UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(Mark One)

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

                      For the Year Ended December 27, 2002

                                       OR

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

         For the transition period from _______ to _______

         Commission file number:            001-14753
                                            ---------

                       INTERNATIONAL SMART SOURCING, INC.

        (Exact Name of Small Business Issuer as specified in its charter)

                  Delaware                                   11-3423157
         (State or other jurisdiction of                  (I.R.S. Employer
         incorporation or organization)                    Identification No.)

                              320 Broad Hollow Road
                              Farmingdale, NY 11735
                    (Address of principal executive offices)

                                 (631) 293-4650
                           (Issuer's telephone number)
      Securities registered under section 12(b) of the Exchange Act: None.
         Securities registered under section 12 (g) of the Exchange Act:
                          Common stock, Par value $.001
                   Redeemable Common Stock Purchase Warrants.

     Check  whether  the Issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports)  and (2) has been subject to such filing  requirements  for the past 90
days.

                   YES    X                                 NO
                      -------------                           -----------

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B is contained  in this form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

                   YES                                      NO     X
                       -------------                          -----------

       The issuer's net sales for the most recent fiscal year were $10,457,350.

     The aggregate market value of the voting stock held by non-affiliates based
upon the last sale price on March 3, 2003 was approximately $ 15,700,000.

     As of March 3, 2003,  the  Registrant  had  3,777,384  shares of its Common
Stock, $0.001 par value, issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  registrant's  definitive  Proxy  Statement  to be  issued  in
connection  with the 2001 annual meeting of  stockholders  are  incorporated  by
reference into Part III

<PAGE>

                                     Part I


Item 1. Description of Business


The Company

International  Smart  Sourcing,  Inc. was organized as a holding company for its
three wholly-owned subsidiaries (collectively, "ISS" or the Company):

o        Electronic Hardware Corp. (EHC)

o        International Plastic Technologies, Inc. (IPT) which does business as
         International Smart Sourcing and

o        Compact Disc Packaging Corp. (CDP).

                      Electronic Hardware Corporation (EHC)

Our EHC subsidiary has over 30 years of experience in the design,  marketing and
manufacture of injection molded plastic components used in industrial, consumer,
and  military  products.  We  also  offer  secondary  operations  on our  molded
products.  Services  such as hand  painting,  pad  printing,  hot  stamping  and
engraving  are  provided  at a  customer's  request.  EHC  generated  revenue of
$8,229,718 for the year ended December 27, 2002.

EHC meets a full range of its customers' needs by maintaining early and total
involvement, from the design and development to the ultimate manufacture and
packaging of the product. When a custom-made product is initially requested,
experienced EHC application engineers assist the customer during the concept
design stage, which we consider critical to the success of the manufacturing
process. During this stage, EHC application engineers draw upon our experience,
expertise and technological innovation to assist customers in reducing costs,
meeting accelerated market schedules and ensuring high quality workmanship.

Our  Farmingdale,  New York  facility  was  certified in January  2001,  for the
International  Quality  Standard  ("ISO")  9002, a  manufacturing  certification
required by European  companies and looked upon favorably  throughout the world.
ISO 9002  requires us to meet  certain  stringent  requirements  established  in
Europe to ensure that the facility's  manufacturing  processes,  equipment,  and
associated quality control systems will satisfy specific customer  requirements.
We believe that obtaining ISO 9002 certification will benefit EHC in the plastic
manufacturing market, both nationally and internationally.


EHC was awarded a government contract through Defense Supply Center Philadelphia
(DSCP) to sell knobs,  dials and pointers to the U.S.  military  and  government
customers worldwide. The contract was awarded in June 1999 for a possible 5-year
period.  DSCP has the option to extend the contract at the end of each  contract
year. The Company believes, but has no assurance,  that the contact will run for
the full 5 years until June 2004.

                                       2
<PAGE>

Over the past year EHC has  increased its sales by 17% due to the success of the
current  government  contract.  EHC  received  an Award from the  United  States
government  based on this contract,  for "Innovative  Business  Performer of the
Year Award for Small  Business" in 2000.  Based on the success of the government
contract,  we  believe  that we have put in  place  the  necessary  distribution
infrastructure  to provide  superior  service to the government not only on this
contract but on other contracts the government might look to place in 2003. This
same  infrastructure  will also provide the Company's  commercial knob customers
with superior  service.  In addition,  the distribution  infrastructure is a key
element to the success of our outsourcing of commercial product manufacturing to
lower costs. The Company anticipates  establishing a user-friendly website which
will allow customers to order directly and obtain stock and delivery information
on the web by the third quarter of 2003.

In  order  to  support  the  increased  number  of  shipments  generated  by the
government contract EHC has created an efficient automated order acquisition and
material  procurement  system.  An EDI  system is in place to  receive  delivery
orders from over 500 ordering  points  throughout the United States.  The system
handles on average  approximately  700 per week. This is a significant  increase
from the 100 per week prior to the government  contract.  The company intends to
migrate from an EDI system to a web based system.

                    International Plastic Technologies (IPT)

At  IPT,  we  specialize  in  assisting  companies  in  reducing  their  cost of
manufacturing by outsourcing  manufacturing to China. Through our offices in the
United States and China,  IPT has put in place the system  necessary to simplify
the transition of moving work to China. IPT's product specialization includes:

o        tooling

o        injection  molding and  secondary  operations

o        castings

o        mechanical assemblies

o        electronic  manufacturing  services

o        metal stampings

IPT generated revenue of $2,226,132 for the year ended December 27, 2002.

IPT has established an office in Shanghai, with engineering, quality, production
control and administrative personnel who provide:

o        project management

o        source selection

o        engineering coordination

o        quality assurance

o        logistics

o        cost reduction.

                                       3
<PAGE>

There are thirty-two manufacturers in China presently providing products for our
customers.  We believe that our service  provides our customers with significant
competitive  advantages.  Savings for customers range from fifteen percent to as
much as seventy-five  percent.  The more labor  intensive the product,  the more
savings are realized.  Due to the low cost of tooling,  the customer's return on
investment is improved and overhead costs are reduced.

                       Compact Disc Packaging Corp. (CDP)

Our CDP subsidiary is currently inactive. It generated revenue of $1,500 for the
year ended December 27, 2002. Its business is the  manufacturing,  marketing and
sale of a compact disc packaging system.

The Company was originally  formed in 1970 as EHC, a New York  corporation,  and
was  reorganized as of December 24, 1998 as a Delaware  holding  company for its
two wholly owned subsidiaries,  EHC and CDP. As part of the Reorganization,  the
stockholders  of each of the  subsidiaries  exchanged the  following  percentage
ownership in the  respective  subsidiaries  for the  percentage of shares of the
Company:  David  Kassel  exchanged  33% of EHC and 90% of CDP for  46.3%  of the
Company;  Andrew Franzone  exchanged 33% of EHC for 25.7% of the Company;  Harry
Goodman exchanged 33% of EHC for 25.7% of the Company; and David Cowan exchanged
10% of CDP for 2.3% of the Company. On May 7, 1999, IPT, a Delaware  Corporation
was formed.

We  maintain  our  principal   executive  offices  at  320  Broad  Hollow  Road,
Farmingdale,  New York 11735.  Our  telephone  number is (631)  293-0750 and our
Internet address is http://www.smart-sourcing.com.


Growth Strategy

Our IPT subsidiary is expanding its operations through specializing in assisting
companies to reduce their cost of  manufacturing  by outsourcing  work to China.
The Company has developed the  infrastructure  necessary to assist companies and
has established an office in Shanghai that has engineering,  quality, production
control and  administrative  personnel in place to assist in the  manufacture of
our customer's products. Our China office utilizes an intensive vendor selection
process  before placing  purchase  orders with  factories;  presently we have 32
factories manufacturing products for our customers.  The products that are being
manufactured for customers  include metal stamped parts and stamped  assemblies,
plastic parts, die cast parts and electronic assemblies.

Manufacturers  in  the  USA  are  faced  with  the  challenges  associated  with
globalization,  as shown by the reduction in the number of  manufacturers in the
U.S.  Based on our  experience  to date,  we are  able to  reduce  the cost of a
customers products, improve their return on investment and lower their overhead.
We believe that  outsourcing  provides  customers with a competitive  advantage.
However, there can be no assurance that we will be able to consummate,  maintain
or establish additional  manufacturing  relationships in China or achieve any of
our growth strategies.

                                       4
<PAGE>

Products

Outsourcing

Our outsourcing  operations  produce products  directly for the customers of the
Company.  All products are special  order and are not produced for the Company's
own inventory.

We  provide  a full  range of  outsourcing  including  source  selection,  price
negotiation,  quality assurance and transportation.  In most cases we charge our
customer an agreed upon price for the order. We include in the price the cost of
our services and our profit. Sometimes we act as a consultant. Our customer pays
the direct  costs of the order and an agreed upon fee to us. We assume  title of
the  manufactured  goods while in transit  from  China.  These goods are insured
while in transit.

Examples of types of products we make include a die-cast  housing for  vibratory
lab  mixers,  hinge  support  for  smoke  dampening  units  used in fire  safety
equipment,  clips to hold socks together, filler neck caps for trucking industry
fuel tanks and a portable power supply.

Control Knobs and Assemblies

Our EHC  subsidiary  manufactures  a full  line  of  instrument  control  knobs,
handles,  value-added  custom  molding,  dials and similar devices for consumer,
industrial and military electronics equipment.  EHC's knobs are used for precise
setting of switches,  on/off  switches,  volume controls and critical setting of
instrumentation  switches.  EHC manufactures many of the knobs to order based on
the customers' exacting  specifications as well as its standard line.  Customers
of EHC order the  knobs by  specifying  particular  descriptions  and  features,
including the shaft  diameter,  outer  diameter,  overall size,  height,  color,
illumination, dials and markings, such as lines, dots or numbers. EHC also has a
standard  product line of consumer,  industrial and military knobs available for
sale through catalogs.

EHC is in the  process  of  moving  manufacturing  to China in order to  improve
profits. As of December 27, 2002, the company has transferred  approximately 70%
of our  manufacturing  of  non-military  products to China and expects that 100%
will be  transferred  by the third  quarter of 2003.  This should  significantly
increase gross profits.

Overall,  the number of  different  types of knobs EHC has  manufactured  in its
history is in the order of tens of thousands.  Some knobs are manufactured  with
mechanical  devices  built  into the knob.  For  example,  one of the  Company's
locking knobs turns freely and sets upon depression, resisting shock, vibration,
or accidental  movement.  A clutch knob is one that continues to turn even after
the device has reached a pre-set  limit so that the pressure of the turning knob
does not damage the equipment.  Most knobs are resin-based and injection molded.
Some knobs are painted and some are  delivered  "as molded."  Certain  knobs are
made with  aluminum  inlays,  caps,  dials,  or skirts and may have  fittings of
screws, bushings, springs, or set screws.

EHC was awarded a  government  contract by Defense  Supply  center  Philadelphia
(DSCP) to provide knobs,  dials and pointers in June 1999 for a possible  5-year
period.  The government has the option to extend the contract on a yearly basis.
The Company believes,  but has no assurance,  that the contract will run for the
full 5 years until June 2004.

                                       5
<PAGE>

Pull Pack TM

CDP manufactures a compact disc packaging unit. CDP is currently inactive.

Competition

Outsourcing

We  believe  that  the  market  of  offshore  manufacturing  sources  is  highly
fragmented and that no one participant or small number of participants dominates
the market. We consider all manufacturers,  both domestic and foreign, generally
to be our  competition.  The principal direct  competition  experienced by us is
from factories in China and manufacturers  representatives and brokers acting on
behalf of those  factories.  We believe that our  competitive  strengths are the
knowledge  and   experience  of  our  domestic  and  Chinese   engineering   and
administrative staffs, their experience working together across two cultures and
the network of 32 qualified  factories in China with whom we have already placed
orders.  We intend to expand the number of qualified  factories with whom we can
place orders on behalf of our customers.

