U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C., 20549

                                   FORM 10-QSB


(Mark One)
X    QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the quarterly period ended March 31, 2000.

     TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
     ACT OF 1934 For the transition period from __________ to __________

Commission File Number 1-12738


                            ONSITE ENERGY CORPORATION
                 (Name of small business issuer in its charter)


           Delaware                                    33-0576371
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)


701 Palomar Airport Road, Suite 200, Carlsbad, CA           92009
   (Address of principal executive offices)               (Zip Code)


Issuer's telephone number, including area code:  (760) 931-2400


Check  whether the issuer (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 _ No___X___

The number of Class A common stock, $0.001 par value, outstanding as of June 22,
2000 is 18,049,265.


<PAGE>2

                            Onsite Energy Corporation
                      Condensed Consolidated Balance Sheet
                                 March 31, 2000
                                   (Unaudited)


ASSETS

Current Assets:
  Cash                                                             $     79,267
  Accounts receivable, net of allowance for
    doubtful accounts of $31,000                                      2,273,767
  Capitalized project costs                                              70,327
  Costs and estimated earnings in excess of
    billings on uncompleted contracts                                   797,178
  Assets held for sale                                                  707,894
  Other assets                                                           55,725
                                                                   ------------
     TOTAL CURRENT ASSETS                                             3,984,158

  Cash-restricted                                                           779
  Property and equipment, net of accumulated
    depreciation and amortization $1,197,000                            843,433
  Other assets                                                           52,745
                                                                   ------------
     TOTAL ASSETS                                                  $  4,881,115
                                                                   ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Notes payable                                                    $  1,490,296
  Accounts payable                                                    7,881,094
  Billings in excess of costs and
    estimated earnings on uncompleted contracts                       1,533,761
  Accrued expenses and other liabilities                                587,231
                                                                   ------------
     TOTAL CURRENT LIABILITIES                                       11,492,382

Long-Term Liabilities:
  Deferred Income                                                       766,510
                                                                   ------------
     TOTAL LIABILITIES                                               12,258,892
                                                                   ------------
Commitments and contingencies

Shareholders' Equity (Deficit):
  Preferred Stock, Series C, 842,500 shares authorized,
    649,120 issued and outstanding
    (Aggregate $3,245,600 liquidation preference)                           649
  Preferred Stock, Series D, 157,500 shares authorized,
    issued and outstanding and held in escrow                                 -
  Preferred Stock, Series E, 50,000 shares authorized,
    issued and outstanding                                                   50
  Common Stock, $.001 par value, 24,000,000 shares authorized:
    Class A common stock, 23,999,000 shares authorized,
      18,739,265 issued and outstanding                                  18,739
    Class B common stock, 1,000 shares authorized, none issued
      and outstanding                                                         -
    Additional paid-in capital                                       27,358,174
    Notes receivable - stockholders                                  (3,733,142)
    Accumulated deficit                                             (31,022,247)
                                                                   ------------
     TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                            (7,377,777)
                                                                   ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)               $  4,881,115
                                                                   ============

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

<PAGE>3

                            Onsite Energy Corporation
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)



<TABLE>
<CAPTION>



                                           Three Months Ended March 31,       Nine Months Ended March 31,
                                             2000               1999             2000             1999
                                         -------------     --------------   --------------   --------------

<S>                                      <C>               <C>              <C>              <C>
Revenues                                 $   2,810,630     $   12,626,593   $   14,715,708   $   31,254,053
Utility Revenues                               207,604            141,668        1,109,950          425,004
                                         -------------     --------------   --------------   --------------
  Total revenues                             3,018,234         12,768,261       15,825,658       31,679,057

Cost of sales                                1,631,288          9,309,107       10,992,254       24,979,061
                                         -------------     --------------   --------------   --------------
    Gross margin                             1,386,946          3,459,154        4,833,404        6,699,996

Selling, general, and administrative
  expenses                                   2,019,491          2,691,633        7,166,465        8,139,931
Depreciation and amortization expense          128,108            258,421          402,981          814,044
Recovery of reserve provided for sale
   or disposal of subsidiary                         -                  -         (358,670)               -
Loss on disposition of subsidiary               72,520                  -           72,520                -
                                         -------------     --------------   --------------   --------------
     Operating income (loss)                  (833,173)           509,100       (2,449,892)      (2,253,979)
                                         -------------     --------------   --------------   --------------
Other income (expense):
   Interest expense                            (57,634)           (56,766)        (250,952)        (261,467)
   Interest income                                 272             30,341           26,277           96,390
                                         -------------     --------------   --------------   --------------
     Total other expense                       (57,362)           (26,425)        (224,675)        (165,077)
                                         -------------     --------------   --------------   --------------
Income (loss) before provision for
  income taxes                                (890,535)           482,675       (2,674,567)      (2,419,056)

