Securities and Exchange Commission
                             Washington D. C. 20549

                                   Form 10-KSB
                                   -----------
(Mark One)
( X )    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
         For the fiscal year ended March 31, 2003

                                       or

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

                         Commission file number 0-20924

                           RECONDITIONED SYSTEMS, INC.
               (Name of small business issuer in its charter)
              Arizona                            86-0576290
(State or other jurisdiction                  (IRS Employer
of incorporation or organization)              Identification No.)

                     444 West Fairmont, Tempe, Arizona 85282
                    (Address of principal executive offices)
                                  480-968-1772
               (Issuer's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:  None

Securities registered pursuant to Section 12(g) of the Exchange Act:
         Title of each class
Common stock, no par value

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No[ ].

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

The issuer's revenues for the fiscal year ended March 31, 2003 were $11,511,058.

As of June 19, 2003, the aggregate market value of the Common Stock (based on
the closing price as quoted on the Nasdaq Small Cap Market on that date) held by
non-affiliates of the Registrant was approximately $1,279,210.

As of June 3, 2003, the number of shares outstanding of the Registrant's common
stock was 1,363,555.

Portions of the Registrant's definitive Proxy Statement, dated July 28, 2003,
are incorporated herein by reference into Part III of this Report.

Transitional Small Business Disclosure Format.       Yes [ ]No[X].
<PAGE>

                                     PART I
                                     ------
Item 1.  Description of Business
--------------------------------
General
-------
Reconditioned Systems, Inc. ("RSI" or the "Company"), an Arizona corporation
formed in March 1987, remanufactures and markets modular office workstations
consisting of panels, work surfaces, file drawers, book and binder storage and
integrated electrical components ("workstations"). The Company specializes in
remanufacturing and marketing workstations originally manufactured by Haworth,
Inc. ("Haworth"). The Company operates three remanufacturing facilities, one in
Arizona, one in Georgia and one in New Mexico. The Company also markets new
office furniture product-lines, including office chairs, desks, filing, lighting
and other office furniture accessories. The Company markets is products
primarily in the continental United States.

There are more than 50 manufacturers of new workstations in the United States.
Steelcase, Inc. ("Steelcase"), Herman Miller, Inc. ("Herman Miller"), and
Haworth constitute the dominant manufacturers, controlling a majority of the
market for new workstations. Steelcase, Herman Miller, and Haworth have each
created a unique system for connecting panels, electrical power and
telecommunications raceways, resulting in virtually no interchangeability
between their respective products. Due to this lack of interchangeability of
dominant manufacturer parts, the Company has generally specialized in
remanufacturing and marketing workstations originally manufactured by Haworth.

The Company's executive offices are located at 444 West Fairmont, Tempe, Arizona
85282 and its telephone number is 480-968-1772.

Principal Line of Business
--------------------------
The Company's principal line of business is the sale of remanufactured Haworth
workstations. Historically, these sales have accounted for approximately 70 -
80% of the Company's revenues. For the year ended March 31, 2003, these sales
represented approximately 74% of the Company's revenues.

The Company purchases used Haworth workstations from manufacturers, dealers,
brokers, and end-users and transports them to one of its three manufacturing
facilities located in Arizona, Georgia and New Mexico, where it disassembles and
inventories the workstations by component parts, stores, and, upon receipt of
purchase orders, reconditions and reassembles the workstations. The
remanufacturing process includes sanding, painting, laminating, and
reupholstering. Certain parts of the used Haworth workstations the Company
purchases are damaged beyond repair and must be replaced with new parts
purchased from Haworth dealers, clone parts which the Company purchases from
various vendors, and new parts which the Company manufactures from raw
materials. The Company markets these remanufactured Haworth workstations
throughout the United States. Orders received by the Company range from as few
as one workstation to as many as several hundred workstations.

The Company believes that workstations offer advantages over the traditional
desk, free standing file, and permanent dry wall dividers common to historical
office layouts since workstations enable businesses to house more people in a
given space than traditional structures and are easier to move and reconfigure.
In addition, workstations are designed around personal computers, and the growth
in that market has contributed to the growth and acceptance of workstations. The
Company believes its remanufactured Haworth workstations offer an advantage over
much of its competition because they are higher quality than new workstations
available in the same price range.


<PAGE>


Other Lines of Business
-----------------------
The Company derives certain revenues outside of its principal line of business.
Other lines of business in which the Company engages include: brokering "as is"
used workstations; selling new office furniture produced by other manufacturers
(including new modular office furniture, desks, files, and chairs); installing
workstations, and remanufacturing product already owned by customers.
Historically, these other lines of business have accounted for approximately 20
- 30% of the Company's revenues. For the year ended March 31, 2003, these sales
represented approximate 26% of the Company's revenues.

In August 2001, the Company opened a new manufacturing facility and retail
showroom under the trade name of Total Office Interiors ("TOI") in Norcross,
Georgia, a suburb of Atlanta. The primary focus of this expansion was to provide
another manufacturing "hub" and sales office to market to customers in the
Eastern United States. The Company modeled this new facility after its Arizona
manufacturing and sales office.

In January 2002, the Company opened a satellite sales office and showroom
("spoke") in Sherman Oaks, California. The primary focus of this new sales
office is to develop a TOI retail presence in the Southern California region.
This office showcases the Company's remanufactured product-line, along with the
other new product-lines offered by the Company's Arizona and Georgia sales
offices.

On May 1, 2003, the Company  purchased Beck Office  Systems,  Inc., a Haworth
remanufacturer  located in  Albuquerque,  New Mexico and
Tucson,  Arizona  (see Item 7.  Financial  Statements  - Footnote  14.
Subsequent  Event).  The primary  focus of this  purchase is to
increase the Company's geographic presence and gain operating synergies.

Inventory and Sources of Supply
-------------------------------
The Company purchases used Haworth workstations throughout the United States
through competitive bids or private negotiations with new workstation
manufacturers and dealers, used workstation brokers, and end-users. The Company
then transports the used Haworth workstations to one of its three manufacturing
facilities in Arizona, Georgia and New Mexico, where it disassembles,
inventories by component part, and stores the used Haworth workstation
components until purchase orders are received which require the various
component parts. The Company also inventories new workstation components
purchased from Haworth dealers, clone workstation components, and raw materials
used in the remanufacturing process. These raw materials include items such as
fabric, particleboard, laminate and paint.

The Company carries a limited amount of work in process and finished goods
inventory because it generally does not initiate the remanufacturing process
until a purchase order has been received and because the remanufacturing process
rarely takes more than a couple of days due to the relatively small size of most
orders. However, a significant portion of the labor related to the
remanufacturing process is completed at the time the used Haworth workstations
are originally received and disassembled, and as a result, the value of this
labor is capitalized and added to the value of the Company's inventory.

The Company currently has sufficient amounts of inventory to meet its
anticipated demand. However, because there is not a principal supplier of used
Haworth workstations and the supply is based upon end-user decisions regarding
disposal of or enhancement to existing furniture, there can be no assurance that
the Company will be able to purchase adequate levels of inventory in the future
at competitive prices. Because the Company's principal line of business is the
sale of remanufactured Haworth workstations, any unavailability of adequate
levels of inventory at competitive prices would have a material adverse effect
on the Company's business, operating results, and financial condition.

The Company also carries a number of new product-lines, including new modular
office furniture, filing, lighting, and other accessories. The Company currently
maintains an excellent relationship with the manufacturers of these
product-lines and does not foresee any disruption in supply. In addition, if the
Company did face a disruption in supply of these product-lines, the Company
believes it could easily find an alternative source.


<PAGE>


Remanufacturing Process
-----------------------
The Company's remanufacturing process for used Haworth workstations includes
sanding, painting, laminating, and reupholstering. The remanufacturing process
also includes replacing certain components with new components purchased from
Haworth dealers, clone components purchased from various vendors, or new
components manufactured by the Company from raw materials. The Company's
facilities in Arizona, Georgia and New Mexico include all of the equipment
required to recondition workstations, including closed and open paint booths,
paint drying booths, sanding equipment, saws and laminating equipment.

The remanufactured Haworth workstations that the Company sells generally consist
of panels, worksurfaces, pedestals, overhead storage units, lateral file storage
units, task lights, and electrical raceways. The Company reconditions all of
these items. Components that are often damaged and need to be replaced with new
or clone components include panel top caps, shelf ends for overhead storage
units, worksurfaces, electrical base and top feeds, and electrical raceways. The
Company sells certain auxiliary items such as chairs, file cabinets, and desks,
but it usually purchases these items new from other manufacturers rather than
purchasing them used and remanufacturing them.

