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, 2001

[_]  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>




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

                  Yes  X        No
                      ----       -----

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

     State registrant's revenues for its most recent fiscal year. $2,774,947

     The   aggregate   market  value  of  the  voting   common  equity  held  by
non-affiliates  as of April 3, 2002 was $334,478.76 based upon 26,686,929 shares
outstanding of which 16,723,938 was held by non-affiliates  and a share price of
$0.02. No non-voting common equity is outstanding.



Item 1:  Description of Business:

     a)   Development

     Certain  statements  contained in this annual  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

     Such factors include, among others, the following: international,  national
and local  general  economic and market  conditions:  demographic  changes;  the
ability of the Company to sustain, manage or forecast its growth; the ability of
the Company to successfully make and integrate acquisitions;  raw material costs
and availability; new product development and introduction;  existing government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.



<PAGE>


     Given these  uncertainties,  readers of this Form 10-KSB and  investors are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

     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.

     The Company  relied upon Section  4(2) of the  Securities  Act of 1933,  as
amended (the "Act") and Rule 506 of Regulation D promulgated  thereunder  ("Rule
506") for recent  issuances of its  unregistered  securities.  In each instance,
such  reliance  was based upon the fact that (i) the  issuance of the shares did
not involve a public  offering,  (ii) there were no more than  thirty-five  (35)
investors (excluding "accredited investors"), (iii) each investor who was not an
accredited  investor  either alone or with his purchaser  representative(s)  has
such  knowledge  and  experience  in financial  and business  matters that he is
capable of evaluating the merits and risks of the prospective investment, or the
issuer  reasonably  believes  immediately  prior to  making  any sale  that such
purchaser comes within this description,  (iv) the offers and sales were made in
compliance  with Rules 501 and 502, (v) the securities  were subject to Rule 144
limitations on resale and (vi) each of the parties was a sophisticated purchaser
and had full  access to the  information  on the  Company  necessary  to make an
informed  investment  decision by virtue of the due  diligence  conducted by the
purchaser or  available  to the  purchaser  prior to the  transaction  (the "506
Exemption").

     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.
Subsequently, Jerry Washburn resigned his position as Chairman of the Board, but
retained his positions as President,  Chief Executive Officer and as a Director.
Thomas Glasgow was then elected to serve as Chairman of the Board until the next
annual meeting of the shareholders. See Part I, Item 1. "Description of Business
- (b) Business of  Registrant - Employees and  Consultants";  Part III, Item 10.
"Executive Compensation - Employee Contracts and Agreements"; Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management";  and Part III,
Item 12. "Certain Relationships and Related Transactions".

     In January  2001,  the Company  entered into an employment  agreement  with
Thomas E. Glasgow, the Company's current Chairman.  The term of the agreement is
for a period of two (2) years. Mr. Glasgow  committed to work at least eight (8)
business days per month. For such services,  Mr. Glasgow is to receive an annual
salary of $60,000,  until such time as the Company yields positive cash flow for
two (2)  consecutive  months.  At that time,  his salary  will be  increased  to
$72,000 per annum.  Mr.  Glasgow also received  500,000  shares of the Company's
restricted common stock and an option to purchase an additional 1,250,000 shares


<PAGE>


of the Company's restricted common stock at a price of $0.19 per share. Of these
options,  750,000  vested already and are  exercisable  for a period of five (5)
years  and five (5)  months.  Additionally,  500,000  more  will  vest  upon the
occurrence of: (i) the Company  achieves  positive cash flow for a period of two
(2) consecutive  quarters;  (ii) annualized sales trending exceeds $3.2 million;
or (3) the Company's  sales growth exceeds by ten percent (10%) of CY annualized
sales for two (2)  consecutive  quarters.  These options are  exercisable  for a
period of five (5) years from the date they vest.  All options are  extinguished
in the event the  Company is sold.  Mr.  Glasgow is also  entitled  to receive a
commission of five percent (5%) for any single financing transaction arranged or
facilitated  by  him  in  excess  of  $500,000,  provided  that  the  cumulative
transaction  fees do not exceed twelve percent (12%).  In the event of a merger,
amalgamation or change of control, Mr. Glasgow is entitled to a commission equal
to the  lesser  of  three  percent  (3%) of the  value  of such  transaction  or
$100,000.  For such  offering,  the Company  relied upon the 506  Exemption  and
Section  14-4-140  of the  Arizona  Code.  See Part I, Item 1.  "Description  of
Business - (b) Business of  Registrant - Employees and  Consultants";  Part III,
Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part III,
Item 11. "Security  Ownership of Certain Beneficial Owners and Management";  and
Part III, Item 12. "Certain Relationships and Related Transactions".

     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 January 2001, the Company entered into  indemnification  agreements with
Jerry M. Washburn,  the Company's  current  President,  CEO, Director and acting
Secretary and Treasurer and Thomas E. Glasgow,  the Company's  current Chairman,
wherein the Company  agreed to indemnify  them for their service as officers and
directors  of the  Company  in the  event the need  arises.  See Part I, Item 1.
"Description   of  Business  -  (b)  Business  of  Registrant  -  Employees  and
Consultants";  Part III, Item 10. "Executive  Compensation - Employee  Contracts
and Agreements";  Part III, Item 11. "Security  Ownership of Certain  Beneficial
Owners  and  Management";  and Part III,  Item 12.  "Certain  Relationships  and
Related Transactions".

     In March 2001, the Company entered into an agreement with Tecniflex,  Inc.,
a  Tennessee  corporation  also  providing  maintenance  services  for banks and
financial  institutions as well as hardware  products,  ("Tecniflex") to provide
maintenance  services for banks and  financial  institutions  for Tecniflex at a
rate of  thirty-five  dollars ($35) per hour. The term of the agreement is for a
period  of one (1)  year  with  automatic  renewal  for one  (1)  year  periods.
OneSource can also receive twenty-five percent (25%) commissions for referral of
customers to Tecniflex and has agreed to refer all prior Tecniflex customers who
are current OneSource customers back to Tecniflex.


<PAGE>


     In July 2001,  the Company  executed an addendum to its  contract  for city
market store equipment  maintenance  with King Soopers.  It covers  equipment at
forty (40) stores. The total estimated annual service fee is $270,000.  Included
in the contract is all preventive  maintenance  examinations of equipment items,
all labor and replacement parts and all  transportation  and related  technician
travel costs to and from the site. Not included are consumable  (supply)  items,
or equipment not currently in use.

     In  December  2001,  Donald C.  Gause  and  Norman E.  Clarke  resigned  as
Directors of the Company.  Neither resigned  because of a disagreement  with the
registrant on any matter relating to the  registrant's  operations,  policies or
practices and neither furnished the registrant with a letter requesting that the
matter be disclosed. See Part I, Item 1. "Description of Business - (b) Business
of  Registrant  - Employees  and  Consultants";  Part III,  Item 10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In December  2001,  the Company's  directors,  at a meeting of the Board of
Directors,  approved the issuance of options to purchase shares of the Company's
common stock. Thomas E. Glasgow, the Company's current Chairman, Jerry Washburn,
the  Company's  current  President,  CEO,  Director  and  acting  Secretary  and
Treasurer and Donald Gause, a former Director of the Company,  received  options
to purchase  1,700,000,  200,000 and 100,000 shares of the Company's  restricted
common  stock at an exercise  price of $0.03 per share for a period of three (3)
years,  respectively.  The  directors  also  rescinded  approval  of a  previous
issuance of 500,000  shares of the Company's  common stock to Thomas E. Glasgow.
For such  offering,  the  Company  relied  upon the 506  Exemption  and  Section
14-4-140 of the Arizona Code. See Part I, Item 1. "Description of Business - (b)
Business  of  Registrant  -  Employees  and  Consultants";  Part  III,  Item 10.
"Executive Compensation - Employee Contracts and Agreements"; Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management";  and Part III,
Item 12. "Certain Relationships and Related Transactions".

     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.

     Between January 2001 and the filing of this report, 3,534,025 shares of the
Company's  restricted  common  stock  were  issued  to four (4)  individuals  in
connection with funding,  2,206,404  shares of the Company's  restricted  common
stock  were  issued  to  seventeen   (17)   individuals   in   connection   with
employee/consulting  services, 920,000 shares of the Company's restricted common
stock were issued to twelve (12)  individuals  in connection  with funding which
occurred in November 2000 and 75,000 shares of the Company's unrestricted common
stock was issued to the  Company's  legal  counsel for legal  services  rendered
pursuant to a Registration Statement filed on Form S-8. For such issuances,  the


<PAGE>


Company  relied upon the 506  Exemption,  Section  14-4-140 of the Arizona Code,
Section  517.061(11) of the Florida Code,  Section 130.293 of the Illinois Code,
Section  11.602 of the Maryland Code,  Rule 803.7 and Section  402(b)(21) of the
Michigan Code,  Section 211(b) of the Pennsylvania  Code and Section 48-2-125 as
interpreted by Rule 0780-4-2-.11.  of the Tennessee Code. No state exemption was
necessary  for  the  sale(s)  to  Canadian  resident(s).  See  Part  I,  Item 1.
"Description   of  Business  -  (b)  Business  of  Registrant  -  Employees  and
Consultants";  and  Part  III,  Item  12.  "Certain  Relationships  and  Related
Transactions".

     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.

     The facts relied upon to make the Florida Exemption  applicable include the
following:  (i) sales of the  shares of common  stock were not made to more than
thirty-five  (35)  persons;  (ii)  neither  the offer nor the sale of any of the
shares was  accomplished  by the  publication  of any  advertisement;  (iii) all
purchasers either had a preexisting  personal or business  relationship with one
or more of the executive officers of the Company or, by reason of their business
or financial  experience,  could be  reasonably  assumed to have the capacity to
protect  their own  interests  in  connection  with the  transaction;  (iv) each
purchaser  represented that he was purchasing for his own account and not with a
view to or for sale in connection with any  distribution of the shares;  and (v)
prior to sale,  each  purchaser  had  reasonable  access to or was furnished all
material books and records of the Company,  all material contracts and documents
relating to the proposed  transaction,  and had an  opportunity  to question the
executive  officers of the Company.  Pursuant to Rule  3E-500.005,  in offerings
made under Section  517.061(11) of the Florida Statutes,  an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or  given  reasonable  access  to full  and  fair  disclosure  of  material
information.  An  issuer  is deemed to be  satisfied  if such  purchaser  or his
representative  has been given access to all  material  books and records of the
issuer;   all  material   contracts  and  documents  relating  to  the  proposed
transaction;  and an opportunity to question the appropriate  executive officer.
In the regard,  the Company supplied such information and was available for such
questioning.

     The facts relied upon to make the Illinois Exemption  available include the
following:  (i) the  Company  filed a  completed  SEC Form D with  the  Illinois
Securities  Department of the  Secretary of State;  and (ii) the Company paid an
appropriate filing fee to the Illinois Securities Department.


<PAGE>


     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  fifteen  (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 (1)  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.

     The facts relied upon to make the Michigan Exemption  available include the
following:  (i) the  Company  filed a  completed  SEC Form D with  the  Michigan
Securities Division;  (ii) the Company executed a Form U-2 consent to service of
process  in the state of  Michigan;  (iii) the Forms  were  filed not later than
fifteen (15) days after the first sale of the  securities in Michigan;  (iv) the
Company  provided  the Michigan  State  Securities  Administrator  a copy of the
information  furnished  by  the  Company  to  the  offerees,  which  constitutes
disclosure adequate to satisfy the anti-fraud provisions of the act; and (v) the
Company paid an appropriate filing fee of $100.

     The facts relied upon to make the Pennsylvania  Exemption available 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.

     The facts relied upon to make the Tennessee  Exemption  applicable  include
the  following:  (i) the Company filed a completed SEC Form D with the Tennessee
Division of Securities; (ii) the Form was filed not later than fifteen (15) days
after the first  sale;  (iii) the Company  provided  the  Tennessee  Division of
Securities a copy of the  information  furnished by the Company to the offerees,
(iv) the Company executed a Form U-2 consent to service of process;  and (v) the
Company paid an appropriate filing fee.

