U. S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   FORM 10-KSB

(Mark One)

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

     For the fiscal year ended: December 31, 2000


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

     For the transition period from _______________ to ________________

Commission File No.:000-30969

                          OneSource Technologies, Inc.
         ---------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)


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

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

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

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

      Title of each class                        Name of each exchange on which
      to be so registered                        each class to be registered

          None                                                None
--------------------------------                -------------------------------

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

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

Copies of Communications Sent to:

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


<PAGE>

Part I

Item 1:              Description of Business:

a)         Development

     OneSource Technologies, Inc. ("the Company" or "OneSource") is incorporated
in the state of Delaware.  The Company was originally  incorporated as LW Global
(U.S.A.),  Inc. in September 1996, changed its name to Micor Technologies,  Inc.
in July 1997 and then  finally to OneSource  Technologies,  Inc. in August 1997.
The Company had little or no operations until July 1997 when the Company entered
into a reverse merger transaction wherein it issued 8,500,000 shares of stock in
exchange for one hundred percent (100%) of the issued and outstanding  shares of
Micor.  Micor started  business in 1984 as a small banking  equipment  sales and
service company and was  incorporated in 1990 as Micor Financial  Systems,  Inc.
Its name was changed to Micor Technologies, Inc. in December 1994 and finally to
OneSource Technologies, Inc in August 1997.

     Its  executive  offices  are  presently  located  at 7419 East Helm  Drive,
Scottsdale,  AZ 85260.  Its telephone number is (800) 279-0859 and its facsimile
number is (480) 889-1166.

b)   Business of Issuer.

General

     OneSource is engaged in three (3) closely related and  complimentary  lines
of business,  1) renewable contract equipment maintenance services, 2) equipment
installation  and  integration  services  and 3) value  added  equipment  supply
distribution.  The Company is primarily  focused on the 1) banking and financial
services and 2) retail  industries even though its service and product offerings
can be readily applied in any industry.  These two (2) are emphasized because of
the significantly  greater number of equipment items used in banking,  financial
service and retail enterprises  compared to other businesses.  Like companies in
other  industries,  banking and retail  enterprises use large numbers of general
business equipment items such as copiers,  facsimiles, PCs and peripherals,  but
in addition  they also  utilize  significant  quantities  of  industry  specific
machines like coin/currency counting and handling machines, check processing and
encoding  equipment and ATMs in banking and  point-of-sale  ("POS")  scanner and
register systems in the retail industry.

     The  Company's  customer  mix at the  end of 2000  and  1999  consisted  of
primarily   banking  (20%  and  23%   respectively)  and  retail  (76%  and  74%
respectively) companies located in Arizona,  California,  Colorado,  Nevada, New
Mexico,  Utah and parts of Wyoming and Texas.  Approximately  forty-one  percent
(41%) and forty-eight  percent (48%) of the Company's revenue was generated from
fiver (5) customers through December 31, 2000 and 1999 respectively, the largest
of which contributed  approximately  twenty-five  percent (25%) and twenty-three
(23%) respectively.

Maintenance Services

     OneSource has pioneered a patent  pending  "flat-rate  blanket  maintenance
service" approach in these industries covering a broad array of general business
and industry specific equipment. The Company's patent pending service program is
unique because it takes a "horizontal"  approach to equipment maintenance rather
than the typical "vertical" approach traditionally offered. In doing

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<PAGE>



so, it creates wide based  savings by being able to service  multiple  equipment
items for a flat fee,  which  constitutes  the  basis for a package  pricing  to
customers.  Equipment  Maintenance  service is delivered on-site to customers by
Company employed field service technicians operating from their homes throughout
the Company's territorial reach, which presently includes the states of Arizona,
northern California, Colorado, Nevada, New Mexico, Utah and parts of Wyoming and
Texas. All supporting services,  including call center dispatching,  routing and
control,  parts  procurement and logistics are centrally housed in the Company's
Arizona corporate  facilities.  Communication and field service  connectivity is
realized  through  the  utilization  of a  number  of  communication  technology
devices,  e.g., wireless  telephones,  pagers, the Internet and Company Intranet
services.

     Maintenance has  historically  been the Company's  primary  business focus.
Now,  with its added  Integration  and  Supplies  capabilities,  OneSource  will
prospectively  be less dependent on this aspect of its business.  For the twelve
months  ended  December  2000  and  1999,   Maintenance   revenues   constituted
approximately   sixty-five   percent  (65%)  and   seventy-nine   percent  (79%)
respectively  of  total  consolidated   revenues.   Installation  revenues  were
introduced in April 1999 and Supplies distribution were added in October 1999.

Installation and Integration Services

     Through  the  Company's   acquisition  of  an  Arizona  based   information
technology  ("IT")   integration   company  OneSource   garnered  the  technical
competencies to undertake equipment installation and integration  assignments at
existing as well as prospective  customers.  The Company  intends to expand this
capability  throughout  all its  geographic  locations.  The Company's  customer
profile  includes  large  regional  enterprises  and/or  divisions  of  national
companies in the banking and retail  industries as these companies  periodically
incur the need to "refresh" their equipment  installation  configurations in the
face of new technologies and expansion.  These  capabilities are in present high
demand.  They also readily  compliment  the Company's  Maintenance  and Supplies
operations by being able to support these divisions' customer base.

Supplies Distribution

     The Supplies segment is focused on delivering consumable equipment supplies
and part requirements to the Company's  Maintenance and Integration customers on
a  single-source  basis.  The Company is  presently  a supplier  for a number of
equipment   consumable  supply  items,  e.g.,   ribbons,   toner,  and  OEM  and
remanufactured  toner  cartridges for copiers,  faxes and laser printers.  Since
toner cartridges represent the Company's largest demand supply item, the Company
acquired an Arizona based high quality toner cartridge  remanufacturing  company
in 1999 in order to expand this products  distribution  throughout the Company's
present as well as future customers.

Internet Services

     A number of the Company's products and services can be readily  distributed
and/or serviced via the Internet on both a retail consumer as well as a business
to business  ("B2B")  basis.  In this regard,  the Company  launched its initial
on-line   Internet   distribution   channel,   to  supply  and   distribute  its
remanufactured printer and copier toner cartridge products. This Internet portal
is presently directed toward individual and small business retail customers, but
prospectively will be

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<PAGE>



directed toward the Company's existing Maintenance, Integration customers. These
products are delivered via on-line  private  catalogs  within the site on a true
Internet B2B basis.

     At year-end 2000 the Company had forty-one (41) full-time employees and one
(1) part-time employee.

Status of Publicly Announced Products and Services

     The  Company is  primarily  focused on its  maintenance,  installation  and
supplies services at this time.  However,  an increasing number of the Company's
products and services can be distributed  and/or serviced via the Internet.  The
Company's supplies  distribution Internet portal was designed with this trend in
mind.

Competition

     The Company faces competition from large,  well-established  companies with
considerably  greater financial,  marketing,  sales and technical resources than
those  available to the Company.  The Company's  training and services  could be
rendered  obsolete or made  uneconomical  by the  development  of new  products,
technological  advances  or  pricing  actions  by one or more  of the  Company's
competitors.   The  Company's  business,   financial  condition  or  results  of
operations  could  be  materially  adversely  affected  by one or  more  of such
developments. There can be no assurance that the Company will be able to compete
successfully  against current or future competitors or that competition will not
have an material adverse effect on the Company's  business,  financial condition
or results of operations.

     The equipment sales and service industry as well as the equipment  supplies
industry  are  highly  competitive  and  consist  of  numerous  independent  and
competing   companies  large  and  small  throughout  the  Company's   operating
territory.  Any organization,  supplier, or equipment sales and service provider
is  technically  a OneSource  competitor.  The  differentiating  factor  between
competitors and the Company is the limited line(s) of service generally provided
by competing companies. Most of these companies are vertical suppliers who focus
primarily  on one  or a few  types  of  equipment  sales  with  service  offered
secondarily as an inducement for increased sales.  Further such competitors tend
to be involved with a limited number of equipment types and brands.  The Company
offers its  customers  equipment  service with Company  employed  field  service
technicians on a broad horizontal basis wherein multiple types and manufacture's
brands are covered under a single  maintenance  contract  known as the OneSource
Flat-Rate Blanket Maintenance System[TM].

Sources and Availability of Raw Materials

     The materials needed to service office and industry specific  equipment are
widely  available  from  numerous  third  parties.  No shortage of  materials is
expected in the foreseeable future.



                                        4

<PAGE>



Dependence on one or few customers

     The  Company  will rely  heavily  on its few  customers'  accounts  for the
majority of its business. A change in the relationship of the Company to any one
(1) of its major customers could have a material adverse affect on the Company's
business.

Research and Development

     The Company  believes that research and development is an important  factor
in its future  growth.  The  equipment  supply  industry  is  closely  linked to
technological  advances,  which constantly produces new machinery for use by the
public. Therefore, the Company must continually invest in training on the latest
technological  advances  and the newest  equipment to  effectively  compete with
other companies in the industry.  No assurance can be made that the Company will
have  sufficient  funds to fund such  training  efforts  to match  technological
advances as they become available.  Additionally,  due to the rapid advance rate
at which  technology  advances,  the  Company's  equipment  and inventory may be
outdated  quickly,  preventing  or impeding the Company from  realizing its full
potential profits.

Patents, Copyrights and Trademarks

     The Company  intends to protect its  original  intellectual  property  with
patents, copyrights and/or trademarks as appropriate.

     The  Company's  only  trademark  extends  to its unique  flat-rate  blanket
maintenance service program. The Company presently has a "business apparatus and
methods" patent application pending with the United States Patent Office for the
Company's OneSource Flat-Rate Blanket Maintenance System[TM],  but otherwise the
Company  has no  other  patents,  trademarks,  royalty  agreements,  franchises,
concessions or labor contracts in effect.

     While a patent of the Company's  systems  would be beneficial  for allowing
the  Company  to  license it to others,  it is not  essential  to the  Company's
operations and would therefore not have a significant  detrimental  effect if it
were not granted.

Governmental Regulation

     There are no  government  approvals  required  to conduct  business  and no
regulatory  issues other than usual and  customary  corporate,  tax and business
licensing with which the Company is current in all its operating jurisdictions.

State and Local Licensing Requirements

     Currently there are no state or local licensing requirements which apply to
the Company's business or to its products



                                        5

<PAGE>



Effect of Probable Governmental Regulation on the Business

     Currently there is no government  regulation of the Company's  business nor
of the  Company's  products.  However,  new laws  are  emerging  which  regulate
commerce over the internet and the way data and  information  may be transmitted
over the  Internet.  Should  the  Company  engage in  activities  involving  the
Internet in the future, it may be subject to these laws and/or regulations.

     As the Company's  products and services are available  over the Internet in
multiple states and foreign  countries,  these  jurisdictions may claim that the
Company is required to qualify to do business as a foreign  corporation  in each
such state and foreign  country.  New legislation or the application of laws and
regulations from jurisdictions in this area could have a detrimental effect upon
the Company's business.

     A governmental  body could impose sales and other taxes on the provision of
the  Company's  products and services,  which could  increase the costs of doing
business.  A number of state and local  government  officials  have asserted the
right or indicated a willingness  to impose taxes on  Internet-related  services
and commerce,  including sales, use and access taxes; however, no such laws have
become  effective to date. The Company  cannot  accurately  predict  whether the
imposition  of any such  taxes  would  materially  increase  its  costs of doing
business or limit the services  which it  provides,  since it may be possible to
pass on some of these costs to the consumer and continue to remain competitive.

     If,  as the law in this area  develops,  the  Company  becomes  liable  for
information  carried on, stored on, or disseminated  through its website, it may
be  necessary  for the Company to take steps to reduce its exposure to this type
of liability through  alterations in its equipment,  insurance or other methods.
This may  require  the  Company  to spend  significant  amounts of money for new
equipment or premiums and may also require it to discontinue offering certain of
its products or services.

     Due to the increasing  popularity  and use of the Internet,  it is possible
that  additional  laws  and  regulations  may be  adopted  with  respect  to the
Internet,  covering issues such as content,  privacy, access to adult content by
minors, pricing, bulk e-mail (spam), encryption standards,  consumer protection,
electronic  commerce,  taxation,  copyright  infringement and other intellectual
property issues.  P&G cannot predict the impact,  if any, that future regulatory
changes or developments may have on the Company's business, financial condition,
or results of operation.

Cost of Research and Development

     For fiscal year 2000 and 1999, the Company expended no measurable amount of
money on research and  development  efforts.  At the current  time,  none of the
costs  associates  with  research  and  development  are bourne  directly by the
customer;  however  there is no guarantee  that such costs will not be bourne by
customers in the future and, at the current time,  the Company does not know the
extent to which such costs will be bourne by the customer, if at all.



                                        6

<PAGE>



Cost and Effects of Compliance with Environmental Laws

     The  Company's  business is not subject to  regulation  under the state and
Federal  laws  regarding  environmental   protection  and  hazardous  substances
control.  The  Company is unaware of any bills  currently  pending in  Congress,
which could  change the  application  of such laws so that they would affect the
Company.

Employees and Consultants

     At December 31, 2000, the Company employed  forty-one (41) fulltime and one
(1) part time  employees.  None of these  employees are  represented  by a labor
union for purposes of collective bargaining. The Company considers its relations
with its employees to be excellent.

Item 2. Description of Property

     The  Company  leases  from  EJM  Development  Co.,  a  California   limited
partnership its corporate  offices located at 7419 East Helm Drive,  Scottsdale,
AZ 85260. This property serves as the Company's  headquarters,  service dispatch
and parts center for all the  Company's  operations.  The lease is for a term of
five (5) years, two (2) months, for which the Company pays rent in the amount of
$9,025 for the first  fourteen  (14) months,  $9,370 for months  fifteen (15) to
twenty-six (26), $9,715 for months twenty-seven (27) through  thirty-eight (38),
$9,995 for months  thirty-nine  (39)  through  fifty (50) and $10,270 for months
fifty-one (51) through sixty-two (62).

Item 3. Legal Proceedings

     No legal  proceedings  have been initiated either by or against the Company
to date.

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

     No matters  have been  submitted  to a vote of security  holders  since the
Company's last stockholders' meeting in April 2000.


PART II

Item 5.  Market for Common Equity and Related Stockholder Matters And Market
         Information.

     The Company's  Common Stock is presently  quoted on the National  Quotation
Bureau's  "Pink  Sheets".  The Common  Stock of the Company  currently is quoted
under the symbol "OSTK" and has been since May 1999.  The high,  low and average
bid information for each quarter since May 1999 to the present are as follows:



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Quarter                        High Bid    Low Bid    Average Bid
----------------------        ----------   --------   -----------
Second Quarter 1999              .63         .25          .44
Third Quarter 1999               .88         .38          .63
Fourth Quarter 1999              .69         .16          .42
First Quarter 2000              1.88         .25         1.06
Second Quarter 2000              .67         .20          .44
Third Quarter 2000               .59         .11          .33
Fourth Quarter 2000              .74         .07          .41

     Please note that  over-the-counter  market  quotations  have been  provided
herein.  The  quotations  reflect  inter-dealer  prices,  without retail markup,
mark-down or commission and may not represent actual transactions.

Description of Capital Stock

     The Company's  authorized  capital stock  consists of 20,000,000  shares of
Common  Stock,  $0.001  par value per share and  1,000,000  shares of  Preferred
Stock,  $0.001 par value per share.  As of December  31,  2000,  the Company had
19,249,178  shares of its Common  Stock  outstanding  and none of its  Preferred
Stock outstanding.

Description of Common Stock

     All shares of Common  Stock have equal  voting  rights  and,  when  validly
issued and outstanding,  are entitled to one vote per share in all matters to be
voted  upon by  shareholders.  The shares of Common  Stock  have no  preemptive,
subscription,  conversion  or  redemption  rights  and  may be  issued  only  as
fully-paid  and  non-assessable  shares.  Cumulative  voting in the  election of
directors  is not  permitted;  which means that the holders of a majority of the
issued and  outstanding  shares of Common  Stock  represented  at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any  directors.  In the event of  liquidation of
the Company,  each  shareholder is entitled to receive a proportionate  share of
the  Company's  assets  available for  distribution  to  shareholders  after the
payment of liabilities and after  distribution in full of preferential  amounts,
if any, to be distributed to holders of the Preferred  Stock.  All shares of the
Company's Common Stock issued and outstanding are fully-paid and nonassessable.

Dividend Policy

     Holders  of  shares  of  Common  Stock  are  entitled  to share pro rata in
dividends  and  distribution  with respect to the Common  Stock when,  as and if
declared by the Board of Directors  out of funds  legally  available  therefore,
after requirements with respect to preferential  dividends on, and other matters
relating to, the  Preferred  Stock,  if any,  have been met. The Company has not
paid any dividends on its Common Stock and intends to retain  earnings,  if any,
to finance the development and expansion of its business. Future dividend policy
is subject to the  discretion  of the Board of Directors  and will depend upon a
number of factors,  including  future  earnings,  capital  requirements  and the
financial condition of the Company.

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<PAGE>



Description of Preferred Stock

     Shares of  Preferred  Stock may be issued  from time to time in one or more
series as may be  determined  by the Board of  Directors.  The voting powers and
preferences,  the  relative  rights of each such series and the  qualifications,
limitations  and  restrictions  thereof  shall be  established  by the  Board of
Directors,  except  that no holder of  Preferred  Stock  shall  have  preemptive
rights.

Transfer Agent and Registrar

     The  Transfer  Agent  and  Registrar  for the  Company's  Common  Stock  is
Interwest Transfer Co., Inc. which is located at 1981 East Murray Holliday Road,
Suite 100, Salt Lake City,  Utah 84117,  telephone  (801) 272-9294 and facsimile
(801) 277-3147. There is no transfer agent for shares of the Company's preferred
stock.

Recent Sales of Unregistered Securities

     During the  period 1 January  2000  through  the  filing  date the  Company
entered into the following transactions:

     In April 2000,  the Company  issued  305,000  shares of its Common Stock to
four (4) employees as signing  bonuses to attract them to the Company.  For such
offering the Company relied upon Section 4(2),  Rule 506,  Section  R14-4-140 of
the Arizona Code and Section 11-51- 308(1)(p) of the Colorado Code.

     The facts  upon  which the  Company  relied  upon for  purposes  of Section
14-4-140 of the Arizona Code are: (i) offers by the issuer were made only by the
Company's  employees,  officers  and  directors  who were not  retained  for the
primary  purpose of making  offers;  (ii) the sale of securities  did not exceed
$1,000,000;  (iii) the  Company  was not a  development  stage  company  with no
specific  business plan or a development  stage company that has indicated  that
its business plan is to engage in a merger or acquisition  with an  unidentified
company or companies, or other entity or person; (iv) offers specified that they
would  be made  only  to  accredited  investors  and  sales  were  made  only to
accredited  investors;  (v) a legend was placed on all offering  documents;  and
(vi) the  issuer,  any of its  predecessors,  affiliates,  directors,  officers,
beneficial  owners  of ten  (10)  percent  or more of any  class  of its  equity
securities did not fall within the disqualification provisions.

     For purposes of Section  11-51-308(1)(p)  of the Colorado  Code,  the facts
upon which the Company relied are: (1) The transaction was in compliance with an
exemption from  registration  with the Securities and Exchange  Commission under
section 3(b) or 4(2) of the Act pursuant to  regulations  adopted  thereunder by
the  Securities and Exchange  Commission;  and (2) The Company filed notice with
the securities commissioner of Colorado and paid an exemption fee.