The Company's facilities have been designed to facilitate the natural flow of
used Haworth workstation components and raw materials in order to streamline the
remanufacturing process through disassembly, storage, remanufacturing, and
shipping. Utilizing narrow aisle storage maximizes storage capacity. The Company
believes that its current facilities will be able to handle the anticipated
increase in volume as a result of its plan to increase its distribution
channels.

Competition
-----------
In purchasing used Haworth workstations, the Company competes with used
workstation brokers and other entities that recondition Haworth workstations.
Even though the Company may not be the highest bidder for an end-user's used
Haworth workstations, it may still have the opportunity to purchase them at a
slightly higher cost if the highest bidder was a used workstation broker who is
simply trying to make a small profit without actually taking possession of the
used Haworth workstations. The Company attempts to procure the used Haworth
workstations directly from end-users so as to avoid the middleman (used
workstation brokers) and to obtain these used Haworth workstations at the lowest
possible cost.

The market for workstations is highly competitive. The Company competes with new
workstation manufacturers, their dealers, and other reconditioners in the sale
of its remanufactured Haworth workstations. New workstation manufacturers and
their dealers have certain competitive advantages over the Company including
established distribution channels and marketing programs, substantial financial
strength, long-term customers, ready access to all component parts, and the fact
that if everything is equal (price, lead-time, etc.), most people would choose
new workstations over remanufactured workstations. The Company has certain
competitive advantages over new workstation manufacturers and their dealers. On
orders of 100 workstations or less, the Company's pricing is usually
significantly less than pricing on new "Grade A" workstations ("Grade A"
workstations are considered to be those workstations manufactured by Haworth,
Herman Miller and Steelcase) and the quality of the Company's remanufactured
Haworth workstations exceeds that of new "Grade B" workstations. In addition,
the Company can produce and install fully remanufactured Haworth workstations
within two to three weeks as compared to standard lead-times of approximately
six to eight weeks for the new workstation manufacturers. The Company believes
that its remanufacturing services are more comprehensive than most other
reconditioners. The Company has the ability to produce more remanufactured
workstations and higher quality remanufactured workstations than most other
reconditioners, resulting in a competitive advantage. The Company is facing
increased competition from "bargain" newly manufactured product lines. There are
no significant barriers to entry into the markets served by the Company. An
increase in competition from existing competitors or the entry of new
competitors could have a material adverse effect on the Company's business,
operating results and financial condition. There can be no assurance that the
Company will be able to compete successfully in the future with existing or new
competitors.


<PAGE>


In an effort to increase the Company's ability to compete in this changing
marketplace, beginning in October 1999, the Company became an authorized dealer
of Teknion, a manufacturer of new modular office furniture and expanded its line
of filing, seating, lighting and other office furniture accessories. In June
2000, the Company became an authorized dealer of Paoli Office Furniture, a
manufacturer of executive freestanding office furniture and tables. The Company
offers the Teknion and Paoli lines as an alternative to its remanufactured
Haworth workstations. The Company's wholly-owned subsidiary, Beck Office
Systems, is an authorized dealer of Kimball Office Furniture and National,
manufacturers of new casegoods and seating.

Distribution
------------
The Company markets its products on a wholesale basis to furniture dealerships,
design firms and installation companies throughout the United States. The
Company employs three full-time employees who concentrate on telemarketing and
servicing its wholesale sales and an independent marketing representative who
concentrates on market expansion. In recent years, the Company's wholesale sales
have comprised as much as approximately 65% of the Company's total sales. For
the year ended March 31, 2003, wholesale sales accounted for 41% of the
Company's total sales.

The Company operates three retail sales offices doing business under the trade
name of "Total Office Interiors," located in the metropolitan areas of Phoenix,
Atlanta and Los Angeles. The Company's Arizona sales office has historically
generated approximately 40-50% of the Company's total sales. For the year ended
March 31, 2003, Arizona retail sales accounted for approximately 38% of the
Company's total sales. In August 2001, the Company opened a new manufacturing
facility and retail showroom in Georgia. The primary focus of this expansion was
to provide another manufacturing hub and sales office to market to customers in
the Eastern United States. The Company modeled this new facility after its
Arizona manufacturing and sales office. In January 2002, the Company opened a
satellite sales office in Sherman Oaks, California. The primary focus of this
new sales office is to develop a retail presence in Southern California. These
two new divisions accounted for 21% of the Company's total sales for the fiscal
year.

On May 1, 2003, the Company purchased, as a wholly-owned subsidiary, Beck Office
Systems, a Haworth remanufacturer located in Albuquerque, New Mexico, with sales
offices in Albuquerque and Tucson, Arizona. Beck markets its products on a
retail basis throughout the United States and Puerto Rico, but primarily in New
Mexico, Arizona, Colorado and Texas.

Customers
---------
In addition to the Company's network of authorized dealers, the Company's retail
customers range from small businesses to Fortune 500 companies. The Company's
customer base also includes various federal, state and local agencies and other
governmental entities. In January 2003, the Company finalized the registration
of its products with the General Services Administration ("GSA"), which allows
the Company to market directly to the U.S. government on open and closed bid
projects. The Company is currently developing marketing material for GSA
customers. The Company maintains a broad customer base and is not dependent on
any one customer.

Personnel
---------
The Company currently has 90 full-time employees of whom 45 are production
personnel directly involved in the remanufacturing process, 12 are in the
installation department, 24 are in the sales and design departments, and 9 are
management and administrative personnel. Beck Office Systems, the Company's
wholly-owned subsidiary currently has 56 full-time employees of whom 25 are
production personnel directly involved in the remanufacturing process, 15 are in
the installation department, 9 are in the sales and design departments, and 7
are management and administrative personnel.

The Company believes that its ability to grow and attain its desired
profitability levels depend on its ability to attract and retain highly
qualified personnel. There can be no assurance that the Company will be
successful in attracting and retaining such personnel. The Company has
employment agreements, which includes severance benefits, with its Chief
Executive Officer (see Item 10 - Executive Compensation) and with the President
of Beck Office Systems, Inc. (see Item 7. Financial Statements; Footnote 14 -
Subsequent Event). None of the Company's personnel are covered by a collective
bargaining agreement, and the Company has never suffered a work stoppage. The
Company considers its relations with its employees to be excellent.


<PAGE>


Environmental Regulations
-------------------------
The Company's operations are subject to a variety of federal, state, and local
environmental laws and regulations, including those governing air quality, water
quality, and hazardous materials. The Company's principle environmental concerns
relate to the handling and disposal of paints, solvents, and related materials
in connection with product finishes and composite fabrication. The Company
contracts with various independent waste disposal companies for services. The
Company may be exposed to certain environmental liabilities which may or may not
be covered by the insurance of the independent contractors or by the Company's
own insurance.

The Company believes that it has been operating in substantial compliance in all
material respects with existing environmental laws and regulations and that the
costs and effects of such compliance are not material. The Company cannot
predict the nature, scope or effect of legislation or regulatory requirements
that could be imposed or how existing or future laws or regulations will be
administered or interpreted with respect to products or activities to which they
have not previously been applied. Compliance with more stringent laws or
regulations, or more vigorous enforcement policies or regulatory agencies, could
require substantial expenditures by the Company and could adversely affect its
business, financial condition and results of operations.

The Company's operations are also governed by laws and regulations relating to
work-place safety and worker health, principally the Occupational Safety and
Health Act and accompanying regulations and various state laws and regulations.
The Company does not believe that future compliance with current laws and
regulations will have a material adverse effect on its financial condition or
results of operations.

Insurance
---------
The Company maintains liability insurance policies covering a number of risks,
including business interruption, property, commercial crime, comprehensive
general liability and workers compensation and employer's liability insurance.
The Company believes that its insurance coverage is adequate.

Item 2.  Description of Properties
----------------------------------

The Company presently leases a 58,500 square foot facility in Tempe, Arizona
that houses its corporate offices, remanufacturing operation, warehouse space
and showroom space. The current lease on the Arizona facility expires April
2006. The Company leases an 18,720 square foot remanufacturing and sales office
facility in Norcross, Georgia which expires June 2004 and a 1,968 square foot
sale office in Sherman Oaks, California which expires December 2004. The
Company's wholly-owned subsidiary, Beck Office Systems, leases a 40,000 square
foot facility in Albuquerque used for remanufacturing, warehousing and showroom
space. Beck Office Systems also leases approximately 13,000 square feet of
additional storage space in Albuquerque, and a 2,500 square foot sale office and
warehouse in Tucson. The Company believes its existing facilities are adequate
for its current and projected sales volumes. In addition, the Company believes
suitable additional space will be available as needed.

The Company owns substantially all of its equipment, including its office
equipment, its company vehicles and its remanufacturing equipment. The Company's
equipment has been assigned as collateral for amounts borrowed under loan
agreements with M&I Thunderbird Bank.