Knob and Assembly Manufacturing/Injection Molding

We believe that our segment of the plastic  injection molding industry is highly
fragmented and that no one participant  dominates the industry.  We believe that
the most important competitive factor in this industry is investment in tooling,
as the high cost of tooling  relative to the low revenue of individual  products
is a barrier to entry in this  market.  We  currently  own  approximately  1,500
tools,  which give us the  ability  to  manufacture  over  10,000  products  and
assemblies.  Other key competitive  factors in this industry  include quality of
products,  depth of industry  knowledge,  a sizable  customer  base,  ability to
provide products on a timely basis, level of experience, breadth of products and
services  offered,  responsiveness to customer requests and ability to produce a
wide  variety of  projects in a timely  manner and at a  competitive  price.  We
believe that our main competitors in the control knobs and components segment of
the injection  molding  industry are the  following:  Rogan  Corporation,  which
produces   instrument  and  consumer  knobs;   Philips   Plastic   Manufacturing
Corporation,  which  produces  consumer  knobs;  Davies Molding  Company,  which
produces  instrument knobs; and Aerospace Knob Company,  which produces military
avionic knobs.

Pull Pack TM

We believe  that the  primary  competition  for the Pull Pack TM is the  current
Jewel Box manufactured by Atlanta  Precision  Molding,  Auriga and International
Packaging  Corp.  Other  companies  have  developed   alternative  Compact  Disc
packaging.  Three of these packages are the Laserfile,  from Laserfile Inc., the
Utmost  Rotary CD Case,  from  Co-Joint  Corp.  and the Alpha  Pak,  from  Alpha
Enterprise, Inc.

Suppliers and Raw Materials

Our IPT  subsidiaries  are currently  manufacturing  products in China.  In such
manufacturing  projects  the  Chinese  manufacturers  will  arrange  for all raw
materials from local suppliers.  While we believe that there will be no shortage
of such materials overseas and that prices will remain  comparatively low, there
can be no assurance  that no shortages will occur.  In addition,  the Company is
subject to the risk of political or economic  dislocation in China,  which could
affect the availability or cost of raw materials.

                                       6
<PAGE>

EHC's principal raw materials consist of Lexan (polycarbonate),  nylon, ABS, and
polypropylene.  Such materials are generally  available  commodities sold to the
injection molding industry by a variety of suppliers;  the Company does not have
any oral or written contracts or agreements with any suppliers.

No one vendor  accounts for more than 10% of our purchases,  except for Shanghai
Foodstuffs  Export & Import  Corporation and Royal Screw Machine  Products.  The
loss of the Company's business relationship with either principal supplier could
have a material  adverse  effect on the Company.  The Company has  established a
relationship with a new company that can provide the same import/export services
as Shanghai Foodstuffs in efforts to minimize this risk. Notwithstanding,  while
a shortage of a particular  supplier's raw materials would not materially affect
the Company,  a general  shortage of raw materials  could  adversely  affect the
Company.  The Company has never experienced a shortage in raw materials and does
not  anticipate  any shortages to occur in the  reasonably  foreseeable  future,
however,  there can be no  assurance  that there  will not be a shortage  of raw
materials in the future.

Distribution Methods

EHC sells its products to industrial  customers either directly or through major
distributors. EHC never sells directly to retail consumers. Approximately 20% of
EHC's non  government  products  are  principally  sold  through  the  following
distributors:  Newark Electronics,  Allied Electronics,  Inc., Bisco Industries,
Inc., Alatec Electronics,  Inc. and Peerless Electronics, Inc. EHC does not have
oral or written contracts or agreements with such distributors.  The Company has
a government  contract through Defense Supply Center Philadelphia to sell knobs,
dials and pointers to the U.S. military and government customers worldwide.  The
defense contract  accounts for  approximately  65% of sales of EHC for 2002. All
sales orders are received  from a single  source,  the Defense  Supply Center of
Philadelphia,  and  were  shipped  during  2002 to over  five  hundred  separate
locations.

Patents, Trademarks, Licenses and Royalty Rights

On June 16, 1998, EHC was issued Patent No. 5,765,449, which expires on June 16,
2015. EHC has submitted a patent application on a tactile detent knob.  However,
there can be no assurance that such patent will be issued.

The Company may apply for  additional  patents  relating to other aspects of its
production.  There can be no  assurance  as to the  degree of  protection,  that
existing or future patents may afford the Company,  if any, or that  competitors
will not develop similar or superior  methods or products outside the protection
of any patent issued to the Company.

Employees

As of December 27, 2002, we had a total of 40 employees based domestically. 5 of
these  employees  work on a  part-time  basis.  23  employees  work in sales and
administration,  while 12 employees  are factory  workers.  The  Shanghai  China
office  had  a  total  of 16  employees  in  engineering,  quality  control  and
administrative support.

We believe we have a satisfactory relationship with our unionized labor and have
never experienced a work stoppage.  The current collective  bargaining agreement
with Local 531 of the  International  Brotherhood  of  Teamsters,  AFL-CIO,  was
renewed effective May 10, 2001 for a period of three years expiring May 9, 2004.
12 factory  employees are  represented by the collective  bargaining  agreement.
Union employees are covered by the Sick & Welfare Fund,  Local 531, to which the
Company contributes a specified amount each year.

                                       7
<PAGE>

Trade Matters in China

On December 11, 2001, China became a member of the World Trade Organization.  We
expect  that  China's  entry into the World Trade  Organization  will be a great
benefit.  We  anticipate  that it will improve  economic  relations  between the
United States and China and increase the speed of its economic  reform  process.
As a result of China's entry,  industrial tariffs will be reduced, there will be
an increased  liberalization regarding trade provisions and increases in service
and other reforms that China must adhere to in accordance with its membership in
the World  Trade  Organization.  However,  China's  entry  into the World  Trade
Organization is relatively  recent and we anticipate that there will be friction
between  China and other nations as China  adjusts to the new  requirements  and
policies.  Additionally, on December 20, 2001 Congress ordered the International
Trade  Commission to launch an  examination  into the tool,  die and  industrial
molding  industries  in order  to  determine  whether  local  manufacturers  are
suffering as a result of unfair trade  practices  from  countries such as China.
The information was compiled over a ten-month period. A negative report from the
International  Trade Commission could have potentially led to Congress  enacting
legislation which would cause us to lose our competitive advantage.  After their
the  investigation,  the  International  Trade  Commission found no unfair trade
practices and the Company has not experienced any effect from this to date.


Segment Information

Segment  information  is set  forth  in  Note 21 to the  Consolidated  Financial
Statements  referred to in the  "Financial  Statements and  Supplementary  Data"
section hereof and incorporated herein by reference.

Item 2. Property


     We operate from an  approximately  20,000 square foot  facility  located in
     Farmingdale,  New York.  The  facility is owned and  operated by K&G Realty
     Associates, a partnership owned by David L. Kassel, our Chairman, and Harry
     Goodman,  our  Vice  President..  Our  lease,  currently  under  a  10-year
     extension,   expires  in  December  2005.  The  annual  rent  is  currently
     approximately  $173,000 per year, and provides for annual adjustments equal
     to the greater of the increase in the Consumer Price Index or 5%.  Pursuant
     to a rider to the lease  agreement  dated as of March 1, 1998, we shall pay
     as  additional  rent,  any and all  real  property  taxes  for the  demised
     premises in excess of $26,000  per annum.  In 2002,  the real estate  taxes
     were approximately $35,000 and our share was $9,000. We lease approximately
     6,000 square feet of office  space in  Shanghai,  China for $5,300 a month.
     The lease is for a 24 month period expiring February 28, 2003. The lease is
     in process of renewal  and is  currently  on a month to month  basis  until
     renewed.

     The mortgage on the premises in the amount of $417,830 at December 27, 2002
     is guaranteed by EHC. The guarantee expires on November 28, 2010. There are
     two  events/circumstances  that would  require the Company to perform under
     the guarantee: The first is if the landlord defaults on their mortgage, due
     to lack of payment. The second, is if the landlord were in violation of any
     of the  covenants as set forth in the  mortgage  agreement.  The  Company's
     maximum potential liability would be $429,726 if the landlord defaulted. If
     the Company was to default on the mortgage, the mortgage company would take
     possession of the property and all machinery and equipment, with a net book
     value of $474,186 at December 27, 2002.

                                       8
<PAGE>

Item 3. Legal Proceedings

     The  Company  was named as a  defendant  in six  employment  discrimination
     complaints,  and on October 2002 settled these  complaints for an aggregate
     amount of approximately $42,000.  Accordingly, the Company has paid $21,000
     and accrued the balance of $21,000 as of December 27, 2002.


Item 4. Bank Debt


     In April 2001,  we closed on a revolving  line of credit  agreement  with a
     bank that provided for a maximum borrowing of up to $1,500,000,  subject to
     certain  conditions,  at an  interest  rate of  prime,  which  was 4.25% at
     December 27, 2002, plus 1.75%. The loan is secured by substantially all the
     assets  of  the  company  and  is   unconditionally   guaranteed  by  three
     officers/stockholders, each limited to $250,000.

     The bank that provided the Company with a credit facility was closed by the
     Connecticut Banking Department on June 27, 2002, with the F.D.I.C. assuming
     receivership  of the failed bank.  Management's  plans with respect to this
     matter include,  replacing the financing arrangement through an alternative
     lending  institution,  raising  additional  funds  through  equity  or debt
     financing and ultimately achieving profitable operations.  The F.D.I.C. has
     continued  to service  the  Company's  credit  facility.  The Company is in
     discussions  with  various  financial  institutions  to replace the line of
     credit. The balance outstanding on the line of credit at December 27, 2002,
     including accrued interest, amounted to $1,028,928

     On March 6, 2003,  the  Company  contacted  the  F.D.I.C.  regarding  their
     outstanding loan. The Company paid the accrued interest totaling $29,275 to
     avoid being put into a pooling group,  which could ultimately result in the
     loan being  sold.  The Company is in  discussions  with  various  financial
     institutions  to replace  its line of credit.  In March  2003,  the Company
     contracted a broker who specializes in obtaining lines of credit.  There is
     no guarantee that this  engagement will secure a new line of credit but the
     company  feels  confident  that  they  will be able to obtain a new line of
     credit. In the interim, the F.D.I.C. has continued to service the Company's
     credit  facility,  although it is  uncertain at this time what the ultimate
     disposition of the facility will be.

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

     No matters  were  submitted to  shareholders  for a vote during the quarter
     ended December 27, 2002.







                                       9
<PAGE>



                                     Part II


Item 5. Market for Common Equity and Related Matters


We completed our initial public offering pursuant to a Registration Statement on
Form SB-2 Registration No. 333-48701,  declared  effective on April 23, 1999. As
of March 3, 2003, we had outstanding 3,777,384 shares of Common Stock $ .001 par
value ("Common Stock").  Our Common Stock is traded on the NASDAQ Bulletin Board
under the symbol ISSG.

The following  table sets forth the high and low bid prices for the Common Stock
as  reported  on the  Nasdaq  Small  Cap.  The high and low bid  prices  reflect
inter-dealer  prices,  without  mark-up,  mark-down or  commission,  and may not
represent actual transactions.

