UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549


                                   FORM 10-QSB


       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                        EXCHANGE ACT OF 1934, AS AMENDED:

                  For the Quarterly Period Ended March 31, 2005

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

                          Commission File No. 33-49797
                         ------------------------------


                               eTOTALSOURCE, INC.
        (Exact name of small business issuer as specified in its charter)

                COLORADO                               84-1066959
  ------------------------------------   -------------------------------------
     (State or Other Jurisdiction of      (I.R.S. Employer Identification No.)
     Incorporation or Organization)


                    1510 Poole Boulevard, Yuba City, CA 95993
                    -----------------------------------------
                     Address of principal executive offices)

                                 (530) 751-9615
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, 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 [_]

             As of March 31, 2005, the issuer had 46,710,821 shares
             of common stock, no par value, issued and outstanding.

Documents Incorporated by Reference:  None

Transitional Small Business Disclosure Format: Yes [_]  No [X]

<PAGE>

                               eTOTALSOURCE, INC.

                                   FORM 10-QSB

                                TABLE OF CONTENTS


PART I. - FINANCIAL INFORMATION
   ITEM 1.  CONSOLIDATED CONDENSED FINANCIAL STATEMENTS........................3
      Balance Sheets - March 31, 2005 and December 31, 2004....................4
      Statements of Operations - Three Month Ended March 31, 2005 and 2004.....6
      Statements of Cash Flows - Three Month ended March 31, 2005 and 2004.....7
      Notes to Financial Statements............................................9
   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.........10
   ITEM 3.  CONTROLS AND PROCEDURES...........................................24

PART II. - OTHER INFORMATION
   ITEM 1.  LEGAL PROCEEDINGS.................................................25
   ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.........................25
   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES...................................25
   ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS................25
   ITEM 5.  OTHER INFORMATION.................................................25
   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..................................26

SIGNATURE PAGE


                                       2
<PAGE>

                                     PART I


                              FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS.

                               eTOTALSOURCE, INC.
                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              As of March 31, 2005


                          INDEX TO FINANCIAL STATEMENTS


                                                                            PAGE

CONSOLIDATED CONDENSED BALANCE SHEETS AS OF MARCH 31, 2005 AND                4
DECEMBER 31, 2004

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE                 6
MONTHS ENDED MARCH 31, 2005 AND 2004

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE                 7
MONTHS ENDED MARCH 31, 2005 AND 2004

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS AS OF                    9
MARCH 31, 2005


                                       3
<PAGE>


                     eTotalSource, Inc.
                 Consolidated Balance Sheet
<TABLE>
<CAPTION>
                                                                   March 31,      December 31,
ASSETS                                                                  2005              2004
                                                                -------------    --------------
<S>                                                                <C>              <C>
Current Assets
Cash                                                               $     401        $   37,849

Other                                                                  1,286             1,296
                                                                -------------    --------------

Total Current Assets                                                   1,687            39,145
                                                                -------------    --------------

Property and Equipment

Furniture and equipment                                               88,122            88,122

   Less accumulated depreciation                                    (60,279)          (56,786)
                                                                                 --------------
                                                                -------------

                                                                      27,843            31,336
                                                                -------------    --------------

Other Assets
Patents applications and trademarks, less $16,439 and
$15,431 accumulated amortization, respectively                        23,899            24,907

Deposits                                                               1,162             1,162
                                                                -------------    --------------

                                                                      25,061            26,069
                                                                -------------    --------------

Total Assets                                                      $    4,591        $   96,550
                                                                =============    ==============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities

Convertible notes payable                                         $  250,000       $   417,569
Other notes payable                                                  632,000           632,000
Judgments payable                                                    204,788           204,788
Accounts payable                                                     295,303           183,461
Accrued compensation payable                                         939,025           845,880
Accrued interest payable                                             198,801           185,475
Deferred revenue                                                      56,250            67,500
                                                                -------------    --------------
Total Current Liabilities                                          2,576,166         2,536,673


Convertible Notes Payable, less current maturities                   294,219           117,900
                                                                -------------    --------------


Total Liabilities                                                  2,870,385         2,654,573
                                                                -------------    --------------



                              See accompanying notes.


