##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




Form 10-K SB



(X BOX)   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: September 30, 2001

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

For the transition period from _______________________ to _____________
Commission file number   333-55460

PODS, Inc.




(Name of small business issuer in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 59-3589361                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |  |                                     
|                                                              
|                                                              
|                                                              
|                                                              
|6061 45th Street N St
St Petersburg FL.                        |  | 33714                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          

Issuers telephone number (727) 528-6300




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

|                           |  |                                               
|-------------------------- |  | ----------------------------------------------
|Title of each class
 
None |  | Name of each exchange on which
registered
None

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




None





(Title of class)


None





(Title of class)


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.   
(X BOX)   Yes   (BOX)   No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not 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-K SB or any amendment to this
Form 10-K SB(X BOX).





---



##### 



State issuers revenues for its most recent fiscal year.   $12,011,571

The Company is unable to state the aggregate market value of the voting and non-voting common equity
held by non-affiliates because the Companys common
equity is not publicly traded and no valuation of the shares has been
performed.

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date.   11,003,237

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-K SB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant
to Rule 424(b) or (c) of the Securities Act of 1933
(Securities Act). None

Transitional Small Business Disclosure Format (Check one):  
Yes   (BOX) ;   No   (X BOX)



---



##### 



PART I

Item 1.  Description of Business.

Summary

We began operating a PODS storage and moving business through a
predecessor in January, 1998. PODS, Inc., a Florida corporation, was formed in
July, 1999. Our executive offices are located at 6061 45th Street North, St.
Petersburg, Florida 33714. Our telephone number is (727) 528-6300. Our website
address, which contains information about us, is www.podsusa.com. Information
contained in our website is not part of this prospectus.

We operate company-owned PODS storage and moving businesses in the Tampa
Bay area of Florida and in Ft. Lauderdale, Florida. We are also a franchisor of PODS
protected franchise areas in 23 metropolitan areas in thirteen states. PODS is an acronym
for Portable On Demand Storage. The PODS concept is simple:



| |  |  | deliver the two most popular sizes of mini-storage units by truck to the customers location;                                            
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | gently lower the storage unit onto the driveway;                                                                                         
|
| |  |  | allow the customer to pack the storage unit and call when it is ready for pick up; and,                                                  
|
| |  |  | load the storage unit on a truck and store it in a centrally-located warehouse until needed
or transport it to another metropolitan area.

This concept has several advantages over other moving and storage methods. It:



| |  |  | eliminates the need for us to have a costly retail storage location (usually on high-traffic
streets);        
| | - |  | --------------------------------------------------------------------------------------------------------------
|
| |  |  | eliminates the need for customers to rent a truck and storage space, making it easier to
move and store goods;
|
| |  |  | allows us to use our trucks more efficiently; and,                                                            
|
| |  |  | allows us to charge lower prices and provide greater convenience to our customers.                            

1



---



##### 



Selected Financial Data

In the table below, we provide you with selected financial data of PODS,
Inc. We have prepared the information for the year ended September 30, 2001
and the nine-month period ended September 30, 2000, from the financial
statements audited by Ernst & Young LLP, independent auditors.

When you read this selected financial data, it is important that you read
along with it the historical financial statements and related notes included in
this annual report as well as the section of this report titled
Managements Discussion and Analysis of Financial Condition and Results of
Operations.

|                                                      |  |                                     |            |               |  |   |            |  
|----------------------------------------------------- |  | ----------------------------------- | ---------- | ------------- |  | - | ---------- | -
|                                                      |  | 12-Month and Nine Month Years Ended
|                                                      |  |                                    
|                                                      |  | September 30,                       |            | September 30,
|                                                      |  | 2001                                |            | 2000         
|                                                      |  |                                     |            |              
|Statement of Operations Data:                         |  |                                     |            |               |  |   |            |  
|                                                     
|                                                     
|                                                     
|                                                     
|Revenues                                              |  | $                                   | 12,011,571 |               |  | $ | 5,992,823  |  
|                                                     
|                                                     
|                                                     
|                                                     
|Net Loss                                              |  | $                                   | (1,233,380 | )             |  | $ | (1,280,832 | )
|                                                     
|                                                     
|                                                     
|                                                     
|Loss per share basic
and diluted                      |  | $                                   | (0.11      | )             |  |   | (0.12      | )
|                                                     
|                                                     
|                                                     
|                                                     
|Weighted average shares outstandingbasic
and diluted |  |                                     | 11,003,237 |               |  |   | 11,003,237 |  
|                                                     
|                                                     
|                                                     
|                                                     
|Balance Sheet:                                        |  |                                     |            |               |  |   |            |  
|                                                     
|                                                     
|                                                     
|                                                     
|Total Assets                                          |  | $                                   | 10,915,093 |               |  | $ | 7,280,691  |  
|                                                     
|                                                     
|                                                     
|                                                     
|Long Term Obligations                                 |  | $                                   | 6,294,240  |               |  | $ | 2,437,767  |  

2



---



##### 



FORWARD-LOOKING STATEMENTS

General.This annual report contains statements that plan for or
anticipate the future. Forward-looking statements include statements about the
future of the storage and moving industry, statements about our expectations,
future business plans and strategies, and most other statements that arent
historical in nature. In this annual report, forward-looking statements are
generally identified by the words anticipate, plan, intend, believe,
expect, estimate, and the like. In particular, forward looking statements
include our expectation as to our need for additional funds in the future and
our ability to sell additional franchises, borrow additional funds,
the sale of additional debentures, our
expectations that rental and delivery income will increase in the future, and
our expectation that our operations, borrowings or capital infusions will
generate sufficient cash to sustain our operations, to pay interest on the debentures and to pay the
debentures at maturity. Because forward-looking statements involve future risks
and uncertainties, there are factors that could cause actual results to differ
materially from those expressed or implied. For example, a few of the
uncertainties that could affect the accuracy of forward-looking
statements, include:



| |  |  | changes in general economic and business conditions affecting the
storage and moving business;                        
| | - |  | ----------------------------------------------------------------------------------------------------------------------
|
| |  |  | our ability to develop adequate consumer demand for PODS in our
existing markets and in each new market we enter; and,
|
| |  |  | changes in our business strategies.                                                                                   

3



---



##### 



OUR BUSINESS

General

We are a Florida corporation. We were formed in July, 1999, and acquired
the assets of PODS, LLC, a Florida limited liability company in September,
1999. PODS, LLC was formed in August, 1998, when it succeeded to the business
of Rope Development Partnership. Rope Development Partnership began its
operation of a PODS moving and storage business in Pinellas County, Florida in
January, 1998. We operate company-owned PODS moving and storage businesses and
we are a franchisor of PODS protected franchise territories in 23
metropolitan areas.

Background.In October of 1996, our founders made a decision to enter the
mini-storage business. They formed a partnership and began building a
mini-storage warehouse. The high cost of suitable real estate and limited
location sites available for future facilities coupled with the red tape
encountered while trying to gain the numerous required city, county and state
approvals for their business soon frustrated them. These frustrations led them
to search for a better way to provide storage facilities within the
marketplace. Faced with the challenge of trying to offer a more convenient
service to the consumer as well as one that used less expensive warehouse
space, the PODS concept was born.

PODS is an acronym for Portable On Demand Storage, a storage concept which
literally brings the storage facility to the consumer. PODS was created from a
simple concept of delivering the most popular size mini-storage unit by truck
to the customers location, lowering the unit hydraulically onto the customers
driveway and leaving it there to be packed by the consumer. Once packed, the
customer can either leave it at their site for storage or simply phone us to
pick it up and take it to a centrally located warehouse for storage until
needed. PODS can also be moved to any location in any state where we or our
franchisees have operations.

During the fall of 1997, our founders designed, built and tested prototype
PODS and the hydraulic lift system used to move the PODS on to and off of the
trucks. By year-end, they were convinced that PODS was a viable alternative to
the conventional mini-storage method. In January 1998, through a predecessor
company, they began full-scale operations serving Northern Pinellas County,
Florida. These operations included television advertising and a move to the
first PODS warehouse with 10,000 square feet of space. As a result of positive
consumer response within its operating territory and increased awareness of the
PODS business, we began providing service to Southern Pinellas County in March
of 1998 and Hillsborough County Florida in May/June of the same year.

Storage and Warehousing

We currently operate four warehouse locations which provide storage
solutions for Broward, Pinellas, Pasco and Hillsborough Counties in Florida. We
have one manufacturing facility in Florida which produces both the POD container units and
our hydraulic lift systems. We opened a second manufacturing facility
in Illinois during 2001 which produces the POD containers. At
December 14, 2001, there are
over 8,400 PODS in service. We own roughly 2,900 of them, which
are available for rent at our company-owned locations. The remainder are owned
by our franchisees and are rented by them in their territories.

We provide solutions for both individual consumers and businesses in need
of storage facilities. We offer three different types of storage options:



| |  |  | warehouse storage;   
| | - |  | ---------------------
|
| |  |  | on-site storage; and 
|
| |  |  | point-to-point moves.

4



---



##### 



Warehouse Storage.We offer warehouse storage for the consumer who wishes
to rent a POD unit, pack it, and store it for at least one month. Our customers
use monthly warehouse storage rental for:



| |  |  | storage when between homes, either awaiting real estate closing dates
or completion of new construction;
| | - |  | --------------------------------------------------------------------------------------------------------
|
| |  |  | storage of excess personal possessions;                                                                 
|
| |  |  | storage during renovations;                                                                             
|
| |  |  | storage after damage from fire or storms;                                                               
|
| |  |  | storage of business records and files; and                                                              
|
| |  |  | storage of excess business inventory.                                                                   

On-Site Storage.We offer the consumer a choice of storing a rented POD
at their own location instead of at one of our warehouses. POD units are built
from a special laminate material which makes them weatherproof and allows
exposure to the elements without damage to the contents. Our customers use
monthly on- site storage rental for the reasons listed above, and for storage
of special event materials; and contractor materials storage at construction
sites.

Inter/Intra State Moves.In July, 2000, we began offering our customers
the ability to contract for point-to-point moving services both within a
metropolitan area and between metropolitan areas served by us and our
franchisees. We designed the cross-country move program to address the business
questions that arose when a customer intended to move across the boundaries of
one territorys local delivery area and into another territory. This was
particularly important as customers had begun moving from company-owned
territories to franchised territories, from franchised territories to
company-owned and between franchise territories. The program is designed to
assure that our customers receive a consistent level of service defined by us
and that pricing to the customer is consistent. It was also designed to make a
cross territory move as seamless as possible so that the customer will not be
aware they have moved between Company owned and franchised territories.

Since the inception of the cross-country move program, we have completed
approximately 600 cross-country moves. The majority of these moves have been
within the State of Florida. We have not formally advertised or promoted the
use of PODS for cross-country moves at this time. All sales to date have come
from customer requests. As our existing franchises mature and we open new
territories, we expect this business to continue to grow.

Customers use our point-to-point moving services for:



| |  |  | customer relocation; moving to a new home; and          
| | - |  | --------------------------------------------------------
|
| |  |  | business relocation; moving to a new office or facility.

Proprietary Property

We have designed and engineered a hydraulic lift system. We install the
system directly onto trucks which are used to move and transport PODS. Unlike
our competition, we have eliminated the need for a forklift or a tilt-bed truck
to move storage containers. Our proprietary lift system eliminates problems for
the consumer by allowing for a more suitable method of delivery and pick-up. We
have received two U.S. patents for our hydraulic lift system. They expire on
June 6, 2020, and December 5, 2020. Our lift system:



| |  |  | can handle large, heavy containers;
| | - |  | -----------------------------------

5



---



##### 





| |  |  | can deliver and pick-up in restricted spaces;                                                                    
| | - |  | -----------------------------------------------------------------------------------------------------------------
|
| |  |  | does not require additional equipment in order to load and unload the rental units;                              
|
| |  |  | loads and unloads the POD unit without tilting the container, thereby minimizing shifting and damage to contents.

The use of the PODS mark and its distinctive design and color scheme, our
computer software, PODS containers and our patented lift system gives us a
competitive advantage that is essential to our business. We rely on patent and
trademark laws, trade secret protection and confidentiality, and our franchise
agreements to protect our proprietary rights. To date, no infringement claims
have been asserted against us or our franchisees and we know of no competitors
using our marks, trade dress, PODS containers, lift system or computer
software.

We believe that the barriers to starting a portable on demand storage
business are substantial. However, given enough time and money, competitors
offering a similar service could enter the market. For instance, others,
including traditional moving and storage businesses, could develop
substantially equivalent marks, designs, computer systems and lift systems and
use them to compete with us. If they have larger advertising and capital
budgets than we do, they could cut into our market share and require us to
lower our prices to compete, which would reduce our operating margins.

Company-Owned Locations

We currently operate company-owned PODS moving and storage businesses in
the Tampa Bay area of Florida and in Ft. Lauderdale, Florida.

Franchise Locations

The
following table includes information at December 14, 2001, with
respect to the PODS moving and storage franchises we have granted:

|                                 |  |        |          |                |  |            |     |              |  |                  |      |             |       |  |                  | 
|-------------------------------- |  | ------ | -------- | -------------- |  | ---------- | --- | ------------ |  | ---------------- | ---- | ----------- | ----- |  | ---------------- | 
|                                 |  |        |          |                |  | Number of  |     |              |  |                  |      | Date Opened
|Metropolitan                     |  | Date   |          | Franchise      |  | Number of  |     | or Expected 
|Area Served                      |  | Signed |          | Territories(1) |  | PODS Owned |     | Opening Date
|                                 |  |        |          |                |  |            |     |             
|Sarasota, Florida(2)             |  |        | 03/15/99 |                |  |            | 1.5 |              |  |                  | 765  |             |       |  | 06/99            | 
|                                
|                                
|                                
|                                
|Orlando, Florida                 |  |        | 08/16/99 |                |  |            | 4   |              |  |                  | 1054 |             |       |  | 11/99            | 
|                                
|                                
|                                
|                                
|Lee County, Florida(2)           |  |        | 10/20/99 |                |  |            | 1   |              |  | See footnote (3) |      |             | 03/00 | 
|                                
|                                
|                                
|                                
|Minneapolis, Minnesota           |  |        | 01/17/00 |                |  |            | 6   |              |  |                  | 690  |             |       |  | 04/00            | 
|                                
|                                
|                                
|                                
|Dallas, Texas                    |  |        | 03/07/00 |                |  |            | 2   |              |  |                  | 35   |             |       |  | 07/01            | 
|                                
|                                
|                                
|                                
|Indianapolis, Indiana            |  |        | 04/14/00 |                |  |            | 3   |              |  |                  | 523  |             |       |  | 06/00            | 
|                                
|                                
|                                
|                                
|Charlotte, North Carolina        |  |        | 05/01/00 |                |  |            | 1.5 |              |  |                  | 391  |             |       |  | 07/00            | 
|                                
|                                
|                                
|                                
|Dayton, Ohio                     |  |        | 06/29/00 |                |  |            | 2   |              |  |                  | 299  |             |       |  | 08/00            | 
|                                
|                                
|                                
|                                
|Daytona, Florida                 |  |        | 07/27/00 |                |  |            | 1   |              |  |                  | 310  |             |       |  | 09/00            | 
|                                
|                                
|                                
|                                
|Jacksonville, Florida            |  |        | 07/27/00 |                |  |            | 2   |              |  |                  | 340  |             |       |  | 12/00            | 
|                                
|                                
|                                
|                                
|Brevard County, Florida          |  |        | 07/27/00 |                |  |            | 1   |              |  |                  | 108  |             |       |  | 03/01            | 
|                                
|                                
|                                
|                                
|Baton Rouge, Louisiana           |  |        | 11/22/00 |                |  |            | 1.5 |              |  |                  | 196  |             |       |  | 05/01            | 
|                                
|                                
|                                
|                                
|St. Louis, Missouri              |  |        | 12/01/00 |                |  |            | 2   |              |  |                  | 145  |             |       |  | 02/01            | 
|                                
|                                
|                                
|                                
|Memphis, Tennessee               |  |        | 12/01/00 |                |  |            | 2   |              |  |                  |     |             |       |  | See footnote (4) | 
|                                
|                                
|                                
|                                
|Nashville, Tennessee             |  |        | 12/01/00 |                |  |            | 1.5 |              |  |                  |     |             |       |  | 01/02            | 
|                                
|                                
|                                
|                                
|Palm Beach County, Florida       |  |        | 02/06/01 |                |  |            | 2   |              |  |                  | 341  |             |       |  | 04/01            | 
|                                
|                                
|                                
|                                
|Miami, Florida                   |  |        | 03/31/01 |                |  |            | 1   |              |  |                  | 36   |             |       |  | 06/01            | 
|                                
|                                
|                                
|                                
|Warren and Butler Counties, Ohio |  |        | 03/28/01 |                |  |            | 1   |              |  | See footnote (3) |      |             | 04/01 | 
|                                
|                                
|                                
|                                
|Charleston, S.C.                 |  |        | 04/09/01 |                |  |            | 1   |              |  |                  |     |             |       |  | 01/02            | 

6



---



##### 



|               |  |        |          |                |  |            |      |              |  |  |    |             |  |  |       | 
|-------------- |  | ------ | -------- | -------------- |  | ---------- | ---- | ------------ |  |  | -- | ----------- |  |  | ----- | 
|               |  |        |          |                |  | Number of  |      |              |  |  |    | Date Opened
|Metropolitan   |  | Date   |          | Franchise      |  | Number of  |      | or Expected 
|Area Served    |  | Signed |          | Territories(1) |  | PODS Owned |      | Opening Date
|               |  |        |          |                |  |            |      |             
|              
|              
|              
|              
|Atlanta GA     |  |        | 07/12/01 |                |  |            | 2    |              |  |  | 36 |             |  |  | 11/01 | 
|              
|              
|              
|              
|Jackson MS     |  |        | 09/15/01 |                |  |            | 1    |              |  |  | 50 |             |  |  | 10/01 | 
|              
|              
|              
|              
|Columbus OH    |  |        | 09/15/01 |                |  |            | 3.25 |              |  |  | 35 |             |  |  | 12/01 | 
|              
|              
|              
|              
|Kansas City MO |  |        | 11/15/01 |                |  |            | 1    |              |  |  |   |             |  |  | 02/02 | 



---

|(1) |  | A franchise territory is an area containing a population of about
400,000 residents.                                                  
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Initial franchise fee waived.                                                                                                           
|   
|   
|   
|   
|(3) |  | Expanded the territory owned by an existing franchisee. The number of
PODS owned is included in the original franchise territory figure.
|   
|   
|   
|   
|(4) |  | No date has been set for the
opening of this metropolitan area.                                                                         

We have a deposit for three franchise territories in Dallas from a new
potential franchisee. The contract has not been signed as of December 14,
2001.

