<PAGE>


                                  FORM 10-Q SB

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549
(Mark One)

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

         For the quarterly period ended   June 30, 1999
                                       ------------------

                                       OR

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

                For the transition period from              to
                                              --------------

                         Commission File Number 0-20947

                             ON-SITE SOURCING, INC.
             (Exact name of registrant as specified in its charter)

              Delaware                                 54-1648470
              --------                                 ----------
  (State or other jurisdiction of           (IRS Employer Identification Number)
   incorporation or organization)

               1111 N. 19TH STREET, SUITE 600, ARLINGTON, VA 22209
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code (703) 276-1123
                                                          ------------------

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

 YES X   NO
    ----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of March 31, 1998.

            COMMON STOCK 0.01 PAR VALUE              NUMBER OF SHARES
            ---------------------------              ----------------
                      NO CLASS                          4,846,669

           PREFERRED STOCK 0.01 PAR VALUE
           ------------------------------
                      NO CLASS                            NONE


<PAGE>



                              ON-SITE SOURCING,INC.

                                      INDEX





<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION.                                                     Page No.
<S>                                                                                <C>
         Item 1.  Financial Statements

         Balance sheets -
         June 30, 1999 and December 31, 1998                                            3

         Statements of Operations -
         Three and six months ended June 30, 1999 and 1998                              4

         Statements of Stockholders Equity
         Six months ended June 30, 1999 and 1998                                        5

         Statements of Cash Flows -
         Three and six months ended June 30, 1999 and 1998                              6

         Condensed notes to financial statements                                        7-9

         Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.                                           10-12


PART II. OTHER INFORMATION


         SIGNATURES                                                                     12

</TABLE>





                                  Page 2 of 12
<PAGE>


                                                       ON-SITE SOURCING, INC.
                                                           BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                    Unaudited
                                                                    June 30,      December 31,
                                                                      1999           1998
ASSETS
                                                                  --------------  -------------
<S>                                                               <C>             <C>
CURRENT ASSETS
     Cash and cash equivalents                                    $       --      $       --
     Accounts receivable, net                                        6,188,159       5,922,027
     Prepaid supplies                                                  540,151         449,366
     Prepaid expenses                                                  280,755         136,758
                                                                  ------------    ------------
          Total current assets                                       7,009,064       6,508,151

     Property and equipment, net                                     4,241,707       4,367,996

     Other assets, net                                                  57,499          75,062
                                                                  ------------    ------------
                                                                    11,308,270      10,951,209
                                                                  ------------    ------------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable - trade                                     $  1,862,817    $  2,018,248
     Line of Credit                                                    928,000         141,345
     Accrued and other liabilities                                     428,551         694,334
     Current portion of long-term debt                                 608,321         472,824
     Provision for income taxes, current                                  --              --
                                                                  ------------    ------------
          Total current liabilities                                  3,827,689       3,326,751

Long-term debt net of current portion                                  764,640       1,169,454

Deferred rent                                                          121,911         121,911
Provision for Income taxes, net of current portion                        --
Deferred taxes                                                         197,182         197,182

Commitments and contingencies                                             --              --

STOCKHOLDERS' EQUITY
     Common stock, $.01 par value, 20,000,000 shares authorized
       4,851,669 and 4,824,669 shares issued and outstanding            48,517          48,247
     Preferred stock,$.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  (5,000 shares of common stock at cost)            (25,000)        (25,000)
                                                                  ------------
     Accumulated Earnings (Deficit)                                    (46,189)       (269,627)
                                                                  ------------    ------------
                                                                  $  6,396,848    $  6,135,911
                                                                  ------------    ------------
                                                                    11,308,270      10,951,209
                                                                  ------------    ------------
</TABLE>