The Company has no investments or interests in real estate, real estate
mortgages or securities of persons primarily engaged in real estate activities.


<PAGE>



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

On March 31, 2003, the Company's lawsuit against its former independent
accountant, Semple & Cooper, LLP filed on August 9, 2001 in the Superior Court
of Arizona, Maricopa County (Case No. CV2001-013810) was amicably resolved
between the parties by settlement and the complaint was dismissed with
prejudice.

Item 4.  Submissions of Matters to a Vote of Security Holders
-------------------------------------------------------------

No matters were submitted to a vote of security holders during the quarter ended
March 31, 2003.

                                     PART II
                                     -------

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
------------------------------------------------------------------------------

The Company's Common Stock is traded on the Nasdaq Small Cap Market under the
symbol "RESY." The following table sets forth the high and low closing sales
price, as reported by the Nasdaq Small Cap Market, in dollars per share for the
quarters then ended:

<TABLE>


                                  Common Stock
                         ----------------------------------------------------
                         Date                            Low       High
                         ------------------------------- --------- ---------
                         <S>                             <C>       <C>

                         June, 2001                      2.86      3.48
                         September, 2001                 2.20      4.10
                         December, 2001                  2.23      3.00
                         March, 2002                     2.25      2.79
                         June, 2002                      2.17      2.50
                         September, 2002                 1.88      2.45
                         December, 2002                  1.55      2.10
                         March, 2003                     1.14      2.03

</TABLE>

The total number of shares of Common Stock of the Company outstanding as of June
12, 2003 was 1,363,555. As of the close of business on June 20, 2003, the number
of record holders of the Company's Common Stock was 44 and the number of holders
of the Company's Common Stock including beneficial holders of stock held in
street name was estimated to be 300.

There were no unregistered sales of the Company's Common Stock during the period
covered by this Report.

On August 15, 2002, the Company issued a 5% stock dividend to shareholders of
record on August 14, 2002. On August 14, 2001, the Company issued a 5% stock
dividend to shareholders of record on August 13, 2001.

The Company has not paid any cash dividends on its Common Stock during the past
two fiscal years and does not intend to pay any cash dividends on its Common
Stock in the foreseeable future. Future earnings, if any, will be retained to
fund the development and growth of the Company's business. In addition, state
corporate law may, under certain circumstances, restrict the Company's ability
to pay dividends.


<PAGE>


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
--------------

The statements contained in this report that are not historical facts may
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Exchange Act of 1933, as amended. These forward-looking statements
involve risks and uncertainties. Important factors that could cause actual
results to differ materially from the forward-looking statements include, but
are not limited to, the risk that the Company may not be able to increase sales
revenues, successfully integrate Beck Office Systems, Inc. into its operations
and maintain profitability. In addition, the Company's business, operations and
financial condition are subject to substantial other risks that are described in
the Company's reports and statements filed from time to time with the Securities
and Exchange Commission, including this Report.

Critical Accounting Policies
----------------------------

Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses. In consultation with our Board of Directors and Audit Committee, we
have identified four accounting principles that we believe are key to an
understanding of our financial statements. These important accounting policies
require management's most difficult, subjective judgments.

Revenue Recognition:
         The Company recognizes a sale when its earnings process is complete. In
connection with projects that are to be installed by a customer or an agent of
the customer, the sale is recognized when the product is shipped to or
possession is taken by the customer. In connection with projects delivered
and/or installed by the Company, the sale is recognized upon completion of the
delivery when possession is taken by the customer.

Accounts Receivable:
         Accounts receivable are reported at the customers' outstanding balances
less any allowance for doubtful accounts. The allowance is based upon a review
of the individual accounts outstanding and the Company's prior history of
uncollectible receivables. At March 31, 2003 and 2002, the Company established
an allowance for doubtful accounts in the amount of $40,000 and $10,500,
respectively.

Inventory:
         Inventory, which is primarily composed of used office workstations and
remanufacturing supplies, is stated at the lower of average cost or market. The
Company reviews its inventory monthly and makes provisions for damaged and
obsolete inventory. The Company contemplates its ability to alter the size of
panels and other workstation components and designs projects so that the
workstations are comprised of products currently in inventory in establishing a
reserve for damaged and obsolete inventory. At March 31, 2003 and 2002, the
Company established a reserve in the amount of $50,000.

Stock-Based Compensation:
         The Company has elected to follow Accounting Principles Board Opinion
No. 25 Accounting for Stock Issued to Employees (APB 25) and the related
interpretations in accounting for its employee stock options. Under APB 25,
because the exercise price of employee stock options equals the market price of
the underlying stock on the date of grant, no compensation expense is recorded.
The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
(Statement No. 123.)


<PAGE>



Results of Operations
---------------------

SALES REVENUE
<TABLE>


                                   For the Year      For the Year
                                          Ended             Ended   % Change in
Division                         March 31, 2003    March 31, 2002         Sales
--------                         --------------    --------------    ----------
<S>                                 <C>                <C>              <C>

Wholesale                            $4,750,135        $3,673,660        29.30%

Arizona Retail                       $4,373,357        $4,353,507         0.45%

Georgia Retail                       $1,093,679          $284,923       283.85%

California Retail                    $1,293,887           $17,603       725.02%

    Total Retail                     $6,760,923        $4,656,033        31.13%

Total Sales                         $11,511,058        $8,329,693        38.19%
</TABLE>

The Company had sales for the fiscal year ended March 31, 2003 (the "reporting
period") of $11.5 million. This compares to $8.3 million for the fiscal year
ended March 31, 2002 (the "comparable period"), resulting in an increase of $3.2
million or approximately 38%. Approximately $2.1 million or 25% of this increase
was contributed by the Company's newer sales offices in Georgia and California.
These increases were primarily due to the new offices establishing a growing
customer base. In addition, the Company's wholesale sales improved by
approximately $1.1 million or 29.3%. Arizona retail sales remained relatively
constant at approximately $4.4 million in the comparable and reporting periods.

GROSS MARGIN
------------
The Company's gross profit margin for the reporting period was 22%, as compared
to approximately 17% for the comparable period. The improved margins are
primarily a result of the effect of fixed costs on higher sales revenues. The
increased gross profit margin for the reporting period is consistent with gross
margins reported in prior years on similar sales levels.

OPERATING EXPENSES
------------------
The Company's selling and administrative expenses net of non-standard operating
expenses (see Notes 8 and 9 of the Audited Financial Statements) decreased from
22.8% in the comparable period to 21.7% in the reporting period. This percentage
did not improve as dramatically as the gross profit percentage due to the fact
that the improvement which resulted from fixed costs being spread over higher
sales volume was partially offset by higher selling expenses as a result of the
new sales offices in Georgia and California.

NON-STANDARD OPERATING EXPENSES
-------------------------------
In response to the lower sales volumes during the comparable period, management
made personnel cuts in an effort to reduce future fixed expenditures and improve
the company's profitability. Due to these lay-offs, the Company incurred
approximately $43 thousand in severance charges during the quarter ended
December 31, 2001. In addition to these severance charges, the Company incurred
legal fees and other non-recurring income and expenses in connection with the
Company's lawsuit against its former independent auditors, Semple & Cooper, LLC
(See Item 3. "Legal Proceedings").

OTHER INCOME AND EXPENSES
-------------------------
The Company's other income and expenses, which consist primarily of interest
income, decreased by approximately $31 thousand or 57% from the comparable
period to the reporting period. This decrease was primarily a result of lower
interest rates and decreased cash reserves.



Financial Condition and Liquidity
---------------------------------

Cash Flows from Operating Activities. Net cash provided by operating activities
totaled approximately $32,000 for the reporting period. This compares to net
cash used by operating activities of approximately $50 thousand for the
comparable period. The Company's pre-tax net income, net of the allowance for
bad debts, depreciation and amortization, for the reporting period was
approximately $278 thousand. The company received approximately $338 thousand in
income tax refunds. In addition, the Company generated positive cashflows by
reducing inventory approximately $64 thousand and reduced deferred income taxes
payable and accrued expenses by approximately $158 thousand. These increases
were partially offset by increases accounts receivable and prepaid expenses and
a reduction to accounts payable. Consistent with the increased in sales, the
Company's accounts receivable and prepaid expenses increased during the
reporting period by approximately $783 thousand. The Company reduced its
accounts payables during the reporting period by approximately $23 thousand.

Cash Flows from Investing and Financing Activities. During the reporting period,
the Company used approximately $134 thousand for the purchase of fixed assets,
primarily for the construction of a showroom in the Atlanta office. Net cash
used for financing activities totaled approximately $2 thousand, primarily for
the purchase of treasury stock.

