<PAGE>


                    U. S. SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                      For the year ended December 31, 1999
                           Commission File No. 0-20947

                             ON-SITE SOURCING, INC.
                 (Name of Small Business Issuer in its Charter)

            Delaware                                     54-1648470

 (State of Other Jurisdiction of               (IRS Employer Identification No.)
  Incorporation or Organization)

            1111 North 19th Street, Sixth Floor, Arlington, VA 22209
         (Address of Principal Executive Offices)            (Zip Code)

                                  703-276-1123
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act: NONE
                                                               ----
Securities registered under Section 12(g) of the Exchange Act:

<TABLE>
<CAPTION>
         TITLE OF EACH CLASS                                  NAME OF EACH EXCHANGE ON WHICH REGISTERED
         -------------------                                  -----------------------------------------
         <S>                                                  <C>
         Units comprised of two shares of Common              NASDAQ (since 7/11/96)
           Stock and one Common Stock Purchase Warrant

         Common Stock ($.01 par value)                        NASDAQ (since 8/19/96)

         Common Stock Purchase Warrants                       NASDAQ (since 8/19/96)
</TABLE>

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No
                                                                  ---   ---

This report contains a total of 33 pages. The Exhibit Index appears on page 31.

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the issuer'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. [ ]

The issuer's revenues for its most recent fiscal year were $ 26,670,903.

Aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant as of March 15, 2000 was approximately
$17,529,860 based upon the closing price reported for such date on the Nasdaq
SmallCap Market. For purposes of this disclosure, shares of common stock held
by persons who hold more than 5% of the outstanding shares of Common Stock
and shares held by officers and directors of the Registrant have been
excluded because such persons may be deemed to be affiliates. The
determination of affiliate status is not necessarily a conclusive
determination for other purposes.

The number of shares outstanding of the issuer's shares of common stock as of
March 30, 2000 was 4,900,740.

Transitional Small Business Disclosure Format             Yes      No  X
                                                              ---     ---


                                       1


<PAGE>


                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS
---------------------------------

On-Site Sourcing, Inc. ("On-Site", "Company", "We" or "Us") provides digital
imaging, document management, litigation reprographics services and facilities
management to law firms, corporations, non-profit organizations, accounting
firms, financial institutions and other organizations throughout the East Coast
of the United States. In order to meet the highly specialized requirements of
each client, we offer a variety of customized reprographic and facilities
management services. We provide reprographic and imaging services 24
hours-per-day, seven days-per-week including copying, binding, labeling,
collating and indexing in support of complex document-intensive litigation as
well as higher volume production of manuals, brochures and other materials for
corporations and non-profit organizations. We also provide on-premises
management of customers' support services including mailroom operations,
facsimile transmission, records and supply room management and copying services.

On-Site Sourcing, Inc. was founded in 1992 and currently serves the greater
Washington, Baltimore, Philadelphia, New York City and Atlanta metropolitan
areas through outsourcing locations in Arlington, Virginia; Baltimore, Maryland;
Philadelphia, Pennsylvania; New York, New York; and Atlanta, Georgia. The
Arlington, Virginia outsourcing location is one of the largest processing
centers in the metropolitan Washington area. Customers include a number of the
large law firms, corporations and non-profit entities operating in these cities.
The Company was originally incorporated in Virginia in December 1992 and changed
its state of incorporation to Delaware in January 1996.

         STRATEGY. During 1999, as part of our strategic planning process, we
refocused on our three core strengths - imaging, digital printing and legal
copying - all of which are critical components in the development and
maintenance of a strong document management capability. We reworked the imaging
business model and sold the Information Technology business. During our
strategic planning process, our goal was to identify specific actions that would
give us a competitive advantage. We received a U.S. patent for a process that
captures billable data from our photocopier. This technology will be integrated
into a web based document management system that will include tracking, billing
and electronic file management systems.

         We also plan to continue to consider making selective acquisitions that
will deepen our base in a particular geographic location or that will complement
our existing capabilities. We will look for strategic partnerships with document
management hardware providers and continue to develop new proprietary processes
to achieve our goal of being a leader in e-based document management.

         We earn a significant portion of our revenue by providing reprographic,
imaging and litigation support services to law firms and corporations. This
accounts for approximately 88 percent of the Company's revenue. Facilities
management accounts for approximately 12 percent of the revenue. Each service,
while independent to the client, shares personnel and resources in order to
minimize costs and provide high quality services.

         OPERATIONS. We provide our services through regional offices in
metropolitan Washington, DC, Philadelphia, PA, New York, NY, Baltimore, MD, and
Atlanta, GA. These facilities maintain staff, equipment, supplies and training
facilities in order to provide reprographic, imaging, and litigation support
services to a variety of customers. We place professional management at each
regional office and provide employees with ongoing training in equipment
operation and maintenance, customer satisfaction, interpersonal skills, and
quality control. Equipment and supplies are provided by numerous regional and
national vendors.

         Our facilities management services provide reprographic, mailroom and
facsimile and other services required on the premises of its customers. We
conduct a comprehensive analysis of each client's needs and tailor the services
provided to these needs based on volume, time, and quality requirements. At
facilities management locations, we provide on-site management of the client's
support services such as copy, mail, supply and records rooms. Mailroom services
include distributing all mail and interoffice correspondence; processing,
logging and billing outgoing mail, parcels and special courier items; logging,
billing, and tracking transmission of outgoing facsimiles and distributing
incoming facsimiles. In the supply room services, we provide all required
materials through a "Just in Time" system designed to minimize the costs of
logging and tracking materials provided. Records room services include
utilization of bar code applications and state-of-the-art imaging and scanning
equipment to store documents and data base information for quick retrieval and
copying. Copy room management involves tracking, logging and billing all copies,
and providing repair services to copy machines.


                                       2


<PAGE>


In addition, specialized proprietary software generates operating data that
allows us to analyze vendor, copy and overtime costs, as well as copy volume,
and to prepare profit and loss statements that offer solutions to productivity
problems.

         Our reprographic and litigation support services to law firms and
corporations include copying, binding, drilling, "Bates" stamping, labeling,
collating, indexing, assembling and quality review. We have technology which
allows customers to "telecommute" by sending documents instantaneously via the
Internet to computers at On-Site. The documents are then transferred into the
memory of a copy machine and reproduced.

         Our imaging and digital printing services allow for the transfer of
information from paper documents into electronic media. Services include case
management consulting, indexing/coding, scan to image, blowback printing,
document enlargement and document search and retrieval services. We believe that
these services will continue to expand as we incorporate our web-based strategy
for managing documents.

         CUSTOMERS. Our customers include law firms, non-profit organizations,
corporations, accounting and consulting firms, financial institutions and other
organizations throughout the East Coast of the United States. Our customer base
is the premium service segment of the market in which speed, accuracy and
quality are critical. Our clients include many of the largest law firms and
business entities in the markets served.

         EMPLOYEES. We continuously recruit, train and offer benefits and other
incentives to personnel in order to develop and retain a qualified and reliable
staff. Under our training program, all personnel receive training covering the
use and maintenance of equipment, interpersonal skills and operating procedures.
We place a strong emphasis on employee relations and engage in team building,
and employee empowerment practices, as well as providing incentives, including a
stock option plan, that are specifically designed to encourage and reward
employee performance. Additionally, all employees are bonded, sign
confidentiality agreements and agree to undergo drug tests. We believe these
programs result in higher employee productivity and professionalism. As of
December 31, 1999, the Company had approximately 375 full-time employees, of
which 4 are in executive positions. None of our employees are represented by a
labor union and we consider our employee relations to be satisfactory.

         COMPETITION. The reprographics and facilities management businesses are
highly competitive. The most significant competition is from prospective clients
themselves, which provide these services internally. The national competitors
providing facilities management services include Pitney Bowes Management
Services and Xerox Business Systems. IKON Corporation and Donnelley Enterprise
Solutions, Inc. are national competitors providing both reprographic and
facilities management services, while Copy America, Balmar and Reliable are
regional competitors providing both of these services in the markets served by
On-Site.

         TECHNOLOGY AND PROPRIETARY INFORMATION. The SiteTrax platform was
created as a solution to automate the highly complex document and facilities
management industry. Effective document management and reproduction, be it mail
or fax management, litigation copying, on-demand printing or document imaging
requires a tremendous monitoring, tracking and accountability solution. These
functions are mission critical, yet peripheral to the task of "putting paper to
machine". Even in the productive 90's, the document management industry
inefficiently uses expensive labor to dispatch these peripheral functions as
required to actually produce the product.

         With the genesis of SiteTrax, we have effectively automated all
peripheral functions. SiteTrax manages every step of the production and
management process, from logging in projects, tracking them throughout the
production and quality control process through shipping and delivery. SiteTrax
tracks mail, fax courier, and box distribution, materials usage, operator
distribution/ workflow, productivity and quality control efficiency. It also
provides integrated cost accounting and invoicing, all at the click of a mouse.
These automated processes make our production and management process more
efficient and productive. The resultant savings are passed on to our clients in
the form of greater investment in quality control, competitive pricing, and
superior tracking, reporting and accountability.

