Principal Shareholder were $127,790 and $150,819,
respectively. Transactions with these related parties include advancement of
funds for inventory, operating expenses and licensing fees.

The Company has approximately one year remaining on a three year licensing
agreement with one of the aforementioned related parties for the use of the "Old
Jacksonville Ceiling Fan" brand. As of September 30, 2000, this related party
has agreed to waive the licensing fee for the remainder of the agreement.
Licensing fees paid to this related party were $170,201 for the nine months
ended September 30, 2000.

In 2000, the Company reported $60,550, respectively in forgiveness of
liabilities owed these related parties controlled by the Principal Shareholder.
This income was reported as a reduction of operating expenses in the income
statement due to its nature.


NOTE 10.  LEASES

The Company leases its main offices in Houston from its Principal Shareholder.
The offices are occupied on a month-to-month basis for current monthly lease
payments of $4,750. The Company made payments under such lease of $42,750 and
$33,492 for the nine months ended September 30, 2000 and for the year ended
September 30, 2001, respectively.


NOTE 11.  FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL
          INSTRUMENTS

The carrying amounts of cash, accounts receivable, accounts payable, short term
notes payable, and accrued expenses approximate fair value because of the short
maturity of these items. These fair value estimates are subjective in nature and
involve uncertainties and matters of significant judgment, and, therefore,
cannot be determined with precision. Changes in assumptions could significantly
affect these estimates. During September 30, 2000 and September 30, 2001, the
Company had no derivative financial instruments.















                                       29