Expected Future Cash Flows. Cash provided by operations in the near future
should closely follow operating income net of budgeted capital expenditures and
merger costs associated and related expenditures with the purchase of Beck
Office Systems.

In April 2003, the Company borrowed on its available line of credit with M&I
Bank and a line of credit from the Company's Chairman of the Board, Scott W.
Ryan to fund the purchase of Beck Office Systems, Inc. and to pay down
liabilities assumed in the merger (see Note 14 of the Audited Financial
Statements.) Management believes current working capital, cash reserves and cash
flows from operations are adequate to fund all additional planned expenditures
without the need for additional outside financing. As of the date of this report
the Company has $650,000 in available borrowings on its $1,000,000 line of
credit with M&I Bank (see Note 7 of the Audited Financial Statements.)
Furthermore, assuming operating income remains at or above a break-even,
management believes the Company will be able to eliminate the remaining $350,000
in borrowings on the line of credit by reducing current inventory levels.


<PAGE>


Forward Looking Statements
--------------------------

SHORT TERM OUTLOOK

With the purchase of Beck Office Systems in May 2003, management's short-term
focus will be to integrate Beck Office Systems into the Company and to develop
and nurture operational synergies between the manufacturing facilities.
Initially, the Company will focus on implementing accounting and manufacturing
software systems, inventory control and turnover improvements, cost reduction
and reporting standardization. Management will also continue to develop and try
to build sales stability within each of its operating divisions, particularly
the newer sales offices in Atlanta and Los Angeles, and the satellite sales
office in Tucson.

LONG TERM OUTLOOK

Management continues to build long-term growth opportunities through product and
market development projects. The Company finalized the registration of its
products with the General Services Administration ("GSA"), which allows the
Company to market directly to the U.S. government on open and closed bid
projects. The Company is currently developing its marketing material for GSA
customers. The Company also partnered with one of its suppliers to develop a
line of clone replacement parts, which will reduce the Company's product costs
on new replacement component parts and allow the Company to market these items
to other remanufactures in the industry.

Finally, the Company will continue to seek geographic expansion through
acquisitions, opening new sales offices and developing relationships with
dealerships throughout the United States as opportunities present themselves.




<PAGE>



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



                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To The Stockholders and Board of Directors of
Reconditioned Systems, Inc.


We have audited the accompanying balance sheets of Reconditioned Systems, Inc.
as of March 31, 2003, and the related statements of operations, stockholders'
equity, and cash flows for the year 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 audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 present fairly, in all material
respects, the financial position of Reconditioned Systems, Inc. as of March 31,
2003, and the results of its operations, stockholders' equity, and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

The financial statements of Reconditioned Systems, Inc. as of March 31, 2002
were audited by other auditors whose report dated May 6, 2002, expressed an
unqualified opinion on those statements.

Renzi, Bernardi, Suarez & Co.
Philadelphia, Pennsylvania

May 9, 2003




<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                                 BALANCE SHEETS
                             March 31, 2003 and 2002

<TABLE>

                                                                                  2003                  2002
                                                                                  ----                  ----
                                                   ASSETS
Current Assets:
       <S>                                                                  <C>                  <C>

       Cash and cash equivalents (Notes 1, 2 and 3)                         $1,274,132           $1,377,234
       Accounts receivable (Notes 1, 3 and 7)                                1,349,365              625,430
       Notes receivable (Note 3 and 4)                                         150,000              150,000
       Corporation income tax receivable                                             0              338,249
       Deferred tax asset, net (Note 11)                                        48,285               62,982
       Inventory (Notes 1 and 7)                                             1,343,157            1,407,923
       Prepaid expenses and other current assets (Note 11)                     186,166              148,790
                                                                               -------              -------

                    Total current assets                                     4,351,105            4,110,608
                                                                             ---------            ---------

Property and Equipment, net:   (Note 1, 6 and 7)                               318,817               391,341
                                                                               -------               -------

Other Assets (Note 7):
       Refundable deposits and other                                            67,034               66,463
                                                                                ------               ------

Total Assets                                                                 $4,736,956           $4,568,412
                                                                             ==========           ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
       Accounts payable (Note 3)                                              $553,400             $576,615
       Customer deposits                                                       157,414               84,631
       Accrued compensation and benefits                                       234,862              174,040
       Other accrued expenses and current liabilities                           34,038               24,293
                                                                                ------               ------

                    Total current liabilities                                  979,714              859,579
                                                                               -------              -------

Stockholders' Equity:
       Common stock, no par value; 100,000,000 shares authorized, 1,607,231 and
            1,547,517 shares issued, respectively and 1,254,055 and 1,194,608
            shares outstanding, respectively                                 4,937,873            4,805,258
       Retained earnings/(accumulated deficit)                               (314,327)             (230,247)
                                                                             ---------             ---------

                                                                             4,623,546            4,575,011
       Less: treasury stock, 353,176 and 352,909 shares
                respectively, at cost                                        (866,304)             (866,178)
                                                                             ---------             ---------

                                                                             3,757,242            3,708,833
                                                                             ---------            ---------

Total Liabilities and Stockholders' Equity                                   $4,736,956           $4,568,412
                                                                             ==========           ==========

</TABLE>

                   The Accompanying Notes are an Integral Part
                           of the Financial Statements


<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                            STATEMENTS OF OPERATIONS
                   For the Years Ended March 31, 2003 and 2002

<TABLE>

                                                                             2003            2002
                                                                             ----            ----
<S>                                                                   <C>              <C>

Sales                                                                 $11,511,058      $8,329,693

Cost of sales                                                           8,993,136       6,915,237
                                                                        ---------       ---------

Gross profit                                                            2,517,922       1,414,456
                                                                        ---------       ---------

Selling & administrative expenses                                       2,498,230       1,901,257
Severance charges (Note 8)                                                      0          42,708
Lawsuit and legal disputes (Note 9)                                      (23,937)          93,533
                                                                         --------          ------

Income (loss) from operations                                              43,629       (623,042)

Other income (expense):
          Interest income                                                  22,631          54,436
          Other                                                               777             326
                                                                              ---             ---

Net income (loss) before income taxes                                      67,037       (568,280)

Provision for income taxes (expense) benefit
(Note 11)                                                                (16,760)         284,185
                                                                         --------         -------

Net income  (loss)                                                        $50,277      $(284,095)
                                                                          =======      ==========

Earnings (loss) per share (Notes 1 and 13):

          Basic                                                             $0.04        $ (0.24)
                                                                            =====        ========
          Diluted                                                           $0.04        $ (0.24)
                                                                            =====        ========

Weighted average number of shares outstanding:
          Basic                                                         1,253,032       1,192,394
                                                                        =========       =========
          Diluted                                                       1,370,730       1,192,394
                                                                        =========       =========

</TABLE>








                   The Accompanying Notes are an Integral Part
                           of the Financial Statements



<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                   For the Years Ended March 31, 2003 and 2002

<TABLE>

                                    Common Stock      Common Stock         Retained
                                       Shares            Amount            Earnings       Treasury
                                                                          (Deficit)        Stock          Total
---------------------------------- -------------- ----------------- ---------------- -------------- --------------
<S>                                    <C>              <C>                 <C>         <C>            <C>

Balance at  March 31, 2001             1,174,250        $4,588,844           $267,460   $(757,869)     $4,098,435

Purchase of Treasury
      Shares                            (40,500)                 -                -       (112,025)     (112,025)

Transfer of shares to ESP
   Plan                                    3,522               242                -          8,379          8,621

Retirement of shares from
      ESP Plan                             (841)                                           (2,103)        (2,103)

Stock Dividend                            58,177           216,172          (213,612)      (2,560)              -

Net loss                                       -                 -          (284,095)            -      (284,095)
                                   -------------- ----------------- ------------------ ------------ --------------

Balance at  March 31, 2002             1,194,608        $4,805,258         $(230,247)   $(866,178)     $3,708,833

Purchase of Treasury
      Shares                             (1,435)                 -                  -      (2,904)        (2,904)

Transfer of shares to
      ESP Plan                             3,317           (1,806)                  -        7,888          6,082

Retirement of shares from
      ESP Plan                           (2,149)                64                  -      (5,110)        (5,046)

Stock Dividend                            59,714           134,357          (134,357)            -              -

Net loss                                       -                 -            50,277             -         50,277
                                   -------------- ----------------- ----------------- ------------- --------------

Balance at  March 31, 2003             1,254,055        $4,937,873         $(314,327)   $(866,304)     $3,757,242
                                   ============== ================= ================== ============ ==============

</TABLE>









                   The Accompanying Notes are an Integral Part
                           of the Financial Statements




<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                   For the Years Ended March 31, 2003 and 2002
<TABLE>

                                                                          2003          2002
                                                                          ----          ----