         During 1999, we received a U.S. patent for our real-time invoicing and
productivity analysis technology. The proprietary process, which is called
Costrax, will enable us to automate certain billing and job tracking functions
which will create an improved document management capability for our customers.
The system networks copy machines and tracks the number of copies made, the
client to be billed, the specific matter involved and the employee making the
copies. This system is designed to increase our appeal to potential clients
based on price and performance.

         We rely on confidentiality and non-competition agreements with our
employees in order to protect our proprietary know-how and employ various
methods to protect the software, concepts, ideas and documentation of its
proprietary technology. However, such methods may not afford complete
protection, and there can be no assurance that others will not independently
develop similar know-how or obtain access to our know-how or software, concepts,
ideas and documentation. Furthermore, although we have and expect to have
confidentiality and non-competition agreements with its employees, consultants,
and appropriate vendors, there can be no assurance that such arrangements will
adequately protect trade secrets.


                                       3


<PAGE>


ITEM 2.   DESCRIPTION OF PROPERTIES
-----------------------------------

         Our executive offices and reprographic operations which service the
metropolitan Washington, DC area are located in approximately 31,000 square feet
of leased space in Arlington, Virginia. The lease provides for a base annual
rent of $450,000 and an expiration date in December 2001. In addition, from time
to time and based on customer needs, we may execute month-to-month leases for
additional space in the same or adjacent buildings as the Arlington, Virginia
facility. We lease approximately 5,500 square feet of additional space under a
lease agreement which provides for a base annual rent of $110,000 and an
expiration date in December 2000.

         We lease approximately 10,500 square feet of office space in
Philadelphia, PA. The lease provides for a base annual rent of $154,700 and an
expiration date in October 2000.

         We lease warehouse storage space located in approximately 12,500 square
feet of leased space in Brentwood, MD. The lease provides for a base annual rent
of $48,000 with additional operating costs of $2,000 per year and an expiration
date in August 2000.

         We lease warehouse storage space located in approximately 11,500 square
feet of leased space in Alexandria, Virginia. The lease provides for a base
annual rent of $75,000 and an expiration date in March 2001.

         We have offices located in approximately 18,000 square feet of leased
space in Atlanta, GA. The lease provides for a base annual rent of $91,200 and
an expiration date in April 2005.

         We have offices located in approximately 14,100 square feet of leased
space in New York, NY. The lease provides for a base annual rent of $268,000
with an annual 3 % increase on November 1 of each subsequent year through
November 2005. The lease expiration date is October 31, 2006.

         We have offices located in approximately 9,700 square feet of leased
space in Baltimore for a base rent of $138,000 with a 3% annual increase each
subsequent year. The lease expires on February 14, 2008.

         We believe that our current facilities are adequate for our current and
reasonably foreseeable future needs for the markets that each facility serves
and that additional physical capacity at our current facilities is available to
accommodate expansion, if required.


ITEM 3.   LEGAL PROCEEDINGS
---------------------------

         In the opinion of the Company's management, there are no legal
proceedings pending to which the Company is a party or to which any of its
properties is subject, other than ordinary, routine litigation incidental to the
business which is not expected to have a material adverse effect on the results
of operations, financial condition or cash flows of the Company.


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

         During the fourth quarter of 1999, covered by this report, no matters
were submitted to a vote of our security holders.


                                       4


<PAGE>


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
         STOCKHOLDERS' MATTERS
         ----------------------

PRICE RANGE OF COMMON STOCK
---------------------------

         The following table shows the high and low closing bid prices for the
Common Stock in the over-the-counter market. The Common Stock, Warrants and
Units (comprised of two shares of common stock and one Common Stock Purchase
Warrant) of On-Site Sourcing, Inc. are listed on the Nasdaq SmallCap Market and
trade under the symbols "ONSS", "ONSSW" and "ONSSU", respectively. The table
below represents the quarterly high and low sales prices for each quarter in
1998 and 1999.(1)

         The quotations represent prices between dealers in securities, do not
include retail markup, markdowns or commissions and may not necessarily
represent the actual transactions.

<TABLE>
<CAPTION>
==========================================================================================================================
                                                 COMMON STOCK                 WARRANTS                    UNITS
==========================================================================================================================
<S>                                          <C>           <C>           <C>           <C>         <C>          <C>
Quarter Ended:                               HIGH           LOW          HIGH          LOW         HIGH          LOW
--------------------------------------------------------------------------------------------------------------------------
March  31, 1998                              3.630         2.810         .813         .344         7.875        5.625
--------------------------------------------------------------------------------------------------------------------------
June 30, 1998                                3.130         2.130         .594         .344         6.625         4.50
--------------------------------------------------------------------------------------------------------------------------
September 30, 1998                           2.310         1.060         .438         .156         5.250         2.50
--------------------------------------------------------------------------------------------------------------------------
December  31, 1998                           1.840         1.030         .406         .125         3.750        2.125
--------------------------------------------------------------------------------------------------------------------------
March  31, 1999                              2.25          1.188         .344         .188         5.00          3.25
--------------------------------------------------------------------------------------------------------------------------
June 30, 1999                                2.438         1.406         .313         .188         3.625        3.125
--------------------------------------------------------------------------------------------------------------------------
September 30, 1999                           1.75          1.063         .250         .156         3.125         3.00
--------------------------------------------------------------------------------------------------------------------------
December 31, 1999                            1.656          .969         .250         .125         3.00         2.125
==========================================================================================================================
</TABLE>


(1) The Company issued units comprised of two shares of Common Stock and one
Common Stock Purchase Warrant in connection with the initial public offering.
The Units began trading on the Nasdaq SmallCap Market on July 11, 1996 and the
Common Stock and Warrants began trading separately on August 19, 1996 with the
Units also continuing to trade.

APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

         As of December 31, 1999, there were 44 holders of record and
approximately 1,170 beneficial owners of the Common Stock.

DIVIDENDS

         We have never paid cash dividends on our common stock. Payment of
dividends will be within the discretion of the our Board of Directors and will
depend on, among other factors, earnings, capital requirements, and the
operating and financial condition of the Company. At the present time, we
anticipate retaining future earnings, if any, in order to finance the
development of our business activities.

RECENT ISSUANCES OF COMMON STOCK

On February 15, 1999 the Company issued 27,000 shares of its Common Stock
pursuant to the exercise of employee stock options. The sales of securities
described above were made in reliance upon Section 4(2) of the 1933 Act, which
provides exemptions for transactions not involving a public offering, and the
certificates for the securities bear a legend accordingly.


                                       5


<PAGE>


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

         The information in this section should be read in conjunction with the
information contained in the financial statements and related notes in "Item 7.
Financial Statements."

         This Annual Report on Form 10-KSB, including the documents Incorporated
by reference, contains forward looking statements within the meaning of Section
21B of the Securities Exchange Act of 1934, as amended. Such statements appear
in a number of places in this Annual Report, including without limitation, under
"Item 6. Management's Discussion and Analysis" and within the information
related to the impact of the year 2000. When the company refers to
forward-looking statements or information, sometimes the Company uses words as
"may," "will," "could," "should," "plans," "intends," "expects," "believes," or
similar expressions. All subsequent written and oral forward-looking statements
attributable to the Company and persons acting on its behalf are qualified by
their entirety by the cautionary statements contained in this Annual Report.
Actual events or results may differ materially from those discussed in
forward-looking statements. The company undertakes no duty to update any
forward-looking statements, or to publicly release the results if it revises any
of them. Factors which may cause the actual results of operations in future
periods to differ materially from intended or expected results include, but are
not limited to:

         [the following are intended as examples only]

     -    the loss of any key employees could adversely impact its ability to
          secure and complete engagements because the Company's business
          involves the delivery of professional services and is labor intensive;

     -    the availability and terms of additional capital or debt financing to
          fund future acquisitions and for working capital purposes;

     -    significant competition for business opportunities because of the
          fragmented nature of companies offering similar services and the low
          barrier of entry;

     -    fluctuations of revenue and operating income between quarters.

GENERAL

         We began to provide reprographic and facilities management services
to the premium service segment of the Philadelphia, PA market in June 1993.
We subsequently expanded our geographic market to include Washington, DC,
Baltimore, MD, New York, NY and Atlanta, GA. In November 1996, we expanded
the scope of our reprographic services to include imaging and scanning. In
1998 the Company formed its Information Technology Division to provide a full
range of technology services to law firms and other professional service
organizations. During 1999, we subsequently sold our Information Technology
Division. Revenues from reprographic, imaging services, information
technology and litigation support account for approximately 88% of total
revenues while facilities management accounts for 12% of total revenue for
the year ended December 31, 1999.

          The revenue provided by the reprographic and imaging services vary
depending on the volume of work orders received, with the months of August and
December historically being slow periods. Revenues are collected on a monthly
basis for facilities management contracts with payment due on the first of the
following month, while reprographic and imaging and digital printing service
revenues are collected on a per job basis.

         We have implemented a growth strategy based on certain e-commerce
initiatives including the development of an interactive business-to-business web
site and investment in human resources and technology to fully integrate our
future expansion plans with technological advances in order to meet the changing
needs of our customers.