Provision for income taxes                       2,858                  -            6,658                -
                                         -------------     --------------   --------------   --------------
Net income (loss)                        $    (893,393)    $      482,675   $   (2,681,225)  $   (2,419,056)
                                         =============     ==============   ==============   ==============
Net income (loss) allocated to common
  shareholders                           $    (981,108)    $      431,079   $   (3,531,702)  $   (2,546,394)
                                         =============     ==============   ==============   ==============
Income (loss) per common share - basic:  $       (0.05)    $         0.02   $        (0.19)  $        (0.14)
                                         =============     ==============   ==============   ==============
Income (loss) per common share - diluted:            *     $         0.02                *                *
                                         =============     ==============   ==============   ==============
Weighted average number of shares
   used in per common share calculation
   - basic                                  18,033,932         18,537,128       18,218,903       18,433,065
                                         =============     ==============   ==============   ==============
Weighted average number of shares
   used in per common share calculation
   - diluted:                                        *         22,567,490                *                *
                                         =============     ==============   ==============   ==============

</TABLE>

*Not applicable as effect would be anti-dilutive


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


<PAGE>4


                            Onsite Energy Corporation
                  Condensed Consolidated Statement of Cashflows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                    Nine Months Ended March 31,
                                                                       2000              1999
                                                                   ------------      ------------

<S>                                                              <C>                <C>
Cash flows from operating activities:

Net loss                                                           $ (2,681,225)     $ (2,419,056)
Adjustments to reconcile net loss to net cash (used in)
  operating activities:
    Amortization of excess purchase price over net assets
      acquired                                                                -           376,793
    Loss on sale of assets                                               72,520                 -
    Provision for bad debts                                              (4,000)           90,000
    Depreciation                                                        402,981           437,251
    Recovery of reserve provided for sale or disposal of
      subsidiaries                                                     (358,670)                -
    Non-cash Compensation related to stock issuancce                     47,500                 -
    Non-cash Compensation related to stock issued to 401k                46,283                 -
(Increase) decrease:
    Accounts receivable                                               3,720,472        (3,125,213)
    Costs and estimated earnings in excess of billings on
      uncompleted contracts                                             307,551        (1,542,681)
    Inventory                                                             6,411           (10,803)
    Other assets                                                        (11,018)          139,877
    Capitalized project costs                                          (366,255)          131,720
    Cash-restricted                                                     147,059            24,141
Increase (decrease):
    Accounts payable                                                 (1,006,972)        5,201,100
    Billings in excess of costs and estimated earnings on
      uncompleted contracts                                             136,998                 -
    Accrued expenses and other liabilities                             (730,231)         (478,676)
    Deferred income                                                    (154,607)          (31,735)
                                                                   ------------      ------------
      Net cash  (used in) operating activities                         (425,203)       (1,207,282)
                                                                   ------------      ------------
 Cash flows from investing activities:
    Purchases of property and equipment                                 (29,250)          (63,670)
    Loans to shareholders                                                46,699        (1,837,394)
    Proceeds from sale of assets                                        296,697                 -
                                                                   ------------      ------------
      Net cash provided by (used in) investing activities               314,146        (1,901,064)
                                                                   ------------      ------------
 Cash flows from financing activities:
    Proceeds from issuance of preferred stock                         1,000,000         2,000,000
    Proceeds from exercise of stock options                                   -            23,479
    Proceeds from borrowings, net                                       152,942           153,634
    Repayment of notes payable - related party                         (211,914)         (178,266)
    Repayment of notes payable                                       (1,651,112)         (404,766)
                                                                   ------------      ------------
      Net cash provided by (used in) financing activities              (710,084)        1,594,081
                                                                   ------------      ------------
 Net decrease in cash                                                  (821,141)       (1,514,265)

 Cash, beginning of period                                              900,408         2,093,006
                                                                   ------------      ------------
 Cash, end of period                                               $     79,267      $    578,741
                                                                   ============      ============

</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

<PAGE>5

                            ONSITE ENERGY CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:   As  contemplated  by  the  Securities  and  Exchange  Commission under
          Item 310 of Regulation S-B, the accompanying  financial statements and
          footnotes  have been  condensed  and do not  contain  all  disclosures
          required by generally accepted  accounting  principles and, therefore,
          should be read in  conjunction  with the Form 10-KSB for Onsite Energy
          Corporation dba ONSITE SYCOM Energy  Corporation (the "Company") as of
          and for the year  ended June 30,  1999 (as the same has been  amended)
          and all other subsequent  filings.  In the opinion of management,  the
          accompanying  unaudited  financial  statements contain all adjustments
          (consisting  of normal  recurring  adjustments)  necessary  to present
          fairly its financial  position and results of its  operations  for the
          interim period.

NOTE 2:   The  consolidated  balance  sheet  as  of  March  31,  2000,  and  the
          consolidated statements of operations and cash flows for the three and
          nine month  periods  ended  March 31,  2000 and 1999,  represents  the
          financial  position and results of  operations  of the Company and are
          not  necessarily  indicative  of the results that will be achieved for
          the entire fiscal year.

NOTE 3:   Financial  Statement  Restatement.  The  Company had  previously  been
          corresponding with the SEC regarding the Company's Form 10-KSB for the
          year ended June 30, 1998. In response to information  submitted by the
          Company,  on December 3, 1999, the SEC sent a comment letter directing
          the Company to restate its financial  statements  for each of the last
          three fiscal years ended June 30, 1999,  1998, and 1997 as well as for
          the quarter ended September 30, 1999. The restatement is the result of
          a review of the  Company's  accounting  policies  as it related to the
          timing of the recognition of revenues and expenses.