Cash Flows from Operating Activities:
        <S>                                                          <C>             <C>

        Cash received from customers                                 $10,787,900     $8,948,330
        Cash paid to suppliers and employees                        (11,114,442)     (8,975,076)
        Income taxes received/(paid)                                    336,186         (72,305)
        Interest received                                                 22,631         49,336
                                                                          ------         ------

                 Net cash provided/(used) by
                 operating activities                                    32,275        (49,715)
                                                                         ------        --------

Cash Flows from Investing Activities:

        Investments in short-term notes
        receivable                                                            -        (100,000)
        Purchase of property and equipment                            (132,938)        (254,900)
        Other                                                             (571)         (32,028)
                                                                          -----         --------

                 Net cash used by investing
                 activities                                           (133,509)        (386,928)
                                                                      ---------        ---------

Cash Flows from Financing Activities:

        Purchase of Treasury Stock                                      (2,904)         (31,925)
        Transfers to/from ESP Plan                                       1,036            6,518
                                                                         -----            -----

                 Net cash used by financing
                 activities                                             (1,868)         (25,407)
                                                                        -------         --------

Decrease in cash and cash
   Equivalents                                                        (103,102)        (462,050)
Cash and cash equivalents at beginning of
   Period                                                            1,377,234        1,839,284
                                                                     ---------        ---------

Cash and cash equivalents at end of period                          $1,274,132       $1,377,234
                                                                    ==========       ==========


</TABLE>





                   The Accompanying Notes are an Integral Part
                           of the Financial Statements




<PAGE>



                           RECONDITIONED SYSTEMS, INC.
                      STATEMENTS OF CASH FLOWS (Continued)
                   For the Years Ended March 31, 2003 and 2002
<TABLE>

                                                                                   2003                      2002
                                                                                   ----                      ----
<S>                                                                             <C>                     <C>

Reconciliation of Net Income/(Loss) to Net Cash
  Provided/(Used) by Operating Activities:

Net Income/(Loss)                                                               $50,277                 $(284,095)

Adjustments to reconcile net income to net cash provided by operating
  activities:

          Depreciation and amortization                                         205,462                   115,641
          Provision for doubtful accounts                                        22,000                   (16,500)
          Non-cash portion of officer note buy-out (Note 5)                           -                    (5,100)

Changes in assets and liabilities:

          Accounts receivable                                                   (745,935)                 618,311
          Inventory                                                              64,766                    26,396
          Prepaid expenses and other assets                                    (37,376)                       149
          Income taxes receivable                                               338,249                  (293,508)
          Deferred income taxes receivable                                       14,697                   (62,982)
          Accounts payable and accrued expenses                                 120,135                  (148,027)
                                                                                -------                  ---------

          Net cash provided by operating activities                             $32,275                  $(49,715)
                                                                                =======                  =========
</TABLE>


Non-Cash Investing and Financing Activities:

During the year ended March 31, 2003, the Company engaged in the following
non-cash investing and financing activities:

o        On August 15, 2002, the Company issued a 5% stock dividend to
shareholders of record on August 14, 2002.

During the year ended March 31, 2002, the Company engaged in the following
non-cash investing and financing activities:

o        On November 27, 2001 the Company purchased 30,000 shares of treasury
         stock in exchange for a $75,000 note receivable from an officer and
         $5,100 in unpaid accrued interest on said note.

o        On August 14, 2001, the Company issued a 5% stock dividend to
shareholders of record on August 13, 2001.




                   The Accompanying Notes are an Integral Part
                           of the Financial Statements




<PAGE>



                           RECONDITIONED SYSTEMS, INC.
                          Notes to Financial Statements
--------------------------------------------------------------------------------

                                     Note 1.
          Summary of Significant Accounting Policies, Nature of Operations,
                             and Use of Estimates
--------------------------------------------------------------------------------

Nature of Business:
         Reconditioned Systems, Inc. ("RSI" or the "Company"), is a corporation
         which was incorporated in the State of Arizona in March 1987. The
         principal business purpose of the Company is the remanufacturing and
         sale of office workstations comprised of panel systems to customers
         located throughout the country. In addition, the Company markets new
         workstations, filing, seating, lighting and other office furniture
         accessories. The Company markets its products primarily in the
         continental United States.

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

Revenue Recognition:
         The Company recognizes a sale when its earnings process is complete. In
         connection with projects that are to be installed by a customer or an
         agent of the customer, the sale is recognized when the product is
         shipped to or possession is taken by the customer. In connection with
         projects delivered and/or installed by the Company, the sale is
         recognized upon completion of the delivery when possession is taken by
         the customer.

Cash and Cash Equivalents:
         The Company considers all highly liquid debt instruments and money
         market funds purchased with an initial maturity of three (3) months or
         less to be cash equivalents.

Accounts Receivable - Trade:
         Accounts receivable are reported at the customers' outstanding balances
         less any allowance for doubtful accounts. The allowance is based upon a
         review of the individual accounts outstanding and the Company's prior
         history of uncollectible receivables. At March 31, 2003 and 2002, the
         Company has established an allowance for doubtful accounts in the
         amount of $40,000 and $10,500, respectively.

Inventory:
         Inventory, which is primarily composed of used office workstations and
         remanufacturing supplies, is stated at the lower of average cost or
         market. The Company reviews its inventory monthly and makes provisions
         for damaged and obsolete items. The Company contemplates its ability to
         alter the size of panels and other workstation components and designs
         projects so that the workstations are comprised of products currently
         in inventory in establishing its obsolescence reserve. At March 31,
         2003 and 2002, the Company had established a reserve for damaged and
         obsolete inventory in the amount of $50,000.


<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                     Note 1.
        Summary of Significant Accounting Policies, Nature of Operations,
                             and Use of Estimates
                                   (Continued)
--------------------------------------------------------------------------------

Property and Equipment:
         Property and equipment are recorded at cost. Major renewals and
         improvements are charged to the asset accounts while replacements,
         maintenance and repairs, which do not improve or extend the lives of
         respective assets, are expensed. At the time property and equipment are
         retired or otherwise disposed of, the assets and related depreciation
         accounts are relieved of applicable amounts. Gains or losses from
         retirements or sales are credited or charged to income. Depreciation is
         generally provided for on the straight-line basis over the following
         estimated useful lives of the assets:

                                                             Years
                  Office furniture and equipment             3 - 7
                  Machinery and equipment                    5 - 7
                  Leasehold improvements                       3
                  Vehicles                                   3 - 5
                  Showroom furniture                         1 - 2

Long-Lived Assets:
         Statement of Financial Accounting Standards No. 121, "Accounting for
         the Impairment of Long-Lived Assets and for Long-Lived Assets to be
         Disposed Of," requires that long-lived assets be reviewed for
         impairment whenever events or changes in circumstances indicate that
         the carrying amount of the assets in question may not be recoverable.
         This standard did not have a material effect on the Company's results
         of operations, cash flows or financial position.

Deferred Income Taxes:
         Deferred income taxes are provided on an asset and liability method,
         whereby deferred tax assets are recognized for deductible temporary
         differences and operating loss and tax credit carryforwards and
         deferred tax liabilities are recognized for taxable temporary
         differences. Temporary differences are the differences between the
         reported amounts of assets and liabilities and their tax basis.
         Deferred tax assets are reduced by a valuation allowance when, in the
         opinion of management, there is uncertainty of using the operating
         losses in future periods. Deferred tax assets and liabilities are
         adjusted for the effects of changes in tax laws and rates on the date
         of enactment.

Stock-Based Compensation:
         The Company has elected to follow Accounting Principles Board Opinion
         No. 25 Accounting for Stock Issued to Employees (APB 25) and the
         related interpretations in accounting for its employee stock options.
         Under APB 25, because the exercise price of employee stock options
         equals the market price of the underlying stock on the date of grant,
         no compensation expense is recorded. The Company has adopted the
         disclosure-only provisions of Statement of Financial Accounting
         Standards No. 123, "Accounting for Stock-Based Compensation" (Statement
         No. 123).




<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                     Note 1.
           Summary of Significant Accounting Policies, Nature of Operations,
                            and Use of Estimates
                                   (Continued)
--------------------------------------------------------------------------------

Stock-Based Compensation (Continued):
         During 1999, the Company adopted an Employee Stock Purchase Plan (the
         "Plan"). Under this plan, employees may purchase shares of the
         Company's common stock, subject to certain limitations, at 85% of its
         market value. Purchases are limited to 10% of an employee's eligible
         compensation, up to a maximum of $25,000 per year. An aggregate of
         200,000 shares of the Company's common stock are authorized and
         available for sale to eligible employees. During the years ended March
         31, 2003 and 2002, 1,168 and 2,681 shares were issued to employees
         under the Plan, respectively. These outstanding shares were adjusted
         for the 5% stock dividends issued on August 15, 2002 and August 14,
         2001 to 1,552 and 2,931, respectively.

