##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K SB

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

For the fiscal year ended: September 30, 2002

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





---



##### 



State issuers revenues for its
most recent fiscal year. $16,557,246

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. 11,003,737

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 [  ] ;
No [x]

2



---



##### 



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.

We operate company-owned PODS storage and moving businesses in the Tampa
Bay area of Florida, in Ft. Lauderdale, Florida and Chicago, Illinois. We are also a franchisor of
PODS protected franchise areas in 27 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                             

3



---



##### 



Selected Financial Data

In the table below, we provide you with selected financial data of PODS,
Inc. We have prepared the information for the years ended
September 30, 2002 and September 30, 2001, 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.

|                                                      |  |               |            |               |  |   |            |  
|----------------------------------------------------- |  | ------------- | ---------- | ------------- |  | - | ---------- | -
|                                                      |  | Years Ended  
|                                                      |  |              
|                                                      |  | September 30, |            | September 30,
|                                                      |  | 2002          |            | 2001         
|                                                      |  |               |            |              
|Statement of Operations Data:                         |  |               |            |               |  |   |            |  
|Revenues                                              |  | $             | 16,557,246 |               |  | $ | 12,011,571 |  
|Loss
from operations                                  |  | $             | (591,659   | )             |  | $ | (907,216   | )
|Net Loss                                              |  | $             | (1,485,507 | )             |  | $ | (1,233,380 | )
|Loss per share basic and diluted                      |  | $             | (0.14      | )             |  |   | (0.11      | )
|Weighted average shares outstandingbasic and diluted |  |               | 11,003,501 |               |  |   | 11,003,237 |  
|Balance Sheet:                                        |  |               |            |               |  |   |            |  
|Total Assets                                          |  | $             | 13,276,826 |               |  | $ | 10,915,093 |  
|Long Term Obligations                                 |  | $             | 8,061,161  |               |  | $ | 5,553,336  |  

4



---



##### 



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 belief that there is significant growth opportunity for
the Company, our expectation that the supply of self-storage
facilities will remain relatively limited for some time and that strong
occupancy and increasing rental rates will continue, our expectation
that our Chicago operation will become profitable during our next
fiscal year, our expectation that we will continue to grow our
business, our expectation that we will be able to put additional PODs
in service in our existing company-owned territories and increase
their profitablity, our expectation that our franchisees will purchase
additional PODs and lifts from us, and that our royalty revenue will
increase, our expectation as to our need for additional funds in the future and
our ability to sell additional franchises, borrow additional funds, 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.                                                                                   

5



---



##### 





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 27 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 13, 2002, there are over 13,700 PODS in service. We own
roughly 3,800 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.

6



---



##### 



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 franchised 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 1,750 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;

7



---



##### 



|  |  |                                                                                                                  
|- |  | -----------------------------------------------------------------------------------------------------------------
| |  | 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, in Ft. Lauderdale, Florida and
Chicago, Illinois.

Franchise Locations

The following table includes information at December 13, 2002, 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 |              |  |                  | 800  |             |       |  | 06/99 | 
|Orlando, Florida                   |  |        | 08/16/99 |                |  |            | 4   |              |  |                  | 1072 |             |       |  | 11/99 | 
|Lee County, Florida(2)             |  |        | 10/20/99 |                |  |            | 1   |              |  | See footnote (3) |      |             | 03/00 | 
|Minneapolis, Minnesota             |  |        | 01/17/00 |                |  |            | 6   |              |  |                  | 850  |             |       |  | 04/00 | 
|Dallas, Texas                      |  |        | 03/07/00 |                |  |            | 2   |              |  |                  | 109  |             |       |  | 07/01 | 
|Indianapolis, Indiana              |  |        | 04/14/00 |                |  |            | 3   |              |  |                  | 797  |             |       |  | 06/00 | 
|Charlotte, North Carolina          |  |        | 05/01/00 |                |  |            | 1.5 |              |  |                  | 582  |             |       |  | 07/00 | 
|Dayton, Ohio                       |  |        | 06/29/00 |                |  |            | 2   |              |  |                  | 299  |             |       |  | 08/00 | 
|Daytona, Florida                   |  |        | 07/27/00 |                |  |            | 1   |              |  |                  | 513  |             |       |  | 09/00 | 
|Jacksonville, Florida              |  |        | 07/27/00 |                |  |            | 2   |              |  |                  | 731  |             |       |  | 12/00 | 
|Brevard County, Florida(Melbourne) |  |        | 07/27/00 |                |  |            | 1   |              |  |                  | 315  |             |       |  | 03/01 | 
|Baton Rouge, Louisiana             |  |        | 11/22/00 |                |  |            | 1.5 |              |  |                  | 555  |             |       |  | 05/01 | 
|St. Louis, Missouri                |  |        | 12/01/00 |                |  |            | 2   |              |  |                  | 307  |             |       |  | 02/01 | 
|Nashville, Tennessee               |  |        | 12/01/00 |                |  |            | 1.5 |              |  |                  | 148  |             |       |  | 01/02 | 
|Palm Beach County, Florida         |  |        | 02/06/01 |                |  |            | 2   |              |  |                  | 602  |             |       |  | 04/01 | 
|Miami, Florida                     |  |        | 03/31/01 |                |  |            | 1   |              |  |                  | 213  |             |       |  | 06/01 | 
|Warren and Butler Counties, Ohio   |  |        | 03/28/01 |                |  |            | 1   |              |  | See footnote (3) |      |             | 04/01 | 
|Charleston,
South Carolina         |  |        | 04/09/01 |                |  |            | 1   |              |  |                  | 190  |             |       |  | 01/02 | 

8



---



##### 



|                                       |  |         |          |                |   |            |      |              |     |                  |     |             |       |  |       | 
|-------------------------------------- |  | ------- | -------- | -------------- | - | ---------- | ---- | ------------ | --- | ---------------- | --- | ----------- | ----- |  | ----- | 
|                                       |  |         |          |                |   | Number of  |      |              |     |                  |     | Date Opened
|Metropolitan                           |  | Date    |          | Franchise      |   | Number of  |      | or Expected 
|Area Served                            |  | Signed  |          | Territories(1) |   | PODS Owned |      | Opening Date
|                                       |  |         |          |                |   |            |      |             
|Atlanta,
Georgia                       |  |         | 07/12/01 |                |   |            | 2    |              |     |                  | 110 |             |       |  | 11/01 | 
|Jackson,
Mississippi                   |  |         | 09/15/01 |                |   |            | 1    |              |     |                  | 243 |             |       |  | 10/01 | 
|Columbus,
Ohio                         |  |         | 09/15/01 |                |   |            | 3.25 |              |     |                  | 467 |             |       |  | 12/01 | 
|Kansas
City, Missouri                  |  |         | 11/15/01 |                |   |            | 1    |              |     |                  | 256 |             |       |  | 02/02 | 
|Raleigh,
North Carolina                |  |         | 03/27/02 |                |   |            | 2    |              |     |                  | 95  |             |       |  | 05/02 | 
|Richmond,
Virginia                     |  |         | 04/29/02 |                |   |            | 2    |              |     |                  | 249 |             |       |  | 07/02 | 
|Dallas,
Texas                          |  |         | 05/30/02 |                |   |            | 1    |              |     |                  | 92  |             |       |  | 07/02 | 
|Virginia
Beach, Virginia               |  |         | 04/17/02 |                |   |            | 2    |              |     |                  | 254 |             |       |  | 05/02 | 
|Atlanta,
Georgia See footnote(4)       |  |         | 05/28/02 |                |   |            | 4    |              |     |                  | 77  |             |       |  | 06/02 | 
|Northern Kentucky                      |  |         | 05/16/02 |                |   |            | 1    |              |     |                  | 64  |             |       |  | 08/02 | 
|Northern
Cincinnati, Ohio              |  |         | 09/04/02 |                |   |            | 1.03 |              |     | See footnote (3) |     |             | 09/02 | 
|Birmingham,
Alabama                    |  |         | 10/01/02 |                |   |            | 2.25 |              |     |                  | N/A |             |       |  | 12/02 | 
|Fairfax,
Virginia                      |  |         | 10/07/02 |                |   |            | 4.29 |              |     |                  | N/A |             |       |  | 12/02 | 
|Memphis,
Tennessee                     |  |         | 10/07/02 |                |   |            | 2.5  |              |     |                  | N/A |             |       |  | 03/03 | 
|North
Shore, Louisiana See footnote(3) |  |         | 11/21/02 |                |   |            | .53  |              |     |                  | N/A |             |       |  | 11/02 | 
|Austin,
Texas                          |  |         | 12/09/02 |                |   |            | 2    |              |     |                  | N/A |             |       |  | 12/02 | 
|Williamsburg,
Virginia See footnote(3) |  |         | 12/09/02 |                |   |            | 1.09 |              |     |                  | N/A |             |       |  | 12/02 | 
|New
Orleans, Louisiana                 |  | Pending |          |                | 2 |            |      |              | N/A |                  |     | Pending    
|Greenville,
South Carolina             |  | Pending |          |                | 2 |            |      |              | N/A |                  |     |             | 02/03 | 



---

|(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) |  | This is a joint venture agreement and PODS, Inc. is a 10% owner.                                                                        

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. 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 $60,000 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
annual 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;
| 
| |  | During the first five years of operation the franchisee will pay
$1,000 per month per franchise area as a call center support fee.                                                                                                                                                                                               

9



---



##### 



|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Requirement to purchase at least 35 PODS containers and 2 lifts from us prior to opening. Prices for the PODS are currently
$1,835 per 12-foot container and $2,087 per 16-foot container from our Tampa factory and $1,866 and $2,118, respectively,
from our Illinois factory. The price of the lifts varies with our materials and manufacturing costs, but is currently
$33,000 for the standard lift and $39,500 for the remote control
lift;
| 
| |  | A requirement that the franchisees spend a specified minimum amount 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 for the storage of PODS. 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 until recently using the revenues from franchisees and other available
capital, to fund the establishment of company-owned PODS moving and storage
businesses. Recently, however, we have shifted our focus more towards
franchising than opening company-owned locations.