We enter into a franchise agreement with each of our franchisees. We have
negotiated the terms of the franchise agreements in the past in order to
accelerate the development and growth of our business. Initial franchise fees
per territory have ranged from $30,000 to $75,000. In some cases, payment has
been deferred until no later than opening. We are less likely to negotiate the
terms now and we expect that, in the future, most terms will be non-negotiable.
Our currently offered terms include:



| |  |  | Term of 20 years, with the right to acquire successor franchises upon expiration;                                                                                                                                                                                                                                         
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Initial franchise fees of $75,000 per each protected area with a population of approximately 400,000;                                                                                                                                                                                                                     
|
| |  |  | Royalties payable to us of 8% to 10% of net sales, with a minimum royalty of $3,500 (adjusted by a cost of living
escalator) commencing on the second anniversary of the Franchise Agreement and after the royalty reaches 10%, a 2% refund
if the franchisees performance rating is excellent or satisfactory or better;
|
| |  |  | Requirement to purchase at least 35 PODS containers and 2 lifts from us prior to opening. Prices for the PODS are currently
$1,725 per 12-foot container and $1,976 per 16-foot container. The price of the lifts varies with our materials and
manufacturing costs, but is currently $34,000 each;                       
|
| |  |  | Requirements that franchisees spend minimum amounts on advertising;                                                                                                                                                                                                                                                       
|
| |  |  | A requirement that the franchisee initially lease a warehouse with at least 20-foot ceilings for first year use and that
the franchisee lease or acquire as its first permanent warehouse a 20,000 to 30,000 foot warehouse meeting our
specifications.                                                                   

Expansion Strategy

General.Our business is capital intensive. In order to commence
operations in an area with a population of about 400,000 residents, it is
generally necessary to have at least 35 PODS, two lifts, two trucks and a large
storage warehouse. Because the PODS and lifts are classified as limited-use
assets by asset-based lenders, we have had difficulty obtaining asset-based
loans. Because we are a young company and have not been profitable, non
asset-based loans have only been available to us on a limited basis. As a
result, our expansion strategy has focused on selling protected franchise
territories and using the revenues from franchisees and other available
capital, to fund the establishment of company-owned PODS moving and storage
businesses.

We plan to grow by expanding our existing company-owned operations,
opening new company-owned operations, and selling additional franchises. We may
also enter into joint venture arrangements if the opportunity presents itself.
Among the new markets we are targeting are:



| |  |  | Chicago, Illinois
| | - |  | -----------------

7



---



##### 





| |  |  | Louisville, Kentucky      
| | - |  | --------------------------
|
| |  |  | Baltimore, Maryland       
|
| |  |  | Boston, Massachusetts     
|
| |  |  | Detroit, Michigan         
|
| |  |  | Bergen County, New Jersey 
|
| |  |  | Long Island, New York     
|
| |  |  | Raleigh, North Carolina   
|
| |  |  | Cincinnati, Ohio          
|
| |  |  | Cleveland, Ohio           
|
| |  |  | Philadelphia, Pennsylvania
|
| |  |  | Pittsburgh, Pennsylvania  
|
| |  |  | Providence, Rhode Island  
|
| |  |  | Houston, Texas            
|
| |  |  | San Antonio, Texas        
|
| |  |  | Fairfax County, Virginia  
|
| |  |  | Milwaukee, Wisconsin      

The PODS Concept

General.Unlike traditional self-storage businesses, we deliver large,
weather-resistant storage container units directly to the customers door.
Customers are able to keep PODS at their home or office as long as necessary
(subject to any local regulations), allowing them to pack the units at their
leisure. If storage is desired, we will pick up the container and deliver it to
one of our warehouses where it is stored until directed by the customer to
re-deliver it to a new location. The PODS concept is simple:



| |  |  | deliver the most popular sizes of mini-storage units by truck to the customers location;   
| | - |  | --------------------------------------------------------------------------------------------
|
| |  |  | lower the storage unit onto the driveway;                                                   
|
| |  |  | let the customer pack the storage unit and call when it is ready for pick up; and,          
|
| |  |  | load the storage unit on a truck and store it in a centrally-located warehouse until needed.

This concept has several advantages over other moving/storage methods, including:



| |  |  | eliminating the need for us to have retail storage locations, usually on high-traffic
streets, with real estate costs higher than our warehouse locations;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | eliminating the need for customers to rent both a truck and storage space, making it easier
to move and store goods;                                      
|
| |  |  | allowing us to use our trucks efficiently; and,                                                                                                           
|
| |  |  | allowing us to charge competitive prices in our markets and provide greater convenience to
our customers.                                                 

The PODS concept offers the consumer a service that surpasses traditional
mini storage. When looking for additional storage facilities, the PODS customer
has the added benefit of having the rental unit delivered to their site. Other
storage companies are beginning to enter the portable storage market. Of the
seven of which we are aware, four offer smaller containers and the
seventh offers
approximately the same size container but is unable to lift and move a full
container. The discriminating features of our service offering are:



| |  |  | the specially designed large POD containers;
| | - |  | --------------------------------------------

8



---



##### 





| |  |  | the patented lift system used to deliver and pick up POD units; and,  
| | - |  | ----------------------------------------------------------------------
|
| |  |  | the accommodation of all moving and storage needs with one phone call.

The POD Containers.We have designed and constructed our containers to be
highly durable and to meet the needs of the residential moving and storage
market. We estimate the average useful life of a POD to be 10 years or perhaps
longer for containers stored in our warehouses.

The Lift System.When developing the lift system, we envisioned being
able to accommodate storage customers in a manner that was both convenient and
hassle-free. Typically, our portable storage competitors offer small units to
the customer using either a piggy-back forklift or a tilt-bed truck for
delivery and pick up. Forklifts for this type of operation represent many
drawbacks to the customer, including:



| |  |  | a piggy-back forklift can only handle 3,000 to 4,000 pounds of cargo thereby limiting both the size of the rental unit as
well as the amount of contents to be stored within the unit;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | forklifts cannot operate within restricted spaces and often cause damage to home lawns and landscaping areas; and,                                                                    
|
| |  |  | companies must deal with the logistics of hauling a forklift to and from customer sites.                                                                                              

Tilt-bed trucks also present problems for the storage customer. In order
for a tilt-bed truck to deliver and pick up a rental container it must drag the
container up and down steep inclines while loading and unloading. Such tilting
of rental units causes the contents to shift excessively and thus become
damaged, and frequently cause damage to customer driveways.

Our custom-designed, patented lift system eliminates these problems for
the customer by allowing for a more suitable method of delivery and pick-up.
Our lift system:



| |  |  | can handle large, heavy containers. Using a POD container, the
customer can load the contents of a small 3 bedroom home into one
unit. One POD can handle over five tons of furnishings;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | can deliver and pick-up in restricted spaces. The POD system allows a
unit to be picked up and placed in a space the size of a single car
driveway or a standard parking space, without damaging adjoining
lawns, gardens or structures as a forklift would;                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |  | does not require additional equipment in order to load and unload the
rental units. The POD custom designed lift allows for a gentle
lowering and retrieval of a POD unit using smooth hydraulic power.
During delivery, the POD is suspended from a solid metal framework
that is built right onto the POD delivery truck. The system is
designed to allow the truck to pull forward leaving the lift framework
and POD in place. The POD is then lowered to the ground and
disconnected from the framework. The framework is then loaded back on
the delivery truck and the POD is left for the customer to pack. The
complete loading and unloading processes take approximately 15
minutes; and,
|
| |  |  | loads and unloads the POD unit without tilting the container, thereby
minimizing shifting and damage to contents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Currently, we sell lifts to our franchisees at a price of $34,000 each.

Benefits to the End User.We offer significant advantages over
traditional self-storage operations and do so at competitive prices in the
markets in which we currently operate. The advantages include:

9



---



##### 





| |  |  | No trucks to rent and drive;                             
| | - |  | ---------------------------------------------------------
|
| |  |  | Ease of use and content loading;                         
|
| |  |  | Convenience;                                             
|
| |  |  | Time savings (no unloading at the self-storage facility);
|
| |  |  | Optional storage locations;                              
|
| |  |  | Optional container sizes;                                
|
| |  |  | One-stop shopping; and,                                  
|
| |  |  | Cross-country moves.                                     

No Trucks to Rent and Drive.When renting a POD unit, the need for a
moving truck is eliminated for the customer. Typically when moving and storing
furnishings the customer must first locate and reserve a truck of the
appropriate size. Often they are inexperienced at driving rental vehicles. They
are also responsible for damage to the truck and have liability for accidents.
In addition, many states require the driver of rental trucks to be at least 25
years of age. Since most moves occur during the weekends, the appropriate size
truck is often unavailable, so the renter either ends up renting a truck that
is too small for the job, thereby necessitating multiple trips or, they incur
the increased cost of renting a larger truck than is really needed.

Once a truck is rented, the customer drives it to their location and loads
the truck by carrying their possessions up a ramp or via a hydraulic lift
(which often costs extra). The truck must be loaded and unloaded quickly in
order for them to return the truck before the return deadline. Of course, when
they are ready to retrieve their belongings, this whole process must be
repeated.

Our system eliminates the entire need of a truck from the customers
standpoint. The customer need only contact us and a clean unit of the
appropriate size will be delivered directly to their location and left for
packing. The customer can take as much time as he or she wishes to pack the
POD. Once loaded, we return to pick up and transport the POD. The POD can be
redelivered directly to the customers new residence or placed in one of our
climate controlled warehouses. Upon the redelivery of the POD, the customer can
take his or her time, unloading it at his or her convenience. When the customer
is finished, they simply call PODS to retrieve the empty unit.

Ease of Use and Content Loading.Our customers have the added benefit of
renting a unit that is easy to use. Our customers only have to carry their
possessions out of the door and walk right into the POD, which is placed at
ground level so that they dont have to haul their possessions up a ramp.
Access to the interior of the POD is through a large roll-up door that makes
large, bulky items easy to load.

An additional benefit of the POD system can be seen by comparing it to
storage in a traditional climate-controlled self-storage facility. Because of
the difficulty in providing heat and air conditioning in facilities with direct
exterior access, customers who want climate-controlled storage in markets in
which we currently operate must carry their possessions down long hallways to
reach the climate-controlled rented space. That inconvenience is eliminated
when using the PODS storage system.

Convenience.The typical loading period for our customers usually takes
place over a few days, which permits them to load and unload the contents at
their convenience. This eliminates the stress and rush associated with trying
to beat a deadline imposed by a rental truck company.

In addition, the POD unit is accessible any time the customer desires. We
request that customers phone 2 hours prior to arrival at our warehouse site so
that their POD may be available and ready for them to gain entry. For a nominal
fee, we will deliver a customers POD back to their location, thus eliminating
the need for the

10



---



##### 



customer to drive to our warehouse. Although accessibility is
often a large concern for customers, most do not request access to their rented
POD during the storage period.

Time Savings.By renting a POD unit, our customers save a significant
amount of time in both unnecessary packing and unpacking and in drive time.
When choosing a traditional self-storage facility, the customer has to pick up
a truck, drive it to their location, load the truck, drive it to a storage
facility and then unpack their possessions. Next, the customer must return the
rental truck. When ready to retrieve their possessions, the consumer must once
again obtain and pick up a rental truck, pack the truck, drive their
possessions to their new location, unpack them, and upon completion, return the
truck to the rental company.

Comparatively, when renting a POD, our customers need only phone for
delivery of a POD unit, load the unit and phone for a pickup. The process is
repeated when they are ready to retrieve their possessions.

Optional Storage Locations.Our customers have a choice when deciding
where to store their possessions:



| |  |  | Storage in a POD warehouse.About 65% of our customers elect to store their belongings within a climate-controlled
warehouse. Very often, these customers are homeowners who are between homes, either awaiting completion of new construction or
experiencing a lag time in closing dates on their old and new homes;                                                                                                           
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Storage on-site.35% of our customers opt to store their rented unit at their own site. Commonly, customers undergoing
home renovation or recovery from damage sustained during a storm or fire desire on-site storage. Restoration companies and
businesses who need extra storage capacity for excess inventory or for storage of records, tools, equipment or construction
materials, are heavy users of on-site storage; and,
|
| |  |  | Point-to-point moves.Point-to-point moves between metropolitan areas are available to our customers who are relocating
their residence or business. To date, this business has not been a significant percentage of our revenues, but we expect this area
of the business to grow as the network of metropolitan areas served increases.                                                                                        

Container Sizes.We offer our customers two sizes of units from which to choose:



| |  |  | 12 ft. x 8 ft. x 8 ft.this smaller size POD can hold up to
7,500 pounds, typically the contents of a 1,200 square foot home;
and,           
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 16 ft. x 8 ft. x 8 ft.this larger size POD can hold over 5
tons of furnishings, typically the contents of a 1,500 to 1,800
square foot home.

One-Stop Shopping.We also offer other products to the consumer that will
assist in the moving and storage process. By offering additional products, we
are a one-stop-shop for all of our customers renting and storage needs. Such
items include:



| |  |  | boxes;                
| | - |  | ----------------------
|
| |  |  | tape;                 
|
| |  |  | padlocks;             
|
| |  |  | content insurance; and
|
| |  |  | packing blankets.     

11



---



##### 



Competition

The Self-Storage Industry.The self-storage industry is a very fragmented
market, characterized by a trend toward consolidation, continuing increase in
demand, relatively slow growth in supply and a targeted market of primarily
residential customers. Based on the 2000 Self-Storage Almanac published by
Minilo, Inc.also the publisher of the Mini-Storage Messenger, a monthly trade
magazinenationwide, there are more than 30,000 self-storage facilities,
containing more than a billion square feet of space. According to the Almanac,
the top 10 companies within this industry control a combined market share of
approximately 19% of the total square footage in the industry, and the top 50
companies control less than 27%. Numerous small local operators characterize
the remainder of the industry. Factors that are leading to industry
consolidation include:



| |  |  | shortage of skilled operators;                                                          
| | - |  | ----------------------------------------------------------------------------------------
|
| |  |  | scarcity of financing available to small operators for acquisitions and expansions; and,
|
| |  |  | potential savings through economies of scale.                                           

We believe that as a result of this trend, as well as the high degree of
fragmentation within this industry, there exists a significant growth
opportunity. We believe we are in a strong position to aggressively attack the
marketplace and become the dominant player due to our proprietary service
offering and the apparent lack of other dominant competitors.

Industry Growth, Supply and Demand.The self-storage industry has
experienced relatively slow growth in supply in recent years for the same
reasons that the industry is consolidating. Also contributing to slow growth
are restrictive zoning and other regulations required through local
governmental agencies, and, substantial start-up costs associated with the
construction and lease of new facilities.

However, demand for self-storage service has increased significantly as
indicated by an average increase in industry-wide rents and in industry-average
occupancy. We believe demand will remain strong because:



| |  |  | consumers are slow to react to changing conditions;                 
| | - |  | --------------------------------------------------------------------
|
| |  |  | population growth;                                                  
|
| |  |  | increased mobility;                                                 
|
| |  |  | expansion of condominium, townhouse and apartment living;           
|
| |  |  | increasing consumer awareness, particularly by commercial users; and
|
| |  |  | consumer desire for convenience.                                    

Historically, rental rates for self-storage have been less volatile and
occupancy rates have been more stable than other types of real estate. Also,
self-storage demand has increased in recent years because of:



| |  |  | greater consumer awareness;                                                   
| | - |  | ------------------------------------------------------------------------------
|
| |  |  | cost reduction programs by businesses;                                        
|
| |  |  | increased mobility in the general population; and,                            
|
| |  |  | an increasing mix of products and services offered by self-storage facilities.

Self-storage industry stability can be attributed to an extensive customer
base that continues to grow annually. Current demand for self-storage
facilities is strong when compared to the available supply of self-storage

12



---



##### 



space. Because of the high cost associated with prime real estate locations and
lack of availability, the industry has recently seen a drop in the number of
new competitors entering the marketplace. For this reason, we expect the supply
of self-storage facilities to remain relatively limited for some time, and the
strong occupancy and increasing rental rates to continue.