          The  SEC  took  exception  to  certain   applications   of  accounting
          principles  as  applied  by the  Company in the areas of the timing of
          revenue recognition where utility incentive payments are a part of the
          Company's  revenue  stream,  the  timing of revenue  recognition  with
          respect to the sale of future utility revenue  payments and the timing
          of revenue and expense  recognition  relative to contracts  containing
          future commitments of services following the implementation of certain
          projects.  As a result,  the Company  restated  its  previously  filed
          financial  statements  for each of the fiscal  years  ending  June 30,
          1997,  1998 and 1999,  as well as the first (a second  amendment)  and
          second fiscal quarters ended September 30, 1999 and December 31, 1999.

<PAGE>6

          The  Company  implemented  several  projects  in fiscal 1998 where the
          price to the customer was less than the cost to implement the project,
          creating a loss for accounting purposes. This "loss" was recovered and
          profits  were  achieved  through  the  Company's  retaining a share of
          utility incentive  payments that resulted from energy savings from the
          implemented  project.  In these instances,  the Company  estimated its
          revenue  from these  utility  incentive  payments and  recognized  the
          revenue as the project was being  implemented  using the percentage of
          completion  methodology.  The SEC has  required  the  Company to defer
          recognition  of the utility  incentive  payment  component  of revenue
          until the point in time that the  utility is billed for the  incentive
          payments.  Generally, these billings occur on a quarterly basis over a
          three year period.

          Further,  the Company  sold other  future  utility  incentive  payment
          streams to a third party on a non-recourse  basis.  At the time of the
          sale, in fiscal 1997 and 1998, the Company  recognized  revenue to the
          extent it received  cash.  The SEC has  required the Company to record
          these  payments as a  financing  transaction  (debt) and to  recognize
          revenue  related to the  utility  incentive  payments  on an as billed
          basis, again quarterly over a three year period.

          In addition,  the Company has a small number of contracts for which it
          has a  commitment  to provide  relamping  and other  ongoing  services
          several  years after the initial  implementation  of the project.  The
          Company  originally  recognized all the revenue and an estimate of the
          future cost as the project was being implemented. The SEC has required
          the  Company  to defer a portion  of the  revenue  and  eliminate  the
          reserve for future cost until the relampings actually occur.

          The  following   table   presents  the  statements  of  operations  as
          originally  filed and as amended for the three and nine month  periods
          ended March 31, 1999:

<TABLE>
<CAPTION>


                                                    Three Months Ended                          Nine Months Ended
                                                      March 31, 1999                              March 31, 1999

                                          As Originally Filed       As Restated       As Originally Filed      As Restated
                                          -------------------      -------------      -------------------      ------------
<S>                                          <C>                   <C>                    <C>                  <C>
Revenues                                     $ 12,632,384          $ 12,768,261           $ 31,271,427         $ 31,679,057
                                             ============          ============           ============         ============
Net income (loss)                            $    374,787          $    482,675           $ (2,742,720)        $ (2,419,056)
                                             ============          ============           ============         ============
Net income (loss per share) - basic          $       0.02          $       0.02           $      (0.16)        $      (0.14)
                                             ============          ============           ============         ============
Net income (loss per share) - diluted        $       0.02          $       0.02                      -                    -
                                             ============          ============           ============         ============
</TABLE>

*Not applicable as effect would be anti-dilutive




<PAGE>7


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

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995. With the exception of historical facts
stated  herein,  the matters  discussed  in this  quarterly  report are "forward
looking" statements that involve risks and uncertainties that could cause actual
results to differ  materially  from  projected  results.  The "forward  looking"
statements  contained  herein  are  cross-referenced  to  this  paragraph.  Such
"forward  looking"  statements  include,  but are not  necessarily  limited  to,
statements  regarding  anticipated  levels of future  revenue and earnings  from
operations of the Company, projected costs and expenses related to the Company's
energy  services  agreements,  and the  availability  of future  debt and equity
capital on  commercially  reasonable  terms.  Factors  that could  cause  actual
results  to  differ  materially  include,  in  addition  to  the  other  factors
identified  in this  report,  the cyclical  and  volatile  price of energy,  the
inability to continue to contract  sufficient  customers to replace contracts as
they become completed,  unanticipated  delays in the approval of proposed energy
efficiency  measures by the  Company's  customers,  delays in the receipt of, or
failure to receive  necessary  governmental or utility permits or approvals,  or
the renewals thereof,  risks and uncertainties  relating to general economic and
political conditions, both domestically and internationally,  changes in the law
and regulations governing the Company's activities as an energy services company
and the  activities  of the nation's  regulators  and public  utilities  seeking
energy  efficiency as a cost  effective  alternative to  constructing  new power
generation  facilities,  results of project specific and company working capital
and financing efforts and market conditions,  and other risk factors detailed in
the Company's  Securities  and Exchange  Commission  filings  including the risk
factors  set forth in the  Company's  Form 10-KSB for the fiscal year ended June
30, 1999 (as the same has been  amended).  Readers of this report are  cautioned
not to put undue reliance on "forward  looking"  statements  which are, by their
nature,  uncertain as reliable  indicators  of future  performance.  The Company
disclaims any intent or obligation to publicly  update these  "forward  looking"
statements, whether as a result of new information, future events or otherwise.