We plan to grow by selling additional franchises. We may
also enter into joint venture arrangements if the opportunity presents itself.
Among the new markets we are targeting are:

|  |  |                           
|- |  | --------------------------
| |  | Louisville, Kentucky      
| 
| |  | Baltimore, Maryland       
| 
| |  | Boston, Massachusetts     
| 
| |  | Detroit, Michigan         
| 
| |  | Bergen County, New Jersey 
| 
| |  | Long Island, New York     
| 
| |  | Phoenix, Arizona          
| 
| |  | Cleveland, Ohio           
| 
| |  | Philadelphia, Pennsylvania
| 
| |  | Pittsburgh, Pennsylvania  
| 
| |  | Providence, Rhode Island  
| 
| |  | Houston, Texas            

10



---



##### 



|  |  |                     
|- |  | --------------------
| |  | San Antonio, Texas  
| 
| |  | Denver, Colorado    
| 
| |  | Milwaukee, Wisconsin

As we continue to open new franchise locations and
they become established in their markets, we would expect to see
growth in the inter/intra state move business.

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;                          
| 
| |  | 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 15 years or perhaps
longer for containers stored in our warehouses with a residual value
of approximately 10% of the original cost.

11



---



##### 



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 $33,000 for the standard lift
and $39,500 for the remote control life. The remote control lift is
optional to the franchisee. Management believes the remote control
feature provides for greater safety in operation.

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:

|  |  |                                                          
|- |  | ---------------------------------------------------------
| |  | No trucks to rent and drive;                             
| 
| |  | Ease of use and content loading;                         
| 
| |  | Convenience;                                             
| 
| |  | Time savings (no unloading at the self-storage facility);

12



---



##### 



|  |  |                            
|- |  | ---------------------------
| |  | 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 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

13



---



##### 



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.     

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 2003 Self-Storage Almanac published by
Minico, 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.

14



---



##### 



According to the Almanac,
the top 10 companies within this industry control a combined market share of
approximately 19.1% of the total square footage in the industry, and the top 50
companies control less than 27.6%. 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
space. Because of the high cost associated with prime real estate locations and
lack of availability, the industry has seen a drop in the number of
new competitors entering the marketplace. For this reason, we expect the

15



---



##### 



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;                                                          
| 
| |  | outsourced logistics and distribution for manufacturers and
distributors;
| 
| |  | home furnishing/remodeling; 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.

16



---



##### 



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 and the 2003 Self-Storage Almanac.

Public Storage, Inc. is the largest self-storage company in the US, with
interests in about 1,450 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.

Storage USA owns
about 550 self-storage facilities (containing 37.9
million square feet of space) and manages more than 30 others (including nine
franchises) in 33 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 260
facilities, serving some 45,000 customers with 10-million square feet of
storage space. Sovrans properties are located in 21 states, primarily along
the Eastern Seaboard and in the southern U.S.

Shurgard Storage Centers primarily develops, buys, owns, and operates
self-storage centers. Directly and through joint ventures, they own and operate
more than 450 properties with about 31 million square feet of net rentable
space. Shurgard operates in 21 states.

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 accommodate up to 2,000 pounds of cargo.

17



---



##### 



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 44 branches in 21 states, they have a diversified base of over
40,000 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 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.

18



---



##### 



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:

|  |  |                                                     
|- |  | ----------------------------------------------------
| |  | 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
allows 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 information video describing our service and its benefits to
the end user.

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.

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

19



---



##### 



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:

|            |  |                         |  |                    |  |           |    |         |  |            |    |  |  |  |  | 
|----------- |  | ----------------------- |  | ------------------ |  | --------- | -- | ------- |  | ---------- | -- |  |  |  |  | 
|            |  |                         |  |                    |  |           |    |         |  | 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       |  | $149/mo                 |  | $119/mo.           |  | $         | 69 |         |  | $          | 49 | 
|16 ft       |  | $169/mo                 |  | $139/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.

20



---



##### 



Operational Considerations

Our operating system
includes five distinct components as follows:

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

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. That factory was moved to Peoria, Illinois
in June, 2002.

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 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.

Customer Invoicing
and Collection.Our software has a component that handles all
customer invoicing and collection of accounts receivable. Included in
this module is an interface to credit card processing software, which
the Company purchased from a third party and wrote an interface to
automatically process the amounts due from customers against their
credit cards and post the payments to the individual customer
accounts. The system also automatically generates late notices and
applies late fees to a customers account. Through
October 31, 2002 we offered invoicing and collection services to
the franchisees on a fee for service basis. Beginning with franchise
agreements signed after November of 2002, franchisees will be
required to use the Company for customer invoicing and collection.

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

21



---



##### 






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, 2002, we employed 124 full-time employees, consisting of
4 in management, 2 in sales and marketing, 33 in customer service, 30 in
administration and finance, 4 in warehouse operations, 24 as truck drivers, 3
in franchisee training / implementation, and 24 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
Pasco County, Florida
Pinellas County, Florida(1)
Broward County, Florida
Carol Stream, Illinois(2) |  |                | 50,000
30,000
80,000
70,000
40,000 |     |  | Warehouse
Warehouse/office
Warehouse/office/manufacturing
Warehouse/office
Warehouse/Office

|    |  |                         |  |  |  | 
|--- |  | ----------------------- |  |  |  | 
|   
|(1) |  | Corporate headquarters. |  |  |  | 
|(2) |  | A suburb of Chicago.    |  |  |  | 

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

22



---



##### 



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.

23



---



##### 



PART II

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

Market Information

There is no public
trading market for our common stock.

Holders

There are 42 holders of
our common stock.

Public Offering of Debentures

On April 18, 2002, 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. This offering was terminated on December 2, 2002. The Debentures were sold at par and are
convertible into shares of our common stock.

At September 30, 2002, we had sold $7,080,000 of Debentures. From the
effective date of the registration statement to December 2, 2002, the expenses
we incurred in connection with the issuance and distribution of the Debentures
totaled $449,224. 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.

24



---



##### 



Approximately
$2,400,000 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            |  | $ | 1,000,000 | 
|New
PODS and lifts         |  | $ | 2,544,749 | 
|Debenture Interest payment |  | $ | 739,317   | 

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.

Subsequent to
year-end and through December 2, 2002, an additional $1,895,000 of
Debentures were sold. Through December 2, 2002, net offering
proceeds from the sale of Debentures after deducting expenses
incurred in connection with issuance and distribution, previously
discussed, was $8,528,389.

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

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our financial
statements that have been prepared in accordance with generally accepted accounting principles. The preparation of financial statements in accordance
with generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period.
Actual results could materially differ from those estimates because the estimates represent judgments made at a specific date for events that are ongoing. Critical
accounting policies have the potential to have the most significant impact on the financial statements. We have disclosed all significant accounting policies including
our critical accounting policies in Note 1 to the financial statements included in this form 10-KSB. The financial statements and related notes thereto should be read
in conjunction with the following discussion of our critical accounting policies. Our critical accounting policies are:

Revenue Recognition

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. Generally a franchise is considered open for business upon having the appropriate
equipment in place to deliver PODS to its customers and has begun advertising in its territory.

Royalties and fees for advertising services provided by the Company to the franchisees are computed as a
percentage of franchisees rental revenues and are recognized as earned. Fees for billing and collection services
provided by the company to the franchisees are recognized when earned.

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. Unbilled accounts receivable represent revenue earned
but not invoiced. Revenues for pickup and delivery charges are recognized as the services are rendered. Revenues related to the sales of PODS and
lifts are to franchisees are recorded upon delivery of the equipment to the franchisee.

Revenue from the sale of PODS and lifts to franchisees is recognized as PODS and lifts are built and assigned
to the fulfillment of a purchase order received from a franchisee. A purchase order from a franchisee is accepted
only after the appropriate deposit is received as required under the franchise agreement.