         Our strategy consists of focusing on Internet-based document management
services in our three core businesses - imaging, digital printing and legal
copying. Our plans include positioning ourselves to become a national e-based
document management leader through product enhancements, development of new
technology, formation of strategic partnerships with document management
companies and selective acquisitions in new and existing markets.

         During 1999, we received a U.S. patent for Costrax, a real-time
invoicing and productivity analysis technology, which allows us to capture
real-time, billable data from our photocopier machines. The technology will
integrate the data into a web-based document management system. The system,
based on state-of-the-art shipping, tracking, billing and electronic file
management systems will provide the foundation for our Internet/web-based
initiatives.


                                       6


<PAGE>


RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 1999 COMPARED WITH THE YEAR
ENDED DECEMBER 31, 1998

REVENUES

         Our revenues are primarily derived from reprographics, imaging
services, litigation support and facilities management services. Revenues in
1999 of $26.67 million were 2.7% higher than 1998 levels of $25.97 million.
Reprographics revenues in 1999 were $20.25 million, almost equal to 1998 levels
of $20.45 million.

         Revenue from imaging services increased from $1.3 million in 1998 to
$2.23 million in 1999, with the largest increase occurring during the 4th
quarter of 1999 as we identified and actively pursued imaging opportunities
which resulted in an increased volume of imaging work orders fulfilled at our
various locations.

COSTS, EXPENSES AND GROSS PROFIT

         The gross profit in 1999 was $7.3 million, an increase of 72% from
1998 levels of $4.25 million. As a percentage of revenue, 1999 gross profit
was 27.38% compared to 16.37% in 1998. A major contribution to the
improvement in margins was from the growth of the imaging division which
contributes higher margins and the elimination of the information technology
division, which was sold in September 1999.

         Improved cost controls implemented in 1999 and improved management of
our labor force in the reprographics operations resulted in increased
efficiencies and improved gross margins. As unprofitable contracts ended,
facilities management gross profits improved in 1999. The imaging division
experienced a steady improvement in gross profit during 1999 and the information
technology operations, which continued to experience lower than expected gross
profits, were divested during the 3rd quarter of 1999.

         Selling expenses, consisting predominantly of sales commissions,
remained constant at 10.1% of sales. Administrative expenses increased from $3.0
million in 1998 to $3.7 million in 1999. Completion of the implementation of a
financial accounting system and increased administrative staff resources
contributed to the increase in administrative expenses.

         Other Income increased $118,762 in 1999 primarily due to the sale of
the information technology division in September 1999.

         Provision for income taxes of $189,000 resulted from 1999 pre-tax
earnings compared to a 1998 loss. The net operating loss carry forward at
December 31, 1999 is $197,000 and expires in 2014.

LIQUIDITY AND CAPITAL RESOURCES

         We have funded our expansion and growth by utilizing internally
generated cash flow, long term financing, and a commercial line of credit. We
anticipate that the cash flow from operations and credit facilities will be
sufficient to meet the our expected cash requirements for the next twelve
months. There can be no assurances that unforeseen events may not require more
working capital than we have at our disposal.

         In order to assure additional working capital is available to us to
fund our growth and expansion, we have available a $2,500,000 working capital
line of credit. The working capital line of credit is subject to certain
financial covenants and bears interest at the bank's prime rate of interest or
the 30 day LIBOR rate plus 2.25%. The underlying loan has a maturity date of
April 30, 2000. At December 31, 1999 net advances totaling $469,475 were made
under this agreement.

         In addition, we have obtained financing for certain equipment and
vehicles. The notes are secured by the equipment and vehicles, at rates ranging
from 5% to 9.7% and mature at various times between 2000 and 2003.

         During 1999, we repurchased 14,300 shares of our common stock. The
shares were repurchased on the open market and will be held for future
initiatives.

         On March 2, 2000, we entered into a non-binding letter of intent to
purchase certain assets and assume certain note and lease obligations of an
offset printing and pre-press service company. We are currently negotiating
terms of the transaction.

         We believe our market risk exposure with regard to our financial
instruments is limited to changes in interest rates. Based upon the composition
of our variable rate debt outstanding at December 31, 1999 which is primarily
borrowings under the working capital line of credit, we do not believe that a
hypothetical increase in the bank's prime rate of interest or the 30 day LIBOR
rate would be material to net income.

YEAR 2000

We successfully completed our program to ensure Year 2000 readiness. As a
result, we had no Year 2000 problems that affected its business, results of
operations or financial condition.


                                       7


<PAGE>


ITEM 7.   FINANCIAL STATEMENTS
------------------------------

INDEX TO FINANCIAL STATEMENTS
                                                                 PAGE

INDEPENDENT AUDITORS' REPORT                                        9

FINANCIAL STATEMENTS

         BALANCE SHEETS AS OF DECEMBER 31, 1999 AND 1998           10

         STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
         DECEMBER 31, 1999 AND 1998                                11

         STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
         YEARS ENDED DECEMBER 31, 1999 AND 1998                    12

         STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
         DECEMBER 31, 1999 AND 1998                                13

         NOTES TO FINANCIAL STATEMENTS                             15



                                       8


<PAGE>



                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors
On-Site Sourcing, Inc.

         We have audited the accompanying balance sheets of On-Site Sourcing,
Inc., as of December 31, 1999 and 1998, and the related statements of
operations, stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of On-Site Sourcing,
Inc., as of December 31, 1999 and 1998, and the results of its operations and
its cash flows for the years then ended, in conformity with generally accepted
accounting principles.




Bethesda, Maryland
January 31, 2000, except for Note 7
    which is dated March 1, 2000


                                       9


<PAGE>


                             On-Site Sourcing, Inc.

                                 BALANCE SHEETS

                           December 31, 1999 and 1998

<TABLE>
<CAPTION>

                                                                         1999             1998
                                                                       -------------   -------------
                                     ASSETS

<S>                                                                    <C>             <C>
CURRENT ASSETS
  Cash and cash equivalents                                            $     22,682    $          -
  Accounts receivable, net                                                6,462,624       5,922,028
  Supplies                                                                  502,361         449,366
  Prepaid expenses                                                          162,484         136,758
  Notes receivable, current portion                                          41,941               -
                                                                       -------------   -------------
          Total current assets                                            7,192,092       6,508,152

PROPERTY AND EQUIPMENT, net                                               4,104,106       4,367,995
OTHER ASSETS
  Note receivable, net of current portion                                   270,000               -
  Other assets                                                               82,931          75,063
                                                                       -------------   -------------
          Total assets                                                 $ 11,649,129    $ 10,951,210
                                                                       =============   =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                      $ 1,808,633     $ 2,018,250
  Accrued and other liabilities                                             806,858         694,333
  Line of credit                                                            469,475         141,345
  Current portion of long-term debt                                         571,707         472,824
  Deferred income taxes                                                      38,573               -
                                                                       -------------   -------------
          Total current liabilities                                       3,695,246       3,326,752

NONCURRENT LIABILITIES
  Long-term debt, net of current portion                                    528,687       1,169,454
  Deferred rent                                                             133,568         121,911
  Deferred income taxes                                                     347,609         197,182
                                                                       -------------   -------------
          Total liabilities                                               4,705,110       4,815,299

Commitments                                                                       -               -

STOCKHOLDERS' EQUITY
  Common stock, $.01 par value, 20,000,000 shares
       authorized; 4,851,669 and 4,824,669 shares issued outstanding         48,517          48,247
  Preferred stock, $.01 par value, 1,000,000 shares
       authorized, no shares issued and outstanding                               -               -
    Subscription receivable                                                 (50,400)        (50,400)
    Additional paid -in capital                                           6,469,921       6,432,691
    Treasury stock (19,300 and 5,000 shares of common stock at cost)        (44,331)        (25,000)
    Accumulated earnings (deficit)                                          520,312        (269,627)
                                                                       -------------   -------------
                                                                          6,944,019       6,135,911
                                                                       -------------   -------------
          Total liabilities and stockholders' equity                   $ 11,649,129    $ 10,951,210
                                                                       =============   =============
</TABLE>


                 See accompanying notes to financial statements

                                       10


<PAGE>




                             On-Site Sourcing, Inc.

