<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, 1998
                                                 -------------

                                       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                              4,819,669
          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, 1998 and December 31, 1997                                    3

         Statements of Operations -
         Six and Three months ended June 30, 1998 and 1997                      4

         Statements of Stockholders Equity
         Six months ended June 30, 1998 and 1997                                5

         Statements of Cash Flows -
         Six and Three months ended June 30, 1998 and 1997                      6

         Condensed notes to financial statements                                7-9

         Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.                                   10-13


Part II. Other Information


         Signatures                                                             13

</TABLE>


                                  Page 2 of 13


<PAGE>

                             ON-SITE SOURCING, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                               Unaudited
                                                                                June 30,                December 31,
                                                                                  1998                      1997
                                                                          --------------------     ----------------------

     <S>                                                                 <C>                       <C>

     ASSETS
     CURRENT ASSETS
          Cash and cash equivalents                                       $                  -     $            1,490,702
          Accounts receivable, net                                                   6,524,807                  5,921,063
          Prepaid supplies                                                             465,500                    417,693
          Prepaid expenses                                                             173,949                    216,747
                                                                          --------------------     ----------------------
               Total current assets                                                  7,164,257                  8,046,205

          Property and equipment, net                                                4,425,039                  4,069,097
          Note receivable - officer                                                     25,000                     25,000

          Other assets, net                                                             59,453                     98,781
                                                                          --------------------     ----------------------
                                                                          $         11,673,748     $           12,239,083
                                                                          --------------------     ----------------------

     LIABILITIES AND STOCKHOLDERS' EQUITY

     CURRENT LIABILITIES
          Accounts payable - trade                                        $          1,643,341    $             1,992,580
          Line of Credit                                                               751,000                          -
          Accrued and other liabilities                                              1,019,725                    924,487
          Current portion of long-term debt                                            488,544                    411,894
          Provision for income taxes, current                                          139,798                    139,798
                                                                          --------------------     ----------------------
               Total current liabilities                                             4,042,408                  3,468,759

     Long-term debt net of current portion                                           1,128,780                  1,094,444

     Deferred rent                                                                      96,509                     96,509
     Provision for Income taxes, net of current portion                                  2,838                    419,395
     Deferred taxes                                                                     33,046                     66,989

     Commitments and contingencies                                                           -                          -

     STOCKHOLDERS' EQUITY
          Common stock, $.01 par value, 20,000,000 shares authorized 4,819,669
            and 4,802,221 shares issued and outstanding                                 48,196                     48,022
          Preferred stock,$.01 par value, 1,000,000 shares
            authorized, no shares issued and outstanding                                     -                          -
          Subscription receivable                                                      (50,400)                   (50,400)
          Additional paid in capital                                                 6,432,741                  6,367,379
          Retained earnings                                                            (60,370)                   727,986
                                                                          --------------------     ----------------------
                                                                                     6,370,167                  7,092,987
                                                                          --------------------     ----------------------
                                                                          $         11,673,748     $           12,239,083
                                                                          --------------------     ----------------------

</TABLE>

                        See notes to financial statements


                                  Page 3 of 13

<PAGE>

ON-SITE SOURCING, INC.
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>


                                                           Six Months Ended                Three Months Ended
                                                    June 30,              June 30,              June 30,             June 30,
                                                      1998                 1997                   1998                 1997
                                              --------------------    --------------    -----------------------  ------------------
<S>                                           <C>                      <C>              <C>                      <C>

Revenue                                       $         11,448,259    $    8,726,314    $             5,701,444    $     5,112,940

Costs and expenses
     Cost of sales                                      10,167,326         6,266,833                  5,069,489          3,488,979
                                              --------------------    --------------    -----------------------  ------------------
                                                         1,280,933         2,459,481                    631,955          1,623,961
                                              --------------------    --------------    -----------------------  ------------------