     In April 2000,  the Company  issued  97,374  shares of its Common  Stock to
eighteen  (18) current or former  employees to  compensate  them for past salary
reductions or in lieu of past salary  increases for their  services as employees
during periods since 1997.  Donald Gause,  a Director,  received 4,000 shares in
connection with such issuance. For such offering the Company relied upon

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<PAGE>



Section 4(2), Rule 506, Section R14-4-140 of the Arizona Code,  Section 25102(f)
of the California Code,  Section 11-51- 308(1)(p) of the Colorado Code,  Section
90.532 of the Nevada  Code,  Section  58-13B-24(R)  of the New  Mexico  Code and
Section 61-1-15.5(2)&R164-15-2 of the Utah Code.

     The facts  upon  which the  Company  relied  upon for  purposes  of Section
14-4-140 of the Arizona Code are: (i) offers by the issuer were made only by the
Company's  employees,  officers  and  directors  who were not  retained  for the
primary  purpose of making  offers;  (ii) the sale of securities  did not exceed
$1,000,000;  (iii) the  Company  was not a  development  stage  company  with no
specific  business plan or a development  stage company that has indicated  that
its business plan is to engage in a merger or acquisition  with an  unidentified
company or companies, or other entity or person; (iv) offers specified that they
would  be made  only  to  accredited  investors  and  sales  were  made  only to
accredited  investors;  (v) a legend was placed on all offering  documents;  and
(vi) the  issuer,  any of its  predecessors,  affiliates,  directors,  officers,
beneficial  owners  of ten  (10)  percent  or more of any  class  of its  equity
securities did not fall within the disqualification provisions.

     For purposes of Section  25102(f) of the  California  Code,  the facts upon
which the Company relied are: (i) shares were sold to not more than  thirty-five
(35) persons,  including  persons not in  California;  (ii) all purchasers had a
preexisting  relationship  with the  offeror or its  officers,  directors  or by
reason of business or financial  experience  or by reason of their  professional
advisors had the capacity to protect their own  interests;  (iii) each purchaser
represented  that they were  purchasing for their own account and with a view to
or for sale in  connection  with any  distribution;  and (iv) the offer and sale
were not accomplished by the publication of any advertisement.

     For purposes of Section  11-51-308(1)(p)  of the Colorado  Code,  the facts
upon which the Company relied are: (1) The transaction was in compliance with an
exemption from  registration  with the Securities and Exchange  Commission under
section 3(b) or 4(2) of the Act pursuant to  regulations  adopted  thereunder by
the  Securities and Exchange  Commission;  and (2) The Company filed notice with
the securities commissioner of Colorado and paid an exemption fee.

     For purposes of Section 90.532 of the Nevada Code, the facts upon which the
Company  relied  are:  (1) The  securities  were  those  set  forth  is  Section
18(b)(4)(D)  of the Act;  and (2) The  Company  filed  notice  with the State of
Nevada and a fee.

     For purposes of Section  58-13B-24(R) of the New Mexico Code and New Mexico
Rule  12NMAC11.4.11.2,  the facts upon which the Company relied are: The Company
filed notice with the New Mexico administrator,  a consent to service of process
and a fee.

     For purposes of Section  61-1-15.5(2)&R164-15-2 of the Utah Code, the facts
upon which the  Company  relied  are:  The Company  filed  notice,  a consent to
service of process and a fee as proscribed by the statute.

     In June 2000,  the Company  granted  XAI an option to purchase  two million
(2,000,000)  shares of the Common Stock of the "freely  tradeable shares" of the
Company at a price of $0.50 per

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share.  The  option is for a period of one (1) year  unless  XAI  introduces  or
arranges for an acceptable  "secondary offering" approved by the Company, and in
which case the term of the option is extended until June 1, 2003. The option has
since been terminated by mutual agreement of the parties. For such offering, the
Company relied upon Section 4(2) of the Act, Rule 506 and Section  49:3-50(b)(9)
of the New Jersey Code.

     For purposes of Section  49:3-50(b)(9)  of the New Jersey  Code,  the facts
upon which the Company  relied  are:  (i) the sale was to not more than ten (10)
persons during any period of twelve (12)  consecutive  months;  (ii) the Company
reasonably  believed  that  all  buyers  purchased  for  investment;   (iii)  no
commission or other  remuneration was paid for soliciting any prospective buyer;
and (iv) the sale was not offered or sold by general solicitation or any general
advertisement.

     In June 2000,  the Company  entered  into a  agreement  wherein the Company
agreed  to  pay a  finder's  fee to XAI  for  any  debt  or  equity  investment,
acquisition, consolidation, merger or purchase of assets between the Company and
any  contact  of XAI  brought  to the  Company's  attention  by XAI,  which  was
consummated within a period of twenty-four (24) months thereafter.  The finder's
fee  is  as  follows:  a)  five  percent  (5%)  of  the  first  million  dollars
($1,000,000)  raised;  b)  four  percent  (4%)  of the  second  million  dollars
($1,000,000)  raised;  c)  three  percent  (3%)  of the  third  million  dollars
($1,000,000)  raised;  d)  two  percent  (2%)  of  the  fourth  million  dollars
($1,000,000)  raised;  and one percent (1%) of the all additional monies raised.
In the event fees are due XAI by the  Company,  the Company and XAI may mutually
agree to  accept  and pay the fee in  shares of the  Company's  stock  priced at
eighty percent (80%) of the most recent bid price. This agreement was terminated
in November  2000 by mutual  agreement  of the  parties.  For such  offering the
Company relied upon Section 4(2) of the Act, Rule 506 and Section 49:3- 50(b)(9)
of the New Jersey Code.

     For purposes of Section  49:3-50(b)(9)  of the New Jersey  Code,  the facts
upon which the Company  relied  are:  (i) the sale was to not more than ten (10)
persons during any period of twelve (12)  consecutive  months;  (ii) the Company
reasonably  believed  that  all  buyers  purchased  for  investment;   (iii)  no
commission or other  remuneration was paid for soliciting any prospective buyer;
and (iv) the sale was not offered or sold by general solicitation or any general
advertisement.

     In June 2000, the Company  entered into a consulting  agreement with XAI to
provide  consultation and advisory services relating to business  management and
marketing in exchange for issuance of 100,000 shares of the Company's stock each
to Edward Meyer,  Jr. and Edward T. Whelan.  The contract is for a period of one
(1) year. The consulting  agreement has been  terminated by mutual  agreement of
the parties. For such offering, the Company relied upon Section 4(2) of the Act,
Rule 506 and Section 49:3-50(b)(9) of the New Jersey Code.

     For purposes of Section  49:3-50(b)(9)  of the New Jersey  Code,  the facts
upon which the Company  relied  are:  (i) the sale was to not more than ten (10)
persons during any period of twelve (12)  consecutive  months;  (ii) the Company
reasonably  believed  that  all  buyers  purchased  for  investment;   (iii)  no
commission or other  remuneration was paid for soliciting any prospective buyer;
and (iv) the sale was not offered or sold by general solicitation or any general
advertisement.


                                       11

<PAGE>



     In June 2000, the Company  borrowed  $50,000 from GHI. The term of the note
is for a period of one (1) year or upon  subsequent  financing  by XAI. The note
bears  interest  at a rate of prime plus  three  percent  (prime+3%)  per annum.
Additionally, the Company granted GHI warrants to purchase 166,666 shares of the
Company's  Common  Stock at a price of $0.30 per  share.  The  warrants  have no
expiration date. In November 2000, the Company repaid the $50,000 owed to GHI in
advance of its due date,  in exchange  for a general  release with regard to the
note and warrants, the finder's fee agreement,  the consulting service contract,
the option agreement and all other  agreements  between the Company and both XAI
and GHI.  For such  offering,  the Company  relied upon Section 4(2) of the Act,
Rule 506 and Section 11.602 of the Maryland Code.

     The facts relied upon to make the Maryland Exemption  available include the
following:  (i) the Company  submitted  a manually  signed SEC Form D, Notice of
Sale of Securities Pursuant to Regulation D with the Securities  Division;  (ii)
the form was filed no later than 15 days after the securities were first sold in
Maryland;  (iii) the Company submitted a Form U-2, Uniform Consent to Service of
Process, and a Form U-2A, Uniform Corporate Resolution  consenting to service of
process in Maryland;  (iv) the Company provided the Securities Division with the
date of the first sale of the securities in Maryland under the offering; (v) the
Company provided the Securities  Division with the name and CRD number,  if any,
of at least one  broker-dealer or issuer agent that will effect  transactions in
the  securities in Maryland;  and (vi) the Company paid the  appropriate  fee of
$100 to the State of Maryland.  Despite the  requirement to file notice with the
State of Maryland, the Company made no filing.

     In July 2000,  the Company  issued 10,000 shares of its Common Stock to one
(1) individual in exchange for a client list of computer service customers,  the
remainder of the  previously  contracted  for but unissued  shares  (943,750) in
connection with the CC  acquisition,  13,166 shares to one (1) past employee for
out-of-pocket  expenses,  90,000  shares to one (1) investor for $30,000,  8,319
shares to one (1)  individual  for past  accounting  services  rendered,  40,000
shares to one (1)  individual  who is an  active  employee  as a signing  bonus,
58,333 shares to Maurice Mallette, the Company's current Interim Vice President,
President of CC and a Director in exchange for $17,500 and 75,000  shares to one
(1) individual for his services as a headhunter who brought potential  employees
to the Company.  For such offering,  the Company relied upon Section 4(2) of the
Act, Rule 506,  Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California  Code, the Nevada  Exemption and Section  211(b) of the  Pennsylvania
Code.

     The facts  upon  which the  Company  relied  upon for  purposes  of Section
14-4-140 of the Arizona Code are: (i) offers by the issuer were made only by the
Company's  employees,  officers  and  directors  who were not  retained  for the
primary  purpose of making  offers;  (ii) the sale of securities  did not exceed
$1,000,000;  (iii) the  Company  was not a  development  stage  company  with no
specific  business plan or a development  stage company that has indicated  that
its business plan is to engage in a merger or acquisition  with an  unidentified
company or companies, or other entity or person; (iv) offers specified that they
would  be made  only  to  accredited  investors  and  sales  were  made  only to
accredited  investors;  (v) a legend was placed on all offering  documents;  and
(vi) the  issuer,  any of its  predecessors,  affiliates,  directors,  officers,
beneficial  owners  of ten  (10)  percent  or more of any  class  of its  equity
securities did not fall within the disqualification provisions.


                                       12

<PAGE>



     For purposes of Section  25102(f) of the  California  Code,  the facts upon
which the Company relied are: (i) shares were sold to not more than  thirty-five
(35) persons,  including  persons not in  California;  (ii) all purchasers had a
preexisting  relationship  with the  offeror or its  officers,  directors  or by
reason of business or financial  experience  or by reason of their  professional
advisors  had  the  capacity  to  protect  their  own   interests;   (iii)  each
purchaserrepresented  that they were purchasing for their own account and with a
view to or for sale in connection with any distribution;  and (iv) the offer and
sale were not accomplished by the publication of any advertisement.

     The  facts  relied  upon to make the  Pennsylvania  Exemption  include  the
following:  (i) the Company filed a completed  SEC Form D with the  Pennsylvania
Securities  Commission,  Division of Corporate Finance;  (ii) the Form was filed
not later than  fifteen  (15) days after the first  sale;  and (iii) the Company
paid an appropriate filing fee.

     In August 2000,  the Company  executed a Promissory  Note in favor of Barry
Zemel in the principal  amount of $50,000.  The note bears interest at a rate of
twelve percent (12%) per annum and matures March 1, 2001. In connection with the
loan, the Company  issued  350,000 shares of its Common Stock to Mr. Zemel.  For
such  offering,  the Company  relied upon Section 4(2) of the Act,  Rule 506 and
Section R14-4-126 of the Arizona Code.

     The Company relied upon Section  R14-4-126 of the Arizona Revised  Statutes
for several  transactions.  The facts relied upon to make the Arizona  Exemption
include  the  following:  (i)  units  were sold to less  than  thirty-five  (35)
persons;  (ii) each purchaser who was not an accredited investor either alone or
with purchaser representative had such knowledge and experience in financial and
business matters  sufficient to evaluate the merits and risks of the prospective
investment;  (iii)  the bad boy  provisions  of the rule  apply to  neither  the
Company nor its predecessors or affiliates;  and (iv) neither the issuer nor any
person  acting  on its  behalf  offered  or sold the  securities  by any form of
general solicitation or general  advertising;  (v) the Company filed a completed
SEC Form D with the  Arizona  Corporation  Commission  signed  by a person  duly
authorized by the issuer; (vi) the Forms were filed not later than 15 days after
the  first  sale  of the  securities  in  Arizona;  (vii)  the  Company  paid an
appropriate filing fee of $250.00 to the Arizona Corporation Commission.

     In August and September 2000, the Company sold a combined 352,322 shares to
two (2) investors for a total of $51,161. For such offering,  the Company relied
upon Section 4(2) of the Act, Rule 506,  Section  25102.1 of the California Code
and Section 10-5-9 (13) of the Georgia Code.

     The  facts  relied  upon to  make  the  California  Exemption  include  the
following:  (i) the  Company  filed a completed  SEC Form D with the  California
Department  of  Corporations;  (ii) the  Company  executed a Form U-2 consent to
service of process  in the state of  California;  (iii) the Forms were filed not
later than 15 days after the first sale of the securities in California; and (v)
the Company paid the appropriate filing fee.

     The facts relied upon to make the Georgia  Exemption  available include the
following:  (i) the aggregate  number of persons  purchasing the Company's stock
during the 12 month period

                                       13

<PAGE>



ending on the date of issuance did not exceed fifteen (15) persons; (ii) neither
the  offer  nor the  sale of any of the  shares  was  accomplished  by a  public
solicitation or advertisement;  (iii) each certificate contains a legend stating
"These securities have been issued or sold in reliance of paragraph (13) of Code
Section  10-5-9  of the  Georgia  Securities  Act of 1973 and may not be sold or
transferred  except in a transaction  which is exempt under such act or pursuant
to an effective registration under such act"; and (iv) each purchaser executed a
statement to the effect that the  securities  purchased  have been purchased for
investment  purposes.  Offerings  made  pursuant to this  section of the Georgia
Securities  Act have no  requirement  for an offering  memorandum  or disclosure
document.

     In November  2000,  the Company  issued  206,500  shares of its  restricted
Common  Stock to four (4) persons.  Two (2) of the persons  receiving a total of
200,000  shares,  were  given the  shares as a hiring  bonus.  The other two (2)
persons  receiving  a total of 6,500  shares,  were  given the shares in lieu of
salary.  For such offering the Company relied upon Section 4(2) of the Act, Rule
506, Section R14-4-140 of the Arizona Code.

     The facts  upon  which the  Company  relied  upon for  purposes  of Section
14-4-140 of the Arizona Code are: (i) offers by the issuer were made only by the
Company's  employees,  officers  and  directors  who were not  retained  for the
primary  purpose of making  offers;  (ii) the sale of securities  did not exceed
$1,000,000;  (iii) the  Company  was not a  development  stage  company  with no
specific  business plan or a development  stage company that has indicated  that
its business plan is to engage in a merger or acquisition  with an  unidentified
company or companies, or other entity or person; (iv) offers specified that they
would  be made  only  to  accredited  investors  and  sales  were  made  only to
accredited  investors;  (v) a legend was placed on all offering  documents;  and
(vi) the  issuer,  any of its  predecessors,  affiliates,  directors,  officers,
beneficial  owners  of ten  (10)  percent  or more of any  class  of its  equity
securities did not fall within the disqualification provisions.

     In November  2000, the Company issued 200,000 shares of its Common Stock to
Ford Williams,  the Company's current Secretary,  Treasurer and a Director,  for
services  rendered to the Company.  For such  offering,  the Company relied upon
Section 4(2) of the Act, Rule 506 and Section R14-4-140 of the Arizona Code.

     The facts  upon  which the  Company  relied  upon for  purposes  of Section
14-4-140 of the Arizona Code are: (i) offers by the issuer were made only by the
Company's  employees,  officers  and  directors  who were not  retained  for the
primary  purpose of making  offers;  (ii) the sale of securities  did not exceed
$1,000,000;  (iii) the  Company  was not a  development  stage  company  with no
specific  business plan or a development  stage company that has indicated  that
its business plan is to engage in a merger or acquisition  with an  unidentified
company or companies, or other entity or person; (iv) offers specified that they
would  be made  only  to  accredited  investors  and  sales  were  made  only to
accredited  investors;  (v) a legend was placed on all offering  documents;  and
(vi) the  issuer,  any of its  predecessors,  affiliates,  directors,  officers,
beneficial  owners  of ten  (10)  percent  or more of any  class  of its  equity
securities did not fall within the disqualification provisions.


                                       14

<PAGE>



     In  December  2000,  the  Company  issued a total of  50,000  to three  (3)
persons,  pursuant to  subscriptions  received in 1998 which were  inadvertently
never processed.  A total of $15,000 was raised pursuant to these three (3) 1998
subscriptions.  For such  offering,  the Company relied upon Section 4(2) of the
Act,  Rule 506 and  Rule  ###-##-####  of the  Oregon  Code.  No  exemption  was
necessary to the Canadian investor.

     The facts relied upon to make the Oregon  Exemption  include the following:
(i) the  Company  filed a  completed  SEC Form D with the Oregon  Department  of
Consumer & Business Services, Division or Finance and Corporate Securities; (ii)
the Form was filed not later  than 15 days after the first  sale;  and (iii) the
Company paid an appropriate filing fee based on the amount of the offering.

Item 6.   Management's Discussion and Analysis of Operations

Overview

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

     OneSource survived a very difficult year that is best described as a period
of consolidation and re- birth. The substantial loss for the year ended December
31, 2000  resulted  from a number of  circumstances  that can be  summarized  as
follows:

     o    Operational  problems  encountered  in the Company's  Maintenance  and
          Installation/Integration divisions;
     o    Excessive General and Administrative costs,
     o    Costly short-term borrowings; and
     o    Lost revenues from terminated maintenance contracts.

     In  spite  of  these  problems,  most of which  were  related  to  internal
circumstances the Company has not only survived but has substantially  rectified
the circumstances that contributed to the poor results for fiscal 2000. Further,
the Company has not encountered  any adverse  business  conditions  specifically
related to its business lines or market impediments limiting OneSource's ability
to  secure  new  business  during  fiscal  2001.   Moreover,   the  Company  has
successfully  demonstrated in the past that its unique "single-source"  delivery
approach to the industry is well accepted in the market place.

     The operational  difficulties encountered during fiscal 2000 are the result
of a number of internal  problems and certain one-time  restructuring  endeavors
undertaken  during  the  second  half of fiscal  2000 to  streamline  and better
synergistically  integrate the Company's three operating divisions into a single
cohesive and efficient  whole.  Consequently  the Company's  business  plans and
management  continue  to  anticipate  significant  increases  in  the  Company's
business  and  scope  of  practice  over  the  next  five-years.  This  will  be
accomplished through;


                                       15

<PAGE>



     *    Completing the  restructuring  and turnaround  initiatives  started in
          2000;
     *    Improving operational management;
     *    Substantially expanding sales and marketing activities and personnel;
     *    Upgrading internal information and communication infrastructures;
     *    Reducing overall General and Administrative costs; and,
     *    Securing additional equity investment capital.