                            STATEMENTS OF OPERATIONS

                     Years ended December 31, 1999 and 1998

<TABLE>
<CAPTION>

                                                     1999                1998
                                                 -----------         -----------
<S>                                              <C>                 <C>
Revenue                                          $26,670,903         $25,965,723
Cost of revenue                                   19,368,458          21,713,453
                                                 -----------         -----------
   Gross profit                                    7,302,445           4,252,270
                                                 -----------         -----------
Selling and marketing                              2,703,755           2,645,776
Administrative                                     3,742,909           3,025,825
                                                 -----------         -----------
                                                   6,446,664           5,671,601
                                                 -----------         -----------
   Earnings (loss) from operations                   855,781          (1,419,331)
                                                 -----------         -----------
Other income (expense)
   Other income                                      348,054             229,292
   Other expense, primarily interest                (224,896)           (236,574)
                                                 -----------         -----------
                                                     123,158              (7,282)
                                                 -----------         -----------
Earnings (loss) before income taxes                  978,939          (1,426,613)
Income tax expense (benefit)                         189,000            (429,000)
                                                 -----------         -----------
   Net earnings (loss)                           $   789,939         $  (997,613)
                                                 ===========         ===========

   Basic earnings (loss) per share                    $ 0.16             $ (0.21)
   Diluted earnings (loss) per share                  $ 0.16             $ (0.21)
</TABLE>


                       See notes to financial statements

                                       11


<PAGE>


                             On-Site Sourcing, Inc.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                     Years ended December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                  Additional                                   Retained
                             Common       Common   paid-in    Subscriptions   Treasury stock   (deficit)
                             shares       stock    capital      receivable      (Common)        earnings             Total
                           ----------   --------  ----------  --------------  --------------  ----------        -------------------
<S>                         <C>         <C>       <C>         <C>             <C>             <C>               <C>
Balance at
December 31, 1997           4,802,221   $48,022   $6,367,379  $ (50,400)      $      -         $727,986            $7,092,987

Sale of common stock           22,448       225       65,312          -              -                -               65,537

Common stock reacquired             -         -            -          -        (25,000)               -              (25,000)

Net loss                            -         -            -          -              -         (997,613)            (997,613)
                            ---------   -------   ----------   ---------     ---------        ---------          -----------

Balance at
December 31, 1998           4,824,669    48,247    6,432,691    (50,400)       (25,000)        (269,627)           6,135,911

Sale of common stock           27,000       270       37,230          -              -                -               37,500

Common stock reacquired             -         -            -          -        (19,331)               -              (19,331)

Net earnings                        -         -            -          -              -          789,939              789,939
                            ---------   -------   ----------   ---------     ---------        ---------          -----------

Balance at
December 31, 1999           4,851,669   $48,517   $6,469,921  $ (50,400)      $(44,331)        $520,312           $6,944,019
                            =========   =======   ==========  ==========     =========        =========
</TABLE>


                       See notes to financial statements

                                       12


<PAGE>


                             On-Site Sourcing, Inc.

                            STATEMENTS OF CASH FLOWS

                      Year ended December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                       1999               1998
                                                                  ----------------   ----------------
<S>                                                               <C>                <C>
Cash flows from operating activities
  Net earnings (loss)                                                   $ 789,939         $ (997,613)
                                                                  ----------------   ----------------

Adjustments to reconcile net earnings
to net cash used in operating activities
  Depreciation                                                          1,057,820          1,037,175
  (Gain) loss on disposition of equipment                                       -            (29,524)
  Gain on disposition of division                                        (270,000)
  Changes in assets and liabilities                                             -
    Decrease (increase) in accounts receivable, net                      (540,597)            64,036
    Increase in prepaid supplies                                          (52,995)           (31,673)
    Decrease (increase) in prepaid expenses                               (25,726)            79,989
    Decrease (increase) in other assets                                    (7,869)            23,719
    Increase (decrease) in accounts payable - trade                      (209,615)            25,668
    (Decrease) increase in accrued  and other liabilities                 112,524           (230,153)
    Increase (decrease) in deferred rent                                   11,657             25,402
    (Decrease) increase in provision for income taxes                      61,943           (559,193)
    Increase (decrease) in deferred taxes                                 189,000            130,193
                                                                  ----------------   ----------------

      Total adjustments                                                   264,199            535,639
                                                                  ----------------   ----------------

      Net cash provided by (used in) operating activities               1,054,138           (461,974)
                                                                  ----------------   ----------------

Cash flows from investing activities
  Capital expenditures                                                   (793,930)        (1,090,034)
  Proceeds from disposition of equipment                                        -              9,501
  Advances in connection with sale of business division                   (50,000)
  Receipt of payments on notes receivable                                   8,059                  -
                                                                  ----------------   ----------------

      Net cash used in investing activities                              (835,871)        (1,080,533)
                                                                  ----------------   ----------------

Cash flows from financing activities
  Proceeds from sale of common stock and exercise of warrants              37,500             65,537
  Proceeds of long-term debt agreements                                         -            316,000
  Net borrowings short-term debt agreement                                328,130            141,345
  Payments under long-term debt agreements                               (541,884)          (471,077)
  Payments for reacquisition of common stock                              (19,331)                 -
                                                                  ----------------   ----------------

      Net cash provided by financing activities                          (195,585)            51,805
                                                                  ----------------   ----------------

      NET INCREASE (DECREASE) IN CASH                                      22,682         (1,490,702)
         AND CASH EQUIVALENTS

Cash and cash equivalents, beginning                                            -          1,490,702
                                                                  ----------------   ----------------

Cash and cash equivalents, end                                           $ 22,682                $ -
                                                                  ================   ================
</TABLE>

                                  (continued)

                                       13


<PAGE>


                             On-Site Sourcing, Inc.

                      STATEMENTS OF CASH FLOWS - CONTINUED

                      Year ended December 31, 1999 and 1998


<TABLE>
<CAPTION>
                                                                                 1999          1998
                                                                              ----------    ----------
<S>                                                                           <C>           <C>
Supplemental disclosure of cash flow activities

Interest paid                                                                 $ 181,714     $ 194,585
                                                                              ==========    ==========

Income taxes paid                                                                     -             -
                                                                              ==========    ==========

Noncash investing and financing activities:

Fixed assets acquired under capital lease obligations                         $       -     $ 269,508
                                                                              ==========    ==========

Fixed assets acquired through long-term debt                                  $       -     $  21,509
                                                                              ==========    ==========

Purchase of treasury stock offset against note receivable                     $       -     $  25,000
                                                                              ==========    ==========

Proceeds from sale of equipment included in accounts receivable               $       -     $  65,000
                                                                              ==========    ==========

Issuance of note receivable in connection with sale of business division      $ 270,000     $       -
                                                                              ==========    ==========
</TABLE>


                       See notes to financial statements

                                       14


<PAGE>


                             On-Site Sourcing, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 1999 and 1998


1.   ORGANIZATION

     NATURE OF BUSINESS

     On-Site Sourcing, Inc. (the "Company") was incorporated in the Commonwealth
     of Virginia on December 1992 and changed its state incorporation to
     Delaware in January 1996. The Company performs various services, including
     facilities management, litigation copying, and related services at customer
     and company locations. The facilities management and litigation copying
     services are performed in the metropolitan areas of Philadelphia,
     Pennsylvania; Washington, D.C.; Atlanta, Georgia; and New York, New York.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     USE OF ESTIMATES

     In preparing financial statements in conformity with generally accepted
     accounting principles, management is required to make estimates and
     assumptions that affect the reported amounts of assets and liabilities, the
     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. Management estimates include the allowance for
     doubtful accounts on accounts receivable. Actual results could differ from
     those estimates. Significant estimates are made when accounting for the
     allowance for uncollectible accounts in connection with accounts
     receivable.

     REVENUE RECOGNITION

     Revenue from reprographic services is recognized on a per copy basis upon
     completion of the services. Facilities management revenue is recognized
     based on monthly fixed fees and, in certain cases, on a variable per copy
     fee basis, as defined in facilities management agreements.

     RECLASSIFICATIONS

     Certain accounts in the 1998 financial statements have been reclassified to
     conform with the presentation.

     SEGMENT DISCLOSURES

     The Company complies with Statement of Financial Accounting Standards
     ("SFAS") No. 131, "Disclosures about Segments of an Enterprise and Related
     Information." SFAS No. 131 establishes standards for reporting information
     about operating segments and related disclosures about products and
     services, geographic areas and major customers.

     INCOME TAXES

     Deferred taxes are recognized based on the estimated future tax effects of
     temporary differences between the carrying amounts of assets and
     liabilities for financial reporting purposes and the amount used for income
     tax purposes. Income tax expense (benefit) represents the current tax
     provision for the period and the change during the period in deferred and
     current tax assets and liabilities. Deferred taxes for temporary
     differences relate to depreciation, deferred rent installment sales and net
     operating loss carryforwards.


                                       15


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     DEPRECIATION AND AMORTIZATION

     Property and equipment are stated at cost. Depreciation on property and
     equipment is computed on a straight-line basis over the estimated useful
     lives of the assets ranging from two to fifteen years for financial
     reporting purposes. Accelerated methods are used for tax purposes.

     Effective January 1, 1999, the Company increased its estimate of the useful
     life of certain equipment from five to fifteen years. The change resulted
     in an increase of net earnings of $174,570 or $0.04 per share for the year
     ended December 31, 1999.

     EARNINGS (LOSS) PER COMMON SHARE

     Basic earnings (loss) per share exclude dilution and are calculated using
     the average number of shares outstanding. Diluted earnings (loss) per share
     is computed on the basis of the average number of shares outstanding plus
     the effect of outstanding stock options using the "treasury stock" method.

<TABLE>
<CAPTION>
                                                                        Year ended December 31
                                                                       1999                1998
                                                                -------------------  ------------------
<S>                                                             <C>                  <C>
Net earnings (loss) available for common shareholders (A)       $      789,939      $     (997,613)

Average outstanding:
   Common stock (B)                                                  4,838,727           4,818,220
   Employee stock options                                               71,197                   -

Common stock and common stock equivalents (C)                        4,909,924           4,818,220

Earnings (loss) per share:
   Basic (A/B)                                                  $          .16      $        (0.21)
   Diluted (A/C)                                                $          .16      $        (0.21)
</TABLE>


Unexercised employee stock options to purchase 999,971 and 1,675,360 shares of
the Company's common stock as of December 31, 1999 and 1998, respectively, were
not included in the computations of diluted earnings per share because the
options' exercise prices were greater than the average market price of the
Company's common stock during the respective period. In addition, since the
Company had a net loss for the year ended December 31, 1998, no potential common
shares to be issued are included in the computation of the diluted per share
amount for that year as they would be antidilutive. Accordingly, for the year
ended December 31, 1998, common stock equivalents totaling 130,285 are not
included in the weighted average shares of common stock outstanding.