Accounts Receivable and Allowance
for Uncollectible Accounts

Accounts receivable represent amounts due from customers and franchisees for services and products
provided. Management is required to use a considerable amount of
judgment when estimating the allowance for
uncollectible accounts. The significant factors used in assessing the allowance include historical collection experience, the
age of accounts receivable and the financial condition of our franchisees.

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 through June 30, 2002. Effective July 1, 2002, PODS are being depreciated over a
fifteen-year useful life based on a revision of the estimated useful lives and residual values. This was a result of a comprehensive analysis of the Companys
experience completed in October 2002. This historical experience generally reflects the positive impact of various programs implemented by
the Company in recent years designed to improve asset longevity and durability. Specifically, the Company implemented
operational systems to track and monitor PODS, structured maintenance and refurbishment programs, and enhanced
specification purchase requirements. The study indicates that these programs are extending the useful lives of PODS
from ten years to fifteen years. This change in accounting estimate
will generally result in a greater proportion
of the Companys operating assets being depreciated over longer useful lives, although the Companys asset life ranges
for other classes of assets will not change.

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 fifteen years.

Year Ended
September 30, 2002 Compared to Year Ended September 30, 2001

Overview.The following is a discussion of certain factors affecting our
results for the years ending September 30, 2002 and September 30, 2001
and our liquidity and capital resources. During the year
ended September 30, 2002, we opened a new company owned location
in Chicago, Illinois. This location officially opened for business on
April 1, 2002. The effect on operations and cash flow of a new
location is generally negative during the first Year of
operations.

Net Cash.Our net cash provided in our operations was $103,771 for the
year ended September 30, 2002 compared to cash used in our
operations of $557,911 for the year ended September 30, 2001.
Our reduction in the net cash flow deficit during the year ended
September 30, 2002 is primarily a result of the timing of
payments to vendors.

We had an increase of cash of $126,420 for the year ended
September 30, 2002 compared to a cash increase of $1,854,923 for
the year ended September 30, 2001. Although we continued to receive significant
proceeds from the debenture offering, we spent significant funds on placing new
PODS in service in the year ended September 30, 2002.

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 increased by $1,413,410 or 119% from $1,188,052 during the
year ended September 30, 2001, to $2,601,462 during the year ended September 30, 2002. The increase is due to
1,094 PODS placed
in service during the year ended September 30, 2002 compared to 313
placed in service during the year ended September 30, 2001. At
September 30, 2002, we had 3,636 PODS and 13 lifts in service of
which two lifts and 163 PODS were used in the new Chicago
operation. At September 30,
2001, we had 2,542 PODS and 11 lifts in service.

Advertising
expenditures, to educate consumers about the advantages of
using PODS, which are included in cash flow from operations, increased by
$73,753 or 16.7% from $442,954 for the year ended September 30,
2001 to $516,707 for the year ended September 30,
2002. During the year ended September 30, 2002,
advertising expenditures related to Chicago were approximately
$200,000 of the $516,707 spent during the fiscal year.
Expenditures for advertising should stay relatively stable over the next fiscal
year as we focus our energies on opening franchises rather than company-owned
stores.

25



---



##### 



Rental and Delivery Revenue.Rental and delivery revenue increased by
$751,643 or 17.7% from $4,248,410 for the year ended September 30,
2001 to $5,000,053 for the year ended September 30,
2002. The new Chicago operation contributed approximately $60,000 of
this revenue during the year ended September 30, 2002. The number
of PODS available for rent in Company-owned markets increased by 1,094 or
43.0%, from 2,542 at September 30, 2001 to 3,636 at September 30, 2002. The
average monthly revenue per POD in service, however, decreased by $5.35 per POD
in service or 3.7% from $143.58 during the year ended September
30, 2001 to $138.23 during the year ended September 30, 2002.
This decrease was due to an aggressive discount plan implemented
during the early part of our fiscal year.

Sales of PODS and Lifts to Franchisees.Revenue from the sale of PODS and
lifts to franchisees increased by $2,392,743 or 34.9% from $6,851,349 for the
year ended September 30, 2001 to $9,244,092 for the year ended September 30, 2002. PODS sold increased by 1,061 or
31.9% from
3,327 PODS in the year ended September 30, 2001 to 4,388 PODS in
the year ended September 30, 2002. Lifts sold increased by three
or 13.0% from 23 lifts sold during the year ended September 30, 2001
to 26 lifts sold during the year ended September 30, 2002.

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 $1,401,289 or 153.7% from $911,812 during the
year ended September 30, 2001 to $2,313,101 during the year ended September 30, 2002.

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 $148,162 or 7.7% from $1,920,728 during the
year ended September 30, 2001 to $2,068,890 during the year
ended September 30, 2002. Included in the gross profit for the
year ended September 30, 2002, is the
effect the new Chicago operation that had a negative gross margin of
approximately $(160,000). This negative effect on gross margin is
considered by management to be normal for a new operation. Gross profit as a percentage of revenue, however,
decreased from 45.2% during the year ended September 30, 2001 to
41.4% during the year ended September 30, 2002. The decrease in gross
profit as a percentage of revenue is primarily a result of the opening of our
company-owned operation in Chicago during April, 2002.

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 decreased by
$137,691 or 10.4% from $1,325,114 during the year ended September 30,
2001 to $1,187,423 during the year ended September 30, 2002.
Gross
profit as a percentage of revenues also decreased from 19.3% during the
year ended September 30, 2001 to 12.8% during the year ended September 30, 2002. The decrease in gross profit was due to costs
associated with the moving of our factory from Bloomington, IL to Peoria, IL
and lower than anticipated POD sales.

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 $1,352,507 from
$844,388 during the year ended September 30, 2001 to $2,196,895 for the
year ended September 30, 2002. Gross profit as a percentage of revenue
also increased slightly from 92.6% during the year ended September 30,
2001 to 95.0% during the year ended September 30, 2002.

Selling, General and Administrative Expenses.Our selling, general and
administrative expenses increased by $885,958 or 20.8% from $4,253,703 during
the year ended September 30, 2001 to $5,139,661 during the year ended September 30, 2002, primarily as a result of some increase in
staffing and pay increases. Selling, general and administrative expense as a
percentage of revenue decreased from 35.4% during the year ended
September 30, 2001 to 31.0% during the year ended September 30,
2002. The decrease in selling general and administrative expenses as a
percentage of revenues is primarily a result of efficiencies derived from a
larger revenue base.

26



---



##### 



Interest Expense.Our interest expense increased by $534,855 or 149.6%
from $357,475 during the year ended September 30, 2001, to $892,330
during the year ended September 30, 2002. The increase in interest
expense is a result of the issuance of the Series A Debentures.

Net Losses.Our net loss increased by $252,127 or 20.4% from $1,233,380
for the year ended September 30, 2001 to $1,485,507 for the year ended September 30, 2002. Included in the net loss for
the year ended September 30, 2002, is
the loss of the new Chicago operation that was
approximately $(430,000). This loss is considered by management
to be normal for a new operation. Our net loss as percentage of revenue
decreased from 10.3% for the year ended September 30,
2001 to 9.0% for
the year ended September 30, 2002.

Liquidity and Capital Resources

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 borrowings and cash flow provided from
future operations, we will be able to put additional PODS in service in our
existing Company-owned territories and increase their profitability

Sales to Franchisees.Our largest source of cash during the year
ended September 30, 2002 was from sales of PODS and lifts to our franchisees
and fees and royalties paid by our franchisees. During the year ended
September 30, 2002 our franchise fees increased by $698,000 or
199% from
$350,000 for the year ended September 30, 2001 to $1,048,000 for the
year ended September 30, 2002. Our revenue from services to
franchises (including royalties) increased by $703,289 or 125.2% from $561,812
for the year ended September 30, 2002 to $1,265,101 for the year
ended September 30, 2002. As of September 30, 2002, 17 of our 31
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
2002. As of September 30, 2002, we have sold nine franchises, representing
approximately sixteen 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.

Borrowings.Borrowings were our second largest source of cash. During the
year ended September 30, 2002, our long-term debt increased to
$8,877,830. The debenture offering raised $7,080,000 as of September 30, 2002.
We believe that our ability to borrow will increase as a result of this
debenture offering.

Rental and
Delivery Revenue.During the year ended
September 30, 2002 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 at a slower rate as
our Tampa Bay and Ft. Lauderdale operations approach maturity.

27



---



##### 



Item 7. Financial Statements.

Financial Statements

Years ended September 30, 2002 and September 30, 2001

Contents

|                                                   |  |  |    | 
|-------------------------------------------------- |  |  | -- | 
|Report of Independent Certified Public Accountants |  |  | 29 | 
|                                                  
|Audited Financial Statements                       |  |  |    | 
|                                                  
|Balance Sheets                                     |  |  | 30 | 
|                                                  
|Statements of Operations                           |  |  | 32 | 
|                                                  
|Statements of Stockholders Equity                 |  |  | 33 | 
|                                                  
|Statements of Cash Flows                           |  |  | 34 | 
|                                                  
|Notes to Financial Statements                      |  |  | 35 | 

28



---



##### 



Report of Independent Certified Public Accountants

Board of Directors
PODS, Inc.