     Selling expense                                     1,284,074         1,048,411                    638,904            625,297
     Administrative expense                              1,332,481           808,134                    698,969            459,658
                                              --------------------    --------------    -----------------------  ------------------
                                                         2,616,556         1,856,545                  1,337,873          1,084,955
                                              --------------------    --------------    -----------------------  ------------------

     Earnings from operations                           (1,335,623)          602,936                   (705,918)           539,006
     Other income (expense)
     Other income                                          172,057            24,823                     80,745             12,567
     Other expense                                         (75,291)          (72,721)                   (36,338)           (40,225)
                                              --------------------    --------------    -----------------------  ------------------
                                                            96,766           (47,898)                    44,408            (27,658)
                                              --------------------    --------------    -----------------------  ------------------

Earnings (Loss) before income taxes                     (1,238,856)          555,038                   (661,510)           511,348
Income tax (benefit) expense                              (450,500)          233,100                   (231,500)           214,900

Net (Loss) Earnings                           $           (788,356)   $      321,938     $             (430,010)   $       296,448
                                              --------------------    --------------    -----------------------  ------------------

Basic earnings (loss) per common share        $        (0.16)         $      0.07       $          (0.09)          $        0.06

Diluted earnings per share                    $          -            $      0.07       $            -             $        0.06

</TABLE>


                        See notes to financial statements


                                  Page 4 of 13

<PAGE>



                                                   ON-SITE SOURCING, INC.
                                             STATEMENTS OF STOCKHOLDERS' EQUITY
                                                          Unaudited

<TABLE>
<CAPTION>

                                                             Additional
                                  Common        Common        Paid in      Subscriptions    Retained
                                  Shares        Stock         Capital       Receivable      Earnings        Total
                                ---------    ------------   ------------   -------------   -----------   ------------

<S>                             <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>



<TABLE>
<CAPTION>

                                                            Additional
                                  Common        Common        Paid in     Subscriptions    Retained
                                  Shares        Stock         Capital       Receivable      Earnings       Total
                                -----------   -----------   ----------    -------------   -----------   -----------

<S>                             <C>           <C>           <C>           <C>             <C>           <C>
Balance at December 31, 1996    4,794,021     $    47,940   $6,351,911    $     (50,400)  $     6,913   $ 6,356,364

 Net earnings                                                                                 321,938       321,938
Balance at June 30, 1997        4,794,021     $    47,940   $6,351,911    $     (50,400)   $  328,851   $ 6,678,302
                                -----------   -----------   ----------    -------------   -----------   -----------


</TABLE>



                        See notes to financial statements


                                  Page 5 of 13


<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,
                                                         1998             1997              1998              1997
                                                      -------------  ---------------   ---------------   ---------------
<S>                                                   <C>            <C>               <C>               <C>
Cash flows from operating activities
     Net earnings (loss)                              $    (788,356) $       321,938   $      (430,010)  $       296,448
                                                      -------------  ---------------   ---------------   ---------------
Adjustments to reconcile net earnings to net cash
     (used in) provided by operations
Depreciation and amortization                               482,840          343,726           256,662           177,965
Loss (gain) on disposition of equipment                          --             (782)               --                --
Changes in assets and liabilities
     (Increase) decrease in accounts receivable, net       (603,744)      (2,148,587)         (387,002)       (1,183,437)
     (Increase) decrease in prepaid supplies                (47,807)        (295,840)           (3,675)         (211,230)
     (Increase) decrease in prepaid expenses                 42,798          (30,831)          (20,566)           33,576
     (Increase) decrease in other assets                     39,328           30,198            34,562            24,346
     Increase (decrease) in accounts payable - trade       (349,239)         639,550          (236,191)          447,571
     Increase (decrease) in accrued and other
         liabilities                                         95,238           47,371           249,288           (25,421)
     Increase (decrease) in deferred rent                        --            1,866                --                --
     Increase (decrease) in provision for income
         taxes                                             (416,557)              --          (231,500)               --
     Increase (decrease) in deferred taxes                  (33,943)         233,100                --           214,900
                                                      -------------  ---------------   ---------------   ---------------
Total Adjustments                                          (791,086)      (1,180,229)         (338,422)         (521,730)
                                                      -------------  ---------------   ---------------   ---------------