<TABLE>
<CAPTION>

                                                        Common Stock Sale Prices
Fiscal 2002                                           High                      Low
<S>                                                   <C>                       <C>
First Quarter                                         4.00                      3.90
Second   Quarter                                      3.50                      2.05
Third Quarter                                         4.05                      2.15
Fourth Quarter                                        4.60                      3.50

                                                        Common Stock Sale Prices
Fiscal 2001                                           High                      Low

First Quarter                                         4.875                     3.3125
Second   Quarter                                      5.80                      3.05
Third Quarter                                         5.20                      4.15
Fourth Quarter                                        5.20                      4.00
</TABLE>

On March 3, 2003 there were approximately 138 holders of record of our 3,777,384
outstanding shares of Common Stock.

On March 3, 2003,  the last sale price of the Common  Stock as  reported  on the
Nasdaq Bulletin Board was $ 4.15.

There are 1,755,734  warrants of the Company currently  outstanding which may be
exercised  for  1,800,193  shares of common  stock of the Company at an exercise
price of $4.93 a share.  For the warrants issued with the Company's IPO in April
1999,  the  number of shares  underlying  the  warrants  ("IPO  Warrants")  were
adjusted, due to the issuance of 53,334 warrants, that were issued in connection
with the Company's  private  placement of 333,334  shares of its common stock in
June  and  July of  2000.  Of the  1,437,500  warrants  issued  with the sale of
1,437,500  shares of common stock from the  aforementioned  IPO,  these warrants
were for the  issuance of  1,437,500  shares of common stock at $5.00 per share.
The dilution, from the aforementioned private placement, increased the amount of
shares underlying the IPO warrants to 1,471,859, after taking into consideration
the exercise of 10,100 of the IPO warrants in the year ended  December 29, 2000.
The  remaining  1,427,400  IPO  warrants,  for the purchase of 1,471,859  common
shares,  currently have an exercise price of $4.85 per share. In addition to the
IPO warrants, the IPO called for an issuance of 125,000 underwriter warrants for
the  purchase  of  125,000  shares of common  stock at $7.20  per  share.  These
warrants  were  adjusted as well due to the  aforementioned  private  placement.
These 125,000  underwriter  warrants are now exercisable at $6.91 per share. The
number of shares issuable under the underwriter warrants were not required to be
adjusted due to the aforementioned dilution.

                                       10
<PAGE>

The  effectiveness  of the  registration  for the common  shares  issuable  upon
exercise of the warrants expired in April 2001 and is not currently active. In a
letter dated April 26,  2001,  the Company  notified its transfer  agent that it
must  not  permit  the  exercise  of any  warrants  of  the  Company  until  the
registration  had  been  declared  effective  by  the  Securities  and  Exchange
Commission.  The Company is in the process of having its registration  statement
for the shares declared effective.

Dividend Policy

We intend, for the foreseeable  future, to retain future earnings for use in our
business.  The  payment of cash  dividends,  if any, in the future is within the
discretion of the Board of Directors and will depend upon our earnings,  capital
requirements, financial condition, and other relevant factors.


Item 6. Management's Discussion and Analysis

The  following  discussion  should be read in  conjunction  with the  historical
financial  statements,  including  the notes  thereto,  of the Company  included
elsewhere herein.

Results of Operations

For the year ended  December  27, 2002  compared to the year ended  December 28,
2001:

Net Sales

Net Sales for the year ended December 27, 2002 were $10,457,350,  as compared to
net sales of $9,159,643  for the year ended  December 28, 2001.  The increase of
$1,297,707,  or 14 % for the period was  attributed  to an increase in shipments
under the contract with the Defense Supply Center in Philadelphia  (DSCP) and an
increase in sales volume by IPT of completed production and tooling orders.

Shipments  under the government  contract  increased by  approximately  45%, IPT
increased 8% and was offset by a 17% decrease in EHC commercial business.

Gross Profits

The Company  realized an overall  gross profit  margin  percentage  for the year
ended  December 27, 2002 of 32.3%,  which  represents an increase from the 30.9%
experienced  during the year ended  December  28,  2001.  This  increase  can be
attributed to the increase in the realized gross profit on sales to the DSCP and
IPT production  orders, and decreases in factory overhead costs of approximately
$500,000.



                                       11

<PAGE>


Selling and Shipping

Selling and shipping expenses for the year ended December 27, 2002 were $863,694
as compared to $1,150,055  for the year ended December 28, 2001. The decrease of
$286,361  or 25% for the  period  is  primarily  attributable  to  decreases  in
consulting  fees of  approximately  $161,000 and payroll  cost of  approximately
$120,000.  Consulting  fees  were  reduced  in the area of  information  systems
support and the payroll reductions were accomplished  through layoffs of factory
personnel.

General, and Administrative Expenses

General and  administrative  expenses for the year ended  December 27, 2002 were
$2,639,109 as compared to $2,678,003  for the year ended  December 28, 2001. The
decrease  of  $38,894  or 1% for  the  period  is  primarily  attributable  to a
reduction in advertising expenses.

Impairment Charge - Long Lived Assets

In December  2001 the Company  evaluated  its  carrying  value for fixed  assets
acquired as part of its 1998  acquisition of CDP, and determined that impairment
in value had incurred for the remaining  unamortized balance of the fixed assets
of $254,613.

Liquidity and Capital Resources

The Company's liquidity needs arise from working capital  requirements,  capital
expenditures,  and principal and interest payments.  Historically, the Company's
primary  source of  liquidity  has been cash  flows  generated  internally  from
operations.  Because cash flows were  insufficient  to meet the  Company's  cash
needs,  the Company  supplemented  its cash needs with bank  borrowings and long
term equipment  financing.  The Company's cash increased to $456,727 on December
27, 2002 from $146,478 on December 28, 2001.

Cash flows used in operating activities was $288,405 for the year ended December
27, 2002 on a net loss of $244,274.  The increase in accounts  receivable is the
result of  increased  sales for the period.  The  increase in  inventory  is the
result of the Company's buildup of inventory to respond to increased  government
orders and shipments.  The decrease in prepaid expenses and other current assets
is a result of the expensing of deposits on materials and molds  associated with
tooling and production orders that were completed during the year ended December
27, 2002.  Cash provided from  investing  activities for the year ended December
27, 2002 was  $120,158,  which  consisted of cash of $35,535 for the purchase of
tooling,  molds,  machinery  and  equipment  and a decrease of $155,693 in notes
receivable from related parties.

Net cash provided by financing  activities  for the year ended December 27, 2002
was $478,496.  Cash of $667,120 was provided from the bank line of credit.  Cash
of  $120,509  was used to make  principal  payments on loans and the bank credit
line and $68,115 to make capital lease repayments.

In April 2001,  we closed on a revolving  line of credit  agreement  with a bank
that provides for a maximum  borrowing of up to  $1,500,000,  subject to certain
conditions,  at an  interest  rate of prime plus  1.75%.  The loan is secured by
substantially all the assets of the Company and is unconditionally guaranteed by
three  officers/stockholders,  each limited to $250,000.  The agreement provides
that, among the other requirements, we maintain a tangible net worth of at least
$1,750,000 from the date of the agreement to and including December 30, 2001 and
$2,000,000  through  April  2003,  when  the  outstanding  balance  is due.  The
agreement  was void on 6/27/02  when the bank that  provided  the Company with a
credit  facility was closed by the  Connecticut  Banking  Department on June 27,
2002, with the F.D.I.C. assuming receivership of the failed bank.

                                       12
<PAGE>

The  independent  auditors'  report  on  the  Company's  consolidated  financial
statements  for the year ended  December  27, 2002  included  elsewhere  herein,
contains  an  explanatory  paragraph  about  the  Company's  ability  as a going
concern.  For the  third  and  fourth  quarters  of 2002 the  Company  generated
sufficient  funds to cover the cost of  operations.  The  Company is  projecting
continued profitability for 2003. Notwithstanding these projections, the Company
is in discussions  with various  financial  institutions  to replace its line of
credit.  In March  2003,  the Company  contracted  a broker who  specializes  in
obtaining  lines of credit.  There is no  guarantee  that this  engagement  will
secure a new line of credit,  but the Company  feels  confident  that it will be
able to obtain a new line of credit. In the interim,  the F.D.I.C. has continued
to service the Company's credit facility,  although it is uncertain at this time
what the ultimate  disposition of the facility will be. During the quarter ended
September 27, 2002,  three  officers /  stockholders  of the Company  loaned the
Company a total of an additional  $150,000,  with interest at 10% per annum. The
officers/stockholders  are forgoing  any  repayment of principal on all loans to
the Company for a period of one year.

In the event  that the  Company  is unable to find  other  sources  of credit or
working capital, operations of the Company would have to be limited.

Note Receivable  Reserve and Exclusive Supply Agreement  between the Company and
Azurel Ltd.

We entered into an exclusive  supply  agreement with Azurel Ltd.  (Azurel) dated
July 7, 1999 ("the Agreement"). Pursuant to the Agreement, we loaned $500,000 to
Azurel in exchange  for the  exclusive  right to supply  Azurel with any and all
products imported by or on behalf of Azurel.  In addition,  the Company received
warrants,  expiring  December 31,  2004,  to purchase  100,000  shares of Azurel
common  stock at a  purchase  price of $1.50  per  share.  The  Company  has not
received any orders through December 2002.

On December 23, 1999,  the terms of the loan  agreement  were extended  allowing
principal  payments to begin on January 15, 2000. In consideration for extending
the principal  payments,  the Company received an additional  50,000 warrants to
purchase  shares of Azurel Ltd.  Common stock at an exercise  price of $1.50 per
share.

In June 2000, the Company renegotiated the loans it had made to Azurel Ltd. This
agreement  granted the Company a security interest in the inventory of Azurel as
collateral for the loan and accrued interest.

In consideration of the security agreement,  the Company granted an extension of
maturity of the notes to January 31, 2001.

In February  2001,  the borrower  declared  bankruptcy  under  Chapter 11 of the
Federal  bankruptcy code in the Bankruptcy Court for the District of New Jersey,
Newark Division. As of December 29, 2000 the Company had reserved for the entire
note and interest receivable aggregating $517,616.

On  January  29,  2002,   the  Bankruptcy   Court  approved   Azurel's  Plan  of
Reorganization.  Pursuant  to the terms of the Plan,  in August 2002 the Company
received   1,682,844   shares  of  the  reorganized   debtor  which   represents
approximately  3 shares for each  dollar  owed to the Company at the time of the
filing of the bankruptcy petition, which aggregated to $517,616. The Company has
valued these shares at $.05 per share, and accordingly has recorded other income
of $84,142  during  2002.  The  Company  has  determined  that these  marketable
securities are to be held for an indefinite  period and has thus classified them
as available for sale.  Unrealized gains or losses on these securities are added
to stockholders'  equity as accumulated  other  comprehensive  gain or loss. The
Company has not recorded any unrealized gain or loss for the year ended December
27, 2002.

                                       13
<PAGE>

Cautionary Factors Regarding Future Operating Results

The matters  discussed  in this form 10-KSB other than  historical  material are
forward-looking  statements.  Any such  forward-looking  statements are based on
current expectations of future events and are subject to risks and uncertainties
which could cause actual results to vary materially from those indicated. Actual
results could differ due to a number of factors, including negative developments
relating to unforeseen order cancellations or push outs, the company's strategic
relationships,  the impact of intense  competition  and changes in our industry.
The Company assumes no obligation to update any forward-looking  statements as a
result of new information or future events or developments.

Critical Accounting Policies

The Securities and Exchange Commission, or SEC, has requested that filers report
their  critical  accounting  policies.  The  SEC  defines  "critical  accounting
policies" as those that require  application  of  management's  most  difficult,
subjective or complex judgments, often as a result of the need to make estimates
about the effects of matters  that are  inherently  uncertain  and may change in
subsequent periods.