     During the year ended December 31, 1999 the Company  acquired two companies
in order to extend OneSource's core long-term  maintenance services business. In
April 1999 the Company acquired all the outstanding stock of Net Express,  Inc.,
an Arizona corporation  engaged in the local area network integration  business.
In September  of that year the Company  acquired  all the  outstanding  stock of
Cartridge Care, Inc., an Arizona  corporation  engaged in the remanufacturing of
printer/copier  toner cartridges.  Both acquisitions were effected with issuance
of stock.  Net Express was  accounted  for as pooling of interests and Cartridge
Care was  accounted for as a purchase.  Accordingly  the results of Net Express'
operations  and financial  condition are included in the Company's  consolidated
results  for the  full two  years  ended  December  31,  2000.  The  results  of
operations of Cartridge Care on the other hand are only included since September
30,1999 its date of purchase.

     These acquisitions  contributed  approximately of thirty-five percent (35%)
and twenty  percent (22%) of  consolidated  revenues in the years ended December
31, 2000 and 1999 respectively.

     In July 1999 the Company  successfully filed a "business process apparatus"
patent application (S/N 09/395,071) with the United States Patent Office for its
OneSource   Flat-Rate  Blanket   Maintenance   System  (TM).  This  application,
consisting   of  eight  (8)  claims   related  to   proprietary   processes  and
methodologies developed by the Company is still pending at December 31, 2000 and
legal  counsel  believes  the Company has a more likely than not chance of being
granted the patent.

Results of Operations

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

     *    Long-term equipment maintenance services;
     *    Equipment installation and integration services; and
     *    Equipment consumable supplies distribution.

     The Company's  primary  customer profile is companies in the a) banking and
financial  services and b) retail  industries.  Though  OneSource's  service and
product  offerings  can be  readily  applied  in any  industry,  these  two  are
emphasized because of the significantly  greater number of equipment  technology
items used in banking and retail companies  compared to other  businesses.  Like
companies in other industries,  banking and retail enterprises use large numbers
of general business equipment such as copiers,  facsimiles, PCs and peripherals,
but in addition they also utilize

                                       16

<PAGE>



significant quantities of industry specific machines like coin/currency counting
and handling  machines,  check  processing  and encoding  equipment  and ATMs in
banking and  point-of-sale  (POS)  scanner and register  systems in retail.  The
Company's  economies-of-scale  are maximized in situations where there are great
concentrations  of  equipment  at  customers'  sites,  hence  its focus on these
industries.

     Overall consolidated results for the year ended December 31, 2000 were poor
in most respects;  maintenance  division  revenues were largely flat compared to
fiscal  1999,  the  installation  division  flopped and costs in all  categories
significantly  increased in the year ended  December 31, 2000  compared to 1999.
The lone bright spot in fiscal 2000 was the  contribution  made by the  supplies
distribution division, (Cartridge Care).

     The following table sets forth selected  consolidated  operating results of
OneSource for the years ended December 31, 2000 and 1999.

<TABLE>
<S>                                                <C>               <C>
    Summary Income Statement                          2000             1999
-------------------------------------------------  -------------     -------------
Operating Revenues                                     3,229,389         2,476,884
Cost of Revenues                                       2,242,176         1,484,096
Gross Margins                                            987,213           992,788
Selling, General and Administrative Expenses           2,077,990         1,171,874
Operating Loss                                       (1,090,777)         (179,086)
Other Income and (Expense)                             (202,560)          (24,021)
Income (Loss) before Extraordinary Gain              (1,293,337)         (203,107)
Extraordinary Gain                                        58,474                 -
Income (Loss) before Taxes                           (1,234,863)         (203,107)
Income Benefit                                         (106,297)          (17,766)
Net Loss                                             (1,128,566)         (185,341)
</TABLE>

Operating Revenues

Total consolidated revenues increased $752,505 or 30% in the year ended December
31, 2000  compared to 1999 but  substantially  all the increase is the result of
including the supplies distribution  division,  (Cartridge Care) for a full year
in fiscal 2000 versus only the post acquisition final three months of 1999. Even
though overall  revenues were up in the year ended December 31, 2000 compared to
1999 total revenue results were disappointing due to;

     *    Cancellation of a major equipment maintenance contract;
     *    Discontinuance of a significant sub-contractor commitment with another
          maintenance provider; and
     *    Lack of any new  maintenance  services and  installation  customers in
          fiscal 2000.

The  following  table shows the amounts  each line of  business  contributed  to
consolidated revenues for the years ended December 31, 2000 and 1999.


                                       17

<PAGE>



<TABLE>
<CAPTION>
    Business Line Revenue Mix                          2000        %       1999       %
------------------------------------------------  ------------ --------  --------  -------
<S>                                                  <C>         <C>     <C>         <C>
Equipment Maintenance and Service Revenues           2,092,540    65     1,983,166    80

Equipment Sales and Integration Revenues               267,728     8       341,548    14

Equipment Parts and Supplies Revenues                  869,121    27       152,170     6

Total Business Line Revenues                         3,229,389   100     2,476,884   100
</TABLE>


Equipment Maintenance Services

     Maintenance  revenues modestly increased 6% in the year-ended  December 31,
2000 compared to 1999. The increase was the result of including the  maintenance
services  of  Cartridge  Care for the entire  year of 2000  (approximately  $100
thousand) and the adding of a number of contract addendums with a major customer
for  new  service  revenues  (approximately  $200  thousand  annualized).  These
increases however were offset by declines in annualized  maintenance revenues of
about $600 thousand. Timing of these increases and decreases account for the net
increase for the year ended December 31, 2000 compared to 1999.

     On a percentage  contribution  basis,  maintenance  services  accounted for
sixty-five  percent (65%) of total  revenues in the year ended December 31, 2000
compared to eighty percent (80%) for the year ended December 31, 1999. A primary
reason for the decline is the result of the significant increase in the supplies
division  revenues in the year ended  December 31, 2000 compared to 1999 because
of including a full year of  operations  for that division in fiscal 2000 versus
only three months in 1999.  Partially offsetting these results, the installation
services  division  contribution  declined to eight percent (8%) of consolidated
revenues in fiscal 2000 from fourteen  percent (14%) in the year ended  December
31, 1999.

     The Company's  annualized  contract service revenues declined slightly from
approximately  $2.0 million at the end of 1999 to about $1.7 million at December
31, 2000. This is the result of the  cancellation of a large service contract by
a major customer (approximately $450 thousand annualized) and the termination by
OneSource of a third party  sub-contracting  relationship  with another  service
company  (about $200 thousand  annualized).  The contract  cancellation  was the
result of a customer  electing to provide its own maintenance  services in-house
and was not because of  unsatisfactory  service  delivery quality on the part of
OneSource.  The Company terminated the sub- contracting  relationship because of
serious  disruptions  it  caused  in the  Company's  internal  service  delivery
processes.

     At  December  31,  2000  retail  industry  customers  accounted  for  about
seventy-six  percent (76%) of  maintenance  revenues  with about twenty  percent
(20%) derived from banking  clients and four percent (4%) from other  industries
and  governmental  customers.  This compares to seventy-four  percent (74%) from
retail, twenty-three (23%) from banking and three percent (3%) from other in the
year ended December 31, 1999.

                                       18

<PAGE>



     The Company ended the year 2000 with a total backlog of renewable  contract
service  revenues of  approximately  $3.1  million.  In  addition  to  long-term
contract  equipment service the Company also performs on-call time and materials
service work that  amounted to less than 10% of total  service  revenues for the
years ended December 31, 2000 and 1999.  This reflects the Company's  continuing
focus on increasing renewable contract services at the expense of unsolicited on
call work.

Equipment Installation and Integration Services

     Fiscal 2000  represented  a period of  realignment  and  refocusing of this
division's operations. At the time of its acquisition in 1999 this division (Net
Express) was engaged in small local area network equipment sales and integration
services.   Since  that  business  is  highly  competitive  and  fragmented  and
traditionally yields very low margins, the Company refocused the division toward
large-scale  installation projects in support of the Company's large maintenance
service  customers in early 2000. Prior to acquiring the division  OneSource had
to pass on a number of opportunities to provide equipment installations services
for two of its large retail accounts.

     The  intent   therefore   of  the   merger  was  to  meld  the   division's
installation/integration  core  competencies  with the  Company's  large project
specific equipment installation  opportunities,  which can be very lucrative and
profitable.  While  progress  was made in this  regard  by the end of 2000,  the
disruption caused in effecting the realignment  during the year seriously eroded
the  division's  revenue  contribution  for the year  ended  December  31,  2000
compared  to  1999.   Revenues  for  the  division  decreased  $82  thousand  or
twenty-four percent (24%) for the year ended December 31, 2000 compared to 1999.

     Contributing to this decline was a number of management glitches during the
transition wherein division  personnel  unwittingly spent time researching other
market niches instead of focusing on selling  installation  services to existing
and/or  prospective  customers.  This led to excessive spending per sales dollar
generated and forced a number of mid-year  layoffs.  Management  continues to be
committed  to the  installation  and  integration  business and views it as very
complementary to its renewable  maintenance  services. By the end of fiscal 2000
management's  intended  refocus on  installations  for  existing  customers  was
succeeding and going into fiscal 2001 the division has a number of  installation
assignment  proposals  pending for  potential  equipment  maintenance  customers
consistent with the Company's original vision for this division.

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

Consumable Supplies Distribution

     This division was the lone bright spot operationally for the Company during
the year ended December 31, 2000. Compared to the prior year, the acquisition of
this division, (Cartridge Care)

                                       19

<PAGE>



contributed  nearly all (95%) of consolidated  revenue growth with the inclusion
of a full year's results in fiscal 2000 versus only 3 months of post acquisition
results in fiscal 1999.  Equipment  supplies  sales  accounted for  twenty-seven
percent  (27%) of total  consolidated  revenues for the year ended  December 31,
2000  compared  to only six percent  (6%) in 1999.  While some  operational  and
management  information  disruptions occurred in early 2000 from the integration
of the new division into consolidated operations these were largely rectified by
mid-year through a change in leadership.

     The  new  management  team  streamlined   order  entry  and   manufacturing
procedures  in the  second  half of  fiscal  2000 and  labor  costs per unit and
overhead  expenses  decreased  accordingly  for  the  division.  Targeted  sales
programs  were   implemented   late  in  the  year  and  cash  flow  and  profit
contributions from this division greatly improved by year-end December 31, 2000.
Going into fiscal 2001 the  division  is focusing on larger  clients  consistent
with the Company's  overall  customer profile to add to its present Fortune 1000
list of customers.  Doing so will  transition the  division's  customer mix away
from numerous  small local  customers to fewer large volume users.  For the year
ended  December  31, 2000  approximately  thirty-six  percent  (36%) of division
revenues were derived from Fortune 1000 type customers versus about  twenty-five
percent (25%) for the year ended December 31, 1999.

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

Profit Margins

     Absolute gross margin dollars were largely flat for the year ended December
31, 2000  compared to 1999 but  consolidated  margin  contribution  for the year
ended December 31, 2000 dropped  significantly to thirty-one  percent (31%) from
forty percent (40%) for the year ended  December 31, 1999.  This decline was the
result of a number of things, but primarily;

     *    Continuing  maintenance service parts inventory and logistics problems
          throughout 2000;
     *    Staffing   dislocations  in  field  service  operations  resulting  in
          excessive overtime costs;
     *    The  collapse  of  the   installation   and   integration   division's
          operational results; and
     *    One-time employee stock grants for prior years service.

The following  tables shows gross margin results for each division for the years
ended December 31, 2000 and 1999:


                                       20

<PAGE>



<TABLE>
<S>                                      <C>        <C>   <C>       <C>
       Business Line Gross Profit            2000    Gm%    1999     Gm%
---------------------------------------- ---------  ----- --------- -------
Equipment Maintenance and Service          656,189    31    892,058  45
Equipment Installation and Integration       8,235    3      36,186  11
Equipment Supplies Distribution            322,788    37     64,544  39
Total Business Line Gross Profit           987,213    31    992,788  40
</TABLE>

Equipment Maintenance Services

     The maintenance  division's  fourteen percent (14%) decline in gross margin
percentage  for the year ended December 31, 2000 compared to 1999 is significant
and reflects a number of problems incurred in the division's operations. Service
parts inventory and logistics and significant field service overtime account for
much of the decline in the face of  essentially  level  revenues year over year.
Inventory  control and parts  procurement and shipping problems that surfaced in
late 1999  continued  through  much of  fiscal  2000.  By the end of the  fourth
quarter  however the  problems  were  appropriately  identified  and  corrective
actions  initiated.  The impact on margins  during  fiscal  2000 though of these
problems was the absorption of approximately  $190 thousand in overtime charges,
excessive  parts  shipping  costs and  productivity  impediments  and about $150
thousand in inventory adjustments during the last two quarters of fiscal 2000.

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

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

Equipment Installation and Integrations Services

     Installation and integration division margins obviously were a flop for the
year  ended  December  31,  2000  compared  to 1999.  Following  the  division's
acquisition  in early 1999 it  continued  its  theretofore  local  area  network
equipment  sales and  integration  operations  through the end of that year.  In
early fiscal 2000 though management  redirected the division's scope of practice
away from small network  installation  projects and into  large-scale  equipment
implementation  projects  in support of  OneSource's  customer  profile of large
regional and/or divisions of national banking and

                                       21

<PAGE>



retail companies.  Doing so will more tightly integrate the Company's  operating
divisions  and at the same time enable  sales and  marketing  endeavors  to more
readily penetrate new customer opportunities.

     During  2000  this  division  had a number  of  failed  false  starts  that
substantially  disrupted division  operations.  Consequently  management cleaned
house in the second half of 2000.  Personnel  changes were made and its customer
mix was  redirected to  synergistically  align with the Company's  core business
operations.  In the end the division  contributed a loss of  approximately  $164
thousand  for the year ended  December  31,  2000.  The good news  though is the
refocused  division was able to propose on a couple of significant  new business
opportunities for new equipment  implementation  projects at the end of the year
for potential fiscal 2001 work.

Consumables Supplies Distribution

     The consumable supply  division's  margin  percentage  declined two percent
(2%) in the year ended December 31, 2000 compared to 1999.  Margins on purchased
cartridges average thirty to thirty-five  percent (30 to 35%) whereas margins on
in-house  manufactured  ones  average  forty  to  fifty  percent  (40% to  50%).
Resulting  margins  therefore are a function of the product mix between in-house
versus  outside  purchased  cartridge  shipments  and the division had a greater
proportion of the former in fiscal 2000.  Competitive pricing required to garner
positions at a number of the  division's  Fortune 1000  accounts  also  impacted
overall margins unfavorably. Finally the division absorbed about $40 thousand of
product shipments and other costs related to the GOINK.com web portal during the
testing phase of this site which had the effect of depressing  overall  division
gross margins.

     Anticipated future margins in the supply division therefore are expected to
increase in fiscal 2001 to the  thirty-five  to forty percent range as expansion
continues  and  shipment  mixes are refined in support of the  greater  customer
base.  Management believes a greater proportion of purchased  cartridges will be
required though to support the expected expansion of this division, particularly
in the  on-line  Internet  fulfillment  site once it comes on line in the second
half of fiscal 2001.

General and Administrative Costs

     General and Administrative costs ballooned  ninety-five (95%) to a total of
$1.8 million for the year ended  December 31, 2000  compared to $942 thousand in
1999. The following table details the significant cost categories;

<TABLE>
<S>                                        <C>         <C>    <C>
  General and Administrative Expenses       2000         %       1999
--------------------------------------     ----------- ------ ----------
General & Administrative Payroll            651,501      34     486,034
Legal and Professional Fees Paid            220,736      218     69,453
Facilities                                  222,869      49     149,704
Medical and Casualty Insurance              185,441      159     71,641
Payroll Taxes Paid                          167,044      100          -
Telecommunication Expenses                   83,881      100          -
Bad debts expense                            58,866      100          -
Travel & Entertainment                       99,012      50      66,098
Other                                       152,094      20      99,482
Total General and Administrative Expense  1,841,444      95     942,412
</TABLE>


                                       22

<PAGE>






     This aspect of the business is where the disparate effects of the Company's
business  units was most  apparent and where costs were most out of line.  Total
general  and  administrative  costs as a percent of total  revenues  exploded to
fifty-seven percent (57%) in fiscal 2000 compared to thirty-eight  percent (38%)
in 1999.  Accordingly much of management's attention in fiscal 2000 was directed
to this  portion of the  business in order to  streamline  and better  integrate
overall operations and reduce administrative costs.

     Much of the  thirty-four  percent  increase in general  and  administrative
payroll  during the year ended  December  31, 2000  compared to 1999  related to
salaries of a number of people held over from the acquisitions in 1999 that were
eliminated  in the  second  half  of  2000  as  part  of the  restructuring  and
integration  program.  They represented  redundant  positions and/or unnecessary
slots following the realignment  and  consolidation  of the three divisions into
the new synergistic  whole. The balance related to certain other  administrative
personnel that were added in the second half of fiscal 1999 in  anticipation  of
the increased level of operations but with the loss of a significant maintenance
contract in mid fiscal 2000 and related  operational  problems in that  division
these individuals were also eliminated in the last half of fiscal 2000.

     Legal  and  professional  fees  increased  substantially  as a result of a)
higher  legal  and  accounting  fees  and b) use of  consultants  and  temporary
personnel and other professionals (approximately $80 thousand) that were engaged
to  define  and  implement  the  Company's   restructuring   plans  intended  to
synergistically   integrate   the  operating   divisions  and  improve   overall
operations. In fiscal 2000, several mid-level managers and technical specialists
were  laid-off.  Either their skills  duplicated  others in the Company or their
contribution didn't warrant continued employment. As a result,  consultants were
used at times in  order to  bridge  the gap  between  terminated  employees  and
subsequently hired replacements.

     Higher  professional  fees also  related to  additional  work  required  in
connection with the Company's public filings and professional matters related to
the  restructuring  (approximately  $35  thousand)  and  funding  fees  paid  to
consultants (approximately $30 thousand) in connection with capital raises.

     Most of the increase in  facilities  costs for the year ended  December 31,
2000 compared to 1999 is due to costs  related to  relocating  and combining all
the Company's  headquarters  and Arizona  operations  into new facilities in the
Scottsdale  Airpark  in the last  quarter  of 1999.  Higher  rents  and  related
utilities  associated  with the larger  facilities  contributed to the increase.
This  was  partially  offset  by  the  elimination  of  small  separate  Company
facilities in Utah and Nevada.

     Medical  insurance  and employee  benefit  increases  are a function of the
Company  going to a PEO  leasing  company  for all its  employees  in the second
quarter of fiscal 2000. As part of this move the Company incurred  significantly
higher medical benefits and workman's  compensation  costs. This change was made
to help assure that the Company is in compliance  with all regulatory  reporting
and

                                       23

<PAGE>



filing  requirements  and that all employees  were  appropriately  and uniformly
covered throughout the Company's disparate geographic reach.

     Casualty  insurance  costs were also greater in the year ended December 31,
2000 compared to 1999 due to the  Company's  new  facilities  at its  Scottsdale
location and additional vehicles added in fiscal 2000.

     Most of the bad debt write off occurred in the installation and integration
where  a  number  of  jobs in that  division  encountered  operational  delivery
problems  during  the  divisions  restructuring  which  resulted  in a number of
customer  issues making it difficult or unlikely to collect for all the services
rendered.  A small amount of receivables  were also reserved for in the supplies
division.