Background

The Company is an energy services company ("ESCO") that assists energy customers
in lowering their energy costs by developing,  engineering,  installing,  owning
and  operating  efficient,  environmentally  sound energy  efficiency  and power
supply  projects,  and  advising  customers  on  the  purchasing  of  energy  in
deregulating  energy  markets.  The Company  offers its services to  industrial,
commercial and institutional  customers. By combining development,  engineering,
analysis,  and project and financial  management  skills, the Company provides a
complete  package of  services,  ranging  from  feasibility  assessment  through
construction and operation for projects incorporating energy efficient lighting,
energy  management  systems,  heating,  ventilation and air conditioning  (HVAC)
upgrades,  cogeneration and other energy efficiency measures.  In addition,  the
Company offers bill auditing,  tariff  analysis,  transmission  and distribution
analysis and  upgrades,  and  aggregation  services.  The Company also  provides
professional consulting services in the areas of direct access planning,  market
assessment,  business  strategies,  public policy analysis,  and engineering and
development   services.   The  Company  has  been  accredited  by  the  National
Association of Energy Service Companies. It is the Company's mission to save its
customers money and improve the quality of the environment  through  independent
energy solutions.

As of June 30, 1999, the Company's  auditors issued a qualified  opinion subject
to the  Company's  ability to continue  as a going  concern.  The going  concern
issues are the result of continued  operating  losses,  negative working capital
and a negative  shareholders'  equity.  See the Liquidity and Capital  Resources
discussion  below for  details  of the  Company's  plan for  dealing  with these
issues.

<PAGE>8

In October 1997, the Company acquired Westar Business Services,  Inc., which was
renamed Onsite Business Services,  Inc., and subsequently  renamed Onsite Energy
Services,  Inc. ("OES"). OES previously provided utility services and industrial
water  services  primarily  in the  states of  Kansas,  Missouri  and  Oklahoma.
However,  as a result of the February  2000,  sale of  substantially  all of the
assets of Onsite/Mid-States, Inc. ("OMS"), a wholly-owned subsidiary of OES, and
the loss of certain key  employees of OES in connection  with that  transaction,
all as discussed in detail below, OES currently  focuses primarily on industrial
water services.

In February  1998,  OES acquired the  operating  assets of  Mid-States  Armature
Works, Inc. through its newly-formed  subsidiary,  OMS. OMS provides specialized
medium and high voltage electrical  fabrication,  installation,  maintenance and
repair  services to municipal  utility  customers  and others,  primarily in the
states of Kansas,  Nebraska,  Missouri, Iowa and Oklahoma. In February 2000, OMS
completed  a  transaction  to sell  substantially  all of the assets of OMS to a
private  buyer in  exchange  for  $300,000  cash plus  uncollected  earnings  on
existing  projects that were  transferred as part of the assets.  As part of the
transaction, all of the employees of OMS and certain key employees of OES ceased
employment  with OMS and/or OES, as applicable,  and began  employment  with the
buyer.

In April 1998,  the Company  formed Onsite Energy de Panama,  S.A., a Panamanian
corporation, to facilitate the development and acquisition of potential projects
in  Panama  and Latin  America.  There has been no  financial  activity  in this
subsidiary since its inception.

In June 1998, the Company acquired Lighting Technology  Services,  Inc. ("LTS").
LTS  provides  energy  efficiency  projects  through  retrofits  of lighting and
controls either  independently  or as a  subcontractor  to other energy services
companies  primarily in Southern  California.  Effective September 30, 1999, the
Company  sold 95 percent of its  interest in LTS. In exchange  for the shares of
LTS, the Company  received the 690,000  shares of the  Company's  Class A Common
Stock that it originally had issued in connection  with the  acquisition of LTS,
as well as a 10 year non-interest bearing note for approximately $936,000, which
may be repaid by LTS by providing lighting services to the Company.  The Company
incurred a loss of approximately  $652,000 as a result of the sale. In addition,
the  note  has  been  fully   reserved  due  to  uncertainty   surrounding   its
recoverability.

On June 30, 1998,  the Company  acquired the assets and certain  liabilities  of
SYCOM Enterprises,  LLC ("SYCOM LLC"), through a newly-formed subsidiary,  SYCOM
ONSITE Corporation ("SO Corporation"). SYCOM LLC was also an ESCO with customers
primarily on the East Coast of the United States.

Effective April 1, 1999, the Company formed REEP Onsite,  Inc. ("REEP") and ERSI
Onsite,  Inc.  ("ERSI"),  for the purpose of acquiring  substantially all of the
assets and certain  liabilities of REEP, Inc. REEP provides  residential  energy
services  while ERSI is a commercial  lighting  contractor.  In the fiscal first
quarter,  the Company made a decision to explore the sale or  disposition of its
lighting subsidiaries.  Unless the context indicates otherwise, reference to the
Company shall include all of its wholly-owned subsidiaries.