Our financial  statements are prepared in accordance with accounting  principles
generally  accepted  in  the  United  States  of  America.  Preparation  of  the
statements in accordance with these  principles  require that we make estimates,
using  available  data and our  judgment  for such  things  as  valuing  assets,
accruing liabilities,  and estimating expenses.  The following is a list of what
we feel  are the  most  critical  estimations  that we make  when  preparing  of
financial statements.

Accounts Receivable - Allowance for Doubtful Accounts

We routinely  review our accounts  receivable,  by customer  account  aging,  to
determine the  collectibility  of the accounts  based on  information we receive
from the customer, past history, and economic conditions. In doing so, we adjust
our  allowance  accordingly  to reflect  the  cumulative  amount that we feel is
uncollectible.  This  estimate  may vary  from  the  proceeds  that we  actually
collect. If the estimate is too low we may incur higher bad debt expenses in the
future  resulting  in lower net  income.  If the  estimate  is too high,  we may
experience lower bad debt expense in the future resulting in higher net income.

Inventories - Slow Moving and Obsolescence

We estimate and reserve amounts related to slow moving and obsolete  inventories
that result from changing market  conditions.  We develop our estimates based on
the  quantity  and  quality of  individual  classes  of  inventory  compared  to
historical and projected  sales trends.  Inventory at December 27, 2002 has been
reduced by a reserve of $87,000,  based on our  assessment of probable  exposure
related  to  excess  and  obsolete  inventories.   Major  uncertainties  in  our
estimation process include future industry and economic trends,  future needs of
our  customers,  our ability to retain or replace our customer  base,  and other
competitive  changes  in the  market  place.  Significant  changes in any of the
uncertainties  used in estimating the loss exposure could result in a materially
different net realizable value of our inventory.

                                       14
<PAGE>

Fixed Assets - Depreciation

We maintain  buildings,  machinery and equipment,  and furniture and fixtures to
operate our business.  These assets have extended lives. We estimate the life of
individual  assets to spread the cost over the expected life. The basis for such
estimates  is  use,  technology,  required  maintenance,  and  obsolescence.  We
periodically  review these estimates and adjust them if necessary.  Nonetheless,
if we over estimate the life of an asset(s),  at a point in the future, we would
have to incur higher depreciation costs or a write-off,  lowering net income. If
we under estimate the life of an asset(s) we would absorb too much  depreciation
in the early years and experience  higher net income in the later years when the
asset is still in service.

Item 7. Financial Statements

<TABLE>
<CAPTION>

Index to Consolidated Financial Statements
                                                                                        Page
<S>                                                        <C> <C>                        <C>
Independent Auditors' Report - for the Year Ended December 27, 2002                     F-1
Independent Auditors' Report - for the Year Ended December 28, 2001                     F-2
Consolidated Balance Sheet                                                              F-3
Consolidated Statements of Operations                                                   F-4
Consolidated Statements of Changes in Stockholder's Equity                              F-5
Consolidated Statements of Cash Flows                                                   F-6
Notes to Consolidated Financial Statements                                              F-7 to F-20

</TABLE>

                                       15
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors of
International Smart Sourcing, Inc. and Subsidiaries
Farmingdale, New York


We have audited the  accompanying  consolidated  balance sheet of  International
Smart  Sourcing,  Inc. and  Subsidiaries  (collectively  the  "Company"),  as of
December 27, 2002 and the related consolidated statements of operations, changes
in  stockholders'  equity  and  cash  flows  for  the  year  then  ended.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material 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
consolidated  financial  statement  presentation.  We  believe  that  our  audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Company as of December 27, 2002 and the consolidated results of their operations
and their  cash  flows for the year then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going  concern.  As discussed in Note 2(a) to the
consolidated financial statements, the Company has suffered recurring losses and
is not in compliance with a financial covenant on its credit line, which raises
substantial doubt about its ability to continue as a going concern. Management's
plans  in  regard  to  these  matters  are  also  described  in Note  2(a).  The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.


                                                    /s/Grassi & Co., CPAs, P.C.
                                                    Grassi & Co., CPAs, P.C.
                                                    Certified Public Accountants

New York, New York
March 6, 2003


                                      F-1
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors of
International Smart Sourcing, Inc. and Subsidiaries
Farmingdale, New York

We have audited the accompanying consolidated statements of operations,  changes
in  stockholders'  equity and cash flows of International  Smart Sourcing,  Inc.
(formerly   ChinaB2Bsourcing.com,   Inc.)  and  Subsidiaries  (collectively  the
"Company"),  for the year ended December 28, 2001. These consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material 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  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  results of operations and
changes in stockholders'  euity and cash flows of the Company for the year ended
December 28, 2001 in conformity with accounting principles generally accepted in
the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going  concern.  As discussed in Note 2(a) to the
financial  statements,  the Company has suffered  recurring losses and is not in
compliance  with  a  financial   covenant  on  its  credit  line,  which  raises
substantial doubt about its ability to continue as a going concern. Management's
plans  in  regard  to  these  matters  are  also  described  in Note  2(a).  The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.


                                                    /s/Feldman Sherb & Co., P.C.
                                                    Feldman Sherb & Co., P.C.
                                                    Certified Public Accountants

New York, New York
March 1, 2002

                                      F-2

<PAGE>
               INTERNATIONAL SMART SOURCING, INC. AND SUBSIDIARIES
             (FORMERLY CHINAB2BSOURCING.COM, INC. AND SUBSIDIARIES)


                           CONSOLIDATED BALANCE SHEET

                                December 27, 2002

<TABLE>
<CAPTION>

                                     ASSETS

CURRENT ASSETS:
<S>                                                                                <C>
     Cash                                                                            $        456,727
     Accounts receivable - net of allowance for
        doubtful accounts of $12,536                                                        1,096,878
     Inventories                                                                            1,471,382
     Prepaid expenses and other current assets                                                253,954
                                                                                       --------------
        TOTAL CURRENT ASSETS                                                                3,278,941

Property and equipment - net                                                                  474,186

Marketable securities available for sale                                                       84,142
                                                                                       --------------

                                                                                     $      3,837,269
                                                                                       ==============



                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable and accrued expenses                                           $      1,243,465
     Deferred revenue                                                                          37,143
     Line of credit and accrued interest                                                    1,028,928
     Current portion of long term debt (including $30,171 to officer / shareholders)          198,597
     Current portion of obligations under capital leases                                       38,758
                                                                                       --------------
        TOTAL CURRENT LIABILITIES                                                           2,546,891

     Long term debt (including $260,825 to officer / shareholders)                            365,958
     Obligations under capital leases                                                          55,836
                                                                                       --------------

        TOTAL LIABILITIES                                                                   2,968,685
                                                                                       --------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Preferred Stock, $.001 par value, 1,000,000  shares authorized, no shares                      -
        issued or outstanding
     Common Stock, $0.001 par value, 10,000,000 shares authorized,
        issued and outstanding 3,777,384                                                        3,777
     Additional paid-in capital                                                             8,045,937
     Accumulated deficit                                                                   (7,181,130)
                                                                                       --------------
        TOTAL STOCKHOLDERS' EQUITY                                                            868,584
                                                                                       --------------

                                                                                     $      3,837,269
                                                                                       ==============



 The accompanying notes are integral part of these consolidated financial statements.

</TABLE>

                                      F - 3
<PAGE>


               INTERNATIONAL SMART SOURCING, INC. AND SUBSIDIARIES
             (FORMERLY CHINAB2BSOURCING.COM, INC. AND SUBSIDIARIES)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                            Years Ended
                                                                             -------------------------------------------
                                                                                 December 27,           December 28,
                                                                                    2002                   2001
                                                                             -------------------    --------------------
<S>                                                                      <C>                     <C>
NET SALES                                                                $           10,457,350  $            9,159,643
COST OF GOODS SOLD                                                                    7,081,118               6,326,445
                                                                             -------------------    --------------------

       GROSS PROFIT                                                                   3,376,232               2,833,198
                                                                             -------------------    --------------------

OPERATING EXPENSES
       Selling and shipping                                                             863,694               1,150,055
       General and administrative                                                     2,639,109               2,678,003
       Impairment charge - long lived assets                                                  -                 254,613
                                                                             -------------------    --------------------

           TOTAL OPERATING EXPENSES                                                   3,502,803               4,082,671
                                                                             -------------------    --------------------

LOSS FROM OPERATIONS                                                                   (126,571)             (1,249,473)

       Interest and other income                                                        113,813                 142,535
       Interest and other expenses                                                     (231,516)               (164,916)
                                                                             -------------------    --------------------

NET LOSS                                                                 $             (244,274) $           (1,271,854)
                                                                             ===================    ====================

NET LOSS PER SHARE - BASIC AND DILUTED                                   $                (0.06) $                (0.34)
                                                                             ===================    ====================

WEIGHTED AVERAGE COMMON SHARES                                                        3,762,000               3,735,000
                                                                             ===================    ====================



 The accompanying notes are integral part of these consolidated financial statements.
</TABLE>

                                     F - 4
<PAGE>


               INTERNATIONAL SMART SOURCING, INC. AND SUBSIDIARIES
             (FORMERLY CHINAB2BSOURCING.COM, INC. AND SUBSIDIARIES)

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>


                                                      Common Stock           Additional
                                               ---------------------------     Paid In       Accumulated
                                                  Shares         Amount        Capital         Deficit         Total
                                               ------------   ------------   ------------   -------------   ------------
<S>              <C> <C>                         <C>         <C>            <C>            <C>             <C>
Balance December 29, 2000                        3,725,934   $      3,726   $  7,715,713   $   5,665,002)  $  2,054,437

    Net loss                                             -              -              -      (1,271,854)    (1,271,854)
    Issuance of stock to consultants                35,000             35        168,715               -        168,750
    Issuance of stock options to consultants             -              -         87,500               -         87,500
                                               ------------   ------------   ------------   -------------   ------------

Balance December 28, 2001                        3,760,934          3,761      7,971,928      (6,936,856)     1,038,833

    Net loss                                             -              -              -        (244,274)      (244,274)
    Issuance of stock to consultants                16,450             16         74,009               -         74,025
                                               ------------   ------------   ------------   -------------   ------------

Balance December 27, 2002                        3,777,384   $      3,777   $  8,045,937   $  (7,181,130)  $    868,584
                                               ============   ============   ============   =============   ============








 The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                       F-5
<PAGE>


               INTERNATIONAL SMART SOURCING, INC. AND SUBSIDIARIES
             (FORMERLY CHINAB2BSOURCING.COM, INC. AND SUBSIDIARIES)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                                  Years Ended
                                                                                         ------------------------------
                                                                                          December 27,    December 28,
                                                                                             2002             2001
                                                                                         -------------   --------------
<S>                                                                                    <C>              <C>
Cash flows from operating activities:
     Net loss                                                                          $     (244,274)  $   (1,271,854)
                                                                                         -------------   --------------

Adjustments to reconcile net loss to net cash used in operating activities:
        Non-cash expenses related to issuance of stock                                         74,025          256,250
        Depreciation  and amortization                                                        200,897          222,135
        Non-cash item related to recovery of debt                                             (84,142)               -
        Forgiveness of interest payable to officer                                                  -          (21,444)
        Impairment charge - long lived assets                                                       -          254,613

Changes in assets and liabilities:
     Accounts receivable                                                                     (320,478)         551,803
     Inventories                                                                             (231,761)         119,353
     Prepaid expenses and other current assets                                                217,055         (158,085)
     Other assets                                                                              79,514          207,666
     Accounts payable and accrued expenses                                                    185,248         (308,470)
     Due to related party                                                                     -                (61,752)
     Deferred revenue                                                                        (164,489)          93,689
                                                                                         -------------   --------------
           Total adjustments                                                                  (44,131)       1,155,758
                                                                                         -------------   --------------