Selling Expenses

<TABLE>
<S>                                <C>          <C>        <C>
Selling Expenses                        2000        %          1999
---------------------------------- -----------  ---------- -------------

Sales and Marketing Compensation      191,545      (6)       205,025

Selling & Service Expense              22,969      150         3,286

Advertising & Promotion                14,103       55         9,101

Meals & Entertainment                   4,867      (58)       12,050

Trade Shows                               281      100             -

Total Selling Expense                 233,765       2        229,462
</TABLE>

     Selling  expenses  increased  slightly by 2% in the year ended December 31,
2000  compared  to the  same  period  in 1999.  The  essentially  flat  level of
expenditures  reflects the disruption  and  conflicted  sales activity in fiscal
2000  because  of   restructuring   in  the  department.   The  effect  of  this
restructuring   is  well  documented  with  the  lack  of  new  maintenance  and
installation  business  during all of fiscal 2000.  The overall  sales effort in
fiscal  2000 is best  characterized  by a number  of  false  starts  and  failed
strategies.

     At the outset of the year each  division  had  separate  sales plans and in
some ways competed with each other.  Further, the lone sales professional in the
Company's maintenance services division quit in the first quarter of 2000 due to
family reasons leaving that unit without any active outbound sales  initiatives.
Without this senior  salesperson  and the  conflicting  sales  objectives of the
three divisions the Company lost sales momentum and went the entire year without
any appreciable new sales department generated business.

     Additional  time was lost with a failed a new sales director that was hired
in the second  quarter of fiscal 2000 to  orchestrate a cohesive  sales strategy
and unify sales and marketing  programs for the mutual and integrated benefit of
each business  unit.  When this  endeavor  failed in the third quarter of fiscal
2000 the entire sales team was  terminated.  The former  seasoned  salesperson's
family

                                       24

<PAGE>



situation  improved and he was rehired at the end of 2000 and assigned to direct
the new unified  plans.  Two other  professionals  were hired late in the fourth
quarter of fiscal 2000 and  management  believes that overall sales activity and
results  will  significantly  improve  in fiscal  2001.  A key factor in the new
program includes engaging  experienced  professionals  with the ability to cross
sell each division's  product lines  supported by an aggressive  advertising and
industry PR campaign.

Operating Losses

     The  substantial  increase  (480%)  in  operating  loss for the year  ended
December  31,  2000  compared  to 1999 is the result of a number of  operational
problems  in  two of  the  Company's  operating  divisions  and a  significantly
disproportionate  increase in general and  administrative  costs.  The following
table summarizes the totals;

<TABLE>
<S>                        <C>              <C>          <C>
    Net Losses                    2000           %            1999
-------------------------  ---------------- -----------  -------------
Operating Losses               (1,087,996)       480         (179,086)
Interest Expenses                (188,576)       679          (24,195)
Other expenses                    (16,765)        na              174
Extraordinary Item                 58,474         na                -
Taxes benefit                     106,297        508           17,766
Net loss                       (1,128,566)       477         (185,341)
</TABLE>

     Most  of the  operating  loss  occurred  in the  maintenance  services  and
installation-integration  divisions.  While the supplies  distribution  division
also ended the year with a loss the balance of the loss resulted from  excessive
administration  costs  ($540  thousand)  and  result-less  sales  and  marketing
expenditures ($150 thousand). Staffing overtime,  unwarranted shipping costs and
inventory and logistics  problems in the  maintenance  division were the culprit
there and the transition and realigning  activities in the installation division
were  responsible  for that  division's  high losses.  A bloated  administrative
function for much of fiscal 2000 and significantly  higher professional fees and
employee benefits pushed general and administrative costs unacceptably higher.

Other Income and Expenses

     Interest expense increased for the year ended December 31, 2000 compared to
1999  because  of  increases  in  outstanding   interest   bearing  debt.   Also
contributing to the substantial increase was the financing costs ($150 thousand)
incurred in arranging and securing  certain  short-term  funding  tranches.  The
Company also  experienced an increase in payment  penalties and interest charges
associated  with vendor  purchases  because of  operational  disruptions  during
fiscal 2000 compared to 1999.



                                       25

<PAGE>



Liquidity and Capital Resources

The following table sets forth selected  financial  condition  information as of
December 31 2000 and 1999:

<TABLE>
<S>                                     <C>                 <C>
Balance Sheet -                              2000                 1999
------------------------------------    ----------------    -----------------
   Working Capital                        ($833,076)              $64,049
   Total Assets                          $1,484,186            $1,715,486
   Debt Obligations                        $587,635              $473,126
   Shareholders' (Deficit) Equity         ($394,608)             $335,880
</TABLE>

     While the  residual of the 1999  private  capital  funding  commitment  was
funded in the second  quarter of fiscal  2000  continuing  operational  problems
throughout  much of fiscal 2000 caused the Company's  cash burn-rate to escalate
to in excess of $100 thousand per month in June and averaged almost $80 thousand
per month through all of the second and third quarters. This cash short fall was
finally  arrested and reduced to about $20 thousand a month by year-end 2000 but
not  before it was  necessary  to secure  additional  funding  while  management
grappled  with  restructuring  and  realigning   operations  to  bring  them  to
profitability.  To do so in light of the  Company's  then  diminished  liquidity
capacity some new equity capital was invested but most of the new capital was in
the form of short-term borrowings,  which increased by $393 thousand compared to
total short-term debt as of December 31, 1999.

     Further, the short-term lenders required "equity sweeteners" as part of the
deals,  which further  increased  the cost of the  short-term  borrowings.  This
increase in short-term  obligations is a primary reason for the sharp decline in
working  capital at December 31, 2000 compared to 1999 and the negative  current
ratio at December 31, 2000 of .47% versus a positive  1.06 at December 31, 1999.
The  financing  cost of these funding  rounds is also a significant  contributor
(approximately  $150 thousand) to the Company's loss for the year ended December
31, 2000.

     Also  contributing to the diminished  working capital ratio at December 31,
2000 compared to 1999 is the  liability of $591 thousand in current  liabilities
representing  the  obligation  for  shares  of the  Company's  stock  that  were
subscribed  during the year ended  December  31, 2000 but were not yet issued at
that  date.  This  obligation  also had the  negative  effect  of  significantly
decreasing  Paid In Capital  and  pushing  the  Company's  Stockholders'  Equity
balance into a deficit at December 31, 2000.

     Notwithstanding  the foregoing  however,  two of the liabilities  making up
total current  liabilities,  "Obligation  for common stock to be issued" of $592
thousand  and  "Deferred  revenue" of $144  thousand  are non-cash in nature and
accordingly have no cash flow impact on working capital. If these two items were
excluded from the working  capital ratio  calculation on a pro forma basis,  the
pro forma  working  capital  ratio would be a negative  .89 or a ninety  percent
(90%) improvement.

     Further  contributing to the decreased working capital position at December
31, 2000 compared to 1999 is the decrease in current asset  balances at December
31, 2000. Accounts receivable and inventory were down from their previous levels
at December 31, 1999 due to restructuring activities

                                       26

<PAGE>



implemented in the second half fiscal 2000 to correct operational  problems.  By
year-end  2000 these turn around  efforts had  sufficiently  taken  effect as to
result in improved accounts receivable  collections and inventory control,  both
balances  of  which  were  lower  at  December  31,  2000  compared  to  1999 by
thirty-eight percent (38%) and twenty-six percent (26%) respectively.

     While current  liabilities  increased slightly (9%) as of December 31, 2000
compared to 1999 all of the increase  was due to  short-term  borrowings.  Every
other current  liability balance decreased at December 31, 2000 compared to 1999
except accounts payable,  which essentially  remained the same. Accounts payable
remained  the  same  largely  because  of a  number  of year  end  accruals  and
adjustments  recognized  as a result of legacy  issues  related to the Company's
turnaround initiatives.  Accruals and other liabilities declined by thirty-eight
percent (38%) at December 31, 2000 compared to 1999 as a result of the Company's
improved  regulatory  compliance  efforts  that were  implemented  in the second
quarter  of  2000.  Deferred  revenue  is down by  thirty-one  percent  (31%) at
December 31, 2000  compared to 1999  because of the mix of contract  maintenance
agreements in place at December 31, 2000 compared to.

     At  year-end  December  31,  2000  the  Company  was  negotiating  with its
short-term  debt  holders  to extend  due dates  and  payment  terms in order to
provide the Company  sufficient  time to complete  its turn around  programs and
improve cash flow and profits. At March 31, 2001 the Company and holders of four
of the  Company's  notes payable that were due in March and June of 2001 entered
into Note Deferral and Extension  Agreements  wherein each note holder agreed to
defer all  principal  payments  until July 15, 2001,  where upon the Company has
agreed to make a twenty-five percent (25%) principal payment to each note holder
and the notes' due dates will  extend to July 15,  2002.  At the same date (July
15, 2001) the Company will begin making level  monthly  principal  and interests
payments over the  remaining  twelve-month  period of the notes.  As part of the
agreements  the Company has agreed to an increase in the  interest  rates of the
notes from their  stated  twelve to  fourteen  percent  (12% to 14%) to eighteen
percent (18%).

     Although the Company's operations have significantly improved over the past
six months negative cash flows of approximately $20 thousand per month continued
into  2001.  With  most of the  defined  turn  around  improvements  in place at
December 31, 2000 though,  management  anticipates that the Company will achieve
breakeven  cash flows in the second quarter of 2001.  This will be  accomplished
through a combination of continued cost reductions and increased  revenues until
this time the Company has secured  bridge  financing for $1000  thousand from an
existing  investor  and is  negotiating  with other for  additional  back bridge
financing to carry the Company to breakeven status.

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


                                       27

<PAGE>



     To improve  the  Company's  financial  position  the Company and a group of
investors  executed  an  agreement  on March 4,  2000 the  Company  and group of
investors  executed an  agreement  with PF Holdings,  Inc.  (PF) to purchase the
promissory note held by PF with a face value of $285,000 and accrued interest of
$36,972 for $150,000 in cash provided by the investors and 175,000 shares of the
Company's common stock with a fair market value on March 4, 2000 of $93,438. The
investors  purchased  643,944 shares of the Company's common stock for $150,000.
The  proceeds  in turn,  together  with the  175,000  shares,  were  used in the
settlement  of the debt.  The carrying  amount of the debt exceeded the $243,438
combined  value of the  consideration  given to settle the debt,  resulting in a
gain of $58,474 net of income taxes of $4,911.

     At December  31, 2000 the Company  had accrued  delinquent  payroll  taxes,
penalties and interest of  approximately  $120 thousand down from  approximately
$210 thousand at the end of 1999. While the Company is current in payment of all
its  payroll  tax  liabilities  and has been  throughout  all of the year  ended
December 31, 2000 the IRS has been  applying  payments made toward the liability
to the  earliest  periods and in so doing has been  showing the current  periods
delinquent,  when in fact they are not. The Company therefore is contesting this
practice  with the IRS in order  to  eliminate  the  false  perception  that the
Company is delinquent and to prevent the application of cash payments to earlier
quarters causing a compounding of penalties and interest.

     These liabilities  relate to unpaid  withholding taxes that were assumed as
part of the LBO in 1997 and two additional tax periods in 1998 and 1999. Most of
the total amount due consists of assessed  penalties ($50 thousand) and interest
($60 thousand).  The Company has an installment  agreement in place with the IRS
wherein  it  makes  monthly  payments  of $10  thousand  or  more  against  this
liability.  Once the balance is paid the Company will apply for abatement of the
penalties and request a refund of them.  Based on present  arrangement  with the
IRS, management believes that the Company will be able to successfully liquidate
this liability without incurring any adverse effects on the Company's  financial
condition from actions of the IRS.

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


Item 7 Financial Statements

                The Financial  Statements of the Company  required by Regulation
S-B commence on page F-1 hereof and are incorporated herein by this reference.

Item 8. Changes in and Disagreements with Accountants

None.

                                       28

<PAGE>





                          ONESOURCE TECHNOLOGIES, INC.



                     Consolidated Financial Statements as of
                           December 31, 2000 and 1999
                        and Independent Auditors' Report













<PAGE>




                          ONESOURCE TECHNOLOGIES, INC.





TABLE OF CONTENTS                                                           PAGE



INDEPENDENT AUDITORS' REPORT                                            F-1


CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2000                      F-2

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THE TWO
YEARS ENDED DECEMBER 31, 2000 AND 1999                                  F-3

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWO YEARS                 F-4
ENDED DECEMBER 31, 2000 AND 1999

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY/(DEFICIT) FOR THE TWO YEARS ENDED DECEMBER 31,
2000 AND 1999                                                           F-6

ACCOMPANYING FOOTNOTES                                                  F-7




<PAGE>

                         INDEPENDENT ACCOUNTANTS' REPORT




To the Stockholders and Board of Directors of
           OneSource Technologies, Inc.:

We have  audited  the  accompanying  consolidated  balance  sheet  of  OneSource
Technologies,  Inc.  as of  December  31,  2000  and  the  related  consolidated
statements of operations,  stockholders'  deficit and cash flows for each of the
two years in the period ended December 31, 2000. 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 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  consolidated  financial  position  of  OneSource
Technologies,  Inc. as of December 31, 2000, and the consolidated results of its
operations and cash flows for each of the two years in the period ended December
31, 2000, in conformity with generally accepted accounting principles.




/s/  Marshall & Weber, CPA's, P.L.C.
Scottsdale, Arizona
April 1, 2001



<PAGE>

<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2000
----------------------------------------------------------------------------------------------
<S>                                                                             <C>

ASSETS

CURRENT ASSETS:
Cash                                                                            $      176,441
Accounts receivable                                                                    284,761
Inventories                                                                            273,255
Other current assets                                                                    16,000
 Total current assets                                                                  750,457

PROPERTY AND EQUIPMENT, net of accumulated depreciation ($105,627)                     255,621
DEFERRED FINANCE COSTS                                                                  99,979
GOODWILL, net of accumulated amortization of $23,074                                   251,590
DEFERRED INCOME TAXES                                                                  119,742
OTHER ASSETS                                                                             6,797

TOTAL ASSETS                                                                    $    1,484,186
                                                                                ==============

LIABILITIES AND STOCKHOLDERS" DEFICIT

CURRENT LIABILITIES:
   Accounts payable                                                             $      345,890
   Accrued expenses and other liabilities                                              209,348
   Deferred revenue                                                                    144,091
   Bank lines of credit                                                                150,913
   Obligation for common stock to be issued                                            591,831
   Current portion capital leases                                                        9,617
   Current portion of long-term debt                                                   131,844
Total current liabilities                                                            1,583,534

CAPITAL LEASES -- LONG TERM PORTION                                                     11,377

NOTES PAYABLE - LONG-TERM PORTION                                                      283,884

Total liabilities                                                               $    1,878,795
                                                                                --------------

STOCKHOLDERS' DEFICIT

Preferred Stock, $.001 par value, 1,000,000 shares authorized, none issued                   -
Common Stock, $.001 par value, 20,000,000 shares authorized, 17,525,566
issued at December 31, 2000 and  3,757,058 subscribed but not issued shares
at December 31, 2000.                                                                   17,526
Paid in capital                                                                      2,082,977
Treasury stock, 500,000 shares $0 cost                                                       -

Stock subscription                                                                 (1,055,000)
Accumulated deficit                                                                (1,440,112)
                                                                                --------------
Total stockholders' equity                                                           (394,609)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                     $    1,484,186
                                                                                ==============
</TABLE>

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


                                      F-2

<PAGE>




<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
----------------------------------------------------------------------------------------------------------
                                                                       2000                  1999
                                                                  ---------------------- -----------------
<S>                                                               <C>                    <C>
REVENUE, net                                                      $          3,229,389   $       2,476,884

COST OF REVENUE                                                              2,242,176           1,484,096
                                                                  --------------------   -----------------
        GROSS PROFIT                                                           987,213             992,788

GENERAL AND ADMINISTRATIVE EXPENSES                                          1,841,444             942,412
SELLING AND MARKETING EXPENSES                                                 233,765             229,462
                                                                  --------------------   -----------------

             Operating income                                               (1,087,996)           (179,086)
                                                                  --------------------   -----------------
OTHER INCOME (EXPENSE)
        Interest expense                                                      (188,576)            (24,195)
        Other income                                                           (16,765)                174
                                                                  --------------------   -----------------
             Total other (expense)                                            (205,341)            (24,021)
                                                                  --------------------   -----------------

LOSS BEFORE EXTRAORDINARY ITEM AND INCOME
TAXES                                                                       (1,293,337)           (203,107)

INCOME TAX BENEFIT                                                             106,297              17,766
                                                                  --------------------   -----------------

LOSS BEFORE EXTRAORDINARY ITEM                                              (1,187,040)           (185,341)


EXTRAORDINARY ITEM -- Gain on extinguishment of debt
(net of income taxes of $4,901)                                                58,474
                                                                  --------------------   -----------------

NET LOSS                                                          $        (1,128,566)   $        (185,341)
                                                                  ====================   =================

NET Loss Per Share:
Basic:
        Before extraordinary item                                                  (0)                 (0)
        Extraordinary item                                                          *                   0
                                                                  --------------------   -----------------
                                                                                   (0)                 (0)
                                                                  ====================   =================
Diluted:
        Before extraordinary item                                                  (0)                 (0)
  Extraordinary item                                                                *                   0
                                                                  --------------------   -----------------
                                                                                   (0)                 (0)
                                                                  ====================   =================

Weighted Average Shares Outstanding:
        Basic                                                              14,682,958          11,878,710
                                                                  ====================   =================
        Diluted                                                            14,682,958          11,878,710
                                                                  ====================   =================

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

  The accompanying notes are an integral part of this statement of operations.


                                      F-3

<PAGE>



<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
---------------------------------------------------------------------------------------------------------------------------

                                                 Common Stock
                                            -------------------------
                                                                           Stock         Paid-in
                                                                       Subscription      Capital     Accumulated
                                            Shares         Amount       Receivable      (Deficit)      Deficit          Total
                                            -------------- ---------- --------------- --------------------------- ---------------
<S>                                         <C>            <C>         <C>            <C>           <C>           <C>
BALANCE
     DECEMBER 31, 1998                         11,623,281  $   11,623  $          0   $   (358,736) $    (126,205)$      (473,318)
                                            -------------  ----------  -------------  ------------  ------------- ---------------

Stock for Acquired Companies                    1,163,888       1,164                      368,773                        369,937
Stock issued for Notes Receivable               3,124,672       3,125       (925,000)      921,875                            (0)
Stock issued for                                  108,333         108              0        29,892                         30,000
Cash
Investment Group Funding Subscription           2,905,828       2,906       (750,000)      747,094                              0
Funded subscriptions                                                         400,000                                      400,000
Subscriptions funded after 12/31/99                                          220,000                                      220,000
Stock Subcribed not issued                     (3,876,772)     (3,877)                       3,877                              0
Capital Placement Fees                                                                     (25,398)                       (25,398)
Net Loss                                                                                                 (185,341)       (185,341)
Treasury                                         (500,000)       (500)                         500                              0
     DECEMBER 31, 1999                         14,549,230  $   14,549  $  (1,055,000) $  1,687,877  $    (311,546) $      335,880
                                            -------------  ----------  -------------  ------------  -------------  --------------

Stock issued for note conversions               1,270,596       1,271              0       339,806              0         341,077
Stock issued for services                         344,737         345              0       121,948              0         122,293
Stock issued as incentives to employees           848,874         849              0        83,982              0          84,831
Stock issued as consideration for equipment        40,000          40                       19,960                         20,000
Stock issued for cash                           1,285,438       1,286              0       167,414              0         168,699
Stock issued for financing costs                1,391,666       1,392              0       251,616              0         253,008
Previously unissued shares, issued in 2000      1,552,083       1,552              0        (1,552)             0               0
Common stock obligated but not issued          (3,757,058)     (3,757)                    (588,074)                      (591,831)
Net loss                                                                                               (1,128,566)     (1,128,566)
     DECEMBER 31, 2000                         17,525,566  $   17,527  $  (1,055,000) $  2,082,977  $  (1,440,112) $     (394,609)
                                            =============  ==========  =============  ============  =============  ==============
</TABLE>

  The accompanying notes are an integral part of this statement of operations.