Since the close of the SYCOM  transaction in June 1998,  Onsite has  experienced
significant  losses and as a result has been unable to provide  sufficient loans
to SYCOM  Corporation  to enable  SYCOM  Corporation  and its  affiliate,  SYCOM
Enterprises,  L.P.  ("SYCOM LP"),  to make the requisite  payments on a previous
loan from Public Service Conservation  Resources  Corporation ("PSCRC") to SYCOM
LP.  PSCRC has  given a notice to SYCOM  Corporation  and  SYCOM LP  alleging  a
default by SYCOM LP under its  agreements  with  PSCRC.  The  Company  has given
notice to SYCOM  Corporation of the  termination of the Sale and  Noncompetition
Agreement,  given in accordance with the Company's  rights under that Agreement,
as a result of the PSCRC default notice and the Company's continuing losses. The

<PAGE>9


Company,  however,  will retain the project  assets  purchased from SYCOM LLC in
June 1998 as well as projects  developed since that date. In connection with the
notice of  termination,  S. Lynn  Sutcliffe  resigned  as the  President  of the
Company.

The Company will maintain its  subsidiary,  SO  Corporation,  for the purpose of
completing several long-term construction projects as well as for the management
of other revenue generating  activities and to meet its ongoing  commitments for
M&V for projects primarily located on the East Coast.  Efforts by SO Corporation
to develop any new business in this region will cease as of June 30, 2000.

In  the  fiscal  year  ended  June  30,  1999,  SO  Corporation   accounted  for
approximately  $20,000,000  in revenues and  approximately  $3.700,000  in gross
margin.  In addition,  SO Corporation had  approximately  $5.400,000 in selling,
general  and  administrative  expenses  (`S,G&A").  It is  anticipated  that the
revenue,  margin  contribution  and  S,G & A will be  substantially  less in the
fiscal year ended June 30, 2000,  and that all revenue and expense  amounts will
continue to decline in future years.

As a result of the disposition of subsidiaries and the decision to terminate its
arrangement  with SYCOM, the size of the Company has been reduced to essentially
how it existed at the end of the fiscal  year  1997.  The  Company  has become a
smaller ESCO,  without as broad a national exposure as it had over the course of
the last two fiscal  years.  The  Company,  as it exists  today,  will  generate
significantly less in revenues and expenses than it had generated in fiscal 1999
and what is expected in the fiscal year ending June 30, 2000.

Pursuant  to the  Certificate  of  Designations  for the  Series  C  Convertible
Preferred  Stock  (the  "Series  C  Stock"),  each  holder  of Series C Stock is
entitled,  when and as declared by the Board of Directors of the Company and out
of any funds legally  available  therefore to an annual  dividend at the rate of
9.75 percent of the  liquidation  preference  ($5 per share),  which dividend is
payable  quarterly.  All of the issued and outstanding  shares of Series C Stock
are  held  by  Westar  Capital,  Inc.  ("Westar").   Under  the  Certificate  of
Designations if, at any time, four or more quarterly  dividends,  whether or not
consecutive,  on the Series C Stock are in default,  in whole,  or in part,  the
holders  of the  Series C Stock are  entitled  to elect the  smallest  number of
directors  as would  constitute  a  majority  of the Board of  Directors  of the
Company and the  holders of the  Company's  Class A Common  Stock as a class are
entitled to elect the remaining directors.  Additionally, under the October 1997
Stock  Subscription  Agreement  entered into by Westar and the  Company,  Westar
agreed for a period of five years to limit its equity  ownership  of the Company
to 45 percent of the  outstanding  shares of the Class A Common Stock on a fully
diluted basis and to not take certain other actions  related to  controlling  or
attempting to control the Company  unless it receives the  Company's  permission
via the majority vote of the  directors of the Company's  Board of Directors who
are not directors designated by Westar or are affiliates of Westar. However, if,
at any time,  Westar  exercises its rights to elect the majority of the Board of
Directors because four or more quarterly dividends,  whether or not consecutive,
on the Series C Stock are in default,  in whole or in part,  all  directors  are
entitled to vote on such ownership issue and not just the non-Westar  designated
directors.

Dividends  were  declared and paid as required for each of the quarters  through
April 15, 1999.  While the Board has  authorized the payment of dividends to the
extent  such  declaration  and  payment is  allowed  under  applicable  Delaware
corporate law, under Delaware law,  dividends on the Series C Stock could not be
declared  and paid as required on July 15, 1999,  October 15, 1999,  January 15,
2000 or April 15, 2000.  In March 2000,  the Company  reached an agreement  with
Westar  whereby the dividends due on October 15, 1999, and the January 15, 2000,
were waived by Westar in exchange  for the  Company's  release of Westar and its
parent,  Western  Resources,  Inc.,  from certain  non-compete  agreements.  The
Company  remains  delinquent  on the July 15,  1999  (15,823  shares of Series C
Stock) and the April 15, 2000 dividend ($81,040 cash dividend) requirements. The
amounts  waived were 16,208  shares of Series C stock related to the October 15,
1999  dividend  and  $83,015 in cash  dividends  related to the January 15, 2000
dividend.