                        See notes to financial statements

                                  Page 3 of 12
<PAGE>




                                         ON-SITE SOURCING, INC.
                                        STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                               Six Months Ended                    Three Months Ended
                                                        June 30,          June 30,         June 30,            June 30,
                                                         1999              1998              1999               1998
                                                    ----------------   --------------  -----------------   ----------------
<S>                                               <C>                <C>             <C>                 <C>
Revenue                                           $      12,921,957  $    11,448,259 $        6,591,361  $       5,701,444
Costs and expenses
     Cost of sales                                        9,892,506       10,167,326          4,956,717          5,069,489
                                                    ----------------   --------------  -----------------   ----------------
                                                          3,029,451        1,280,933          1,634,644            631,955
                                                    ----------------   --------------  -----------------   ----------------

     Selling expense                                      1,069,805        1,284,074            574,533            638,904
     Administrative expense                               1,711,364        1,332,481            911,651            698,969
                                                    ----------------   --------------  -----------------   ----------------
                                                          2,781,168        2,616,556          1,486,183          1,337,873
                                                    ---------------------------------  -----------------   ----------------

     Earnings from operations                               248,283       (1,335,623)           148,461           (705,918)
     Other income (expense)
     Other income                                            67,182          172,057             43,500             80,745
     Other expense                                          (92,027)         (75,291)           (46,743)           (36,338)
                                                    ----------------   --------------  -----------------   ----------------
                                                            (24,845)          96,766             (3,243)            44,408
                                                    ----------------   --------------  -----------------   ----------------

Earnings (Loss) before income taxes                         223,438       (1,238,856)           145,218           (661,510)
Income tax (benefit)expense                                       -         (450,500)                             (231,500)
                                                    ----------------   --------------  -----------------   ----------------

Net Earnings (Loss)                                 $       223,438    $    (788,356)  $        145,218    $      (430,010)
                                                    ----------------   --------------  -----------------   ----------------
Basic earnings (loss) per common share              $   0.05           $       (0.16)  $          0.03     $         (0.09)

Diluted earnings per share                          $   0.05           $         N/A   $           0.03    $            N/A
</TABLE>


                   See notes to financial statements



                                  Page 4 of 12
<PAGE>


<TABLE>
<CAPTION>

                                                            Additional                      Treasury
                                 Common       Common         Paid in       Subscriptions     Stock         Retained
                                 Shares       Stock          Capital        Receivable     (COMMON)        Earnings         Total
                               ---------     ----------     ----------     ------------   -----------     ----------     -----------
<S>                          <C>           <C>            <C>            <C>             <C>             <C>           <C>
Balance at December 31, 1998   4,824,669     $   48,247     $6,432,691     $  (50,400)     $  (25,000)     $ (269,628)   $6,135,910
                              ----------     ----------     ----------     ----------      ----------      ----------    ----------


     Sale of common stock         27,000            270         37,230         37,500
     Net Income                  223,438        223,438
                              ----------     ----------     ----------     ----------      ----------      ----------    ----------
                                                                                                           ----------    ----------

Balance at June 30, 1999       4,851,669     $   48,517     $6,469,921     $  (50,400)     $ (25,000)     $  (46,190)   $6,396,848
                              ----------     ----------     ----------     ----------      ----------      ----------    ----------

<CAPTION>

                                                            Additional                      Treasury
                                 Common       Common         Paid in       Subscriptions     Stock         Retained
                                 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         17,448           174          65,362                                                       65,536
                              ----------     ----------     ----------     ----------      ----------      ----------    ----------
     Net loss                                                                                                (788,356)     (788,356)
                              ----------     ----------     ----------     ----------      ----------      ----------    ----------
Balance at June 30, 1998       4,819,669    $   48,196      $6,432,741       $  (50,400)         -         $  (60,370)   $6,370,167
                              ----------     ----------     ----------     ----------      ----------      ----------    ----------
</TABLE>




                                  Page 5 of 12
<PAGE>




                                                          ON-SITE SOURCING, INC.
                                                        STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                          Six Months Ended              Three Months Ended
                                                                   June 30,         June 30,         June 30,         June 30,
                                                                     1999            1998              1999             1998
                                                                ---------------  --------------   ---------------  ---------------