     In January 2002, Donald E. McIntyre was appointed by the Board of Directors
to fill a vacancy on the Board until the next annual meeting of the shareholders
in which Directors are elected.

     See (b) "Business of Issuer"  immediately  below for a  description  of the
Company's business.

     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  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


<PAGE>


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 2001  and  2000  consisted  of
primarily   banking  (13%  and  20%   respectively)  and  retail  (87%  and  76%
respectively) companies located in Arizona,  California,  Colorado,  Nevada, New
Mexico, Utah and parts of Wyoming and Texas.  Approximately  fifty-seven percent
(57%) and forty-one  percent (41%) of the Company's  revenue was generated  from
five (5) customers through December 31, 2001 and 2000 respectively,  the largest
of which  contributed  approximately  forty-four  percent (44%) and  twenty-five
(25%) 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 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.

     For the twelve months ended  December 2001 and 2000,  Maintenance  revenues
constituted  approximately  sixty-two percent (62%) and sixty-five percent (65%)
respectively of total consolidated revenues.

Installation Services

     The Company's acquired the technical competencies via a 1999 acquisition to
undertake equipment installation  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 readily compliment the Company's  Maintenance and
Supplies operations by being able to support these divisions' customer base.


<PAGE>



Supplies Distribution

     The Supplies segment is focused on delivering consumable equipment supplies
and part requirements to the Company's existing as well as prospective 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, 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 an on-line
Internet  distribution  channel  to supply  and  distribute  its  remanufactured
printer and copier toner cartridge products.  Products are delivered via on-line
private catalogs within the site on a true Internet B2B basis.

     At year-end 2000 the Company had thirty-five  (35) full-time  employees and
no 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


<PAGE>


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.

Dependence on one or few customers

     The Company presently generates a significant portion of its gross revenues
from a limited number of customers.  Approximately fifty-seven percent (57%) was
generated from five (5) customers through December 31, 2001 of which the largest
contributed approximately forty-four percent (44%). The following summarizes the
contribution of these five (5) largest accounts:

                                                     (000)
         Company                        2001 Revenues              %
         -------                        -------------              -
         Kroger Corporation                1,219                  44
         Wells Fargo Bancorp                 168                   6
         Tecniflex, Inc.                     108                   4
         Bank of America                      45                   2
         Fry's Food & Drugs                   42                   1

     No  other  customers  accounted  for  more  than  one  percent  (1%) of the
Company's gross revenues.

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.


<PAGE>



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.

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.


<PAGE>



     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 years 2001 and 2000, 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 borne  directly  by the
customer;  however  there is no  guarantee  that such costs will not be borne by
customers in the future and, at the current time,  the Company does not know the
extent to which such costs will be borne by the customer, if at all.

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, 2001, the Company employed thirty-five (35) fulltime and no
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 good.

     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.
Subsequently, Jerry Washburn resigned his position as Chairman of the Board, but
retained his positions as President,  Chief Executive Officer and as a Director.
Thomas Glasgow was then elected to serve as Chairman of the Board until the next
annual  meeting  of  the  shareholders.   See  Part  III,  Item  10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".


<PAGE>



     In January  2001,  the Company  entered into an employment  agreement  with
Thomas E. Glasgow, the Company's current Chairman.  The term of the agreement is
for a period of two (2) years. Mr. Glasgow  committed to work at least eight (8)
business days per month. For such services,  Mr. Glasgow is to receive an annual
salary of $60,000,  until such time as the Company yields positive cash flow for
two (2)  consecutive  months.  At that time,  his salary  will be  increased  to
$72,000 per annum.  Mr.  Glasgow also received  500,000  shares of the Company's
restricted common stock and an option to purchase an additional 1,250,000 shares
of the Company's restricted common stock at a price of $0.19 per share. Of these
options,  750,000  vested already and are  exercisable  for a period of five (5)
years  and five (5)  months.  Additionally,  500,000  more  will  vest  upon the
occurrence of: (i) the Company  achieves  positive cash flow for a period of two
(2) consecutive  quarters;  (ii) annualized sales trending exceeds $3.2 million;
or (3) the Company's  sales growth exceeds by ten percent (10%) of CY annualized
sales for two (2)  consecutive  quarters.  These options are  exercisable  for a
period of five (5) years from the date they vest.  All options are  extinguished
in the event the  Company is sold.  Mr.  Glasgow is also  entitled  to receive a
commission of five percent (5%) for any single financing transaction arranged or
facilitated  by  him  in  excess  of  $500,000,  provided  that  the  cumulative
transaction  fees do not exceed twelve percent (12%).  In the event of a merger,
amalgamation or change of control, Mr. Glasgow is entitled to a commission equal
to the  lesser  of  three  percent  (3%) of the  value  of such  transaction  or
$100,000.  For such  offering,  the Company  relied upon the 506  Exemption  and
Section  14-4-140  of the  Arizona  Code.  See Part  III,  Item  10.  "Executive
Compensation - Employee Contracts and Agreements";  Part III, Item 11. "Security
Ownership of Certain  Beneficial Owners and Management";  and Part III, Item 12.
"Certain Relationships and Related Transactions".

     In January 2001, the Company entered into  indemnification  agreements with
Jerry M. Washburn,  the Company's  current  President,  CEO, Director and acting
Secretary and Treasurer and Thomas E. Glasgow,  the Company's  current Chairman,
wherein the Company  agreed to indemnify  them for their service as officers and
directors  of the Company in the event the need arises.  See Part III,  Item 10.
"Executive Compensation - Employee Contracts and Agreements"; Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management";  and Part III,
Item 12. "Certain Relationships and Related Transactions".

     In  December  2001,  Donald C.  Gause  and  Norman E.  Clarke  resigned  as
Directors of the Company.  Neither resigned  because of a disagreement  with the
registrant on any matter relating to the  registrant's  operations,  policies or
practices and neither furnished the registrant with a letter requesting that the
matter be disclosed.  See Part III, Item 10. "Executive  Compensation - Employee
Contracts and  Agreements";  Part III, Item 11.  "Security  Ownership of Certain
Beneficial Owners and Management"; and Part III, Item 12. "Certain Relationships
and Related Transactions".

     In December  2001,  the Company's  directors,  at a meeting of the Board of
Directors,  approved the issuance of options to purchase shares of the Company's
common stock. Thomas E. Glasgow, the Company's current Chairman, Jerry Washburn,
the  Company's  current  President,  CEO,  Director  and  acting  Secretary  and
Treasurer and Donald Gause, a former Director of the Company,  received  options
to purchase  1,700,000,  200,000 and 100,000 shares of the Company's  restricted


<PAGE>



common  stock at an exercise  price of $0.03 per share for a period of three (3)
years,  respectively.  The  directors  also  rescinded  approval  of a  previous
issuance of 500,000  shares of the Company's  common stock to Thomas E. Glasgow.
For such  offering,  the  Company  relied  upon the 506  Exemption  and  Section
14-4-140 of the Arizona Code. See Part III, Item 10.  "Executive  Compensation -
Employee  Contracts and Agreements";  Part III, Item 11. "Security  Ownership of
Certain  Beneficial  Owners and  Management";  and Part III,  Item 12.  "Certain
Relationships and Related Transactions".

     Between January 2001 and the filing of this report, 3,534,025 shares of the
Company's  restricted  common  stock  were  issued  to four (4)  individuals  in
connection with funding,  2,206,404  shares of the Company's  restricted  common
stock  were  issued  to  seventeen   (17)   individuals   in   connection   with
employee/consulting  services, 920,000 shares of the Company's restricted common
stock were issued to twelve (12)  individuals  in connection  with funding which
occurred in November 2000 and 75,000 shares of the Company's unrestricted common
stock was issued to the  Company's  legal  counsel for legal  services  rendered
pursuant to a Registration Statement filed on Form S-8. For such issuances,  the
Company  relied upon the 506  Exemption,  Section  14-4-140 of the Arizona Code,
Section  517.061(11) of the Florida Code,  Section 130.293 of the Illinois Code,
Section  11.602 of the Maryland Code,  Rule 803.7 and Section  402(b)(21) of the
Michigan Code,  Section 211(b) of the Pennsylvania  Code and Section 48-2-125 as
interpreted by Rule 0780-4-2-.11.  of the Tennessee Code. No state exemption was
necessary  for the  sale(s)  to  Canadian  resident(s).  See Part III,  Item 12.
"Certain Relationships and Related Transactions".

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  (commencing  in November  1999),  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

     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 case is scheduled for trial in the second half of 2002.

     The Company is a named  defendant in a lawsuit filed by 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. Management believes
that this obligation  will  ultimately be transferred  back to the former owner.
The Company has filed a  counter-suit  against the former owner.  The case is in
its early (pre-discovery) stage.


<PAGE>



     The Company was named in a workman's compensation lawsuit filed by a former
employee  during the time  covered by this  report.  The amount of the claim was
$20,000. The Company did not have workman's compensation coverage during a short
period of time in 2000. However, costs incurred by the former employee were paid
by the Arizona  Industrial  Commission.  The plaintiff withdrew his complaint in
March 2002.

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

     In 2001  shareholders of the Company  approved an amendment to its Articles
of  Incorporation  to increase the number of  authorized  shares of common stock
from 20 million to 50 million.  No other matters were put before the vote of the
Company's shareholders in 2001.


                                     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 Over The Counter
Bulletin  Board  (OTCBB).  The common  stock of the Company was quoted under the
symbol "OSTK" from May 1999 through  February 20, 2002  whereupon the symbol was
changed to "OSRC".  The high, low and average bid  information  for each quarter
since May 1999 to the present are as follows:

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
First Quarter 2001            .125              .11               .11
Second Quarter 2001           .22               .145              .17
Third Quarter 2001            .065              .065              .065
Fourth Quarter 2001           .03               .02               .03

     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 50,000,000  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,  2001,  the Company had
26,686,929  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,


<PAGE>



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.

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.

Item 6. Management's Discussion and Analysis of Operations - Full Fiscal Years

Introduction

     The financial results discussed herein include the consolidated  operations
of OneSource Technologies,  Inc, (hereinafter  "OneSource" and/or "the Company")
for the years ended  December  31, 2001 and 2000.  OneSource is engaged in three
closely  related and  complimentary  lines of technology and business  equipment
support  activities;  1)  equipment  maintenance  services,  ("Maintenance")  2)
equipment installation  services,  ("Installation") and 3) value added equipment
supply sales,  ("Supplies").  OneSource is a leader in the technology  equipment
maintenance  and service  industry and is the  inventor of the unique  OneSource
Flat-Rate Blanket Maintenance System(TM). This program provides customers with a
Single  Source for all general  office,  computer  and  peripheral  and industry
specific equipment technology maintenance, installation and supplies products.


<PAGE>



     In  April  2001 as part of  management's  refocused  emphasis  on its  core
business  opportunities  the Company  discontinued  the operations of its wholly
owned  subsidiary Net Express,  Inc., (NEI) and implemented a plan to dispose of
the net asset of that division. No significant  operations were conducted by NEI
in year to date 2001 and for  comparative  purposes the  consolidated  financial
statements of the Company for the nine-months  ended December 31, 2000 have been
restated to show the net operating  results of NEI  separately  as  discontinued
operations in the following tables of financial data as of December 31, 2001 and
2000.  Fiscal 2000 financial  results have also been restated to correct certain
errors that were made a) in the amount of expense that was  attributed to Common
Stock of the  Company  that was  issued  for legal and  other  services,  b) the
application of cash received for Common Stock subscribed and c) other accounting
errors that came to light during the Company's  conversion of its accounting and
information  systems conversion in 2001. The effect of these restatements was to
increase the Net Loss for the year ended  December  31, 2000 by $316,797  ($0.02
per share) and to  increase  Subscriptions  Funded  After  December  31, 1999 by
$130,000.

