U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: March 31, 2001

Commission file no.: 000-30969

                          ONESOURCE TECHNOLOGIES, INC.
          ------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

         Delaware                                               65-0691963
------------------------------------                      ----------------------
(State or other jurisdiction of                           (I.R.S.Employer
incorporation or organization)                               Identification No.)

   7419 East Helm Drive
    Scottsdale, Arizona                                             85260
------------------------------------------                ----------------------
(Address of principal executive offices)                       (Zip Code)

Issuer's telephone number: (800) 279-0859

Securities to be registered under Section 12(b) of the Act:

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

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

                    Common Stock, $0.001 par value per share
            --------------------------------------------------------
                                (Title of class)

Copies of Communications Sent to:

                                     Mintmire & Associates
                                     265 Sunrise Avenue, Suite 204
                                     Palm Beach, FL 33480
                                     Tel: (561) 832-5696 - Fax: (561) 659-5371







<PAGE>



         Indicate by Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

                         Yes X     No
                            ---      ---

     As of March 31, 2001,  there were 19,951,500  shares of voting stock of the
registrant issued and outstanding.




<PAGE>



Part I - FINANCIAL INFORMATION

Item 1.           Financial Statements









                          ONESOURCE TECHNOLOGIES, INC.



                     Consolidated Financial Statements as of
                             March 31, 2001 and 2000
                                   (Unaudited)






<PAGE>









ONESOURCE TECHNOLOGIES, INC.



TABLE OF CONTENTS

                                                                           PAGE


CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2001                             F-1

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2001  AND 2000                                              F-2

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THREE MONTHS ENDED
MARCH 31, 2001 AND 2000                                                     F-3

FOOTNOTES                                                                   F-5







<PAGE>


<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2001
------------------------------------------------------------------------------- ----------------
                                                                                   (Unaudited)
<S>                                                                             <C>
ASSETS

CURRENT ASSETS:
Cash                                                                                   $66,493
Accounts receivable                                                                    241,409
Inventories                                                                            321,097
Other current assets                                                                    17,001
 Total current assets                                                                  646,000

PROPERTY AND EQUIPMENT, net of accumulated depreciation $117,080                       258,147
DEFERRED FINANCING EXPENSE                                                              38,308
GOODWILL, net of accumulated amortization of $27,652                                   247,012
DEFERRED INCOME TAXES                                                                  119,742
OTHER ASSETS                                                                             7,593
TOTAL ASSETS                                                                        $1,316,801
                                                                                ==============

LIABILITIES AND STOCKHOLDERS" DEFICIT

CURRENT LIABILITIES:
   Accounts payable                                                                   $201,618
   Accrued expenses and other liabilities                                              261,265
   Deferred revenue                                                                    154,910
   Bank lines of credit                                                                150,913
   Obligation for common stock to be issued                                            439,215
   Current portion capital leases                                                        5,536
   Current portion of long-term debt                                                   300,873
Total current liabilities                                                            1,514,332

CAPITAL LEASES -- LONG TERM PORTION                                                     11,377
NOTES PAYABLE - LONG-TERM PORTION                                                      293,385
Total liabilities                                                                    1,819,094
                                                                                --------------

STOCKHOLDERS' DEFICIT
Preferred Stock, $.001 par value, 1,000,000 shares authorized, none issued
Common Stock, $.001 par value, 20,000,000 shares authorized, 18,227,888 issued
at March 31, 2001and 3,376,403 subscribed but not issued at March 31, 2001              18,229
Paid in capital                                                                      2,272,435
Stock subscription                                                                 (1,055,000)
Accumulated deficit                                                                (1,737,957)
               Total stockholders' deficit                                           (502,293)
                                                                                --------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                         $1,316,801
                                                                                ==============
</TABLE>


       The accompanying notes are an integral part of this balance sheet.

                                      F-1



<PAGE>



<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31

                                                               (Unaudited)        (Unaudited)
                                                                  2001               2000
                                                              ---------------   -----------------
<S>                                                           <C>               <C>
REVENUE, net                                                         $662,729            $890,545

COST OF REVENUE                                                       421,637             540,636
                                                              ---------------   -----------------

      GROSS PROFIT                                                    241,092             349,909

GENERAL AND ADMINISTRATIVE EXPENSES                                   409,170             409,130

SELLING AND MARKETING EXPENSES                                         53,058              60,328

                                                              ---------------   -----------------
      Operating loss                                                (221,136)           (119,549)

OTHER INCOME / (EXPENSE)
   Interest expense                                                  (72,938)            (11,265)
   Other income / (expense)                                           (3,770)               2,933
                                                              ---------------   -----------------
      Total other expense                                            (76,708)             (8,332)

LOSS BEFORE EXTRAORDINARY ITEM                                      (297,844)           (127,881)

EXTRAORDINARY ITEM -- Gain on extinguishment of debt                                       63,375

NET LOSS                                                           ($297,844)           ($64,506)
                                                              ===============   =================

NET Loss Per Share:

Basic, before extraordinary item                                      ($0.02)              $( * )
      Extraordinary item
                                                              ---------------   -----------------
                                                                      ($0.02)              $( * )
                                                              ===============   =================

Diluted, before extraordinary item                                    ($0.02)              $( * )
      Extraordinary item
                                                              ---------------   -----------------
                                                                      ($0.02)              $( * )
                                                              ===============   =================

Weighted Average Shares Outstanding:
   Basic                                                           18,134,245          15,772,402

   Diluted                                                         18,134,245          15,772,402

* Less than $0.01 per share.
</TABLE>


       The accompanying notes are an integral part of this balance sheet.

                                      F-2



<PAGE>




<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE THREE MONTHS ENDED MARCH 31

                                                                           (Unaudited)      (Unaudited)
                                                                              2001             2000
                                                                          ---------------  ---------------
<S>                                                                       <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
         Net loss                                                              ($297,844)        ($64,506)
         Depreciation and goodwill amortization                                    16,781           12,653
         Gain on retirement of debt                                                               (63,375)
         Amortization of deferred financing cost                                   61,671
         Reduction of obligation for common stock to be issued                  (152,231)
         Non cash stock issued to vendors and employees                            37,547
         Changes in assets and liabilities
               Accounts receivable                                                 43,352           38,164
               Inventory                                                         (47,842)         (10,130)
               Other current assets                                                18,158         (18,341)
               Accounts payable                                                 (144,273)         (99,375)
               Accrued expenses and other liabilities                            (10,173)         (14,847)
               Non cash acrued expenses and other liabilities                      62,090
               Deferred revenue                                                    10,819           51,761
                                                                          ---------------  ---------------
                  Net cash provided (used) by operating activities              (401,945)        (167,996)
                                                                          ---------------  ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
         Purchases of property and equipment                                     (13,979)         (61,542)
                  Net cash provided (used) by investing activities               (13,979)         (61,542)
                                                                          ---------------  ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from notes payable                                                  150,000
     Payments on notes payable and capital leases                                   3,745        (166,934)
     Net receipts on line of credit                                                                 39,113
     Funds received for stock subscriptions                                                        220,000
     Issuance of common stock (net of capital placement fees)                     152,231          150,000
                  Net cash provided (used) by financing activities                305,976          242,179
                                                                          ---------------  ---------------

INCREASE (DECREASE) IN CASH                                                     (109,948)           12,641
CASH, January 1                                                                   176,441           37,692
CASH, March 31                                                                    $66,493          $50,333
                                                                          ===============  ===============
</TABLE>


       The accompanying notes are an integral part of this balance sheet.