<PAGE>10

Results of Operations

In order to perform parallel nine and three month comparisons, the activity from
certain  subsidiaries  had to be  eliminated  from each fiscal  year.  The after
elimination  comparisons  exclude  the  activity  of LTS,  REEP  and  ERSI  from
consolidated balances for the nine and three months ended March 31, 2000.

Nine months  ended March 31,  2000  compared to the nine months  ended March 31,
1999

Revenues  for the nine  month  period  ended  March 31,  2000  were  $15,825,658
compared to $31,679,057  for the same period in 1999, a decrease of $15,853,399,
or 50.04 percent.  After the elimination of amounts related to the  subsidiaries
identified  above,  revenues for the nine month period ended March 31, 2000 were
$11,462,876, compared to $23,549,022 for the same period in 1999 The decrease of
$12,086,146,  or 51.32 percent,  was primarily due to the 46.98 percent decrease
in revenue recognized on long term construction contracts at SO Corporation.

Cost of sales for the nine months ended March 31, 2000 was $10,992,254  compared
to  $24,979,061  for the nine  months  ended  March  31,  1999,  a  decrease  of
$13,986,807,  or 55.99  percent.  After  eliminations  of cost of sales from the
identified subsidiaries, cost of sales were $8,180,489 for the nine months ended
March 31,2000,  compared to $17,772,285  for the comparable  period in 1999. The
decrease of $9,591,796,  or 53.97 percent,  was primarily due to the decrease in
the long term construction contracts from So Corporation as mentioned above.

Gross  margin for the nine month  period  ended  March 31,  2000 was  $4,833,404
(30.54 percent of revenues),  compared to $6,699,996 (21.15 percent of revenues)
for the nine month period ended March 31, 1999.  The increase in gross margin as
a  percentage  of sales was the result of several  contracts  in the nine months
ended  March 31, 1999 with lower than  historical  margins as well as lower than
typical margins at LTS. After the  elimination of  subsidiaries  not included in
both  periods,  the gross  margin for the nine month period ended March 31, 2000
was  $3,282,387  (28.63  percent of  revenues),  compared to  $5,776,737  (24.53
percent of revenues) for the nine month period ended March 31, 1999.

Selling,  general and administrative  ("SG&A") expense for the nine months ended
March 31, 2000 was  $7,166,465  compared to $8,139,931 for the nine months ended
March 31, 1999, a decrease of $973,466, or 11.96 percent.  After the elimination
of SG&A expenses of the identified  subsidiaries,  SG&A expenses were $5,801,934
for the nine months ended March 31, 2000,  compared to  $7,309,265  for the same
period on the previous  year, a decrease of $1,507,331,  or 20.62 percent.  This
decrease is  primarily  attributable  to the ongoing  attempt by  management  to
reduce SG&A costs,  including reduction in personnel and locations,  among other
things.

Goodwill  amortization and depreciation  expense for the nine months ended March
31, 2000 was  $402,981,  compared to $814,044 for the  comparable  period in the
previous year, a decrease of $411,063,  or 50.50 percent.  After the elimination
of the identified subsidiaries,  goodwill amortization and depreciation expenses
for the nine months ended March 31, 2000 were $390,702, compared to $581,727 for
the comparable  period last year. The primary reason for the decrease was due to
the elimination of  amortization  of goodwill for SO Corporation  resulting from
the write-off of the remaining goodwill at the fiscal year ended June 30, 1999.

Recovery of reserve  provided for sale or disposal of subsidiary was a reduction
in operating loss (income) of $358,670 for the three months ended  September 30,
1999 and is a non recurring item relating specifically to the sale of 95 percent
of the Company's  interest in LTS. The Company had decided on exploring  options

<PAGE>11


for the sale of LTS, and at that time established a reserve for possible loss of
$1,010,000  based upon  estimates  derived from the facts that existed  prior to
entering into a definitive  agreement for sale.  The ultimate sale resulted in a
loss of approximately $651,000.

Loss on  disposition  of  subsidiary  in the  amount of $72,520 is the result of
selling  substantially all of the assets of OMS for less than the carrying value
of the assets.

Net  other  expense  for the nine  months  ended  March 31,  2000 was  $224,675,
compared to a net other  expense of  $165,077  for the nine month  period  ended
March 31, 1999, an increase of $59,598, or 36.10 percent.  After the elimination
of the activity of the identified subsidiaries,  net other expense was $227,464,
compared to $100,252 for the same period in 1999,  an increase of  $127,212,  or
126.89 percent. The increase is due to a reduction in interest income charged to
related parties in the current year.

Net loss for the nine months ended March 31, 2000 was $2,681,225,  or $0.19 loss
per share,  compared to net loss of $2,419,056,  or $0.14 loss per share for the
same period in 1999.  After the  elimination  of revenues and expenses  from the
identified subsidiaries,  net loss for the six month period ended March 31, 1999
was $3,300,861, compared to $2,220,015 for the comparable period in 1999.