Net cash provided by (used in) operations                (1,579,442)        (858,291)         (768,432)         (225,282)
                                                      -------------  ---------------   ---------------   ---------------
Cash flows from investing activities
     Capital expenditures                                  (838,782)        (609,470)         (301,081)         (367,831)
                                                      -------------  ---------------   ---------------   ---------------
Net cash used in investing activities                      (838,782)        (609,470)         (301,081)         (367,831)
                                                      -------------  ---------------   ---------------   ---------------
Cash flows from financing activities
     Proceeds from sale of common stock and
          exercise of warrants                               65,536               --             5,550                --
     Proceeds of long-term debt agreements                  316,000        1,100,000           316,000         1,100,000
     Payments under long-term debt agreements              (205,014)        (513,266)          (99,509)         (465,900)
     Net borrowings under line of credit agreement          751,000               --           251,000                --
                                                      -------------  ---------------
Net cash provided by financing activities                   927,522          586,734           473,041           634,100
                                                      -------------  ---------------   ---------------   ---------------

NET INCREASE (DECREASE) IN
     CASH AND CASH EQUIVALENTS                           (1,490,702)        (881,027)         (596,472)           40,987
Cash and cash equivalents, beginning                      1,490,702        1,894,722           596,472           972,708
                                                      -------------  ---------------   ---------------   ---------------
Cash and cash equivalents, ending                     $           0  $     1,013,695   $             0   $     1,013,695
                                                      -------------  ---------------   ---------------   ---------------

</TABLE>




                           See notes to financial statements


                                  Page 6 of 13

<PAGE>

On-Site Sourcing, Inc.

Condensed Notes to Financial Statements
(unaudited)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
June 30, 1998
--------------------------------------------------------------------------------


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 and three months ended
    June 30, 1998 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 ten years. 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 13

<PAGE>



On-Site Sourcing, Inc.

Condensed Notes to Financial Statements--Continued
(unaudited)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
June 30, 1998
--------------------------------------------------------------------------------


    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, 1999. The line of credit
    is secured by certain assets of the Company, including accounts receivable
    and certain fixed assets. As of June 30, 1998 there were advances made under
    the line of credit of $751,000

    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, 1998 was $756,250


    During 1997, the Company has 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 at June 30, 1998
    was approximately $630,000.

    The Company has financed certain equipment purchases under capitalized
    leases, with terms of sixty months.


NOTE C--RELATED PARTY TRANSACTIONS


    Transactions with an Officer/Shareholder

         During the six months ended June 30, 1998 and 1997, the Company
         recorded the following transaction with an officer/shareholder:

         During the six months ended June 30, 1998 and 1997, the Company
         incurred approximately $44,000 and $30,000, respectively, for legal


                                  Page 8 of 13

<PAGE>

         services rendered by the officer/shareholder. During the six months
         ended June 30, 1998 and 1997, the Company recorded revenue of
         approximately $16,500 and $3,400, respectively, for reprographic
         services. Included in accounts receivable as of June 30, 1998, is
         approximately $2,000 due from the officer/shareholder.


    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, 1999.
     The balance of the note at June 30, 1998 was $50,400.

    Note  receivable -- Officer

     During 1996, the Company entered into a note agreement with an
     officer/shareholder in the amount of $25,000. The loan bears interest at
     the prime rate of interest and is due in September 1998.

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 $1,250,000

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, was $50,400.

    At June 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 June 30, 1998 the options are fully vested. The options expire
    in December 2000.