We have audited the accompanying balance sheets of PODS, Inc. as
of September 30, 2002 and 2001, and the related statements of operations,
stockholders equity, and cash flows for the years then
ended. 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,
2002 and 2001, and the results of its operations and its cash flows
for the years
then ended in conformity with accounting
principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

Tampa, FL
December 13, 2002

29



---



##### 



PODS, Inc.

Balance Sheets

|                                                        |                                                                                                  |   |              |           |      |   |            |           | 
|------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | - | ------------ | --------- | ---- | - | ---------- | --------- | 
|                                                        |                                                                                                  |   | September 30
|                                                        |                                                                                                  |   |             
|                                                        |                                                                                                  |   | 2002         |           | 2001
|                                                        |                                                                                                  |   |              |           |     
|Assets                                                  |                                                                                                  |   |              |           |      |   |            |          
|Current assets:                                         |                                                                                                  |   |              |           |      |   |            |          
|                                                        | Cash and cash equivalents                                                                        |   | $            | 2,404,340 |      |   | $          | 2,277,920 | 
|                                                        | Accounts receivable, net of allowance for doubtful
accounts of $70,134 and $17,536, respectively |   |              | 1,388,687 |      |   |            | 931,333   | 
|                                                        | Prepaid expenses and other current assets                                                        |   |              | 313,314   |      |   |            | 139,266   | 
|                                                        | Inventory                                                                                        |   |              | 801,107   |      |   |            | 830,104   | 
|                                                        |                                                                                                  |   |              |           |      |   |            |          
|Total current assets                                    |                                                                                                  |   | 4,907,448    |           |      |   | 4,178,623  |          
|PODS and lifts in process                               |                                                                                                  |   | 169,752      |           |      |   | 331,788    |          
|Rental equipment, net of accumulated depreciation       |                                                                                                  |   | 5,458,870    |           |      |   | 3,987,641  |          
|Property and equipment, net of accumulated depreciation |                                                                                                  |   | 1,795,203    |           |      |   | 1,549,735  |          
|Other assets:                                           |                                                                                                  |   |              |           |      |   |            |          
|                                                        | Deposits                                                                                         |   |              | 149,013   |      |   |            | 105,386   | 
|                                                        | Other noncurrent assets                                                                          |   |              | 796,540   |      |   |            | 761,920   | 
|                                                        |                                                                                                  |   |              |           |      |   |            |          
|Total other assets                                      |                                                                                                  |   | 945,553      |           |      |   | 867,306    |          
|                                                        |                                                                                                  |   |              |           |      |   |            |          
|Total assets                                            |                                                                                                  | $ | 13,276,826   |           |      | $ | 10,915,093 |          
|                                                        |                                                                                                  |   |              |           |      |   |            |          

See accompanying notes.

30



---



##### 



|                                                                     |                                                      |                                                                                                                                     |           |              |       |      |           |            |       | 
|-------------------------------------------------------------------- | ---------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | --------- | ------------ | ----- | ---- | --------- | ---------- | ----- | 
|                                                                     |                                                      |                                                                                                                                     |           | September 30
|                                                                     |                                                      |                                                                                                                                     |           |             
|                                                                     |                                                      |                                                                                                                                     |           | 2002         |       | 2001
|                                                                     |                                                      |                                                                                                                                     |           |              |       |     
|Liabilities and stockholders equity                                 |                                                      |                                                                                                                                     |           |              |       |      |           |           
|Current liabilities:                                                 |                                                      |                                                                                                                                     |           |              |       |      |           |           
|                                                                     | Accounts payable                                     |                                                                                                                                     | $         | 2,437,745    |       |      |           | 1,418,665  |      
|                                                                     | Due to customers                                     |                                                                                                                                     |           | 26,343       |       |      |           | 24,884     |      
|                                                                     | Deferred revenue                                     |                                                                                                                                     |           | 550,057      |       |      |           | 308,784    |      
|                                                                     | Deferred franchise fees                              |                                                                                                                                     |           | 96,200       |       |      |           | 260,000    |      
|                                                                     | Accrued expenses                                     |                                                                                                                                     |           | 660,519      |       |      |           | 620,381    |      
|                                                                     | Current portion of long-term debt and capital leases |                                                                                                                                     |           | 816,669      |       |      |           | 740,904    |      
|                                                                     |                                                      |                                                                                                                                     |           |              |       |      |           |           
|Total current liabilities                                            |                                                      |                                                                                                                                     | 4,587,532 |              |       |      | 3,373,618 |           
|Long-term debt and capital lease obligations, net of
current portion |                                                      |                                                                                                                                     | 981,161   |              |       |      | 1,708,336 |           
|Subordinated debentures                                              |                                                      |                                                                                                                                     | 7,080,000 |              |       |      | 3,845,000 |           
|Stockholders equity:                                                |                                                      |                                                                                                                                     |           |              |       |      |           |           
|                                                                     | Common stock, par value $.0001 per share:            |                                                                                                                                     |           |              |       |      |           |            |      
|                                                                     |                                                      | authorized
100,000,000 shares; 11,003,737 and 11,003,237 shares issued
and outstanding at September 30, 2002 and 2001, respectively |           |              | 1,100 |      |           |            | 1,100 | 
|                                                                     | Additional paid-in capital                           |                                                                                                                                     |           | 6,853,815    |       |      |           | 6,853,315  |      
|                                                                     | Unearned compensation                                |                                                                                                                                     |           | (156,250     | )     |      |           | (281,250   | )    
|                                                                     | Accumulated deficit                                  |                                                                                                                                     |           | (6,070,533   | )     |      |           | (4,585,026 | )    
|                                                                     |                                                      |                                                                                                                                     |           |              |       |      |           |           
|                                                                     | Total stockholders equity                           |                                                                                                                                     |           | 628,132      |       |      |           | 1,988,139  |      
|                                                                     |                                                      |                                                                                                                                     |           |              |       |      |           |           
|                                                                     | Total liabilities and stockholders equity           |                                                                                                                                     | $         | 13,276,826   |       |      | $         | 10,915,093 |      
|                                                                     |                                                      |                                                                                                                                     |           |              |       |      |           |           

See accompanying notes.

31



---



##### 



PODS, Inc.

Statements of Operations

|                                                                 |                                              |   |              |           |              |   |            |           |  
|---------------------------------------------------------------- | -------------------------------------------- | - | ------------ | --------- | ------------ | - | ---------- | --------- | -
|                                                                 |                                              |   | Year ended   |           | Year ended  
|                                                                 |                                              |   | September 30 |           | September 30
|                                                                 |                                              |   | 2002         |           | 2001        
|                                                                 |                                              |   |              |           |             
|Revenues:                                                        |                                              |   |              |           |              |   |            |          
|                                                                 | Rental and delivery revenue                  |   | $            | 5,000,053 |              |   |            | 4,248,410 |  
|                                                                 | Sales of PODS® and lifts to franchisees      |   |              | 9,244,092 |              |   |            | 6,851,349 |  
|                                                                 | Franchise license revenue                    |   |              | 1,048,000 |              |   |            | 350,000   |  
|                                                                 | Revenue from services to franchisees         |   |              | 1,265,101 |              |   |            | 561,812   |  
|                                                                 |                                              |   |              |           |              |   |            |          
|                                                                 |                                              |   | 16,557,246   |           |              |   | 12,011,571 |          
|Cost of revenues:                                                |                                              |   |              |           |              |   |            |          
|                                                                 | Cost of rental and delivery                  |   |              | 2,931,163 |              |   |            | 2,327,682 |  
|                                                                 | Cost of sales of PODS® and lifts             |   |              | 8,056,669 |              |   |            | 5,526,235 |  
|                                                                 | Franchise costs                              |   |              | 116,206   |              |   |            | 67,424    |  
|                                                                 |                                              |   |              |           |              |   |            |          
|                                                                 |                                              |   | 11,104,038   |           |              |   | 7,921,341  |          
|Operating expenses:                                              |                                              |   |              |           |              |   |            |          
|                                                                 | Selling, general and administrative expenses |   |              | 5,139,661 |              |   |            | 4,253,703 |  
|                                                                 | Depreciation and amortization                |   |              | 905,206   |              |   |            | 743,743   |  
|                                                                 |                                              |   |              |           |              |   |            |          
|Loss from operations                                             |                                              |   | (591,659     | )         |              |   | (907,216   | )        
|Other expense (income):                                          |                                              |   |              |           |              |   |            |          
|                                                                 | Other                                        |   |              | 14,732    |              |   |            | (28,010   | )
|                                                                 | Interest income                              |   |              | (13,214   | )            |   |            | (3,301    | )
|                                                                 | Interest expense                             |   |              | 892,330   |              |   |            | 357,475   |  
|                                                                 |                                              |   |              |           |              |   |            |          
|Net loss                                                         |                                              | $ | (1,485,507   | )         |              | $ | (1,233,380 | )        
|                                                                 |                                              |   |              |           |              |   |            |          
|Basic and diluted net loss per share                             |                                              | $ | (0.14        | )         |              | $ | (0.11      | )        
|                                                                 |                                              |   |              |           |              |   |            |          
|Weighted average number of shares outstanding, basic and diluted |                                              |   | 11,003,501   |           |              |   | 11,003,237 |          
|                                                                 |                                              |   |              |           |              |   |            |          

See accompanying notes.