                                       16


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     DEFERRED RENT

     Deferred rent is recorded and amortized to the extent the total minimum
     rental payments allocated to the current period on a straight-line basis
     are less than the cash payments required.

     CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid investments with an original
     maturity of three months or less at the date of acquisition to be cash
     equivalents.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following disclosure of the estimated fair value of financial
     instruments is made in accordance with the requirements of SFAS No. 107,
     "Disclosure about Fair Value of Financial Instruments." The estimated fair
     value amounts have been determined using available market information,
     assumptions and valuation methodologies.

     SUBSCRIPTION RECEIVABLE AND NOTES RECEIVABLE

     Management believes that it is not practicable to estimate the fair value
     of notes because notes with similar characteristics are not available from
     the Company.

     LINE OF CREDIT AND LONG-TERM DEBT

     The carrying amounts approximate fair value.

     IMPAIRMENT OF LONG-LIVED ASSETS

     The Company complies with SFAS No. 121, "Accounting for the Impairment of
     Long-Lived Assets to be Disposed Of." SFAS No. 121 requires that long-lived
     assets and certain identifiable intangibles held and used by an entity be
     reviewed for impairment whenever changes in circumstances indicate that the
     carrying amount of an asset may not be recoverable. To determine
     recoverability of its long-lived assets, the Company evaluates the
     probability that future undiscounted net cash flows will be less than the
     carrying amounts of net assets. Impairment, if any, is measured at fair
     value.

     CONCENTRATION OF CREDIT RISK

     Financial instruments, which potentially subject the Company to a
     concentration of credit risk, principally consist of trade accounts
     receivable and cash. The Company places its cash with creditworthy, high
     quality financial institutions. Credit risk with respect to trade
     receivables is also limited because the Company deals with a large number
     of customers in a wide geographic area.


                                       17


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


3.   COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

     ACCOUNTS RECEIVABLE

     Accounts receivable consist of the following at December 31, :

<TABLE>
<CAPTION>
                                                                              1999               1998
                                                                       -----------------   -----------------
<S>                                                                    <C>                  <C>
Trade receivables                                                      $     6,979,040      $   6,306,209
Other receivables                                                               28,000            220,152
Allowance for uncollectible accounts                                          (544,416)          (604,333)
                                                                       -----------------   -----------------

                                                                       $     6,462,624      $   5,922,028
                                                                       =================   =================

OTHER ASSETS

Other assets consist of the following at December 31, :
                                                                             1999                1998
                                                                       -----------------   -----------------

Deposits                                                               $       67,756       $     47,389
Employee advances                                                              15,175             27,674
                                                                       -----------------   -----------------
                                                                       $       82,931       $     75,063
                                                                       =================   =================
PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31, :

                                                                             1999                1998
                                                                       -----------------   -----------------
Copiers                                                                $    3,609,823       $  3,560,647
Computers, equipment and other                                              3,428,547          2,683,792
Vehicles                                                                      332,551            332,551
Accumulated depreciation                                                   (3,266,815)        (2,208,995)
                                                                       -----------------   -----------------
                                                                       $    4,104,106       $  4,367,995
                                                                       =================   =================
</TABLE>


Depreciation expense charged to operations was $1,057,820 and $1,037,175 for the
years ended December 31, 1999 and 1998, respectively.


                                       18


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


3.   COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (CONTINUED)

     ACCRUED AND OTHER LIABILITIES

     Accrued and other liabilities consist of the following at December 31, :

<TABLE>
<CAPTION>
                                                                            1999               1998
                                                                     ------------------- ------------------
<S>                                                                  <C>                 <C>
Accrued salaries, commissions, taxes and fringe benefits             $        459,192    $        484,732
Accrued sales tax payable                                                     155,670             109,581
Other accrued liabilities                                                     191,996             100,021
                                                                     ------------------- ------------------

                                                                     $        806,858    $        694,334
                                                                     =================== ==================
</TABLE>

4.   SEGMENT INFORMATION

     The Company's reportable segments are strategic business units that offer
     different products and services. The Company has two reportable segments:
     reprographics and facilities management services. Reprographic services
     include copying, binding, labeling, collating and indexing materials.
     Facilities management services include on-premises management of the
     customer's support services, including mailroom operations, facsimile
     transmission, records and supply room management and copying services.
     Other operating segments include information technology and imaging
     services. During 1999, the company sold the information technology business
     segment (note 12).

     The accounting policies of the segments are the same as those described in
     the summary of significant accounting policies (note 2). The Company
     evaluates performance based on profit and loss from operations before
     income taxes and does not review information regarding the allocation of
     assets to each segment. In addition, corporate administrative costs are not
     allocated to each segment. There are no intersegment sales or transfers.


                                       19


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


4.   SEGMENT INFORMATION (CONTINUED)

Revenue and profit by reportable segment for the years ended December 31, 1999
and 1998 are as follows:

<TABLE>
<CAPTION>
                     Reprographic services                    Facilities management services
                     ------------------------------------- --------------------------------------
                           1999                1998               1999               1998
                     ------------------ ------------------ ------------------- ------------------
<S>                  <C>                <C>                <C>                 <C>
Revenue              $     20,250,011   $     20,447,165   $      3,222,480    $      4,002,208

Segment profit              2,873,962   $      1,264,860            685,706             459,702
</TABLE>


A reconciliation of segment revenue and profit to total revenue and earnings
(loss) from operations is as follows:

<TABLE>
<CAPTION>
                                                                           1999               1998
                                                                    ------------------- ------------------
<S>                                                                 <C>                 <C>
Revenue
   Total revenue for reportable segments                            $     23,472,491    $     24,449,373
   Other revenue                                                           3,198,412           1,516,350
                                                                    ------------------- ------------------

       Total revenue                                                $     26,670,903    $     25,965,723
                                                                    =================== ==================

Profit or loss
   Total profit for reportable segments                             $      3,559,668    $      1,724,562
   Other loss                                                             (2,703,887)         (3,143,893)
                                                                    ------------------- ------------------

       Earnings (loss) before other income, interest expense and
         income taxes                                               $        855,781    $     (1,419,331)
                                                                    =================== ==================
</TABLE>

5.   LINE OF CREDIT

     At December 31, 1999 and 1998, the Company had available a working capital
     line of credit with a financial institution in the amount of $2,500,000.
     The working capital line of credit is collateralized by accounts receivable
     and certain equipment as described in the agreement. The working capital
     line of credit expires April 30, 2000 and is subject to certain financial
     covenants, including minimum tangible net worth requirements. The line of
     credit bears interest at the bank's prime rate or the 30-day LIBOR rate
     plus 2.25% (8.08% at December 31, 1999). As of December 31, 1999 and 1998,
     there were $469,475 and $141,345 advances made under this agreement,
     respectively.


                                       20


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


6.  LONG-TERM DEBT

    Long-term debt is as follows:
<TABLE>
<CAPTION>

                                                                                  1999                 1998
                                                                           -------------------- --------------
<S>                                                                        <C>                  <C>
Equipment  note of  $1,100,000  at  9.02%,  collateralized  by  certain
assets  of the  Company,  payable  in  equal  monthly  installments  of
$22,916 plus interest, maturing in March 2001.                             $      343,750         $  618,750

Equipment note at 8.75%,  collateralized  by the equipment,  payable in
equal aggregate monthly installments of $5,594 plus interest,  maturing
in December 2001.                                                                 139,416            203,919

Vehicle  notes at 5.0%,  collateralized  by the  vehicles,  payable  in
equal  aggregate  monthly  installments  of  principal  and interest of
approximately $983, maturing in October 2001.                                      21,518             31,954

Vehicle  notes at 9.7%,  collateralized  by the  vehicles,  payable  in
equal  aggregate  monthly  installments  of  principal  and interest of
approximately $1,272, maturing in August 2001.                                     23,412             35,752

Equipment  note at 8.75%  collaterized  by the  equipment,  payable  in
equal  aggregate  monthly  installments  of  principal  and interest of
approximately $7,380, maturing in July 2002.                                      210,124            282,235

Vehicle note at 6.88%,  collateralized by the vehicle, payable in equal
aggregate   monthly   installments   of   principal   and  interest  of
approximately $425, maturing in November 2003.                                     17,455             21,208

Capital leases obligations (see note 7)                                           344,719            448,460
                                                                           -------------------- --------------

                                                                                1,100,394          1,642,278
Less current maturities included in current liabilities                          (571,707)          (472,824)
                                                                           -------------------- --------------

                                                                           $      528,687        $ 1,169,454
                                                                           ==================== ==============
</TABLE>


                                       21


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


6.   LONG-TERM DEBT (CONTINUED)

     Aggregate maturities for long-term debt is as follows:

           Year ending December 31, 2000            $         571,707
                                    2001                      372,230
                                    2002                      125,391
                                    2003                       31,066
                                                    ------------------
                                                    $       1,100,394
                                                    ==================

7.   LEASES

     The Company leases its office facilities, copiers and office equipment
     under various operating and capital leases. Lease terms range from one to
     approximately six years. On March 1, 2000 the company entered into a new
     lease agreement for office space in Atlanta, GA, and terminated the
     existing lease. The new lease provides for fixed escalations in payments
     over the lease term through 2005.