                                       4
<PAGE>

                     eTotalSource, Inc.
                 Consolidated Balance Sheet


<CAPTION>
Commitments and Contingencies

Stockholders' Equity (Deficit)
Common stock; no par value; 300 million shares authorized,
<S>                                                              <C>               <C>
  46,710,821 shares issued and outstanding                         5,810,485         5,784,300

Accumulated (deficit)                                            (8,626,279)       (8,342,323)
                                                                -------------    --------------
Total Stockholders' Equity
                                                                 (2,815,794)       (2,558,022)
                                                                -------------    --------------

Total Liabilities and Stockholders' Equity (Deficit)              $   54,591        $   96,550
                                                                =============    ==============
</TABLE>


                              See accompanying notes.


                                       5
<PAGE>

               eTotalSource, Inc.
     Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                         Three Months Ended March 31,
                                                         ----------------------------
                                                            2005              2004
                                                         ----------        ----------
<S>                                                      <C>               <C>
Revenues                                                 $  14,987         $  18,093


General and Administrative Expenses                        252,525           397,262
                                                         ----------        ----------

Operating Income (Loss)                                   (237,538)         (379,170)

Other Income (Expense)

Interest expense                                           (47,761)          (27,368)

Other income (expense), net                                  1,342               (19)
                                                         ----------        ----------
Total Other Income (Expense)                               (46,419)          (27,386)
                                                         ----------        ----------

Net (Loss)                                               $(283,957)        $(406,556)
                                                         ==========        ==========

Basic and Diluted (Loss) per Share                       $  (0.006)        $   (0.01)
                                                         ==========        ==========


Weighted Average Common Shares Outstanding               46,710,821        30,307,449
                                                         ==========        ==========
</TABLE>



                             See accompanying notes.


                                       6
<PAGE>

                eTotalSource, Inc.
       Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                         Three Months Ended March 31,
                                                         ----------------------------
                                                            2005              2004
                                                         ----------        ----------
<S>                                                      <C>               <C>
                                                         $(283,957)        $(406,556)


Depreciation and amortization                               13,251             5,681

Loss on retirement of assets                                  --                  18

Stock issued for services and in lieu of interest             --             160,000

Stock options and warrant expense                           26,185            25,338
Changes in assets and liabilities:

Decrease (increase) in accounts receivable                    --                  85

Decrease (increase) in deposits                               --                 196

Decrease (increase) in other current assets                     11              --
Increase (decrease) in payables, credit cards and
accrued liabilities                                        218,312            (5,016)

Increase (decrease) in deferred revenue                    (11,250)          (11,250)
                                                         ----------        ----------


Net Cash (Used in) Operating Activities                    (37,448)         (231,504)
                                                         ----------        ----------

Cash Flows From (Used in) Investing Activities:

Purchase of equipment                                         --              (9,077)
                                                         ----------        ----------


Net Cash (Used in) Investing Activities                       --              (9,077)
                                                         ----------        ----------

Cash Flows From (Used in) Financing Activities:

Proceeds from sale of stock                                   --                --
                                                         ----------        ----------


Net Cash From Financing Activities                            --                --
                                                         ----------        ----------


Increase (decrease) in Cash and Cash Equivalents           (37,448)         (240,581)


Cash and Cash Equivalents - Beginning of Period             37,849           313,084
                                                         ----------        ----------



                            See accompanying notes.


                                       7
<PAGE>
                eTotalSource, Inc.
       Consolidated Statements of Cash Flows


<CAPTION>
<S>                                                      <C>               <C>

                                                         ==========        ==========
Cash and Cash Equivalents - End of Period                $     401        $  72,503
                                                         ==========        ==========

Supplemental Disclosures:

   Interest paid                                            12,713          378,804

   Income taxes paid                                             -              800
   Non-cash investing and financing transactions:

      Conversion of debt to equity                               -          340,000

</TABLE>



                             See accompanying notes.


                                       8
<PAGE>

                               eTOTALSOURCE, INC.

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                              AS OF MARCH 31, 2005

Note A - Basis of Presentation

The accompanying unaudited financial statements of eTotalSource, Inc. (the
"Company") were prepared in accordance with generally accepted accounting
principles for interim financial information and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial condition for the
periods presented have been included. Such adjustments are of a normal recurring
nature. The results of operations for the three-month period ended March 31,
2005 are not necessarily indicative of the results of operations that can be
expected for the fiscal year ending December 31, 2005. For further information,
refer to the Company's audited financial statements and footnotes thereto
included in Item 7 of Form 10-KSB filed by THE Company on March 25, 2005.

Certain reclassifications have been made to prior year expenses to conform to
the current year presentation and have no effect on the reported net loss for
either period.