                                      F-3




<PAGE>





<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE THREE MONTHS ENDED MARCH 31
                                                                       (Unaudited)     (Unaudited)
                                                                          2001            2000
                                                                       -----------      ----------
<S>                                                                        <C>          <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
        Interest paid                                                      $9,582          $5,578

SUPPLEMENTAL SCHEDULE OF NONCASH
            INVESTING AND FINANCING ACTIVITIES:
     Common stock subscribed in exchange for notes receivable                            $278,438
     Common stock issued in exchange for note payable                                     $30,000
</TABLE>




       The accompanying notes are an integral part of this balance sheet.

                                      F-4




<PAGE>





ONESOURCE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR
THE THREE MONTHS ENDED MARCH 31, 2001 and 2000

1.   BASIS OF PRESENTATION

The unaudited  financial  statements  presented herein have been prepared by the
Company  without  audit,  pursuant  the  rules  And  regulations  for  financial
information.  Accordingly, certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been omitted.  These unaudited financial  statements
should be read in  conjunction  with the financial  statements and notes thereto
included in the Company"s audited financial  statements as of December 31, 2000.
In the opinion of management,  these unaudited financial  statements reflect all
adjustments  which are necessary to present  fairly the  financial  position and
results of operations of the Company for such interim period.  Operating results
for the interim  period are not  necessarily  indicative  of results that may be
expected for the entire year

2.   EXTINGUISHMENT OF DEBT

The Company and a group of investors  executed an agreement on March 4, 2000 the
Company and a group of investors  executed an agreement  with PF Holdings,  Inc.
("PF")  to  purchase  the  promissory  note  held  by PF  with a face  value  of
$285,000.00  and accrued  interest of $36,  972 for $150,000 in cash and 175,000
shares of the  Company's  common  stock with an  estimated  fair market value on
March  4,  2000 of  $93,438.  The  investors  purchased  643,944  shares  of the
Company's  common stock for  $150,000.  The proceeds in turn,  together with the
175,000 shares,  were used in the settlement of the debt. The carrying amount of
the debt  exceeded the $243,438  combined  value of the  consideration  given to
settle the debt, resulting in a gain of $58,474 net of income taxes of $4,901.

3.   STOCKHOLDERS' DEFICIT

Shares  issued to employees and others for services are valued based on the fair
value of the stock issued and/or the service rendered. Other non-monetary common
stock  transactions were valued at the trading price of the stock at the date of
the  transactions.  The following  table shows the number of shares issued,  the
amount  recorded as expense  and the basis of  valuation  for shares  issued for
services in the quarter ended March 2001.

<TABLE>
<CAPTION>
                                                      Cost per
Description                         Shares Issued      Share        Valuation Basis
-----------------------------       -------------      --------     ------------------------
<S>                                  <C>                <C>         <C>
Issued for services                  171,667            0.10        Stock price at commitment date
Issued for employee compensation     150,000            0.14        Stock price at commitment date
</TABLE>


Shares  issued for services  during the quarter ended March 31, 2001 were issued
in three separate  transactions to  nonaffiliates  with a weighted average share
price at the commitment date of $0.10 per share.  The weighted  average price of
shares  granted to employees  was $0.14 per share.  These shares were granted in
three separate transactions during the quarter.


The  Company  has a  number  of  subscriptions  for its  common  stock  totaling
3,376,403 which are not yet issued at March 31, 2001.  Shares  committed but not
issued are awaiting the  implementation  of a shareholder  approved  increase in
authorized  shares  from 20  million  to 50  million.  The  aggragate  value  of
transactions for which shares have not yet been issued is $439,215.



                                      F-5

<PAGE>


4.   BUSINESS SEGMENTS

The Company is engaged in three  related and  complementary  lines of  business,
equipment technology maintenance services,  equipment technology  installation &
integration  services,  and equipment  technology  supplies sales. The following
table shows  certain  financial  information  for each  segment for the quarters
ended March 2001 and 2000.

<TABLE>
<CAPTION>
                                 Maintenance      Integration      Supplies     Eliminations      Total
                                 --------------  --------------  -------------  --------------  -------------
<S>                                  <C>               <C>            <C>         <C>            <C>
2001
Revenues                               $437,211              $0       $225,517                     $662,729
Inter-segment sales                       2,975               0          2,161      ($5,136)              0
Operating (loss) income               (245,694)               0         24,558                    (221,136)
Depreciation and amortization             9,815               0          6,965                       16,781
Interest                                 69,091               0          3,847                       72,938
Property & equipment purchases           13,979               0              0                       13,979
Total assets                         $1,364,025         $27,004       $454,262    ($528,489)     $1,316,801


2000
Revenues                               $616,407         $49,028       $204,535                     $890,545
Inter-segment sales                       4,000           2,000          2,905      ($8,905)              0
Operating (loss) income                (40,122)        (11,505)       (12,879)                     (64,506)
Depreciation and amortization            12,653               0              0                       12,653
Interest                                  7,267           1,879          2,119                       11,265
Property & equipment purchases           46,202         (1,924)         17,264                       61,542
Total assets                         $1,321,938         $98,984       $512,606    ($390,971)     $1,542,557
</TABLE>



                                    ********


                                      F-6



<PAGE>



Item 2. Management's Discussion and Analysis or Plan of Operation

General

     In January  2001,  at a meeting of the Board of  Directors,  the  Directors
elected  to fill a vacancy to the Board of  Directors  with  Thomas E.  Glasgow.
Subsequently, Jerry Washburn resigned his position as Chairman of the Board, but
retained his positions as President,  Chief Executive Officer and as a Director.
Thomas Glasgow was then elected to serve as Chairman of the Board until the next
annual meeting of the shareholders.

Discussion and Analysis

Introduction

     The interim  financial  results  discussed  herein  include  the  financial
results of OneSource  and its wholly owned  subsidiaries  Net Express,  Inc., an
Arizona corporation and Cartridge Care, Inc., an Arizona corporation ("CC").

     In 1999 the Company acquired all the outstanding stock of NE engaged in the
LAN and WAN  (local and wide area  network)  integration  and other  information
technology  ("IT") business and of CC, which was engaged in the  remanufacturing
of printer/copier toner cartridges.

Overview

     The financial results discussed herein include the consolidated  operations
of OneSource Technologies,  Inc, (hereinafter  "OneSource" and/or "the Company")
and that of its wholly owned subsidiaries Net Express,  Inc. and Cartridge Care,
Inc.

     While much  progress  has been  effected in  staunching  bloated  costs and
operational  problems incurred in fiscal 2000 the numbers in the initial quarter
to 2001 do not yet  reflect  all the  improvements  that have been  implemented.
Further some of the operational induced problems  encountered in 2000 continued,
albeit to a lesser  degree into the first  quarter of 2001.  Problems  remaining
include;

*    Revenues  remained flat in the non supplies  divisions  with no significant
     new contracts;
*    General and  Administrative  costs are still too high relative to the level
     of operations; and,
*    Residual  effects  of  short-term   financing  costs  negatively   impacted
     earnings.

     With much of fiscal 2000 and prior period issues arrested and/or eliminated
the  Company  is  now  in a much  improved  position  to  complete  turn  around
initiatives  started  in fiscal  2000 and move to  profitability  later in 2001.
Specifically:

*    The restructuring and realigning of operating divisions is complete;
*    New division  management  teams are in place and  appropriately  empowered;
     and,
*    Overall operating costs have been reduced.