32



---



##### 



PODS, Inc.

Statements of Stockholders Equity

|                                               |                                                                    |  |            |              |  |            |       |          |  |              |           |               |  |        |          |          |   |   |            |            |   |   |            |            |   | 
|---------------------------------------------- | ------------------------------------------------------------------ |  | ---------- | ------------ |  | ---------- | ----- | -------- |  | ------------ | --------- | ------------- |  | ------ | -------- | -------- | - | - | ---------- | ---------- | - | - | ---------- | ---------- | - | 
|                                               |                                                                    |  |            | Common Stock |  | Additional |       |          |  |              |           |               |  |        |          | Total   
|                                               |                                                                    |  |            |              |  | Paid-In    |       | Unearned |  | Accumulated  |           | Stockholders'
|                                               |                                                                    |  |            | Shares       |  | Amount     |       | Capital  |  | Compensation |           | Deficit       |  | Equity
|                                               |                                                                    |  |            |              |  |            |       |          |  |              |           |               |  |       
|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  |           
|Earned portion of options
granted to employees |                                                                    |  |            |              |  |            |       |          |  |              |           |               |  |        | 125,000  |          |   |   |            |            |   |   | 125,000    |           
|Stock options exercised                        |                                                                    |  | 500        |              |  |            |       |          |  |              | 500       |               |  |        |          |          |   |   |            |            |   |   | 500        |           
|Net loss                                       |                                                                    |  |            |              |  |            |       |          |  |              |           |               |  |        |          |          |   |   | (1,485,507 | )          |   |   | (1,485,507 | )         
|                                               |                                                                    |  |            |              |  |            |       |          |  |              |           |               |  |        |          |          |   |   |            |            |   |   |            |           
|Balance at September 30, 2002                  |                                                                    |  | 11,003,737 |              |  | $          | 1,100 |          |  | $            | 6,853,815 |               |  | $      | (156,250 | )        |   | $ | (6,070,533 | )          |   | $ | 628,132    |           
|                                               |                                                                    |  |            |              |  |            |       |          |  |              |           |               |  |        |          |          |   |   |            |            |   |   |            |           

See accompanying notes.

33



---



##### 



PODS, Inc.

Statements of Cash Flows

|                                                                            |                                                                                |                                              |            |              |           |              |            |         |          |  
|--------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | -------------------------------------------- | ---------- | ------------ | --------- | ------------ | ---------- | ------- | -------- | -
|                                                                            |                                                                                |                                              |            | Year ended   |           | Year ended  
|                                                                            |                                                                                |                                              |            | September 30 |           | September 30
|                                                                            |                                                                                |                                              |            | 2002         |           | 2001        
|                                                                            |                                                                                |                                              |            |              |           |             
|Cash flow from operating activities                                         |                                                                                |                                              |            |              |           |              |            |        
|Net loss                                                                    |                                                                                | $                                            | (1,485,507 | )            |           | $            | (1,233,380 | )      
|Adjustments to reconcile net loss to net cash used
in operating activities: |                                                                                |                                              |            |              |           |              |            |        
|                                                                            | Depreciation and amortization                                                  |                                              |            | 905,206      |           |              |            | 743,743 |         
|                                                                            | Gain on disposal of equipment                                                  |                                              |            | 15           |           |              |            | (28,010 | )       
|                                                                            | Stock options granted to employees                                             |                                              |            | 125,000      |           |              |            | 218,750 |         
|                                                                            | Interest expense on stock options issued in connection
with guarantees of debt |                                              |            | 52,554       |           |              |            | 47,340  |         
|                                                                            | Changes in assets and liabilities:                                             |                                              |            |              |           |              |            |         |         
|                                                                            |                                                                                | Accounts receivable                          |            |              | 457,354   |              |            |         | (288,143 | )
|                                                                            |                                                                                | Prepaid expenses and other current assets    |            |              | (174,048  | )            |            |         | (247,940 | )
|                                                                            |                                                                                | Inventory                                    |            |              | 28,997    |              |            |         | (264,940 | )
|                                                                            |                                                                                | PODS and lifts in process                    |            |              | 162,036   |              |            |         | (228,223 | )
|                                                                            |                                                                                | Deposits and other noncurrent assets         |            |              | (191,278  | )            |            |         | 47,998   |  
|                                                                            |                                                                                | Accounts payable                             |            |              | 1,019,080 |              |            |         | 107,074  |  
|                                                                            |                                                                                | Due to customers                             |            |              | 1,459     |              |            |         | (72,645  | )
|                                                                            |                                                                                | Deferred revenue                             |            |              | 241,273   |              |            |         | 29,810   |  
|                                                                            |                                                                                | Accrued expenses and deferred franchise fees |            |              | (123,662  | )            |            |         | 610,655  |  
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|Total adjustments                                                           |                                                                                |                                              | 1,589,278  |              |           |              | 675,469    |        
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|Net cash used in operating activities                                       |                                                                                |                                              | 103,771    |              |           |              | (557,911   | )      
|Cash flow from investing activities                                         |                                                                                |                                              |            |              |           |              |            |        
|Purchase of PODS                                                            |                                                                                |                                              | (2,010,750 | )            |           |              | (851,862   | )      
|Purchase of property and equipment                                          |                                                                                |                                              | (483,389   | )            |           |              | (336,190   | )      
|Proceeds from sale of PODS and equipment                                    |                                                                                |                                              | 6,000      |              |           |              | 160,992    |        
|Patent costs                                                                |                                                                                |                                              |           |              |           |              | (3,409     | )      
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|Net cash used in investing activities                                       |                                                                                |                                              | (2,488,139 | )            |           |              | (1,030,469 | )      
|Cash flow from financing activities                                         |                                                                                |                                              |            |              |           |              |            |        
|Debt issuance cost                                                          |                                                                                |                                              | (20,842    | )            |           |              | (385,135   | )      
|Proceeds
from subordinated debentures                                       |                                                                                |                                              | 3,235,000  |              |           |              | 4,702,067  |        
|Principal payments on long-term debt and capital lease
obligations          |                                                                                |                                              | (703,870   | )            |           |              | (873,629   | )      
|Exercise of stock options                                                   |                                                                                |                                              | 500        |              |           |              |           |        
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|Net cash provided by financing activities                                   |                                                                                |                                              | 2,510,788  |              |           |              | 3,443,303  |        
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|Net increase in cash                                                        |                                                                                |                                              | 126,420    |              |           |              | 1,854,923  |        
|Cash
and cash equivalents at beginning of period                            |                                                                                |                                              | 2,277,920  |              |           |              | 422,997    |        
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|Cash and cash equivalents at end of period                                  |                                                                                | $                                            | 2,404,340  |              |           | $            | 2,277,920  |        
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|Supplemental disclosures of noncash financing activities:                   |                                                                                |                                              |            |              |           |              |            |        
|                                                                            | Equipment financed through capital leases                                      |                                              | $          | 52,460       |           |              | $          | 28,035  |         
|                                                                            |                                                                                |                                              |            |              |           |              |            |        
|                                                                            | Fair value of options issued in connection with
guarantees of debt             |                                              | $          |              |           |              | $          | 117,665 |         
|                                                                            | Value of stock options issued to employees                                     |                                              | $          |              |           |              | $          | 500,000 |         
|                                                                            |                                                                                |                                              |            |              |           |              |            |        

See accompanying notes.

34



---



##### 



PODS, Inc.

Notes to Financial Statements

September 30, 2002

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. Unbilled accounts receivable
represents revenue earned but not invoiced. 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 years ended
September 30, 2002 and September 30, 2001, the Company sold 16 and 19.25 franchises
(representing 9 and 13 metropolitan areas, respectively) and recognized initial
franchise fee revenues related to these franchises of $1,048,000 and $350,000,
respectively.

The Company does not provide financing for its franchisees. However, the
Company has allowed its first franchisee as well as a partner of this
franchisee to defer payment on a portion of its royalties and POD and lift
purchases. Deferred amounts due from this franchise are $155,938 and $162,132
at September 30, 2002 and 2001, 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.

During the fourth quarter of fiscal 2002, the
Company recorded adjustments totaling approximately $159,000
primarily relating to accounts receivable.