Target Market.Our target market is made up of both residential and
commercial customers. Residential customers who are suitable for our service
include:



| |  |  | new home buyers;                                                                                          
| | - |  | ----------------------------------------------------------------------------------------------------------
|
| |  |  | people relocating in the same metropolitan area or to other metropolitan areas served by a PODS
operation;
|
| |  |  | current public storage customers; and,                                                                    
|
| |  |  | people requiring additional storage space.                                                                

We target the following commercial customers:



| |  |  | remodeling and renovation contractors;                             
| | - |  | -------------------------------------------------------------------
|
| |  |  | restoration contractors;                                           
|
| |  |  | businesses with excess inventory;                                  
|
| |  |  | businesses requiring additional records and documents storage; and,
|
| |  |  | special events coordinators.                                       

Planned Target Market.There are several untapped target markets which
represent potentially significant sales contacts for us. These planned target
markets include:



| |  |  | insurance companies;                               
| | - |  | ---------------------------------------------------
|
| |  |  | chambers of commerce;                              
|
| |  |  | corporate relocation prospects;                    
|
| |  |  | Goodwill Industries;                               
|
| |  |  | Salvation Army;                                    
|
| |  |  | home furnishing/remodeling materials delivery; and,
|
| |  |  | other not-for-profit organizations.                

Competitive Factors.We compete on the basis of our unique service,
price, and PODS brand recognition. Although there are a handful of companies
currently offering portable storage facilities to the consumer, we believe that
none of them offer a service comparable to ours. PODS are larger than the
container used by most of the competition, thereby allowing our customers to
utilize fewer storage units for the possessions being stored. Furthermore, PODS
are built to be weather resistant. Most competitors containers are not
weatherproof without the addition of a tarp, which must be placed over the
storage container. Such a tarp presents inconvenience for the customer who must
remove and replace the tarp each time access to their contents is desired.

13



---



##### 



As stated above, the self-storage industry is highly fragmented and small,
independent companies hold the majority of market share. Leading competitors
include both the permanent self-storage facilities and portable storage
providers, which are listed below:



| |  |  | Public Storage;      
| | - |  | ---------------------
|
| |  |  | Storage USA;         
|
| |  |  | Sovran Self Storage; 
|
| |  |  | Shurgard;            
|
| |  |  | Door-to-Door Storage;
|
| |  |  | Kontane, Inc.; and,  
|
| |  |  | Mobile Mini, Inc.    

The information below was derived from the websites of the companies
discussed.

Public Storage, Inc. is the largest self-storage company in the US, with
interests in about 1,100 storage facilities in 38 states. Over 80% of its sales
come from self-storage properties located mostly in larger cities and rented
for personal or business use. This firm also rents commercial and industrial
storage space, rents and transports portable self-storage units, and owns
retail stores that rent trucks and sell related moving items. In March 1999,
Public Storage acquired Storage Trust Realty, a competitor with 187 facilities
in 16 states.

Storage USA owns about 360 self-storage facilities (containing 24.8
million square feet of space) and manages more than 30 others (including nine
franchises) in 30 states and the District of Columbia. The self-administered,
self-managed umbrella-partnership real estate investment trust (UPREIT)
acquires, develops, owns, franchises, and operates self-storage facilities,
which are rented primarily on a monthly basis. The facilities have an average
rent of about $10 per square foot and an average occupancy rate of 84%. Most
are equipped with computer-controlled access gates. In addition, the firm sells
locks, boxes, and other related products.

Sovran Self Storage provides self-storage space for business and personal
use. Operating mainly under the name Uncle Bobs, this company has about 200
facilities, serving some 45,000 customers with 10-million square feet of
storage space. Sovrans properties are located in 19 states, primarily along
the Eastern Seaboard and in the southern U.S. This company has been active in
acquiring properties, focusing on markets with populations in excess of 250,000
and seeking to operate facilities with a gross potential of $250,000 and
rentable square feet of 35,000. Sovran Self Storage is structured as a real
estate investment trust.

Shurgard Storage Centers primarily develops, buys, owns, and operates
self-storage centers. Directly and through joint ventures, they own and operate
more than 300 properties with about 18.2 million square feet of net rentable
space. Nine of its properties are in Europe; the rest are in 19 states
including California, Michigan, and Maryland. In addition to its own
properties, they manage 30 self-storage centers and a business park with about
1.5 million rentable square feet for third parties.

Door-to-Door Storage is a portable self-storage company which operates
with a forklift system and delivers storage containers directly to the
customers home or business. The company currently has six geographic areas
which it serves in Washington and California.

Kontane, Inc. is headquartered in Hickory, North Carolina and offers a
turnkey business opportunity, HomePak, to individuals desiring entry to the
portable storage marketplace. HomePak offers 7 x 5 plywood containers which
are moved using a forklift and jig system. Each container offers a roll up door
which will

14



---



##### 



accommodate up to 2,000 pounds of cargo. An optional vinyl cover is
also offered when weatherproofing is desired.

Mobile Mini, Inc. started in 1983, and became a publicly-traded company in
1994. With 29 branches in 14 states, they have a diversified base of over
36,000 customers. All of their units are constructed of heavy duty steel and
include high security patented locking systems on all doors. They provide
single mobile sales offices, security offices and multi-sectional buildings to
their customers. They custom build to meet unique requirements and their
customers have the option to rent, buy or lease-purchase. They are currently
the largest publicly-traded portable storage company in the United States.

Future Competition.We recognize that there are relatively low entry
barriers to the storage industry. In addition, as more people become aware of
the PODS service, we believe there will be others attempting to copy our
concept. However, there are features of our service that provide a barrier to
quick entry by others:



| |  |  | We have a patent on our unique hydraulic lift which was custom
designed to load PODS on to and off of trucks. Other companies have
entered the mobile storage business, but we believe they have not
solved the problem of handling large, heavy containers within
restricted spaces. Those companies are forced to use small, crate-like
units that are moved with forklifts or leave their steel containers on
the customer site;                                                                                                              
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | We have designed and engineered our storage containers to be stacked
3-high, thereby allowing us to maximize our overhead crane warehouse
storage space. Furthermore, PODS are built from a special laminate
material, which renders them weatherproof and means that they can be
stored outside in weather without damage to their contents.
Competitive approaches use crate-like containers, which require tarps
for weatherproofing, which are inconvenient for customers trying to
gain access to the contents, and are also prone to damage;
|
| |  |  | We have designed and built a production facility that produces the POD
storage containers efficiently and at a reasonable cost; and,                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  |  | We have established a toll free number and call center where potential
and existing customers from around the United States are routed. The
call center handles all customer orders, provides information, and
takes care of customer inquiries. The call center is supported by
proprietary software package that, in addition to handling all
customer orders and change orders, provides for the management of the
POD inventory and all billing and collection for both company-owned
and franchise operations.                               

A competitor desiring to gain entry into the self-storage industry and to
compete directly with us by offering a similar service would have to overcome
the following capital intensive barriers:



| |  |  | designing and engineering a comparable storage container;                                         
| | - |  | --------------------------------------------------------------------------------------------------
|
| |  |  | designing and building a non-patent infringing lift system for container delivery;                
|
| |  |  | designing and building a manufacturing production line for the assembly of the storage containers;
|
| |  |  | establishing brand awareness; and,                                                                
|
| |  |  | establishing a call center with supporting software and systems.                                  

Competitive Position.Because we have the above systems in place, we
believe we are significantly far ahead of any would-be competitors. Barriers to
potential competitors are present because in addition to perfecting the POD
concept, we have already established significant market presence and brand
awareness among storage

15



---



##### 



consumers. In addition, because we began our operations
in Florida, an area that attracts part-time residents and tourists from the
Eastern United States and Canada, many of these part-time residents are
familiar with our service creating broad awareness in their home states. Thus,
as we enter new markets, there exists the possibility that consumers will
already have some familiarity with us.

Marketing & Operations

Marketing Orientation.We are positioned as a provider of professional,
convenient, full-service storage facilities. We believe we are the only storage
company in the United States which offers the consumer large rental containers,
on-site and warehouse storage options, smooth, shift-free delivery, and a
door-to-door service feature at competitive prices.

Marketing Strategy.We intend to become the provider of choice for the
customer needing storage facility space, whether for long or short time
periods. We expect to capitalize upon superior service features and benefits to
the end user in order to gain market share.

We currently have several successful marketing strategies in place with
which we are reaching our targeted markets. These strategies include:



| |  |  | cable television advertising;                       
| | - |  | ----------------------------------------------------
|
| |  |  | Yellow Page advertising;                            
|
| |  |  | web based advertising;                              
|
| |  |  | realtor relations;                                  
|
| |  |  | drive-by advertising; and                           
|
| |  |  | other discounts and promotions at the point-of-sale.

Our promotions through cable television ads enable us to reach highly
segmented groups of the target population by choosing air placement based upon
viewer demographics. In addition, cable allows us to enter several markets
simultaneously without the spill-over into areas which we dont service. When
compared to traditional broadcast network advertising, cable offers a higher
penetration rate at a lower price point.

We advertise in the Yellow Page directories for each territory in which we
operate.

We have an internet presence with our website www.podsusa.com which is
capable of reaching thousands of potential customers daily. We expect internet
users to increase considerably in the future. By maintaining a presence on the
World Wide Web, we have the ability to reach, educate, inform and respond to
consumers 24 hours a day, 365 days a year. During 2001, we have enhanced our existing website to be interactive with our proprietary software. This will
allow our customers to order and pay for services on the Internet. Our
customers will be able to choose to have their monthly invoices mailed to them
through the US Postal service, e-mailed to them or automatically charged to a
credit card.

Our website includes a short video hosted by Cheryl Ladd. The video
describes and explains our service and its benefits and is available in tape
and CD format for advertising.

Our logo is prominently displayed on all of our POD units and trucks.
Approximately 35% of our total POD rentals are stored on-site at a customers
location. We generate a number of sales simply from consumers driving by such
sites and seeing the POD storage unit. This high degree of visibility is a
virtually free form of advertising for us and is highly effective.

16



---



##### 



The self-storage industry is highly fragmented with many single or
family-owned proprietors. While demand is strong within this industry,
competitor companies fall short when addressing customer service. Other than
providing a facility or small portable containers for customer rentals, most
companies offer no other benefits to the consumer. We are different. When
addressing the need for public storage, we wanted to develop a rental system
which would enhance the consumers rental experience and be cost effective. The
development of our proprietary lift system enabled us to surpass services
offered by our competitors. We believe that our lift system, larger rental
containers, price competitiveness, and choice in storage location will enable
us to compete effectively with traditional moving and self-storage companies.

Overall Strategy.Our long-term objective is to become a leading provider
of portable storage facilities throughout the United States. By entering prime
territories with quick roll-outs, we seek to gain strong brand awareness for
our service and product offerings. The key elements of our marketing strategy
include:



| |  |  | targeting consumers and educating them regarding the benefits of the PODS storage system;                                                                   
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | targeting businesses and providing them with solutions for excess inventory and business supply challenges;                                                 
|
| |  |  | targeting the Salvation Army, Goodwill and other not-for-profit organizations regarding the use of POD containers at
various public donation points;        
|
| |  |  | targeting real estate professionals and educating them about the benefits of the PODS point-to-point moves and storage
systems for their clients;           
|
| |  |  | targeting large corporations and introducing them to the PODS solution for corporate relocation challenges;                                                 
|
| |  |  | targeting construction and general contracting companies and educating them about the benefits of using PODS for on-site
storage at company work sites; and,
|
| |  |  | maintaining a presence on the World Wide Web and thereby target, attract and educate specific need consumers about our
benefits and services.               

Company Image.We have designed a company logo that is vibrant,
attractive and eye-catching. We have registered the PODS logo in the U.S.
Patent and Trademark office. It is prominently displayed on the POD units where
it is highly visible to drive-by traffic. The PODS acronym is suitable and
appropriate for our business and aptly describes our services and products to
the consumer unfamiliar with the PODS concept.

Our employees wear uniforms daily on the job site. They serve as a good
promotional tool away from the workplace when the employee is asked what PODS
is and the significance of the uniforms branding.

Pricing Strategy.We compete, in part, on the basis of the price of our
service. We believe that as long as our prices are competitive with those of
traditional moving and storage companies, consumers will prefer the convenience
of our unique service. We have developed a pricing strategy based upon the size
of the POD rented, and the type of storage selected. Although we may adjust our
pricing in various metropolitan areas, the following are typical prices for
rentals and deliveries of POD units:

17



---



##### 



|            |  |                         |  |                    |  |           |    |         |  |            |    |  |  |  |  | 
|----------- |  | ----------------------- |  | ------------------ |  | --------- | -- | ------- |  | ---------- | -- |  |  |  |  | 
|            |  |                         |  |                    |  |           |    |         |  | Round Trip
|            |  | Monthly Rental Price by |  | Delivery Charge   
|            |  | Type of Storage         |  | by Type of Storage
|            |  |                         |  |                   
|Size of POD |  | Warehouse               |  | On-Site            |  | Warehouse |    | On-Site
|            |  |                         |  |                    |  |           |    |        
|12 ft.      |  | $134/mo.                |  | $94/mo.            |  | $         | 69 |         |  | $          | 49 | 
|           
|           
|           
|           
|16 ft.      |  | $159/mo.                |  | $119/mo.           |  | $         | 69 |         |  | $          | 49 | 

There is a risk that reductions in prices charged by traditional moving
and storage companies could lead consumers to forego the benefits of our
service in favor of lower prices. Increased price competition could reduce our
operating margins, impede our growth, and cause us to lose market share.

Operational Considerations

Our operating system includes four distinct components as follows:



| |  |  | the national customer call center;
| | - |  | ----------------------------------
|
| |  |  | PODS manufacturing division;      
|
| |  |  | PODS delivery system; and,        
|
| |  |  | PODS storage system.              

National Customer Call Center.We have a national toll-free number for
use by the public, so that wherever a customer is located, they can reach us.
The operation of the national call center, located in Pinellas Park, Florida,
promotes efficiencies by reducing unit expenses by handling all incoming calls
from one centralized location. Having one call center serve the entire PODS
network of operations is more cost effective than having each territory staff
and manage their own centers. A centralized call center also assures that all
calls are routed to the appropriate area based on the customers location.
Additionally, customers can arrange moves out of the area or even out of state,
with one telephone call.

We have designed our main computer system to automatically update new
orders, request pick-ups, request materials delivery, etc. as information is
input into the system during the initial phone call from the customer. The
system produces a schedule and associated paperwork, such as invoices, daily
routing schedules and accounts receivable functions that are downloaded
directly to each warehouse territory. Features currently under consideration
for development include vehicle tracking using GPS and onboard computers for
each delivery truck.

PODS Manufacturing Division.Our manufacturing center is located in
Pinellas County, Florida, at our corporate headquarters. We build both the POD
units and the lift systems at this facility. In June of 2001 the Company
entered into a contract with a third party to manufacture PODS in their facility in
Bloomington, Illinois.

Currently, our manufacturing facilities have fully operational assembly
lines which, when operating at full capacity, require 60 workers and is capable
of producing 60 PODS per day. At full capacity, it has the ability to produce
over 1,200 PODS per month without adding a second shift.

Our manufacturing center includes an assembly line devoted to the
manufacture of truck lifts. This assembly line requires five workers per shift
and, working one shift per day, POD lift capacity is four lifts per month.

PODS Delivery System.We have developed a custom software system that has
the ability to dispatch trucks based upon information gathered at our national
call center. Once an order is taken, the system

18



---



##### 



automatically places the
delivery into the scheduling program for each territory. Map functionality
allows the system to print sequenced delivery schedules for optimum driver
routing. Effective routing reduces drive time, thus increasing the number of
deliveries a
driver can perform per day. The system automatically produces the appropriate
rental paperwork for the drivers, and directions and maps to the customers
location.

PODS Storage System.Our customers have three types of storage choices
when renting a POD unit. In order to keep track of all POD units, we have
developed a software system which tracks each individual POD from the point of
manufacture all the way through the rental, delivery and redelivery processes.
Whether stored at a customers location, in a POD warehouse or during a
point-to-point move, we can locate and track each unit on a daily, incremental
basis. Each metropolitan area is projected to have up to 150,000 square feet of
PODS warehouse storage capable of handling in excess of 2,000 PODS. This
warehouse space would be divided among three or four locations, allowing for
efficient coverage of the service area.

We plan to enter new metropolitan areas with a single warehouse and then
open additional warehouse locations as rental demands require. A forklift
suitable for the movement of PODS is required at each warehouse location. An
overhead crane system can be utilized for the storage of PODS in a warehouse
with a PODS designed Grabber, but this is recommended only when a suitable
crane system is already installed and the building height will allow for
three-high storage. The Grabber allows for the movement of PODS in the void
ceiling area of the warehouse rather than through forklift hallways, resulting
in more useable storage space.

We expect to use both forklifts and overhead crane systems to our
advantage by having the flexibility to enter new metropolitan areas using
existing available facilities. This keeps our costs low.

Employees

At September 30, 2001, we
employed 121 full-time employees, consisting of
4 in management, 2 in sales and marketing, 24 in customer service, 22 in
administration and finance, 6 in warehouse operations, 21 as truck drivers, 3
in franchisee training / implementation, and 39 in manufacturing.

Government Regulations

Local municipal codes and regulations sometimes limit the amount of time
that PODS may remain on the premises of our customers. When our customers are
required to move PODS ahead of their schedule, we move the PODS to one of our
warehouses. The effect of those limitations on our business has not been
material. We have recently received citations issued by the City of
Clearwater, Florida alleging a violation of the City's ordinance
governing signage, a requirement that a sticker be placed on each POD
container indicating its delivery date, and the length of time a
container may remain on site. We are defending the citations
vigorously however; we believe that even if the citations are
sustained, they will not have a material adverse affect on our
results of operations. Other governmental jurisdictions have similar
laws, but we and our franchises have adjusted our operations to
comply with these laws with no material adverse affect on our
results of operations.

Our cross-country moves are regulated by the U.S. Department of
Transportation and by some states. We hold the required Department of
Transportation license and licenses from several states.



|        |                         
|------- | ------------------------
|Item 2. | Description of Property.