     While  these  accomplishments  are  significant  there  remains a number of
matters still needing to be fully implemented, including:

                                        11

<PAGE>




*    Securing additional equity capital investment;
*    Substantially expanding sales and marketing activities and results; and,
*    Upgrading internal information systems and communication infrastructures.

Results of Operations

     OneSource is engaged in delivering  important equipment  technology support
services for information technology and industry specific equipment devices used
in business,  government  and education on an outsourcing  basis.  The Company's
service  and  product  offerings  are  aligned  in  three  closely  related  and
complimentary business lines, including:

* Renewable long-term equipment maintenance services; * Equipment
installation and integration services; and, * Equipment consumable
supplies distribution.

     The Company's  primary  customer profile is companies in the a) banking and
financial  services and b) retail  industries.  Though  OneSource's  service and
product  offerings  can be  readily  applied  in any  industry,  these  two  are
emphasized because of the significantly  greater number of equipment  technology
items used in banking and retail companies  compared to other  businesses.  Like
companies in other industries,  banking and retail enterprises use large numbers
of general business equipment such as copiers,  facsimiles, PCs and peripherals,
but in addition they also utilize  significant  quantities of industry  specific
machines like coin/currency counting and handling machines, check processing and
encoding  equipment  and ATMs in banking  and  point-of-sale  (POS)  scanner and
register systems in retail.  The Company's  economies-of-scale  are maximized in
situations  where there are great  concentrations  of  equipment  at  customers'
sites, hence its focus on these industries.

     Overall consolidated results for the quarter ended March 31, 2001 were poor
in many respects; maintenance division revenues were down significantly compared
to the same period in 2000, as were the  installation  division and costs in all
categories did not decrease  pro-rata with the decrease in revenues in the three
months  ended  March 31,  2001  compared  to 2000.  One bright spot in the first
quarter of 2001 however was the  continuing  positive  contribution  made by the
supplies distribution division.

     The following table sets forth selected  consolidated  operating results of
OneSource for the quarters ended March 31, 2001 and 2000.


                                       12

<PAGE>




<TABLE>
<CAPTION>
     Summary Income Statement                           2001         2000
------------------------------------------------  ------------   ------------
------------------------------------------------  ------------   ------------
<S>                                               <C>            <C>
Operating Revenues                                     662,729       890,545
------------------------------------------------  ------------   ------------
Cost of Revenues                                       421,637       540,636
------------------------------------------------  ------------   ------------
Gross Margins                                          241,092       349,909
------------------------------------------------  ------------   ------------
Selling, General and Administrative Expenses           462,228       469,458
------------------------------------------------  ------------   ------------
Operating Loss                                        (221,136)     (119,549)
------------------------------------------------  ------------   ------------
Other Income and (Expense)                             (76,708)       (8,332)
------------------------------------------------  ------------   ------------
Income (Loss) before Extraordinary Gain               (297,844)     (127,881)
------------------------------------------------  ------------   ------------
Extraordinary Gain                                           -        63,375
------------------------------------------------  ------------   ------------
Income (Loss) before Taxes                            (297,844)      (64,506)
------------------------------------------------  ------------   ------------
Income Benefit                                               -             -
------------------------------------------------  ------------   ------------
Net Loss                                              (297,844)      (64,506)
------------------------------------------------  ------------   ------------
</TABLE>

Operating Revenues

     Total  consolidated  revenues decreased $228 thousand or 26% in the quarter
ended March 31, 2001 compared to 2000 due to:

*    Cancellation of a major equipment  maintenance  contract in the second half
     of fiscal 2000;
*    Discontinuance  of a  significant  sub-contractor  commitment  with another
     maintenance provider in the latter half of 2000; and,
*    Lack of any new maintenance  services and installation  customers in all of
     fiscal 2000 or during the first quarter of 2001.

The following table shows the amounts each business segment contributed to
consolidated revenues for the quarters ended March 31, 2001 and 2000.



<TABLE>
<CAPTION>
Business Line Revenue Mix                             2001       %       2000    %
------------------------------------                -------    ---     -------- ---
<S>                                                 <C>        <C>      <C>     <C>
Equipment Maintenance Revenues                      437,211     66      645,692  74
Equipment Installation and Integration Revenues           -      -       25,275   3
Equipment Supplies Revenues                         225,517     34      201,630  23
Total Business Line Revenues                        662,729    100      872,597 100
</TABLE>

Equipment Maintenance Services

     Maintenance  revenues  decreased  32% in the  quarter-ended  March 31, 2001
compared to the same quarter in 2000  reflecting  the loss in the second half of
fiscal  2000 of two  significant  maintenance  contracts,  one the  result  of a
customer's decision to do their own in-house maintenance (about a $120

                                       13

<PAGE>



thousand  impact  for the three  months)  and  termination  by the  Company of a
subcontract commitment with another service provider (approximately $65 thousand
for the three  months).  The balance is due to a number of smaller  account drop
offs in the  latter  part of 2000  and  early  2001.  As the  Company  struggled
operationally  during  much of fiscal  2000  because  of parts  procurement  and
logistics  problems and field service  delivery  issues it was not successful in
stemming the loss of these  engagements.  Further the  division  went the entire
fiscal year 2000 without a seasoned  sales team actively  procuring new accounts
for the division to replace lost revenues.

     This lack of new sales activity continued through most of the first quarter
of 2001. A new sales plan was  implemented  in February 2001 and although by the
end of March  2001 a number  of new  account  proposals  were  pending,  nothing
significant was closed in the quarter.  Management anticipates however that with
the much  improved  procurement  and field  service  delivery  situation in 2001
compared to 2000 and the increased new sales  activity in 2001, the Company will
be able to replace lost revenues in the next two quarters and through the end of
the year will be in a position to largely realize its 2001  maintenance  revenue
projections.

     On a percentage  contribution  basis,  maintenance  services  accounted for
sixty-six  percent  (66%) of total  revenues in the quarter ended March 31, 2001
compared to  seventy-four  percent  (74%) for the quarter  ended March 31, 2000.
Contributing to the decline is the increase in the supplies division revenues in
the first quarter of 2001compared to 2000.  Partially  offsetting these results,
the installation services division  contribution also declined  significantly in
the first  quarter of 2001 with zero  contribution  in the first quarter of 2001
from three percent (3%) in the quarter ended March 31, 2000.

     The  Company's   annualized   contract  service   revenues   declined  from
approximately  $2.7 million at March 31, 2000 to about $1.5 million at March 31,
2001. This is primarily the result of the cancellation of two service  contracts
(approximately  $700 thousand  annualized) and the termination by OneSource of a
third party  sub-contracting  relationship  with another  service company (about
$250  thousand  annualized).  The  contract  cancellation  was the  result  of a
customer  electing to provide its own maintenance  services in-house and was not
because of unsatisfactory service delivery quality on the part of OneSource. The
Company  terminated  the   sub-contracting   relationship   because  of  serious
disruptions it caused in the Company's internal service delivery processes.

     At March 31, 2001 retail industry customers accounted for about seventy-six
percent (76%) of  maintenance  revenues with about twenty  percent (20%) derived
from  banking   clients  and  four  percent  (4%)  from  other   industries  and
governmental customers. This compares to seventy-four percent (74%) from retail,
twenty-three (23%) from banking and three percent (3%) from other in the quarter
ended March 31, 2000.