35



---



##### 



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 through June 30, 2002.
Effective July 1, 2002, PODS are being depreciated over a
fifteen year useful
life based on a revision of the estimated useful lives and residual values.
This was a result of a comprehensive analysis of the Companys experience completed in October, 2002. This historical experience
generally reflects the positive impact of various programs implemented by the
Company in recent years designed to improve asset longevity and durability.
Specifically, the Company implemented operational systems to track and monitor
PODS, structured maintenance and refurbishment programs. The study indicates that these programs
are extending the useful lives of PODS from ten years to fifteen years. This
change in accounting estimate will generally result in a greater proportion of
the Companys operating assets being depreciated over longer useful lives,
although the Companys asset life ranges for other classes of assets will not
change. The change in estimate decreased of depreciation expense in the
year ended September 30, 2002 by approximately $78,000.

Accumulated depreciation on the rental equipment
was $1,584,033 and $1,044,512
at September 30, 2002 and 2001, 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 fifteen years.

Patent Costs

The Company has capitalized legal fees net of amortization expense in the
amount of $41,562 and $25,637 at September 30, 2002 and 2001, 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 years ended September 30, 2002 and
2000 is $2,051 and $1,879, respectively.

Advertising

The Company expenses the costs of advertising the first time an advertisement
is placed. Advertising expense was $516,707 and $442,954 for the years ended
September 30, 2002 and September 30, 2001, respectively.

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, 2002 and 2001, was $(26,967) and $40,014, respectively, and is
included in accrued expenses.

36



---



##### 



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.

Reclassifications

Certain 2001 amounts have been reclassified to
conform to the 2002 presentation.

37



---



##### 



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 in the accompanying notes. Actual results could differ from
those estimates.

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 years ended September 30, 2002
and 2001, amounts charged to expense relating to transactions with this
individual were $330,996 and $103,120, respectively.

4. Inventory

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

|                          |  |      |         |      |  |   |         | 
|------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                          |  | 2002 |         | 2001
|                          |  |      |         |     
|Completed PODS and lifts  |  | $    | 195,716 |      |  | $ | 136,593 | 
|PODS and lifts in process |  |      | 21,323  |      |  |   | 29,314  | 
|Raw materials             |  |      | 584,068 |      |  |   | 664,197 | 
|                          |  |      |         |      |  |   |         | 
|Total inventory           |  | $    | 801,107 |      |  | $ | 830,104 | 
|                          |  |      |         |      |  |   |         | 

5. Property and Equipment

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

|                                |  |      |           |      |  |   |           |  
|------------------------------- |  | ---- | --------- | ---- |  | - | --------- | -
|                                |  | 2002 |           | 2001
|                                |  |      |           |     
|Equipment                       |  | $    | 1,542,944 |      |  | $ | 1,232,578 |  
|Furniture                       |  |      | 102,017   |      |  |   | 93,814    |  
|Leasehold improvements          |  |      | 173,778   |      |  |   | 148,794   |  
|Computer equipment and software |  |      | 538,484   |      |  |   | 500,911   |  
|Vehicles                        |  |      | 174,119   |      |  |   | 24,869    |  
|                                |  |      |           |      |  |   |           |  
|Total property and equipment    |  |      | 2,531,342 |      |  |   | 2,000,966 |  
|Accumulated depreciation        |  |      | (736,139  | )    |  |   | (451,231  | )
|                                |  |      |           |      |  |   |           |  
|Property and equipment, net     |  | $    | 1,795,203 |      |  | $ | 1,549,735 |  
|                                |  |      |           |      |  |   |           |  

38



---



##### 



5. Property and Equipment (continued)

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

|                         |  |      |          |      |  |   |          |  
|------------------------ |  | ---- | -------- | ---- |  | - | -------- | -
|                         |  | 2002 |          | 2001
|                         |  |      |          |     
|PODS                     |  | $    | 279,128  |      |  | $ | 279,128  |  
|Hydraulic lifts          |  |      | 161,265  |      |  |   | 161,265  |  
|Equipment                |  |      | 464,313  |      |  |   | 411,853  |  
|                         |  |      |          |      |  |   |          |  
|                         |  |      | 904,706  |      |  |   | 852,246  |  
|Accumulated depreciation |  |      | (250,717 | )    |  |   | (159,254 | )
|                         |  |      |          |      |  |   |          |  
|                         |  | $    | 653,989  |      |  | $ | 692,992  |  
|                         |  |      |          |      |  |   |          |  

Depreciation expense for the years ended
September 30, 2002 and 2001 were
$823,887 and $686,511, respectively and includes depreciation on portable
storage units, hydraulic lifts and equipment under capital lease of
$87,091 in 2002 and 2001.

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 years ended September 30, 2002 and 2001 were $1,440,199 and $1,049,104,
respectively.

Future minimum annual lease payments under the above operating leases as of
September 30, 2002 are as follows:

|           |  |   |           | 
|---------- |  | - | --------- | 
|2003       |  | $ | 1,665,449 | 
|2004       |  |   | 1,332,315 | 
|2005       |  |   | 520,274   | 
|2006       |  |   | 422,741   | 
|2007       |  |   | 287,716   | 
|Thereafter |  |   | 208,911   | 
|           |  |   |           | 
|           |  | $ | 4,437,406 | 
|           |  |   |           | 

7. Long-Term Obligations

Long-term obligations as of September 30 are summarized as follows:

|                                                                                                                                                                     |  |      |           |      |  |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- |  | - | --------- | -
|                                                                                                                                                                     |  | 2002 |           | 2001
|                                                                                                                                                                     |  |      |           |     
|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 |  |      | 1,217,475 |      |  |   | 1,736,822 |  
|Subordinated Convertible Debentures                                                                                                                                  |  |      | 7,080,000 |      |  |   | 3,845,000 |  
|Capital leases, principal and interest payable in
installments through 2005, interest at varying
rates from 8.0% to 9.18%                                            |  |      | 500,355   |      |  |   | 632,418   |  
|                                                                                                                                                                     |  |      |           |      |  |   |           |  
|                                                                                                                                                                     |  |      | 8,877,830 |      |  |   | 6,294,240 |  
|Less current portion                                                                                                                                                 |  |      | (816,669  | )    |  |   | (740,904  | )
|                                                                                                                                                                     |  |      |           |      |  |   |           |  
|Due after one year                                                                                                                                                   |  | $    | 8,061,161 |      |  | $ | 5,553,336 |  
|                                                                                                                                                                     |  |      |           |      |  |   |           |  

39



---



##### 



The Company raised $7,080,000 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, 2002 and 2001 is $0 and $184,825 respectively, and is included in other
non-current 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 asset is
recorded as interest expense and amounted to $52,554 during the year ended
September 30, 2002 and $49,285 during the year ended September 30, 2001.

Cash paid for interest during the year ended September 30, 2002 and 2001 was
$706,569 and $236,874, respectively.

Annual maturities of long-term debt as of
September 30, 2002 are summarized as
follows:

|           |  |   |           | 
|---------- |  | - | --------- | 
|2003       |  | $ | 646,337   | 
|2004       |  |   | 412,238   | 
|2005       |  |   | 196,467   | 
|2006       |  |   | 32,034    | 
|2007       |  |   | 10,399    | 
|Thereafter |  |   | 7,080,000 | 
|           |  |   |           | 
|           |  | $ | 8,377,475 | 
|           |  |   |           | 

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

|                                                                               |  |   |         |  
|------------------------------------------------------------------------------ |  | - | ------- | -
|2003                                                                           |  | $ | 197,483 |  
|2004                                                                           |  |   | 164,433 |  
|2005                                                                           |  |   | 91,365  |  
|2006                                                                           |  |   | 56,228  |  
|2007                                                                           |  |   | 4,647   |  
|                                                                               |  |   |         |  
|                                                                               |  |   | 514,156 |  
|Less amount representing interest                                              |  |   | (13,801 | )
|                                                                               |  |   |         |  
|Present value of minimum lease payments (includes current
portion of $250,332) |  | $ | 500,355 |  
|                                                                               |  |   |         |  

8. Income Taxes

At September 30, 2002 and 2001, 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.

40



---



##### 



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

|                                    |                                 |      |                    |           |              |   |           |           | 
|----------------------------------- | ------------------------------- | ---- | ------------------ | --------- | ------------ | - | --------- | --------- | 
|                                    |                                 |      | Deferred Tax      
|                                    |                                 |      | Assets/Liabilities
|                                    |                                 |      |                   
|                                    |                                 |      | September 30       |           | September 30
|Temporary Differences/Carryforwards |                                 | 2002 |                    | 2001     
|                                    |                                 |      |                    |          
|Deferred tax assets:                |                                 |      |                    |           |              |   |           |          
|                                    | Net operating loss carryforward |      | $                  | 2,296,822 |              |   | $         | 1,487,250 | 
|                                    | Deferred rental income          |      |                    | 59,891    |              |   |           | 59,386    | 
|                                    | Other                           |      |                    | 122,561   |              |   |           | 127,392   | 
|                                    |                                 |      |                    |           |              |   |           |          
|Total deferred tax assets           |                                 |      | 2,479,274          |           |              |   | 1,674,028 |          
|Deferred tax liabilities:           |                                 |      |                    |           |              |   |           |          
|                                    | Property and equipment          |      |                    | 769,918   |              |   |           | 563,183   | 
|                                    |                                 |      |                    |           |              |   |           |          
|Total deferred tax liability        |                                 |      | 769,918            |           |              |   | 563,183   |          
|Less valuation allowance            |                                 |      | 1,709,356          |           |              |   | 1,110,845 |          
|                                    |                                 |      |                    |           |              |   |           |          
|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 years ended September 30, 2002 and 2001,
the valuation allowance increased by $598,511 and $417,219, respectively.