Net cash used in operating activities                                                        (288,405)        (116,096)
                                                                                         -------------   --------------

Cash flows from investing activities:
     Note receivable from related parties                                                     155,693           54,563
     Expenditures for property and equipment                                                  (35,535)        (224,927)
                                                                                         -------------   --------------

Net cash provided by (used in) investing activities:                                          120,158         (170,364)
                                                                                         -------------   --------------

Cash flows from financing activities:
     Capital lease repayments                                                                 (68,115)         (94,635)
     Proceeds from borrowings                                                                 667,120          608,217
     Principal payments and repayment of loans                                               (120,509)        (268,857)
                                                                                         -------------   --------------

Net cash  provided by financing activities                                                    478,496          244,725
                                                                                         -------------   --------------

Increase (decrease) in cash                                                                   310,249          (41,735)

Cash - beginning of year                                                                      146,478          188,213
                                                                                         -------------   --------------

Cash - end of year                                                                     $      456,727   $      146,478
                                                                                         =============   ==============

Supplemental disclosure of cash flow information:
     Cash paid during the year for interest                                            $      174,852   $      164,916
                                                                                         =============   ==============
     Purchase of equipment through capital leases payable                              $        9,140   $       77,011
                                                                                         =============   ==============
     Conversion of accounts payable to note payable                                    $       90,000   $       12,982
                                                                                         =============   ==============







The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                      F - 6
<PAGE>

               INTERNATIONAL SMART SOURCING, INC. AND SUBSIDIARIES
             (formerly ChinaB2Bsourcing.com, Inc. and Subsidiaries)


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               Years Ended December 27, 2002 and December 28, 2001



1.   BUSINESS OF THE COMPANY

     International Smart Sourcing,  Inc. (formerly  ChinaB2Bsourcing.com,  Inc.)
     ("International")  was  incorporated  in  February  1998 in  Delaware  as a
     holding company for the purpose of acquiring the common stock of Electronic
     Hardware  Corp.  ("EHC")  and  Compact  Disc  Packaging  Corp.  ("CDP")  in
     contemplation of an initial public offering of  International's  stock (the
     "Offering"),  which was successfully  completed in April of 1999. On May 7,
     1999   International   formed  a  company  called   International   Plastic
     Technologies, Inc., ("IPT") a Delaware corporation.

     Hereinafter,  International, EHC, CDP, and IPT are collectively referred to
     as the "Company".

     The Company specializes in the marketing, out-sourcing and manufacturing of
     injection  molded  plastic  components,  products  and  assemblies  used in
     industrial,  consumer and  military  products.  The  Company,  performs its
     manufacturing functions, and other services for its customers,  through its
     United States  facilities  and through their  out-sourcing  contacts in the
     People's Republic of China.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a)  Basis of Presentation - The accompanying consolidated financial
            statements have been prepared assuming that the Company will
            continue as a going concern. The Company has incurred losses of
            approximately $244,000 and $1,272,000, for the years ended December
            27, 2002 and December 28, 2001, respectively, and has an accumulated
            deficit of approximately $7,181,000 at December 27, 2002. The
            Company has not complied with its credit line's minimum tangible net
            worth covenant. In addition, the bank that provided the Company with
            its credit facility was closed by the Connecticut Banking Department
            on June 27, 2002, with the F.D.I.C. assuming receivership of the
            failed bank. These conditions raise substantial doubt about the
            Company's ability to continue as a going concern. Management's plans
            with respect to this matter include, replacing its financing
            arrangement through an alternative lending institution, raising
            additional funds through equity or debt financing and / or
            ultimately achieving profitable operations. The Company is in
            discussions with various financial institutions to replace its line
            of credit. In the interim, the F.D.I.C. has continued to service the
            Company's credit facility, although it is uncertain at this time
            what the ultimate disposition of the facility will be. The
            accompanying consolidated financial statements do not include any
            adjustments that might be necessary should the Company be unable to
            continue as a going concern.

       (b)   Fiscal Year - The Company operates on a "52-53 Week" reporting year
             ending the last Friday of the month.

       (c)   Use of Estimates - The preparation of financial statements in
             conformity with accounting principles generally accepted in the
             United States of America requires management to make estimates and
             assumptions that affect the reported amounts of assets and
             liabilities and disclosure of contingent assets and liabilities at
             the date of the financial statements and the reported amounts of
             revenue and expenses during the reporting period. Actual results
             could differ from those estimates.

       (d)   Recognition of Revenue - Income from sales of goods is recognized
             when the orders are completed and shipped, provided that collection
             of the resulting receivable is reasonably assured. Substantially
             all of the Company's goods are shipped F.O.B. shipping point.
             Amounts billed to customers are recorded as sales while the
             shipping costs are included in cost of sales. The Company's return
             policy on defective parts is as follows: Custom parts may only be
             exchanged for replacement parts within 30 days of the invoice.
             Catalogue parts, which can be resold, may be exchanged for
             replacement parts or for a refund.

                                      F-7
<PAGE>

       (e)   Principles of Consolidation - The consolidated financial statements
             include the accounts of the Company and its subsidiaries. All
             material intercompany transactions have been eliminated.

       (f)   Inventories - Inventories are stated at the lower of cost or
             market. Cost is determined principally by the use of the first-in,
             first-out method.

       (g)   Depreciation and Amortization - Fixed assets are depreciated on the
             straight-line basis over the estimated useful lives of the related
             assets. Leasehold improvements are being amortized on the
             straight-line basis over the shorter of the estimated useful life
             of the improvements, which is 10 years, or the life of the lease.

       (h)   Income Taxes - The Company recognizes deferred tax assets and
             liabilities based on the difference between the financial
             statements' carrying amount and the tax basis of the assets and
             liabilities, using the effective tax rates in the years in which
             the differences are expected to reverse. A valuation allowance
             related to the deferred tax asset is also recorded when it is
             probable that some or all of the deferred tax asset will not be
             realized.

       (i)   Net Loss Per Share - Net loss per share is computed based on the
             weighted average of number of common shares outstanding during each
             period. Potential common shares are included in the computation of
             diluted per share amounts during each period that income is
             reported. In periods that the Company reports a loss, potential
             common shares are not included in the diluted earnings per share
             calculation since the inclusion of those shares in the calculation
             would be anti-dilutive.

       (j)   Accounting for Long-Lived Assets - The Company reviews long-lived
             assets for impairment whenever circumstances and situations change
             such that there is an indication that the carrying amounts may not
             be recovered. Recoverability of assets to be held and used in
             operations, is measured by a comparison of the carrying amount of
             the assets to the future net cash flows expected to be generated by
             the assets. If such assets are considered to be impaired, the
             impairment to be recognized is measured by the amount by which the
             carrying amount of the assets exceeds the fair value of the assets.

       (k)   Stock Based Compensation - The Company follows the accounting
             treatment prescribed by Accounting Principles Board Opinion No. 25
             ("Accounting for Stock Issued to Employees") when accounting for
             stock-based compensation granted to employees and directors and
             provides the required pro forma disclosures as if the fair value
             method under Statement of Financial Accounting Standards No. 123,
             "Accounting for Stock Based Compensation" ("SFAS No.123") was
             adopted. Any stock-based compensation awards to non-employees and
             non-directors are accounted for using the provisions of SFAS
             No.123.

       (l)   Accounts  Receivable - Allowance  for Doubtful  Accounts - The
             Company routinely  reviews its accounts  receivable,  by customer
             account aging, to determine the  collectibility  of the amounts due
             based on  information  it receives from the customer, past history
             and economic conditions.  In doing so, the Company adjusts its
             allowance accordingly to reflect the cumulative amount that the
             Company feels is uncollectible. This estimate may vary from the
             proceeds  that it actually  collects.  If the estimate is too low,
             the Company  may incur bad debt  expense in the future  resulting
             in lower net income.  If the estimate is too high, the Company may
             experience  lower bad debt expense resulting in higher net income.

       (m)   Fair Value of Financial Instruments - The carrying amounts reported
             in the consolidated balance sheet for cash, trade receivables,
             accounts payable and accrued expenses approximate fair value based
             on the short-term maturity of these instruments. The carrying
             amount of the Company's borrowings also approximates fair value.

                                      F-8
<PAGE>



       (n)   RECENT ACCOUNTING PRONOUNCEMENTS


             (i)  SFAS 142

                  Effective January 1, 2002, the Company adopted Statement of
                  Financial Accounting Standard ("SFAS") No. 142, which
                  eliminates the amortization for goodwill and other intangible
                  assets with indefinite lives. Intangible assets with lives
                  restricted by contractual, legal, or other means will continue
                  to be amortized over their useful lives. Goodwill and other
                  intangible assets not subject to amortization are tested for
                  impairment annually or more frequently if events or changes in
                  circumstances indicate that the asset might be impaired. SFAS
                  No. 142 requires a two-step process for testing impairment.
                  First, the fair value of each reporting unit is compared to
                  its carrying value to determine whether an indication of
                  impairment exists. If impairment is indicated, then the
                  implied fair value of the reporting unit's goodwill is
                  determined by allocating the unit's fair value to its assets
                  and liabilities (including any unrecognized intangible assets)
                  as if the reporting unit had been acquired in a business
                  combination. The amount of impairment for goodwill and other
                  intangible assets is measured as the excess of its carrying
                  value over its implied fair value. The adoption did not have a
                  material effect the Company's consolidated financial
                  statements.

             (ii) SFAS 144

                  Effective January 1, 2002, the Company adopted Statement of
                  Financial Accounting Standards No. 144 ("SFAS 144"),
                  "Accounting for the Impairment or Disposal of Long-lived
                  Assets" SFAS 144 superceded Statement of Financial Accounting
                  Standards No. 121, "Accounting for the Impairment of
                  Long-lived Assets and Assets to be Disposed of" and the
                  accounting and reporting provisions of Accounting Principles
                  Board Opinion No. 30, "Reporting the Results of Operations -
                  Reporting the Effects of Disposal of a Segment of a Business,
                  and Extraordinary, Unusual and Infrequently Occurring Events
                  and Transactions" SFAS 144 also amends Accounting Research
                  Bulletin No. 51, "Consolidated Financial Statements," to
                  eliminate the exception to consolidation for a subsidiary for
                  which control is likely to be temporary. The adoption did not
                  have a material effect the Company's consolidated financial
                  statements.

            (iii) SFAS 145

                  In April 2002, the Financial Accounting Standards Board
                  ("FASB") issued Statement of Financial Accounting Standards
                  ("SFAS") No. 145, "Rescission of FASB Statement No. 4, 44 and
                  64, Amendment of FASB Statement No.13, and Technical
                  Corrections." The rescission of SFAS No.4, "Reporting Gains
                  and Losses from Extinguishments," and SFAS No.64,
                  "Extinguishments of Debt made to Satisfy Sinking Fund
                  Requirements," which amended SFAS No.4, will affect income
                  statement classification of gains and losses from
                  extinguishment of debt. SFAS No.4 requires that gains and
                  losses from extinguishment of debt be classified as an
                  extraordinary item, if material. Under SFAS No. 145, if the
                  extinguishment of debt is a routine and recurring transaction
                  by the entity, as in a risk management strategy, then it
                  should not be considered extraordinary under the criteria in
                  APB Opinion No. 30, "Reporting the Results of
                  Operations-Reporting the Effects of Disposal of a Segment of a
                  Business, and Extraordinary, Unusual and Infrequently
                  Occurring Events and Transactions," as it does not meet the
                  unusual in nature and infrequency of occurrence criteria in
                  APB Opinion No. 30. SFAS No. 145 will be effective for fiscal
                  years beginning after May 15, 2002. Upon adoption,
                  extinguishments of debt shall be classified under the criteria
                  in APB Opinion No. 30. The Company does not expect the
                  provisions of SFAS No.145 to materially affect its
                  consolidated financial position and results of operations.