Three months  ended March 31, 2000  compared to the three months ended March 31,
1999

Revenues  for the three  month  period  ended  March 31,  2000 were  $3,018,234,
compared  to  $12,768,261  for the three  month  period  ended  March 31, 1999 a
decrease  of  $9,750,027,  or 76.36  percent.  In order to  perform  a  parallel
comparison,   revenues  and  expenses  of  the  identified   subsidiaries   were
eliminated.  After  eliminations of these  subsidiaries,  revenues for the three
month period ended March 31, 2000 were  $3,191,882,  compared to $11,276,626 for
the same  period in 1999,  a decrease  of  $8,084,744,  or 71.69  percent.  This
decrease  is  primarily  attributable  to the  decrease  in revenue on long term
construction contracts at SO Corporation of $8,145,270.

Cost of sales for the three month period  ended March 31, 2000 were  $1,631,288,
compared to  $9,309,107  for the same period ended March 31, 1999, a decrease of
$7,677,819,  or 82.48  percent.  After the  elimination of the activity from the
identified  subsidiaries,  the cost of sales for the three  month  period  ended
March 31, 2000 were $1,732,737, compared to $7,955,216 for the comparable period
in 1999, a decrease of $6,222,479,  or 78.22 percent. This decrease is primarily
attributable to the decline in revenues on long term  construction  contracts at
SO Corporation as mentioned above.

Gross margin for the three months ended March 31, 2000,  was  $1,386,946  (45.95
percent of revenues), compared to $3,459,154 (27.09 percent of revenues) for the
three months ended March 31, 1999. After the elimination of revenues and cost of
sales of the identified subsidiaries, gross margin was $1,459,145 (45.71 percent
of revenues)  for the three months ended March 31, 2000,  compared to $3,321,410
(29.45 percent of revenues) for the comparable  period in the previous year. The
increase as percentage of revenue was primarily the result of a concentration on
consulting  projects in the quarter ended March 31, 2000,  which  generally have
higher gross margins.

SG&A expense was $2,019,491 for the three months ended March 31, 2000,  compared
to $2,691,633 for the three months ended March 31, 1999, a decrease of $672,142,
or 24.97  percent.  After the  elimination  of SG&A expense from the  identified
subsidiaries, SG&A expense was $2,031,351 for the three month period ended March
31, 2000, compared to $2,410,942 for the comparable period in the previous year,
a decrease of $379,591, or 15.74 percent. The decrease was the result of efforts
to reduce SG&A expenses  through a reduction in personnel and  locations,  among
other things.

<PAGE>12

Goodwill  amortization and depreciation  expense for the quarter ended March 31,
2000 was  $128,108,  compared  to  $258,421  for the  comparable  quarter in the
previous year, a decrease of $130,313,  or 50.43 percent.  After the elimination
of the identified  subsidiaries,  goodwill amortization and depreciation expense
for the three months ended March 31, 2000 was $128,108, compared to $183,422 for
the comparable  period last year, a decrease of $55,314,  or 30.16 percent.  The
primary reason for the decrease was due to the  elimination of  amortization  of
goodwill  for SO  Corporation  resulting  from the  reduction  of the  remaining
goodwill at the fiscal year ended June 30, 1999.

Net other expense was $57,362 in the three months ended March 31, 2000, compared
to net other expense of $26,425 for the three month period ended March 31, 1999,
an increase of $30,937,  or 117.07  percent.  After the elimination of net other
income and  expense  from the  identified  subsidiaries,  net other  expense was
$58,562 for the three months ended March 31, 2000,  compared to net other income
of $34,955 for the same period in 1999, an increase of $93,517.  The change from
period to period was primarily  attributable to interest income on related party
notes receivable in the previous year periods.

Net loss for the three months ended March 31, 2000 was  $893,393,  or $0.05 loss
per share,  compared to net income of $482,675, or $0.02 income per share. After
the  elimination  of revenues and expenses of the identified  subsidiaries,  net
loss for the quarter ended March 31, 2000 was  $834,202,  compared to net income
of  $756,492  for same  period  in the  previous  fiscal  year,  a  decrease  of
$1,594,694.

Liquidity and Capital Resources

The  Company's  cash and cash  equivalents  were  $79,267 as of March 31,  2000,
compared to  $900,408  as of June 30,  1999,  a decrease  of  $821,141.  Working
capital was a negative  $7,508,224 as of March 31, 2000,  compared to a negative
$6,511,390 as of June 30, 1999.

Cash flows used in operating  activities were $425,203 for the nine month period
ended March 31,  2000  compared to cash flows used in  operating  activities  of
$1,207,282 for the same nine month period in 1999.

Cash flows  provided by investing  activities in the nine months ended March 31,
2000 were $314,146,  compared to $1,901,064 used in investing  activities in the
comparable period in the prior year.

Cash flows used in financing  activities were $710,084 for the nine months ended
March 31,  2000,  compared to cash flows  provided by  financing  activities  of
$1,594,081 for the nine month period ended March 31, 1999.