Summary of Operations

     Operating results are improved in the year ended December 31, 2001 compared
to  the  same  period  in  fiscal  2000.  The  following  table  summarizes  the
comparative results for the two periods:

<TABLE>
<CAPTION>
   -----------------------------------------------------------------------------------------------
   Summary of Operations                                    2001                2000 Restated
   -----------------------------------------------------------------------------------------------
<S>   <C>                                                    <C>                <C>
      Revenues                                               $   2,774,947      $   2,931,642
      Cost of Revenue                                        $   1,854,820      $   2,004,521
      Gross Margin                                           $     920,127      $     927,121
      Selling General and Administrative Costs               $   1,476,273      $   2,160,481
      Operating Loss before Extraordinary Items and
          Discontinued Operations                            $    (556,146)     $  (1,233,360)
      Other Income (Expense)                                 $    (153,139)     $    (196,867)
      Extraordinary Gain, net of income taxes                $      62,250-     $      58,474
      Extraordinary Loss, net of income tax benefit          $    (800,000)     $           -
      Loss from discontinued operations                      $     (73,260)     $    (183,885)
   ------------------------------------------------------    ---------------    ----------------
      Net Loss                                               $  (1,519,895)     $  (1,445,363)
   -------------------------------------------------------   ---------------    ----------------
</TABLE>

     Fiscal  2001  results  reflect  management's  changed  focus and  strategic
emphasis for the Company.  The Company's  rapid growth and expansion in 1999 and
early  2000  contributed  to a number of  operational  problems  that  adversely
impacted the  Company's  operating  results in fiscal 2000 and 2001.  While they
were not as evident in the first half of 2000 they compounded and accelerated in
the latter half of that year.  The problems  centered on a)  contraction of core
maintenance  revenues and b)  abnormally  high  operating  costs  stemming  from
disparate  and  competing  agendas  among and  within  the  Company's  operating
divisions.


<PAGE>



     In January 2001 the Board of Directors installed a new Chairman to lead and
direct a  restructuring  of  operations  to position the Company for  profitable
future results and granted him authority to make any changes he deemed warranted
to accomplish  this objective.  Operating  results for the twelve months of 2001
show significantly improved results with an eighty-one percent (55%) decrease in
the 2001 Loss from Continuing Operations compared to December 31, 2000.

     While  consolidated  revenues  declined  about  five  percent  (5%) in 2001
compared to 2000, consolidated cost of revenues were narrowed eight percent (8%)
thus  improving  consolidated  gross  profit by three  percent (3%) for the year
ended  December 31, 2001  compared to the same period in 2000.  This turn around
reflects  the  stabilizing  effects of the  operational  changes  that have been
installed in the Company's maintenance services division as well as a continuing
increase in the supply division's  overall revenues which increased nine percent
(9%) in the year ended December 31, 2001 compared to the year ended 2000.

     Overall gross margins improved  slightly to thirty-three  percent (33%) for
the year ended  December 31, 2001 versus  thirty-two  percent for the year ended
December 31, 2000. These improved  operating trends,  particularly in the latter
half of  fiscal  2001  are the  result  of a) right  sizing  Company  staff,  b)
realigning operating divisions,  c) general cost cutting and d) streamlining and
empowering management.

     The most significant factor  contributing to the improved operating results
is the thirty-three  percent (33%) decrease in General and Administrative  costs
in the year ended December 31, 2001 compared to 2000. While the approximate $650
thousand  decrease is substantial  the Company  continues to absorb high General
and  Administrative  costs as a percent of revenues as a result of legacy issues
related to past  problems.  Most of these  costs  relate to salary  and  related
benefits and taxes and legal and  professional  costs related to controlling and
managing the issues.

     In April the  Company  discontinued  the  operations  of its  wholly  owned
subsidiary Net Express,  Inc. and implemented a plan to dispose of the net asset
of that  division.  Too much of Net  Express's  activities  concentrated  in the
highly  competitive  and low  margin  network  hardware  sales  and  integration
industry which drained  resources from the Company's core equipment  maintenance
and installation divisions. The net effects of discontinued operations are shown
separately in the  Consolidated  Statement of Operations  for the three and nine
months ended December 31, 2001 and 2000.

Revenues

     The entire  revenue  decline in the twelve  months ended  December 31, 2001
compared  to the  same  period  in 2000  occurred  in the  maintenance  division
operations.  The supplies division revenue increased  approximately nine percent
(9%) in 2001  compared to 2000 as well as  realizing  improving  margins for the
year  ended  December  31,  2001  compared  to the  same  period  in 2000 as the
following table illustrates:


<PAGE>



<TABLE>
<CAPTION>
-------------------------------------------------------------------
Revenues                     2001               2000 Restated
-------------------------------------------------------------------
<S>                          <C>                <C>
   Maintenance               $   1,872,471      $   2,103,659
   Supplies                  $     902,476      $     827,983
--------------------------   ----------------   -------------------
       Total                 $   2,774,947      $    2,931,642
--------------------------   ----------------   -------------------
</TABLE>

     In  June  of 2000  the  Company  lost a  significant  maintenance  contract
($450,000  annualized)  when a client elected to go "in-house" with  maintenance
and  in  August  2000  the  Company  terminated  a  significant   subcontracting
relationship   worth   about   $250   thousand   annually   because   it  didn't
synergistically  fit  OneSource's  approach  to service  delivery.  Installation
services  were  suspended  in early  fiscal 2001 so  management  could focus the
Company's  limited  resources on improving and  strengthening the Company's core
maintenance  and  supplies  division  operations.  To  the  degree  installation
opportunities  arise in line with present  geographic and staffing resources the
Company  will  pursue  and  engage  them  but in  the  near-term  management  is
concentrating  on the maintenance and supplies  divisions.  Now that operational
efficiencies  and  customer  satisfaction  levels have  improved  management  is
focusing greater  attention growing revenues of these divisions via both current
account extensions as well as through out-bound sales and marketing efforts.

     Supply  division  revenues  increased  nine  percent (9%) in the year ended
December 31, 2001 compared to the same period in fiscal 2000.  This increase was
realized in spite of not having the  division's  planned  Internet  distribution
channel  on  line  in  the  period  and  represents  non-Internet  new  customer
acquisition and expanded  present  customer  shipments.  Management is committed
however to  bringing  the  division's  web-based  distribution  delivery  system
on-line by the end of the first quarter of fiscal 2002 in order to significantly
enhance  division  revenue  expansion  to  existing  as  well as  potential  new
accounts.  A featured  focus of this endeavor will be to more deeply  cross-sell
division  products and services into the Company'  maintenance and  installation
customer bases.

Operating Costs and Gross Margins

     As noted,  consolidated  operating margins for the year ended December 2001
improved slightly to thirty-three  percent (33%) compared to thirty-two  percent
(32%) in the year ended December 31, 2000. Gross margin on maintenance  services
improved  to  thirty-one  percent  (31%) for the year ended  December  31,  2001
compared to 2000 and supply division  margins  improved  slightly from forty-one
percent  (41%) in fiscal  2000 to  forty-two  percent  (42%) for the year  ended
December 31, 2001.  Improved  inventory control and field service  management in
the maintenance  division and improved  inventory and  remanufacturing  controls
largely account for the improving margins.

     In addition to the improving  operating margin rates overall costs are down
in both  divisions as well for the year ended  December 31, 2001 compared to the
same period in fiscal 2000. These improvements document that changes implemented
earlier  in  fiscal  2001  to  right-size  staffing  and  eliminate  inefficient
operations  are  starting to be reflected  in reported  results and  represent a
trend that management believes will continue into fiscal 2002.


<PAGE>



Selling, General and Administrative Costs

     Significant  improvement has been accomplished in this category of costs in
the twelve  months  ended  December  31,  2001.  Overall  Selling  and G&A costs
declined  about $650  thousand  from the level of for the year 2000.  While down
substantially from the prior year these costs at 48% of gross revenues are still
higher than the Company's business model of about 30% contemplates.  Even though
already  significant  reductions  have been  achieved in each expense  category,
management believes there are additional limited opportunities for further cuts.
Management  is focused  however on again  growing  revenues  while  holding  the
present level of overhead  costs to bring the  proportionate  percentage in line
with expected  results The following  table  schedules the  significant  general
administrative cost categories:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
General and Administrative                           2001              2000 Restated
-------------------------------------------------------------------------------------
<S>                                               <C>                 <C>
   Salaries Wages and Benefits                    $     744,288       $     729,048
   Facilities                                     $     200,876       $     222,869
   Legal and Professional                         $     142,005       $     220,736
   Telecommunication Costs                        $      63,341       $      83,881
   Travel and Entertainment                       $      33,042       $      99,012
   Other                                          $     136,325       $     606,225
---------------------------------------------     ---------------     ---------------
      Total                                       $   1,319,877       $   1,961,771
---------------------------------------------     ---------------     ---------------
</TABLE>

     While  overall costs  declined in the year 2001 salary and related  benefit
costs  showed a 2% increase  compared to the year ended  December 31 2000.  This
small  increase  reflects  the  issuance  of certain  stock  grants to  retained
employees in fiscal 2001 even though G&A staff was  reduced.  Salary and benefit
costs in fiscal 2001 included a $68 thousand  charge for  additional  trust fund
taxes  related to periods prior to 2001 that was accrued in the first quarter of
2001.  Without this charge  current  2001 results  would show a decline of about
eight  percent (8%)  compared to the year ended  December  31,  2000.  All other
general  administrative  costs are down  reflecting  improvements  and cuts that
management  has  installed  during  fiscal 2001 to curtail and reduce  operating
costs.  As of  December  31,  2001 total  Company  staff had been  reduced to 35
employees from 56.  Substantially  all these  reductions  occurred in the latter
month of the first quarter and  throughout  the second  quarter.  These declines
further  document  the  improved  effects  of  management's  infrastructure  and
operational changes.

     Results for the year ended  December 31, 2000 have been restated to correct
certain  accounting errors that were identified in fiscal 2001 but which related
to periods prior to the year ended 2001.  Much of the impact of  adjustments  to
correct  these  prior  period  errors  were  posted to  accounts in the G$A cost
category which further  contributed to the  substantial  decline in G&A costs in
the twelve months ended December 31, 2001 compared to the same period in 2000.

<TABLE>
<CAPTION>
----------------------------------------------------------------------- --------------
Sales and Marketing                                       2001           2000 Restated
-------------------------------------------------------------------------------------
<S>                                                      <C>            <C>
   Salaries, Commissions and Benefits                    $   104,424    $   156,490
   Advertising and Promotion                             $    39,460    $    37,353
   Travel and Entertainment                              $    12,512    $     4,867
------------------------------------------------------   ------------   --------------
      Total                                              $   156,396    $   198,710
------------------------------------------------------   ------------   --------------
</TABLE>


<PAGE>



     The  decline  in  selling  personnel  costs is  largely  the  result of the
Company's turnaround restructuring  activities.  The paramount objective of this
effort was to streamline  overall  operations and redirect  corporate  resources
toward improving the Company's core maintenance and supplies division  operating
infrastructures  and  management.  To some degree sales and  marketing  became a
casualty of this redirected  focus and accordingly  have taken a back seat while
the realignment was being implemented. The decline in selling compensation costs
for fiscal  2001 were  offset  some by an  increase  in  advertising  and direct
selling expenses in the supply division during the period.  Now that operational
and  management  changes are largely in place and the  attendant  infrastructure
improved   management  is  concentrating   on  implementing  and   significantly
supporting  the sales and  marketing  plans  that have been  heretofore  on hold
pending completion of the strategic redirectional thrust of the Company.

Loss from Continuing Operations

     The  Company  again  incurred  a loss  from  continuing  operations  before
interest  expense and other charges for the year ended December 31, 2001 but the
magnitude of the loss declined significantly,  (55%) in the year ending December
31, 2001  compared  to the same twelve  months of fiscal  2000.  As noted,  this
dramatic  turn  around  is  due  to  a)  improved   division   operating  rates,
particularly  in the  maintenance  division and b) the  substantial  decrease in
overhead costs for the year ended December 31, 2001 compared to 2000.