     Minimum annual rental and lease commitments for leases with a remaining
     term of one year or more at December 31, 1999, are as follows:

<TABLE>
<CAPTION>
Year ending December 31,                                              Capital leases     Operating leases
------------------------------------------------------------------- ------------------- --------------------
<S>                                                                 <C>                <C>
2000                                                                $        152,510   $        865,739
2001                                                                         143,735            692,840
2002                                                                          81,832            600,936
2003                                                                          27,308            480,059
2004                                                                               -            407,578
Thereafter                                                                         -            733,840
                                                                    ------------------- --------------------

Total minimum lease payments                                                 405,385    $      3,708,992
                                                                                        =====================

Less:     interest                                                            60,666
                                                                    -------------------

Present value of net minimum lease payments                         $        344,719
                                                                    ===================
</TABLE>



                                       22


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


7.   LEASES (CONTINUED)

     Fixed assets recorded under capital leases as of December 31, 1999 and
     December 31, 1998, total approximately $659,000 each year, representing
     reprographic machines, and computer equipment. Interest expense on the
     outstanding obligations under capital leases was approximately $45,717 and
     $15,400 for the years ended December 31, 1999 and 1998, respectively.

     Rent expense was $2,243,190 and $1,488,294 for the years ended December 31,
     1999 and 1998, respectively.

8.   RELATED PARTY TRANSACTIONS

     During the years ended  December 31, 1999 and 1998, the Company recorded
     the following transactions with a shareholder and former officers.

     -    During 1998, the Company billed a shareholder and former officer
          approximately $16,500 for reprographic services.

     -    During 1998, the Company incurred approximately $40,000 for legal
          services rendered by a shareholder and former officer.

     -    During 1996, the Company entered into a note agreement with a former
          officer/shareholder in the amount of $25,000. The loan bore interest
          at the prime rate of interest at the date of the loan (8.25%). All
          unpaid principal and accrued interest was repayable in September 1998.
          In November 1998, the Company repurchased shares of common stock in
          satisfaction for the note receivable.

     -    In March 1996, the Company loaned $89,900 to Allen Outlaw. The
          loan bears interest at 6% per year. The balance of $50,400 at December
          31, 1999 is due April 1, 2000.

9.   COMMITMENTS AND CONTINGENCIES

     EMPLOYMENT AGREEMENTS

     The Company has entered into employment agreements with its officers and
     certain employees. The agreements provide for base salaries, contingent
     incentive compensation based on achievement of certain sales and other
     goals, noncompete and nondisclosure restrictions and, in certain cases,
     stock options which vest over a period of time. The agreements are
     terminable at the discretion of the Company.

10.  INCENTIVE STOCK OPTION PLAN

     The Company adopted an incentive stock option plan for 1998, 1997, 1996 and
     1995 under which a pool of 700,000, 500,000, 242,000 and 510,000 shares,
     respectively, has been reserved. The plan is administered and terms of
     option grants are established by the Board of Directors. Under the terms of
     the plan, options may be granted to the Company's employees to purchase
     shares of common stock. Options become exercisable ratably over a vesting
     period as determined by the Board of Directors, and expire over terms not
     exceeding 10 years from the date of grant, three months after termination
     of employment, or one year after the death or permanent disability of the
     employee. The Board of Directors determines the option price (not less than
     fair market value) at the date of grant.


                                       23


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


10.  INCENTIVE STOCK OPTION PLAN (CONTINUED)

     The Company applied APB Opinion No. 25 and related Interpretations in
     accounting for its plans. Had compensation cost been determined in
     accordance with FASB No. 123, the Company's net income (loss) and net
     income (loss) per share would have been the pro forma amounts indicated
     below:

<TABLE>
<CAPTION>
Net income (loss):                                                         1999               1998
                                                                    ------------------ -------------------
<S>                                                                 <C>                <C>
    AS REPORTED                                                     $        789,939   $       (997,613)
    Pro forma                                                                634,985         (1,225,712)

Net income (loss) per common share - Basic:
    AS REPORTED                                                                  .16              (0.21)
    Pro forma                                                                    .13              (0.25)

Net income (loss) per common share - Diluted:
    AS REPORTED                                                                  .16              (0.21)
    Pro forma                                                                    .13              (0.25)
</TABLE>

     All options granted during the years ended December 31, 1999 and 1998 were
     issued pursuant to the incentive stock option plans. The fair value of each
     option grant under the plan is estimated on the date of grant using the
     Black-Scholes option-pricing model. The following weighted-average
     assumptions for 1999 and 1998, respectively, were used: expected dividend
     yields of 0.0% and 0.0%, expected volatility rates of 72% and 48%,
     risk-free rates of 4.6% and 5.5% and expected lives of 1 to 4 years.

     At December 31, 1999 and 1998, the Company had outstanding options to sell
     469,825 and 434,937 shares, respectively, of common stock to officers and
     directors at exercise prices ranging from $1.11 to $3 per share. The
     options expire through 2002.

     During 1999 and 1998, the Company granted options for 161,000 and 1,182,285
     shares of common stock, respectively, at exercise prices ranging from $1.13
     to $3.44 per share, respectively. The grant price per share was equal or
     greater than the market price at the date of grant. During 1999, options
     for 630,402 shares of common stock expired and 27,000 were exercised. As of
     December 31, 1998, options for 781,885 of the shares are vested and
     outstanding. As of December 31, 1999, options for 795,442 of the shares are
     vested with the remainder scheduled to vest through October 2002. The
     options expire through October 2006.


                                       24


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


10.  INCENTIVE STOCK OPTION PLAN (CONTINUED)

     The following depicts activity in the plan for two years ended December 31,
     1999:

<TABLE>
<CAPTION>
                                                              Options outstanding

                                                                            Per share
                                                           Shares        exercise prices
                                                     ------------------ -------------------
<S>                                                   <C>                <C>
Outstanding, January 1, 1998                                  966,755   $      1.10-3.25
     Options granted                                        1,182,225          1.13-3.44
     Options exercised                                          5,000               1.11
     Options expired                                          468,620          2.13-3.00
                                                     ------------------ -------------------

Outstanding, December 31, 1998                              1,675,360          1.10-3.00
     Options granted                                          161,000          1.38-1.88
     Options exercised                                         27,000               1.39
     Options expired                                          630,402          1.11-3.44
                                                     ------------------ -------------------

Outstanding, December 31, 1999                              1,178,958   $      1.10-3.44
                                                     ================== ===================
</TABLE>

11.  INCOME TAXES

     The amounts and sources of the provision for deferred income tax expense
     (benefit) were as follows for the year ended December 31,:

<TABLE>
<CAPTION>
                                                            1999               1998
                                                     ------------------ -------------------
<S>                                                  <C>                <C>
Current
    Federal                                          $         52,147   $       (447,424)
    State                                                       9,796           (111,769)
                                                     ------------------ -------------------

                                                               61,943           (559,193)
Deferred
    Federal                                                   104,966            103,731
    State                                                      22,091             26,462
                                                     ------------------ -------------------

                                                     $        189,000   $       (429,000)
                                                     ================== ===================
</TABLE>


                                       25


<PAGE>


                             On-Site Sourcing, Inc.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                           December 31, 1999 and 1998


11.  INCOME TAXES (CONTINUED)

     Deferred income taxes reflect the net tax effects of temporary differences
     between carrying amounts of assets and liabilities for financial reporting
     purposes. Components of the Company's deferred tax liability (benefit) are
     as follows:

<TABLE>
<CAPTION>

                                                                          1999               1998
                                                                    ------------------ ------------------
     <S>                                                            <C>               <C>
     Excess of tax over financial accounting depreciation             $    385,724      $     365,477
     Loss carryforwards                                                    (79,531)          (138,315)
     Other                                                                  79,989            (29,980)
                                                                    ------------------ ------------------

     Deferred tax liability                                           $    386,182      $     197,182
                                                                    ================== ==================
</TABLE>

     Beginning in 1998, the Company is required to report on the accrual basis
     for federal and state income tax purposes. In accordance with Internal
     Revenue Service Code, the amount of income tax due resulting from the
     conversion from cash to accrual is payable over 4 years. The income tax
     payable was offset by net operating loss carryforwards. At December 31,
     1999, the company had approximately $197,000 of operating loss carry
     forwards that expire in 2014.

12.  EMPLOYEE BENEFIT PLAN

     The Company sponsors a plan to provide retirement benefits under the
     provision of Section 401(k) of the Internal Revenue Code (the 401(k) Plan)
     for all employees who have completed one year of service and have reached
     their 21st birthday. Company contributions may range from 0% to 100% of
     employee contributions. Employees may elect to contribute up to 25% of
     their eligible compensation on a pretax basis. Benefits under the 401(k)
     Plan are limited to the assets of the 401(k) Plan. During the years ended
     December 31, 1999 and 1998, respectively, the Company made no contributions
     to the 401(k) Plan.