We lease the following properties:

|                             |  |                |        |     |  |                               
|---------------------------- |  | -------------- | ------ | --- |  | ------------------------------
|                             |  | Approximate    |        |    
|Location                     |  | Size (sq. ft.) |        | Use
|                             |  |                |        |    
|Hillsborough County, Florida |  |                | 50,000 |     |  | Warehouse                     
|                            
|                            
|                            
|                            
|Pasco County, Florida        |  |                | 30,000 |     |  | Warehouse/office              
|                            
|                            
|                            
|                            
|Pinellas County, Florida(1)  |  |                | 80,000 |     |  | Warehouse/office/manufacturing
|                            
|                            
|                            
|                            
|Broward County, Florida      |  |                | 70,000 |     |  | Warehouse/office              



---

|(1) |  | Corporate headquarters.
|--- |  | -----------------------

Our leased properties are in good condition and will be adequate for our
operations over the next 12 months.



|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.

Except
as described under Item 1.  Business  Government Regulations,
as of the date of this annual report, we were not engaged in any pending
legal proceedings.



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

None.

19



---



##### 



PART II

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

Privately Placed Securities

In the past, we issued the following securities that were
not registered under the Securities Act. The securities were offered
and sold by us in reliance upon the exemptions provided under Section
4(2) of the Securities Act, Rule 506 of Regulation D, and/or
Rule 701 under the Securities Act. All sales were made without an
underwriter or selling agent. Any certificates evidencing the
securities sold bear a restrictive legend that prohibits transfer
without registration or an applicable exemption.

In
September, 1999, upon our initial capitalization, we issued to PODS,
LLC 7 million shares of our common stock in return for all of
the assets of PODS, LLC. All three of the beneficial owners of PODS,
LLC at that time were executive officers of and active participants in
the PODS, LLC business transferred to us. As such, they were
knowledgeable about the business, were financially sophisticated and
had access to all information about PODS, LLC and us.

In
September, 1999, we sold 4,003,273 shares of common stock to 29
persons in a private placement conducted pursuant to Rule 506 of
Regulation D solely to persons we believe to be accredited
investors. Our directors or their affiliates purchased 1,063,237 of
those shares. The shares were sold for $1 per share. There were no
underwriting discounts or commissions paid. We required each purchaser
to complete a questionnaire evidencing that they were accredited
investors. No general solicitation or advertising was used to offer the
securities. Each purchaser certified to us that he was purchasing the
securities for himself, written disclosure was made that the
securities were not registered under the Act and therefore cannot be
resold unless they are registered under the Act or unless an
exemption from registration is available, and the certificates
evidencing such securities are inscribed with a restrictive legend
stating that the securities have not been registered under the Act
and setting forth or referring to the restrictions on transferability
and sale of the securities. 220,065 of such shares were issued to
W. Keith Schilit, an accredited investor and one of our
directors, in return for financial and strategic advisory services
performed by his consulting firm.

In
2000 and 2001, we granted options to purchase a total of 648,000
shares of our common stock under our 2000 Stock Option Plan to our
directors and employees.

In
2000, we granted options to five of our directors and
executive officers and two other shareholders to purchase a total of
250,000 shares of our common stock in return for personal guaranties
of our loans. Each of the directors and the two shareholders are
accredited investors and each of the executive officers
are knowledgeable and experienced in financial and business matters.

20



---



##### 



Public Offering of Debentures

On
May 30, 2001, our registration statement (Commission file
#333-55460) for the sale of a minimum of $1 million and a maximum of $10
million of our 12% Series A Subordinated Convertible Debentures (the
Debentures) was declared effective by the Securities and Exchange
Commission and the offering commenced at that time and is ongoing.
The Debentures were sold at par and are convertible into shares of our
common stock.

At
September 30, 2001, we had sold $3,845,000 of Debentures. From
the effective date of the registration statement to
December 14, 2001, the expenses we incurred in connection with
the issuance and distribution of the Debentures totaled $390,348. We
paid no underwriting discounts or commissions or finders' fees for
the sale of Debentures. No such expenses were paid, directly or
indirectly to directors, officers, or their associates; to persons
owning 10% or more of any class of our equity securities, or to our
affiliate and no such payments were direct or indirect payments to
others. Subsequent to year end and through December 14, 2001, an
additional $1,540,000 of Debentures were sold.

The
net offering proceeds from the sale of the Debentures, after
deducting the total expenses described above was $4,994,652.

$3,372,450 of
the net proceeds from the offering is currently invested in short
term temporary investments pending application to the uses set forth
in our prospectus. The remaining net proceeds were used as follows:

|                           |  |          
|-------------------------- |  | ---------
|Working Capital            |  | $936,528 
|New PODS                   |  | $625,730 
|Debenture Interest payment |  | $  59,944

None
of the foregoing payments were direct or indirect payments to our
directors or officers or their associates; to persons owning 10% or
more of any class of our equity securities; or to any of our
affiliates and none of such payments were direct or indirect payments to others.

21



---



##### 



|        |                                                            
|------- | -----------------------------------------------------------
|Item 6. | Managements Discussion and Analysis or
Plan of Operations.

Twelve Months Ended September 30, 2001 Compared to Nine Months Ended September 30, 2000

Overview.The following is a discussion of certain factors affecting our
results for the twelve and nine month periods ending September 30, 2001 and
September 30, 2000 and our liquidity and capital resources.

Net
Cash. Our net cash used in our operations was $557,911 for the
twelve-month period ended September 30, 2001 and $371,103 for the nine-month
period ended September 30, 2000. Our increase in the net cash flow deficit
during the twelve month period ended September 30, 2001 is primarily a result of
an increase in our finished goods inventory.

We had an increase of cash of $1,854,923 for the twelve months ended
September 30, 2001 compared to a cash decrease of $1,331,149 for the nine
months ended September 30, 2000. The increase is due to a successful debenture
offering, with $3,845,000 raised as of September 30, 2000.

Capital Expenditures. Our business is capital intensive. We incur
relatively large capital expenditures to open and grow PODS moving and storage
businesses in a territory. Those expenses include the manufacture of PODS and
lifts and the acquisition of trucks, forklifts, computer and office equipment.
Also, because we have a unique product, we must spend a considerable amount in
each new market to educate consumers about the advantages of using PODS over
other moving and storage alternatives.

Capital expenditures consisting primarily of new PODS and lifts being
placed in service decreased by $398,214 or 25.1% from $1,586,266 during the nine
month period ended September 30, 2000, to $1,188,052 during the twelve month
period ended September 30, 2001. The decrease is due to 313 PODS placed in
service during the twelve months ended September 30, 2001 compared to 551
placed in service during the nine months ended September 30, 2000.

The PODS and lifts used in company-owned territories increased by 313
PODS, or 14.0% and one lift in 2001. At September 30, 2001, we had 2,542 PODS
and 11 lifts in service. At September 30, 2000, we had 2,229 PODS and 10 lifts
in service.

Advertising expenditures, to educate consumers about the advantages of
using PODS, which are included in cash flow from operations, decreased by
$24,151 or 5.2% from $467,105 for the nine month period ended September 30,
2000 to $442,954 for the twelve month period ended September 30, 2001.

We expect to increase both our capital expenditures and advertising in
2002 as we open new company-owned territories with the proceeds from our
debenture offering. Management expects to open a territory in Chicago during
February 2002.

Rental and Delivery Revenue.Rental and delivery revenue increased by
$1,661,855 or 64.3% from $2,586,555 for the nine months ended September 30,
2000 to $4,248,410 for the twelve months ended September 30, 2001. The number
of PODS available for rent in Company-owned markets increased by 313 or 14.0%,
from 2,229 at September 30, 2000 to 2,542 at September 30, 2001. The average
monthly revenue per POD rented also increased by $9.65 per POD rented or 6.7%

22



---



##### 



from $144.19 during the nine-month period ended September 30, 2000 to $153.84
during the twelve-month period ended September 30, 2001.

Sales of PODS and Lifts to Franchisees.Revenue from the sale of PODS and
lifts to franchisees increased by $3,749,399 or 120.9% from $3,101,950 for
the nine-month period ended September 30, 2000 to $6,851,349 for the
twelve-month period ended September 30, 2001. PODS sold increased by 1,842 or
124.0% from 1485 PODS in the nine-month period ended September 30, 2000 to 3,327
PODS in the twelve-month period ended September 30, 2001. Lifts sold increased
by eight or 53.3% from 15 lifts sold during the nine months ended September 30,
2000 to 23 lifts sold during the twelve months ended September 30, 2001.

Franchise Revenues.Franchise revenues consists primarily of initial
license fees paid by the franchisee for exclusive rights for a geographic
territory, which is recognized in revenue when the franchisee opens for
business, and an 8% royalty the franchisee pays on a semi-monthly basis.
Franchise revenues increased by $607,494 or 199.6% from $304,318 during the nine
month period ended September 30, 2000 to $911,812 during the twelve month
period ended September 30, 2001.

Gross Profit from Rental and Delivery Revenue.Gross profit from rental
and delivery revenue represents revenues less the cost of services provided.
Gross profit increased by $829,870 or 76.1% from $1,090,858 during the nine
months ended September 30, 2000 to $1,920,728 during the twelve-month period
ended September 30, 2001. Gross profit as a percentage of revenue also
increased from 42.2% during the nine-month period ended September 30, 2000 to
45.2% during the twelve months ended September 30, 2001. The increase in gross
profit as a percentage of revenue is a result of better leveraging certain
fixed costs in the rental and delivery of PODS.

Gross Profit from the Sale of PODS and Lifts.Gross profit from the sale
of PODS and lifts represents the revenue from the sale of PODS and lifts less
all manufacturing costs related to their production. Gross profit increased by
$1,182,994 or 832.4% from $142,120 during the nine months ended September 30,
2000 to $1,325,114 during the twelve months ended September 30, 2001. Gross
profit as a percentage of revenues also increased from 4.6% during the
nine-month period ended September 30, 2000 to 19.3% during the twelve-month
period ended September 30, 2001.

Gross Profit from Franchise Revenues.Gross profit from franchise
revenues represents the revenues less costs associated with selling and opening
a franchise. Gross profit from franchise revenues increased by $561,161 from
$283,227 during the nine months ended September 30, 2000 to $844,388 for the
twelve months ended September 30, 2001. Gross profit as a percentage of
revenue decreased slightly from 93.1% during the nine months ended September
30, 2000 to 92.6% during the twelve months ended September 30, 2001.

Selling, General and Administrative Expenses.Our selling, general and
administrative expenses increased by $1,860,195 or 81.7% from $2,277,412 during
the nine months ended September 30, 2000 to $4,253,703 during the nine months
ended September 30, 2001, primarily as a result of a 15% increase in staffing
and pay increases from the nine months ended September 30, 2000 to the twelve
months ended September 30, 2001 to handle the larger volume of business.
Selling, general and administrative expense as a percentage of revenue
decreased from 38.0% during the nine-month period ended September 30, 2000 to
34.5% during the twelve-month period ended September 30, 2001. The decrease in
selling general and administrative expenses as a percentage of

23



---



##### 



revenues is
primarily a result of efficiencies derived from a larger revenue base.

Interest Expense.Our interest expense increased by $247,554 or 225.2%
from $109,921 during the twelve months ended September 30, 2000, to $357,475
during the twelve months ended September 30, 2001. The increase in interest
expense is a result of the issuance of the Series A Debentures and
other borrowings during the year to continue to
develop our infrastructure and to support our growth.

Net Losses.Our net loss decreased by $47,452 or 3.7%
from $1,280,832 for the nine months ended September 30, 2000 to
$1,233,380
for the twelve months ended September 30, 2001. Our net loss as
percentage of revenue decreased from 21.4% for the nine months ended
September 30, 2000 to 10.2% for the twelve months ended
September 30, 2001.

Liquidity and Capital Resources

During the year ended September 30, 2001, the Company experienced its first
profitable quarter of operations since its inception during the three
months ended June 30, 2001. We expect to continue to grow our business and maintain
the expense of an infrastructure to support this expected growth. We expect
that with our existing cash reserves, additional sales of debentures and cash
flow provided from future operations, we will be able to put additional PODS in
service in our existing Company owned Territories, increasing their
profitability, and fund the growth of a new territory which management expects
to open in February of 2002.

Sales to Franchisees.Our largest source of cash during the twelve months
ended September 30, 2001 was from sales of PODS and lifts to our franchisees
and fees and royalties paid by our franchisees. During the twelve months ended
September 30, 2001 we opened a second manufacturing location in Illinois to
accommodate the growth in POD sales. During the nine months ended September
30, 2000 our POD sales alone were $2,610,450, but increased by $3,446,245 or
132.0% to $6,056,695 for the twelve months ended September 30, 2001. Our royalty
revenue increased by $298,170 or 379.8% from $78,509 for the nine months ended
September 30, 2000 to $376,679 for the twelve months ended September 30, 2001.
As of September 30, 2001, nine of our 23 franchises have been open for more
than one year. As those franchises continue to mature, we expect them to
purchase additional PODS and lifts from us. We also expect Royalty revenue from
them to continue to increase. In addition, we sold twelve new franchises during
this fiscal year, representing approximately twenty, 400,000-population
territories, eight of which opened for business in 2001. As of September 30, 2001, we have sold seven franchises,
representing approximately twelve, 400,000-population units, which we expect
will open during the upcoming fiscal year. These franchises will purchase PODS
and lifts from us and generate additional royalty revenue.

24



---



##### 



Borrowings.Borrowings were our second largest source of cash. During
the twelve months ended September 30, 2001, our long-term debt increased to
$5,553,336. The debenture offering raised $3,845,000 as of September 30,
2001. We believe that our ability to borrow will increase as a result of this
debenture offering.

Rental and Delivery Revenue.During the twelve-month period ended
September 30, 2001 our third largest source of cash was from rental and
delivery revenue generated by our company-owned PODS moving and storage
business. We expect revenues from this source to increase significantly
with the opening of new locations. Our next expansion is currently targeted
for February 2002 in the Chicago, Illinois market.

25



---



##### 



|        |                      
|------- | ---------------------
|Item 7. | Financial Statements.

Financial Statements

Year ended September 30, 2001 and nine months ended September 30, 2000

Contents

|                                                   |  |  |    | 
|-------------------------------------------------- |  |  | -- | 
|Report of Independent
Certified Public Accountants |  |  | 27 | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |  |  |    | 
|                                                  
|                                                  
|                                                  
|                                                  
|Audited Financial Statements                       |  |  |    | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |  |  |    | 
|                                                  
|                                                  
|                                                  
|                                                  
|Balance Sheets                                     |  |  | 28 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Statements of Operations                           |  |  | 30 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Statements of Stockholders Equity                 |  |  | 31 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Statements of Cash Flows                           |  |  | 32 | 
|                                                  
|                                                  
|                                                  
|                                                  
|Notes to Financial Statements                      |  |  | 33 | 

26



---



##### 



Report of Independent Certified Public Accountants

Board of Directors
PODS, Inc.

We have audited the accompanying balance sheets of PODS, Inc. (the Company) as
of
September 30, 2001 and 2000, and the related statements of operations,
stockholders equity, and cash flows for the year and the nine
months then ended, respectively.
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 auditing standards generally
accepted in the United States. 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 that 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 financial position of PODS, Inc. at September 30,
2001 and 2000 and the results of its operations and its cash flows for the year
and the nine months then ended, respectively, in conformity with accounting principles generally
accepted in the United States.

/s/ ERNST & YOUNG LLP

Tampa, FL
November 20, 2001



27



---



##### 



PODS, Inc.