Interest and Other Income (Expense)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
Other Income (Expense)                     2001                2000 Restated
-----------------------------------------------------------------------------
<S>                                       <C>                  <C>
   Interest                               $   (158,920)        $   (188,576)
   Other                                  $      5,782         $     (8,291)
----------------------------------------  -----------------    --------------
      Total                               $   (153,139)        $   (196,867)
----------------------------------------  -----------------    --------------
</TABLE>

     Interest  costs  declined  in the twelve  months  ended  December  31, 2001
sixteen  percent (16%) even though total  short-term debt increased for the year
compared to the year ended December 31, 2000.  While interest expense related to
Company  short-term  borrowings  in  support  of  funding  needed  to cover  the
Company's  turnaround  continued to be significant,  total interest cost is down
due to the Company's  decision in 2001 to discontinue  granting stock incentives
to lenders for debt  funding.  About $100  thousand of the  interest  represents
"financing costs" incurred as deal sweeteners (stock and/or warrants) offered to
secure  short-term  debt  capital in 2000,  a portion of which was  deferred  at
year-end  2000 and  amortized  in fiscal  2001 as a result of recent  accounting
profession and SEC  pronouncements.  While these costs didn't utilize  corporate
cash the value of the  sweeteners  was required to be charged to earnings  under
the  new  pronouncements.  Because  of the  revised  accounting  for  such  debt
sweeteners  the Company has not entered  into any  similar  deal  structures  in
fiscal 2001 and accordingly should not have to absorb these costs in the future.


<PAGE>



Liquidity and Capital Resources

     The following table sets forth selected financial condition  information as
of December 31, 2001 compared to December 31 2000:

<TABLE>
<CAPTION>
-------------------------------------- -------------------- --------------------
   Balance Sheet                            2001              2000 Restated
-------------------------------------- -------------------- --------------------
<S>                                         <C>                  <C>
   Working Capital                          ($1,129,210)         ($1,218,179)
-------------------------------------- -------------------- --------------------
   Total Assets                              $1,208,027           $1,470,193
-------------------------------------- -------------------- --------------------
   Debt Obligations                            $952,851             $587,635
-------------------------------------- -------------------- --------------------
   Shareholders' (Deficit)                    ($566,837)           $(761,529)
-------------------------------------- -------------------- --------------------
</TABLE>

     Liquidity and sufficient capital resources continued to be a problem during
the year ended  December 31,  2001.  Total costs  continued  to exceed  revenues
throughout  the year and while a  significant  proportion  of total  costs  were
non-cash  charges  the  company  continued  to operate  in a negative  cash flow
position  through December  31,2001 which  necessitated  funding the short falls
with  short-term  borrowings.  In the  prior  year  (2000),  short-term  lenders
required  "equity  sweeteners"  as  part of the  funding  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, 2001 and the negative  current  ratio at December 31, 2001 of .44%
compared to .47% at December 31, 2000.

     During the last quarter of 2001 cash flow short falls dropped significantly
with the addition of new  maintenance  business  coming  on-line in the quarter.
Monthly cash  deficiency in the fourth quarter was about $25 thousand versus the
$85 to $100 thousand a month negative cash earlier in the year.  Accordingly the
Company  was able to  adequately  manage  cash flow  through  the final  quarter
without having to make further  borrowings.  Management believes it can continue
to manage this shortfall in the near-term  with  additional new business that is
pending  while  it  negotiates  additional  funding  opportunities  intended  to
recapitalize the Company.

     The Company is also  engaged in this regard in  negotiations  with  several
investment  banking firms and others with the intent of securing  equity funding
of $1 million. These negotiations were continuing as of December 31, 2001.

     Also contributing to the decreased working capital position at December 31,
2001 compared to year-end 2000 was the overall  increase in current  liabilities
versus current assets at December 31, 2001 primarily because of short-term debt.
Accounts receivable increased 11% as a result of the improved operating division
levels  yet  related  inventories   remained  essentially   unchanged.   Current
liabilities other than short-tem borrowings  relatively at the December 31, 2000
levels except for accrued liabilities, which increased about 30% at December 31,
2001  compared to 2000.  The increase is due to interest  costs and a settlement
charge for a workman's  compensation  claim.  Other current  liability  balances
decreased  at December  31,  2001  compared  to  year-end  2000  except  account
payables,  which increased slightly in support of the increased operations level
in the period.

     In March  2001 the  Company  and  holders  of four of the  Company's  notes
payable that were due in March and  September 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  agreed  to  make a
twenty-five  percent (25%) principal  payment to each note holder and the notes'


<PAGE>


due dates were  extend to July 15,  2002.  But at July 15,  2001 the Company was
unable to make the scheduled  partial principle payment or commence making level
monthly principal and interests payments over the remaining  twelve-month period
of the notes.  As part of that agreement the Company also agreed to increase the
interest rates of the notes from their stated twelve to fourteen percent (12% to
14%) to eighteen percent (18%). The Company has continued to make timely monthly
interest payments to the holders.  Further the Company is in communication  with
the holders and believes it will be able to negotiate an  arrangement  that will
not adversely impact the Company's continuing operations.

     To improve  the  Company's  financial  position  the Company and a group of
investors  executed an agreement in March 2000 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
of  $93,438.00.  The investor group  exchanged the  promissory  note for 643,944
shares of  OneSource  stock.  The  investor's  are  restricted  from selling the
combined  818,944  shares of stock for a period of one year.  Completion of this
transaction resulted in an extraordinary gain of $63 thousand.

     At December  31, 2001 the Company  had accrued  delinquent  payroll  taxes,
penalties and interest of approximately $87 thousand of which  approximately $46
thousand  represent  the Trust  Fund  principle  portion.  While the  Company is
current in payment of all its payroll tax  liabilities  and has been since April
2000 and has been  making  $11.5  thousand  a month  payments  against  the past
accrual the IRS was  applying  payments to penalty  and  interest  first then to
taxes.  The Company  therefore in July 2001  submitted an Offer in Compromise to
settle this issue by  offering to pay the Trust Fund  portion in lieu of penalty
and  interest.  This offer was pending at December 31, 2001.  These  liabilities
relate to unpaid  withholding  taxes that were assumed as part of the  Company's
LBO in 1997 and two additional tax periods in 1998 and 1999. Management believes
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.

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.



<PAGE>




                          ONESOURCE TECHNOLOGIES, INC.



                     Consolidated Financial Statements as of
                           December 31, 2001 and 2000
                        and Independent Auditors' Report













<PAGE>




                          ONESOURCE TECHNOLOGIES, INC.





TABLE OF CONTENTS                                                           PAGE



INDEPENDENT AUDITORS' REPORT                                            F-1


CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001                      F-2

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THE TWO
YEARS ENDED DECEMBER 31, 2001 AND 2000                                  F-3

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY/(DEFICIT) FOR THE TWO YEARS ENDED DECEMBER 31,
2001 AND 2000                                                           F-4

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWO YEARS                 F-5
ENDED DECEMBER 31, 2001 AND 2000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                              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,  2001  and  the  related  consolidated
statements of operations,  stockholders'  deficit and cash flows for each of the
two years in the period ended December 31, 2001. 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, 2001, and the consolidated results of its
operations and cash flows for each of the two years in the period ended December
31, 2001, in conformity with generally accepted accounting principles.




/s/  Epstein, Weber & Conover, P.L.C.
Scottsdale, Arizona
March 11, 2002

                                      F-1


<PAGE>


<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2001

<S>                                                                             <C>
ASSETS
CURRENT ASSETS:
    Cash                                                                        $        75,433
    Accounts receivable                                                                 311,995
    Inventories                                                                         209,045
    Other current assets                                                                 24,052
        Total current assets                                                            620,525
                                                                                ---------------

PROPERTY AND EQUIPMENT, net of accumulated depreciation $158,529                        210,918

GOODWILL                                                                                235,074

DEFERRED INCOME TAXES                                                                   140,187

OTHER ASSETS                                                                              1,323

TOTAL ASSETS                                                                    $     1,208,027
                                                                                ===============

LIABILITIES AND STOCKHOLDERS"  DEFICIT
CURRENT LIABILITIES:
    Accounts payable                                                            $       356,159
    Accrued expenses and other liabilities                                              326,228
    Deferred revenue                                                                    139,626
    Bank line of credit                                                                  50,000
    Current portion capital leases                                                        9,212
    Current portion of debt                                                             882,170
         Total current liabilities                                                    1,763,395
                                                                                ---------------

INSTALLMENT NOTES - LONG-TERM PORTION                                                    11,469

TOTAL LIABILITIES                                                                     1,774,864
                                                                                ---------------

STOCKHOLDERS' DEFICIT
    Preferred Stock, $.001 par value, 1,000,000 shares authorized, none issued
    Common Stock, $.001 par value, 50,000,000 shares authorized, 24,963,317
        issued and outstanding at December 31, 2001                                      24,963
    Paid in capital                                                                   2,685,004
    Accumulated deficit                                                              (3,276,804)
                                                                                       (566,837)
                                                                                ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                     $     1,208,027
                                                                                ===============
</TABLE>


         The accompanying notes are an integral part of this statement.

                                      F-2


<PAGE>



<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31



                                                                                                  Restated
                                                                                 2001               2000
                                                                           -----------------   ---------------
<S>                                                                        <C>                 <C>
REVENUE, net                                                               $       2,774,947   $     2,931,642
COST OF REVENUE                                                                    1,854,820         2,004,521
                                                                           -----------------   ---------------
          GROSS PROFIT                                                               920,127           927,121

GENERAL AND ADMINISTRATIVE EXPENSES                                                1,319,877         1,961,771
SELLING AND MARKETING EXPENSES                                                       156,396           198,710
                                                                           -----------------   ---------------
          Operating Loss                                                            (556,146)       (1,233,360)

OTHER INCOME (EXPENSE)
      Interest expense                                                              (158,921)         (188,576)
      Other income (expense)                                                          (5,782)           (8,291)
                                                                           -----------------   ---------------
          Total other expense                                                       (153,139)         (196,867)

LOSS BEFORE EXTRAORDINARY ITEMS, DISCONTINUED
      OPERATIONS AND INCOME TAXES                                                   (709,285)       (1,430,227)
INCOME TAX BENEFIT                                                                         -           110,275
                                                                           -----------------   ---------------
                                                                                    (709,285)       (1,319,952)
EXTRAORDINARY ITEMS
      Gain on  extinguishment of debt, no income tax effect                           62,650            58,474
      Loss from default of subscription receivable                                  (800,000)                -
                                                                           -----------------   ---------------
          Total extraordinary items                                                 (737,350)           58,474
                                                                           -----------------   ---------------

NET LOSS FROM CONTINUING OPERATIONS                                               (1,446,635)       (1,261,478)

DISCONTINUED OPERATIONS -
      Loss from discontinued operations of integration segment                       (73,260)         (183,885)
NET LOSS                                                                   $      (1,519,895)  $    (1,445,363)
                                                                           =================   ===============

Basic, before extraordinary item and loss from discontinued operations     $           (0.03)  $         (0.08)
          Extraordinary items                                              $           (0.04)               **
          Loss from discontinued operations                                               **   $         (0.01)
          Net loss                                                         $           (0.07)  $         (0.09)

Diluted, before extraordinary item and loss from discontinued operations   $           (0.03)  $         (0.08)
          Extraordinary items                                              $           (0.04)               **
          Loss from discontinued operations                                               **   $         (0.01)
          Net loss                                                         $           (0.07)  $         (0.09)

Weighted Average Shares Outstanding:                                              22,045,674        15,927,669
          Basic                                                                   22,045,674        15,927,669
          Diluted

      **Less than $0.00 per share
</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-3

<PAGE>




<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000



                                                                       Stock         Paid-in
                                              Common      Stock        Subscription  Capital      Accumulated
                                              Shares      Amount       Receivable    (Deficit)    Deficit        Total
                                             -----------------------------------------------------------------------------
<S>                                           <C>        <C>       <C>            <C>           <C>            <C>
BALANCE DECEMBER 31, 1999                     12,250,205 $  12,250 $ (1,055,000)  $ 1,082,497   $    (311,546) $  (271,799)
                                             =========== ========= ============== ============= ============== ===========