Earnings Per Common and Common Equivalent Share:
         Basic earnings per share include no dilution and are computed by
         dividing income available to common stockholders by the weighted
         average number of shares outstanding for the period.

         Diluted earnings per share amounts are computed based on the weighted
         average number of shares actually outstanding plus the shares that
         would be outstanding assuming the exercise of dilutive stock options,
         all of which are considered to be common stock equivalents. The number
         of shares that would be issued from the exercise of stock options has
         been reduced by the number of shares that could have been purchased
         from the proceeds at the average market price of the Company's stock.
         In addition, certain outstanding options are not included in the
         computation of diluted earnings per share because their effect would be
         antidilutive.

Advertising:
         All direct advertising costs are expensed as incurred. The Company
         charged to operations $202,245 $146,693 in advertising costs for the
         years ended March 31, 2003 and 2002, respectively.

Shipping costs:
         Shipping costs include freight and mailing charges associated with
         delivery of goods from the company's warehouse to customer's designated
         locations. The company's policy is to classify shipping costs as part
         of cost of goods sold in the statement of operations.

Recent Accounting Pronouncements:
         In June 2001 and August 2001, the FASB issued the following statements:

                  FASB 141 - Business Combinations
                  FASB 142 - Goodwill and other Intangible Assets
                  FASB 143 - Accounting for Asset Retirement Obligations
                  FASB 144 - Accounting for the Impairment or Disposal of
                  Long-Lived Assets FASB 148 - Accounting for Stock-Based
                  Compensation - Transition and Disclosure

         These FASB statements did not have a material impact on the Company's
financial position or results of operations.


<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                     Note 2.
                                 Concentrations
--------------------------------------------------------------------------------

The Company maintains cash balances at various financial institutions. Deposits
not to exceed $100,000 at the financial institutions are insured by the Federal
Deposit Insurance Corporation. As of March 31, 2003, the Company had
approximately $1,200,000 of uninsured cash.

In addition, the Company specializes in remanufacturing one particular original
equipment manufacturer's (OEM) line of office workstations. The business is
dependent upon a readily available supply of new parts, as well as used product.

--------------------------------------------------------------------------------

                                     Note 3.
                       Fair Value of Financial Instruments
--------------------------------------------------------------------------------

The Company estimates that the fair value of all financial instruments at March
31, 2003 and 2002 as defined in FASB 107, does not differ materially from the
aggregate carrying values of its financial instruments recorded in the
accompanying balance sheets. The estimate fair value amounts have been
determined by the Company using available market information and appropriate
valuation methodologies. Considerable judgment is required in interpreting
market data to develop the estimates of fair value, and accordingly, the
estimates are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.

Estimated fair values of the Company's financial instruments (all of which are
held for non-trading purposes), are as follows:

<TABLE>


                                                         March 31, 2003                       March 31, 2002
                                                         --------------                       --------------
                                                   Carrying                            Carrying
                                                     Amount     Fair Value               Amount        Fair Value
                                                ----------      ----------          -----------        ----------
<S>                                             <C>             <C>                 <C>                <C>

Cash and cash equivalents                       $1,274,132      $1,274,132          $1,377,234         $1,377,234

Accounts receivable                             $1,349,365      $1,349,365          $  625,430         $  625,430

Short-term note receivable                       $ 150,000       $ 150,000           $ 150,000          $ 150,000

Accounts payable                                 $ 553,400       $ 553,400           $ 576,615          $ 576,615

</TABLE>


<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                     Note 4.
                                 Note Receivable
--------------------------------------------------------------------------------

As of March 31, 2003 and 2002, the Company held an interest in a note receivable
from American Business Financial Services, Inc. in the amount of $150,000, which
matures on December 4, 2003 and December 4, 2002, respectively. The
uncollateralized note is held for investment purposes and accrues interest
quarterly at an annual rate of 7.0% and 8.25%, respectively.

--------------------------------------------------------------------------------

                                     Note 6.
                             Property and Equipment
--------------------------------------------------------------------------------

Property and equipment by major classifications are as follows:

<TABLE>

                                           March 31, 2003         March 31, 2002
                                           --------------         --------------
<S>                                             <C>                    <C>

Office furniture and equipment                   $382,282              $331,596
Machinery and equipment                           242,229               227,065
Leasehold improvements                            102,011                47,806
Showroom furniture                                 76,263                64,931
Vehicles                                           67,447                67,447
                                                   ------                ------

                                                  870,233               738,845
Accumulated depreciation                         (551,415)             (347,504)
                                                 --------              --------
                                                 $318,817              $391,341
                                                 ========              ========
</TABLE>

Depreciation expense for the years ended March 31, 2003 and 2002 totaled
$205,462 and $112,061, respectively.


<PAGE>



                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                     Note 7.
                        Pledged Assets and Line of Credit
--------------------------------------------------------------------------------

As of March 31, 2003, the Company had a $1,000,000 line of credit agreement with
M&I Thunderbird Bank. Under this agreement, interest is payable at the bank's
base rate. Borrowings on the line of credit may not exceed seventy-five percent
(75%) of eligible accounts receivables and thirty percent (30%) of eligible
inventory up to $300,000. The line of credit is collateralized by accounts
receivable, inventory, property and equipment, and intangibles which total
$4,736,956. The agreement contains various covenants by the Company, including
covenants that the Company will maintain certain net worth thresholds and
ratios, will meet certain debt service coverage ratios, and will not enter into
or engage in various types of agreements or business activities without approval
from M&I Thunderbird Bank. The line of credit matures on July 31, 2003.

As of March 31, 2003, the Company had no outstanding borrowings on the line of
credit and was in compliance with all of the covenants of the agreement.

--------------------------------------------------------------------------------

                                     Note 8.
                                Severance Charges
--------------------------------------------------------------------------------

In response to decreased sales volume and the Company's reported losses during
the year ended March 31, 2002, the Company made personnel cuts during the
quarter ended December 31, 2001. In connection with the lay-offs, the Company
incurred $42,708 in severance charges.

--------------------------------------------------------------------------------

                                     Note 9.
                           Lawsuit and Legal Disputes
--------------------------------------------------------------------------------

On March 31, 2003, the Company's lawsuit against its former independent
accountant, Semple & Cooper, LLP filed on August 9, 2001 in the Superior Court
of Arizona, Maricopa County (Case No. CV2001-013810) was amicably resolved
between the parties by settlement and the complaint was dismissed with
prejudice.



<PAGE>




                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                    Note 10.
                           Operating Lease Commitments
--------------------------------------------------------------------------------

The Company leases remanufacturing, warehouse, showroom and office space in
Arizona, Georgia and California, as well as certain equipment under
non-cancelable operating lease agreements expiring at various times through
April 2006. Certain of the lease agreements require the Company to pay property
taxes, insurance and maintenance costs.

Future minimum lease payments were as follows at March 31, 2003:
<TABLE>


                  March 31,                                   Amount
                 <S>                                         <C>

                  2004                                        $507,364
                  2005                                         443,229
                  2006                                         392,155
                  2007                                          32,728
                                                            ----------
                                                            $1,375,476

</TABLE>

Rent expense under operating lease agreements for the years ended March 31, 2003
and 2002 was approximately $460,000 and $350,000, respectively.

--------------------------------------------------------------------------------

                                    Note 11.
                                  Income Taxes
--------------------------------------------------------------------------------

The provision for income taxes consist of the following for the years ended
March 31, 2003 and 2002:

<TABLE>

                                                     For the Year Ended
                                               March 31, 2003          March 31, 2002
                                               --------------          --------------
<S>                                                    <C>                 <C>

Federal
   Current (Benefit)                                   $2,063              $(221,203)
   Deferred (Benefit)                                   7,993                (13,102)
                                                        -----                --------

                                                      $10,056               (234,305)
                                                      -------               ---------
State
   Current                                                  0                       0
   Deferred (Benefit)                                   6,704                (49,880)
                                                        -----                --------

                                                        6,704                (49,880)
                                                        -----                --------

Tax Expense (Benefit)                                 $16,760              $(284,185)
                                                      =======              ==========


</TABLE>


<PAGE>



                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                    Note 11.
                                  Income Taxes
                                   (Continued)
--------------------------------------------------------------------------------

The Company's income tax provisions/(benefit) differ from the amounts computed
by applying the federal statutory income tax rate to income before income taxes.
Reconciliation to the statutory federal income tax rate is as follows:

<TABLE>

                                                              For the Year Ended
                                                        March 31, 2003       March 31, 2002
                                                        --------------       --------------
<S>                                                           <C>                       <C>