Balance Sheets

|                                                        |                                                                                                  |   |              |           |      |   |           |         | 
|------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | - | ------------ | --------- | ---- | - | --------- | ------- | 
|                                                        |                                                                                                  |   | September 30
|                                                        |                                                                                                  |   |             
|                                                        |                                                                                                  |   | 2001         |           | 2000
|                                                        |                                                                                                  |  
|Assets                                                  |                                                                                                  |   |              |           |      |   |           |        
|                                                       
|                                                       
|                                                       
|                                                       
|Current assets:                                         |                                                                                                  |   |              |           |      |   |           |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Cash
and cash equivalents                                                                        |   | $            | 2,277,920 |      |   | $         | 422,997 | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Accounts receivable, net of allowance for doubtful
accounts of $17,536 and $49,800, respectively |   |              | 931,333   |      |   |           | 643,190 | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Prepaid expenses and other current assets                                                        |   |              | 139,266   |      |   |           | 28,202  | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Inventory                                                                                        |   |              | 830,104   |      |   |           | 565,164 | 
|                                                        |                                                                                                  |  
|Total current assets                                    |                                                                                                  |   | 4,178,623    |           |      |   | 1,659,553 |        
|                                                       
|                                                       
|                                                       
|                                                       
|PODS and lifts in process                               |                                                                                                  |   | 331,788      |           |      |   | 103,565   |        
|                                                       
|                                                       
|                                                       
|                                                       
|Rental equipment, net of accumulated depreciation       |                                                                                                  |   | 3,987,641    |           |      |   | 3,732,877 |        
|                                                       
|                                                       
|                                                       
|                                                       
|Property and equipment, net of accumulated depreciation |                                                                                                  |   | 1,549,735    |           |      |   | 1,407,905 |        
|                                                       
|                                                       
|                                                       
|                                                       
|Other assets:                                           |                                                                                                  |   |              |           |      |   |           |        
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Deposits                                                                                         |   |              | 105,386   |      |   |           | 114,531 | 
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Other noncurrent assets                                                                          |   |              | 761,920   |      |   |           | 262,260 | 
|                                                        |                                                                                                  |  
|Total other assets                                      |                                                                                                  |   | 867,306      |           |      |   | 376,791   |        
|                                                        |                                                                                                  |  
|Total assets                                            |                                                                                                  | $ | 10,915,093   |           |      | $ | 7,280,691 |        
|                                                        |                                                                                                  |  

28



---



##### 



|                                                                     |                                                                         |   |              |            |      |   |           |            |  
|-------------------------------------------------------------------- | ----------------------------------------------------------------------- | - | ------------ | ---------- | ---- | - | --------- | ---------- | -
|                                                                     |                                                                         |   | September 30
|                                                                     |                                                                         |   |             
|                                                                     |                                                                         |   | 2001         |            | 2000
|                                                                     |                                                                         |  
|Liabilities and stockholders equity                                 |                                                                         |   |              |            |      |   |           |           
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Current liabilities:                                                 |                                                                         |   |              |            |      |   |           |           
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Accounts payable                                                        |   | $            | 1,418,665  |      |   |           | 1,311,591  |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Due to customers                                                        |   |              | 24,884     |      |   |           | 97,529     |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Deferred revenue                                                        |   |              | 308,784    |      |   |           | 278,974    |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Deferred
franchise fees                                                 |   |              | 260,000    |      |   |           | 60,000     |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Accrued expenses                                                        |   |              | 620,381    |      |   |           | 209,726    |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Current portion of long-term debt and capital leases                    |   |              | 740,904    |      |   |           | 693,165    |  
|                                                                     |                                                                         |  
|Total current liabilities                                            |                                                                         |   | 3,373,618    |            |      |   | 2,650,985 |           
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Long-term debt and capital lease obligations, net of
current portion |                                                                         |   | 5,553,336    |            |      |   | 1,744,602 |           
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Stockholders equity:                                                |                                                                         |   |              |            |      |   |           |           
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Common stock, par value $.0001 per share:                               |   |              |            |      |   |           |            |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | authorized 100,000,000 shares; 11,003,237 shares
issued and
outstanding |   |              | 1,100      |      |   |           | 1,100      |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Additional paid-in capital                                              |   |              | 6,853,315  |      |   |           | 6,235,650  |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Unearned
compensation                                                   |   |              | (281,250   | )    |   |           |           |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Accumulated deficit                                                     |   |              | (4,585,026 | )    |   |           | (3,351,646 | )
|                                                                     |                                                                         |  
|Total stockholders equity                                           |                                                                         |   | 1,988,139    |            |      |   | 2,885,104 |           
|                                                                     |                                                                         |  
|Total liabilities and stockholders equity                           |                                                                         | $ | 10,915,093   |            |      | $ | 7,280,691 |           
|                                                                     |                                                                         |  

See accompanying notes.

29



---



##### 



PODS, Inc.

Statements of Operations

|                                                                 |                                              |   |              |           |              |   |             |           |  
|---------------------------------------------------------------- | -------------------------------------------- | - | ------------ | --------- | ------------ | - | ----------- | --------- | -
|                                                                 |                                              |   |              |           |              |   | Nine months
|                                                                 |                                              |   | Year ended   |           | ended       
|                                                                 |                                              |   | September 30 |           | September 30
|                                                                 |                                              |   | 2001         |           | 2000        
|                                                                 |                                              |  
|Revenues:                                                        |                                              |   |              |           |              |   |             |          
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Rental and delivery revenue                  |   | $            | 4,248,410 |              |   |             | 2,586,555 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Sales of PODS® and lifts to franchisees      |   |              | 6,851,349 |              |   |             | 3,101,950 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Franchise license revenue                    |   |              | 350,000   |              |   |             | 160,000   |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Revenue from services to franchisees         |   |              | 561,812   |              |   |             | 144,318   |  
|                                                                 |                                              |  
|                                                                 |                                              |   | 12,011,571   |           |              |   | 5,992,823   |          
|                                                                
|                                                                
|                                                                
|                                                                
|Cost of revenues:                                                |                                              |   |              |           |              |   |             |          
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Cost of rental and delivery                  |   |              | 2,327,682 |              |   |             | 1,495,697 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Cost of sales of PODS® and lifts             |   |              | 5,526,235 |              |   |             | 2,959,830 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Franchise costs                              |   |              | 67,424    |              |   |             | 21,091    |  
|                                                                 |                                              |  
|                                                                 |                                              |   | 7,921,341    |           |              |   | 4,476,618   |          
|                                                                
|                                                                
|                                                                
|                                                                
|Operating expenses:                                              |                                              |   |              |           |              |   |             |          
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Selling, general and administrative expenses |   |              | 4,253,703 |              |   |             | 2,277,412 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Depreciation and amortization                |   |              | 743,743   |              |   |             | 428,745   |  
|                                                                 |                                              |  
|Loss from operations                                             |                                              |   | (907,216     | )         |              |   | (1,189,952  | )        
|                                                                
|                                                                
|                                                                
|                                                                
|Other expense (income):                                          |                                              |   |              |           |              |   |             |          
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Gain on disposal of equipment                |   |              | (28,010   | )            |   |             |          |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Other income                                 |   |              | (3,301    | )            |   |             | (19,041   | )
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Interest expense                             |   |              | 357,475   |              |   |             | 109,921   |  
|                                                                 |                                              |  
|Net loss                                                         |                                              | $ | (1,233,380   | )         |              | $ | (1,280,832  | )        
|                                                                 |                                              |  
|Basic and diluted net loss per share                             |                                              | $ | (0.11        | )         |              | $ | (0.12       | )        
|                                                                 |                                              |  
|Weighted average number of shares outstanding,
basic and diluted |                                              |   | 11,003,237   |           |              |   | 11,003,237  |          
|                                                                 |                                              |  

See accompanying notes.

30



---



##### 



PODS, Inc.

Statements of Stockholders Equity

|                              |                                                                    |  |              |   |            |   |          |             |              |               |           |         |  |       |          |          |   |            |            |   |   |           |            |  
|----------------------------- | ------------------------------------------------------------------ |  | ------------ | - | ---------- | - | -------- | ----------- | ------------ | ------------- | --------- | ------- |  | ----- | -------- | -------- | - | ---------- | ---------- | - | - | --------- | ---------- | -
|                              |                                                                    |  | Common Stock |   | Additional |   |          |             |              |               |           |         |  | Total
|                              |                                                                    |  |              |   | Paid-In    |   | Unearned | Accumulated |              | Stockholders'
|                              |                                                                    |  | Shares       |   | Amount     |   | Capital  |             | Compensation | Deficit       |           | Equity 
|                              |                                                                    | 
|Balance at December 31, 1999  |                                                                    |  | 11,003,237   |   |            |   | 1,100    |             |              |               | 6,168,990 |         |  |       |          |          |   | (2,070,814 | )          |   |   | 4,099,276 |           
|                             
|                             
|                             
|                             
|                              | Fair value of options
issued in connection with
guarantees of debt |  |              |  |            |   |          |            |              |               |           | 66,660  |  |       |          |          |   |            |           |   |   |           | 66,660     |  
|                             
|                             
|                             
|                             
|                              | Net loss                                                           |  |              |  |            |   |          |            |              |               |           |        |  |       |          |          |   |            | (1,280,832 | ) |   |           | (1,280,832 | )
|                              |                                                                    | 
|Balance at September 30, 2000 |                                                                    |  | 11,003,237   |   |            | $ | 1,100    |             |              |               | 6,235,650 |         |  |       |          |          |   | (3,351,646 | )          |   | $ | 2,885,104 |           
|                             
|                             
|                             
|                             
|                              | Fair value of options
issued in connection with
guarantees of debt |  |              |   |            |   |          |             |              |               |           | 117,665 |  |       |          |          |   |            |            |   |   |           | 117,665    |  
|                             
|                             
|                             
|                             
|                              | Stock
options granted to employees                                 |  |              |   |            |   |          |             |              |               |           | 500,000 |  |       |          |          |   |            |            |   |   |           | 500,000    |  
|                             
|                             
|                             
|                             
|                              | Unearned portion of options granted to employees                   |  |              |  |            |   |          |            |              |               |           |        |  |       |          | (281,250 | ) |            |           |   |   |           | (281,250   | )
|                             
|                             
|                             
|                             
|                              | Net loss                                                           |  |              |   |            |   |          |             |              |               |           |         |  |       |          |          |   |            | (1,233,380 | ) |   |           | (1,233,380 | )
|                              |                                                                    | 
|Balance
at September 30, 2001 |                                                                    |  | 11,003,237   |   |            | $ | 1,100    |             |              | $             | 6,853,315 |         |  |       | (281,250 | )        | $ | (4,585,026 | )          |   | $ | 1,988,139 |           
|                              |                                                                    | 

See accompanying notes.

31



---



##### 



PODS, Inc.

Statements of Cash Flows

|                                                                            |                                                                    |                                                                                |                                              |         |              |          |                   |         |         |           |  
|--------------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------------------------------------------ | -------------------------------------------- | ------- | ------------ | -------- | ----------------- | ------- | ------- | --------- | -
|                                                                            |                                                                    |                                                                                |                                              |         | Year ended   |          | Nine months ended
|                                                                            |                                                                    |                                                                                |                                              |         | September 30 |          | September 30     
|                                                                            |                                                                    |                                                                                |                                              |         | 2001         |          | 2000             
|                                                                            |                                                                    |                                                                               
|Cash flow from operating activities                                         |                                                                    |                                                                                |                                              |         |              |          |                   |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Net loss                                                                    |                                                                    | $                                                                              | (1,233,380                                   | )       |              | $        | (1,280,832        | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Adjustments to reconcile net loss to net cash used in
operating activities: |                                                                    |                                                                                |                                              |         |              |          |                   |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Depreciation and amortization                                                  |                                              |         | 743,743      |          |                   |         | 428,745 |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Gain on disposal of equipment                                                  |                                              |         | (28,010      | )        |                   |         |        |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Stock options granted to employees                                             |                                              |         | 218,750      |          |                   |         |        |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Interest expense on stock options
issued in connection with guarantees of debt |                                              |         | 47,340       |          |                   |         | 1,945   |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    | Changes in assets and liabilities:                                             |                                              |         |              |          |                   |         |         |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Accounts receivable                          |         |              | (288,143 | )                 |         |         | (503,023  | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Prepaid expenses and other current assets    |         |              | (247,940 | )                 |         |         | 7,169     |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Inventory                                    |         |              | (264,940 | )                 |         |         | (273,404  | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | PODS and lifts in process                    |         |              | (228,223 | )                 |         |         | 34,964    |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Deposits and other noncurrent assets         |         |              | 47,998   |                   |         |         | (27,387   | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Accounts payable                             |         |              | 107,074  |                   |         |         | 1,002,184 |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Due to customers                             |         |              | (72,645  | )                 |         |         | 69,362    |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Deferred revenue                             |         |              | 29,810   |                   |         |         | 137,289   |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                    |                                                                                | Accrued expenses and deferred franchise fees |         |              | 610,655  |                   |         |         | 31,885    |  
|                                                                            |                                                                    |                                                                               
|Total adjustments                                                           |                                                                    |                                                                                | 675,469                                      |         |              |          | 909,729           |        
|                                                                            |                                                                    |                                                                               
|Net cash used in operating activities                                       |                                                                    |                                                                                | (557,911                                     | )       |              |          | (371,103          | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash flow from investing activities                                         |                                                                    |                                                                                |                                              |         |              |          |                   |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Purchase of PODS                                                            |                                                                    |                                                                                | (851,862                                     | )       |              |          | (1,240,361        | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Purchase of property and equipment                                          |                                                                    |                                                                                | (336,190                                     | )       |              |          | (345,905          | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Proceeds from sale of PODS and equipment                                    |                                                                    |                                                                                | 160,992                                      |         |              |          | 0                 |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Patent costs                                                                |                                                                    |                                                                                | (3,409                                       | )       |              |          | (11,101           | )      
|                                                                            |                                                                    |                                                                               
|Net cash used in investing activities                                       |                                                                    |                                                                                | (1,030,469                                   | )       |              |          | (1,597,367        | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash flow from financing activities                                         |                                                                    |                                                                                |                                              |         |              |          |                   |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Debt issuance cost                                                          |                                                                    |                                                                                | (385,135                                     | )       |              |          | (5,213            | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Proceeds from long-term debt                                                |                                                                    |                                                                                | 4,702,067                                    |         |              |          | 1,100,000         |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Principal payments on long-term debt and capital lease
obligations          |                                                                    |                                                                                | (873,629                                     | )       |              |          | (457,466          | )      
|                                                                            |                                                                    |                                                                               
|Net cash provided by financing activities                                   |                                                                    |                                                                                | 3,443,303                                    |         |              |          | 637,321           |        
|                                                                            |                                                                    |                                                                               
|Net
increase (decrease) in cash                                             |                                                                    |                                                                                | 1,854,923                                    |         |              |          | (1,331,149        | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash at beginning of period                                                 |                                                                    |                                                                                | 422,997                                      |         |              |          | 1,754,146         |        
|                                                                            |                                                                    |                                                                               
|Cash at end of period                                                       |                                                                    | $                                                                              | 2,277,920                                    |         |              | $        | 422,997           |        
|                                                                            |                                                                    |                                                                               
|Supplemental disclosures of noncash financing activities:                   |                                                                    |                                                                                |                                              |         |              |          |                   |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Equipment financed through capital leases                          |                                                                                | $                                            | 28,035  |              |          | $                 | 357,352 |        
|                                                                            |                                                                    |                                                                               
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Fair value of options issued in connection with
guarantees of
debt |                                                                                | $                                            | 117,665 |              |          | $                 | 66,660  |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Unamortized value of stock options issued to employees             |                                                                                | $                                            | 500,000 |              |          | $                 |        |        
|                                                                            |                                                                    |                                                                               

See accompanying notes.

32



---



##### 



PODS, Inc.

Notes to Financial Statements

September 30, 2001

1.     Summary of Significant Accounting Policies

The Company manufactures and rents portable storage units to the public to be
used as alternative means of storage rental space to the mini-storage market or
an alternative means for customers to conduct physical moves of household or
business contents. The Company also franchises its operations throughout the
United States. The Company generally provides short-term rentals on a weekly
basis for moves and on a monthly basis for storage either on the customer site
or in the Companys warehouses. The Company also provides pickup and delivery
services for the storage units.

The Company was initially formed as a limited liability company, Portables On
Demand Storage, LLC, under the laws of the state of Florida on August 26, 1998.
Upon formation, the Company merged the assets and liabilities of a predecessor
entity, Rope Developments Partnership, into the Company. In February, 1999, the
Company registered a name change with the state of Florida to PODS, LLC. In
September 1999, the Company transferred the assets of PODS, LLC at net book
value to a newly formed corporation, PODS, Inc.

Revenues

Revenues from the rental of portable storage units are recognized ratably over
the rental period. Deferred revenue represents amounts billed for rental
periods that extend beyond the balance sheet date as well as amounts billed for
deliveries/pickups which have not yet taken place. Revenues for pickup and
delivery charges are recognized as the service is rendered. Revenues related to
the sales of PODS and lifts to franchisees are recorded upon delivery of the
equipment to the franchisee.

Initial franchise fees from franchisees are recognized upon the opening of the
franchise operation. Fees received prior to this point are reflected as
deferred revenue to be recognized when all services have been substantially
performed. Royalties and fees for advertising and billing services provided by
the Company to the franchisees are computed as a percentage of franchisees
rental revenues and are recognized as earned. During the year ended September
30, 2001 and the nine months ended September 30, 2000, the
Company sold 19.25 and 18 1/2 franchises (representing
13 and five metropolitan areas, respectively) and
recognized initial franchise fee revenues related to these franchises of
$350,000 and $160,000, respectively.

The Company does not provide financing for its
franchisees. However, the Company has allowed its first franchisee to
defer payment on a portion of its royalties and POD and lift
purchases. Deferred amounts due from this franchise are $162,132 and
$127,717 at September 30, 2001 and 2000, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments
with original maturities of three months or less when acquired to be
cash equivalents.

Accounts Receivable

Accounts receivable represent amounts due from
customers and franchisees for services and products provided. Estimates
for uncollectible accounts are provided for in the financial statements and
have been within managements expectations.

33



---



##### 



1.     Summary of Significant Accounting Policies (continued)

Inventory and PODS and Lifts in Process

Inventory and PODS and lifts in process consist of raw materials, PODS and
lifts at various stages of completion and PODS and lifts which are completed
but which have not been placed into service, in the case of PODS and lifts to
be used in the Companys operations, or sold to a franchisee, in the case of
inventory. PODS and lifts in process and inventory are stated at the
lower of cost
or market. Cost is determined using the first-in, first-out method.

Rental Equipment

Rental equipment consists of PODS that are used for rental to customers. The
PODS are stated at cost and depreciated using the straight-line method over a
ten-year useful life. Accumulated depreciation on the rental equipment was
$1,044,512 and $602,806 at
September 30, 2001 and 2000, respectively.

Property and Equipment

Property and equipment is stated at cost and depreciated using the
straight-line method over estimated useful lives of the respective assets,
which range from three to ten years.

Patent Costs

The Company has capitalized legal fees net of amortization expense in the
amount of $25,637 and $19,692 at September 30, 2001 and 2000, respectively,
associated with the patent application process for its hydraulic lift system.
In December 1999, the patent was allowed, and in January 2000, the Company
began amortizing the patent over its 15-year remaining life. Amortization
expense for patent costs capitalized for the year ended
September 30, 2001 and nine months ended September 30, 2000 is
$1,879 and $1,096, respectively.

Advertising

The Company expenses the costs of advertising the first time an advertisement
is placed. Advertising expense was $442,954 and $467,105 for the year ended
September 30, 2001 and the nine months ended September 30, 2000, respectively.