<S>                                                              <C>             <C>              <C>              <C>
Cash flows from operating activities
     Net earnings (loss)                                         $     223,438   $    (788,356)   $      145,218   $     (430,010)
                                                                ---------------  --------------   ---------------  ---------------
Adjustments to reconcile net earnings to net cash
     (used in) provided by operations
Depreciation and amortization                                          512,207         482,840           216,140          256,662
Loss (gain) on disposition of equipment                                                      -                                  -
Changes in assets and liabilities
     Increase in accounts receivable, net                             (266,132)       (603,744)         (707,124)        (387,002)
     Increase in prepaid supplies                                      (90,785)        (47,807)          (17,712)          (3,675)
     (Increase) decrease in prepaid expenses                          (143,997)         42,798           (83,944)         (20,566)
     (Increase) decrease in other assets                                17,563          39,328           127,090           34,562
     Increase in accounts payable - trade                             (155,431)       (349,239)          345,526         (236,191)
     Increase in accrued and other liabilities                        (265,783)         95,238          (134,197)         249,288
     Increase (decrease) in deferred rent                                    -               -                 -                -
     Increase (decrease) in provison for income taxes                        -        (416,557)                -         (231,500)
     Increase (decrease) in deferred taxes                                   -         (33,943)                -                -
                                                                ---------------  --------------   ---------------  ---------------
Total Adjustments                                                     (392,357)       (791,086)         (254,221)        (338,422)
                                                                ---------------  --------------   ---------------  ---------------
Net cash provided by (used in) operations                             (168,920)     (1,579,442)         (109,004)        (768,432)
                                                                ---------------  --------------   ---------------  ---------------
Cash flows from investing activities
     Capital expenditures                                             (385,919)       (838,782)         (185,700)        (301,081)
                                                                ---------------  --------------   ---------------  ---------------
Net cash used in investing activities                                 (385,919)       (838,782)         (185,700)        (301,081)
                                                                ---------------  --------------   ---------------  ---------------
Cash flows from financing activities
     Proceeds from sale of common stock and
          exercise of warrants                                          37,500          65,535            37,500            5,550
     Proceeds of long-term debt agreements                                   -         316,000                 -          316,000
     Payments under long-term debt agreements                         (269,317)       (205,014)         (135,434)         (99,509)
     Net borrowings (payments) under line of credit agreement          786,655         751,000          392,638          251,000
                                                                ---------------  --------------   ---------------  ---------------
Net cash provided by financing activities                              554,838         927,521           294,704          473,041
                                                                ---------------  --------------   ---------------  ---------------
NET INCREASE (DECREASE) IN
     CASH AND CASH EQUIVALENTS                                              (0)     (1,490,702)               (0)        (596,472)
Cash and cash equivalents, beginning                                         -       1,490,702                 -          596,472
                                                                ---------------  --------------   ---------------  ---------------
Cash and cash equivalents, ending                               $           (0)  $           (0)  $           (0)  $            (0)
                                                                ---------------  --------------   ---------------  ---------------
                                                                ---------------  --------------   ---------------  ---------------
</TABLE>




                                  Page 6 of 12
<PAGE>


ON-SITE SOURCING, INC.

Condensed Notes to Financial Statements
(unaudited)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

JUNE 30, 1999
--------------------------------------------------------------------------------


NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


    The accompanying unaudited condensed financial statements have been prepared
    pursuant to the rules and regulations of the Securities and Exchange
    Commission. Certain information and note disclosures normally included in
    the annual financial statements prepared in accordance with generally
    accepted accounting principles have been condensed or omitted pursuant to
    those rules and regulations, although the Company believes that the
    disclosures made are adequate to make the information presented not
    misleading.

    In the opinion of management, the accompanying condensed financial
    statements reflect all necessary adjustments and reclassifications that are
    necessary for fair presentation for the periods presented. It is suggested
    that these condensed financial statements be read in conjunction with the
    financial statements and the notes filed in the Company's Annual Report on
    Form 10-KSB. The results of operations for the six months ended June 30,
    1999 are not necessarily indicative of the results to be expected for the
    full year.