Income tax at statutory effective rate                         $22,861                  $ 0

Adjustments:
          NOL Carryforward/carryback                           (6,101)            (238,745)
          State taxes, net of federal benefit                        0             (45,440)
          Alternative minimum tax carryforward                       0                    0
                                                                     -                    -

Income Tax Expense (Benefit)                                   $16,760           $(284,185)
                                                               =======           ==========

</TABLE>

Significant components of the Company's deferred tax assets and liabilities are
as follows:
<TABLE>

                                                              For the Year Ended
                                                        March 31, 2003       March 31, 2002
                                                        --------------       --------------
<S>                                                           <C>                  <C>

Deferred tax assets:
     Net operating loss carryforwards                          $72,850             $ 99,942
     Less valuation allowance                                        0                    0
                                                                     -                    -

     Deferred tax asset                                        $72,850             $ 99,942
                                                               -------             --------

Deferred tax liability:
     Property and equipment related                            $24,565             $ 36,960
                                                               -------             --------

Net deferred tax asset                                         $48,285              $62,982
                                                               =======              =======
</TABLE>

Summary of valuation allowance:

     Balance at April 1, 2002                                  $           0

      Addition for the year ended March 31, 2003                           0
                                                                ------------

      Balance at March 31, 2003                                $           0
                                                               =============

Realization of the net deferred tax assets is dependent on future reversals of
existing taxable temporary differences and adequate future taxable income,
exclusive of reversing temporary differences and carryforwards. Although
realization is not assured, management believes that it is more likely than not
that the net deferred tax assets will be realizable. The amount of the net
deferred tax asset considered realizable could be reduced in the near term if
actual future taxable income is lower than estimated, or if there are
differences in the timing or amount of future reversals of existing taxable
temporary differences.
<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                    Note 12.
                              Common Stock Options
--------------------------------------------------------------------------------

During the year ended March 31, 1997, the Board of Directors issued 300,000
common stock options to certain officers and directors with an exercise price of
$1.00 per share. During the year ended March 31, 2000, 100,000 of the options
were cancelled. The remaining options were subsequently readjusted following the
5% stock dividends issued on August 15, 2001 and August 14, 2002. As of March
31, 2003, these options total 220,500 shares with an exercise price of $0.91 per
share.

During the year ended March 31, 1998, the Board of Directors approved the 1997
Employee Stock Option Plan. The Plan authorizes the Company to grant incentive
stock options to key employees of the Company. 55,125 shares of common stock are
reserved for issuance pursuant to this Plan.

During the year ended March 31, 1999, the Board of Directors issued 6,300 common
stock options to certain key employees under the 1997 Employee Stock Option Plan
with an exercise price of $3.00. To date, 1,050 of these options have been
forfeited. The remaining options were subsequently readjusted following the 5%
stock dividends issued on August 15, 2001 and August 14, 2002. As of March 31,
2003, these options total 5,788 with an exercise price of $2.72 per share.

During the year ended March 31, 2000, the Board of Directors issued 4,000 common
stock options to certain officers and directors with an exercise price of $2.63.
These options were subsequently readjusted to 4,410 options at an exercise price
of $2.39 per share. In addition, during the year ended March 31, 2000, the Board
of Directors issued 4,907 common stock options to certain key employees under
the 1997 Employee Stock Option Plan with an exercise price of $2.63. To date,
1,402 of these options have been forfeited. The remaining options were
subsequently readjusted to 3,864 at an exercise price of $2.39 per share.

During the year ended March 31, 2001, the Board of Directors issued 5,000 common
stock options to certain officers and directors with an exercise price of $3.00.
The Board also issued 10,112 common stock options to certain key employees under
the 1997 Employee Stock Option Plan with an exercise price of $3.00, of which
3,792 have been forfeited. These options were subsequently readjusted to 5,512
and 6,968 options, respectively, with an exercise price of $2.72.

During the year ended March 31, 2003, the Board of Directors issued 15,000
common stock options to certain directors with an exercise price of $2.30.


<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                    Note 12.
                              Common Stock Options
                                   (Continued)
--------------------------------------------------------------------------------

Following is a summary of the status of the outstanding stock options for
employees, officers and directors during the year ended March 31, 2003 and 2002:

<TABLE>
                                                                                                 Weighted Average
                                                                         Number of Options         Exercise Price
                                                                         -----------------         --------------
<S>                                                                                <C>                     <C>

Outstanding as of March 31, 2001                                                   230,319                  $1.25
        Granted                                                                          0                   3.00
        Exercised                                                                        0                      0
        Forfeited                                                                        0                      0
        Adjustment for 5% stock dividend - August 15, 2001                          11,516                  (.06)
                                                                                    ------                  -----

Outstanding as of March 31, 2002                                                   241,835                  $1.19

        Granted                                                                     15,000                   2.30
        Exercised                                                                        0                      0
        Forfeited                                                                  (6,556)                      0
        Adjustment for 5% stock dividend - August 14, 2002                          11,764                  (.05)
                                                                                    ------                  -----



Outstanding as of March 31, 2003                                                   262,043                  $1.16
                                                                                   =======                  =====

</TABLE>


Information relating to the stock options at March 31, 2003, summarized by
exercise price, is as follows:


<TABLE>


Range                                    Weighted Average          Weighted                      Weighted Average
of                     Shares under        Remaining Life           Average        Exercisable     Exercise Price
Exercise Price               Option               (Years)    Exercise Price             Shares
--------------         ------------     -----------------    --------------        -----------   ----------------
<S>                         <C>                      <C>              <C>              <C>                 <C>

$1.00 - $2.00               220,500                  3.39             $0.91            220,500              $0.91

$2.01 - $2.50                23,274                  5.30             $2.33              8,274              $2.39

$2.51 - $3.00                18,268                  3.00             $2.72             11,301              $2.72
</TABLE>



<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                    Note 12.
                              Common Stock Options
                                   (Continued)
--------------------------------------------------------------------------------

All stock options issued have an exercise price not less than the fair market
value of the Company's common stock on the date of grant. In accordance with
accounting for such options utilizing the intrinsic value method, there is no
related compensation expense recorded in the Company's financial statements for
the years ended March 31, 2003 and 2002. Had compensation cost for stock-based
compensation been determined based on the fair value of the options at the grant
dates consistent with the method of SFAS 123, the Company's net income (loss)
and earnings (loss) per share would have been reduced to the pro forma amounts
presented below:

<TABLE>

                                                                  Year Ended          Year Ended
                                                               March 31,2003       March 31,2002
                                                               -------------       -------------
<S>                                                                  <C>              <C>

Net income (loss):
     As reported                                                     $50,277          $(284,095)
     Pro forma                                                       $37,299          $(295,187)

Earnings (loss) per share:
     Basic:
          As reported                                                  $0.04             $(0.24)
          Pro forma                                                    $0.03             $(0.25)

     Diluted:
          As reported                                                  $0.04             $(0.24)
          Pro forma                                                    $0.03             $(0.25)

</TABLE>

The fair value of option grants is estimated as of the date of grant utilizing
the Black-Scholes option-pricing model with the following weighted average
assumptions for grants in 2003 and 2002: expected remaining life of options of
5.00 years in 2003 and 6.25 years in 2002, expected volatility of 31%, risk-free
interest rates of 5%, and a 0% dividend yield. The weighted average fair value
at date of grant for options granted during 2003 approximated $0.84.


<PAGE>



                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)

--------------------------------------------------------------------------------
                                  Note 13.
                            Earnings (Loss) Per Share
--------------------------------------------------------------------------------

For the years ended March 31, 2003 and 2002, the following data shows amounts
used in computing earnings per share and the effect on income and the weighted
average number of shares of dilutive potential common stock.

<TABLE>

                                                                                                 March 31,
                                                                                          2003              2002
                                                                                          ----              ----
<S>                                                                                     <C>           <C>

Basic EPS

Net income (loss)                                                                      $50,277        $(284,095)
                                                                                       =======        ==========

Weighted average number of shares outstanding                                        1,253,032         1,192,394

Basic earnings (loss) per share                                                          $0.04           $(0.24)
                                                                                         =====           =======

Diluted EPS

Net income (loss)                                                                      $50,277        $(284,095)
                                                                                       =======        ==========

Weighted average number of shares outstanding                                        1,253,032         1,192,394

Effect of dilutive securities:
  Stock options                                                                        117,698                 0
                                                                                       -------                 -

Total common shares + assumed conversions                                            1,370,730         1,192,394

Diluted earnings (loss) per share                                                        $0.04           $(0.24)
                                                                                         =====           =======

</TABLE>


<PAGE>


                           RECONDITIONED SYSTEMS, INC.
                    Notes to Financial Statements (Continued)
--------------------------------------------------------------------------------

                                    Note 14.
                                Subsequent Event
--------------------------------------------------------------------------------

Effective May 1, 2003, Reconditioned Systems, Inc., an Arizona corporation
("RSI") completed its acquisition of Beck Office Systems, Inc., a New Mexico
corporation ("Beck"), by means of a merger of Beck with and into RSI Acquisition
Sub, Inc., a New Mexico corporation and wholly-owned subsidiary of RSI formed in
order to effect the acquisition. The merger was accomplished pursuant to the
Agreement and Plan of Merger dated April 24, 2003 and entered into by the
respective corporations and certain others and a copy of which was filed as an
attachment to the articles of merger with the New Mexico State Corporation
Commission on April 29, 2003.