Note B - Contingency

As reported in the December 31, 2004 financial statements, the Company has
incurred significant recurring losses from operations and has a substantial
liquidity shortage, including default conditions on certain notes payable and
judgments payable to creditors. The foregoing raises substantial doubt about the
Company's ability to continue as a going concern. These conditions are
substantially unchanged through the first quarter of 2005. The accompanying
condensed consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

Note C - Events Subsequent to March 31, 2005

On April 20, 2005, the Company and Cornell Capital Partners, LP ("Cornell"), the
holder of two $175,000 convertible debentures issued in 2004, agreed to modify
the 20% floating conversion rate of the debentures to a fixed rate equal to
$0.0112 per share. In addition, the term of the debentures was reset for a new
24-month period beginning April 20, 2005, when the principal and accrued
interest shall be, at the Company's option, either paid or converted into shares
of common stock at a conversion price equal to $0.0112 per share.


In addition, on April 20, 2005, the Company borrowed $100,000 from Cornell and
issued it a note payable with interest accruing at 12%. The note and accrued
interest is due on the earlier of (i) the effective date a proposed Registration
Statement on Form SB-2 is filed with the United States Securities and Exchange
Commission (the "SEC"), or (ii) August 1, 2005. The note is secured by 8,117,946
shares of Company common stock of three officers of the Company.


                                       9
<PAGE>

Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS.


Forward-Looking Statements and Associated Risks. This report contains
forward-looking statements. Such forward-looking statements include statements
regarding, among other things, (a) our projected sales and profitability, (b)
our growth strategies, (c) anticipated trends in our industry, (d) our future
financing plans, (e) our anticipated needs for working capital, (f) our lack of
operational experience, and (g) the benefits related to ownership of our common
stock. Forward-looking statements, which involve assumptions and describe our
future plans, strategies, and expectations, are generally identifiable by use of
the words "may," "will," "should," "expect," "anticipate," "estimate,"
"believe," "intend," or "project" or the negative of these words or other
variations on these words or comparable terminology. This information may
involve known and unknown risks, uncertainties, and other factors that may cause
our actual results, performance, or achievements to be materially different from
the future results, performance, or achievements expressed or implied by any
forward-looking statements. These statements may be found under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business," as well as in this report generally. Actual events or results may
differ materially from those discussed in forward-looking statements as a result
of various factors, including, without limitation, the risks outlined under
"Risk Factors" and matters described in this report generally. In light of these
risks and uncertainties, there can be no assurance that the forward-looking
statements contained in this report will in fact occur as projected.

Description of Our Business


      History and Overview

      The company was incorporated in Colorado on September 16, 1987, as Premium
Enterprises, Inc. On December 20, 2002 Premium Enterprises, Inc. ("Premium")
entered into a Plan and Agreement of Reorganization with eTotalSource, Inc. and
its shareholders whereby Premium acquired 91% of the issued and outstanding
common stock of eTotalSource in exchange for 15,540,001 shares of common stock
of Premium. The contract was completed December 31, 2002. On June 17, 2003,
shareholders voted to amend the Articles of Incorporation to change the name of
Premium to eTotalSource, Inc. For a period of time in 1988-94, Premium operated
three fast lube locations, at various times in Arizona and Colorado as Grease
Monkey franchises. The locations were unprofitable, two were sold, and the last
franchise closed in 1994. Premium then attempted to enter the automobile and
truck tire recycling business in 1994. It formed a limited partnership of which
it owned 62.5% and commenced limited tire recycling operations. The equipment
proved to be inadequate and Premium ran out of capital to continue operations
and ceased all operations in 1996. Premium wrote-off all of its investment in
equipment and licenses for tire recycling in 1996. Premium was dormant from 1996
until 2002, when it effectuated the above-described Plan and Agreement of
Reorganization with eTotalSource and its shareholders.


                                       10
<PAGE>

      eTotalSource, Inc., a California corporation, was founded on February 7,
2000. eTotalSource is a subsidiary of Premium and the sole business of Premium.

      eTotalSource is a developer and supplier of proprietary multimedia
software technology, and a publisher of multimedia training content. Our clients
have included: U.S. Department of Defense, Boeing, Steven Spielberg Online Film
School, Pacific Bell/SBC, Grant School District, California State University,
Logistics Management Institute, First American Title Company and other corporate
entities. eTotalSource's clients work with eTotalSource to develop, produce,
market, and distribute multimedia development software. eTotalSource also
markets educational training programs it has produced utilizing its proprietary
software.

      eTotalSource was founded with the express goal of designing a better
interface for information and education multimedia delivery. Approximately one
year after inception, the beta Presenta ProTM platform was completed. Presenta
ProTM features back-end development of multi-panel time synchronized
presentations and course work, as well as testing, feedback and performance
monitoring. Clients are utilizing Presenta ProTM as a platform for distance
learning and computer-based training. Presenta ProTM is delivered via the
Internet, intranet, or CD/DVD.