    REVENUE RECOGNITION

    Revenue from facilities management is recognized based on monthly fixed fees
    and, in certain cases, variable per copy fees, as contained in facilities
    management agreements. Revenue from reprographic and imaging services is
    recognized on a per copy or image basis upon completion of the services.
    Revenue from information technology services is billed on an hourly basis.

    PROPERTY AND EQUIPMENT

    Property and equipment consists of copy center equipment, office furniture
    and fixtures, and delivery equipment. Depreciation is provided for in
    sufficient amounts to relate the cost of depreciable assets to operations
    over their estimated service lives, ranging from two to fifteen years.
    During 1999, management determined that the useful life of certain equipment
    was longer than originally estimated. A change in accounting estimate was
    recognized to reflect this decision, resulting in an increase in net income
    of $82,784 for the three months ended June 30, 1999. The straight-line
    method is followed for financial reporting purposes. Accelerated methods
    are used for tax purposes.


    INCOME TAXES

    The provision for income taxes presented in the statements of earnings is
    based upon the estimated effective tax rate for the year, and is largely
    determined by management's estimate as of the interim date of projected
    taxable income for the entire fiscal year.


                                  Page 7 of 12
<PAGE>



ON-SITE SOURCING, INC.

Condensed Notes to Financial Statements--Continued
(unaudited)

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

JUNE 30, 1999
--------------------------------------------------------------------------------



    EARNINGS PER COMMON SHARE

    Basic earnings per share is calculated using the average number of shares
    outstanding and excludes dilution. Diluted earnings per share is computed on
    the basis of the average number of shares outstanding plus the effect of
    outstanding options using the "treasury stock method". Prior year earnings
    per share have been restated to conform to this method.


NOTE B--CREDIT FACILITIES

    The Company entered into an agreement for a working capital line of credit
    with a financial institution for $2,500,000. The line of credit bears
    interest at the financial institution's prime rate or the 30 day LIBOR rate
    plus 2.25%, payable monthly. Any remaining principal balance and accrued
    interest is due at the maturity date of April 30, 2000.The line of credit is
    secured by certain assets of the Company, including accounts receivable and
    certain fixed assets. As of June 30, 1999 there were advances made under the
    line of credit of $928,000.

    During 1997, the Company entered into a term note with a financial
    institution to provide $1,100,000 to refinance certain capitalized lease
    obligations. The note is payable in 48 monthly installments, bears interest
    at the rate of 9.02%, and matures on April 30, 2001. The note is
    collateralized by specific equipment and is subject to certain financial
    covenants. The balance of the term note at June 30, 1999 was $481,250.


    During 1997, the Company financed certain equipment purchases of
    approximately $361,000 with notes with terms of 36 to 48 months and interest
    rates of 5.0% to 9.7%. During 1998 the Company financed additional equipment
    purchases under similar terms. The balance of these notes as of June 30,
    1999 was approximately $891,712.




NOTE C--RELATED PARTY TRANSACTIONS


    TRANSACTIONS WITH AN OFFICER/SHAREHOLDER

         During the six months ended June 30, 1999 and 1998, the Company
         recorded the following transaction with an officer/shareholder:

         During the six months ended June 30, 1998, the Company incurred
         approximately $44,000 for legal services and recognized $16,500 in
         revenue due to the officer/shareholder. There were no related
         transactions for the six months ended June 30, 1999.


                                  Page 8 of 12
<PAGE>


    SUBSCRIPTION RECEIVABLE -- SHAREHOLDER

     The Company has a note receivable from an officer/director for $89,900 in
     connection with the exercise of stock options. The note bears interest at
     6% per year with the remaining principal and interest due April 1, 2000.
     The balance of the note at June 30, 1999 was $50,400.

During the first quarter of 1999 the Company revalued options to its original
Underwriter, M.H. Meyerson & Co., Inc. The original agreement included an option
to purchase 96,000 Units (Units consists of two shares of common stock and one
common stock warrant) at an exercise price of $10.00. The units are exercisable
starting July 9, 1997 for a period of four years. Under the new agreement the
options are exercisable at a price of $3.50. All other terms remain unchanged.