                                      F-4


<PAGE>




<TABLE>
<CAPTION>
 .ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                                                                       2000              1999
                                                                                ---------------   ---------------
<S>                                                                             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                      $   (1,128,566)    $    (185,341)

  Adjustments to reconcile net loss to net cash provided (used) by operations
      Extraordinary gain                                                              (58,474)
      Depreciation                                                                     38,471            30,514
      Amortization                                                                     18,311
      Amortization of deferred financing costs                                        153,029
      Stock issuances to consultants for services                                     122,293            (5,000)
      Stock issuances to employees for services                                        84,832
      Gain on sale of equipment                                                        (7,404)
      Deferred taxes                                                                 (106,297)          (17,766)
      Changes in assets and liabilities (net of acquisitions):
          Accounts receivable                                                         175,360          (163,382)
          Inventory                                                                    95,643          (151,109)
          Deposits and other                                                           81,497            (8,440)
          assets
          Other current assets                                                         18,061           (77,100)
          Accounts payable                                                                171           146,041
          Accrued expenses and other liabilities                                     (129,825)           32,267
          Deferred revenue                                                            (68,726)           11,681
                                                                                ---------------   ---------------
                 Net cash (used) by operating activities                             (711,624)         (387,635)
                                                                                ---------------   ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and equipment                                             (27,245)          (44,919)
      Gain on sale of equipment                                                         3,000
                                                                                ---------------   ---------------
          Net cash provided (used) by investing activities                            (24,245)          (44,919)
                                                                                ---------------   ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Advances on bank lines of credit                                                    115,495            82,415
  Payments on bank lines of credit                                                    (53,419)          (16,578)
  Proceeds collected on stock subscriptions receivable                                220,000
  Principal payments on capital lease obligations                                     (14,829)
  Proceeds on notes payable                                                           635,000            24,000
  Principal payments on notes payable                                                (196,328)          (73,737)
  Issuance of common stock (net of capital placement fees)                            168,699           404,602
                                                                                ---------------   ---------------
          Net cash provided (used) by financing activities                            874,618           420,702
                                                                                ---------------   ---------------

INCREASE (DECREASE) IN CASH                                                           138,749           (11,852)

CASH, January 1                                                                        37,692            49,544
CASH, December 31                                                               $     176,441     $      37,692
                                                                                ===============   ===============
</TABLE>

  The accompanying notes are an integral part of this statement of operations.


                                      F-5




<PAGE>




<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE TWO YEARS ENDED DECEMBER 31, 2000
---------------------------------------------------------------------------------------------------------------------------
                                                                                    2000              1999
                                                                                ----------------   ----------------
<S>                                                                             <C>                <C>

SUPPLEMENTAL CASH FLOW INFORMATION:
        Interest paid                                                           $        31,594    $     17,692
                                                                                ================   ==============



SUPPLEMENTAL SCHEDULE OF NONCASH
 INVESTING AND FINANCING ACTIVITIES:
        Conversion of debt to common stock                                      $       341,077
                                                                                ================

        Equipment acquired under capital leases                                 $        23,690    $     65,567
                                                                                ================   ==============

        Equipment acquired by issuance of common stock                          $        20,000
                                                                                ================

        Common stock issued for financing costs                                 $       253,008
                                                                                ================

        Fair value of net assets acquired for common stock                                         $    369,937
                                                                                                   ==============

        Sale of vehicle at net book value for a note, ($20,650 less $14,176                        $      6,474
                                                                                                   ==============
</TABLE>

  The accompanying notes are an integral part of this statement of operations.


                                      F-6






<PAGE>



ONESOURCE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEARS ENDED DECEMBER 31, 2000 AND 1999

1.   ORGANIZATION AND BASIS OF PRESENTATION

OneSource  Technologies,  Inc.  (the  "Company")  is an  information  technology
equipment maintenance,  installation and supplies distribution company.  Service
work is performed pursuant to renewable term contracts and on-call relationships
with  customers.  The  Company's  customers  are primarily in banking and retail
businesses located in the western and southwestern United States.

The  accompanying  financial  statements  represent the  financial  position and
results of operations of OneSource Technologies,  Inc., Cartridge Care, Inc. and
Net Express, Inc. on a consolidated basis. For the year ended December 31, 1999,
operating  results of Cartridge Care are included for the period from October 1,
1999 its acquisition date, through December 31, 1999. (Note 9)

2.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash  includes  all  short-term  highly  liquid  investments  that  are  readily
convertible  to known  amounts  of cash and have  original  maturities  of three
months or less.

Inventories consist primarily of used equipment, new and used parts and supplies
and are  stated  at the  lower  of cost  (specific  identification)  or  market.
Cartridge Care  inventories  consist of raw materials and finished  goods,  that
consists of  remanufactured  toner  cartridges.  Cartridge Care  inventories are
stated on a FIFO basis.

Property and equipment is recorded at cost and  depreciated  on a  straight-line
basis over the estimated useful lives of the assets ranging from 3 to 10 years.

Goodwill - Costs in excess of the fair  values  assigned to the  underlying  net
assets of acquired  companies are being  amortized on the  straight-line  method
over fifteen (15) years.

Revenue  recognition - The Company recognizes revenue on contracts pro rata over
the term of the contract or when the service is  performed  pursuant to terms of
agreements  with  customers.  Sales of parts and equipment are  recognized  when
shipped or  installed.  Deferred  revenue is recorded for advanced  billings and
cash  receipts  prior to revenue  recognition  under a pro rata basis  under the
terms of service contracts.

Income taxes - The Company  provides for income taxes based on the provisions of
Statement of  Financial  Accounting  Standards  No. 109,  Accounting  for Income
Taxes,  which among other things,  requires that  recognition of deferred income
taxes be measured by the provisions of enacted tax laws in effect at the date of
financial statements.

Advertising  expenses-  The  Company  expenses  advertising  costs as  incurred.
Advertising expenses for the years ended December 31, 2000 and 1999 were $37,072
and $18,001 respectively.

Financial  Instruments  -  Financial  instruments  consist  primarily  of  cash,
accounts receivable,  obligations under accounts payable, accrued expenses, debt
and  capital  lease  instruments.   The  carrying  amounts  of  cash,   accounts
receivable,  accounts payable,  accrued expenses and short-term debt approximate
fair value  because of the short  maturity of those  instruments.  The  carrying
value of the  Company's  capital  lease  arrangements  approximates  fair  value
because the  instruments  were valued at the retail cost of the equipment at the
time the Company entered into the arrangements.

Principles of Consolidation - The accompanying  financial statements include the
accounts and balances of OneSource  Technologies,  Inc. and its two subsidiaries
Cartridge  Care and Net  Express.  All  significant  intercompany  balances  and
transactions have been eliminated.

                                      F-7

<PAGE>





Net Loss per share - Net loss per share is calculated using the weighted average
number of shares of Common Stock outstanding during the period.

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

Stock-Based Compensation - Statements of Financial Accounting Standards No. 123,
Accounting for Stock- Based  Compensation,  ("SFAS 123") established  accounting
and disclosure  requirements  using a fair-value  based method of accounting for
stock-based employee compensation.  In accordance with SFAS 123, the Company has
elected to continue  accounting for stock based compensation using the intrinsic
value  method  prescribed  by  Accounting   Principles  Board  Opinion  No.  25,
"Accounting  for Stock Issued to  Employees."  The  proforma  effect of the fair
value method is discussed in Note 17.

Impairment of  Long-Lived  Assets and  Long-Lived  Assets to be Disposed Of -The
Company  reviews  long- lived assets and certain  identifiable  intangibles  for
impairment  whenever  events or changes in  circumstances  indicate the carrying
amount of an asset may not be recoverable.  Recoverability  of assets to be held
and used is  measured  by a  comparison  of the  carrying  amount of an asset to
future,  undiscounted,  net cash flows expected to be generated by the asset. If
such assets are  considered to be impaired,  the  impairment to be recognized is
measured by the amount by which the  carrying  amount of the assets  exceeds the
fair value of the assets.  Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.

Recently Issued  Accounting  Standards - In June 1998, the Financial  Accounting
Standards Board issued SFAS No. 133,  Accounting for Derivative  Instruments and
Hedging Activities, which is effective for fiscal years beginning after June 15,
2000 (as amended). This statement establishes accounting and reporting standards
requiring that derivative instruments be recorded on the balance sheet as either
an asset or liability  measured at its fair value.  The statement  also requires
that changes in the  derivative's  fair value be recognized  in earnings  unless
specific hedge accounting  criteria are met. The adoption of SFAS No. 133 has no
significant impact on the Company.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements. SAB No. 101
summarizes  the  staff's  views  in  applying  generally   accepted   accounting
principles to revenue recognition in financial  statements.  The adoption of SAB
No.  101 did not have a material  effect on the  Company's  revenues  or revenue
recognition policy.

3.   INVENTORIES

Inventories consisted of the following at December 31, 2000:

      Finished Goods                                       $3,295
      Equipment                                            18,832
      Parts                                               219,666
      Supplies                                             10,236
      Raw Materials                                        12,439
      Manuals, tools and training materials                23,287
Less: Allowance for obsolescence                         (14,500)
Total inventory                                          $273,255
                                                       ==========

                                      F-8

<PAGE>



There are slow-moving inventories, which consist primarily of parts removed from
whole  equipment  items and  stored  until  needed for  future  jobs.  Costs are
allocated to these items as  components  of the larger  piece of equipment  from
which they were removed. Much of this inventory has been allocated minimum costs
and management believes market value exceeds recorded costs.

4.   PROPERTY AND EQUIPMENT


Property and equipment consisted of the following at December 31, 2000:

      Equipment                                             $ 150,859
      Furniture, fixtures and other                           111,408
      Vehicles                                                 55,082
      Leasehold improvements                                   43,899
                                                          -----------
      Total                                                   361,248
Less: accumulated depreciation                              (105,627)
Total  Property and equipment - net                         $ 255,621
                                                          ===========

Depreciation expense for the years ended December 31, 2000 and 1999 was $ 38,471
and $28,892 respectively.

5.   NOTES PAYABLE

Notes payable at December 31, 2000 consist of the following:

<TABLE>
<S>                                                                             <C>
Notes payable, collateralized by vehicles, interest from 8%
to 10%, total monthly installments of $987 through May 2002                     $      34,728

Note payable, unsecured, interest at 12%, convertible to stock, at the option
of the holder at a rate to be determined at the date of conversion.(at December
31, 2000 this note was convertible into 111,111 shares)                                20,000

Note payable, interest at 12% due in February 2001 secured by trade receivables       100,000

Notes payable, unsecured, interest between 12% and 14% due in full, March, 2001       145,000

Investor long term note, matures in December 2002                                      16,000

Note payable, unsecured, interest at 14% due in October 2001                          100,000
                                                                                ---------------
                                                                          Total       415,728
                                                           Less current portion       131,844
                                                                                ---------------

                                                              Long-term portion $     283,884
                                                                                ---------------
</TABLE>

The Company  issued  1,391,666  shares of its common  stock in  connection  with
certain of the above notes as  incentive  for the lenders to enter into the debt
agreements.  The  value of those  shares  totaling  $253,000  was  deferred  and
amortized over the terms of the notes.


                                      F-9

<PAGE>


Notes  payable with  principal  balances at December  31, 2000 of $245,000  were
restructured by extension of the original maturity dates.  These  restructurings
occurred  subsequent to December 31, 2000.  The notes were extended to due dates
in 2002., (see Note 19).


Future maturities of principal at December 31, 2000 are as follows:

              2001                 $ 131,884
              2002                   273,331
              2003                     6,611
              2004                     3,942
                    Total          $ 415,728

6.         LINES OF CREDIT

The company has various  revolving line of credit agreements with banks totaling
$160,000  with  interest  ranging  from 9.75% to 18%. At  December  31, 2000 the
Company had utilized $150,913 of the credit facilities.

7.   INCOME TAXES

The  Company  recognizes  deferred  income  taxes  for the  differences  between
financial  accounting and tax bases of assets and liabilities.  Income taxes for
the years ended December 31, consisted of the following:


                                             2000               1999
                                             ----               ----
Current tax provision (benefit)            $(504,653)         (67,948)
Deferred tax provision (benefit)             403,257           50,182
Total income tax provision (benefit)       $(101,396)        $(17,766)


Deferred tax assets of $714,000 at December 31, 2000 relate primarily to federal
net  operating  loss  carryforwards  of  $1,697,000,  and state  operating  loss
carryforwards  of $1,633,000.  The carry forwards expire from 200- through 2020.
Approximately  $31,000 of the deferred tax asset at December 31, 2000 relates to
allowances on accounts receivable and inventories. At December 31, 2000 there is
a  deferred  income  tax  liability  of  $5,781  that  relates  to book  and tax
differences for property, equipment and intangibles. The net deferred income tax
asset of $709,000 at December  31,  2000 is  substantially  offset by  valuation
allowance of $588,000.  The valuation  allowance on the net deferred  income tax
asset increased by $414,000 in the year ended December 31, 2000

<TABLE>
<CAPTION>
Reconciliation of statutory and effective tax rates:              2000                1999
                                                       ---------------------       -------------------
<S>                                                   <C>           <C>            <C>           <C>
Federal                                               $(440,640)      (34%)         (64,420)     (31%)
State                                                   (84,240)      ( 6%)         (16,240)      (8%)
Valuation allowance                                     414,526        32%           51,928       25%
Miscellaneous                                             8,958         -%           10,966        5%
                                                      $(101,396)      (8)%         $(17,766)     (9)%
                                                   ==============   ========       ============ ======
</TABLE>


                                      F-10

<PAGE>



8.   LEASES

Operating Leases

The Company leases its facilities  under long-term  operating leases that expire
through  2004.  Rent expense under these leases was $108,645 and $98,577 for the
years ended December 31, 2000 and 1999  respectively.  Remaining  minimum annual
lease payments under these agreements are as follows:


Years ended December 31:
                             2001                117,330
                             2002                117,140
                             2003                120,490
                             2004                102,700
               Capital leases                   $457,660

 The Company has several  capital leases for  equipment.  Capital lease interest
expense  was $1,603 and $2,121 for the years  ended  December  31, 2000 and 1999
respectively. The following presents future minimum lease payments under capital
leases by year and the present  value of minimum  lease  payments as of December
31, 2000:


<TABLE>
<CAPTION>
Year ended December 31,                                       :2001
                                                           -----------
<S>    <C>                                                 <C>
                                                           $    18,411
                                                                 3,529
                                                           -----------
       Total minimum lease payments                             21,940
       Less amount representing interest                           946
                                                           -----------
       Present value of minimum lease payments                  20,994
       Current portion                                           9,617
                                                           -----------
       Long-term portion                                   $    11,377
                                                           ===========
</TABLE>

Assets  capitalized  under capital leases total $43,098 and related  accumulated
amortization is $2,660 at December 31, 2000.

9.   BUSINESS ACQUISITIONS

The Company  acquired Net  Express,  Inc.  ("Net  Express") on April 15, 1999 by
issuing 727,946 shares of the Company's common stock for 100% of the outstanding
stock  of  Net  Express.  The  transaction  is  accounted  for as a  pooling  of
interests.  Accordingly,  the Company's  consolidated  financial statements have
been restated for all periods prior to the  combination  to include the combined
financial  position and  operating  results of the Company and Net Express.  The
officers and management of Net Express remain with the Company. Net Express is a
computer equipment reseller and network integration company.

The following table presents a  reconciliation  of the net revenues and net loss
previously  reported  by the Company  and for the  current  period  prior to the
combinations:


                                      F-11

<PAGE>



<TABLE>
<S>                                              <C>                <C>
                                                                    Period January 1, 1999
                                                 Year ended         to  April 15,1999
                                                 December 31, 1999  (Unaudited)
                                                 --------------     -----------------
Net Revenues:
          OneSource Technologies, Inc            $    1,191,068     $         472,197
          Net Express                                   188,973                98,888
                                   Combined      $    1,380,041     $         571,085
                                                 ==============     =================
Net (Loss) Income:
          OneSource Technologies, Inc.           $      (55,766)    $             936
          Net Express                                     4,152                 3,632
                                   Combined      $      (51,614)    $           4,568
                                                 ==============     =================
</TABLE>

For the period prior to the merger there were no inter-company transactions that
required  elimination from the combined  consolidated  results of operations and
there were no adjustments  necessary to conform the accounting  practices of the
two companies.

The Company acquired  Cartridge Care, Inc.  ("Cartridge  Care") on September 30,
1999.  The  Company  issued  1,163,888  shares  of  common  stock  for  all  the
outstanding  stock of Cartridge  Care.  The  acquisition  of Cartridge  Care was
accounted for under the purchase method. The $369,937,  ($0.318 per share) value
of the transaction  was determined on the basis of recent private  placements of
the Company's  common stock,  taking into  consideration  contractual  and legal
restrictions  related to these private  transactions  and  management's  present
assessment  of the  affect on the  value of this  transaction  of post  purchase
adjustments  currently  being  negotiated.  Following the close of the purchase,
OneSource  agreed to assume  additional  liabilities  arising  from  operational
losses and  relocation  costs of Cartridge  Care in exchange for the return of a
portion of the shares  originally  tendered,  see Note 12.  Goodwill of $274,664
associated  with the  purchase  is being  amortized  over  fifteen  (15)  years.
Officers and  management of Cartridge Care remain with the Company and Cartridge
Care is being operated as a separate subsidiary of OneSource.  Cartridge Care is
a toner cartridge re-manufacturer.

As part of the purchase certain adjustments were made to the assets acquired and
liabilities assumed to state them at their respective fair values at the date of
purchase as shown in the following table.

Purchase price                                         $369,937
Allocation of purchase price to -
        Assets acquired                                 213,823
        Liabilities assumed                            (118,650)
Balance of purchase price assigned to goodwill         $274,664

The purchase  price  contains a  contingency  whereby the sellers may receive an
additional  723,612  shares of the Company's  common stock (see Note 12).  Those
shares are non-voting and are being held in escrow pending the resolution of the
contingency.

Had the Cartridge Care acquisition  occurred at the beginning of 2000,  revenues
and net loss would have been  $3,186,012  and  $191,237  ($0.01 per share) as of
December 31, 1999 (unaudited).


                                      F-12

<PAGE>


10.  CONCENTRATION OF CREDIT RISK

Financial  instruments that potentially subject the Company to concentrations of
credit risk are primarily  accounts  receivable.  Approximately $ 166,013 of the
accounts receivable balance at December 31, 2000 is due from five (5) customers.

The Company has relied upon few  investors  to fund its cash flow  deficiencies.
The Company raised net debt and equity capital of $875,000 during the year ended
December 31,  2000.  Given the current  level of the  Company's  operations  the
Company will require additional capital to meet its obligations.

11.  EMPLOYEE BENEFIT PLAN

The Company provides  benefits through a 401(k) plan for all full time employees
who have  completed  six  months  of  service  and are at least 21 years of age.
Contributions  to the plan are at the discretion of the Board of Directors.  The
Company made no  contributions to the plan for the years ended December 31, 2000
and 1999.

12. COMMITMENTS AND CONTINGENCIES

The  purchase  agreement  for  Cartridge  Care  contains  a  contingency  for an
additional  723,612  shares of the Company's  common stock to be issued  pending
resolution of the  contingency.  The Company is pursuing legal remedies  against
the original owners for misrepresentations made that materially affect the value
of  Cartridge  Care.  The  sellers of  Cartridge  Care have agreed to escrow the
723,612  shares  of the  Company's  stock  on the  pending  the  results  of the
litigation.  The ultimate  resolution of this matter could result in an increase
of the purchase price of Cartridge  Care,  which would increase the basis of the
net assets acquired.  The recorded purchase price reflects  management's current
best estimates of what the final figure will be.