Beck specializes in the remanufacturing of modular office furniture originally
manufactured by Haworth, Inc. In addition, Beck retails numerous new office
furniture lines. Beck was founded by Daniel and Marjorie Beck in 1983 and now
employs approximately 60 employees. Beck is headquartered in Albuquerque, New
Mexico and also has a sales office in Tucson, Arizona. Included within the
assets acquired from Beck are office, showroom, plant and equipment, located in
Albuquerque and Tucson. RSI intends to continue to utilize the assets of Beck in
the same manner that they were utilized prior to the merger.

In consideration for the merger which is intended to qualify as a tax free
reorganization under Section 368 of the Internal Revenue Code, RSI paid $200,000
in cash and 125,000 shares of restricted RSI common stock, 14,000 shares of
which shall revert to RSI in the event the post-closing audit of Beck does not
confirm a total stockholders' equity of at least $500,000. The cash portion of
the merger consideration was funded through borrowings from Scott W. Ryan, the
registrant's Chairman of the Board under a $200,000 note payable dated April 25,
2003. The issuance of RSI common stock was made without general solicitation or
advertising pursuant to Section 4(2) of the Securities Act of 1933.

The terms of the merger are fully described in the Agreement and Plan of Merger,
which was filed an exhibits to the 8-K filed on May 5, 2003.



<PAGE>




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

On December 13, 2002 the Registrant's former principal independent accountant,
Moffitt & Company, PC resigned. Moffitt & Company, PC's reports on the Company's
financial statements for the years ended March 31, 2002 and 2001 did not contain
an adverse opinion or disclaimer of opinion, and were not modified as to
uncertainty, audit scope or accounting principles. There were no disagreements
with Moffitt & Company, PC on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure. On December 13,
2002, the Registrant appointed Renzi, Bernardi, Suarez & Company as the
principal independent accountant.
(See the Registrant's filings on Form 8-K December 13, 2002.)

                                    PART III
                                    --------

The information required by Items 9 - 11 of Part III is omitted from this Report
by virtue of the fact that the Company will file with the Securities and
Exchange Commission (the "SEC"), pursuant to Regulation 14A, within 120 days
after the end of the fiscal year covered by this Report, a definitive proxy
statement (the "Proxy Statement") relating to the Company's Annual Stockholders'
Meeting to be held August 29, 2003.

         Material incorporated herein by reference and location in Proxy
Statement for 2003 Annual Meeting:

<TABLE>

Item No.  Item Description                                     Proxy Statement
--------  -----------------                                     ---------------
<S>  <C>                                                  <C>

9    Directors, Executive Officers, Promoters             Proposal One - Election of Directors
     and Control Persons; Compliance with
     Section 16(a) of the Exchange Act

10   Executive Compensation                               Proposal One - Election of Directors

11   Security Ownership of Certain                        General Information - Security Owner-
     Beneficial Owners and Management                     ship of Certain Principal Stockholders
                                                          and Management

</TABLE>

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

None.


<PAGE>


Item 13.  Exhibits and Reports on Form 8-K
------------------------------------------
(a)(1)  Exhibits

The following exhibits are filed herewith pursuant to Regulation S-B:
<TABLE>

No.               Description                                                          Reference
---               -----------                                                          ---------
<S>       <C>                                                                           <C>

2.1      Agreement and Plan of Merger dated as of April 29, 2003 by and among
         Reconditioned Systems, Inc. and all of the outstanding shareholders of
         Beck Office Systems, Inc.                                                     10
3.1      Articles of Incorporation of the Registrant, as amended and restated           3
3.2      Bylaws of Registrant, as amended and restated                                  3
4.1      Form of Common Stock Certificate                                               1
4.5      Registration Rights Agreements                                                 2
*4.10    Options issued to Dirk D. Anderson                                             4
*4.12    Amendment to Options issued to Dirk D. Anderson                                5
*4.14    Options issued to Dirk D. Anderson                                             5
*4.15    Options issued to Scott W. Ryan                                                5
*4.16    Options issued to Scott W. Ryan                                                5
*4.17    Options issued to Scott W. Ryan                                                7
*4.18    Options issued to Dirk D. Anderson                                             7
*4.19    Options issued to Scott W. Ryan                                                7
*4.20    Options issued to Dirk D. Anderson                                             7
10.1     Lease Agreement, dated April 12, 1990 between Boston Safe Deposit
         and Trust Company, as Lessor, and Registrant as Lessee                         1
10.33    Loan document between M&I Thunderbird Bank and the Registrant                  6
10.34    Agreement for Conveyance and Assignment between First Capital Bank
         and Registrant                                                                 8
10.35    Sublease between Iron Mountain Records Management, Inc. and Registrant         8
10.36    Lease agreement between Arden Realty Finance III, LLC and Registrant           9
23.1     Consent the Independent Public Accountants, Moffitt & Company, PC             11
23.2     Consent the Independent Public Accountants, Renzi, Bernardi and Suarez, PC    11
99.1     Certification Pursuant to 18 United States Code Section 1350,
         as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
         2002, of Dirk D. Anderson, President and Chief Executive Officer of
         the Company.                                                                  11

</TABLE>

         (1)      Filed with Registration Statement on Form S-18, No.
                  33-51980-LA, under the Securities Act of 1933, as declared
                  effective on December 17, 1992
         (2)      Filed with Form 10-KSB on July 13, 1995
         (3)      Filed with Form 10-KSB on July 2, 1996
         (4)      Filed with Form 10-KSB on November 14, 1996
         (5)      Filed with 10-KSB on September 26, 1997
         (6)      Filed with 10-KSB on August 11, 2000
         (7)      Filed with 10-KSB on July 18, 2001
         (8)      Filed with 10-QSB on November 9, 2001
         (9)      Filed with 10-QSB on February 5, 2002
         (10)     Filed with Form 8-K on May 5, 2003
         (11)     Filed herein
         (*)      Indicates a compensatory plan or arrangement

(b)      Reports on Form 8-K:

         On May 5, 2003, the Registrant filed a Current Report on Form 8-K
         incorporated by reference under Item 4 a copy of the Agreement and Plan
         of Merger dated as of April 29, 2003 by and among Reconditioned
         Systems, Inc. and all of the outstanding shareholders of Beck Office
         Systems, Inc. Included under Item 5 of the same filing, the Company
         announced it entered into a Settlement Agreement with the registrant's
         former independent accountant, Semple & Cooper, LLP (`Semple")
         regarding the lawsuit filed in the Superior Court of Arizona, Maricopa
         County (Case No. CV2001-013810).


<PAGE>



                                   SIGNATURES
                                   ----------

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                           Reconditioned Systems, Inc.
Date:    June 25, 2003     /s/ Dirk D. Anderson
                           -------------------------------------
                           Dirk D. Anderson, Chief Executive Officer
                           (Principal Finance Officer)

                           /s/ Kerrie A. Leach
                           -------------------------------------
                           Kerrie A. Leach, V.P. of Finance
                           (Principal Accounting Officer)

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.

Date:    June 25, 2003                /s/ Scott W. Ryan
                                      -------------------------------------
                                      Scott W. Ryan, Chairman

				      /s/ Dirk D. Anderson
                                      -------------------------------------
                                      Dirk D. Anderson, Secretary and Treasurer

			             /s/ Ronald Ziegler
                                     -------------------------------------
                                     Ronald Ziegler, Director



<PAGE>


                                  Certification

I, Dirk D. Anderson, certify that:

1.       I have reviewed this annual report on Form 10-KSB of Reconditioned
         Systems, Inc. (the "registrant"):

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
         such 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.       I am  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  related to the registrant  particularly
            during the period in which this 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.       I have disclosed, based on my 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
            weaknesses in internal controls; and

        b.  any  fraud,  whether  or not  material,  that  involves  management
            or other  employees  who have a  significant  role in the
            registrant's internal controls; and

6.       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:  June 25, 2003


/s/ Dirk D. Anderson
------------------------------------
Dirk D. Anderson