    The Company has outstanding employee stock options for 1,485,589 shares of
    common stock at exercise prices ranging from $1.11 to $3.50 per share. As of
    June 30, 1998 547,402 of the shares are vested with the remainder scheduled
    to vest through December 2003.


                                  Page 9 of 13

<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 1998 vs. 1997
------------------------------

Revenue for the six months ended June 30, 1998 increased 31% or $2,721,945 to
$11,448,259 over the comparable period in 1997. Principal reasons for the
increase are higher demand for the Company's reprographics and facilities
management groups.

Cost of sales for the six months ended June 30, 1998 increased by 62% or
$3,900,493 to $10,167,326 as compared to $6,266,833 for the same period in 1997.
Operating margins were 11% and 28%, respectively for the six months ended June
30, 1998 and 1997. The decrease in margins was due to high staffing levels and
start up of our information technology group.

Selling expense increased by $235,663 to $1,284,074 over the same period last
year. As a percentage of sales, selling expense was 11% and 12% for the six
months ended June 30, 1998 and 1997, respectively. Selling expenses are
primarily commissions based on sales.

Administrative expense for the six months ended June 30, 1998 increased by
$524,347 to $1,332,481 over the same period last year due primarily to increases
in administrative staffing and costs associated with the expansion into new
markets. As a percent of sales, administrative expense was 12% for the six month
period in 1998 as compared to 9% for the same period last year.


                                  Page 10 of 13

<PAGE>

Net earnings (loss)

For the six months ended June 30, 1998 the Company incurred a net loss of
$788,356 as compared to net earnings of $321,938 for the same period last year.
The loss amounted to $ 0.16 basic loss per share compared to earnings of $ 0.07
for basic and diluted for the same period last year. Shares outstanding for the
six months ended June 30, 1998 were 4,819,669 basic and 4,979,630 diluted. For
the six months ended June 30, 1997 shares outstanding were 4,794,021, basic and
4,888,407 diluted. The Company has an income tax benefit of $450,500 versus an
income tax expense of $233,100 for the six months ended June 30, 1998 and 1997,
respectively.


Liquidity and Capital Resources at June 30, 1998 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, 1998 there were advances under the line that totaled
$751,000. 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, 1998 was $756,250.

During the six months ended June 30, 1998 and 1997, the Company's principal uses
of cash were to fund fixed asset purchases, reduce long-term debt, changes in
staffing requirements and relocations costs and expenses.

Three Months ended  June 1998 vs. 1997
--------------------------------------

Revenue for the three months ended June 30, 1998 increased 12% or 588,504 to
$5,701,444 over the same period in 1997. The increase is primarily from the
Company's facilities management and information technology group. Demand for the
Company's reprographic operations was comparable to the same period in 1997.

Cost of Sales increased by $1,580,510 to $5,069,489 for the three months ended
June 30, 1998 compared to the same period in 1997. Principal reasons for the
increase were due to higher staffing levels as compared to the comparable
quarter and start up expenditures for the information technology group.

Selling Expenses increased 2% or $13,607 for the three months ended June 30,
1998 as compared to June 30, 1997. Selling Expenses as a percentage of sales
were 11% and 12% for the three months ended June 30, 1998 and 1997.

Administrative expenses increased 52% or $239,311 to $698,969 resulting mainly
from additional support staff and start up expenditures for the information
technology group.

Net earnings for the three months ended June 30, 1998 for the Company declined
by $726,458, which resulted in a net loss of $430,010 compared to net earnings
of $296,448 for the comparable period. Included in net earnings for the three
months ended June 30, 1998 is a tax benefit of $231,500 compared to a tax


                                  Page 11 of 13

<PAGE>

expense of $214,900 for the comparable period. The net loss resulted from
increases in cost of sales and administrative expenses.


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


                                  Page 12 of 13

<PAGE>


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:    Aug 14, 1998
                                 By:
                                          /s/ Christopher J. Weiler
                                          President and
                                          Chief Executive Officer


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


                                  Page 13 of 13