                                      F-9
<PAGE>

             (iv) SFAS 146

                  In June 2002, the FASB issued SFAS No.146, "Accounting for
                  Costs Associated with Exit or Disposal Activities." SFAS No.
                  146 addresses financial accounting and reporting for costs
                  associated with exit or disposal activities and nullified
                  Emerging Issues Task Force Issue No. 94-3, "Liability
                  Recognition for Certain Employee Termination Benefits and
                  Other Costs to Exit an Activity (including Certain Costs
                  Incurred in a Restructuring)." SFAS No. 146 requires that a
                  liability for a cost associated with an exit or disposal
                  activity be recognized when the liability is incurred versus
                  the date an entity commits to an exit plan under EITF 94-3.
                  SFAS No. 146 also establishes that fair value is the objective
                  for initial measurement of the liability. The provisions of
                  this statement are effective for exit or disposal activities
                  that are initiated after December 31, 2002, with early
                  application encouraged. The Company does not expect the
                  provisions of SFAS No.146 to materially affect its
                  consolidated financial position and results of operations.

             (v)  SFAS 148

                  In December 2002, the FASB issued SFAS No. 148, "Accounting
                  for Stock-Based Compensation - Transition and Disclosure - an
                  amendment of FASB Statement No. 123." SFAS No. 148 amends SFAS
                  No. 123, "Accounting for Stock-Based Compensation," to provide
                  alternative methods of transition for a voluntary change to
                  the fair value based method of accounting for stock-based
                  employee compensation. In addition, SFAS No. 148 amends the
                  disclosure requirements of SFAS No. 123 to require prominent
                  disclosures in both annual and interim financial statements
                  about the method of accounting for stock-based employee
                  compensation and the effect of the method used on reported
                  results. The disclosure requirements apply to all companies
                  for fiscal years ending after December 15, 2002. The interim
                  disclosure provisions are effective for financial reports
                  containing financial statements for interim periods beginning
                  after December 15, 2002. The adoption of SFAS No. 148 is not
                  expected to have a material impact on the Company's
                  consolidated financial statements

             (vi) FIN 45

                  In November 2002, the FASB issued FASB Interpretation No. 45
                  ("FIN 45"), "Guarantor's Accounting and Disclosure
                  Requirements for Guarantees, Including Indirect Guarantees of
                  Indebtedness of Others." FIN 45 requires that upon issuance of
                  a guarantee, the guarantor must recognize a liability for the
                  fair value of the obligation it assumes under that guarantee.
                  FIN 45 also requires additional disclosures by a guarantor in
                  its interim and annual financial statements about the
                  obligations associated with guarantees issued. The disclosure
                  requirements are effective for financial statements of interim
                  or annual periods ending after December 15, 2002. The
                  recognition and measurement provisions are effective on a
                  prospective basis to guarantees issued or modified after
                  December 31, 2002. The Company has provided the required
                  disclosures in footnote 17(b).

             (vii)FIN 46
                  In January 2003, the FASB issued FASB Interpretation No. 46
                  ("FIN 46"), "Consolidation of Variable Interest Entities." FIN
                  46 provides guidance on the identification of entities for
                  which control is achieved through means other than through
                  voting rights, variable interest entities, and how to
                  determine when and which business enterprises should
                  consolidate variable interest entities. This interpretation
                  applies immediately to variable interest entities created
                  after January 31, 2003. It applies in the first fiscal year or
                  interim period beginning after June 15, 2003, to variable
                  interest entities in which an enterprise holds a variable
                  interest that it acquired before February 1, 2003. The
                  adoption of this interpretation is not expected to have a
                  material impact on the Company's consolidated financial
                  statements.

                                      F-10
<PAGE>

           (viii) SOP 01-6

                  In December 2001, the Accounting Standards Committee (AcSEC)
                  of the American Institute of Certified Public Accountants
                  issued Statement of Position 01-6, "Accounting by Certain
                  Entities (including Entities with Trade Receivables) That Lend
                  to or Finance the Activities of Others" ("SOP 01-6"). SOP 01-6
                  provides guidance on accounting and reporting matters for
                  entities that have trade receivables and entities that finance
                  their customers' purchases of goods and services using trade
                  receivables. SOP 01-6 is effective for fiscal years beginning
                  after December 15, 2001, and the Company has adopted the
                  provisions of SOP 01-6 effective January 1, 2002. The adoption
                  of SOP 01-6 has not had a material effect on the Company's
                  consolidated financial position, results of operations or cash
                  flows. The required disclosures are provided in footnote 2(l).

3.     CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS

       Financial instruments that potentially subject the Company to significant
       concentrations of credit risk consists of cash and trade receivables. At
       times, the cash in any one bank account may exceed the Federal Deposit
       Insurance Corporation's $100,000 limit. As of the year ended December 27,
       2002, the Company was over the insured limit by $356,727. The Company
       places its cash with high credit quality financial institutions. In
       regards to trade receivables, management believes the risk is relatively
       limited due to the credit assessment of its customers.

       The  Company  relies on  vendors  located  in China for a  significant
       amount   (approximately   70%  for  2002)  of  its  manufacturing  and
       outsourcing capabilities.  On December 11, 2001, China became a member
       of the World Trade Organization.

       During the years ended December 27, 2002 and December 28, 2001, two
       customers accounted for approximately 64% and 54%, respectively of the
       Company's sales. The United States government accounted for approximately
       60% of the Company's outstanding accounts receivable as of December 27,
       2002.


4.     INVENTORIES

       Inventories consist of the following at December 27, 2002:

          Raw Materials           $     67,606
          Work in Process               53,105
          Finished Goods             1,009,195
          Components                   341,476
                                  -------------
                                  $  1,471,382
                                 =============


5.     INVESTMENTS

       In August 2002, the Company received 1,682,844 shares of common stock as
       a settlement for a note and interest receivable. The note receivable was
       originally issued to another company (the "borrower") in July and August
       1999. In February 2001, the borrower declared bankruptcy under Chapter 11
       of the Federal bankruptcy code. The Company had fully reserved the note
       and interest receivable of $517,616. On January 29, 2002, The Bankruptcy
       Court approved the borrower's Plan of Reorganization, pursuant to which
       the Company received 1,682,844 shares of the reorganized debtor common
       stock, which represents approximately 3 shares for each dollar owed to
       the Company at the time of the filing of the bankruptcy petition, or
       $517,616. The Company has valued these shares at $.05 per share, and
       accordingly has recorded other income of $84,142. The Company has
       determined that these marketable securities are to be held for an
       indefinite period and thus classified as available for sale. Unrealized
       gains or losses on these securities are added to stockholders' equity as
       accumulated other comprehensive gain or loss. The Company has not
       recorded any unrealized gain or loss for the year ended December 27,
       2002.

                                      F-11
<PAGE>

6.     PROPERTY AND EQUIPMENT

       Property and equipment are comprised of the following at December 27,
       2002:

                                         Life
                                    --------------
Machinery and Equipment                5-10 Years        $3,452,738
Tools, Dies and Molds                  5-10 Years         1,543,913
Leasehold Improvements                  10 Years            257,157
Office Furniture and Fixtures            5 Years            224,379
                                                         -----------
                                                          5,478,187
Less: Accumulated Depreciation
      and Amortization                                   (5,004,001)
                                                         -----------
                                                         $  474,186
                                                         ===========

       At December 27, 2002 the Company had $382,326 of its property and
       equipment under capital leases, with accumulated depreciation of
       $261,944.


       During the year ended December 28, 2001, the Company determined that the
       value of the fixed assets of its CDP subsidiary had been impaired due to
       CDP's losses since inception, with only minimally expected revenues in
       the near term. Accordingly, the Company incurred a charge for the
       remaining undepreciated balance of $254,613.


7.     OBLIGATIONS UNDER CAPITAL LEASES

       The Company leases certain equipment under various capital lease
       arrangements expiring in December 2003 through November 2005. Following
       is a summary of future minimum payments under capital leases:

               2003                                              $    50,076
               2004                                                   38,173
               2005                                                   14,655
                                                                ------------
                                                                     102,904
               Less: amounts representing interest                     8,310
                                                                ------------
               Present value of lease payments                        94,594
               Less: current portion                                  38,758
                                                                ------------

               Long-term portion of capital lease obligations   $    55,836
                                                                ============

8.     LINE OF CREDIT

       In April 2001, the Company closed on a revolving line of credit agreement
       with a bank that provided for a maximum borrowing of up to $1,500,000,
       subject to certain conditions, at an interest rate of prime, which was
       4.25% at December 27, 2002, plus 1.75%. The loan is secured by
       substantially all the assets of the Company and is unconditionally
       guaranteed by three officers/stockholders, each limited to $250,000.

                                      F-12
<PAGE>



       The bank that provided the Company with a credit facility was closed by
       the Connecticut Banking Department on June 27, 2002, with the F.D.I.C.
       assuming receivership of the failed bank. Management's plans with respect
       to this matter include, replacing its financing arrangement through an
       alternative lending institution, raising additional funds through equity
       or debt financing and ultimately achieving profitable operations. The
       F.D.I.C. has continued to service the Company's credit facility. The
       Company is in discussions with various financial institutions to replace
       the line of credit.

9.     LOANS PAYABLE

<TABLE>
<CAPTION>
<S>                                                                                 <C>
       Loans payable are comprised of the following at December 27, 2002:

(a)      Loan agreement payable in monthly installments of $2,903 of principal
         and interest at 7% per annum due February 2007. The loan is guaranteed
         by the Company's three officers/stockholders ..........................    $    125,571
(b)      Various loans payable to officer/stockholders, all bearing interest at
         10% per annum, payable in monthly installments ranging from $1,613 to
         $2,125 including interest.  There is a one year moratorium on principal
         payment on these loans through July 2003.  The loans are due September
         2006...................................................................         290,995
(c)      In December 2000 the Company converted an outstanding payable to an
         outside consultant into a loan payable with monthly installments of
         $4,840 of principal and interest at 10% per annum due January 2004 ....          90,000
(d)      In December 2002 the Company converted an outstanding payable to an
         outside consultant into a loan payable with monthly installments of
         $6,755 of principal and interest at 8.0% per annum due February 1,
         2004...................................................................          55,054
(e)      In July 2001 the Company converted an outstanding payable to the
         insurance carrier into a loan payable with monthly installments of
         $2,935 of principal and interest at 9.6% per annum due January 2003 ...           2,935
                                                                                    -------------
                                                                                         564,555
         Less: current portion                                                           198,597
                                                                                    -------------
         Long-term portion                                                          $    365,958
                                                                                    =============
</TABLE>

       Long-term debt matures as follows:

                 2003            $       198,597
                 2004                    134,092
                 2005                    127,725
                 2006                     98,387
                 2007                      5,754
                                    ------------
                                 $       564,555
                                    ============

     The Company  estimates that the fair value of the above loans  approximates
     their carrying value.

                                      F-13
<PAGE>


10.    STOCKHOLDERS' EQUITY

        (a)  In April 2001, the Company issued 10,000 shares of stock, at a fair
             value of $68,750, pursuant to a consulting agreement.

       (b)   In April 2001, the Company issued options to purchase an aggregate
             of 25,000 shares of its common stock exercisable at $3.50 per share
             to a consultant for services provided. Accordingly, the Company has
             valued the options at their fair value and has recorded a charge to
             operations in the amount of $87,500.

       (c)   In December 2001, the Company issued 25,000 shares of stock at a
             fair value of $100,000  pursuant to a consulting agreement.

       (d)   In December 2002, the Company issued 16,450 shares of stock to
             employees and consultants at a fair value of $74,025 pursuant to a
             stock grant.