The Company has accrued  delinquent  payroll  taxes,  penalties  and interest of
approximately  $120,000 at December  31,  2000.  The Company has an  installment
agreement in place with the IRS wherein it makes monthly  payments of $10,000 or
more against this liability. Once the balance is paid the Company will apply for
a rebate  of the  penalties  and  request  a refund  of them.  Based on  present
arrangement with the IRS,  management  believes that the Company will be able to
successfully  liquidate this liability  without incurring any adverse effects on
the Company's financial condition from actions of the IRS.

The Company  had entered  into a  distribution  agreement  with a third party to
distribute  certain hardware and resell related services.  The Company cancelled
its  agreement and is attempting to settle with the third party and customers to
which the  products  were sold.  The Company has accrued  amounts  billed by the
third party less the purchase  price of returned  product.  The Company does not
believe that the remaining settlement will materially exceed amounts accrued.

The Company has been named in a lawsuit claiming that the developer of a certain
website  development  project was unpaid.  The  Company has  disputed  the claim
stating  that it was not the owner of the website and that it  therefore  should
not be named as an  obligor  for its  development.  The  amount  of the claim is
$13,000.

The Company has entered into a dispute with the former owner of Net Express. The
dispute  relates to certain  transactions  entered  into by the former  owner on
behalf  of Net  Express  without  appropriate  management  approval.  Management
believes  that all  obligations  have been  recorded.  However,  the  Company is
disputing an obligation  for $10,000 which was not accrued at December 31, 2000.
Management  believes that this obligation will ultimately be transferred back to
the former owner.

13.  MAJOR CUSTOMERS

           Approximately  41% of the Company's  revenue was generated  from five
customers for the year ended December 31, 2000, the largest customer  accounting
for  approximately  29%.  For the year ended  December 31, 1999 about 50% of the
Company's  total  revenues  were  derived  from six  customers  with the largest
contributing approximately 25%.

                                      F-13

<PAGE>



14.  BUSINESS SEGMENTS

The Company's  revenues are derived from three closely related and complimentary
service and product  categories,  1) renewable  contract  equipment  maintenance
services, 2) equipment  installation and integration services and 3) value added
equipment  supply  distribution.  The  following  table sets  forth the  salient
operating contributions of each for the years ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                 Maintenance      Integration      Supplies       Internal       Total
<S>                             <C>               <C>             <C>           <C>             <C>
1999
Revenues                        $  1,971,343      $   339,343     $ 166,198                     $ 2,476,884
Inter-segment sales                    1,693           23,504         3,024        (28,211)
Operating (loss) income             (130,028)          13,376       (62,434)                       (179,086)
Depreciation                          18,100            6,634         5,780                          30,514
Income tax benefit                    17,766                0             0                          17,766
Interest                              20,017            2,803         1,375                          24,195
Property & Equipmt Purch              44,919                0             0                          44,919
Total assets                    $  1,545,991     $     81,873     $ 478,593     $ (390,971)     $ 1,715,486


2000
Revenues                        $  2,106,977     $    257,227     $ 865,185                     $  3,229,389
Inter-segment sales                   15,461           12,565        14,257        (42,283)
Operating (loss) income             (899,005)        (163,122)     (116,811)                      (1,178,938)
Depreciation                          32,687              631         5,153                           38,471
Income tax benefit                    81,057           14,696        10,544                          106,297
Interest                             168,736            8,615        11,225                          188,576
Property & Equip Purch                70,935                -             -                           70,935
Total assets                    $  1,516,456     $     27,003     $ 413,258     $ (472,531)     $  1,484,186
</TABLE>


15.  STOCKHOLDERS' DEFICIT

Shares  issued  to  employees  and  others  for  services  are  valued  based on
consideration  of the value of the stock  issued  and/or the  service  rendered.
Other non-monetary common stock transactions were valued at the trading value of
the stock at the date of the transactions.  The following table shows the number
of shares  issued,  the amount  recorded as expense and basis of  valuation  for
shares  issued for services in the year ended  December 31, 2000. No shares were
issued for services during the year ended December 31, 1999.

<TABLE>
<CAPTION>
                                           Shares           Value
Description                                Issued         PerShare       Valuation Basis
                                          ------------    ---------    -----------------------------------
In 2000
--------------------------------------
<S>                                        <C>              <C>        <C>

  Issued for legal and other services      344,737           $0.35     Stock price at commitment date
  Issued for employee compensation         848,874           $0.10     Stock price at commitment date
</TABLE>

Shares issued for legal and other  services  were issued  during the  nine-month
period  March  through  December  2000 in nine  separate  transactions  with non
affiliates.  The weighted average price of the shares issued at the dates of the
transactions  was $0.35 per  share.  The  weighted  average  price of the shares
granted to  employees  was $0.10 per share.  Theses  shares were granted in five
separate  transaction  to non  affiliates  in a six-month  period  July  through
December 2000.

Also during the year 2000 the Company issued:  a) 1,285,438 shares of its common
stock to non affiliates in eight separate  transactions for cash with a weighted
average price per share of $0.13;  b) 1,391,666  shares in three  transaction to
non affiliates in conjunction with notes payable as financing  incentives with a
weighted  average  of  $0.18  per  share;  and  c)  1,270,596  shares  in  three
transaction for note  conversions  with non affiliates  with a weighted  average
price per share of $0.27.

The Company obtained a number of subscriptions and incurred  obligations for its
common stock  totaling  6,733,394  shares and  7,301,721  shares during the year
ended December 31, 2000 and 1999  respectively.  Of the total shares  committed,
3,757,058 and 3,876,772  were  obligated but not yet issued at December 31, 2000
and  1999   respectively.   Obligations   for  shares  not  yet  issued  reflect
transactions for services, cash and debt for which shares had not been issued at
December 31, 2000 and the aggregate value of the  transactions  for which shares
had not yet been  issued  was  $591,831  at  December  31,  2000.  Comitted  and
obligated  but  unissued  shares  will be issued  upon the  implementation  of a
shareholder-approved  increase  in  authorized  shares  from  20  million  to 50
million,  which the Company  believes will be  accomplished  prior to the end of
2001.  Further,  during  the  year  2000 the  Company  issued  1,552,083  of the
3,876,772 shares that were subscribed  during the year 1999 but not issued as of
December 31, 1999.

The due dates of notes receivable  related to common stock  subscriptions in the
year ended December 31, 1999 were extended to July 2001 and accordingly no funds
were received by the Company  during the year ended December 31, 2000 from these
notes. The Company  anticipates  receiving  payment of these notes in the latter
half of 2001.




                                      F-14

<PAGE>


During the year ended  December  31,  2000,  the  Company  granted  warrants  to
purchase  200,000 shares of the Company's  common stock at $1.00 to a consultant
for  assistance in raising  capital.  The warrants  expire in 2002. The exercise
price  exceeded  the  trading  value of the  stock at the time of grant  and the
estimated fair value was not considered significant.


16.        LOSS PER SHARE

Convertible  debt,  outstanding  options and warrants were not considered in the
calculation for diluted earnings per share for the years ended December 31, 2000
and 1999 because the effect of their inclusion would be antidilutive. The effect
of the extraordinary item on the loss per share was less than $0.01 for the year
ended  December 31, 2000.  The following  presents the  computation of basic and
diluted earnings per share from continuing operations:


<TABLE>
<CAPTION>
                                                   2000                                          1999
                                   -------------------------------------------  ------------------------------------------
                                    Loss            Shares       Per share       Loss           Shares        Per share
                                   -------------  -------------- -------------  ------------   ------------  -------------
<S>                                <C>            <C>            <C>            <C>            <C>           <C>
Net (Loss)                          $(1,128,566)                                $  (185,341)
Extraordinary Income                      58,474                                          -
                                   -------------                                ------------
Basic Loss Per Share
Loss available to common
stockholders                        $(1,187,040)     14,895,687       $(0.08)   $  (185,341)    11,878,710       $(0.02)
Effect of dilutive securities               N/A                                        N/A
Diluted Loss Per Share                                                $(0.08)                                    $(0.02)
</TABLE>


Debt  convertible  to 111,111 shares of common stock and warrants and options to
purchase  900,000 shares of common stock were  outstanding at December 31, 2000.
Debt  convertible  to 570,140  shares of common stock and partially  paid Common
Stock  subscriptions  of 5,449,334 shares were outstanding at December 31, 1999.
These  securities  were excluded from the  computation  of diluted  earnings per
share because the effect of their inclusion would be anti-dilutive.

17.  STOCK OPTIONS

The Company issues stock options from time to time to executives,  key employees
and   members  of  the  Board  of   Directors.   The  Company  has  adopted  the
disclosure-only  provisions of Statement of Financial  Accounting  Standards No.
123,  "Accounting  for Stock-Based  Compensation,"  and continues to account for
stock  based  compensation  using  the  intrinsic  value  method  prescribed  by
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees".  All stock options  granted in the year ended December 31, 2000 have
exercise  prices at or higher  than the  quoted  market  price of the  Company's
common stock at the dates of the grants.  Accordingly,  no compensation cost has
been  recognized for the stock options  granted to employees.  Had  compensation
cost for the Company's stock options been determined  based on the fair value at
the grant date for awards in 2000,  consistent  with the  provisions of SFAS No.
123, the Company's net loss and loss per share would have been  increased to the
pro forma amounts indicated below:

                                          2000
                                         -------
Net Loss - as reported                 $(1,128,566)
Net Loss - pro forma                   $(1,164,266)
Loss per share - as reported           $     (0.08)
Loss per share - pro forma             $     (0.08)

                                      F-15

<PAGE>



Under the  provisions  of SFAS No. 123,  there were no fully vested  options and
525,000  proportionately vested options considered to determine net earnings and
earnings per share under a pro forma basis for the year ended December 31, 2000.

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes  option-  pricing  model with the following  assumptions  for year
ended December 31:


                                           2000
                                         -------
Divident yield                             None
Volatility                                7.437
Risk free interest rate                   5.25%
Expected asset life                       2.5 years


The  shareholders  approved a Long-term  Incentive  plan in 2000 that reserves 1
million shares of the Company's  common stock for employee stock based incentive
plans. Also in 2000 the board of directors approved a grant of 700,000 shares of
the Company's common stock to three current or former officers.

During the year ended December 31, 2000, the Company  granted 700,000 options to
certain key  employees.  These  options  vest over one year.  The  options  were
granted at an exercise  price of $0.55 per share,  the fair market  value of the
underlying  shares on the date of grant.  The options expire 30 months from date
of grant.

The summary of activity for the Company's stock options is presented below:

<TABLE>
<CAPTION>
                                                                            Weighted
                                                                            Average
                                                            2000            Exercise Price
                                                            -----------     --------------
<S>                                                         <C>             <C>
Options outstanding at beginning of year                    -0-             N/A
Granted                                                     700,000         $    0.55
Exercised                                                   -0-             N/A
Terminated/Expired                                          -0-             N/A
Options outstanding at end of year                          700,000         $    0.55
Options exercisable at end of year                          -0-             N/A
Options available for grant at end of year                  1,000,000
Price per share of options outstanding                      $    0.55
Weighted average remaining contractual lives                2 years
Weighted Average fair value options granted during year     $    0.07
</TABLE>


                                      F-16

<PAGE>



18.  EXTRAORDINARY ITEM - DEBT FORGIVENESS INCOME

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

19.   SUBSEQUENT EVENT

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

                                   * * * * * *

                                      F-17

<PAGE>


                        PROFORMA INFORMATION (UNAUDITED)

The  accompanying Pro Forma  information is presented for illustrative  purposes
only and is not  necessarily  indicative of the results of operations that would
have actually been  reported had this  transaction  occurred at the beginning of
the  period  presented.   The  accompanying  Pro  Forma  Condensed  Consolidated
Statement of Operations has been prepared as if the  transaction had occurred at
January 1, 1999 and should be read in conjunction with the historical  financial
statements and related footnotes of OneSource Technologies, Inc.

In September 1999 the Company  purchased all the outstanding  stock of Cartridge
Care,  Inc.,  (Cartridge  Care) in exchange  for  1,887,500  shares of OneSource
Technologies,  Inc.  common  stock.  The  transaction  was  accounted  for  as a
purchase.  Since the date of  acquisition  the Company has funded the facilities
relocation  costs and operating losses of Cartridge Care. It is anticipated that
these costs as well as ongoing funding requirements will result in an adjustment
of the purchase price of the acquisition.

In as much as the Company's stock was thinly traded at the time of the purchase,
the  underlying  value,  ($369,937  or $0.318 per share)  ascribed to the shares
tendered  was  based on share  values  utilized  in a  number  of  independently
negotiated capital funding transactions with third party investors.  At December
1999 the value  assigned to the  purchase  reflects  management's  current  best
estimate  of what the  adjusted  purchase  price will be based on all  presently
available facts.

                                      F-18

<PAGE>


<TABLE>
<CAPTION>
            Pro Forma Condensed Consolidated Statements of Operations
                 For the year ended December 31, 1999 Unaudited

                                        OneSource       Cartridge Care
                                       December 31     January 1 through         Pro Forma          Pro Forma
                                           1999        September 30,1999        Adjustments          Combined

<S>                              <C>                   <C>                      <C>               <C>
REVENUE, net                     $       2,476,884     $         687,132        $   (21,996) (3)  $     3,142,020
COST OF SERVICE                          1,484,096               402,981            (19,524) (3)        1,867,553

      GROSS PROFIT                         992,788               284,151             (2,472)            1,274,447
                                 -------------------   -------------------      ------------ ---  ----------------

OPERATING EXPENSES                       1,171,874               322,866                                1,497,740

 Amortization of goodwill                                                            14,289  (1)           14,289
 Depreciation on increased basis
 of equipment                                                                         5,322  (2)            5,322


      Operating loss                      (179,086)              (38,715)           (22,083)             (239,884)
                                 -------------------   ---------------------    ------------ ---    --------------

OTHER INCOME
(EXPENSE)

 Interest (income) expense                  24,195                  (396)                                  23,799
 Other (income) expense                       (174)              (27,109)                                 (27,283)

      Total other expense                   24,021               (27,505)                 -                (3,484)
                                 -------------------   ---------------------    ------------ ---    --------------
      NET LOSS before TAXES      $        (203,107)    $         (11,210)       $   (22,083)        $    (236,400)
                                 -------------------   ---------------------    ------------ ---    --------------

       TAX BENEFIT                        17,776                                                           20,685
       NET LOSS                         (185,341)                                                        (215,715)
       Net Loss Per Share:
             Basic                       $(0.02)                                                       $(0.02)
             Diluted                     $(0.02)                                                       $(0.02)
        Weighted Average Shares
              Basic                     11,878,710                                                   13,094,150
              Diluted                   11,878,710                                                   13,094,150
</TABLE>



Note 1: Pro Forma Adjustments



 The following is a description of each of the pro forma adjustments:


     (1)  Amortization of goodwill over 15 years

     (2)  Depreciation on adjusted basis of equipment purchased

     (3)  Elimination of inter-company revenues and profits








                                      F-19


<PAGE>



PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons:

Executive Officers and Directors

           Set forth below are the names, ages, positions,  with the Company and
business experiences of the executive officers and directors of the Company.

Name                       Age         Position(s) with Company
---------------------      ----       --------------------------------------
Thomas E. Glasgow          48         Chairman
Jerry M.  Washburn         57         CEO
Ford L. Williams           47         Director, Treasurer and Secretary
Maurice E. Mallette        65         Director, President of Subsidiary
Norman E. Clarke           47         Director
Donald C. Gause            42         Director
William B. Meger           55         Director

           All  directors  hold  office  until the next  annual  meeting  of the
Company's shareholders and until their successors have been elected and qualify.
Officers  serve at the  pleasure of the Board of  Directors.  The  officers  and
directors  will devote such time and effort to the  business  and affairs of the
Company as may be  necessary  to perform  their  responsibilities  as  executive
officers and/or directors of the Company.

           In addition to serving on the board of the Company,  Mr. Glasgow also
serves on the board of  MicroDiagnostics,  NASDAQ, OTC BB  "MRDG".LoanGenie  and
Children's Technology Group.

           In November 1995, Micor, signed a promissory note in favor of William
Meger, a current  Director of the Company,  in the principal  amount of $40,000,
which note bore  interest a rate of six percent  (6%) per annum.  The note had a
term of five (5) years, for which interest was payable monthly and the principal
was  payable as a balloon  payment at the end of the term.  In April  2000,  the
Company  issued  60,000  shares of its Common Stock to William Meger as full and
final payment of such note. For such  offering,  the Company relied upon Section
4(2) of the Act, Rule 506 and Section R14-4-140 of the Arizona Code. See Part I,
Item 6. "Executive  Compensation";  Part I, Item 7. "Certain  Relationships  and
Related  Transactions";  and  Part II,  Item 4.  "Recent  Sales of  Unregistered
Securities."

           In July 1997,  Jerry  Washburn,  Micor and four (4)  others  signed a
promissory note in favor of PF in the principal amount of $285,000.  The term of
the note was through April 15, 2003.  In March 2000,  the Company and a group of
investors (the "Investors")  purchased the note, which had $285,000 in principal
outstanding  and an  additional  $36,972 of  interest  outstanding,  from PF for
$150,000 in cash provided by the  Investors and 175,000  shares of the Company's
Common Stock issued by the Company.  The Investors had the option to convert the
note to shares of the  Company's  Common  Stock in their sole  discretion.  They
exercised such option, converting the full amount of

                                       30

<PAGE>



the note  (principal  and interest) to 643,944 shares of the Common Stock of the
Company.  For such  offering,  the Company  relied upon Section 4(2) of the Act,
Rule  506 and  Section  R14-4-140  of the  Arizona  Code.  See  Part I,  Item 6.
"Executive  Compensation";  Part I, Item 7. "Certain  Relationships  and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."

           In July 1997,  the Company  entered into a share  exchange  agreement
with Micor and its  shareholders.  The  exchange  was made  whereby  the Company
issued  8,500,000  shares of its restricted  Common Stock to the shareholders of
Micor for all of the issued and outstanding stock of Micor. Jerry Washburn,  the
current President, Chief Executive Officer and Chairman of the Company, received
3,300,000 shares in connection with such exchange.  William B. Meger, a Director
of the Company,  received 3,285,287 shares. This offering was conducted pursuant
to Section 4(2) of the Act,  Rule 506,  Section  44-1844(6) of the Arizona Code,
Section 25103(c) of the California Code,  Section  90.530(17) of the Nevada Code
and  Section  61-1-14(2)(p)  of the Utah  Code.  See Part I, Item 6.  "Executive
Compensation"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."

           In September  1998,  the Company  issued 750,000 shares of its Common
Stock to two (2) persons for services rendered to the Company.  Donald C. Gause,
a  Director,  received  250,000 of the shares  issued.  For such  offering,  the
Company  relied upon Section 4(2) of the Act, Rule 506,  Section  14-4-126(f) of
the Arizona Code and Section  11-51-308(1)(j)  of the Colorado Code. See Part I,
Item 6. "Executive  Compensation";  Part I, Item 7. "Certain  Relationships  and
Related  Transactions";  and  Part II,  Item 4.  "Recent  Sales of  Unregistered
Securities."