Stock issued for note conversions              1,270,596     1,271            -       339,806               -      341,077
Stock issued for services                        344,737       345      118,750       121,948               -      241,042
Stock issued as incentives to employees          848,874       850            -        83,982               -       84,832
Stock issued in consideration for equipment       40,000        40            -        19,960                       20,000
Stock issued for cash                          1,285,438     1,285            -       167,413               -      168,699
Stock issued for financing costs               1,391,666     1,392            -       251,616               -      253,008
Previously unissued shares, issued in 2000     1,552,083     1,552            -       148,448               -      150,000
Subscriptions funded                                                    130,000                                    130,000
Shares obligated but not issued               (1,458,033)   (1,458)                  (431,567)                    (433,025)
Net loss                                               0         -            -             -      (1,445,363)           -
                                             ----------- --------- -------------- ------------- -------------- -----------
BALANCE DECEMBER 31, 2000 RESTATED            17,525,566 $  17,526 $   (806,250)  $ 1,784,104    $ (1,756,909) $  (761,529)
                                             =========== ========= ============== ============= ============== ===========

Stock issued for services                        961,667       962            -        61,213               -      62,100
Stock issued as incentives to employees          500,000       500            -        62,817               -      63,317
Stock issued for note conversions                936,667       937            -        14,063               -      15,000
Receipt of service for stock subscription                                 6,250             -                       6,250
Stock subscription write-off                                            800,000                                   (800,000)
Return of shares under rescission agreement   (1,016,666)   (1,018)                  (121,841)                    (123,793)
Previously unissued shares, issued in 2001     6,056,083     6,056            -       884,648               -      890,704
Net loss YTD                                                                                       (1,519,895)           -
                                             ----------- --------- -------------- ------------- -------------- -----------
BALANCEDECEMBER 31, 2001                      24,963,317 $  24,963 $          -   $ 2,685,004    $ (3,276,804) $  (566,837)
                                             =========== ========= ============== ============= ============== ===========
</TABLE>



         The accompanying notes are an integral part of this statement.


                                      F-4


<PAGE>



<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000



                                                                                                      Restated
                                                                                      2001              2000
                                                                                --------------------------------
<S>                                                                             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                     $  (1,519,895)    $  (1,445,363)
Adjustments to reconcile net loss to net cash  provided (used) by operations

        Extraordinary gain                                                            (62,650)          (58,474)
        Rescision of stock subscription agreement                                     (39,660)                -
        Loss from discontinued operations                                              48,812           127,412
        Depreciation/Amortization                                                      69,359            56,782
        Amortization of deferred financing costs                                       99,979           153,029
        Stock issuances to consultants for services                                    68,350           241,043
        Stock issuances to employees for services                                      63,317            84,832
        Stock subscription write off                                                  800,000                 -
        Gain on sale of equipment                                                           -            (7,404)
        Deferred taxes                                                                      -          (126,742)
        Changes in assets and liabilities (net of acquisitions):
             Accounts receivable                                                       (7,077)          179,651
             Inventory                                                                  1,286           158,567
             Deposits and other assets                                                      -            81,497
             Other current assets                                                      (8,052)           18,061
             Accounts payable                                                          (2,613)           43,053
             Accrued expenses and other liabilities                                    75,708           (62,180)
             Deferred revenue                                                          (4,465)          (68,726)
                                                                                --------------   ---------------
                     Net cash (used) by continuing operating activities              (417,601)         (624,962)
                                                                                --------------   ---------------
                     Net cash (used) by discontinued operating activities             (73,260)         (183,885)
NET CASH Provided (used) by Operating Activities                                     (490,861)         (808,847)
                                                                                --------------   ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchases of property and equipment                                           (18,622)          (24,982)
        Disposal of equipment                                                           8,219             3,000
                                                                                --------------   ---------------
                     Net cash provided (used) by investing activities                 (10,403)          (21,982)
                                                                                --------------   ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Advances on bank lines of credit                                                         -           115,495
   Payments on bank lines of credit                                                  (100,913)          (53,419)
   Cash proceeds from borrowings                                                      479,290                 -
   Proceeds collected on stock subscriptions receivable                                     -           350,000
   Principal payments on capital lease obligations                                    (13,161)          (14,829)
   Proceeds on notes payable                                                                -           635,000
   Principal payments on notes payable                                                      -          (196,328)
   Issuance of common stock (net of capital placement fees)                                 -           168,699
                     Net cash provided (used) by financing activities                 365,216         1,004,618
                                                                                --------------   ---------------

INCREASE (DECREASE) IN CASH                                                          (136,048)          173,789

CASH, January 1                                                                       211,481            37,692
CASH, December 31                                                               $      75,433    $      211,481
                                                                                ==============   ===============
</TABLE>

          The accompanying notes are an integral part of this statement

                                      F-5


<PAGE>



<TABLE>
<CAPTION>
ONESOURCE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE TWO YEARS ENDED DECEMBER 31, 2001





                                                                                  Restated
                                                                  2001              2000
                                                               -------------------------------
<S>    <C>                                                     <C>              <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
       Interest paid                                           $       58,952   $      31,594
                                                               --------------   --------------

 SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
       Conversion of debt to common stock                      $       38,000   $     407,233
                                                               --------------   --------------

       Assumption of debt                                      $        7,007   $           -
                                                               --------------   --------------

       Equipment acquired under capital leases                 $            -   $      23,690
                                                               --------------   --------------

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

       Common stock issued for financing costs                 $            -   $     253,008
                                                               --------------   --------------
</TABLE>

          The accompanying notes are an integral part of this statement

                                      F-6


<PAGE>



ONESOURCE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000


1.   ORGANIZATION AND BASIS OF PRESENTATION


     OneSource Technologies, Inc. (the "Company") is a technology infrastructure
     maintenance and installation  services  provider 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. and its two wholly
     owned  subsidiaries,  Cartridge  Care,  Inc.  and Net  Express,  Inc.  on a
     consolidated basis.

     The Company  continues to incur operating  losses and has a working capital
     deficiency of $1,142,870 at December 31, 2001. Management believes that the
     Company will achieve operating  profitability in the near future. Also, the
     Company  intends to  restructure  much of the debt that was  outstanding at
     December  31,  2001.  Approximately  $750,000  of the debt  outstanding  at
     December 31, 2001 is held by  individuals  or entities  that have an equity
     stake in the  Company.  Management  believes  that  these  individuals  and
     entities therefore have an interest in assisting in the Company's long-term
     viability and will respond positively to debt restructuring. However, there
     can be no  assurances  that  the  debt  will be  restructured  and that the
     Company will achieve profitability.


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,  consisting  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 - Reflects  the cost in excess of the fair values  assigned to the
     underlying  net assets of an acquired  company at its date of purchase.  At
     December 31, 2001the fair value of the acquired net assets remains  greater
     than their cost.

     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.

                                      F-7

<PAGE>


     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, 2001 and 2000 were
     $32,060 and $37,072 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.

     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.

                                      F-8

<PAGE>



     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.

     In June 2001, the Financial Accounting Standards Board issued Statements of
     Financial  Accounting  Standards  No.'s 141 Business  Combinations  and 142
     Goodwill  and  Other  Intangible  Assets.  The  Company  has  reviewed  the
     provisions of the new  accounting  pronouncements  and does not believe the
     adoption of such will have a material effect on the financial  position and
     results  of  operations  of the  Company  and as of  January  1,  2002 will
     discontinue  the  practice  of  amortizing  goodwill.  In 2001 the  Company
     amortized  $16,516 of goodwill that resulted  from the  acquisition  of the
     Company's  cartridge  division in 1999. Based on the Company's  analysis of
     the  underlying  value  of the net  assets  acquired  in  this  transaction
     management  believes  there  has been no  impairment  of the  value of this
     intangible as of December 31, 2001. However, the Company will formalize its
     process of analyzing the carrying value of its intangible assets.


3.   RESTATEMENT

     The accompanying  financial statements for the year ended December 31, 2000
     have been  restated  to correct  errors  that were made a) in the amount of
     expense that was  attributed to Common Stock of the Company that was issued
     for legal and other  services,  b) the  application  of cash  received  for
     Common Stock subscribed and c) other  accounting  errors that came to light
     during the Company's  conversion of its accounting and information  systems
     conversion in 2001.  The effect of these  restatements  was to increase the
     Net Loss for the year ended December 31, 2000 by $316,797 ($0.02 per share)
     net of related income tax benefit of $20,445 and to increase  Subscriptions
     Funded After December 31, 1999 by $130,000.

4.   INVENTORIES

     Inventories consisted of the following at December 31, 2001:

<TABLE>
<S>   <C>                                               <C>
      Finished Goods                                      $ 26,968
      Parts and supplies                                   176,175
      Raw Materials                                         20,328
        Less reserve for obsolescence                      (14,426)
                                                      -------------
      Total inventory                                     $209,045
                                                      =============
</TABLE>

     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 net realizable value exceeds recorded
     costs.

                                      F-9

<PAGE>



5.   PROPERTY AND EQUIPMENT

     Property and equipment consisted of the following at December 31, 2001:

<TABLE>
<S>   <C>                                                         <C>
      Equipment                                                   $150,859
      Furniture, fixtures and other                                117,785
      Vehicles                                                      52,297
      Leasehold improvements                                       47,874
                                                                   ------
      Total                                                       $368,815
                                                                  --------
                     Less: accumulated depreciation                157,897
      Total  Property and equipment - net                         $210,918
</TABLE>

     Depreciation expense for the years ended December 31, 2001 and 2000 was
$52,843 and $ 38,471 respectively.


6.   LINE OF CREDIT

     The Company has a bank revolving line of credit  agreement for $50,000 with
     interest at 9.75% to 18% per annum.  At  December  31, 2001 the Company had
     fully utilized the $50,000 under the credit facility.  . The line of credit
     is  collateralized  by  the  accounts  receivable  of  Cartridge  Care  and
     personally  guaranteed by the former owners of Cartridge  Care. The line of
     credit expired in 2001 and the Company is attempting to negotiate a payment
     plan with the bank.


7.   NOTES PAYABLE

     Notes payable at December 31, 2001 consist of the following:

<TABLE>
<S>                                                                             <C>
Installment  notes  payable,   collateralized  by  vehicles,
interest   from  8%  to  10%  per  annum  ,  total   monthly
installments of $987 through 2004                                               $       31,879

Investor notes payable, unsecured, interest at 18% per annum
due in July 2002                                                                       245,000

Unsecured demand notes payable to investor,  interest at 14%
per annum                                                                              560,000

Unsecured demand notes payable to individuals, interest from
0% to 12% per annum                                                                     56,760
                                                                                -------------------
              Total                                                                    893,639
              Less long-term portion                                                    11,469
                                                                                -------------------
              Total current debt                                                $      882,170
                                                                                ===================
</TABLE>

     Except for $25,129 due in 2002 through 2004 all the  Company's  debt is due
in 2002 or on demand.

     In the year ended December 31, 2000, the Company issued 1,391,666 shares of
     its common stock in connection with certain of the above notes as incentive
     for lenders to enter into the debt  transactions.  The total value of those
     shares, $253,000 was amortized over the terms of the notes with $99,979 and
     $153,021  charged to interest  expense in the years ended December 31, 2001
     and 2000 respectively.

                                      F-10

<PAGE>



8.   INCOME TAXES


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

<TABLE>
<CAPTION>
                                                                   2001            2000
                                                                   ----            ----
<S>         <C>                                                <C>              <C>
Current tax provision (benefit)                                $ (556,766)      $ (513,532)
Deferred tax provision (benefit)                                  556,766         403,257
                                                               ------------     ------------
            Total income tax provision (benefit)               $    - 0 -       $  110,275
                                                               ============     ============
</TABLE>

     Deferred tax assets of $1,335,194,000 at December 31, 2001 relate primarily
     to federal net  operating  loss  carry-forwards  of  $3,123,000,  and state
     operating  loss carry forwards of $3,053,  000. The carry  forwards  expire
     from 2004 through 2021.  Approximately $51,000 of the deferred tax asset at
     December  31,  2001  relates  to  allowances  on  accounts  receivable  and
     inventories.  Additionally,  the  deferred  tax asset at December 31, 2001,
     includes a $20,000 benefit related to a contingency  accrual related to the
     winding up of Net Express.  At December 31, 2000 there is a deferred income
     tax  liability  of $5,  185 that  relates to book and tax  differences  for
     property,  equipment and intangibles.  The net deferred income tax asset of
     $1,330,000  at  December  31,  2001 is  substantially  offset by  valuation
     allowance of $1,190,000. The valuation allowance on the net deferred income
     tax asset increased by $601,000 in the year ended December 31, 2001.