11.    INCOME TAXES

       The Company  accounts  for income  taxes under  Statement of Financial
       Accounting  Standards No. 109,  Accounting for Income Taxes ("SFAS No.
       109").  SFAS No. 109 requires the  recognition  of deferred tax assets
       and liabilities  for both the expected  impact of differences  between
       the financial statements and tax basis of assets and liabilities,  and
       for the  expected  future tax benefit to be derived  from tax loss and
       tax credit  carry-forwards.  SFAS No. 109  additionally  requires  the
       establishment  of a valuation  allowance to reflect the  likelihood of
       realization of deferred tax assets.

       The major tax-deferred assets are as follows:

                                                       Years ended
                                        ----------------------------------------
                                           December 27,           December 28,
                                               2002                   2001
                                          ----------------       ---------------
Depreciation                              $             -        $       14,000
Impaired long lived assets                              -                67,000
Net operating loss carryforwards                2,304,000             2,245,000
                                          ----------------       ---------------
                                                2,304,000             2,326,000
Less: valuation allowance                      (2,304,000)           (2,326,000)
                                          ----------------       ---------------
                                          $             -        $             -
                                          ================       ===============

       The income tax benefit differs from the amount computed by applying the
       statutory Federal income tax rate to the loss before the income taxes
       income as follows:
<TABLE>
<CAPTION>

                                                                 Years ended
                                                   --------------------------------------
                                                    December 27,           December 28,
                                                        2002                   2001
                                                   ---------------        ---------------
<S>                                                  <C>                  <C>
Income tax benefit computed at the Federal           $     78,000         $     432,000
  statutory rate
Effect of permanent differences                           (25,000)              (89,000)
Effect of temporary differences                                 -               (14,000)
Deductions for which no benefit is
  recognized                                              (53,000)             (329,000)
                                                   ---------------        ---------------
                                                   $            -         $           -
                                                   ===============        ===============
</TABLE>

       The Company has a net operating loss carryforward for tax purposes
       totaling approximately $6,875,000 at December 27, 2002 expiring between
       the years 2010 through 2022. The resulting deferred tax asset of
       approximately $2,304,000 has been offset by a corresponding valuation
       allowance.

                                      F-14
<PAGE>

12.    RETIREMENT PLAN

       The Company sponsors a 401(k) savings plan covering all non-union
       employees who have attained the age of 21 and have completed 3 months of
       service. Participants may contribute up to 15% of their annual
       compensation, subject to certain limitations. In addition, the Company
       may make contributions to the plan. During the years ended December 27,
       2002 and December 28, 2001, the Company did not make any contributions to
       the plan.


13.    CASH GAIN SHARING PROGRAM

       The Company's full-time, non-union employees and other key company
       employees receive additional compensation as determined by cash profits,
       as defined, under the Cash Gain Sharing Program. For the years ended
       December 27, 2002 and December 28, 2001, there was no additional
       compensation earned.


14.    STOCK OPTION AND GRANT PLAN

       In March 1998, the Company adopted the Stock Option and Grant Plan (the
       "Plan") which as amended in June 2000, and in June 2002, to provide for
       an aggregate grant of 1,000,000 options to purchase shares of the
       Company's common stock. Options may be granted to employees, officers,
       directors, consultants and independent contractors. Under the Plans,
       options may be issued for periods up to 10 years and become exercisable
       in varying amounts based on a vesting schedule. Generally, options are
       granted at prices equal to market value on the date of the grant with
       lives of five years.

       In January 2001, the Company granted 67,500 stock options to key
       employees and members of the board of directors at an exercise price of
       $2.50 per share. The stock options vest on the second anniversary of the
       agreement and expire on the fifth anniversary of the agreement. In April
       2001, the Company granted 25,000 stock warrants to a consultant at an
       exercise price of $3.50 per share. The stock warrants are exercisable on
       the date of grant and expire on the fifth anniversary of the agreement.

       In August 2002, the Company granted 523,000 stock options to key
       employees, consultants and members of the board of directors at an
       exercise price of $2.15 per share. The stock options vest on the second
       anniversary of the agreement and expire on the fifth anniversary of the
       agreement.

       For disclosure purposes the fair value of each stock option grant is
       estimated on the date of grant using the Black-Scholes option-pricing
       model with the following weighted average assumptions used for stock
       options granted during the years ended December 27, 2002 and December 28,
       2001: (i) annual dividends of $0.00, (ii) expected volatility of 170% and
       79% for the years ended December 27, 2002 and December 28, 2001,
       respectively, (iii) risk-free interest rate of 5.7%, and (iv) expected
       option lives of three years for the years ended December 27, 2002 and
       December 28, 2001, respectively. The weighted average fair value of the
       stock options granted for the years ended December 27, 2002 and December
       28, 2001 was $1.87 and $2.31, respectively.

       The following tables illustrates the Company's stock option and warrant
       issuances and balances outstanding as of, and during the years ended
       December 27, 2002 and December 28, 2001, retroactively restated for the
       aforementioned anti-dilution provisions related to the Company's common
       stock warrants.


                                      F-15

<PAGE>

<TABLE>
<CAPTION>


                                                                 OPTIONS                          WARRANTS
                                                     ------------------------------    ------------------------------
                                                                         Weighted                          Weighted
                                                        Shares           Average           Shares          Average
                                                       Underlying        Exercise        Underlying        Exercise
                                                        Options            Price          Warrants           Price
                                                      -------------     ------------    -------------     ------------
<S>                              <C> <C>                   <C>          <C>                 <C>           <C>
         Outstanding at December 29, 2000                  467,500      $    4.77           1,775,193     $     4.95

            Granted                                         67,500           2.50              25,000           3.50
            Canceled                                        (3,000)          4.00                   -              -
            Exercised                                            -              -                   -              -
                                                      -------------     ------------    -------------     ------------
         Outstanding at December 28, 2001                  532,000      $    4.49           1,800,193      $    4.93
            Granted                                        523,000           2.15                  -               -
            Canceled                                       (56,500)          3.50                  -               -
            Exercised                                            -              -                  -               -
                                                      -------------     ------------    -------------     ------------
         Outstanding at December 27, 2002                  998,500      $    3.32           1,800,193      $    4.93
                                                      =============     ============    =============     ============

</TABLE>

       The following is additional information with respect to the Company's
       options and warrants as of December 27, 2002:

<TABLE>
<CAPTION>
<S>          <C>                    <C>          <C>                 <C>
                                                                                                 OPTIONS
                                  OPTIONS OUTSTANDING                                          EXERCISABLE
         ----------------------------------------------------------------------     --------------------------------
                               Number of          Weighted                            Number of
                              Outstanding          Average          Weighted         Excercisable          Weighted
                                 Shares           Remaining          Average            Shares             Average
                               Underlying        Contractual         Exercise         Underlying          Excercise
          Excercise Price       Options             Life             Price              Options             Price
         ----------------    --------------    ---------------    -------------     --------------     -------------
             $ 2.50                 47,000       3.00 years          $ 2.50                     -               -
             $ 4.00                 95,000       1.58 years          $ 4.00                95,000          $ 4.00
             $ 4.50                 25,000       1.58 years          $ 4.50                25,000          $ 4.50
             $ 5.13                308,500       2.29 years          $ 5.13               158,500          $ 5.13
             $ 2.15                523,000       4.33 years          $ 2.15                     -               -
         ----------------    --------------    ---------------    -------------     --------------     -------------
                                   998,500       2.90 years          $ 3.32               278,500          $ 4.69
                             ==============    ===============    =============     ==============     =============
</TABLE>

<TABLE>
<CAPTION>

                                                                                                WARRANTS
                                 WARRANTS OUTSTANDING                                          EXERCISABLE
        -----------------------------------------------------------------------     ----------------------------------
         Exercise Price        Number of          Weighted                            Number of
                             Outstanding          Average           Weighted         Exercisable          Weighted
                                Shares           Remaining          Average            Shares             Average
                              Underlying        Contractual         Exercise         Underlying           Excercise
                               Warrants             Life             Price            Warrants              Price
        -----------------    --------------    ---------------    -------------     --------------     ---------------
<S>       <C>   <C>                 <C>          <C>                 <C>                   <C>             <C>
          $3.00-$3.50               78,334       2.89 years          $ 3.16                78,334          $ 3.16
          $4.85-$6.91            1,721,859       1.29 years          $ 5.01             1,721,859          $ 5.01
                             --------------    ---------------    -------------     --------------     ---------------
                                 1,800,193       1.36 years          $ 4.93             1,800,193          $ 4.93
                             ==============    ===============    =============     ==============     ===============
</TABLE>

       Had compensation cost for the Company's option plan been determined in
       accordance with SFAS 123, the Company's net loss and loss per share would
       have been increased to the pro forma amounts indicated below:

                                      F-16
<PAGE>

<TABLE>
<CAPTION>

                                                                            Years ended
                                                            --------------------------------------------
                                                            December 27, 2002        December 28, 2001
                                                            -------------------      -------------------
<S>                                                         <C>                      <C>
Net loss:                                  As reported      $        (244,274)       $      (1,271,854)
                                             Pro forma      $        (744,783)       $      (1,741,063)
Net loss per share:
    Basic and diluted                      As reported      $           (0.06)       $           (0.34)
    Basic and diluted                        Pro forma      $           (0.20)       $           (0.47)
</TABLE>

15.    KEY MAN LIFE INSURANCE

       The Company is the  beneficiary of a $500,000 life insurance  policy on
       the life of the President of the EHC.


16.    COLLECTIVE BARGAINING AGREEMENT

       The Company's factory employees and factory supervisors are represented
       by a collective bargaining agreement between a local branch of a major
       national labor trade union and the Company. Such agreement expires in May
       2004.


17.    RELATED PARTY TRANSACTIONS

       (a)Sales  during the years ended  December 27, 2002 and December 28, 2001
          included approximately $274,000 and $682,000,  respectively to another
          company  owned by three  officer/stockholders  of the  Company.  Gross
          profit on such sales was  approximately  $74,000 and  $257,000 for the
          years ended  December 27, 2002 and  December  28, 2001,  respectively.
          Accounts receivable from the related company was approximately $39,000
          at December  27,  2002.  In  September  1999,  the  Company  converted
          outstanding accounts receivable of $253,150 into a term loan at 8% per
          annum,  with  monthly  payments  of  $5,133  per  month  inclusive  of
          principal  and  interest  for 5 years  starting  January 1, 2000.  The
          balance of the note receivable on December 28, 2001 was $155,693.  The
          note was fully paid to the Company  during the year ended December 27,
          2002.

       (b)The Company leases its premises from a company (the "landlord")  owned
          by two of the  officer/stockholders of the Company at an annual rental
          of $173,405.  Such lease expires in December 2005. The mortgage on the
          premises in the amount of $417,830 at December 27, 2002 is  guaranteed
          by the Company.  The guarantee expires on November 28, 2010. There are
          two  events/circumstances  that would  require  the Company to perform
          under the  guarantee:  The first is if the landlord  defaults on their
          mortgage,  due to lack of payment. The second, is if the landlord were
          in  violation  of any of the  covenants  as set forth in the  mortgage
          agreement. The Company's maximum potential liability would be $429,726
          if the  landlord  defaulted.  If the  Company  was to  default  on the
          mortgage,  the mortgage  company would take possession of the property
          and all machinery and equipment having a net book value of $474,186 at
          December 27, 2002.

       (c)In March 1998, the Company entered into employment agreements with its
          three officer/stockholders for periods of 10 years at aggregate annual
          base salaries of $325,000.  Such  agreements  provide for increases at
          the greater of 5% or the  consumer  price index and an annual bonus to
          be determined by the Board of Directors.