34



---



##### 



1.     Summary of Significant Accounting Policies (continued)

The Company collects a fee from its franchisees, which is committed to an
advertising program. The Company accrues these committed amounts in accordance
with Statement of Financial Accounting Standards (SFAS) No. 45, Accounting for
Franchise Fee Revenue,until the amounts are expended. Committed advertising at
September 30, 2001 and 2000, was $40,014 and $25,200, respectively, and is
included in accrued expenses.

Impairment of Long-lived Assets

Impairment losses are recorded on long-lived
assets used in operations when impairment indicators are present and
the undiscounted cash flows estimated to be generated by those assets
are less than the assets carrying value. When impairment is
indicated, a loss is recognized for the excess of carrying value
over fair value.

Financial Instruments

The Companys financial instruments include
cash, accounts receivable, accounts payable, long term debt and
obligations under capital leases. The carrying values of the
Companys financial instruments approximate fair value.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and the accompanying notes. Actual results could differ from those
estimates.

Fiscal Year

Effective September 30, 2000, the Company changed its fiscal year end from December 31 to September 30.

2.     Sale-Leaseback Transactions

The Company engages in transactions for financing purposes whereby it sells
certain assets (primarily PODS® and hydraulic lifts) to a leasing company and
then leases these assets back for a period of five to six years. In each case,
the sales price has approximated the cost of the assets involved and no gain or
loss was recognized. The related leases have been accounted for as capital
leases in accordance with Statement of Financial Accounting Standards (SFAS)
No. 13, Accounting for Leases.

3.     Related-Party Transactions

The Company has engaged in business transactions for the purchase of insurance
from a relative of an officer/stockholder of the Company. The Company purchases
liability, property and life insurance. For the year ended September 30, 2001
and the nine months ended September 30, 2000, amounts charged to expense
relating to transactions with this individual were $103,120 and $51,906,
respectively.

35



---



##### 



4.     Inventory

The Companys inventory is summarized as follows at September 30:

|                          |  |      |         |      |  |   |         | 
|------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                          |  | 2001 |         | 2000
|                          |  |     
|Completed PODS and lifts  |  | $    | 136,593 |      |  | $ | 53,932  | 
|                         
|                         
|                         
|                         
|PODS and lifts in process |  |      | 29,314  |      |  |   | 50,142  | 
|                         
|                         
|                         
|                         
|Raw materials             |  |      | 664,197 |      |  |   | 461,090 | 
|                          |  |     
|Total inventory           |  | $    | 830,104 |      |  | $ | 565,164 | 
|                          |  |     

5.     Property and Equipment

The Companys property and equipment is summarized as follows at September 30:

|                                |  |      |           |      |  |   |           |  
|------------------------------- |  | ---- | --------- | ---- |  | - | --------- | -
|                                |  | 2001 |           | 2000
|                                |  |     
|Equipment                       |  | $    | 1,232,578 |      |  | $ | 995,613   |  
|                               
|                               
|                               
|                               
|Furniture                       |  |      | 93,814    |      |  |   | 85,507    |  
|                               
|                               
|                               
|                               
|Leasehold improvements          |  |      | 148,794   |      |  |   | 148,794   |  
|                               
|                               
|                               
|                               
|Computer equipment and software |  |      | 500,911   |      |  |   | 396,291   |  
|                               
|                               
|                               
|                               
|Vehicle                         |  |      | 24,869    |      |  |   | 24,869    |  
|                                |  |     
|Total property and equipment    |  |      | 2,000,966 |      |  |   | 1,651,074 |  
|                               
|                               
|                               
|                               
|Accumulated depreciation        |  |      | (451,231  | )    |  |   | (243,169  | )
|                                |  |     
|Property and equipment, net     |  | $    | 1,549,735 |      |  | $ | 1,407,905 |  
|                                |  |     

36



---



##### 



5.     Property and Equipment (continued)

Assets recorded under capital leases are included in property, equipment and
rental equipment are as follows at September 30:

|                         |  |      |          |      |  |   |         |  
|------------------------ |  | ---- | -------- | ---- |  | - | ------- | -
|                         |  | 2001 |          | 2000
|                         |  |     
|PODS                     |  | $    | 279,128  |      |  | $ | 279,128 |  
|                        
|                        
|                        
|                        
|Hydraulic lifts          |  |      | 161,265  |      |  |   | 161,265 |  
|                        
|                        
|                        
|                        
|Equipment                |  |      | 411,853  |      |  |   | 411,853 |  
|                         |  |     
|                         |  |      | 852,246  |      |  |   | 852,246 |  
|                        
|                        
|                        
|                        
|Accumulated depreciation |  |      | (159,254 | )    |  |   | (72,163 | )
|                         |  |     
|                         |  | $    | 692,992  |      |  | $ | 780,083 |  
|                         |  |     

Depreciation expense for the year ended September 30, 2001 and nine months
ended September 30, 2000 was $686,511 and $413,500, respectively
and includes depreciation on portable storage units,
hydraulic lifts and equipment under capital lease of $87,091 and
$43,546, respectively.

6.     Leasing Arrangements and Commitments

The Company leases vehicles, office equipment and office and warehouse space
under operating leases having terms from two to six years. Certain of these
leases include renewal options for periods up to two years. Rental expense for
the year ended September 30, 2001 and the nine months ended September 30, 2000
was $1,049,104 and $643,396, respectively.

Future minimum annual lease payments under the
above operating leases as of September 30, 2001 are as
follows:

|           |  |   |           | 
|---------- |  | - | --------- | 
|2002       |  | $ | 1,182,227 | 
|          
|          
|          
|          
|2003       |  |   | 1,181,940 | 
|          
|          
|          
|          
|2004       |  |   | 846,695   | 
|          
|          
|          
|          
|2005       |  |   | 262,120   | 
|          
|          
|          
|          
|2006       |  |   | 169,371   | 
|          
|          
|          
|          
|Thereafter |  |   | 390,307   | 
|           |  |   |           | 
|           |  | $ | 4,032,660 | 
|           |  |   |           | 

37



---



##### 



7.     Long-Term Obligations

Long-term obligations as of September 30, 2001 and 2000 are summarized as
follows:

|                                                                                                                                                                      |  |      |           |      |  |   |           |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- |  | - | --------- | -
|                                                                                                                                                                      |  | 2001 |           | 2000
|                                                                                                                                                                      |  |     
|10% note payable, principal and interest due on
September 30, 2003; collateralized by software.                                                                       |  |      | 80,000    |      |  |   | 80,000    |  
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Notes payable, principal and interest payable
in installments through September 2004,
interest at varying rates from 7.75% to 9.5%;
collateralized by certain assets. |  |      | 1,736,822 |      |  |   | 1,625,543 |  
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Subordinated Convertible Debentures                                                                                                                                   |  |      | 3,845,000 |      |  |   |          |  
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Capital leases, principal and interest payable
in installments through 2005, interest at
varying rates from 8.0% to 9.18%.                                            |  |      | 632,418   |      |  |   | 732,224   |  
|                                                                                                                                                                      |  |     
|                                                                                                                                                                      |  |      | 6,294,240 |      |  |   | 2,437,767 |  
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|                                                                                                                                                                     
|Less current portion                                                                                                                                                  |  |      | (740,904  | )    |  |   | (693,165  | )
|                                                                                                                                                                      |  |     
|Due after one year                                                                                                                                                    |  | $    | 5,553,336 |      |  | $ | 1,744,602 |  
|                                                                                                                                                                      |  |     

The Company raised $3,845,000 through an offering of Series A Subordinated
Convertible Debentures. These debentures carry an interest rate of 12% payable
quarterly and mature on April 15, 2010. They are convertible into one share of
common stock for each $5.10 of debentures held only the event of a public
offering or the sale of the Company.

Certain of the above notes are personally guaranteed by certain stockholders
and directors of the Company. During the nine months ended September 30, 2000,
the Company granted 200,000 options to purchase the Companys common stock at
$1 per share to certain guaranteeing stockholders and directors in exchange for
their personal guarantees. In October 2000 the Company granted 50,000 options
to purchase the Companys Common Stock at a price of $1 in
exchange for another
personal guarantee. The total fair value of the options granted as of
September 30, 2001 and 2000 is $184,825 and $66,660 respectively, and is
included in other noncurrent assets in the Companys balance sheet. The fair
value of
the options granted was calculated using the Black-Scholes Model with an
estimated market value of the common stock, which took into consideration
recent and anticipated sales of the Companys common stock. Amortization of
this

38



---



##### 



7.     Long-Term Obligations (continued)

asset is recorded as interest expense and amounted to $49,285 during the year
ended September 30, 2001 and $1,945 during the nine months ended September 30,
2000.

Cash paid for interest during the year ended September 30, 2001 and the nine
months ended September 30, 2000 was $236,874 and $109,713, respectively.

Annual maturities of long-term debt as of September 30, 2001 are summarized as
follows:

|           |  |   |           | 
|---------- |  | - | --------- | 
|2002       |  | $ | 570,090   | 
|          
|          
|          
|          
|2003       |  |   | 570,753   | 
|          
|          
|          
|          
|2004       |  |   | 348,614   | 
|          
|          
|          
|          
|2005       |  |   | 299,301   | 
|          
|          
|          
|          
|2006       |  |   | 28,064    | 
|          
|          
|          
|          
|Thereafter |  |   | 3,845,000 | 
|           |  |   |           | 
|           |  | $ | 5,661,822 | 
|           |  |   |           | 

Future minimum lease payments on capital leases are summarized as follows:

|                                                                               |  |   |         |  
|------------------------------------------------------------------------------ |  | - | ------- | -
|2002                                                                           |  | $ | 211,619 |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|2003                                                                           |  |   | 197,384 |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|2004                                                                           |  |   | 164,433 |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|2005                                                                           |  |   | 91,365  |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|2006                                                                           |  |   | 56,228  |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Thereafter                                                                     |  |   | 4,660   |  
|                                                                               |  |   |         |  
|                                                                               |  |   | 725,689 |  
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Less amount representing interest                                              |  |   | (93,271 | )
|                                                                               |  |   |         |  
|Present value of minimum lease payments (includes current
portion of $170,814) |  | $ | 632,418 |  
|                                                                               |  |   |         |  

8.     Income Taxes

At September 30, 2001 and 2000, the Company had temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and such amounts measured by the tax laws. The Company also has net operating
loss carryforwards available to offset future taxable income.

39



---



##### 



8.     Income Taxes (continued)

Significant components of the Companys deferred tax assets and liabilities are as follows:

|                                    |                                 |                    |              |           |              |   |          |         | 
|----------------------------------- | ------------------------------- | ------------------ | ------------ | --------- | ------------ | - | -------- | ------- | 
|                                    |                                 |                    | Deferred Tax
|Temporary Differences/Carryforwards |                                 | Assets/Liabilities
|                                    |                                 |                   
|                                    |                                 |                    | September 30 |           | September 30
|                                    |                                 |                    | 2001         |           | 2000        
|                                    |                                 |                    |              |           |             
|Deferred tax assets:                |                                 |                    |              |           |              |   |          |        
|                                   
|                                   
|                                   
|                                   
|                                    | Net operating loss carryforward |                    | $            | 1,487,250 |              |   | $        | 822,696 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Deferred rental income          |                    |              | 59,386    |              |   |          | 82,416  | 
|                                   
|                                   
|                                   
|                                   
|                                    | Other                           |                    |              | 127,392   |              |   |          | 29,211  | 
|                                    |                                 |                   
|Total deferred tax assets           |                                 |                    | 1,674,028    |           |              |   | 994,323  |        
|                                   
|                                   
|                                   
|                                   
|Deferred tax liabilities:           |                                 |                    |              |           |              |   |          |        
|                                   
|                                   
|                                   
|                                   
|                                    | Property and equipment          |                    |              | 563,183   |              |   |          | 300,697 | 
|                                    |                                 |                   
|Total deferred tax liability        |                                 |                    | 563,183      |           |              |   | 300,697  |        
|                                   
|                                   
|                                   
|                                   
|Less valuation allowance            |                                 |                    | 1,110,845    |           |              |   | (693,626 | )      
|                                    |                                 |                   
|Net deferred tax asset              |                                 | $                  |             |           |              | $ |         |        
|                                    |                                 |                   

Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes,requires a valuation allowance to reduce the deferred tax assets
reported if, based on the weight of evidence, it is more likely than not that
some portion or all of the deferred tax asset will not be realized. After
consideration of all the evidence, both positive and negative, management has
determined that a valuation allowance is required equal to the full amount of
the net deferred tax asset. During the year ended September 30, 2001
and the nine months ended September
30, 2000, the valuation allowance increased by $417,219 and $479,092,
respectively.

At September 30, 2001, the Companys net operating loss carryforward for
federal income tax purposes is approximately $3,952,299, which
expires through the
year 2021.

40



---



##### 



9.     Stockholders Equity

Effective December 31, 2000, the Company
converted certain shareholder interests in the predecessor entity, PODS, LLC, that
employees were entitled to in the event of a public offering of the
Company's common stock or the sale of the Company to options in shares of
stock in PODS, Inc. There were 250,000 options granted that will be
vested over a four year period beginning January 1, 2000. The options have an exercise price of $1 per share,
but were granted when the fair market value of the stock was $3 per share.
This resulted in the intrinsic value of the options of $500,000 being
recorded. This amount is being amortized as compensation expense over the vesting
period of the options. Compensation expense of $218,750 was recorded
in the year ended September 30, 2001.

11.     Loss Per Share

Options to purchase shares of common stock were not included in the computation
of diluted loss per share because of the antidilutive effect of the options on
the loss per share calculation.

41



---



##### 



12.     Stock Option Grants

During the nine months ended September 30, 2000, the Board of Directors adopted
the 2000 Stock Option Plan (the Plan). Under the terms of the Plan, 1,100,000
shares of the Companys common stock may be subject to option and sold. During
the year ended September 30, 2001 and the nine months ended September 30, 2000,
the Company granted 325,000 and 170,250 incentive stock options, respectively,
to purchase its common stock to Company employees and Board of Director members
under the Plan. The per share option price was set based on managements
estimate of the market value of the Companys common stock at the time of the
grant of the incentive stock option. The value of the Companys common stock
was estimated by management, taking into consideration recent and anticipated
sales of the Companys common stock. These options have an exercise price of $1
to $3 per share and life of ten years; and are subject to vesting based on
length of service.

The following table summarizes the stock option activity during the nine months ended September 30, 2000, and the year ended
September 30, 2001:

|                                  |  |           |         |        |  |               |         |            |  |   |      | 
|--------------------------------- |  | --------- | ------- | ------ |  | ------------- | ------- | ---------- |  | - | ---- | 
|                                  |  |           |         |        |  | Per Share     |         | Fair Value
|                                  |  | Number of |         | Option |  | of Options at
|                                  |  | Shares    |         | Price  |  | Grant        
|                                  |  |           |         |       
|Outstanding at December 31, 1999  |  |           |        |        |  | $             |        |            |  |   |      | 
|                                 
|                                 
|                                 
|                                 
|Granted                           |  |           | 170,250 |        |  |               | 1       |            |  | $ | 0.33 | 
|                                 
|                                 
|                                 
|                                 
|Exercised                         |  |           |        |        |  |               |        |            |  |   |      | 
|                                 
|                                 
|                                 
|                                 
|Cancelled                         |  |           |        |        |  |               |        |            |  |   |      | 
|                                  |  |          
|Outstanding at September 30, 2000 |  |           | 170,250 |        |  | $             | 1       |            |  |   |      | 
|                                  |  |          
|Exercisable at September 30, 2000 |  |           | 170,250 |        |  | $             | 1       |            |  |   |      | 
|                                  |  |          
|Granted                           |  |           | 275,000 |        |  | $             | 1       |            |  | $ | 2.44 | 
|                                 
|                                 
|                                 
|                                 
|Granted                           |  |           | 50,000  |        |  | $             | 3       |            |  | $ | 1.32 | 
|                                 
|                                 
|                                 
|                                 
|Exercised                         |  |           |        |        |  |               |        |            |  |   |      | 
|                                 
|                                 
|                                 
|                                 
|Cancelled                         |  |           |        |        |  |               |        |            |  |   |      | 
|                                  |  |          
|Outstanding at September 30, 2001 |  |           | 445,250 |        |  | $             | 1       |            |  |   |      | 
|                                  |  |          
|Outstanding at September 30, 2001 |  |           | 50,000  |        |  | $             | 3       |            |  |   |      | 
|                                  |  |          
|Exercisable at September 30, 2001 |  |           | 249,000 |        |  | $             | 1 to $3 |            |  |   |     
|                                  |  |           |         |        |  |              

The Company has adopted the disclosure only provisions of Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock Based
Compensation,but applies Accounting Principles Board (APB) Opinion No. 25 and
related interpretations in accounting for its incentive stock options.
Therefore, no compensation expense has been recognized for stock options
granted to Company employees and board members at fair market value. Additionally,
compensatory stock options granted to employees at below market value have been recorded
using the intrinsic value outlined in APB No. 25. Pro forma information regarding net
income is required by SFAS
123, which also requires that the information be determined as if the Company
had accounted for its employee stock options under the fair value method
of that statement. If the Company had elected to recognize compensation expense
for stock options based on the fair value at grant date, consistent with the
method prescribed in SFAS No. 123, net loss would have been
increased to $1,417,829 ($0.13 per share) and
$1,292,633 ($0.12 per share) for the year ended September 30, 2001 and the nine
months ended September 30, 2000, respectively.

42



---



##### 



The fair value for these options was estimated at the date of grant using the
Minimum Value option pricing model with the following assumptions:

|                                    |  |  |     |  
|----------------------------------- |  |  | --- | -
|Risk free interest rate             |  |  | 5.8 | %
|                                   
|                                   
|                                   
|                                   
|Dividend yield                      |  |  |    |  
|                                   
|                                   
|                                   
|                                   
|Expected life of options (in years) |  |  | 7   |  

The weighted average remaining contractual life of the
options is nine years.