At September 30, 2002, the Companys net operating loss carryforward for
federal income tax purposes is $6,103,699, which expires through the
year 2022.

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 vest 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 $125,000 and $218,750 was recorded in the
years ended September 30,
2002 and 2001, respectively.

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.

12. Stock Option Grants

During fiscal 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 years ended September 30, 2002 and 2001, the Company granted
183,584 and
325,000 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.

41



---



##### 



The following table summarizes the stock option activity during the twelve
months ended September 30, 2001 and 2002:

|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|--------------------------------- |  | --------- | ------- | ------ |  | ------------- | ---- | ---------- |  | ----- |  | 
|                                  |  |           |         |        |  | Per Share     |      | Fair Value
|                                  |  | Number of |         | Option |  | of Options at
|                                  |  | Shares    |         | Price  |  | Grant        
|                                  |  |           |         |        |  |              
|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
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Outstanding at September 30, 2001 |  |           | 445,250 |        |  | $             | 1    |            |  |       |  | 
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Outstanding at September 30, 2001 |  |           | 50,000  |        |  | $             | 3    |            |  |       |  | 
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Exercisable at September 30, 2001 |  |           | 249,000 |        |  |               |      |            |  |       |  | 
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Granted                           |  |           | 183,584 |        |  | $             | 3.25 |            |  | $1.06
|Exercised                         |  |           | 500     |        |  | $             | 1    |            |  |       |  | 
|Cancelled                         |  |           |        |        |  |               |     |            |  |       |  | 
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Outstanding at September 30, 2002 |  |           | 445,250 |        |  | $             | 1    |            |  |       |  | 
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Outstanding at September 30, 2002 |  |           | 50,000  |        |  | $             | 3    |            |  |       |  | 
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Outstanding at September 30, 2002 |  |           | 183,584 |        |  | $             | 3.25 |            |  |       |  | 
|                                  |  |           |         |        |  |               |      |            |  |       |  | 
|Exercisable at September 30, 2002 |  |           | 305,250 |        |  | $1 to 3.00    |      |            |  |      
|                                  |  |           |         |        |  |               |      |            |  |       |  | 

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
$1,829,123 ($0.17 per share) and $1,417,829 ($0.13 per share) for the years ended September 30, 2002 and
2001, respectively.

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

|                                    |  |      |     |      |  |  |     |  
|----------------------------------- |  | ---- | --- | ---- |  |  | --- | -
|                                    |  | 2002 |     | 2001
|                                    |  |      |     |     
|Risk free interest rate             |  |      | 5.7 | %    |  |  | 5.8 | %
|Dividend yield                      |  |      |    |      |  |  |    |  
|Expected life of options (in years) |  |      | 7   |      |  |  | 7   |  

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

13. Subsequent Events (Unaudited)

As of December 13, 2002, an additional $1,895,000 was raised through the sale
of the Series A Subordinate Convertible Debenture.

42



---



##### 



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 four 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    |  |     | 50 |          |  | President, Chief Executive Officer and
Chairman of the Board
|Thomas M. Calcaterra |  |     | 48 |          |  | Chief Financial Officer                                     
|David Revelia        |  |     | 49 |          |  | Chief Operations Officer                                    
|R. Paul Umberg       |  |     | 62 |          |  | Chief Administrative Officer                                
|Philip Doganiero     |  |     | 45 |          |  | Director                                                    
|Scott Spencer        |  |     | 38 |          |  | Director                                                    
|W. Keith Schilit     |  |     | 48 |          |  | 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.

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.

43



---



##### 



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. Spencer has
been a member of our Board of Directors since March, 2002. He is a
founding member of the Board of Directors of Spencer International
Advisors, Inc., a full-service, fee-only investment management firm
located in Clearwater, Florida, and currently serves as its President
and Chief Executive Officer. He is a Certified Public Accountant, a
Certified Financial Planner practitioner, and has served as an
Industry Arbitrator Chairperson appointee of the NASD Dispute
Regulation, Inc., a subsidiary of the National Association of
Securities Dealers, Inc. Mr. Spencer has a Bachelor's degree (cum
laude) in accounting and a Masters of Business Administration degree
from Chaminade University of Honolulu. From 1985 to 1989, he was an
account executive with GTE-Hawaiian Telephone, and after successfully
completing the Certified Public Accountant exam, worked as a tax and
international currency advisor to private investors. During 1993 to
1997, he served as vice president of Spencer International
Investments, Inc., a broker/dealer corporation licensed by the NASD.

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.

44



---



##### 



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 executive
officers. For years not contained in the table, total annual salary
and bonus did not exceed $100,000. 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    |                     |      | 2002       |           |  | $        | 131,295 |              |  | $       |       |              |  |              |  |         |  |                        |       |  |  |  |  | 
|                     |                     |      | 2001       |           |  | $        | 55,871  |              |  | $       |       |              |  |              |  |         |  |                        |       |  |  |  |  | 
|                     |                     |      | 2000       |           |  | $        | 17,692  |              |  |         |       |              |  |              |  |         |  |                        | 30,000 |  |  |  |  | 
|David Revelia        |                     |      | 2002       |           |  | $        | 107,000 |              |  |         |       |              |  |              |  |         |  |                        | 12,500 |  |  |  |  | 
|Thomas M. Calcaterra |                     |      | 2002       |           |  | $        | 103,640 |              |  | $       | 25,000 |              |  |              |  |         |  |                        | 22,500 |  |  |  |  | 
|                     |                     |      | 2001       |           |  | $        | 100,397 |              |  | $       | 15,000 |              |  |              |  |         |  |                        | 10,000 |  |  |  |  | 
|R. Paul Umberg       |                     |      | 2002       |           |  | $        | 132,750 |              |  |         |       |              |  |              |  |         |  |                        | 22,500 |  |  |  |  | 
|                     |                     |      | 2001       |           |  | $        | 108,739 |              |  |         |       |              |  |              |  |         |  |                        | 35,000 |  |  |  |  | 

Option Grants During 2002

The following table provides information regarding stock options
granted during fiscal year 2002 to our officers. All of these
options 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 |  |            | 22,500 |               |  |             | 16.3 | %               |  |  | 3.25 |  |  |  | October
1, 2011 and February 1, 2012 | 
|R. Paul Umberg       |  |            | 22,500 |               |  |             | 16.3 | %               |  |  | 3.25 |  |  |  | October 1, 2011 and February 1, 2012 | 
|
|David Revelia        |  |            | 12,500 |               |  |             | 9.1  | %               |  |  | 3.25 |  |  |  | October 1, 2011                      | 

45



---



##### 



Year-End Option Values

The following table provides information as to the number and value of
options outstanding at September 30, 2002, held by our officers.

|                                                                    |  |                                               |  |                                               
|------------------------------------------------------------------- |  | --------------------------------------------- |  | ----------------------------------------------
|                                                                    |  | Number of Unexercised                         |  | Value of Unexercised                          
|                                                                    |  | Options at                                    |  | In-the-Money Options                          
|                                                                    |  | September 30, 2002                            |  | at September 30,
2002                         
|Name                                                                |  | Exercisable/Unexercisable                     |  | Exercisable/Unexercisable                     
|                                                                    |  |                                               |  |                                               
|Peter S. Warhurst
Thomas M. Calcaterra
R. Paul Umberg
David Revelia |  | 30,000/0
55,000/42,500
85,000/42,500
0/12,500 |  | Footnote(1)
Footnote(1)
Footnote(1)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.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Messrs Calcaterra
and Umberg have employment contracts with the Company which began in
February and April of 2000 respectively. Under the terms of the contract
Messrs. Calcaterra and Umberg are employed for a four year period of
time, however, they can be terminated without cause with two weeks
notice and Messrs. Calcaterra and Umberg are to receive a grant of
10,000 stock options at the beginning of each year of employment at
the then current estimated market value of 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 13,
2002, options to purchase a total of 678,834 shares of our common stock had
been granted under the plan, including 105,834 to our outside directors and
207,500 to our executive officers.

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 vested on January 1, 2002 if the holder was 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. We also granted 5,834 options to purchase shares at $3.25 on
March 1, 2002, to a new director. The options vested on October 1, 2002 if the holder is a director on
September 30, 2002.

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. 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.