     The  Company  ended  the first  quarter  of 2001  with a total  backlog  of
renewable contract service revenues of approximately  $2.5 million.  In addition
to long-term  contract  equipment service the Company also performs on-call time
and  materials  service  work that  amounted  to less than 10% of total  service
revenues  for the  quarters  ended March 31, 2001 and 2000.  This  reflects  the
Company's  continuing  focus on increasing  renewable  contract  services at the
expense of unsolicited on call work.

                                       14

<PAGE>





Equipment Installation and Integration Services

     Fiscal 2000  represented  a period of  realignment  and  refocusing of this
division's  operations.  The  division  was acquired in 1999 via a merger with a
small local area network  integrations  company. The intent of the merger was to
meld  the  division's   installation/integration   core  competencies  with  the
Company's large project specific equipment installation opportunities, which can
be very lucrative and profitable.  While progress was made in this regard by the
end of 2000, the disruption  caused in effecting the  realignment  during fiscal
2000 continued  through the first quarter of 2001.  Consequently  no significant
installation  engagements  were  effected  in the  quarter  ended March 31, 2001
resulting in decreased  revenues for the division of $25 thousand or one hundred
percent (100%) for the quarter ended March 31, 2001 compared to 2000.

Potential new engagements that were pending at the end of fiscal 2000 were not
committed in the quarter ended March 31, 2001 due to deteriorating general
economic conditions in the quarter that prompted the pending customers to delay
their decisions to proceed. The operational and managerial glitches that dogged
the division during all of fiscal 2000 have been overcome and the division is
now positioned for growth. Management is committed to the installation and
integration business and views it as very complementary to its renewable
maintenance services. Accordingly a significant part of the Company's new sales
plan is targeted to growing the division's contribution to consolidated results.

     Going forward  management is also committed to increasing sales of industry
specific (banking and retail)  equipment as part of the installation  division's
large-scale  installation  assignments in both its retail and financial  service
industry  markets.  This will be  accomplished  through the  Company's in- house
equipment sales function as well as alliances with equipment  dealer/distributor
organizations  in those  industries.  Margins on this type of  equipment  can be
double or triple  the  margins  traditionally  realized  from PC and  peripheral
equipment sales.

Consumable Supplies Distribution

     This division  continued to be the Company's bright spot during the quarter
ended March 31, 2001.  Equipment  supplies  distribution  accounted  thirty-four
percent  (34%) of total  consolidated  revenues for the quarter  ended March 31,
2001  compared to  twenty-three  percent (23%) during the first quarter of 2000.
While some operational and management information disruptions occurred in fiscal
2000 from the integration of the new division into consolidated  operations they
were rectified with new management before year-end 2000.

     The  new  management  team  streamlined   order  entry  and   manufacturing
procedures  in the  second  half of  fiscal  2000 and  labor  costs per unit and
overhead  expenses  decreased  accordingly  for  the  division.  Targeted  sales
programs  were   implemented   late  in  the  year  and  cash  flow  and  profit
contributions from this division greatly improved by year-end December 31, 2000.
During the first quarter of 2001 the division  increased revenues twelve percent
(12%) compared to the three months ended

                                       15

<PAGE>



March 31, 2000.  At he same time division  management  continued to increase the
size of  average  shipments  by  focusing  on  larger  account  sales  with  its
significant   Fortune  1000  customers.   The  Company's  new  sales  plan  also
contemplates significantly expanding the division's contribution to consolidated
results through the end of fiscal 2001.

     Prospectively   management  also  expects  to  substantially   expand  this
division's  operations by targeting existing contract maintenance  customers and
by channeling a greater proportion of its distribution through the Internet.  In
this regard a new e-commerce portal, GOINK.com, was introduced in fiscal 2000 as
the division's  on-line Internet  fulfillment  delivery  channel.  This site was
available to anyone on the Internet in addition to the Company's  customer base.
During  trials in fiscal  2000  however,  it became  apparent  that the site was
geared  primarily  to consumers  and retail  customers  ("business  to consumer"
customers  (BtoC)) and not sufficiently  robust for business-to-  business (B2B)
distribution  the Company had  intended.  Accordingly  the Company is  presently
engaged in  revamping  the  website to afford the  scalability  desired  for the
Company's B2B objectives and anticipates  having the new site fully  operational
by the end of the second quarter of fiscal 2001.

Profit Margins

     Absolute gross margin dollars  dropped $109 thousand or thirty-one  percent
(31%) for the quarter ended March 31, 2001 compared to 2000. Consolidated margin
contribution  for the quarter  ended March 31, 2001 also  dropped to  thirty-six
percent  (36%)  from  forty  percent  (40%)  for the same  period  in 2000.  The
thirty-six  percent  (36%)  margin for the first  quarter of 2001  however is an
improvement  over the  thirty-one  percent  (31%)  realized  for the year  ended
December 31, 2000. This increase  confirms the positive  effects of improvements
the Company made in the second half of 2000 to improve operational  results. The
improved 36% margin for the first  quarter of 2001 though is still not at levels
Company management believes is achievable once all improvements have had time to
be fully realized  during the remaining  periods of 2001. To assure this happens
the Company is committed to the following activities;

*    Significantly  increasing  sales and  marketing  endeavors  to  secure  new
     business in all divisions,
*    Continuing   inventory   procurement  and  logistics  process  enhancements
     throughout 2001;
*    Further  streamlining  and  consolidating  staffing to curtail overtime and
     overhead costs; and
*    Completing  the  systems  infrastructure  initiatives  started in the first
     quarter of 2001.

     The  following  table shows gross profit  results for each division for the
quarter ended March 31, 2001 and 2000:

<TABLE>
<CAPTION>
  Business Line Gross Profit                    2001       Gm%        2000    Gm%
-------------------------------------------   ----------  -----  ----------  -----
<S>                                          <C>          <C>    <C>         <C>
-------------------------------------------  -----------  -----  ----------  -----
Equipment Maintenance and Service GP             146,803     34     261,542    41
-------------------------------------------  -----------  -----  ----------  -----
Equipment Sales and Integration GP                     -      -      (1,702)   (7)
-------------------------------------------  -----------  -----  ----------  -----
Equipment Parts and Supplies GP                   94,289     42      90,069    45
-------------------------------------------  -----------  -----  ----------  -----
Total Business Line Gross Profit                 241,092     36     349,909    40
-------------------------------------------  -----------  -----  ----------  -----
</TABLE>

Equipment Maintenance Services

     The  maintenance  division's  seven  percent  (7%)  decline in gross margin
percentage for the quarter ended March 31, 2001 compared to 2000 is significant,
yet is a positive  improvement  over the fourteen  percent (14%) decline for the
year ended December 31, 2000 compared to the prior year. The 7% decline reflects
the legacy effects of a number of problems incurred in the division's operations
during  fiscal 2000.  Service  parts  inventory  and logistics and field service
delivery issues in fiscal 2000 pulled down operating margins during the year but
adjustments  that were effected in last half of fiscal 2000  contributed  to the
improved first quarter margins compared to year end 2000.


     Strides made in controlling shipping costs and overtime also contributed to
improved margins for the first quarter of 2001, yet new procurement  systems and
personnel  are  needed  to  completely   resolve  the  inventory  and  logistics
accountability  problems. New management was installed in the last two months of
fiscal 2000 and a priority  objective of OneSource  management  is to have a new
information  and  communications  infrastructure  platform  in place  and  fully
operational by the end of the second quarter of fiscal 2001. Notwithstanding the
foregoing,   management  still  believes  that  once  these  changes  are  fully
implemented that the corporate goal of a target margin rate of 50% is attainable
in the maintenance services division.