13.  SALE OF INFORMATION TECHNOLOGY DIVISION

     On September 30, 1999, the Company entered into a purchase and sale
     agreement with a former stockholder and employee to sell the rights and
     contracts to provide certain information technology services to customers
     previously serviced by the Company's Information Technology Division. The
     sale price, in the amount $270,000, is financed by a note agreement between
     the Company and former shareholder. The note accrues interest at 8% per
     annum, is payable in interest only installments through September 2000 and
     in principal and interest installments until maturity in September 2002. At
     December 31, 1999, $270,000 remains payable to the Company.

     In connection with the sale, the Company entered into an additional note
     agreement with the former shareholder in the amount of $50,000. The note
     accrues interest at 8% per annum and is payable in monthly principal and
     interest installments until maturity in September 2000. At December 31,
     1999, $41,941 remains payable to the Company.


                                       26


<PAGE>


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

        None

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS

       The following individuals are the Directors and Officers of the Company.
       All Directors are elected annually by the shareholders to serve until the
       next annual meeting of shareholders and until their successors are duly
       elected and qualified. Officers are elected annually by the Board of
       Directors to serve at the pleasure of the Board.

<TABLE>
<CAPTION>
                       NAME             AGE                       POSITION
        -----------------------------  -----          ---------------------------------
<S>                                    <C>          <C>
                                                    President, Chief Executive Officer and Chairman
Christopher J. Weiler                    37         of the Board
Allen C. Outlaw                          34         Executive Vice President-Marketing and Director
Alfred Duncan                            56         Executive Vice President/ Chief Financial Officer
John Sabanosh                            49         Vice President-Finance
Charles B. Millar                        39         Director
Jorge R. Forgues                         44         Director
Denis Seynhaeve                          44         Director
</TABLE>


     CHRISTOPHER J. WEILER founded the Company with in December 1992 and has
     been President, Chief Executive Officer and a director of the Company since
     that time. Mr. Weiler graduated from the United States Naval Academy in
     1985 and served in the United States Navy as a surface warfare officer and
     as a Navy Senate Liaison Officer on Capitol Hill, Washington, D.C. before
     joining Pitney Bowes Management Services in 1991. Since 1998, Mr. Weiler
     has served as Chairman of the Board.

     ALFRED DUNCAN joined the Company as Executive Vice President and Chief
     Financial Officer in July 1998. From June 1997 until July 1998, Mr Duncan
     served as Vice President and Chief Financial Officer of Meadowlanders,
     Inc., owners of the New Jersey Devils, a National Hockey League team. From
     1992 until June 1997, Mr. Duncan was an independent management consultant
     to the computer, software and consumer electronics industries. Mr. Duncan
     holds a BSCE from Duke University and an MBA from Harvard University.

     ALLEN C. OUTLAW has been Executive Vice President of Marketing since
     September 1997. Prior thereto Mr. Outlaw served as Vice President of
     Sales and Marketing since joining the Company in March 1994. Mr. Outlaw
     has also served on the Board of Directors since March 1994. Prior to
     joining the Company, he held various positions in the investment
     industry, including owner and Director of Marketing of Justin Asset
     Management, a successful investment management firm from January 1991
     until joining the Company.

     JOHN SABANOSH has been the Vice President of Finance since June 1998. Prior
     thereto, Mr. Sabanosh was Vice President of Phoenix International, LLC, an
     international trade and investment company. From 1991 until 1995, he was
     General Manager of FedComp, Inc., where he restored the software firm to
     profitability. He has a B.S. in Business from Virginia Polytechnic
     Institute and State University.

     CHARLES B. MILLAR has served as a Senior Vice President of the Washington
     D.C. investment banking firm of Johnston, Lemon & Co., Inc. since 1991. Mr.
     Millar joined the Board of Directors, Compensation and Audit Committees in
     August 1996.


                                       27


<PAGE>



     JORGE R. FORGUES has the position of Vice President - Finance, Latin
     America for PSINet, Inc. Prior thereto, from 1996 to 1998, Mr. Forgues
     served in the positions of Senior Vice President of Finance and
     Administration, Chief Financial Officer and Treasurer of Treev Corporation
     (formerly Network Imaging Corporation), a Herndon, Virginia based publicly
     traded software developer. From October 1993 to April 1996, Mr. Forgues was
     Vice President of Finance and Administration, Chief Financial Officer and
     Treasurer of Globalink, a Fairfax-based, publicly-traded, machine
     translation software company. []From 1992 to 1993, Mr. Forgues was the
     Director of Accounting for Spirit Cruises, a harbor cruise line with
     operations in nine states. Prior thereto, from 1987 to 1992, Mr. Forgues
     was Vice President of Finance at Best Software, Inc., a computer software
     developer.] Mr. Forgues joined the Board of Directors, Compensation and
     Audit Committees in July 1996.

     Messrs. Charles Millar and Jorge Forgues are the members of the Audit
     Committee of the Board of Directors. Messrs. Christopher Weiler, Charles
     Millar and Jorge Forgues are the members of the Compensation Committee of
     the Board of Directors.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     To the best of the Company's knowledge, in 1999, all Officers, Directors
     and 10% shareholders have filed, on a timely basis, all forms required by
     Section 16(a) of the Exchange Act of 1934.

ITEM 10.  EXECUTIVE COMPENSATION

     The following table sets forth certain information regarding the
     compensation of the Company's Chief Executive Officer and the other most
     highly compensated executive officers (collectively, the "Named Executive
     Officers") whose annual compensation (salary and bonus) for services
     rendered in all capacities to the Company exceeded $100,000 for the years
     ended December 31, 1999, 1998 and 1997.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                       Annual Compensation                                            Long Term Compensation
--------------------------------------------------------------------------------------------------------------------------------
                                                                         Other                                  All
                                                                         Annual                                Other
Name and Principal Position                                            Compensation           Options/      Compensation
                                               Salary         Bonus         $                  SAR's             $
                                   Year           $             $                             (Shares)
--------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>           <C>           <C>        <C>                   <C>            <C>
Christopher Weiler               1999          150,707       15,000            -                 -                   -
                                 -----------------------------------------------------------------------------------------------
President and CEO                1998          145,145         -               -               4,225                 -
                                 -----------------------------------------------------------------------------------------------
                                 1997          118,917       20,000            -                 -                   -
--------------------------------------------------------------------------------------------------------------------------------
Alfred Duncan                    1999          128,592         -               -               10,000                -
                                 -----------------------------------------------------------------------------------------------
Executive VP/Chief Financial
Officer                          1998           78,267         -               -               84,225                -
                                 -----------------------------------------------------------------------------------------------
                                 1997(2)          -            -               -                 -                   -
--------------------------------------------------------------------------------------------------------------------------------
John Sabanosh                    1999          112,146         -               -               15,000                -
                                 -----------------------------------------------------------------------------------------------
Vice President - Finance         1998           50,829                                         53,375
                                 -----------------------------------------------------------------------------------------------
                                 1997(2)          -            -               -                 -                   -
--------------------------------------------------------------------------------------------------------------------------------
Lance Waagner, VP -              1999(1)       109,383         -               -                 -                   -
                                 -----------------------------------------------------------------------------------------------
Information Technology           1998          148,754         -               -               77,500                -
                                 -----------------------------------------------------------------------------------------------
                                 1997             -            -               -                 -                   -
--------------------------------------------------------------------------------------------------------------------------------
Allen Outlaw                     1999          304,709         -               -                 -                   -
                                 -----------------------------------------------------------------------------------------------
Executive VP, Marketing          1998          222,604         -               -              107,800                -
                                 -----------------------------------------------------------------------------------------------
                                 1997           99,028         -               -                 -                   -
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Waagner terminated his employment with the Company effective September
30, 1999.

(2) Mr. Duncan and Mr. Sabanosh joined the Company in 1998

DIRECTOR COMPENSATION

Directors currently receive no cash compensation for serving on the Board of
Directors other than reimbursement of reasonable expenses incurred in attending
meetings. For 1998 and 1999, three outside directors each received options to
purchase 40,000 and 10,000, respectively, shares of Common Stock vesting over a
period of three years in equal portions at the end of each quarter.
The options were granted at the market price at the time of grant.


                                       28


<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table enumerates, as of December 31, 1999, the name and
     ownership, both by numerical holding and percentage interest, of the
     Company's common stock by (1) each person or group, known to the Company,
     who beneficially owns more than 5 percent of the Company's outstanding
     common stock; (2) the Directors and Executive Officers of the Company,
     individually, and (3) the Directors and Executive Officers as a group.

     In preparing the following tables, the Company has relied upon statements
     filed with the Securities and Exchange Commission by beneficial owners of
     more than 5 percent of the Company's outstanding common stock pursuant to
     Section 13(d) or 13(g) of the Securities Act of 1934, unless the Company
     knew or had reason to believe that the information contained in such
     statements was not complete or accurate, in which case the Company relied
     upon information which it considered to be accurate and complete.