     There was no income tax effect allocated to the net extraordinary  loss for
     the years  ended  December  31,  2001 and 2000.  Any  potential  income tax
     benefit related to these items were offset by an equal valuation allowance.

     Reconciliation of statutory and effective tax rates:

<TABLE>
<CAPTION>
                                                    2001                         2000
                                                    ----                         ----
<S>                                             <C>          <C>                <C>         <C>
Federal                                         $ (516,764)  (34%)              $(440,640)  (34%)
State                                              (98,793)  (6.5%)               (84,240)  ( 6%)
Valuation allowance                                601,099    1.0%                414,526    32%
Miscellaneous                                       14,458   39.5%                  8,958     -%
                                                ----------- -------            ----------  -----
                                                ----------- -------            ----------  -----
                                                $    - 0 -                      $(101,396)  ( 8%)
                                                =========== =======             =========  ======
</TABLE>

                                      F-11

<PAGE>


9.   LEASES

     Operating Leases

     The Company leases its facilities  under  long-term  operating  leases that
     expire  through  2004.  Rent  expense  under these  leases was $113,130 and
     $108,990  for the years  ended  December  31,  2001 and 2000  respectively.
     Remaining  minimum  annual lease  payments  under these  agreements  are as
     follows:

     Years ended December 31:


     2002                  $117,140
     2003                  $120,490
     2004                  $102,700

   Capital leases

     The  Company  has  several  capital  leases for  equipment.  Capital  lease
     interest  expense  was $1,510 and $3,139 for the years ended  December  31,
     2001 and 2000 respectively. The future minimum lease payments under capital
     leases at December  31,  2001 was  $3,436and  the present  value of minimum
     lease  payments at December 31, 2001 was $3,344.  All capital leases expire
     in 2002.

     Assets  capitalized  under  capital  leases  total  $  43,098  and  related
accumulated amortization is $ 2,660 at December 31, 2001.


10.  CONCENTRATION OF CREDIT RISK

     Financial   instruments   that   potentially   subject   the   Company   to
     concentrations   of  credit  risk  are   primarily   accounts   receivable.
     Approximately  $194,138 of the accounts  receivable balance at December 31,
     2001 is due from two (2) customers.


11.  EMPLOYEE BENEFIT PLAN

     The  Company  provided  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, 2001 and 2000.


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.

                                      F-12

<PAGE>



     The Company has accrued delinquent payroll taxes, penalties and interest of
     approximately   $89,356  at  December  31,  2001  of  which  about  $46,000
     represents the remaining Trust Fund principle portion. The Company has been
     making monthly payments of $10,000 or more against the Trust Fund liability
     and will continue to do so until the Trust Fund principle is exhausted.  In
     July 2001 the Company filed an Offer in Compromise  with the IRS wherein it
     asks the IRS to waive the remaining penalty and interest.

     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  Company
     management  approval.  Management  believes that all obligations  have been
     recorded and that this obligation  will  ultimately be transferred  back to
     the former owner.

     The  Company  has been named in a law suit filed by a former  employee  for
     damages, ($20,000) the employee alleges are due to the Company's failure to
     have workman's compensation coverage during a short period of time in 2000.
     Costs incurred by the former employee pursuant to the employee's  workman's
     compensation claim have been paid by the Arizona Industrial  Commission and
     accordingly  the Company  believes  the claims of the former  employee  are
     groundless and is aggressively disputing the matter.

     The Company has entered into a dispute with an  investment  firm related to
     funds loaned to the Company and the  Company's  common stock  subscribed by
     the investment firm and one of its related entities. The investment firm is
     claiming that it loaned the Company $25,000 that is due by the Company. The
     Company  claims that the loan was repaid in the form of common stock issued
     to the investment  firm's related entity.  The Company believes that it has
     adequate defense against any claim made by the investment firm.

13.  MAJOR CUSTOMERS

     Approximately  57% of the  Company's  revenue was  generated  from five (5)
     customers  during the year ended  December 31,  2001,  the largest of which
     accounted for approximately 44%. For the year ended December 31, 2000 about
     41% of the Company's  total  revenues were derived from five customers with
     the largest contributing approximately 29%.

                                      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 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, 2001 and 2000:

<TABLE>
<CAPTION>
                                  Maintenance     Installation     Supplies     Eliminations        Total
                                ---------------------------------------------------------------------------------
<S>       <C>                     <C>                 <C>         <C>            <C>              <C>
          2001
Revenues                           $1,878,421              $0      $907,606                        $2,774,947
Inter-segment sales                     5,950               0         5,130       ($11,080)                 -
Operating (loss) income             (881,104)                         95796                          (709,285)
Income Tax Benefit                          -               -             -                                 -
Depreciation/Amortization              46,109               0        26,249                            72,358
Interest                              152,218               0         6,702                           158,920
PP&E purchases                         14,958               0         3,664                            18,622
Total assets                       $1,474,898         $27,004      $411,408      ($705,283)        $1,208,027

          2000 Restated
Revenues                           $2,119,120              $0      $865,185                        $2,931,642
Inter-segment sales                    15,461                        37,202       ($52,663)
Operating (loss) income            (1,365,781)                      (79,582)                       (1,445,363)
Income Tax Benefit                     11,275               -             -                           110,275
Depreciation/Amortization              32,687                         5,153                            37,840
Interest                              177,351                        11,225                           188,576
PP&E purchases                         70,935               -             -                            70,935
Total assets                       $1,438,795         $27,004      $420,282      ($491,802)        $1,470,193
</TABLE>

     All operating  results for the installation  segment have been reclassified
as discontinued operations.

15.  STOCKHOLDERS' DEFICIT

     Shares  issued to employees and others for services are valued based on the
     fair  value  of  the  stock  issued  and/or  the  service  rendered.  Other
     non-monetary  common stock transactions were valued at the trading price 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 years ended  December 31,
     2001 and 2000.

<TABLE>
<CAPTION>
                                                      Value
       Description                   Shares Issued   Per Share      Valuation Basis
-----------------------------------  -------------   ---------      -----------------------------
<S>  <C>                               <C>            <C>            <C>
     2001 -
Issued for legal and other services    961,667        $0.07          Stock price at commitment date

Issued for employee compensation       500,000        $0.13          Stock price at commitment date

     2000 -
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 during the year 2001 were issued
     in eleven separate transactions with non-affiliates with a weighted average
     price at the dates of the  transactions  of $0.07 per share. In 2000 shares
     issued  for  services  were  issued  in  nine  separate  transactions  with
     non-affiliates at a weighted average price at the dates of the transactions
     of $0.35 per share.

                                      F-14

<PAGE>



     During  the year  2001 the  Company  issued  shares  to  employees  in five
     separate transactions with a weighted price at the date of the transactions
     of $0.13  per  share.  The  weighted  average  price of shares  granted  to
     employees  during 2000 was $0.10 per share and those shares were granted in
     five separate transactions to non-affiliates.

     Additionally,  in the year ended  December  31,  2001,  the Company  issued
936,667 in converting an obligation for $15,000.

     In 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  transactions 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
     transactions  for note  conversions  with non  affiliates  with a  weighted
     average price per share of $0.27.

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>
                                                       2001                                    2000
                                     -------------------------------------      -------------------------------------
                                        Loss           Shares      Per share      Loss          Shares      Per share
---------------------------------- ---------------- -------------- ---------- -------------- -------------- ----------
<S>                                 <C>                 <C>           <C>       <C>             <C>            <C>
Net (Loss)                          $  (1,519,895)                              $(1,445,363)
Extraordinary Items                       737,350                                    58,474
Discontinued operations                    73,260                                   183,885
Loss from continuing operations          (709,285)                               (1,319,952)

Basic Loss Per Share
Loss available to common
stockholders                            $(855,805)      22,045,674    $(0.03)   $(1,203,004)    14,682,958     $(0.08)
Effect of dilutive securities               N/A                                       N/A
Diluted Loss Per Share                                  22,045,674    $(0.03)                    14,682,958    $(0.08)
</TABLE>



<PAGE>



     Common  stock  options to purchase  2,700,000  shares of common  stock were
     outstanding  at December 31, 2001.  Debt  convertible  to 111,111 shares of
     common  stock and common  stock  warrants  and options to purchase  900,000
     shares of common  stock  were  outstanding  at  December  31,  2000.  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:

<TABLE>
<CAPTION>
                                          2001                  2000
                                          ----                  ----
<S>                                   <C>                 <C>
Net Loss - as reported                $(1,519,895)        $(1,445,363)
Net Loss - pro forma                  $(1,583,675)        $(1,481,063)
Loss per share - as reported              $ (0.07)            $ (0.09)
Loss per share - pro forma                $ (0.07)            $ (0.09)
</TABLE>

     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:

<TABLE>
<CAPTION>
                                               2001              2000
                                               ----              ----
<S>                                            <C>              <C>
Dividend yield                                 None             None
Volatility                                     6.963            7.437
Risk free interest rate                        4.18%            5.25%
Expected asset life                            2.5 years        2.5 years
</TABLE>

     The shareholders  approved a Long-term Incentive plan in 2000 that reserves
     1,000,000  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..  The 1,000,000  shares  reserved under the 2000 employee  option
     plan are set set-aside for rank and file employees.  The board of directors
     has  discretion  to grant options to officers and directors in addition the
     Long-term  Incentive  Plan.  No options  have been  granted  under the 2000
     Long-term Incentive Plan.

                                      F-15

<PAGE>



     During the year ended  December  31,  2001 and 2000,  the  Company  granted
     2,000,000 and 700,000  options  respectively  to certain  directors and key
     employees. The 2001 options vest immediately and the 2000 options vest over
     one year.  The 2001 options were granted at an exercise  price of $0.03 per
     share and the 2000 options at $0.55 per share, the fair market value of the
     underlying  shares on the dates of grant for both grants.  The 2001 options
     expire 36  months  from the date of grant  and the 2000  options  expire 30
     months from date of grant.

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

<TABLE>
<CAPTION>
                                                                               Weighted                    Weighted
                                                                                Average                    Average
                                                                               Exercise                    Exercise
                                                                  2001           Price         2000         Price
------------------------------------------------------------ ---------------- ------------ ------------- -------------
<S>                                                              <C>               <C>        <C>              <C>
Options outstanding at beginning of year                             700,000       $ 0.55           -0-           N/A
Granted                                                            2,000,000       $ 0.03       700,000        $ 0.55
Exercised                                                                -0-                        -0-           N/A
Terminated/Expired                                                       -0-                        -0-           N/A
Options outstanding at end of year                                 2,700,000       $ 0.16       700,000        $ 0.55
Options exercisable at end of year                                 2,700,000       $ 0.16           -0-           N/A
Options available for grant at end of year                         1,000,000          N/A     1,000,000
Price per share of options outstanding                           $0.03-$0.55                     $ 0.55
Weighted average remaining contractual lives                      2.78 years                    2 years
Weighted Average fair value of options granted during the year                     $ 0.02         $0.07
</TABLE>


18.  EXTRAORDINARY ITEMS

     Loss on Write-off of Stock Subscription Notes:

     In 1999 the Company  entered into a transaction  with two investment  firms
     wherein it issued 2,624,672 shares of its common stock (1,312,336 shares to
     each) in  return  for two  notes  receivable  in the  principal  amount  of
     $400,000  and  interest  of 6% per annum.  As part of the  transaction  the
     investment  firms were  engaged to assist the  Company in building a public
     market for its then newly listed common stock.  The investment firms agreed
     to repay the notes and  interest  from the  proceeds of selling  certain of
     their  shares of stock in the open  market.  The notes'  original  2000 due
     dates  were  extended  to  2001  but  when  presented  for  collection  the
     investment  firms  defaulted.  The  Company is  attempting  to  negotiate a
     satisfactory  settlement  of the matter but at  December  31,  2001 no such
     agreement had yet been reached. The Company is not certain that one will be
     achieved  and in light  of that  uncertainty  has  written  off the  notes,
     resulting  in a loss of  $800,000.  There is no income  tax  effect on this
     transaction  because  any income tax  benefit  has been  offset by an equal
     valuation allowance.