NOTE D--COMMITMENTS

    The Company has annual rental and lease commitments with a term of one year
    or more for its offices and production facilities that expire at various
    times through 2006. The minimum annual rent is approximately $1,400,000.

NOTE E--INCENTIVE STOCK OPTION PLANS

    In 1995 through 1998, the Company adopted incentive stock option plans,
    under which pools of 510,000, 200,000, 500,000, and 700,000 shares
    respectively have been reserved. The plans are administered and terms of
    option grants are established by the Board of Directors. Under the terms of
    the plans, options may be granted to the Company's employees and directors
    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 ten 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.

    Pursuant to an employment agreement, the Company had outstanding options to
    sell 162,000 shares of common stock to an officer/director of the Company at
    an exercise price of $.56 per share. The options, which were fully vested
    during 1994, were exercised on March 29, 1996 for $90,000. In connection
    with the exercise of the options, the Company loaned $89,900 to the
    officer/director. The balance of the note on June 30, 1999, was $50,400.

    At September 30, 1998 the Company had outstanding options to sell 126,000
    shares of common stock to an officer/director at an exercise price of $1.11
    per share. As of September 30, 1998 the options are fully vested.
    The options expire in December 2000.

    The Company has outstanding employee stock options for 1,398,612 shares of
    common stock at exercise prices ranging from $1.11 to $3.50 per share. As of
    June 30, 1999, 779,452 of the shares are vested with the remainder scheduled
    to vest through June, 2004.



                                  Page 9 of 12
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS


On-Site Sourcing, Inc. (On-Site or the "Company") provides reprographic,
document management, imaging, facilities management services and information
technology services 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, On-Site offers a variety of customized reprographic
and facilities management services. The Company provides 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.
On-Site also provides on-premises management of customers' support services
including mailroom operations, facsimile transmission, records and supply room
management and copying services. The information technology group provides a
full range of technology services to professional service organizations,
including systems design and integration, training and network management
services.

The nature of the IT Group's value-added services is expected to produce
significant revenue and increased margins in future periods. The IT Group was
formed in response to the need of law firms for new client/server applications
and connectivity, requiring IT expertise that is difficult to acquire due the
competitive nature of the industry. The competitive law firm has the need for
E-mail, integrated billing and document management services and recurring
technology upgrades that are being demanded by their clients. These are problems
that the IT Group is beginning to address for these firms.

This Form 10-QSB contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from
results discussed in the forward-looking statements. Factors that might cause
such differences include, but are not limited to, demand for services, market
acceptance of the new IT group, impact of competitive services and pricing,
commercialization and technical difficulties, capacity constraints or
difficulties, general business and economic conditions and other risks detailed
in the Company's Annual Report, Form 10-KSB and other filings with the
Securities and Exchange Commission.

SIX MONTHS ENDED 1999 VS. 1998

Revenue for the six months ended June 30, 1999 increased 13% or $1,473,698 to
$12,921,957 over the comparable period in 1998. Principal reasons for the
increase are higher demand for the Company's Reprographics, Information
Technology, and Imaging groups.

Cost of sales for the six months ended June 30, 1999 decreased by 3 % or
$274,820 to $9,892,506 as compared to $10,167,326 for the same period in 1998.
Gross margins were 23% and 11%, respectively for the six months ended June 30,
1999 and 1998. The increase in gross margins was due to effective management of
the direct labor force, improved imaging operations, and increased volume in our
information technology business.


Selling expenses for the six months ended June 30,1999 decreased by $214,269 to
$1,069,805 over the same period last year. As a percentage of sales, selling
expense was 8% and 11% for the six months ended June 30, 1999 and 1998,
respectively. Selling expenses are primarily commissions based on sales.

Administrative expense for the six months ended June 30, 1999 increased by
$378,883 to $1,711,364 over the same period last year due primarily to increases
in administrative staffing and costs associated with expansion. As a percent of
sales, administrative expense was 13% for the six month period in 1998 as
compared to 12% for the same period last year.