           In  September  1999,  the  Company  entered  into  a  share  exchange
agreement with the shareholders of CC, whereby the Company  exchanged  1,887,500
shares of its  Common  Stock for one  hundred  percent  (100%) of the issued and
outstanding  stock of CC such that CC became a  wholly-owned  subsidiary  of the
Company.  Of the 1,887,500  shares to be issued in connection with the exchange,
1,125,000  shares are  subject  to a two (2) year  "lock-up"  provision  and the
remaining 762,500 shares are not contractually restricted (but are restricted by
Rule  144).  562,500 of the LU Shares and  381,250 of the  remaining  shares are
beneficially  owned by Maurice  Mallette,  a current Director of the Company and
the President of CC. In June 2000, the Company  entered into a letter  agreement
with Maurice  Mallette,  Judith  Mallette and Pasquale  Rizzi to escrow  723,612
shares  of the  Common  Stock  of the  Company  issued  in  connection  with the
acquisition of Cartridge  Care, Inc. in September 1999. The escrowed shares will
be held  pending an  investigation  by  OneSource  into the books and records of
Cartridge  Care.  Whereas,  all  shares  have  now  been  issued  and  none  are
contingently  issuable  shares,  it is  contemplated  that  some  shares  may be
cancelled and returned to the authorized but unissued capital stock of OneSource
should the valuation of Cartridge  Care  conducted at the time of acquisition by
OneSource  found to be  overstated.  For such  offering the Company  relied upon
Section 4(2) of the Act,  Rule 506 and Section  44-1844(6)  of the Arizona Code.
See  Part I,  Item  6.  "Executive  Compensation";  Part  I,  Item  7.  "Certain
Relationships and Related  Transactions";  and Part II, Item 4. "Recent Sales of
Unregistered Securities."

           In April 2000,  the Company  issued 97,374 shares of its Common Stock
to eighteen (18) current or former  employees to compensate them for past salary
reductions or in lieu of past salary  increases for their  services as employees
during periods since 1997. Donald Gause, a Director,

                                       31

<PAGE>



received 4,000 shares in connection  with such  issuance.  For such offering the
Company  relied upon Section 4(2),  Rule 506,  Section  R14-4-140 of the Arizona
Code,  Section 25102(f) of the California Code,  Section  11-51-308(1)(p) of the
Colorado Code,  Section 90.532 of the Nevada Code,  Section  58-13B-24(R) of the
New Mexico Code and Section 61-1-15.5(2)&R164-15-2 of the Utah Code. See Part I,
Item 6. "Executive  Compensation";  Part I, Item 7. "Certain  Relationships  and
Related  Transactions";  and  Part II,  Item 4.  "Recent  Sales of  Unregistered
Securities."

           In July 2000, the Company issued 10,000 shares of its Common Stock to
one (1) individual in exchange for a client list of computer service  customers,
the remainder of the previously  contracted for but unissued shares (943,750) in
connection with the CC  acquisition,  13,166 shares to one (1) past employee for
out-of-pocket  expenses,  90,000  shares to one (1) investor for $30,000,  8,319
shares to one (1)  individual  for past  accounting  services  rendered,  40,000
shares to one (1)  individual  who is an  active  employee  as a signing  bonus,
58,333 shares to Maurice Mallette, the Company's current Interim Vice President,
President of CC and a Director in exchange for $17,500 and 75,000  shares to one
(1) individual for his services as a headhunter who brought potential  employees
to the Company.  For such offering,  the Company relied upon Section 4(2) of the
Act, Rule 506,  Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California  Code,  Section  90.532 of the Nevada Code and Section  211(b) of the
Pennsylvania Code. See Part I, Item 6. "Executive Compensation"; Part I, Item 7.
"Certain Relationships and Related  Transactions";  and Part II, Item 4. "Recent
Sales of Unregistered Securities."

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

Family Relationships

           There  are no family  relationships  between  or among the  executive
officers and directors of the Company.

Business Experience

Thomas Glasgow,  joined the Company in 2001 to lead turnaround and restructuring
plans  to  complete   infrastructure  for  planned  rapid  growth.  Glasgow  was
instrumental in leading successful turnarounds at several companies in the three
previous  years. An alumnus of the United States Marine Corps (Captain) and Vice
President  of  Federal  Express  Corporation,  Glasgow  is  a  graduate  of  the
University of Illinois with BS in  Criminology  and holds an MBA degree from the
Kellogg School of Management - Northwestern University

Jerry  Washburn,  has over thirty  (30) years of  financial  and  administrative
experience in a variety of business  situations.  Jerry,  a CPA,  spent ten (10)
years with Arthur  Andersen & Co.,  LLC where among other  things he managed two
(2) of that firm's Fortune 200 audit clients.  Following Andersen,  Mr. Washburn
served as President of Total Information Systems, Inc., ("TIS") for eight

                                       32

<PAGE>



(8) years,  during  which  time he  successfully  guided  this  vertical  market
computer  software  company from its inception and startup through eventual sale
in 1989.  At the time of its sale TIS had  over  three  hundred  (300)  customer
installations in forty-one (41) states and five (5) provinces.  Prior to joining
the  Company,  he worked  for a number of  closely  held  business  owners as an
advisor on a variety of financial and operational matters. Mr. Washburn has a BS
degree in Accounting from Brigham Young University.

Ford L. Williams,  serves as OneSource's  Controller,  Secretary/Treasurer and a
Director. Mr. Williams has twenty-three (23) years of progressively  challenging
experience  in a  variety  of  senior  financial  positions.  He  was  Corporate
Controller  for  First   Interstate   Bank's  (now  Wells  Fargo  Bank)  Arizona
operations.  Other  noteworthy  positions  include deputy CFO for a $660 million
business bank, international finance controller for Security Pacific Corporation
and division  auditor with RCA. Mr.  Williams  holds a BA in Economics  from the
University   of   California   at  Santa  Barbara  and  a  Masters  in  Business
Administration  from  University  of  Southern  California  with an  emphasis in
financial administration.

Maurice Mallette,  has over thirty years (30) of administration  and operational
experience.  Maurice,  and engineer  spent thirty (30) years with Avon  Products
Inc. where,  among other things,  he was  responsible  for the company's  Asian,
Latin American and European  operations.  Maurice has a BS degree in Engineering
from the University of Montreal.

Norman  Clarke,  has a diversified  background in finance,  sales and marketing,
specializing  in  technology  companies.  Clarke  has  over  twenty  years  (20)
experience in turnaround,  venture capital  fund-raising and pre IPO situations.
Mr. Clarke has held management positions with MCI Corporation, AT&T Corporation,
ICOT Corporation and Phoenix based Three-Five Systems,  Inc. While at Three-Five
Systems  Clarke was a key  management  team member that  initiated the company's
rapid growth and initial public  offering.  Clarke has a BA degree from Michigan
State University and an MBA from Wayne State University.

Donald Gause,  has over fourteen  years (14) of  experience,  seven (7) years of
which were with  Clifton,  Gunderson & Co., a regional CPA firm.  Don also spent
three (3) years as Controller of Blockbuster  Video's largest Arizona Franchisee
prior to its sale to Blockbuster  Corporate.  Prior to joining  OneSource in the
summer  of  1998,  Don  spent  three  (3)  years  as  Managing   Director  of  a
multi-location  franchisee  of Blimpie  Subs & Salads.  Gause has a BS degree in
Accounting from Arizona State University.

William Meger, has over twenty-seven (27) years of experience in the electronics
and equipment service industry gained through several positions with a number of
business  equipment  manufacturers  prior to  founding  OneSource  in  1984.  In
addition to assisting  with new business  development  in the banking and retail
industries,  Meger provides a valuable wealth of knowledge and experience in all
facets of the equipment service industry. He is also well known and respected in
the banking industry and has a significant network of contacts in that industry.



                                       33

<PAGE>



Compliance with Beneficial Ownership Reporting

           None of the Officers, Directors or Beneficial Owners of the Company's
stock were delinquent in filing of all reports  required by section 16(a) of the
Exchange Act during the most recent fiscal year.

Item 10. Executive Compensation

           The  following  sets  forth the  compensation  paid to the  Company's
executive officers.

<TABLE>
<CAPTION>
                                                                           Long-term Compensation
                                              Annual Compensation             Awards           Payouts     Other
                                                                      Restricted   Number of              All Other
                                  Fiscal                                 Stock    Securities/   LTIP       Compen-
          Name & Position          Year      Salary   Bonus    Other     Awards       SARs     Payments     sation
<S>                                <C>     <C>        <C>        <C>    <C>       <C>            <C>        <C>
Thomas E.  Glasgow,                2000      $0.00    $ 0.00     $0.00    $0.00     $0.00        $0.00      $0.00
Chair

Jerry M. Washburn,                 2000    $93,776    $ 0.00     $0.00    $0.00      None        $0.00      $0.00
   CEO & President                 1999    $51,000    $ 0.00     $0.00  $60,000   200,000        $0.00      $0.00
                                   1998    $25,457    $ 0.00     $0.00    $0.00      None        $0.00      $0.00

Donald C. Gause,                   2000    $24,921    $ 0.00     $0.00    $0.00      None        $0.00      $0.00
Director (former Secretary         1999    $46,200    $ 0.00     $0.00  $75,000   250,000        $0.00      $0.00
and Treasurer)                     1998    $12,250    $ 0.00     $0.00    $0.00      None        $0.00      $0.00

William B. Meger,                  2000     $5,308    $ 0.00     $0.00    $0.00      None        $0.00      $0.00
Director  and sales person         1999    $24,792    $ 0.00     $0.00    $0.00      None        $0.00      $0.00
                                   1998     $5,833    $ 0.00    $3,933    $0.00      None        $0.00      $0.00

Maurice E. Mallette                2000    $47,917    $ 0.00     $0.00    $0.00      None        $0.00      $0.00
                                   1999    $37,500    $ 0.00     $0.00    $0.00      None        $0.00      $0.00


Daniel C. Webb                     1999    $41,500    $ 0.00   $79,800    $0.00      None        $0.00      $0.00
 Vice President - Sales            1998     $6,000    $ 0.00   $13,138    $0.00      None        $0.00      $0.00
</TABLE>


(1) All other  compensation  includes certain health and life insurance benefits
paid by the Company on behalf of its employee.

(2) Mr.  Glasgow  started  with the  Company  in  January  2001 and  accordingly
received no compensation for the year 2000.

(3) Mr. Gause started with the Company in June 1998 and left in may 2000.


                                       34

<PAGE>



(4) During 1998, Mr.  Washburn and Mr. Gause were not paid regular  salaries but
took  draws in lieu  thereof  as cash  flows  permitted.  The  amounts  shown as
"salaries" represent the total of each officer's draws for 1998.

(5) In addition to his Director position, Meger was employed by the Company as a
sales person in 1998, 1999 and 2000. Meger's "other  compensation"  consisted of
sales commissions paid for services rendered.

(6) Mallette is President of the Company's  wholly owned  subsidiary,  Cartridge
Care, Inc. and a Director of the Company.

(7) Webb started with the Company in mid 1998 and was an officer and director in
1998 and part of 1999 but as of December  31, 1999,  he was a  commission  sales
person only. Webb's "other" compensations consisted of sales commissions paid in
1998 and 1999 for services.

(8) None of the  Directors  are  compensated  for their  Director  activities on
behalf of the Company.

(9) In November 1995, Micor, signed a promissory note in favor of William Meger,
a current  Director of the Company,  in the principal  amount of $40,000,  which
note bore interest a rate of six percent (6%) per annum.  The note had a term of
five (5) years,  for which  interest was payable  monthly and the  principal was
payable as a balloon  payment at the end of the term. In April 2000, the Company
issued  60,000  shares of its Common  Stock to  William  Meger as full and final
payment of such note. For such offering, the Company relied upon Section 4(2) of
the Act, Rule 506 and Section R14-4-140 of the Arizona Code. See Part I, Item 1.
"Employees and  Consultants";  Part Part I, Item 7. "Certain  Relationships  and
Related  Transactions";  and  Part II,  Item 4.  "Recent  Sales of  Unregistered
Securities."

(10) In July 1997, Jerry Washburn, Micor and four (4) others signed a promissory
note in favor of PF in the  principal  amount of $285,000.  The term of the note
was through April 15, 2003. In March 2000,  the Company and a group of investors
(the   "Investors")   purchased  the  note,  which  had  $285,000  in  principal
outstanding  and an  additional  $36,972 of  interest  outstanding,  from PF for
$150,000 in cash provided by the  Investors and 175,000  shares of the Company's
Common Stock issued by the Company.  The Investors had the option to convert the
note to shares of the  Company's  Common  Stock in their sole  discretion.  They
exercised  such option,  converting  the full amount of the note  (principal and
interest)  to  643,944  shares  of the  Common  Stock of the  Company.  For such
offering,  the Company relied upon Section 4(2) of the Act, Rule 506 and Section
R14-4-140 of the Arizona Code.  See Part I, Item 7. "Certain  Relationships  and
Related  Transactions";  and  Part II,  Item 4.  "Recent  Sales of  Unregistered
Securities."

(10) In July 1997,  the Company  entered into a share  exchange  agreement  with
Micor and its  shareholders.  The exchange  was made whereby the Company  issued
8,500,000 shares of its restricted Common Stock to the shareholders of Micor for
all of the issued and outstanding  stock of Micor.  Jerry Washburn,  the current
President,  Chief  Executive  Officer  and  Chairman  of the  Company,  received
3,300,000 shares in connection with such exchange.  William B. Meger, a Director
of the Company,  received 3,285,287 shares. This offering was conducted pursuant
to

                                       35

<PAGE>



Section  4(2) of the Act,  Rule 506,  Section  44-1844(6)  of the Arizona  Code,
Section 25103(c) of the California Code,  Section  90.530(17) of the Nevada Code
and  Section  61-1-14(2)(p)  of the  Utah  Code.  See Part I,  Item 7.  "Certain
Relationships and Related Transactions"; and Part II, Item 4.
"Recent Sales of Unregistered Securities."

(11) In September 1998, the Company issued 750,000 shares of its Common Stock to
two (2)  persons  for  services  rendered to the  Company.  Donald C.  Gause,  a
Director,  received 250,000 of the shares issued. For such offering, the Company
relied  upon  Section  4(2) of the Act,  Rule 506,  Section  14-4-126(f)  of the
Arizona Code and Section  11-51-308(1)(j) of the Colorado Code. See Part I, Item
7.  "Certain  Relationships  and  Related  Transactions";  and Part II,  Item 4.
"Recent Sales of Unregistered Securities."

(12) In September 1999, the Company entered into a share exchange agreement with
the  shareholders of CC, whereby the Company  exchanged  1,887,500 shares of its
Common Stock for one hundred percent (100%) of the issued and outstanding  stock
of CC such that CC  became a  wholly-owned  subsidiary  of the  Company.  Of the
1,887,500 shares to be issued in connection with the exchange,  1,125,000 shares
are subject to a two (2) year  "lock-up"  provision  and the  remaining  762,500
shares  are not  contractually  restricted  (but are  restricted  by Rule  144).
562,500 of the LU Shares and 381,250 of the  remaining  shares are  beneficially
owned by Maurice  Mallette,  a current Director of the Company and the President
of CC. In June 2000,  the Company  entered into a letter  agreement with Maurice
Mallette,  Judith  Mallette and Pasquale  Rizzi to escrow  723,612 shares of the
Common  Stock of the  Company  issued  in  connection  with the  acquisition  of
Cartridge Care, Inc. in September 1999. The escrowed shares will be held pending
an  investigation  by OneSource  into the books and records of  Cartridge  Care.
Whereas,  all shares  have now been  issued and none are  contingently  issuable
shares, it is contemplated that some shares may be cancelled and returned to the
authorized  but  unissued  capital  stock of OneSource  should the  valuation of
Cartridge Care  conducted at the time of  acquisition  by OneSource  found to be
overstated.  For such offering the Company  relied upon Section 4(2) of the Act,
Rule 506 and  Section  44-1844(6)  of the  Arizona  Code.  See  Part I,  Item 7.
"Certain Relationships and Related  Transactions";  and Part II, Item 4. "Recent
Sales of Unregistered Securities."

(13) In April 2000,  the Company  issued  97,374  shares of its Common  Stock to
eighteen  (18) current or former  employees to  compensate  them for past salary
reductions or in lieu of past salary  increases for their  services as employees
during periods since 1997.  Donald Gause,  a Director,  received 4,000 shares in
connection with such issuance. For such offering the Company relied upon Section
4(2), Rule 506, Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California Code, Section 11-51-308(1)(p) of the Colorado Code, Section 90.532 of
the  Nevada  Code,  Section  58-13B-24(R)  of the New  Mexico  Code and  Section
61-1-15.5(2)&R164-15-2  of the Utah Code. Part I, Item 7. "Certain Relationships
and Related  Transactions";  and Part II, Item 4. "Recent Sales of  Unregistered
Securities."

(14) In July 2000,  the Company  issued 10,000 shares of its Common Stock to one
(1) individual in exchange for a client list of computer service customers,  the
remainder of the  previously  contracted  for but unissued  shares  (943,750) in
connection with the CC  acquisition,  13,166 shares to one (1) past employee for
out-of-pocket expenses, 90,000 shares to one (1) investor for $30,000,

                                       36

<PAGE>



8,319 shares to one (1) individual for past accounting services rendered, 40,000
shares to one (1)  individual  who is an  active  employee  as a signing  bonus,
58,333 shares to Maurice Mallette, the Company's current Interim Vice President,
President of CC and a Director in exchange for $17,500 and 75,000  shares to one
(1) individual for his services as a headhunter who brought potential  employees
to the Company.  For such offering,  the Company relied upon Section 4(2) of the
Act, Rule 506,  Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California  Code,  Section  90.532 of the Nevada Code and Section  211(b) of the
Pennsylvania  Code.  See Part I,  Item 7.  "Certain  Relationships  and  Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."

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

The  following  table sets forth the  officers and  Directors  that were granted
stock options in 1999 for share of the Company's  Common Stock: (No options were
granted in 2000).

<TABLE>
<CAPTION>
                            Option/SAR Grants in 1999
                                Individual Grants
                          ---------------------------

                                                     % of Total
                                                Options/SARs Granted
                      Number of Securities     to Employees in Fiscal       Exercise or Base
Name & Position       Options/SARs Granted              Year                Price per share       Expiration Date)

<S>                       <C>                        <C>                      <C>                  <C>
Jerry M. Washburn,        200,000                    28.6%                    $0.55                15 October 2002

John L. Day               250,000                    35.7%                    $0.55                15 October 2002
(former off/dir)
Donald C. Gause,          250,000                    35.7%                    $0.55                15 October 2002
</TABLE>



Employee Contracts and Agreements

     The Company has not entered into Employee  Agreements with its officers and
directors,  but intends to enter into formal  contracts with each of them in the
near future.

Key Man Life Insurance

     The   Company   intends   to  apply   for  Key  Man  Life   Insurance   and
Officer/Director Insurance upon becoming a reporting company under the 1934 Act.


                                       37

<PAGE>



Employee and Consultants Stock Option Plans

     There is currently no employee nor  consultant  stock option plan in place,
although the Company plans to submit such a plan or plans to the shareholders in
the future.

Compensation of Directors

     The Company has no standard  arrangements for compensating the directors of
the Company for their attendance at meetings of the Board of Directors.

Item 11. Security Ownership of Certain Beneficial Owners and Management:

     The  following  table sets  forth  information  as of  December  31,  2000,
regarding the ownership of the Company's Common Stock by each shareholder  known
by the Company to be the beneficial  owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group.  Except as otherwise  indicated,  each of the shareholders
has sole voting and  investment  power with respect to the share of Common Stock
beneficially owned.