     Debt Forgiveness Income:

     In  November  2001 an investor  and the  Company  agreed to rescind a stock
     subscription  agreement  wherein the Company was to issue  shares of Common
     Stock in exchange for a) the  conversion  of a note due the investor in the
     amount of $67,901 and b) for certain  debt  placement  fees related to debt
     contributed by the investor to the Company.

     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.

                                      F-16

<PAGE>



19.  DISCONTINUED OPERATIONS

     In April 2001 the Company  discontinued  the operations of its  integration
     subsidiary and moved to dispose for the net assets of that business,  which
     management   anticipates   completing  in  2002.  The  Company  anticipates
     abandoning the remaining assets and negotiating the liabilities  through an
     orderly liquidation or through bankruptcy.  No significant  operations were
     conducted in the  subsidiary  during the year ended  December 31, 2001. The
     accompanying  consolidated financial statements for the year ended December
     31,  2000 have  been  restated  to show the net  operating  results  of the
     subsidiary  separately  and net revenues of the  subsidiary of $297,747 for
     2000 are  excluded  from total  consolidated  revenues in the  accompanying
     Consolidated  Statement  of  Operations.  There  were no  revenues  in this
     segment during the year ended December 31, 2001.

     Discontinued assets are carried at their expected net realizable values and
     liabilities at their face values.  Assets and liabilities of Net Express to
     be disposed of consist of the following at December 31, 2001.

<TABLE>
<S>                                             <C>
 Cash                                               $2,438
 Inventory                                          23,743
Property and equipment                               2,526
Payables and short-term borrowings                 (77,252)
                                               ------------
          Net Liabilities                         ($48,545)
                                               ============
</TABLE>

                                    * * * * *

                                      F-17


<PAGE>

Item 8.               Changes in and Disagreements with Accountants

              None.



                                    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 who
served during the year 2001.

<TABLE>
<CAPTION>
Name                     Age         Position(s) with Company
------------------       ----      -------------------------------------
<S>                       <C>      <C>
Thomas E. Glasgow         48       Chairman

Jerry M.  Washburn        58       CEO, President and Director and acting Secretary and Treasurer

Donald E. McIntyre        77       Director
</TABLE>

     Directors  Ford L. Williams  (47),  Norman E. Clarke (47),  Donald C. Gause
(42) and  William B.  Meger (55)  served as  Directors  until May 2001.  Ford L.
Williams  also  resigned as Company  Secretary  and  Treasurer at that time.  In
January  2002,  Donald E.  McIntyre  was  appointed  to the Board as an  outside
Director to fill one of the vacancies.

     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.

     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
as a board member of the public  companies:  Miracor  Diagnostics  and First Net
Technology  Group.  Donald  E.  McIntyre,  in  addition  to his  service  on the
OneSource  Board,  also serves on the Board of Directors  of Cragar  Industries,
Inc., a public company as well as a number of private Boards.

Family Relationships

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


<PAGE>



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 many 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 (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.

     Donald E. McIntyre  joined the  Company's  Board of Directors as an outside
Director in January 2002.  In addition to his position on the  Company's  Board,
Don sits as an outside  director  on the board of  directors  of another  public
company (Cragar Industries,  Inc.) and the boards of three private corporations.
Don is presently the CEO of the American Foundation and has been the CEO of four
other  companies  leading to his  extensive  business and  corporate  governance
experience.  As a former CEO his expertise  focuses on finance,  operations  and
governance.  McIntyre  holds a BS in  Business  from Iowa State  University.  In
addition to attending Drake Law School and the Michigan State University  School
of Organizational  Management,  Don has had a long association with the Business
College at Arizona State  University  and is the founder of the McIntyre  Center
for Corporate Governance at that university.

Compliance with Beneficial Ownership Reporting

     None of the Officers, Directors or Beneficial Owners of the Company's stock
failed to file the 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.


<PAGE>



<TABLE>
<CAPTION>
                                      Annual Compensation                   Long-term Compensation
                                                                        Awards      Payouts          Other
                                --------------------------------        --------    -------          -------
                                                                       Restricted   Number of
                                Fiscal                                   Stock     Securities/      LTIP       All Other
    Name & Position             Year     Salary    Bonus    Other       Awards        SARs        Payments     Compensation
------------------------------- -------- --------- -------- ---------- ----------- ------------- ------------ -------------
<S>                             <C>      <C>        <C>       <C>       <C>          <C>            <C>          <C>
                                 2001    $60,000    $0.00     $0.00      $6,000      200,000        $0.00        $0.00
Thomas E. Glasgow, Chair         2000     $0.00     $0.00     $0.00      $0.00        $0.00         $0.00        $0.00

                                 2001    $83,000    $0.00     $0.00      $6,000      200,000        $0.00        $0.00
                                 2000    $93,776    $0.00     $0.00      $0.00         None         $0.00        $0.00
Jerry M. Washburn, CEO           1999    $51,000    $0.00     $0.00     $60,000      200,000        $0.00        $0.00

Ford L. Williams (former CFO)    2001    $30,000    $0.00     $0.00      $8,400      200,000        $0.00        $0.00
                                 2000    $30,000    $0.00     $0.00      $0.00         None         $0.00        $0.00

Donald C. Gause, Director        2001                                    $3,000      100,000        $0.00        $0.00
(former Secretary and            2000    $24,921    $0.00     $0.00      $0.00         None         $0.00        $0.00
Treasurer                        1999    $46,2000   $0.00     $0.00     $75,000      250,000        $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

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
</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. Williams  started with the Company in June 2000 and left the Company in
     July 2001.

(4)  Gause  started  with the  Company in June 1998 and left in My 2000.  He was
     compensated  for his Board  service in the balance of 2000 and part of 2001
     with a stock option award.


<PAGE>



(5)  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.

(6)  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.

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

(8)  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.

(9)  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.

(10) In January  2001,  the Company  entered into an employment  agreement  with
     Thomas  E.  Glasgow,  the  Company's  current  Chairman.  The  term  of the
     agreement is for a period of two (2) years.  Mr. Glasgow  committed to work
     at least eight (8) business days per month. For such services,  Mr. Glasgow
     is to receive an annual  salary of $60,000,  until such time as the Company
     yields positive cash flow for two (2) consecutive months. At that time, his
     salary will be increased to $72,000 per annum.  Mr.  Glasgow also  received
     500,000  shares of the Company's  restricted  common stock and an option to
     purchase an additional  1,250,000 shares of the Company's restricted common
     stock at a price of $0.19  per  share.  Of these  options,  750,000  vested
     already  and are  exercisable  for a period  of five (5) years and five (5)
     months.  Additionally,  500,000 more will vest upon the  occurrence of: (i)
     the Company achieves positive cash flow for a period of two (2) consecutive
     quarters;  (ii) annualized sales trending exceeds $3.2 million;  or (3) the
     Company's sales growth exceeds by ten percent (10%) of CY annualized  sales
     for two (2)  consecutive  quarters.  These  options are  exercisable  for a
     period  of five  (5)  years  from the  date  they  vest.  All  options  are
     extinguished in the event the Company is sold. Mr. Glasgow is also entitled
     to receive a  commission  of five  percent  (5%) for any  single  financing
     transaction arranged or facilitated by him in excess of $500,000,  provided
     that the cumulative transaction fees do not exceed twelve percent (12%). In
     the event of a merger,  amalgamation  or change of control,  Mr. Glasgow is
     entitled to a commission  equal to the lesser of three  percent (3%) of the
     value of such  transaction  or  $100,000.  For such  offering,  the Company
     relied upon the 506 Exemption and Section 14-4-140 of the Arizona Code. See
     Part III, Item 11.  "Security  Ownership of Certain  Beneficial  Owners and
     Management";  and Part III,  Item 12.  "Certain  Relationships  and Related
     Transactions".


<PAGE>



(11) In January 2001, the Company entered into  indemnification  agreements with
     Jerry M.  Washburn,  the Company's  current  President,  CEO,  Director and
     acting Secretary and Treasurer and Thomas E. Glasgow, the Company's current
     Chairman, wherein the Company agreed to indemnify them for their service as
     officers and  directors  of the Company in the event the need  arises.  See
     Part III, Item 11.  "Security  Ownership of Certain  Beneficial  Owners and
     Management";  and Part III,  Item 12.  "Certain  Relationships  and Related
     Transactions".

(12) In  December  2001,  Donald C.  Gause  and  Norman E.  Clarke  resigned  as
     Directors of the Company.  Neither resigned because of a disagreement  with
     the  registrant  on any matter  relating  to the  registrant's  operations,
     policies or practices and neither  furnished the  registrant  with a letter
     requesting that the matter be disclosed.  See Part III, Item 11.  "Security
     Ownership of Certain Beneficial Owners and Management";  and Part III, Item
     12. "Certain Relationships and Related Transactions".

(13) In December  2001,  the Company's  directors,  at a meeting of the Board of
     Directors,  approved  the  issuance  of options to  purchase  shares of the
     Company's common stock. Thomas E. Glasgow,  the Company's current Chairman,
     Jerry Washburn,  the Company's current President,  CEO, Director and acting
     Secretary and Treasurer and Donald Gause, a former Director of the Company,
     received options to purchase  1,700,000,  200,000 and 100,000 shares of the
     Company's  restricted  common stock at an exercise price of $0.03 per share
     for a period of three (3) years, respectively. The directors also rescinded
     approval of a previous  issuance of 500,000 shares of the Company's  common
     stock to Thomas E. Glasgow. For such offering,  the Company relied upon the
     506 Exemption and Section  14-4-140 of the Arizona Code. See Part III, Item
     11. "Security  Ownership of Certain Beneficial Owners and Management";  and
     Part III, Item 12. "Certain Relationships and Related Transactions".

     The following table sets forth the officers and Directors that were granted
stock options in 2001.

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

                                                           % of Total
                                                      Options/SARs Granted
                                                      to Employees in Fiscal    Exercise or Base
        Name & Position           SARs Granted              Year                Price per share     Expiration Date
    ---------------------------- ------------------- ------------------------ -------------------- ------------------
<S>                                 <C>                      <C>                   <C>           <C>
  Thomas E. Glasow (1)              200,000                  10%                   $0.03         28 December 2004
    Chairman

  Jerry M. Washburn (1)             200,000                  10%                   $0.03         28 December 2004
    CEO and Director

    Donald C. Gause (1)             100,000                   5%                   $0.03         28 December 2004
  (former Off/Dir)

  Thomas E. Glasgow(2)              150,000                  75%                   $0.03         28 December 2004
  Chairman
</TABLE>


<PAGE>



(1)  These options for purchase of Company  stock were granted as  consideration
     for service as Directors  during 2001.  Other Directors not included herein
     that served for part of the year, William B. Meger,  Norman Clarke and Ford
     Williams  were  previously  given  stock  grants  during the year for their
     service.

(2)  This option is in consideration for Mr. Glasgow's  commitment to expand his
     involvement  in the  Company's  day-to-day  operations  and to  assume  tot
     position  as  the  Company's  Chief   Operations   Officer  (COO)  for  the
     foreseeable future.

Employee Contracts and Agreements

     The Company has employment  agreements  with its two (2) present  executive
officers, Thomas E. Glasgow and Jerry M. Washburn

Key Man Life Insurance

     The Company has Key Man Life  Insurance  coverage  for Jerry  Washburn  the
Company's CEO and President. No other officers or directors are so insured.