46



---



##### 



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

The following table
provides information as of December 13, 2002 about
stockholders who are the beneficial owners of more than 5% of our common stock
or who are our directors (or served as such during the last fiscal
year) 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)                                |                                                 |        | 7,000,000                  |            |  |  | 63.6 | %
|                                                | 6061
45th Street North
St. Petersburg, FL 33714 |        |                            |            |  |  |      |   | 
|JPJ Development, Inc.(2)                        |                                                 |        | 7,000,000                  |            |  |  | 63.6 | %
|                                                | 6061
45th Street North
St. Petersburg, FL 33714 |        |                            |            |  |  |      |   | 
|Peter S. Warhurst(2),(3)                        |                                                 |        | 7,030,000                  |            |  |  | 63.7 | %
|Philip Doganiero(4)                             |                                                 |        | 555,000                    |            |  |  | 5.0  | %
|Dennis
Martino(5, 11)                           |                                                 |        | 348,172                    |            |  |  | 3.2  | %
|W. Keith Schilit(6)                             |                                                 |        | 256,065                    |            |  |  | 2.3  | %
|Martin
H. Schweitzer(7, 11)                     |                                                 |        | 75,000                     |            |  |  | 0.6  | %
|R. Paul Umberg(8)                               |                                                 |        | 85,000                     |            |  |  | 0.7  | %
|Thomas M. Calcaterra(9)                         |                                                 |        | 55,000                     |            |  |  | 0.4  | %
|David Revelia(10)                               |                                                 |        | 0                          |            |  |  |     |  
|All directors and executive officers as a group |                                                 |        | 8,379,237                  |            |  |  | 76.1 | %
|                                                | (8 persons)                                     |        |                            |            |  |  |      |   | 



---

|(1) |  | The percentages are calculated
on the basis of 11,003,737 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.                                                                                                                                                                                                                                           

47



---



##### 



|(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% 
|William K. 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 55,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|(5)  |  | Includes 293,172 shares held in Mr. Martinos IRA and exercisable options
to purchase 55,000 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 55,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    
|(7)  |  | Includes 50,000 shares owned by Mr. Schweitzer and his wife jointly and
exercisable options to purchase 25,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|(8)  |  | Represents exercisable options
to purchase 85,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|(9)  |  | Represents exercisable options
to purchase 55,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|(10) |  | Mr. Revelia owns an approximate 4.28% non-voting interest in PODS USA,
LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|(11) |  | Messrs. Martino and
Schweitzer are no longer directors of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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.

48



---



##### 



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.

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 has repaid these advances.

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                           

49



---



##### 



|  |  |                     
|- |  | --------------------
| |  | 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.

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

(a)  Exhibits:

50



---



##### 



|        |  |   |  |                                                                                                                                                   
|------- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|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.                                                                                                                            
|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)                   

51



---



##### 



|        |  |   |  |                                                                                                                                         
|------- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |   |  |                                                                                                                                         
|Number  |  |   |  | Description                                                                                                                             
|        |  |   |  |                                                                                                                                         
|4.25() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of Florida dated September 3,
1999.                            
|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)                                  
|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.                             

52



---



##### 



|         |  |   |  |                                                                                                                                                                                                                            |  |  |  | 
|-------- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit  |  |   |  |                                                                                                                                                                                                                            |  |  |  | 
|Number   |  |   |  | Description                                                                                                                                                                                                                |  |  |  | 
|         |  |   |  |                                                                                                                                                                                                                            |  |  |  | 
|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.                                                                                                                                                                                                   
|10.14() |  |  |  | Lease Agreement
dated as of December 31, 2001, between First American Trust and
PODS, Inc.                                                                                                                                
|21()    |  |  |  | Subsidiaries of
registrant                                                                                                                                                                                                
|99.1     |  |  |  | Certificate
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes Oxley Act of 2002                                                                                                       



---

| |  |  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

Item 14. Controls and Procedures.

The Company has
established and currently maintains disclosure controls and other
procedures designed to ensure that material information required to
be disclosed in its reports filed under the Securities Exchange Act
of 1934 is recorded, processed, summarized and reported, within the
time periods specified by the Securities and Exchange Commission. In
conjunction with the close of each fiscal quarter, the Company
conducts an update and a review and evaluation of the effectiveness
of the Companys disclosure controls and procedures. It is the
opinion of the Companys CEO and CFO, based upon an
evaluation completed within 90 days prior to the filing of this
report, that the Companys disclosure controls and procedures are
sufficiently effective to ensure that any material information
relating to the Company is recorded, processed, summarized and
reported to its principal officers to allow timely decisions
regarding required disclosures.

Our auditors have
indicated to the audit committee that a reportable condition in our
internal controls existed during the year ended September 30,
2002. This condition related to the completion of reconciliations of
our bank accounts and the reconciliation of the details of our
franchise accounts receivable. In an effort to address these matters,
the Company brought in additional staff to bring all reconciliations
current, reorganized the accounting department and is in the process
of hiring more qualified staff in these areas. As of
December 13, 2002, all reconciliations had been completed.

53



---



##### 



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. WARHURST

Peter S. Warhurst       |  | President, Chief Executive Officer
and Chairman of the Board (Principal
Executive Officer) |  | December 27, 2002
|                                              
|/s/ THOMAS M. CALCATERRA

Thomas M. Calcaterra |  | Chief Financial Officer (Principal
Accounting and Financial Officer)                       |  | December 27, 2002
|                                              
|/s/ PHILIP DOGANIERO

Philip Doganiero         |  | Director                                                                                   |  | December 27, 2002
|                                              
|/s/ SCOTT SPENCER

Scott Spencer               |  | Director                                                                                   |  | December 27, 2002
|                                              
|/s/ W. KEITH SCHILIT

W. Keith Schilit         |  | Director                                                                                   |  | December 27, 2002
|                                              

54



---



##### 



Exhibit Index

|        |  |   |  |                                                                                                                                                   
|------- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |   |  |                                                                                                                                                   
|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.                                                                                                                            
|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)                   



---



##### 



|        |  |   |  |                                                                                                                                         
|------- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |   |  |                                                                                                                                         
|Number  |  |   |  | Description                                                                                                                             
|        |  |   |  |                                                                                                                                         
|4.25() |  |  |  | Commercial Security Agreement between PODS, Inc. and First National Bank of Florida dated September 3,
1999.                            
|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)                                  
|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.                             



---



##### 



|         |  |   |  |                                                                                                                                                                                                                            |  |  |  | 
|-------- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit  |  |   |  |                                                                                                                                                                                                                            |  |  |  | 
|Number   |  |   |  | Description                                                                                                                                                                                                                |  |  |  | 
|         |  |   |  |                                                                                                                                                                                                                            |  |  |  | 
|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.                                                                                                                                                                                                   
|10.14() |  |  |  | Lease Agreement
dated as of December 31, 2001, between First American Trust and
PODS, Inc.                                                                                                                                
|21()    |  |  |  | Subsidiaries of
registrant                                                                                                                                                                                                
|99.1     |  |  |  | Certificate
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes Oxley Act of 2002                                                                                                       



---

| |  |  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
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------



---



##### 



CERTIFICATION

I, Thomas M. Calcaterra, certify that:

1. I have reviewed this annual report on
Form 10-KSB of PODS, Inc.;

2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which statements were made,
not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements,
and other financial information included in this annual report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this annual report;

4. The registrants other certifying officers
and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:



| |    |                                                                                                                                                                                                                                                                                                             
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this annual report is being prepared;
|
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) | presented in this annual report our conclusions
    about the effectiveness of the disclosure controls and
    procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5. The registrants other certifying
officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons
performing the equivalent functions):



| |    |                                                                                                                                                                                                                                                                                                                 
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weakness in internal
    controls; and
|
| | b) | any fraud, whether or not material, that involves
    management or other employees who have significant role in the
    registrants internal controls; and                                                                                                                                                    

6. The registrants other certifying officers
and I have indicated in this annual report whether there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date:     December 27, 2002

/s/ Thomas M. Calcaterra

---

Thomas M. Calcaterra


CFO




---



##### 



CERTIFICATION

I, Peter S. Warhurst, certify that:

1. I have reviewed this annual report on
Form 10-KSB of PODS, Inc.;

2. Based on my knowledge, this annual report
does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made,
in light of the circumstances under which statements were made,
not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements,
and other financial information included in this annual report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this annual report;

4. The registrants other certifying officers
and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:



| |    |                                                                                                                                                                                                                                                                                                             
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this annual report is being prepared;
|
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this annual
    report (the Evaluation Date); and                                                                                                      
|
| | c) | presented in this annual report our conclusions
    about the effectiveness of the disclosure controls and
    procedures based on our evaluation as of the Evaluation Date;                                                                                                                                

5. The registrants other certifying
officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons
performing the equivalent functions):



| |    |                                                                                                                                                                                                                                                                                                                 
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weakness in internal
    controls; and
|
| | b) | any fraud, whether or not material, that involves
    management or other employees who have significant role in the
    registrants internal controls; and                                                                                                                                                    

6. The registrants other certifying officers
and I have indicated in this annual report whether there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date:     December 27, 2002

/s/ Peter S. Warhurst

---

Peter S. Warhurst


President and CEO