13.     Subsequent
Events (Unaudited)

On October 1, 2001, the Company granted 152,750 incentive stock options to
purchase the Companys common stock at a price of $3.25 per
share.

As of December 14, 2001, an additional
$1,540,000 was raised through
the sale of the Series A Subordinate Convertible Debenture.

43



---



##### 



|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|Item 8. | Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure.

None.

PART III



|        |                                                                                                                 
|------- | ----------------------------------------------------------------------------------------------------------------
|Item 9. | Directors, Executive Officers, Promoters
and Control Persons; Compliance with Section 16(a) of the
Exchange Act.

Our board of directors includes five members, one of which is an executive
officer. Our directors are elected annually. We have no board committees. The
following table sets forth the name, age and position of each of our directors
and executive officers:

|                     |  |     |    |          |  |                                                             
|-------------------- |  | --- | -- | -------- |  | ------------------------------------------------------------
|Name                 |  | Age |    | Position
|                     |  |     |    |         
|Peter S. Warhurst    |  |     | 49 |          |  | President, Chief Executive Officer and Chairman of the Board
|                    
|                    
|                    
|                    
|Thomas M. Calcaterra |  |     | 47 |          |  | Chief Financial Officer                                     
|                    
|                    
|                    
|                    
|David Revelia        |  |     | 48 |          |  | Chief Operations Officer                                    
|                    
|                    
|                    
|                    
|R. Paul Umberg       |  |     | 61 |          |  | Chief Administrative Officer                                
|                    
|                    
|                    
|                    
|Philip Doganiero     |  |     | 44 |          |  | Director                                                    
|                    
|                    
|                    
|                    
|Dennis Martino       |  |     | 49 |          |  | Director                                                    
|                    
|                    
|                    
|                    
|W. Keith Schilit     |  |     | 47 |          |  | Director                                                    
|                    
|                    
|                    
|                    
|Martin H. Schweitzer |  |     | 57 |          |  | Director                                                    

Mr. Warhursthas served as our President since August 27, 1998 and
Chairman and CEO since January 2000. From October 1996 through August 26, 1998,
he held the position of Managing Partner with our Predecessor. From October
1994 to October 1996, he managed personal investments including real estate
development. In 1985 Mr. Warhurst was one of the three founders of EAI Systems,
Inc., developers of computer software for the public safety market, and held
the position of Vice President of Operations with EAI Systems, Inc and its
successors Bell Atlantic Public Sector Systems, Inc. (who purchased EAI
Systems) and OCS Technologies, Inc. (who purchased Bell Atlantic Public Sector
Systems), respectively until October 1994, out of Clearwater, Florida. Mr.
Warhurst has not entered into an employment agreement with us.

Mr. Calcaterrajoined PODS in February 2000 as our Chief Financial
Officer. From November 1998 to February 2000, he was employed as a financial
consultant and a chief financial officer for companies in the time-share and
staffing businesses in central Florida. From March 1997 to November 1998, he
was Vice President, Chief Financial Officer and Secretary of Romac
International, Inc. From October 1991 to April 1997 he was Vice President of
Administration and Chief Financial Officer of Hydro Agri North America, a
subsidiary of Norsk Hydro, headquartered in Oslo, Norway. Norsk Hydro is a
multi billion dollar conglomerate with its primary operations in oil and
energy, light metals and agriculture. From May 1989 to October 1991, he was
Vice President of a sister company; Hydro Transnitro, Inc. Mr. Calcaterra was
Senior Manager with Arthur Andersen & Company from 1984 to 1989 and Manager
with Deloitte & Touche from 1977 to 1984.

Mr. Reveliahas served as Vice President Operations since August 27, 1998
and our Chief Operations Officer since April, 2001. Previously, he held the
same position with our predecessor from June 1, 1998 through August 26, 1998.
Mr. Revelia has held the position of Company Officer with the Largo Fire
Department, Largo, Florida since 1977. In addition, he was Manager of
Operations and Distribution for IPAGSA in Odessa, Florida, a foreign
manufacturer of offset printing equipment and supplies, from November, 1994 to
January, 1995. From August, 1989 through September, 1994 and from May 1995 to
March 1996 he was a Project Manager for EAI Systems, Inc. of Clearwater
Florida, developers of computer software for the public safety market, and its
successors Bell Atlantic Public Sector Systems, Inc. and OCS Technologies,
Inc., respectively.

44



---



##### 



Mr. Umberghas been our Chief Administrative Officer since April 2000. In
April, 2001, his duties and title were changed to Chief Administrative Officer.
Mr. Umberg joined PODS, Inc. in March of 2000 after five and one half years of
executive management with Danka Office Imaging, in St. Petersburg, Florida, a
global supplier of copies, fax and printer office products, during which he was
engaged in a number of roles with direct operational responsibility. Mr.
Umbergs titles included President and CEO of Danka Omnifax, President of Danka
North American Operations and Corporate Vice President. At one time or another
he had direct responsibility for Service Dispatch Centers, Operations,
Integrated Supply Chains, Worldwide Integration, Human Resources, Real Estate
and Facilities, and Fleet Management in addition to P&L responsibility. Prior
to joining Danka Mr. Umberg spent over 30 years in the banking industry as a
shareholder of a two-bank community holding company with assets over $165
million and as the President and CEO of both banks.

Mr. Doganierohas been a member of our Board of Directors since November,
1999. Currently Mr. Doganiero is President of Doganiero Holdings, Inc. (private
investments), in Las Vegas, Nevada, a position he has held since November 1997.
Before his retirement at age 41, he was, from June 1997 to June 1998, Chairman
of Dataflex Corporation, in Clearwater Florida, a national publicly traded
systems integration company, and served as its President from January 1995 to
June 1998. He was President, the founder and CEO of National Data Products,
Inc., in Clearwater, Florida, which was recognized by INC. Magazine as one of
the top 100 fastest growing private companies between May 1982 and January
1995. Mr. Doganiero was three time finalist for entrepreneur of the year in the
State of Florida sponsored by INC. Magazine and Ernst & Young LLP.

In December, 1994, a former employee of National Data Products, Inc. filed
a complaint in the United States District Court for the Middle District of
Florida, Tampa Division, against Mr. Doganiero and National Data Products, Inc.
The complaint alleges, among other things, that Mr. Doganiero promised to
provide the employee with stock options to purchase National Data Products,
Inc. common stock, but terminated his employment at a time when the company was
being sold without granting him any options and that in doing so, Mr. Doganiero
and National Data Products, Inc. breached a contract with the former employee,
violated Rule 10b-5 of the Securities Exchange Act of 1934, and violated the
Florida Securities and Investor Protection Act. On March 31, 1997, after a jury
trial, a judgment was entered against Mr. Doganiero and National Data Products,
Inc. in the amount of $564,721, including pre-judgment interest.

Mr. Martinohas been a member of our Board of Directors since November,
1999. Mr. Martino is a Certified Financial Planner and owns
an independent branch office of a major securities brokerage firm. He
has been in the securities industry for twenty two years.
Mr. Martino has completed the Security Institutes
three-year course at the Wharton School. Concurrent with his activities at the
brokerage firm, he owns and operates, Contactman
Coaching, Inc., which provides a Client Contact Management System including a
multi-media package, and seminars.

Mr. Schilithas been a member of our Board of Directors since November,
1999. Mr. Schilit is President of Catalyst Ventures of Tampa, Florida, one of
three companies he has founded. Catalyst provides consulting to growth
businesses seeking private and public funding for growth, assists companies
seeking merger or acquisition opportunities and provides analysis of investment
opportunities to investment companies. Early in his career he developed
strategic planning programs for Fortune 500 companies, governmental agencies
and industry associations such as Corning Glass Works, Niagara Mohawk Power,
The U.S. Civil Service Commission and the National Tire Dealers and Retreaders
Association. He specializes in helping young entrepreneurial companies grow and
find the financing they need to be successful. He is also the author of six
recent books on venture capital, IPOs and emerging growth ventures. He has
served on the board of directors of Check Express, Inc., Dataflex Corp., and
Chicos FAS, Inc.

Mr. Schweitzerhas been a member of our Board of Directors since November,
1999. Mr. Schweitzer is a Certified Public Accountant. Since 1976, he has been
and is Managing Partner of Schweitzer and Dobosz, C.P.A., P.A. in Clearwater,
Florida. The firm specializes in medical and real estate entities. Prior to
joining Schweitzer and Dobosz, he was Financial Vice President of Page
CorporationU.S. Home in Silver Spring, Maryland, and he started his career
with Deloitte & Touche, in Baltimore, Maryland.

45



---



##### 



Director Compensation

Currently, we do not pay our directors cash compensation for their service
as directors. In February, 2000, we granted to each of our directors options to
purchase 7,500 shares of our common stock at a purchase price of $1.00 per
share. The options vested on January 1, 2001 and expire in February, 2010. In
January, 2001, we granted each of our directors options to purchase another
7,500 shares of our common stock at a purchase price of $3.00 per share. The
options vest on January 1, 2002 if the holder is a director on December 31,
2001. In October of 2001, we granted each of our directors options to purchase
another 10,000 shares of our common stock at a purchase price of $3.25 per
share. The options vest on October 1, 2002 if the holder is a director on
September 30, 2002.

Section 16(a) Beneficial
Ownership Reporting Compliance.

Our securities are not registered pursuant to
Section 12 of the Securities Exchange Act of 1934 and are not
publicly traded. Accordingly, Section 16(a) of the Exchange Act
is not applicable.

Item 10.  Executive
Compensation

The following table sets forth all cash compensation we paid or accrued
during each of our last three fiscal years to our chief executive officer. The
total annual salary and bonus paid or accrued during fiscal year 2000 to each
of our executive officers did not exceed $100,000 unless indicated below. The
options included in the table were granted to Mr. Warhurst in return for his
guaranty of our debt.

Summary Compensation Table

|                    |  |      |      |           |  |                     |         |              |  |         |        |              |  |              |   |         |  |                        |        |  |  |  |   | 
|------------------- |  | ---- | ---- | --------- |  | ------------------- | ------- | ------------ |  | ------- | ------ | ------------ |  | ------------ | - | ------- |  | ---------------------- | ------ |  |  |  | - | 
|                    |  |      |      |           |  |                     |         |              |  |         |        |              |  |              |   |         |  | Long Term Compensation
|                    |  |      |      |           |  |                     |         |              |  |         |        |              |  |              |   |         |  |                       
|                    |  |      |      |           |  | Annual Compensation |         | Securities   |  |         |        |             
|                    |  |      |      |           |  |                     |         | Underlying   |  |         |        |             
|Name and            |  |      |      |           |  |                     |         |              |  |         |        |              |  | Other Annual |   | Options |  | All Other             
|Principal Position  |  | Year |      | Salary($) |  | Bonus($)            |         | Compensation |  | Awarded |        | Compensation
|                    |  |      |      |           |  |                     |         |              |  |         |        |             
|Peter S. Warhurst   |  |      | 2001 |           |  | $                   | 55,871  |              |  | $       |       |              |  |              |  |         |  |                        |       |  |  |  |  | 
|                    |  |      | 2000 |           |  | $                   | 17,692  |              |  |         |       |              |  |              |  |         |  |                        | 30,000 |  |  |  |  | 
|                    |  |      | 1999 |           |  |                     |        |              |  |         |       |              |  |              |  |         |  |                        |       |  |  |  |  | 
|                   
|                   
|                   
|                   
|Thomas M Calcaterra |  |      | 2001 |           |  | $                   | 100,397 |              |  | $       | 15,000 |              |  |              |  |         |  |                        | 12,500 |  |  |  |  | 
|                   
|                   
|                   
|                   
|R Paul Umberg       |  |      | 2001 |           |  | $                   | 108,739 |              |  |         |       |              |  |              |  |         |  |                        | 12,500 |  |  |  |  | 

46



---



##### 



Option Grants During 2001

The following table provides information regarding stock options granted
during fiscal year 2001 to our officers. All of those options
were granted in return for Mr. Warhursts personal guaranty of our debt, and
have an exercise price equal to estimated fair market value on the date of
grant. In addition to the options described in the following table, we granted
options to three of our other directors and two of our other executive officers
in return for their guaranty of our debt. Those options are described under
Related Party Transactions.

|                     |  |            |        |               |  |             |  |                 |  |  |      |  |  |                 
|-------------------- |  | ---------- | ------ | ------------- |  | ----------- |  | --------------- |  |  | ---- |  |  | ----------------
|                     |  | Number of  |        | Percent of    |  |             |  |                 |  | 
|                     |  | Shares     |        | Total Options |  |             |  |                 |  | 
|                     |  | Underlying |        | Granted to    |  | Exercise or |  |                
|                     |  | Options    |        | Employees in  |  | Base Price  |  |                
|Name                 |  | Granted    |        | Fiscal Year   |  | Per Share   |  | Expiration Date
|                     |  |            |        |               |  |             |  |                
|Thomas M. Calcaterra |  |            | 10,000 |               |  |             |  |                 |  |  | 3.00 |  |  | February 1, 2011
|R. Paul Umberg       |  |            | 35,000 |               |  |             |  |                 |  |  | 3.00 |  |  | February 1, 2011

Year-End Option Values

The following table provides information as to the number and value of
options outstanding at September 30, 2001, held by our officers.

|                     |  |                           |                |                           |  |             |  | 
|-------------------- |  | ------------------------- | -------------- | ------------------------- |  | ----------- |  | 
|                     |  | Number of Unexercised     |                | Value of Unexercised     
|                     |  | Options at                |                | In-the-Money Options     
|                     |  | September 30, 2001        |                | at September 30, 2001    
|Name                 |  | Exercisable/Unexercisable |                | Exercisable/Unexercisable
|                     |  |                           |                |                          
|Peter S. Warhurst    |  |                           | 30,000/0       |                           |  | Footnote(1)
|Thomas M. Calcaterra |  |                           | 87,500/42,500  |                           |  | Footnote(1)
|R. Paul Umberg       |  |                           | 117,500/72,500 |                           |  | Footnote(1)

(1)   The Company is unable to state
the market value of its common equity because the Company's common
equity is not publicly traded and no valuation of the shares has been
performed. This amount is not disclosed due to the lack of a trading
market for the Company's common stock.

Stock Option Plan

In 2000, our board of directors approved our 2000 Stock Option Plan.
Employees, directors and consultants are eligible to receive grants of options
under the plan. We set aside 1.1 million shares in the plan. As of December 14,
2001, options to purchase a total of 648,000 shares of our common stock had
been granted under the plan, including 100,000 to our outside directors and
187,500 to our executive officers. Thirty thousand of the options held by our
outside directors vest on January 1, 2002, if they continue to serve as
directors on December 31, 2001.

Indemnification

The Company has entered into indemnification agreements with each of its
current directors and executive officers which will provide for indemnification
of, and advancement of expenses to, such persons for expenses and liability
incurred by them by reason of the fact that they are or were a director,
officer, shareholder of the Company.

47



---



##### 



including indemnification under
circumstances in which indemnification and advancement of expenses are
discretionary under Florida law.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the Act) may be permitted to directors, officers and controlling
persons of the company pursuant to the foregoing provisions, or otherwise, the
company has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable.

|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 11. | Security Ownership of Certain Beneficial Owners and Management.