Employee and Consultants Stock Option Plans

     The  Company  has a  shareholder  approved  Long-term  Incentive  Plan that
permits the execution of certain stock based  incentive  plans for employees and
others.  At December 31, 2001 no option plans had been granted  pursuant to this
Plan.

Compensation of Directors

     The Company has no formal  consideration  arrangements for compensating the
directors of the Company for their attendance at meetings and service as members
of the  Board of  Directors.  From  time to time  certain  payments  are made to
directors for their service,  including payment in shares of the Company's stock
as well as options to purchase  shares of the  Company's  stock,  sometimes at a
price which is at or below market price.

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


     The  following  table sets  forth  information  as of  December  31,  2001,
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


<PAGE>


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 shares 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                Common              3,150,000                  11.8%

Thomas E. Glasgow                Common                790,000                   3.0%

Donald E McEntyre                Common                      0                     0%

All Executive Officers and       Common              3,940,000                  14.8%
Directors as a Group
(Three (3) persons)

William B. Meger                 Common              3,085,772                  11.6%

Blackwater Capital Partners      Common              2,937,219                  11.0%

Donald C. Gause                  Common                254,000                   0.1%

Ford L. Williams                 Common                200,000                   0.7%

Norman E. Clarke                 Common                215,180                   0.8%
</TABLE>


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

(2)  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.
     Subsequently,  Jerry  Washburn  resigned  his  position  as Chairman of the
     Board, but retained his positions as President, Chief Executive Officer and
     as a Director.  Thomas Glasgow was then elected to serve as Chairman of the
     Board until the next annual meeting of the shareholders. See Part III, Item
     12. "Certain Relationships and Related Transactions".

(3)  In January  2001,  the Company  entered into an employment  agreement  with
     Thomas  E.  Glasgow,  the  Company's  current  Chairman.  The  term  of the
     agreement is for a period of two (2) years.  Mr. Glasgow  committed to work


<PAGE>


     at least eight (8) business days per month. For such services,  Mr. Glasgow
     is to receive an annual  salary of $60,000,  until such time as the Company
     yields positive cash flow for two (2) consecutive months. At that time, his
     salary will be increased to $72,000 per annum.  Mr.  Glasgow also  received
     500,000  shares of the Company's  restricted  common stock and an option to
     purchase an additional  1,250,000 shares of the Company's restricted common
     stock at a price of $0.19  per  share.  Of these  options,  750,000  vested
     already  and are  exercisable  for a period  of five (5) years and five (5)
     months.  Additionally,  500,000 more will vest upon the  occurrence of: (i)
     the Company achieves positive cash flow for a period of two (2) consecutive
     quarters;  (ii) annualized sales trending exceeds $3.2 million;  or (3) the
     Company's sales growth exceeds by ten percent (10%) of CY annualized  sales
     for two (2)  consecutive  quarters.  These  options are  exercisable  for a
     period  of five  (5)  years  from the  date  they  vest.  All  options  are
     extinguished in the event the Company is sold. Mr. Glasgow is also entitled
     to receive a  commission  of five  percent  (5%) for any  single  financing
     transaction arranged or facilitated by him in excess of $500,000,  provided
     that the cumulative transaction fees do not exceed twelve percent (12%). In
     the event of a merger,  amalgamation  or change of control,  Mr. Glasgow is
     entitled to a commission  equal to the lesser of three  percent (3%) of the
     value of such  transaction  or  $100,000.  For such  offering,  the Company
     relied upon the 506 Exemption and Section 14-4-140 of the Arizona Code. See
     Part III, Item 12. "Certain Relationships and Related Transactions".

(4)  In January 2001, the Company entered into  indemnification  agreements with
     Jerry M.  Washburn,  the Company's  current  President,  CEO,  Director and
     acting Secretary and Treasurer and Thomas E. Glasgow, the Company's current
     Chairman, wherein the Company agreed to indemnify them for their service as
     officers and  directors  of the Company in the event the need  arises.  See
     Part III, Item 12. "Certain Relationships and Related Transactions".

(5)  In  December  2001,  Donald C.  Gause  and  Norman E.  Clarke  resigned  as
     Directors of the Company.  Neither resigned because of a disagreement  with
     the  registrant  on any matter  relating  to the  registrant's  operations,
     policies or practices and neither  furnished the  registrant  with a letter
     requesting  that the matter be disclosed.  See Part III, Item 12.  "Certain
     Relationships and Related Transactions".

(6)  In December  2001,  the Company's  directors,  at a meeting of the Board of
     Directors,  approved  the  issuance  of options to  purchase  shares of the
     Company's common stock. Thomas E. Glasgow,  the Company's current Chairman,
     Jerry Washburn,  the Company's current President,  CEO, Director and acting
     Secretary and Treasurer and Donald Gause, a former Director of the Company,
     received options to purchase  1,700,000,  200,000 and 100,000 shares of the
     Company's  restricted  common stock at an exercise price of $0.03 per share
     for a period of three (3) years, respectively. The directors also rescinded
     approval of a previous  issuance of 500,000 shares of the Company's  common
     stock to Thomas E. Glasgow. For such offering,  the Company relied upon the
     506 Exemption and Section  14-4-140 of the Arizona Code. See Part III, Item
     12. "Certain Relationships and Related Transactions".

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


<PAGE>



Item 12. Certain Relationships and Related Transactions

     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.
Subsequently, Jerry Washburn resigned his position as Chairman of the Board, but
retained his positions as President,  Chief Executive Officer and as a Director.
Thomas Glasgow was then elected to serve as Chairman of the Board until the next
annual meeting of the shareholders.

     In January  2001,  the Company  entered into an employment  agreement  with
Thomas E. Glasgow, the Company's current Chairman.  The term of the agreement is
for a period of two (2) years. Mr. Glasgow  committed to work at least eight (8)
business days per month. For such services,  Mr. Glasgow is to receive an annual
salary of $60,000,  until such time as the Company yields positive cash flow for
two (2)  consecutive  months.  At that time,  his salary  will be  increased  to
$72,000 per annum.  Mr.  Glasgow also received  500,000  shares of the Company's
restricted common stock and an option to purchase an additional 1,250,000 shares
of the Company's restricted common stock at a price of $0.19 per share. Of these
options,  750,000  vested already and are  exercisable  for a period of five (5)
years  and five (5)  months.  Additionally,  500,000  more  will  vest  upon the
occurrence of: (i) the Company  achieves  positive cash flow for a period of two
(2) consecutive  quarters;  (ii) annualized sales trending exceeds $3.2 million;
or (3) the Company's  sales growth exceeds by ten percent (10%) of CY annualized
sales for two (2)  consecutive  quarters.  These options are  exercisable  for a
period of five (5) years from the date they vest.  All options are  extinguished
in the event the  Company is sold.  Mr.  Glasgow is also  entitled  to receive a
commission of five percent (5%) for any single financing transaction arranged or
facilitated  by  him  in  excess  of  $500,000,  provided  that  the  cumulative
transaction  fees do not exceed twelve percent (12%).  In the event of a merger,
amalgamation or change of control, Mr. Glasgow is entitled to a commission equal
to the  lesser  of  three  percent  (3%) of the  value  of such  transaction  or
$100,000.  For such  offering,  the Company  relied upon the 506  Exemption  and
Section 14-4-140 of the Arizona Code.

     In January 2001, the Company entered into  indemnification  agreements with
Jerry M. Washburn,  the Company's  current  President,  CEO, Director and acting
Secretary and Treasurer and Thomas E. Glasgow,  the Company's  current Chairman,
wherein the Company  agreed to indemnify  them for their service as officers and
directors of the Company in the event the need arises.

     In  December  2001,  Donald C.  Gause  and  Norman E.  Clarke  resigned  as
Directors of the Company.  Neither resigned  because of a disagreement  with the
registrant on any matter relating to the  registrant's  operations,  policies or
practices and neither furnished the registrant with a letter requesting that the
matter be disclosed.

     In December  2001,  the Company's  directors,  at a meeting of the Board of
Directors,  approved the issuance of options to purchase shares of the Company's
common stock. Thomas E. Glasgow, the Company's current Chairman, Jerry Washburn,


<PAGE>



the  Company's  current  President,  CEO,  Director  and  acting  Secretary  and
Treasurer and Donald Gause, a former Director of the Company,  received  options
to purchase  1,700,000,  200,000 and 100,000 shares of the Company's  restricted
common  stock at an exercise  price of $0.03 per share for a period of three (3)
years,  respectively.  The  directors  also  rescinded  approval  of a  previous
issuance of 500,000  shares of the Company's  common stock to Thomas E. Glasgow.
For such  offering,  the  Company  relied  upon the 506  Exemption  and  Section
14-4-140 of the Arizona Code.

     Between January 2001 and the filing of this report, 3,534,025 shares of the
Company's  restricted  common  stock  were  issued  to four (4)  individuals  in
connection with funding,  2,206,404  shares of the Company's  restricted  common
stock  were  issued  to  seventeen   (17)   individuals   in   connection   with
employee/consulting  services, 920,000 shares of the Company's restricted common
stock were issued to twelve (12)  individuals  in connection  with funding which
occurred in November 2000 and 75,000 shares of the Company's unrestricted common
stock was issued to the  Company's  legal  counsel for legal  services  rendered
pursuant to a Registration Statement filed on Form S-8. For such issuances,  the
Company  relied upon the 506  Exemption,  Section  14-4-140 of the Arizona Code,
Section  517.061(11) of the Florida Code,  Section 130.293 of the Illinois Code,
Section  11.602 of the Maryland Code,  Rule 803.7 and Section  402(b)(21) of the
Michigan Code,  Section 211(b) of the Pennsylvania  Code and Section 48-2-125 as
interpreted by Rule 0780-4-2-.11.  of the Tennessee Code. No state exemption was
necessary for the sale(s) to Canadian resident(s).

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

     (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.
</TABLE>


<PAGE>

<TABLE>
<S>      <C>      <C>
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.

5.1       [4]     Opinion of Mintmire & Associates

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.

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).
</TABLE>


<PAGE>


<TABLE>
<S>      <C>      <C>
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.

10.26    [4]      OneSource Technologies, Inc. Year 2001  Employee/Consultant Stock Compensation Plan.

10.27    *        Addendum to City Market Store Equipment Maintenance Contract with King Soopers dated July 31, 2001.

10.28    *        Subcontractor Agreement with Tecniflex, Inc. dated March 9, 2001.
</TABLE>


<PAGE>


<TABLE>
<S>      <C>      <C>
10.29    *        Indemnification Agreement between the Company and Jerry M. Washburn dated January 4, 2001.

10.30    *        Indemnification Agreement between the Company and Thomas E. Glasgow dated January 4, 2001.

10.31    *        Employment agreement between the Company and Thomas E. Glasgow dated January 4, 2001.

23.1     [4]      Consent of Marshall & Weber, CPA's, P.L.C.

23.2     [4]      Consent of Mintmire & Associates  (contained in the opinion filed as Exhibit 5.1)
-------------------------------
</TABLE>


[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.

[4]  Filed as an exhibit to the  Company's  Registration  Statement  on Form S-8
     filed July 25, 2001.

*    filed herewith

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








<PAGE>



                                   SIGNATURES

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



                          OneSource Technologies, Inc.
                                  (Registrant)


Date: April 9, 2002         By: /s/ Jerry M. Washburn
                            -----------------------------------------------
                                Jerry M. Washburn, President, CEO, Director
                                and acting Secretary and Treasurer

                            By: /s/ Thomas E. Glasgow
                            -----------------------------------------------
                                Thomas E. Glasgow, Chairman

                            By: /s/ Donald E. McIntyre
                            -----------------------------------------------
                                Donald E. McIntyre, 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.

Signature                           Title                       Date

/s/ Jerry M. Washburn
----------------------
Jerry M. Washburn          President, CEO, Director and       April 9, 2002
                           acting Secretary and Treasurer

/s/ Thomas E. Glasgow
----------------------
Thomas E. Glasgow          Chairman                           April 9, 2002


/s/ Donald E. McIntyre
----------------------
Donald E. McIntyre         Director                           April 9, 2002