                                      F-17
<PAGE>

18.    CONSULTING AGREEMENT

       In March 1998, the Company entered into a ten year consulting agreement
       in connection with the Company's plans to develop manufacturing resources
       in the People's Republic of China ("China"). The consultant, who was
       board member of the Company at the time, will be paid at an hourly rate
       as mutually determined and agreed upon by the Company and the consultant
       from time to time and 1.5% of the net cost, as defined, of all products
       manufactured in China up to $5,000,000 per year and 1% of net costs in
       excess of $5,000,000. The Company expensed $18,106 and $12,785,
       respectively, in the years ended December 27, 2002 and December 28, 2001
       under this consulting agreement.


19.    PREFERRED STOCK

       The Board of Directors of the Company is authorized, without further
       action of the stockholders of the Company, to issue up to 1,000,000
       shares of Preferred Stock in one or more classes or series and to fix the
       rights, preferences, privileges and restrictions thereof, including
       dividend rights, conversion rights, voting rights, terms of redemption,
       liquidation preferences, and the number of shares constituting any series
       or the designation of such series. As of December 27, 2002, there were no
       shares issued and outstanding.


20.    STOCKHOLDERS' AGREEMENTS

       In March 1998, the Company entered into an agreement with each of its
       three officers/stockholders which provides that in the event of the death
       of the stockholder within 24 months after the consummation of a public
       offering of the Company's stock, as defined, the estate of the
       stockholder can require the Company to repurchase 250,000 shares of the
       stockholder's stock for $500,000. The repurchase of stock can only be
       made though the use of insurance proceeds payable to the Company upon the
       death of the stockholder.

21.    SEGMENT AND GEOGRAPHIC INFORMATION

       The Company views its operations as principally two segments, the
       manufacturing and assembly of injection molded plastic components and
       outsourcing of injection molded plastic components and their assemblies.
       The segments share a common workforce and office headquarters, which
       include an allocation of all overhead components. Overhead items that are
       specifically identifiable to a particular segment are applied to such
       segment. The Company's segment information for the years ended December
       27, 2002 and December 28, 2001 is as follows:

<TABLE>
<CAPTION>

                                     Manufacturing                        Corporate
                                          and                                and
                                       Assembly        Outsourcing          Other        Consolidated
                                     --------------   --------------    --------------   --------------
Year ended December 27, 2002
<S>                                  <C>              <C>               <C>              <C>
    Sales                            $   8,229,718    $   2,227,632     $           -    $  10,457,350
    Cost of Goods Sold                   5,068,708        2,012,410                 -        7,081,118
    Gross Profit                         3,161,010          215,222                 -        3,376,232
    Gross Profit %                            38.4%             9.7%                -             32.3%
    Interest and Other Income               26,100            3,571            84,142          113,813
    Interest and Other Expenses            183,084            9,770            38,662          231,516
    Depreciation and Amortization          136,797           49,508            14,592          200,897
    Segment Assets                       2,553,926        1,072,588           210,755        3,837,269
    Long-Lived Asset Expenditures           33,227            2,308                 -           35,535
    Segment Net Income (Loss)              498,918         (626,770)         (116,422)        (244,274)

</TABLE>
                                      F-18
<PAGE>

<TABLE>
<CAPTION>

                                     Manufacturing                        Corporate
                                          and                                and
                                       Assembly        Outsourcing          Other        Consolidated
                                     --------------   --------------    --------------   --------------
Year ended December 28, 2001
<S>                                  <C>              <C>               <C>
    Sales                            $   7,026,317    $   2,133,326     $           -    $   9,159,643
    Cost of Goods Sold                   4,204,581        2,121,864                 -        6,326,445
    Gross Profit                         2,821,736           11,462                 -        2,833,198
    Gross Profit %                            40.2%             1.0%                -             30.9%
    Interest and Other Income               76,098           18,045            48,392          142,535
    Interest and Other Expenses            115,198            8,650            41,068          164,916
    Depreciation and Amortization          170,694           36,849            14,592          222,135
    Segment Assets                       2,340,577          886,320           249,381        3,476,278
    Long-Lived Asset Expenditures          135,747           89,180                 -          224,927
    Segment Net Income (Loss)              246,903       (1,090,952)         (427,805)      (1,271,854)
</TABLE>


22.    COMMITMENTS AND CONTINGENCIES

       The Company leases office space in Shanghai, China at a rental rate of
       $5,300 per month. The lease is for 24 monthly periods expiring on
       February 28, 2003. The lease is in process of renewal and is on a month
       to month basis until renewed.

       As discussed in Note 17, the Company leases its premises from a related
       party.

       The Company also has various other operating leases for equipment and
       automobiles.

       Future minimum lease payments, excluding escalation, are as follows:

                 Fiscal Years
                  Ending in
                   December

                      2003          $        245,952
                      2004                   255,072
                      2005                   264,660
                      2006                         -
                                      --------------
                                    $        765,684
                                      ==============


        Total rent expense charged to operations for the years ended December
        27, 2002 and December 28, 2001 was approximately $265,067 and $204,122,
        respectively.

       The Company was named as a defendant in six employment discrimination
       complaints, and on October 2002 settled these complaints for an aggregate
       amount of approximately $42,000. Accordingly, the Company has paid
       $21,000 and accrued the balance of $21,000 as of December 27, 2002.

                                      F-19

<PAGE>


23.    SUBSEQUENT EVENTS

       On March 6, 2003, the Company contacted the F.D.I.C. regarding its
       outstanding loan. The Company paid the accrued interest totaling $29,275
       to avoid being put into a pooling group, which could ultimately result in
       the loan being sold. The Company is in discussions with various financial
       institutions to replace its line of credit. In March 2003, the Company
       contracted a broker who specializes in obtaining lines of credit. There
       is no guarantee that this engagement will secure a new line of credit. In
       the interim, the F.D.I.C. has continued to service the Company's credit
       facility, although it is uncertain at this time what the ultimate
       disposition of the facility will be.

                                      F-20
<PAGE>


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

None

                                       15
<PAGE>



                                    Part III

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


Incorporated by reference from the Registrant's  definitive proxy statement,  to
be filed in accordance  with rule 14a-101 with the Commission not later than 120
days after the end of the fiscal year covered by this form.

Item 10. Executive Compensation


Incorporated by reference from the Registrant's  definitive proxy statement,  to
be filed in accordance  with rule 14a-101 with the Commission not later than 120
days after the end of the fiscal year covered by this form.

Item 11. Security Ownership of Certain Beneficial Owners and Management

Incorporated by reference from the Registrant's  definitive proxy statement,  to
be filed in accordance  with rule 14a-101 with the Commission not later than 120
days after the end of the fiscal year covered by this form.

Item 12. Certain Relationships and Related Transactions


Incorporated by reference from the Registrant's  definitive proxy statement,  to
be filed in accordance  with rule 14a-101 with the Commission not later than 120
days after the end of the fiscal year covered by this form.


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


(A) Exhibits (Numbered in accordance with item 601 of regulation S-B)

Exhibit
No.      Description of Exhibit

99.1     Certification  of  Chief  Executive  Officer  pursuant  to 18  U.S.C.
         ss.1350,  as  adopted  pursuant  to  Section  906  of the Sarbanes-
         Oxley act of 2002

99.2     Certification  of  Chief  Financial  Officer  pursuant  to 18  U.S.C.
         ss.1350,  as  adopted  pursuant  to  Section  906  of the Sarbanes-
         Oxley act of 2002


(B) Reports on Form 8-K

The Company  did not file any  reports  on Form 8-K during  the  quarter  ended
December 27, 2002

                                       16
<PAGE>

                                   SIGNATURES



In accordance with Section 13 or 15 (d) of the Securities  Exchange Act of 1934,
the Registrant has duly caused this Annual Report on Form 10-KSB to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                              INTERNATIONAL SMART SOURCING, INC.



March 27, 2003                                /s/ David Kassel

Date                                          David Kassel
                                              Chairman and Chief Executive
                                              Officer





In  accordance  with the Exchange  Act, this report has been signed below by the
following persons and in the capacities and on the dates indicated.


Signature                           Title                              Date

/s/ David Kassel           Chairman of the Board                  March 27, 2003
----------------           of Directors and Chief Executive
                           Officer

/s/ Andrew Franzone        President of EHC, Director             March 27, 2003
-------------------        Director

/s/ Harry Goodman          Vice President and Secretary,          March 27, 2003
-----------------

/s/ Arthur Myers           Chief Financial Officer                March 27, 2003
----------------

/s/ Carl Seldin Koerner    Director                               March 27, 2003
-----------------------

/s/ Mitchell Solomon       Director                               March 27, 2003
--------------------




                                       17
<PAGE>




                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER



I, David Kassel, certify that:

     1. I have reviewed this annual report on Form 10-KSB of International Smart
Sourcing Inc.

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          a. designed  such  disclosure  controls and  procedures to ensure that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

          b. evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

          c.  presented  in  this  annual  report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

          a. all significant deficiencies in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

          b. any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6. The registrant's other certifying  officers and I have indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

                                       18
<PAGE>

Date:    March 27, 2003





                                                     David Kassel
                                                     Chief Executive Officer









                                       19

<PAGE>


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER



I, Arthur Myers, certify that:

     1. I have reviewed this annual report on Form 10-KSB of International Smart
Sourcing Inc.

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

          d. designed  such  disclosure  controls and  procedures to ensure that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

          e. evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

          f.  presented  in  this  annual  report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

          c. all significant deficiencies in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

          d. any fraud,  whether or not material,  that  involves  management or
          other  employees  who  have a  significant  role  in the  registrant's
          internal controls; and

     6. The registrant's other certifying  officers and I have indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.

                                       20
<PAGE>

Date:    March 27, 2003





                                                        Arthur Myers
                                                        Chief Financial Officer




                                       21


<PAGE>



Exhibit 99.1


                             CERTIFICATE PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



     In connection with the Quarterly  Report of  International  Smart Sourcing,
Inc.  (the  "Company")  on Form 10-KSB for the year ended  December  27, 2002 as
filed with the  Securities  and  Exchange  commission  on the date  hereof  (the
"Report"),  I, David Kassel,  Chief Executive  Officer of the Company,  certify,
pursuant  to  18  U.S.C.  ss  1350,  as  adopted  pursuant  to  ss  906  of  the
Sarbanes-Oxley Act of 2002, that:

          1. The report fully complies with the requirements of Section 13(a) or
             15(d) of the Securities Exchange Act of 1934: and

          2. The  information  contained in the report fairly  presents,  in all
             material respects,  the financial  condition and results of
             operations of the Company as of and for the period covered by the
             Report.




                                                         /s/David Kassel
                                                         David Kassel
                                                         Chief Executive Officer
                                                         March 27, 2003







                                       22
<PAGE>


EXHIBIT 99.2





                             CERTIFICATE PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



     In connection with the Quarterly  Report of  International  Smart Sourcing,
Inc.  (the  "Company")  on Form 10-KSB for the year ended  December  27, 2002 as
filed with the  Securities  and  Exchange  commission  on the date  hereof  (the
"Report"),  I, Arthur Myers,  Chief Financial  Officer of the Company,  certify,
pursuant  to  18  U.S.C.  ss  1350,  as  adopted  pursuant  to  ss  906  of  the
Sarbanes-Oxley Act of 2002, that:

          1. The report fully complies with the requirements of Section 13(a) or
             15(d) of the Securities Exchange Act of 1934; and

          2. The  information  contained in the report fairly  presents,  in all
             material respects,  the financial  condition and results of
             operations of the Company as of and for the period covered by the
             Report.




                                                         /s/Arthur Myers
                                                         Arthur Myers
                                                         Chief Financial Officer
                                                         March 27, 2003




                                       23