The Company has shown  significant  net losses for the year ended June 30, 1999,
as well as the nine months ended March 31, 2000.  Management  believes  that the
Company will be able to generate  revenues and  operating  efficiencies  through
sales and/or financing of long term project revenue streams,  sales of assets or
subsidiaries, as well as by other means to achieve profitable operations. During
the quarter ended March 31, 2000,  the Company took steps to mitigate the losses
and enhance its future viability. Subsequent to its most recent fiscal year end,
the  Company  privately  placed  shares of newly  created  Series E  Convertible
Preferred  Stock  ("Series E Stock") to existing  shareholders  for  $1,000,000.
Concurrent  with this private  placement,  members of senior  management  of the
Company agreed to receive  shares of the Company's  Class A Common Stock in lieu
of a portion of their  salary in an effort to reduce  cash  outflows  related to
compensation.  During the first quarter, a decision was made to explore the sale
or  disposition  of the  Company's  lighting  subsidiaries,  which could provide
capital and reduce operating  losses,  and will allow management to better focus
on its core ESCO business  activities.  Subsequent  to September  30, 1999,  the
Company sold 95 percent of its interest in LTS. Subsequent to December 31, 1999,
OMS sold  substantially all of its assets to a private party. As a result of the
sale, OES was able to reduce staff from six persons to one person.  In addition,

<PAGE>13

subsequent to December 31, 1999, 17 persons were terminated by SYCOM Corporation
in the Company's East Coast operations. The Company also recently gave notice to
SYCOM  Corporation of the termination of the Sale and  Noncompetition  Agreement
between the Company and SYCOM  Corporation,  in  accordance  with the  Company's
rights under that Agreement.

In  addition,  the  Company  has  been  and is  continuing  exploring  strategic
relationships  with  companies  that could involve an investment in the Company.
The Company  also may raise cash  through  the sale of long term future  revenue
streams that it currently  owns or has rights to under current  agreements.  The
Company also is examining ways to further  reduce  overhead  including,  but not
limited to, the  possibility  of targeted staff  reductions,  asset sales or the
sale of a portion of its operations to a third party that would provide  ongoing
offset to the overall overhead of the Company.  Management  believes that all of
the above actions will allow the Company to continue as a going concern.  Future
cash requirements depend on the Company's  profitability,  its ability to manage
working  capital  requirements  and its  rate of  growth.  Additional  financing
through the sale of securities may have an ownership dilution effect on existing
shareholders.

Part II - Other Information

Item 1. Legal Proceedings.

In June 1999, a former  officer of the Company (July 1998 through  October 1998)
filed a suit (Superior  Court of the State of  California,  County of San Diego,
North County Branch,  Case No. N081711) alleging fraud,  negligence and wrongful
discharge in connection  with his  employment  termination  in October 1998. The
Company  settled this matter in April 2000.  Any portion of the  settlement  not
covered by insurance was immaterial and accrued for as of March 31, 2000.


In March 2000,  Powerweb  Technologies,  Inc., a subcontractor to ERSI, filed an
action  (Superior Court of New Jersey,  Law Division,  Essex County,  Docket No.
ESX-L-2071-00)  against  ERSI and the Company  alleging  breach of contract  and
related causes of action in connection with one of the Company's  projects.  The
suit seeks payment of monies  ($121,800)  allegedly due under  subcontracts,  as
well as interest,  costs of suit and punitive damages.  Because the subcontracts
contain arbitration  provisions  requiring that any disputes between the parties
be settled by binding arbitration, the Company has filed a motion to dismiss the
action. The Company and ERSI are making efforts to settle this matter;  however,
no settlement agreement has been reached.

In April  2000,  the Company  was served  with two  separate  actions by General
Accident  Insurance  Company  of  America  (Superior  Court of New  Jersey,  Law
Division,  Atlantic  County,  Docket No.  ATL-L-93-00  and Superior Court of New
Jersey,  Law Division,  Morris County,  Docket No. L-214-00) against the Company
and other parties  alleging breach of contract and related actions in connection
with one of the Company's  projects.  The actions seek  indemnification  (in the
amount of $710,562)  allegedly owed under an indemnity agreement executed by the
Company,  plus  interest,  costs and other  damages.  The  Company has filed its
answers  in both  actions.  Additionally,  in May  2000,  D.  Falasca  Plumbing,
Heating,  Cooling,  Inc., a subcontractor to the Company on this project,  filed
certain cross-claims against the Company in the above actions alleging breach of
contract and related  causes of actions in  connection  with this  project.  The
cross-claims  seek payment of monies  ($757,337)  allegedly  owed under  certain
agreements,  including a  subcontract,  plus  interest,  costs of suit and other
alleged damages.  The Company was served with copies of these claims in late May
and  early  June  2000,  and is in  the  process  of  preparing  its  responsive
pleadings.

<PAGE>14


Item 2.    Changes in Securities - Not Applicable

Item 3.    Defaults upon Senior Securities - Not Applicable

Item 4.    Submission of Matters to a Vote of Security Holders - Not Applicable

Item 5.    Other - Not Applicable

Item 6.    Exhibits and Reports on Form 8-K

a)      Reports on Form 8-K - None

           Exhibit 27        Financial Data Schedules


<PAGE>15

                                   SIGNATURES


In  accordance  with  the  requirements  of the  Securities  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                          ONSITE ENERGY CORPORATION



Date: June 23, 2000                  By:  \s\ Richard T. Sperberg
                                          -----------------------------------
                                          Richard T. Sperberg
                                          Chief Executive Officer


                                     By:  \s\ J. Bradford Hanson
                                          -----------------------------------
                                          J. Bradford Hanson
                                          Chief Financial Officer and
                                          Principal Accounting Officer