     Given the tighter integration of the Company's three divisions'  operations
now opportunities to cross-sell  services and equipment supplies among the three
are greater than before and  management's  intention is to expand  revenues from
existing  customers in this manner as well as aggressively go after new accounts
in each  business  segment.  At the end of fiscal 2000 for example less than ten
percent  (10%) of the  Company's  supplies  volume was shipped to the  Company's
other division  customers.  Similarly less than five percent (5%) of maintenance
services were derived from other division's customers in the year ended December
31, 2000.

Equipment Installation and Integrations Services

     Installation and integration  division was a non-contributor  operationally
for the quarter ended March 31, 2001. By the same token though it was also not a
drain on cash or  earnings  in the  quarter  either.  Following  the  division's
acquisition in 1999 it continued its  theretofore  local area network  equipment
sales and integration  operations  through the end of that year. In early fiscal
2000  management  redirected  the  division's  scope of practice away from small
network  installation  projects and into  large-scale  equipment  implementation
projects in support of OneSource's  customer  profile of large  regional  and/or
divisions of national banking and retail  companies.  Doing so will more tightly
integrate  the Company's  operating  divisions and at the same time enable sales
and marketing endeavors to more readily penetrate new customer opportunities.

     During  2000  this  division  had a number  of  failed  false  starts  that
substantially  disrupted division  operations.  Consequently  management cleaned
house in the second half of 2000.  Personnel  changes were made and its customer
mix was  redirected to  synergistically  align with the Company's  core business
operations.  By year-end  2000 the  refocused  division was able to propose on a
couple of

                                       16

<PAGE>



significant new business opportunities for new equipment implementation projects
but because of declining general economic conditions the prospects delayed their
decisions.

Consumables Supplies Distribution

     Gross margin  percentages for the supplies division decreased three percent
(3%) during the three months ended March 31, 2001  compared to 2000.  Margins on
purchased  cartridges average thirty to thirty-five  percent (30 to 35%) whereas
margins on in-house  manufactured  ones average  forty to fifty  percent (40% to
50%).  Resulting  margins  therefore  are a function  of the product mix between
in-house versus outside purchased  cartridge shipments and the division has been
concentrating  on the latter  during the last half of fiscal  2000 and the first
quarter of 2001.

     Anticipated  future  margins in the supply  division  are  expected to hold
steady at the current  rate in fiscal 2001 as expansion  continues  and shipment
mixes are refined in support of the greater customer base. Management believes a
greater  proportion of purchased  cartridges  will be required though to support
the expected  expansion of this division,  particularly in the on-line  Internet
fulfillment  site once it comes on line in the second  half of fiscal 2001 which
might have a slight damping effect on division margins.

General and Administrative Costs

     General and  Administrative  costs  leveled off for the quarter ended March
31, 2001  compared  to the same three  months of 2000 but at  sixty-two  percent
(62%) of total  revenues the  category  still  accounts  for a  disproportionate
amount of consolidated  operations.  The following table details the significant
cost categories;

<TABLE>
<CAPTION>
  General and Administrative Expenses             2001       %            2000        %
---------------------------------------------  -----------  ----      -----------  -----
---------------------------------------------  -----------  ----      -----------  -----
<S>                                            <C>          <C>       <C>          <C>
General & Administrative Payroll                   163,604    25          164,423    18
---------------------------------------------  -----------  ----      -----------  -----
Legal and Professional Fees Paid                    48,131     7           46,055     5
---------------------------------------------  -----------  ----      -----------  -----
Facilities                                          50,838     8           60,336     7
---------------------------------------------  -----------  ----      -----------  -----
Medical and Casualty Insurance                      42,544     6           46,533     5
---------------------------------------------  -----------  ----      -----------  -----
Payroll Taxes Paid                                  69,218    10           30,675     3
---------------------------------------------  -----------  ----      -----------  -----
Telecommunication Expenses                          20,677     3           31,205     4
---------------------------------------------  -----------  ----      -----------  -----
Depreciation & amortization                         16,781     3            1,611     0
---------------------------------------------  -----------  ----      -----------  -----
Travel & Entertainment                               4,150     1            8,044     1
---------------------------------------------  -----------  ----      -----------  -----
Other                                               (6,773)   (1)          20,248     2
---------------------------------------------  -----------  ----      -----------  -----
Total General and Administrative Expense           409,170    62          409,130    46
---------------------------------------------  -----------  ----      -----------  -----
</TABLE>


     Administrative  costs  bloated  significantly  during fiscal 2000 and while
total general and administrative costs for the three months ended March 31, 2001
are largely even with the same costs for the first quarter of fiscal 2000,  they
are still excessive compared to the overall level of Company

                                       17

<PAGE>



operations.  Accordingly  much of management's  attention in fiscal 2000 through
the  quarter  ended  March 31,  2001 has been  directed  to this  portion of the
business in order to streamline  and better  integrate  overall  operations  and
reduce administrative costs.

     While  administrative  payroll  and  benefits  are down some from  previous
levels at  twenty-five  percent  of total  revenues  they are still too high.  A
number of reductions and redeployment of  administrative  personnel were made in
the latter half of fiscal 2000 and during the first  quarter of 2001 in order to
lower this cost  category.  The full  effect of certain  reductions  made in the
quarter ended March 31, 2001 however will not be completely realized until later
quarters  because  of  severance  and  other  related   continuing  costs.  Also
contributing  to the  disproportionate  amount  of  administrative  payroll  and
benefit costs is the current low revenue base. Operational problems through much
of fiscal 2000 and the lack of any significant new business  accounts during the
same period has seriously stunted total revenues relative to the  administrative
foundation  that is  presently  in  place  to  support  a much  larger  level of
operations.  Consequently in order to fully proportionately align administrative
costs with consolidated revenues Company management is focusing on substantially
increasing service and installation revenues during the balance of fiscal 2001.

     Legal and  professional  fees increased five percent (5%) at March 31, 2001
compared to 2000 as a result of a number of legacy  issues  stemming from fiscal
2000.  Management  believes  the worst is past and all such  matters are largely
isolated and are being  appropriately  worked through.  Legal fees therefore are
anticipated to moderate and be lower than the amount  incurred for all of fiscal
2000 by  year-end.  Higher  professional  fees also related to  additional  work
required in  connection  with the  Company's  public  filings  and  professional
matters related to the restructuring.

     Facility costs decreased  sixteen percent (16%) for the quarter ended March
31, 2001  compared to 2000 due to the closure of three  satellite  parts storage
facilities  in late  fiscal  2000 as part  of the  Company's  restructuring  and
realignment endeavors to cut costs and inefficiencies.

     Medical  insurance and employee benefit costs declined nine percent (9%) in
the first  quarter of 2001  compared to the same  period of 2000  because of the
lower  employee  head count in fiscal  2001  compared  to 2000.  Even though the
Company  went to a PEO  leasing  company  for all its  employees  in the  second
quarter of fiscal 2000 and as part of this move  incurred  significantly  higher
medical benefits and workman's  compensation costs per employee the fewer number
of employees  in 2001  compared to 2000 more than offset the  increased  cost of
utilizing  a PEO.  This  change was made to help  assure  that the Company is in
compliance with all regulatory  reporting and filing  requirements  and that all
employees  were  appropriately  and uniformly  covered  throughout the Company's
disparate geographic reach.