 .

NET EARNINGS (LOSS)

For the six months ended June 30, 1999 the Company's net earnings were $223,438
compared to a loss of $788,356 for the same period last year. Profits amounted
to $ 0.05 basic earnings per share and $0.05 diluted earnings per share compared

                                 Page 10 of 12
<PAGE>

to losses of $ 0.16 for basic and diluted for the same period last year.
Shares outstanding for the six months ended June 30, 1999 were 4,833,169
basic and 4,938,302 diluted. The Company had an income tax benefit of
$450,500 versus an income tax expense of $0.00 for the six months ended
June 30, 1998 and 1999 respectively.

 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company believes its market risk exposure with regard to its financial
instruments is limited to changes in interest rates. Based upon the composition
of the Company's variable rate debt outstanding at June 30, 1999 which is
primarily borrowings under the working capital line of credit, the Company does
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.



LIQUIDITY AND CAPITAL RESOURCES AT JUNE 30, 1999 AND SUBSEQUENT ACTIVITY

The Company has funded its expansion and growth by utilizing internally
generated cash flow and long term financing, where appropriate, for significant
capital outlays. The Company anticipates that cash flow from operations and
credit facilities will be sufficient to meet the Company's expected cash
requirements for the next twelve months. There can be no assurances that
unforeseen events may require more working capital than the Company has at its
disposal.

The Company has a secured a $2,500,000 line of credit with a financial
institution. The line of credit bears interest at the financial institution's
prime rate or the 30 day LIBOR rate plus 2.25%, payable monthly. The line of
credit will be utilized to finance accounts receivable and other working capital
needs. As of June 30, 1999 there were advances under the line that totaled
$928,000. The Company also has a $1,100,000 term note to refinance certain
capital leases at more favorable interest rates. The note is payable in 48
monthly installments, bears interest at the rate of 9.02%, and matures on April
30, 2001. The balance on the note at June 30, 1999 was $481,250.

During the six months ended June 30, 1999 and 1998, the Company's principal uses
of cash were to fund fixed asset purchases, pay off long-term debt, changes in
staffing requirements and relocation costs and expenses.

THREE MONTHS ENDED  JUNE 1999 VS. 1998

Revenue for the three months ended June 30, 1999 increased 16% or $889,917 to
$6,591,361 over the same period in 1998. The increase is primarily from the
Company's Reprographics, Imaging and Information Technology groups.

Cost of Sales decreased by $112,772 to $4,956,717 for the three months ended
June 30, 1999 compared to the same period in 1998, even as sales increased.
Gross margins improved to 25% for the three months ended June 30, 1999 compared
to 11% for the same period in 1998.

Selling Expenses decreased 10% or $64,371 for the three months ended June 30,
1999 as compared to June 30, 1998. Selling Expenses as a percentage of sales
were 9% and 11% for the three months ended June 30, 1999 and 1998.

Administrative expenses increased 32% or $212,682 to $911,651 resulting mainly
from additional support staff and costs associated with expansion.

Net earnings for the three months ended June 30, 1999 for the Company were
$145,218 compared to a loss of $430,010 for the comparable period in 1998. The
profit resulted from improved gross margins and effective cost controls.

YEAR 2000

The Company is aware of the issues associated with the programming code in
existing computer systems as the Year 2000 approaches. Management is in the
process of converting its computer systems. Maintenance or modification costs
will be expensed as incurred, while the costs associated with new computer
systems will be capitalized and amortized over the



                                 Page 11 of 12
<PAGE>

systems useful lives. Management believes that with converting to new computer
systems, the Year 2000 issue will not pose a significant operational problem.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                      On-site Sourcing, Inc.
                                      ----------------------





Date:    August 15, 1999
                                       By:
                                                /s/ Christopher J. Weiler
                                                 President and
                                                Chief Executive Officer


                                       By:
                                                /s/ Alfred Duncan
                                                Vice President of Finance and
                                                Chief Financial Officer



                                 Page 12 of 12