<TABLE>
<CAPTION>
Name and Address of              Title of    Amount and Nature of    Percent of
Beneficial Owner                  Class        Beneficial Owner           Class
<S>                              <C>            <C>                       <C>
Jerry M. Washburn(3)(4)          Common         3,150,000                 16.5%
William B. Meger(2)(4)           Common         3,285,287                 17.1%

Joseph Umbach                    Common           968,609                  5.0%
Maurice Mallette(6)(8)           Common           943,750                  4.9%

Pasquali Rizzi                   Common           943,750                  4.9%

Thomas E. Glasgow                Common           290,000                  1.5%

Donald C. Gause(5)(7)            Common           254,000                  1.3%

Ford L. Williams                 Common           200,000                  1.0%

Norman E. Clarke                 Common           148,513                  0.8%

All Executive Officers and       Common         8,271,550                 43.0%
Directors as a Group
(Six (6) persons)
------------------------------------------
</TABLE>

(1) The address for each of the above is c/o OneSource  Technologies,  Inc.,7419
East Helm Drive, Scottsdale, AZ 85260.


                                       38

<PAGE>



(2) In November 1995, Micor, signed a promissory note in favor of William Meger,
a current  Director of the Company,  in the principal  amount of $40,000,  which
note bore interest a rate of six percent (6%) per annum.  The note had a term of
five (5) years,  for which  interest was payable  monthly and the  principal was
payable as a balloon  payment at the end of the term. In April 2000, the Company
issued  60,000  shares of its Common  Stock to  William  Meger as full and final
payment of such note. For such offering, the Company relied upon Section 4(2) of
the Act, Rule 506 and Section R14-4-140 of the Arizona Code. See Part I, Item 1.
"Employees  and  Consultants";  Part I, Item 4.  "Security  Ownership of Certain
Beneficial  Owners  and  Management";  Part  I,  Item 5.  "Directors,  Executive
Officer,   Promoters  and  Control   Persons";   Part  I,  Item  6.   "Executive
Compensation"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."

(3) In July 1997, Jerry Washburn,  Micor and four (4) others signed a promissory
note in favor of PF in the  principal  amount of $285,000.  The term of the note
was through April 15, 2003. In March 2000,  the Company and a group of investors
(the   "Investors")   purchased  the  note,  which  had  $285,000  in  principal
outstanding  and an  additional  $36,972 of  interest  outstanding,  from PF for
$150,000 in cash provided by the  Investors and 175,000  shares of the Company's
Common Stock issued by the Company.  The Investors had the option to convert the
note to shares of the  Company's  Common  Stock in their sole  discretion.  They
exercised  such option,  converting  the full amount of the note  (principal and
interest)  to  643,944  shares  of the  Common  Stock of the  Company.  For such
offering,  the Company relied upon Section 4(2) of the Act, Rule 506 and Section
R14-4-140 of the Arizona Code. See Part I, Item 1. "Employees and  Consultants";
Part  I,  Item  4.  "Security   Ownership  of  Certain   Beneficial  Owners  and
Management";  Part I,  Item 5.  "Directors,  Executive  Officer,  Promoters  and
Control  Persons";  Part I, Item 6.  "Executive  Compensation";  Part I, Item 7.
"Certain Relationships and Related  Transactions";  and Part II, Item 4. "Recent
Sales of Unregistered Securities."

(4) In July 1997, the Company entered into a share exchange agreement with Micor
and its shareholders. The exchange was made whereby the Company issued 8,500,000
shares of its restricted  Common Stock to the  shareholders  of Micor for all of
the  issued  and  outstanding  stock  of  Micor.  Jerry  Washburn,  the  current
President,  Chief  Executive  Officer  and  Chairman  of the  Company,  received
3,300,000 shares in connection with such exchange.  William B. Meger, a Director
of the Company,  received 3,285,287 shares. This offering was conducted pursuant
to Section 4(2) of the Act,  Rule 506,  Section  44-1844(6) of the Arizona Code,
Section 25103(c) of the California Code,  Section  90.530(17) of the Nevada Code
and  Section  61-1-14(2)(p)  of the Utah Code.  See Part I, Item 5.  "Directors,
Executive  Officer,  Promoters and Control Persons";  Part I, Item 6. "Executive
Compensation"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."

(5) In September  1998, the Company issued 750,000 shares of its Common Stock to
two (2)  persons  for  services  rendered to the  Company.  Donald C.  Gause,  a
Director,  received 250,000 of the shares issued. For such offering, the Company
relied  upon  Section  4(2) of the Act,  Rule 506,  Section  14-4-126(f)  of the
Arizona Code and Section  11-51-308(1)(j) of the Colorado Code. See Part I, Item
5. "Directors,  Executive Officer,  Promoters and Control Persons"; Part I, Item
6. "Executive Compensation";  Part I, Item 7. "Certain Relationships and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."

                                       39

<PAGE>





(6) In September 1999, the Company entered into a share exchange  agreement with
the  shareholders of CC, whereby the Company  exchanged  1,887,500 shares of its
Common Stock for one hundred percent (100%) of the issued and outstanding  stock
of CC such that CC  became a  wholly-owned  subsidiary  of the  Company.  Of the
1,887,500 shares to be issued in connection with the exchange,  1,125,000 shares
are subject to a two (2) year  "lock-up"  provision  and the  remaining  762,500
shares  are not  contractually  restricted  (but are  restricted  by Rule  144).
562,500 of the LU Shares and 381,250 of the  remaining  shares are  beneficially
owned by Maurice  Mallette,  a current Director of the Company and the President
of CC. In June 2000,  the Company  entered into a letter  agreement with Maurice
Mallette,  Judith  Mallette and Pasquale  Rizzi to escrow  723,612 shares of the
Common  Stock of the  Company  issued  in  connection  with the  acquisition  of
Cartridge Care, Inc. in September 1999. The escrowed shares will be held pending
an  investigation  by OneSource  into the books and records of  Cartridge  Care.
Whereas,  all shares  have now been  issued and none are  contingently  issuable
shares, it is contemplated that some shares may be cancelled and returned to the
authorized  but  unissued  capital  stock of OneSource  should the  valuation of
Cartridge Care  conducted at the time of  acquisition  by OneSource  found to be
overstated.  For such offering the Company  relied upon Section 4(2) of the Act,
Rule 506 and  Section  44-1844(6)  of the  Arizona  Code.  See  Part I,  Item 5.
"Directors,  Executive Officer,  Promoters and Control Persons"; Part I, Item 6.
"Executive  Compensation";  Part I, Item 7. "Certain  Relationships  and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."

(7) In April  2000,  the Company  issued  97,374  shares of its Common  Stock to
eighteen  (18) current or former  employees to  compensate  them for past salary
reductions or in lieu of past salary  increases for their  services as employees
during periods since 1997.  Donald Gause,  a Director,  received 4,000 shares in
connection with such issuance. For such offering the Company relied upon Section
4(2), Rule 506, Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California Code, Section 11-51-308(1)(p) of the Colorado Code, Section 90.532 of
the  Nevada  Code,  Section  58-13B-24(R)  of the New  Mexico  Code and  Section
61-1-15.5(2)&R164-15-2  of the  Utah  Code.  See  Part I,  Item  5.  "Directors,
Executive  Officer,  Promoters and Control Persons";  Part I, Item 6. "Executive
Compensation"; Part I, Item 7. "Certain Relationships and Related Transactions";
and Part II, Item 4. "Recent Sales of Unregistered Securities."

(8) In July 2000,  the Company  issued  10,000 shares of its Common Stock to one
(1) individual in exchange for a client list of computer service customers,  the
remainder of the  previously  contracted  for but unissued  shares  (943,750) in
connection with the CC  acquisition,  13,166 shares to one (1) past employee for
out-of-pocket  expenses,  90,000  shares to one (1) investor for $30,000,  8,319
shares to one (1)  individual  for past  accounting  services  rendered,  40,000
shares to one (1)  individual  who is an  active  employee  as a signing  bonus,
58,333 shares to Maurice Mallette, the Company's current Interim Vice President,
President of CC and a Director in exchange for $17,500 and 75,000  shares to one
(1) individual for his services as a headhunter who brought potential  employees
to the Company.  For such offering,  the Company relied upon Section 4(2) of the
Act, Rule 506,  Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California  Code,  Section  90.532 of the Nevada Code and Section  211(b) of the
Pennsylvania Code. See Part I, Item 5.

                                       40

<PAGE>



"Directors,  Executive Officer,  Promoters and Control Persons"; Part I, Item 6.
"Executive  Compensation";  Part I, Item 7. "Certain  Relationships  and Related
Transactions"; and Part II, Item 4. "Recent Sales of Unregistered Securities."

There are no  arrangements  which may  result in the  change of  control  of the
Company.

Item 12. Certain Relationships and Related Transactions

     In  November  1995,  Micor,  signed a  promissory  note in favor of William
Meger, a current  Director of the Company,  in the principal  amount of $40,000,
which note bore  interest a rate of six percent  (6%) per annum.  The note had a
term of five (5) years, for which interest was payable monthly and the principal
was  payable as a balloon  payment at the end of the term.  In April  2000,  the
Company  issued  60,000  shares of its Common Stock to William Meger as full and
final payment of such note. For such  offering,  the Company relied upon Section
4(2) of the Act, Rule 506 and Section  R14-4- 140 of the Arizona Code.  See Part
II, Item 4. "Recent Sales of Unregistered Securities."

     In July 1997, Jerry Washburn, Micor and four (4) others signed a promissory
note in favor of PF in the  principal  amount of $285,000.  The term of the note
was through April 15, 2003. In March 2000,  the Company and a group of investors
(the   "Investors")   purchased  the  note,  which  had  $285,000  in  principal
outstanding  and an  additional  $36,972 of  interest  outstanding,  from PF for
$150,000 in cash provided by the  Investors and 175,000  shares of the Company's
Common Stock issued by the Company.  The Investors had the option to convert the
note to shares of the  Company's  Common  Stock in their sole  discretion.  They
exercised  such option,  converting  the full amount of the note  (principal and
interest)  to  643,944  shares  of the  Common  Stock of the  Company.  For such
offering,  the Company relied upon Section 4(2) of the Act, Rule 506 and Section
R14-4-140  of  the  Arizona  Code.  See  Part  II,  Item  4.  "Recent  Sales  of
Unregistered Securities."

     In July 1997,  the Company  entered into a share  exchange  agreement  with
Micor and its  shareholders.  The exchange  was made whereby the Company  issued
8,500,000 shares of its restricted Common Stock to the shareholders of Micor for
all of the issued and outstanding  stock of Micor.  Jerry Washburn,  the current
President,  Chief  Executive  Officer  and  Chairman  of the  Company,  received
3,300,000 shares in connection with such exchange.  William B. Meger, a Director
of the Company,  received 3,285,287 shares. This offering was conducted pursuant
to Section 4(2) of the Act,  Rule 506,  Section  44-1844(6) of the Arizona Code,
Section 25103(c) of the California Code,  Section  90.530(17) of the Nevada Code
and Section  61-1-14(2)(p)  of the Utah Code. See Part II, Item 4. "Recent Sales
of Unregistered Securities."

     In September 1998, the Company issued 750,000 shares of its Common Stock to
two (2)  persons  for  services  rendered to the  Company.  Donald C.  Gause,  a
Director,  received 250,000 of the shares issued. For such offering, the Company
relied upon  Section  4(2) of the Act,  Rule 506,  Section  14-4-  126(f) of the
Arizona Code and Section 11-51-308(1)(j) of the Colorado Code. See Part II, Item
4. "Recent Sales of Unregistered Securities."

     In April 1999, the Company entered into a share exchange agreement with the
shareholders of NE, whereby the Company  exchanged  727,946 shares of its Common
Stock for one hundred percent

                                       41

<PAGE>



(100%)  of the  issued  and  outstanding  stock  of NE  such  that NE  became  a
wholly-owned  subsidiary  of the  Company.  The shares in  connection  with such
exchange were not issued until December  1999.  For such  offering,  the Company
relied upon  Section  4(2) of the Act,  Rule 506 and Section  44-1844(6)  of the
Arizona Code. See Part II, Item 4. "Recent Sales of Unregistered Securities".

     Contemporaneously with execution of the share exchange with NE, the Company
signed a redemption  agreement  which  effectively  allowed  either party to the
transaction to rescind the transaction  without penalty at any time on or before
July 1, 1999.  Neither party elected to redeem and the redemption  agreement has
since expired.  Additionally,  at the time of the NE share exchange, the Company
entered into an  employment  agreement  with  Ahlawyss  Fulton,  which has since
expired.

     In September 1999, the Company entered into a share exchange agreement with
the  shareholders of CC, whereby the Company  exchanged  1,887,500 shares of its
Common Stock for one hundred percent (100%) of the issued and outstanding  stock
of CC such that CC  became a  wholly-owned  subsidiary  of the  Company.  Of the
1,887,500 shares to be issued in connection with the exchange,  1,125,000 shares
are subject to a two (2) year  "lock-up"  provision  and the  remaining  762,500
shares  are not  contractually  restricted  (but are  restricted  by Rule  144).
562,500 of the LU Shares and 381,250 of the  remaining  shares are  beneficially
owned by Maurice  Mallette,  a current Director of the Company and the President
of CC. In June 2000,  the Company  entered into a letter  agreement with Maurice
Mallette,  Judith  Mallette and Pasquale  Rizzi to escrow  723,612 shares of the
Common  Stock of the  Company  issued  in  connection  with the  acquisition  of
Cartridge Care, Inc. in September 1999. The escrowed shares will be held pending
an  investigation  by OneSource  into the books and records of  Cartridge  Care.
Whereas,  all shares  have now been  issued and none are  contingently  issuable
shares, it is contemplated that some shares may be cancelled and returned to the
authorized  but  unissued  capital  stock of OneSource  should the  valuation of
Cartridge Care  conducted at the time of  acquisition  by OneSource  found to be
overstated.  For such offering the Company  relied upon Section 4(2) of the Act,
Rule 506 and  Section  44-1844(6)  of the  Arizona  Code.  See Part II,  Item 4.
"Recent Sales of Unregistered Securities."

     In April 2000,  the Company  issued  305,000  shares of its Common Stock to
four (4) employees as signing  bonuses to attract them to the Company.  For such
offering the Company relied upon Section 4(2),  Rule 506,  Section  R14-4-140 of
the Arizona Code and Section  11-51-308(1)(p) of the Colorado Code. See Part II,
Item 4. "Recent Sales of Unregistered Securities."

     In April 2000,  the Company  issued  97,374  shares of its Common  Stock to
eighteen  (18) current or former  employees to  compensate  them for past salary
reductions or in lieu of past salary  increases for their  services as employees
during periods since 1997.  Donald Gause,  a Director,  received 4,000 shares in
connection with such issuance. For such offering the Company relied upon Section
4(2), Rule 506, Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California Code, Section 11-51-308(1)(p) of the Colorado Code, Section 90.532 of
the  Nevada  Code,  Section  58-13B-24(R)  of the New  Mexico  Code and  Section
61-1-15.5(2)&R164-15-2  of the Utah Code.  See Part II, Item 4. "Recent Sales of
Unregistered Securities."


                                       42

<PAGE>



     In June 2000,  the Company  granted  XAI an option to purchase  two million
(2,000,000)  shares of the Common Stock of the "freely  tradeable shares" of the
Company  at a price of $0.50 per  share.  The  option is for a period of one (1)
year unless XAI  introduces or arranges for an acceptable  "secondary  offering"
approved  by the  Company,  and in which case the term of the option is extended
until June 1, 2003. For such  offering,  the Company relied upon Section 4(2) of
the Act, Rule 506 and Section 49:3-50(b)(9) of the New Jersey Code. See Part II,
Item 4. "Recent Sales of Unregistered Securities."

     In June 2000,  the Company  entered  into a  agreement  wherein the Company
agreed  to  pay a  finder's  fee to XAI  for  any  debt  or  equity  investment,
acquisition, consolidation, merger or purchase of assets between the Company and
any  contact  of XAI  brought  to the  Company's  attention  by XAI,  which  was
consummated within a period of twenty-four (24) months thereafter.  The finder's
fee  is  as  follows:  a)  five  percent  (5%)  of  the  first  million  dollars
($1,000,000)  raised;  b)  four  percent  (4%)  of the  second  million  dollars
($1,000,000)  raised;  c)  three  percent  (3%)  of the  third  million  dollars
($1,000,000)  raised;  d)  two  percent  (2%)  of  the  fourth  million  dollars
($1,000,000)  raised;  and one percent (1%) of the all additional monies raised.
In the event fees are due XAI by the  Company,  the Company and XAI may mutually
agree to  accept  and pay the fee in  shares of the  Company's  stock  priced at
eighty percent (80%) of the most recent bid price. For such offering the Company
relied upon Section 4(2) of the Act, Rule 506 and Section  49:3-50(b)(9)  of the
New Jersey Code. See Part II, Item 4. "Recent Sales of Unregistered Securities."

     In June 2000, the Company  entered into a consulting  agreement with XAI to
provide  consultation and advisory services relating to business  management and
marketing in exchange for issuance of 100,000 shares of the Company's stock each
to Edward Meyer,  Jr. and Edward T. Whelan.  The contract is for a period of one
(1) year.  For such  offering,  the Company relied upon Section 4(2) of the Act,
Rule 506 and Section 49:3-50(b)(9) of the New Jersey Code.

     In June 2000, the Company  borrowed  $50,000 from GHI. The term of the note
is for a period of one (1) year or upon  subsequent  financing  by XAI. The note
bears  interest  at a rate of prime plus  three  percent  (prime+3%)  per annum.
Additionally, the Company granted GHI warrants to purchase 166,666 shares of the
Company's  Common  Stock at a price of $0.30 per  share.  The  warrants  have no
expiration date. For such offering,  the Company relied upon Section 4(2) of the
Act, Rule 506 and Section 11.602 of the Maryland Code.

     In July 2000,  the Company  issued 10,000 shares of its Common Stock to one
(1) individual in exchange for a client list of computer service customers,  the
remainder of the  previously  contracted  for but unissued  shares  (943,750) in
connection with the CC  acquisition,  13,166 shares to one (1) past employee for
out-of-pocket  expenses,  90,000  shares to one (1) investor for $30,000,  8,319
shares to one (1)  individual  for past  accounting  services  rendered,  40,000
shares to one (1)  individual  who is an  active  employee  as a signing  bonus,
58,333 shares to Maurice Mallette, the Company's current Interim Vice President,
President of CC and a Director in exchange for $17,500 and 75,000  shares to one
(1) individual for his services as a headhunter who brought potential  employees
to the Company.  For such offering,  the Company relied upon Section 4(2) of the
Act, Rule 506,  Section  R14-4-140 of the Arizona Code,  Section 25102(f) of the
California  Code,  Section  90.532 of the Nevada Code and Section  211(b) of the
Pennsylvania Code.

                                       43

<PAGE>



PART III

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       44

<PAGE>


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       45

<PAGE>




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

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

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

(b)   No reports on Form 8-K have been filed.



                                       46

<PAGE>



                                   SIGNATURES

           In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this Registration  Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                  One Source Technologies, Inc.
                                                 (Registrant)

Date: April 13, 2001         By: /s/Thomas E. Glasgow
                             -------------------------------------------------
                                 Thomas E. Glasgow, Chairman

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


           Pursuant to the  requirements  of the Exchange  Act,  this report has
been  signed  by the  following  persons  in  the  capacities  and on the  dates
indicated.

Date: April 13, 2001         By: /s/Thomas E. Glasgow
                             -------------------------------------------------
                             Thomas E. Glasgow, Chairman

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

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

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



                                       47