     The  significant  one hundred and  twenty-six  percent  (126%)  increase in
payroll  taxes during the quarter ended March 31, 2001 compared to 2000 reflects
the accrual of an additional $40 thousand in the quarter in addition to payments
of $10 thousand per month for prior years liabilities pursuant to an installment
agreement  the Company has with the IRS, (see  Liquidity  and Capital  Resources
below).


                                       18

<PAGE>



     Telecom expenses declined  thirty-four  percent (34%) for the quarter ended
March 31, 2001  compared to 2000 as a result of the  Company's  cost cutting and
streamlining initiatives during the past nine months which enabled management to
incorporate a number of less costly yet equally  utilitarian  devices as part of
the Company's geographically dispersed field service operations.

Selling Expenses

<TABLE>
<CAPTION>
   Selling Expenses                        2001     %         2000      %
---------------------------------       --------  ----      --------  ----
---------------------------------       --------  ----      --------  ----
<S>                                     <C>       <C>       <C>       <C>
Sales and Marketing Compensation          40,419    6         52,441    6
---------------------------------       --------  ----      --------  ----
Selling & Service Expense                  2,176    0          7,671    1
--------------------------------        --------  ----      --------  ----
Marketing                                  4,428    1           (366)  (0)
--------------------------------        --------  ----      --------  ----
Meals & Entertainment                      5,995    1            582    0
--------------------------------        --------  ----      --------  ----
Training & Aids                               40    0              -    -
--------------------------------        --------  ----      --------  ----
Total Selling Expense                     53,058    8         60,328    7
--------------------------------        --------  ----      --------  ----
</TABLE>

     Selling expenses decreased twelve (12%) in the quarter ended March 31, 2001
compared to the same period in 2000. The decrease reflects the Company's restart
in the first  quarter of 2001 of its sales and marketing  plans.  During much of
fiscal 2000 the Company  incurred  disruptions  and  conflicted  sales  activity
because of restructuring in the department.  The effect of this restructuring is
well  documented  with the lack of new  maintenance  and  installation  business
during all of fiscal  2000 and the first  quarter of fiscal  2001.  The  overall
sales  effort in fiscal 2000 is best  characterized  by a number of false starts
and failed strategies.  Management in early fiscal 2001 therefore orchestrated a
new sales and  marketing  plan to address and fix the lack of sales  results and
accordingly the Company anticipates higher sales and marketing costs through the
remainder of fiscal 2001 with their attendant increased in sales volumes.

     Marketing costs for the quarter ended March 31, 2001 increased  compared to
the  same  period  of  2000  and  countered  the  declines  in the  other  sales
categories.  This  increase is a result of the Company  priming the pump for the
new sales  plan with some  nominal  trade show  activity,  tele-  marketing  and
direct-response out bound sales activities during the quarter.

Operating Losses

     The  eighty-five  percent (85%)  increase in operating loss for the quarter
ended March 31, 2001 compared to 2000 reflects the residual  effects of a number
of  operational  problems  that  occurred in fiscal 2000 in two of the Company's
operating divisions and a significantly disproportionate increase in general and
administrative costs. The following table summarizes the totals;


                                       19

<PAGE>




<TABLE>
<CAPTION>
   Net Losses                      2001   %    2000
--------------------------    --------- ---- ----------
--------------------------    --------- ---- ----------
<S>                           <C>       <C>    <C>

Operating Losses               (221,136)  85  (119,549)
--------------------------    --------- ---- ----------
Interest Expenses               (72,938) 547   (11,265)
--------------------------    --------- ---- ----------
Other Income / (Expenses)        (3,770)(229)    2,933
--------------------------    --------- ---- ----------
Extraordinary Item                    - (100)   63,375
--------------------------    --------- ---- ----------
Net Losses                     (297,844) 362   (64,506)
--------------------------    --------- ---- ----------
</TABLE>


     All  of  the  operating  loss  occurred  in the  maintenance  services  and
installation-integration  divisions as the supplies distribution division turned
a small profit for the first  quarter of about $3 thousand.  Staffing  overtime,
excessive shipping costs and inventory and logistics problems in the maintenance
division were the culprit there and the transition and realigning  activities in
the installation division were responsible for that division's high losses. Also
contributing  to the losses  was a bloated  administrative  function  for all of
fiscal 2000 and the quarter ended March 31, 2001.

Other Income and Expenses

     Interest expense  increased  significantly  for the quarter ended March 31,
2001 compared to 2000 because of increases in outstanding interest bearing debt.
Also  contributing  to the  substantial  increase  was the  amortization  of $61
thousand  in  deferred  financing  costs that were  incurred  in  arranging  and
securing  certain  short-term  funding  tranches during fiscal 2000. The Company
decreased  payments for penalties and interest  charges  associated  with vendor
purchases  during the first  quarter of 2000 compared to the same period in 2000
reflecting  improvements  the Company has made in its inventory and  procurement
operations.

Liquidity and Capital Resources

     The following table sets forth selected financial condition  information as
of March 31 2001 and December 31, 2000:


     Balance Sheet              2001      %          2000
-----------------------       --------- -----     ----------
-----------------------       --------- -----     ----------
Working Capital                (868,332)  (4)       (833,076)
-----------------------       --------- -----     ----------
Total Assets                  1,316,801  (11)      1,484,186
-----------------------       --------- -----     ----------
Debt Obligations                762,084   30        587,635
-----------------------       --------- -----     ----------
Shareholders' Deficit          (502,293) (27)       (394,609)
-----------------------       --------- -----     ----------

     Operational  problems  throughout  much of fiscal 2000 caused the Company's
cash  burn-rate to escalate to in excess of $100  thousand per month in June and
averaged  almost  $80  thousand  per month  through  all of the second and third
quarters.  This cash short fall was  finally  arrested  and reduced to about $35
thousand a month by the end of the first quarter of 2001 but not before it was

                                       20

<PAGE>



necessary  to  secure   additional   funding  while  management   grappled  with
restructuring and realigning operations to bring them to profitability. To do so
in light of the Company's then diminished liquidity capacity required new equity
capital  which  was  invested  but  most of the new  capital  was in the form of
short-term  borrowings  of  $393  thousand  through  December  31,  2000  and an
additional $150 thousand during the first quarter of 2001.

     Further,  the  short-term  borrowings  during  fiscal 2000 ($393  thousand)
included "equity  sweeteners" as part of the deals,  which further increased the
cost of those short-term borrowings.  This increase in short-term obligations is
a primary  reason for the further  decline in working  capital at March 31, 2001
compared to December 31, 2000 and the negative  current  ratio at March 31, 2001
of 43%  compared to a 47% ratio at December 31, 2000.  The  amortization  of the
financing  costs of these funding  rounds also  contributed  (approximately  $61
thousand)  to the  Company's  loss for the quarter  ended March 31,  2001.  Also
contributing  to the diminished  working  capital ratio at March 31, 2001 is the
liability of $439 thousand in current  liabilities  representing  the obligation
for  shares of the  Company's  stock that were  committed  during the year ended
December 31, 2000 and the first quarter of 2001 but were not yet issued at those
dates. This obligation also had the negative effect of significantly  decreasing
Paid In Capital and pushing the Company's  Stockholders'  Equity  balance into a
deficit at March 31, 2001 and December 31, 2000.