<TABLE>
<CAPTION>
NAME                                                         # OF SHARES    APPROXIMATE % OF BENEFICIAL
                                                      BENEFICIALLY OWNED                  OWNERSHIP (1)
                                                      ------------------    ---------------------------
<S>                                                   <C>                   <C>
Denis A. Seynhaeve (2)                                           547,000                           9.5%
220 Wardour Drive
Annapolis, MD 21401
Christopher J. Weiler (3)                                        364,225                           6.3%
c/o the Company

Allen C. Outlaw (4)                                              264,800                           4.6%
c/o the Company

Alfred Duncan  (5)                                                88,225                           1.5%
c/o the Company

Charles B. Millar (6)                                             77,934                           1.4%
1101 Vermont Ave., N.W.
Washington, D.C. 20005

Jorge R. Forgues (7)                                              74,434                           1.3%
500 Huntmar Park Drive
Herndon, VA 20170

John Sabanosh (8)                                                 62,825                           1.1%
c/o the Company

All Officers and Directors as a group                          1,479,443                          25.7%

</TABLE>

-----------

(1)  Based on 4,851,669 shares of Common Stock outstanding as of December 31,
     1999 and 910,612 shares of vested exercisable options.

(2)  Includes 10,000 shares subject to options that are exercisable currently or
     exercisable within 90 days.

(3)  Includes 4,225 shares subject to options that are exercisable currently or
     exercisable within 90 days.

(4)  162,000 shares are held by escrow agent pursuant to the Promissory Note and
     Escrow Agreement. See "Interest of Management and others in Certain
     Transactions - Loans and Guarantees". Includes 57,800 shares subject to
     options that are exercisable currently or exercisable within 90 days.

(5)  Includes 88,225 shares subject to options that are exercisable currently or
     exercisable within 90 days.

(6)  Includes 74,434 shares subject to options that are exercisable currently or
     exercisable within 90 days.

(7)  Includes 74,434 shares subject to options that are exercisable currently or
     exercisable within 90 days.

(8)  Includes 59,825 shares subject to options that are exercisable currently or
     exercisable within 90 days.


                                       29


<PAGE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     During 1998, the Company granted options to purchase 40,000 shares of the
     Company's common stock at $3.00 per share to each of the Company's three
     outside directors. The options vest in equal quarterly installments over a
     period of one year. At the date of the grant, these options were granted on
     terms no less favorable to the Company than those available to unaffiliated
     parties purchasing Shares of the Company's common stock.

     During 1998, the Company granted options to purchase 277,237 shares of the
     Company's common stock at exercise prices ranging from $1.13 to $2.88 to
     five officers of the Company. The options vest in equal quarterly
     installments over a period of one to three years. At the date of the grant,
     these options were granted on terms no less favorable to the Company than
     those available to unaffiliated parties purchasing Shares of the Company's
     common stock.

     During July 1999, the Company granted options to purchase 10,000 shares of
     the Company's common stock at $1.38 per share to each of the Company's
     three outside directors. The options vest in equal quarterly installments
     over a period of one year. At the date of the grant, these options were
     granted on terms no less favorable to the Company than those available to
     unaffiliated parties purchasing Shares of the Company's common stock.

     During 1999, the Company granted options to purchase 25,000 shares of the
     Company's common stock at exercise prices ranging from $1.38 to $1.44 to
     two officers of the Company. At the date of the grant, these options were
     granted on terms no less favorable to the Company than those available to
     unaffiliated parties purchasing Shares of the Company's common stock.

     In connection with the Company's Initial Public Offering in 1996, the
     underwriter was granted 96,000 units, each consisting of two shares of the
     Company's common stock, $0.01 par value, and one common stock purchase
     warrant, at an exercise price of $8.45. In March 1999, the Company repriced
     each unit held by the underwriter at $3.50. There was no material impact to
     the financial position of the Company.

LOANS AND GUARANTEES

     In March 1996, the Company loaned $89,900 to Allen Outlaw, an officer/
     director. The loan bears interest at 6%. The balance due at December 31,
     1999 was $50,400.



                                       30


<PAGE>


ITEM 13.  EXHIBITS, REPORTS ON FORM 8-K

(A)       EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT #         DESCRIPTION OF DOCUMENT
---------         -----------------------
<S>               <C>
3.01(1)           Certificate of Incorporation: Delaware

3.02(1)           Restated By-Laws: Delaware

4.01(1)           Form of Common Stock Certificate

4.02(1)           Form of Warrant Certificate

4.03(1)           Form of Warrant Agreement between On-Site Sourcing, Inc. and the Continental Stock Transfer and Trust Company

4.04(1)           Registrant's Articles of Incorporation are incorporated by reference to exhibit 3.01

4.05(1)           Registrant's Restated Bylaws pages 1-5 are incorporated by reference to exhibit 3.02

10.01(1)          Employment Agreement between the Company and Christopher Weiler

10.02(1)          Employment Agreement between the Company and Allen Outlaw

10.03(1)          Employment Agreement between the Company and Anthony Kopsidas

10.04(1)          Employment Agreement between the Company and Jack Krutsick

10.05(2)          Employment Agreement between the Company and Larry F. Morris

10.05(3)          Employment Agreement between the Company and Joseph Sciacca

10.06(1)          Lease with Rubin Strouse Realty for Philadelphia, PA

10.07(1)          Amendment 1 to Lease with Rubin Strouse Realty

10.08(1)          Amendment 2 to Lease with Rubin Strouse Realty

10.09(1)          Amendment 3 to Lease with Rubin Strouse Realty

10.10(1)          Lease with JRG/Lynn Associates, 9/12/95, for Arlington, VA

10.11(1)          First Addendum to Lease with JRG/Lynn Associates, 3/30/94

10.12(1)          Second Addendum to Lease with JRG/Lynn Associates, 7/6/94

10.13(1)          Third Addendum to Lease with JRG/Lynn Associates, 6/29/95

10.14(1)          Fourth Addendum to Lease with JRG/Lynn Associates, 1/25/96

10.15(1)          Lease Agreement between Oak Crest Ltd. and SWR 1/31/92 for Frederick, MD assumed by On-Site

10.16(1)          Assumption of Lease Agreement between the Company and Oak Crest Ltd.

10.17(1)          Lease with Kingston Atlanta Partners, L.P. - 12/15/95 for Atlanta, GA

10.18(1)          Form of Management Services Contract

10.19(5)          Lease with 443 Company/William Real Estate Co., Inc. for New York, NY office


                                       31
<PAGE>

10.20(5)          Lease with JRG/Lynn Associates 10/18/96

10.21(5)          Lease with Frederick Park Limited Partnership

10.22(5)          Fifth Amendment to Lease with Suburban Station Associates

10.23(2)          Revised 1996 Stock Option Plan

10.24(2)          1997 Stock Option Plan

10.25(5)          First Amendment to lease with Kingston Atlanta Partners, L.P.

10.26             Lease with Miller Properties.

10.27             Lease Modification with Williams Real Estate

10.28             1998 Stock Option Plan

10.29             Employment Agreement with Arne Christensen

10.30             Employment Agreement with Allen Outlaw

10.31             Employment Agreement with Alfred Duncan

10.32             Employment Agreement with Edward Hook

10.33             Employment Agreement with Jack Sabanosh

16.01(4)          Letter on change in certifying accountant

23.               Accountants Consents

23.1              Consent of Reznick Fedder & Silverman P.C.*

27.01             Financial Data Schedule
</TABLE>


(1)  Incorporated by reference to the Company's Registration Statement on Form
     SB-2 file No. 333-3544.

(2)  Incorporated by reference to the Company's Post Effective Amendment to the
     Company's Registration Statement on Form SB-2 file No. 333-3544.

(3)  Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
     for the period ended September 30, 1996.

(4)  Incorporated by reference to the Company's Current Report on Form 8-K dated
     November 29, 1996 and amended December 9, 1996.

(5)  Incorporated by reference to the Company's Annual Report on Form 10-KSB for
     the period ended December 31, 1996

*    Filed Herewith. All other exhibits have been previously filed as indicated

(B)  REPORTS ON FORM 8-K

     None


                                       32


<PAGE>


                                   SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized on this 30th day of March 2000.


                                    ON-SITE SOURCING, INC.


                                    BY:     /s/ Christopher J. Weiler
                                            ---------------------------------
                                            Christopher J. Weiler, President



In accordance with the Exchange, this Report has been signed below by the
following persons on behalf of the Registrant, and in the capacities and on the
date indicated.

<TABLE>
<CAPTION>

SIGNATURE                                 TITLE                           DATE
---------                                 -----                           ----
<S>                              <C>                                      <C>
/s/ CHRISTOPHER J. WEILER        President, Chief Executive
------------------------         Officer and Director                     March 30, 2000
Christopher J. Weiler

/s/ ALFRED DUNCAN
------------------------
Alfred Duncan                    Chief Financial Officer                  March 30, 2000

/s/ ALLEN OUTLAW                 Executive Vice President/Director         March 30, 2000
------------------------
Allen Outlaw

/s/ CHARLES B. MILLAR            Director                                 March 30, 2000
------------------------
Charles B. Millar

</TABLE>


                                       33