The
following table provides information as of December 14, 2001 about
stockholders who are the beneficial owners of more than 5% of our common stock
or who are our directors or executive officers. Except as otherwise indicated,
the persons named in the table have sole voting and investment power with
respect to all shares of common stock owned by them.

|                                                                         |  |  |                            |  |  |        |           |            |  |  |      |   |  |  |  |  | 
|------------------------------------------------------------------------ |  |  | -------------------------- |  |  | ------ | --------- | ---------- |  |  | ---- | - |  |  |  |  | 
|                                                                         |  |  | Amount and Nature         
|                                                                         |  |  | of Beneficial Ownership(1)
|                                                                         |  |  |                           
|Name and Address of Beneficial Owner                                     |  |  |                            |  |  | Shares |           | Percentage |  |  |      |  
|                                                                         |  |  |                            |  |  |        |           |            |  |  |      |  
|PODS USA, LLC(2)
6061 45th Street North
St. Petersburg, FL 33714         |  |  |                            |  |  |        | 7,000,000 |            |  |  | 63.6 | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|JPJ Development, Inc.(2)
6061 45th Street North
St. Petersburg, FL 33714 |  |  |                            |  |  |        | 7,000,000 |            |  |  | 63.6 | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Peter S. Warhurst(2),(3)                                                 |  |  |                            |  |  |        | 7,030,000 |            |  |  | 63.7 | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Philip Doganiero(4)                                                      |  |  |                            |  |  |        | 545,000   |            |  |  | 5.0  | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Dennis Martino(5)                                                        |  |  |                            |  |  |        | 338,172   |            |  |  | 3.1  | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|W. Keith Schilit(6)                                                      |  |  |                            |  |  |        | 246,065   |            |  |  | 2.2  | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Martin H. Schweitzer(7)                                                  |  |  |                            |  |  |        | 65,000    |            |  |  | 0.5  | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|R. Paul Umberg(8)                                                        |  |  |                            |  |  |        | 72,500    |            |  |  | 0.7  | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Thomas M. Calcaterra(9)                                                  |  |  |                            |  |  |        | 42,500    |            |  |  | 0.4  | %
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|David Revelia(10)                                                        |  |  |                            |  |  |        | 0         |            |  |  |     |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|All
directors and executive officers as a group
(8 persons)              |  |  |                            |  |  |        | 8,339,237 |            |  |  | 75.8 | %



---

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | The percentages are calculated on the basis of 11,003,237 shares of
common stock outstanding on September 30, 2001. Under SEC rules, we
calculate the percentage ownership of each person who owns exercisable
options by adding (1) the number of exercisable options for that person
only to (2) the number of total shares outstanding, and dividing the
result into (3) the total number of shares and exercisable options owned
by that person. The business address of each of our directors and
executive officers is: c/o PODS, Inc., 6061 45th Street North, St.
Petersburg, Florida 33714.
|   
|   
|   
|   
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|   
|   
|   
|    |  | Since our shareholders are not required to file reports of beneficial
ownership under Section 13(d) of the Securities and Exchange Commission,
the information in this table is derived from our records and is based on
our interpretation of the term beneficial ownership, rather than on
reports filed with the Securities and Exchange Commission.                                                                                                                                                                                                                                           

48



---



##### 





|(2) |  | PODS USA, LLC is a limited liability company. The following members hold
the voting interests in PODS USA, LLC:
|--- |  | ---------------------------------------------------------------------------------------------------------------

|                         |  |               |    |  
|------------------------ |  | ------------- | -- | -
|                         |  | Approximate %
|                         |  | of Voting    
|Member                   |  | Interest     
|                         |  |              
|JPJ Development, Inc.    |  |               | 50 | %
|                        
|                        
|                        
|                        
|Varo Estates, Inc.       |  |               | 31 | %
|                        
|                        
|                        
|                        
|Ona, LLC                 |  |               | 12 | %
|                        
|                        
|                        
|                        
|Robert B. Timberlake     |  |               | 2  | %
|                        
|                        
|                        
|                        
|Dennis Martino, Trustee  |  |               | 2  | %
|                        
|                        
|                        
|                        
|Richard K. Warhurst      |  |               | 1  | %
|                        
|                        
|                        
|                        
|Christopher J. Cavallaro |  |               | 1  | %
|                        
|                        
|                        
|                        
|Ricardo Chaves           |  | Less than 1% 
|                        
|                        
|                        
|                        
|Lovelace                 |  | Less than 1% 



|     |  | Peter S. Warhurst, as trustee of his family trust, owns all of the voting
shares of JPJ Development, Inc. W. Roy Courtney owns all of the shares of
Varo Estates, Inc., and C. William Ash and his wife own all of the member
interests of Ona, LLC. All of the persons or entities listed in the table
above, and all of their shareholders could be deemed to be the beneficial
owners of all or part of the shares owned by PODS USA, Inc. Of the
foregoing persons and entities, we consider only JPJ Development, Inc.
and Mr. Warhurst to be beneficial owners of the shares owned by PODS USA,
LLC.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(3)  |  | Includes all of the shares beneficially owned by JPJ Development, Inc.
and an exercisable option to purchase 30,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|(4)  |  | Includes 500,000 shares owned by the Doganiero Family Trust and exercisable
options to purchase 45,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|(5)  |  | Includes 293,172 shares held in Mr. Martinos IRA and exercisable options
to purchase 45,000 shares. Does not include any shares owned by PODS USA,
LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|(6)  |  | Includes 201,065 shares owned
by Mr. Schilit and his wife jointly and exercisable options to
purchase 45,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    
|(7)  |  | Includes 50,000 shares owned by Mr. Schweitzer and his wife jointly and
exercisable options to purchase 15,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|(8)  |  | Represents exercisable options to purchase 72,500 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|(9)  |  | Represents exercisable options to purchase 42,500 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|(10) |  | Mr. Revelia owns an approximate 4.28% non-voting interest in PODS USA,
LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



|         |                                                
|-------- | -----------------------------------------------
|Item 12. | Certain Relationships and Related Transactions.

In October, 1996, JPJ Development, Inc. and Varo Estates, Inc. formed Rope
Developments, a general partnership which initially developed a mini-storage
business. Peter S. Warhurstour chairman and chief executive officerwas then
the beneficial owner of all of the voting shares of JPJ Development, Inc. and
W. Roy Courtney was the beneficial owner of all of the voting shares of Varo
Estates, Inc.

Upon the formation of Rope Developments, JPJ Development, Inc. and Varo
Estates, Inc. contributed as capital to Rope Developments the real estate which
Rope Developments then developed as a mini storage. The property
had been purchased by them for $493,389 and in return for their contributions,
each of them received a 50% profits and capital interest in Rope Developments.

49



---



##### 



Later, David Reveliaour Chief Operations Officerthrough Davlin
Investments, Inc., acquired a 5% non-voting profits interest in Rope
Developments in return for his services. Through Rope Developments, Messrs.
Warhurst, Courtney and Revelia began the initial development of the PODS
concept, and the PODS container and hydraulic lift designs.

In 1997, JPJ Development, Inc. made a non-interest bearing $90,000 loan to
Rope Developments. One-half of the loan was repaid and the other half was
converted to capital in August, 1998. Also, in February through August, 1998,
Rope Development advanced to Davlin Investments, Inc. $500 per week. The
advances totaled $15,000 and were non-interest bearing. Davlin Investments is
repaying the advances on a weekly basis.

In August, 1998, Rope Developments sold its mini-storage property and
distributed the net proceeds of the sale to its partners. Also in August, 1998,
JPJ Development, Inc., Varo Estates, Inc. and Davlin Investments, Inc. formed
Portables On Demand Storage, L.L.C. and contributed as capital an aggregate of
$232,000 in cash. Rope Developments merged into Portables on Demand Storage,
L.L.C., which then became the owner of the PODS name, concept, and technology.
At about the same time, Varo Estates then sold a 12.5% voting membership
interest to Ona, LLC.

Portables On Demand Storage L.L.C. later changed its name to PODS, LLC. On
September 3, 1999, we issued 7 million shares of our common stock to PODS, LLC
in exchange for the assets and liabilities of its portable-on-demand moving and
storage business. Those assets (net of liabilities) were carried on the books
of PODS, LLC at $1,248,962 at the time of the transaction. Mr. Warhurst, our
chairman, and W. Roy Courtney and C. William Ash were the beneficial owners of
membership interests in PODS, LLC at the time of that transaction. See Footnote
2 to Principal Shareholders.

On the same date, we simultaneously sold 2,150,000 shares of our common
stock for $1.00 per share in a private offering. Later in 1999, we sold an
additional 1,633,172 shares for $1.00 per share in the same private offering.
The Doganiero Family Trust, an affiliate of, Mr. Doganiero, one of our
directors, purchased 500,000 of those shares. Mr. Martino, one of our
directors, purchased 273,172 of those shares through his IRA. Mr. Schweitzer,
one of our directors, and his wife jointly purchased 50,000 of those shares.

In November, 1999, we issued 220,065 shares of our common stock to Mr.
Schilit, a director, in lieu of cash compensation for financial and strategic
advisory services performed by Mr. Schilits consulting firm, Catalyst
Ventures, in connection with our 1999 private offering.

In December, 1999, we entered into a Stockholders Agreement with all of
our stockholders which includes the following provisions:



| |  |  | restrictions on disposition of our common stock;                                                       
| | - |  | -------------------------------------------------------------------------------------------------------
|
| |  |  | rights of first refusal if our common stock is being sold;                                             
|
| |  |  | rights of co-sale if our common stock is being sold;                                                   
|
| |  |  | requirements to sell our common stock if shareholders owning more than 33.3% wish to sell their shares;
|
| |  |  | preemptive rights to subscribe to additional shares of our common stock; and                           
|
| |  |  | registration rights.                                                                                   

During calendar 2000, we granted options to purchase a total of 250,000
shares of our common stock in return for personal guaranties of a specified
amount of a working capital loan. Directors Warhurst, Doganiero, Martino, and
Schilit each guaranteed $300,000 of debt and were each granted options to
purchase 30,000 shares at a purchase price of $1.00 per share.

We have entered into employment agreements with Messrs. Umberg and
Calcaterra, our Chief Administrative Officer and Chief Financial Officer,
respectively. We have also entered into indemnification agreements with each of
our executive officers and directors as described under Our
ManagementIndemnification.

50



---



##### 



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



| |  | (a)      Exhibits:
| |  | ------------------

51



---



##### 



|        |  |   |  |                                                                                                                                                    | 
|------- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Exhibit |  |   |  |                                                                                                                                                    | 
|Number  |  |   |  | Description                                                                                                                                       
|        |  |   |  |                                                                                                                                                   
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|3.1()  |  |  |  | Articles of Incorporation of Registrant.                                                                                                          
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|3.2()  |  |  |  | Articles of
Amendment to Articles of Incorporation of Registrant.                                                                                 
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|3.3()  |  |  |  | Bylaws of Registrant.                                                                                                                             
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.1()  |  |  |  | Revised Form of
Series A Subordinated Convertible Debenture.                                                                                      
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.2()  |  |  |  | Revised Form of
Trust Indenture for Series A Subordinated Convertible Debentures.                                                                 
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.3()  |  |  |  | Revised Form of Escrow Agreement between U.S. Bank Trust National Association
and the Registrant for Series A Subordinated Convertible Debentures.
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.4()  |  |  |  | Promissory Note between Rope Developments and Pinellas Community Bank dated
April 16, 1997. (Principal amount of $27,000).                        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.5()  |  |  |  | Promissory Note between Rope Developments and Citizens Bank & Trust dated
April 10, 1998. (Principal amount of $19,699.22).                       
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.6()  |  |  |  | Promissory Note between Rope Developments and Citizens Bank & Trust
dated September 1, 1998. (Principal amount of $44,000).                       
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.7()  |  |  |  | Commercial Security Agreement between Rope Developments and Citizens Bank &
Trust dated September 1, 1998.                                        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   
|       
|       
|       
|       
|4.8()  |  |  |  | Intentionally Omitted.                                                                                                                            
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                                   

52



---



##### 



|        |  |   |  |                                                                                                                                          | 
|------- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------- | 
|4.9()  |  |  |  | Promissory Note between PODS, Inc. and Peoples Bank dated August 6, 1999.
(Principal amount of $100,000).                               
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.10() |  |  |  | Commercial Security Agreement between PODS, Inc. and Peoples Bank dated August 6, 1999.                                                 
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.11() |  |  |  | Business Loan Agreement dated September 3, 1999 between PODS, Inc. and First National
Bank of Florida. (Principal amount of $15,526.87).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.12() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $15,526.87).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.13() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999.                            
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.14() |  |  |  | Business Loan Agreement dated September 3, 1999 between PODS, Inc. and First National
Bank of Florida. (Principal amount of $37,263.07).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.15() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $37,263.07).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.16() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999.                            
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.17() |  |  |  | Business Loan Agreement dated September 3, 1999 between PODS, Inc. and First
National Bank of Florida. (Principal amount of $79,636.41).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.18() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $79,636.41).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.19() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999.                            
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.20() |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999. (Principal amount of $87,541.03).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.21() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $87,541.03).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.22() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated September 3, 1999.                            
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.23() |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999. (Principal amount of $87,813.37).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.24() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $87,813.37).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                         
|       
|       
|       
|       
|4.25() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated September 3, 1999.                            

53



---



##### 



|        |  |   |  |                                                                                                                                           |  | 
|------- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------- |  | 
|4.26() |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999. (Principal amount of $93,261.60). 
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.27() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $93,261.60).         
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.28() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated September 3, 1999.                             
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.29() |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999. (Principal amount of $99,046.99). 
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.30() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $99,046.99).         
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.31() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated September 3, 1999.                             
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.32() |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999. (Principal amount of $101,797.18).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.33() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $101,797.18).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.34() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated September 3, 1999.                             
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.35() |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999. (Principal amount of $101,813.49).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.36() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $101,813.49).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.37() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated September 3, 1999.                             
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.38() |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated September 3, 1999. (Principal amount of $140,084.20).
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.39() |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
September 3, 1999. (Principal amount of $140,084.20).        
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.40() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated September 3, 1999.                             
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.41() |  |  |  | Promissory Note between PODS, Inc. and Peoples Bank dated September 15, 1999.
(Principal amount of $62,365.40).                          
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.42() |  |  |  | Commercial Security Agreement between PODS, Inc. and Peoples Bank dated
September 15, 1999.                                              
|       
|       
|       
|       
|        |  |   |  |                                                                                                                                          
|       
|       
|       
|       
|4.43() |  |  |  | Promissory Note between PODS, Inc. and Peoples Bank dated May 23, 2000.
(Principal amount of $500,000).                                  

54



---



##### 



|         |  |   |  |                                                                                                                                                                                                                           |  | 
|-------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|4.44()  |  |  |  | Commercial Security Agreement between PODS, Inc. and Peoples Bank dated
May 23, 2000.                                                                                                                                    
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|4.45()  |  |  |  | Promissory Note between PODS, Inc. and Peoples Bank dated September 5, 2000.
(Principal amount of $500,000).                                                                                                             
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|4.46()  |  |  |  | Business Loan Agreement between PODS, Inc. and First National Bank of Florida
dated October 18, 2000. (Principal amount of $500,000).                                                                                    
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|4.47()  |  |  |  | Promissory Note between PODS, Inc. and First National Bank of Florida dated
October 18, 2000. (Principal amount of $500,000).                                                                                            
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|4.48()  |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of
Florida dated October 18, 2000.                                                                                                              
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|4.49()  |  |  |  | Promissory Note between PODS, Inc. and Peoples Bank dated December 19, 2000.
(Principal amount of $250,000).                                                                                                             
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|4.50()  |  |  |  | Promissory Note between PODS, Inc. and PowerCerv Technologies Corporation
dated September 30, 1999. (Principal amount of $80,000).                                                                                       
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|10.1()  |  |  |  | Organizational Written Action of The Board of Directors of PODS, Inc.
pursuant to which PODS, Inc. acquired the assets of PODS, LLC.                                                                                     
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.2()  |  |  |  | Stockholders Agreement.                                                                                                                                                                                                 
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.3()  |  |  |  | Form of
Indemnification Agreements between Registrant and its directors.                                                                                                                                                 
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.4()  |  |  |  | Employment Agreement between PODS, Inc. and R. Paul Umberg dated April 4, 2000.                                                                                                                                          
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.5()  |  |  |  | Employment Agreement between PODS, Inc. and Thomas M. Calcaterra dated
February 1, 2000.                                                                                                                                 
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.6()  |  |  |  | Lease dated
December    , 1998 between MICP Realty Associates No. 2, MICP
Realty Associates No. 3, MICP Realty Associates No. 4, and MICP Realty Associates
No. 5 (all as landlord) and Portables On Demand Storage, LLC.
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.7()  |  |  |  | Rider dated January 5, 1999 to Lease dated December 31, 1998.                                                                                                                                                            
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.8()  |  |  |  | Lease Expansion Agreement dated June 18, 1998 between MICP Realty Associates
Nos. 2, 3, 4 and 5 and Portables On Demand Storage, LLC.                                                                                    
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.9()  |  |  |  | Warehouse Lease
dated May 24, 1999 between Wes-Flo Co. and PODS, LLC.                                                                                                                                                    
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.10() |  |  |  | Business Lease dated September 17, 1999 between Fundamental Hopkins Easton
No. 11, Inc. and PODS, Inc.                                                                                                                   
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.11() |  |  |  | Lease between William B. Shirley and PODS, Inc. dated February 24, 2000.                                                                                                                                                 
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.12() |  |  |  | Form of Stock Option Grants dated August 23, 2000 between each of the Registrant
and Peter J. Warhurst, Philip Doganiero, Dennis Martino, and W. Keith Schilit
regarding loan guarantees.                                
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          
|        
|        
|        
|        
|10.13() |  |  |  | 2000 Stock Option Plan.                                                                                                                                                                                                  
|        
|        
|        
|        
|         |  |   |  |                                                                                                                                                                                                                          



---

|   |  | Incorporated by reference to
the Company's registration statement on Form SB-2, file number
333-55460, filed in Washington, D.C. on May 30, 2001
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Reports on Form 8-K                                                                                                                             
|    |  | None                                                                                                                                            

55



---



##### 



SIGNATURES

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

| |     |                                          | 
| | --- | ---------------------------------------- | 
| | By: | /s/ PETER S. WARHURST                    | 
| |     |                                          | 
| |     | Name: Peter S. Warhurst
Title: President | 

Each person whose signature to this Annual Report
on Form 10-KSB appears below hereby appoints Peter S. Warhurst and
Thomas M. Calcaterra, or either of them, as his attorney-in-fact to
sign on his behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Annual
Report on Form 10-KSB, and any and all instruments or documents filed as
a part of or in connection with this Annual Report on Form 10-KSB or
the amendments thereto, and the attorney-in-fact, or either of them,
may make such changes and additions to this Annual Report on Form
10-KSB as the attorney-in-fact, or either of them, may deem necessary
or appropriate.

In
accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                                             |  |                                                                                            |  |                  
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------ |  | -----------------
|Signature                                    |  | Capacity                                                                                   |  | Date             
|                                             |  |                                                                                            |  |                  
|                                            
|/s/ PETER S. WARHURSTPeter S. Warhurst       |  | President, Chief Executive Officer
and Chairman of the Board (Principal Executive Officer) |  | December 21, 2001
|                                            
|/s/ THOMAS M. CALCATERRAThomas M. Calcaterra |  | Chief Financial Officer (Principal Accounting and Financial Officer)                       |  | December 21, 2001
|                                            
|/s/ PHILIP DOGANIEROPhilip Doganiero         |  | Director                                                                                   |  | December 21, 2001
|                                            
|/s/ DENNIS MARTINODennis Martino             |  | Director                                                                                   |  | December 21, 2001
|                                            
|/s/ W. KEITH SCHILITW. Keith Schilit         |  | Director                                                                                   |  | December 21, 2001
|                                            
|/s/ MARTIN H. SCHWEITZERMartin H. Schweitzer |  | Director                                                                                   |  | December 21, 2001



56