     Notwithstanding  the foregoing  however,  two of the liabilities  making up
total current  liabilities,  "Obligation  for common stock to be issued" of $439
thousand  and  "Deferred  revenue" of $155  thousand  are non-cash in nature and
accordingly have no cash flow impact on working capital. If these two items were
excluded from the working  capital ratio  calculation on a pro forma basis,  the
pro forma working capital ratio at March 31, 2001 would be a negative .70.

     Further contributing to the decreased working capital position at March 31,
2001 compared to December 31, 2000 is the decrease in current asset  balances at
March 31, 2001.  Accounts  receivables  decreased $44 thousand  (15%) during the
quarter  as a result  of lower  revenues  in the  maintenance  and  installation
divisions as well as improved collection  practices.  Inventories  increased $48
thousand (18%) in support of improving  operations generally but in the supplies
division  specifically.  Both  situations  are the result of the Company's  turn
around initiatives implemented during the past nine months

     While  current  liabilities  decreased  slightly  (4%) at of March 31, 2001
compared to December 31, 2000. Accounts payable decreased $145 thousand (42%) as
a result of lower activity in the maintenance and installation divisions as well
as improved payment  practices as a result of the Company's clean up and process
improvement  endeavors  implemented  in late fiscal 2000 and  continuing  in the
quarter. Accruals would have also decreased slightly during the first quarter of
2001 were it not for an  additional  accrual  the Company  made for  withholding
taxes as part of its ongoing  negotiations  with the IRS, (see below).  Deferred
revenue  increased  slightly  ($11 thousand or 7%) at March 31, 2001 compared to
December 31, 2000 because of the mix of contract maintenance agreements in place
at March 31, 2001 compared to year-end. Partially offsetting these decreases are
increases in the current portion of long term debt.

                                       21

<PAGE>



     At March 31, 2001 the Company  and holders of four of the  Company's  notes
payable that were due in March and June of 2001  entered into Note  Deferral and
Extension  Agreements  wherein  each note holder  agreed to defer all  principal
payments  until  July 15,  2001,  where  upon the  Company  has agreed to make a
twenty-five  percent (25%) principal  payment to each note holder and the notes'
due dates will  extend to July 15,  2002.  At the same date (July 15,  2001) the
Company will begin making level monthly  principal  and interests  payments over
the remaining  twelve-month  period of the notes.  As part of the agreements the
Company has agreed to an increase in the interest  rates of the notes from their
stated twelve to fourteen  percent (12% to 14%) to eighteen  percent  (18%).  No
additional  consideration  was given the note  holders by the Company as part of
the extension agreement.

     Although the Company's operations have significantly improved over the past
nine  months  negative  cash  flows of  approximately  $35  thousand  per  month
continued  through  the three  months  ended  March 31,  2001.  With most of the
defined turn around  improvements in place though,  management  anticipates that
the Company will achieve  breakeven  cash flows by the end of the second quarter
of 2001.  This will be  accomplished  through a  combination  of continued  cost
reductions  and  increased  revenues  from  continuing  as well as new  business
situations.  In order to assure the Company has sufficient  cash resources until
this time the Company is  negotiating  with a number of investment  advisors and
investors  for  additional  bridge  financing  to carry the Company to breakeven
status.  Management  is  confident  that it will be able to secure  the  capital
needed to assure  these  short-falls  are met while  the  Company  continues  to
improve operationally to profitability.

     The Company is also engaged in negotiations with several investment banking
firms and their advisors with the intent of securing  equity funding of $1 to $3
million  during  fiscal 2001.  A number of these  negotiations  have  progressed
sufficiently  to the point where once the Company's stock is elevated to listing
on NASDAQ's OTC BB one or more of these firms are  anticipated  to commit to the
anticipated  funding.  Company  management  expects to  complete  all  necessary
application  and  regulatory  requirements  for OTC BB listing by the end of the
second quarter of fiscal 2001.

     The Company and a group of investors executed an agreement on March 4, 2000
the Company and a group of  investors  executed an  agreement  with PF Holdings,
Inc.  ("PF") to  purchase  the  promissory  note held by PF with a face value of
$285,000.00  and accrued  interest of $36,  972 for $150,000 in cash and 175,000
shares of the  Company's  common  stock with an  estimated  fair market value on
March  4,  2000 of  $93,438.  The  investors  purchased  643,944  shares  of the
Company's  common stock for  $150,000.  The proceeds in turn,  together with the
175,000 shares,  were used in the settlement of the debt. The carrying amount of
the debt  exceeded the $243,438  combined  value of the  consideration  given to
settle the debt, resulting in a gain of $58,474 net of income taxes of $4,901.

     At March  31,  2001 the  Company  had  accrued  delinquent  payroll  taxes,
penalties  and interest of  approximately  $210  thousand.  While the Company is
current in payment of all its payroll tax  liabilities  and has been  throughout
all of fiscal 2000 and year to date 2001 the IRS has been applying payments made
toward the  liability to the  earliest  periods and in so doing has been showing
the current periods delinquent, when in fact they are not. The Company therefore
is contesting this

                                       22

<PAGE>



practice  with the IRS in order  to  eliminate  the  false  perception  that the
Company is delinquent and to prevent the application of cash payments to earlier
quarters causing a compounding of penalties and interest.

     These liabilities  relate to unpaid  withholding taxes that were assumed as
part of the LBO in 1997 and two additional tax periods in 1998 and 1999. Most of
the total amount due consists of assessed  penalties ($60 thousand) and interest
($80 thousand).  The Company has an installment  agreement in place with the IRS
wherein  it  makes  monthly  payments  of $10  thousand  or  more  against  this
liability.  Once the balance is paid the Company will apply for abatement of the
penalties and request a refund of them.  Based on present  arrangement  with the
IRS, management believes that the Company will be able to successfully liquidate
this liability without incurring any adverse effects on the Company's  financial
condition from actions of the IRS.

     In 1999 the Company completed two acquisitions with the issuances of shares
of the Company's Common stock. While both transactions were completed with stock
the company  did incur  significant  non-operating  costs of  approximately  $90
thousand in the last  quarter of fiscal 1999 for facility  relocation  and other
costs of integrating the operations into the consolidated group. The Company may
acquire  additional  companies  in the  future  and will  attempt  to do so with
issuances  of the  Company's  Common  stock.  To the extent  cash is required to
finance  acquisitions  in the future the Company will seek outside  capital from
investors rather than attempt to finance the cash component from operations.

Employees

     At March 31, 2001, the Company  employed  forty-one  (41) persons.  None of
these  employees  are  represented  by a labor union for purposes of  collective
bargaining.  The  Company  considers  its  relations  with its  employees  to be
excellent.  The  Company  plans to employ  additional  personnel  as needed upon
product rollout to accommodate fulfillment needs.

Research and Development Plans

     The Company  believes that research and development is an important  factor
in its future growth.  The equipment  service  industry is closely linked to the
technological advances of the products it services.  Therefore, the Company must
continually  invest in learning the new  technology  to provide the best quality
service to the public and to  effectively  compete  with other  companies in the
industry.  No assurance can be made that the Company will have sufficient  funds
to complete  new  training in the latest  technological  advances as they become
available.  Additionally,  due to the  rapid  advance  rate at which  technology
advances,  the  Company's  equipment  may be  outdated  quickly,  preventing  or
impeding the Company from realizing its full potential profits.

Forward-Looking Statements

     This Form 10-QSB includes  "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of

                                       23

<PAGE>



     1934,  as amended.  All  statements,  other than  statements  of historical
facts,  included or  incorporated by reference in this Form 10-QSB which address
activities, events or developments which the Company expects or anticipates will
or may occur in the future, including such things as future capital expenditures
(including the amount and nature thereof), expansion and growth of the Company's
business and operations, and other such matters are forward-looking  statements.
These  statements  are based on certain  assumptions  and  analyses  made by the
Company in light of its  experience  and its  perception of  historical  trends,
current conditions and expected future  developments as well as other factors it
believes are appropriate in the circumstances.  However,  whether actual results
or developments will conform with the Company's  expectations and predictions is
subject  to a number of risks and  uncertainties,  general  economic  market and
business  conditions;  the business  opportunities (or lack thereof) that may be
presented  to and pursued by the  Company;  changes in laws or  regulation;  and
other factors, most of which are beyond the control of the Company.

     Consequently,  all of the  forward-looking  statements  made in  this  Form
10-QSB  are  qualified  by  these  cautionary  statements  and  there  can be no
assurance  that the actual  results or  developments  anticipated by the Company
will be realized  or, even if  substantially  realized,  that they will have the
expected consequence to or effects on the Company or its business or operations.

PART II

Item 1. Legal Proceedings.

     The  Company  knows  of no legal  proceedings  to which it is a party or to
which any of its  property  is the  subject  which are  pending,  threatened  or
contemplated or any unsatisfied judgments against the Company.

Item 2. Changes in Securities and Use of Proceeds

         None.

Item 3. Defaults in Senior Securities

         None

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

     No matter was submitted  during the quarter ending March 31, 2001,  covered
by this report to a vote of the Company's shareholders, through the solicitation
of proxies or otherwise.

Item 5. Other Information

         None.


                                       24

<PAGE>



Item 6. Exhibits and Reports on Form 8-K

     (a) The exhibits  required to be filed  herewith by Item 601 of  Regulation
S-B, as described in the following index of exhibits, are incorporated herein by
reference, as follows:

<TABLE>
<CAPTION>
Exhibit No.             Description
----------------------------------------------------------------------
<S>      <C>      <C>
3.(i).1  [1]      Certificate of Incorporation of L W Global (U.S.A.), Inc. filed August 27, 1996.

3.(i).2  [1]      Certificate of Amendment of Certificate of Incorporation filed January 16, 1997.

3.(i).3  [1]      Certificate of Amendment of Certificate of Incorporation changing name to Micor
                  Technologies, Inc. dated July 28, 1997.

3.(i).4  [1]      Certificate of Amendment of Certificate of Incorporation changing name to
                  OneSource Technologies, Inc. dated August 22, 1997.

3.(ii).1 [1]      Bylaws of L W Global (U.S.A.), Inc.

4.1      [1]      Form of Private Placement Offering of 1,200,000 common shares at $0.01 per share
                  dated September 10, 1996.

4.2      [1]      Form of Private Placement Offering of 300,000 common shares at $0.01 per share
                  dated July 14, 1997.

4.3      [1]      Form of Private Placement Offering of 575,000 common shares at $0.50 per share
                  dated September 17, 1997.

10.1     [1]      Share Exchange Agreement between L W Global (U.S.A.), Inc. and Micor
                  Technologies, Inc. dated July 15, 1997.

10.2     [1]      King Soopers Agreement dated September 1, 1998.

10.3     [1]      Attachment B to King Soopers Agreement dated September 1, 1998.

10.4     [1]      King Soopers Contract Renewal and Extension dated September 8, 1999.

10.5     [1]      Promissory Note by Cossack Financial, LLC in favor of the Company dated March
                  31, 1999.

10.6     [1]      Agreement to Extend Promissory Note by Cossack Financial, LLC in favor of the
                  Company dated January 3, 2000.

10.7     [1]      Promissory Note by Titan Capital Partners, LLC in favor of the Company dated
                  March 31, 1999.
</TABLE>

                                       25

<PAGE>



<TABLE>
<S>      <C>      <C>
10.8     [1]      Agreement to Extend Promissory Note by Titan Capital Partners, LLC in favor of the
                  Company dated January 4, 2000.

10.9     [1]      Share Exchange Agreement with Net Express, Inc. dated April 15, 1999.

10.10    [1]      Stock Redemption Agreement (Exhibit A to Net Express Share Exchange).

10.11    [1]      Employment Agreement (Exhibit B to Net Express Share Exchange).

10.12    [1]      Stock Purchase Agreement with Blackwater Capital Partners II, L.P. dated May 26,
                  1999.

10.13    [1]      Investor Rights Agreement with Blackwater Capital Partners II, L.P. dated May 26,
                  1999.

10.14    [1]      Share Exchange Agreement with Cartridge Care, Inc. dated September 1, 1999.

10.15    [1]      Lease of Scottsdale, Arizona property dated September 20, 1999.

10.16    [2]      Promissory Note by Micor Technologies, Inc. in favor of William Meger dated
                  November 28, 1995.

10.17    [2]      Promissory Note by Jerry Washburn and others in favor of PF Holdings, Inc. dated
                  July 31, 1997.

10.18    [2]      Form of Note Modification Agreement dated February 2000.

10.19    [2]      Installment Agreement between the Company and the Department of the Treasury
                  of the Internal Revenue Service dated July 2000.

10.20    [2]      Option Agreement between the Company and XCEL ASSOCIATES, Inc. dated June
                  1, 2000.

10.21    [2]      Agreement For A Finder's Fee between the Company and XCEL ASSOCIATES,
                  Inc. dated June 1, 2000.

10.22    [2]      Business Consulting Agreement between the Company and XCEL ASSOCIATES,
                  Inc. dated June 1, 2000.

10.23    [2]      Term Sheet for loan by the Company from Grace Holdings, Inc. dated June 29, 2000.

10.24    [2]      Letter Agreement between the Company and Maurice Mallette, Judith Mallette and
                  Pasquale Rizzi to escrow shares of the Company dated June 8, 2000.

10.25    [3]      Promissory Note by the Company in favor of Barry Zemel dated August 29, 2000.
-------------------------------
</TABLE>

                                       26

<PAGE>



[1]  Filed as an  exhibit to the  Company  Registration  Statement  on Form 10SB
     filed July 10, 2000.

[2]  Filed as an exhibit to the Company's first amended  Registration  Statement
     on Form 10SB filed October 13, 2000.

[3]  Filed as an exhibit to the Company's third amended  Registration  Statement
     on Form 10SB filed January 26, 2001.






                                       27

<PAGE>




                                   SIGNATURES



     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                          ONESOURCE TECHNOLOGIES, INC.
                                (Registrant)



Date: May 9, 2001          By: /s/Thomas E. Glasgow
                           --------------------------------
                           Thomas E. Glasgow, Chairman

                           By: /s/ Jerry M. Washburn
                           --------------------------------
                           Jerry M. Washburn, Chairman, President and CEO

                           By: /s/ Ford L. Williams
                           --------------------------------
                           Ford L. Williams, Director, Secretary and Treasurer

                           By: /s/ Donald C. Gause
                           --------------------------------
                           Donald C. Gause, Director

                           By: /s/William B. Meger
                           --------------------------------
                           William B. Meger, Director




                                       28

<PAGE>