      Our Software And IP

      eTotalSource has developed a software application, Presenta ProTM that
simplifies the production and delivery of multimedia presentations and content
while at the same time improving the quality and effectiveness of the
presentations. Presenta ProTM is designed with cost saving features and it
offers post-production opportunities.

      Presenta ProTM features include:

      o  Multi-panel time synchronized presentation
      o  Quick content and program development
      o  Rich video and content experience
      o  Still images
      o  Graphics
      o  Flash
      o  Links to Website
      o  Live Cams
      o  Test and quizzes to tract performance
      o  Users progress can be tracked
      o  Diagrams
      o  Simple server requirements
      o  Reduces training and learning curve time
      o  Easy to implement and use

      Our Business Model

      eTotalSource employs a dual strategy to meet market demands and
opportunities that includes both software licensing and publishing.


                                       11
<PAGE>

      eTotalSource is licensing Presenta ProTM software via distribution
partners and an internal sales and marketing team. The marketing team will be
directing its sales effort in targeting the education, corporate and government
markets. The cost of the product ranges from $5,500 to $15,000, and eTotalSource
is positioning the software package for a volume intensive market. The nearest
competitor (in quality or functionality), Virage, prices its product at
substantially higher prices. The aggressive pricing policy is intended to appeal
to governments, schools and corporate clients.

      eTotalSource publishes and produces original content and postproduction
services, and participates in the sales and distribution of the final published
product.

      eTotalSource shares in the revenue derived from the program sales.
eTotalSource carefully chooses its content, identifying unique subjects and
niches offering more probable sales. We believe that these markets are generally
underserved and in need of the program packages that are produced by
eTotalSource. Examples of finished products currently being marketed include:

      o  Anger Management Facilitator Training and Certification
      o  Domestic Violence Facilitator Training and Certification
      o  School Maintenance, Cleaning Training and Certification
      o  Emergency Disaster Preparedness - Terrorist Awareness
      o  Mandated School Internet Acceptable Use Policy ("AUP")

      Intellectual Property Differentiation

      eTotalSource currently has five patents pending:

      o  Multiple screen operating environment, framework and tools for
         transacting e-commerce;

      o  System and method for pre-loading still imagery data in an interactive
         multimedia presentation; provides an image pre-loading system that
         maximizes available network bandwidth;

      o  System and method for dynamically managing web content using a browser
         independent framework, which provides an interactive system for
         enabling dynamic updating of web content to "live" websites;

      o  System and method for providing an interactive multimedia presentation
         environment with low bandwidth capable sessions, which provides an
         integrated presentation environment consisting of multi-screen clinic
         logically defined within a browser application; and

      o  Presenta Pro(TM) production and delivery system, which provides a
         multi-screen environment for presenting multimedia presentations with
         video, images, flash images and text all integrating with the video.

                                       12
<PAGE>

      eTotalSource's technological differentiation is based on high quality and
low cost software. We believe that Presenta ProTM is easier to use and
considerably more flexible than eTotalSource's closest competitor. We believe
that Presenta ProTM is priced to be affordable, cost-effective, and
training-efficient. Presenta Pro'sTM ease of implementation and quality it a
viable choice for authoring software and distance learning tools.

      Technology

      The Presenta ProTM, production and delivery system is modular and was
designed to allow rapid addition of functionality. The platform provides high
quality streaming of video and audio, and was designed for delivery over the
Internet, intranet, compact disk ("CD") or digital video disk ("DVD"). The
Presenta ProTM system has been created using the Delphi development system. The
server portion of Presenta ProTM is a custom control that connects to a
Microsoft SQL server. The data is distributed to the viewing client via a custom
control that connects to the server via Extensible Markup Language ("XML"). The
backend is scalable and transportable. The production client uses all custom
code written in Delphi connecting to the SQL server via TCP/IP. The end-user
client can be run on any Windows based personal computer and requires minimum
system resources. There are several modules to the end-user client that allow
the producer to export video to either a CD/DVD format or stand alone web site.
We believe that eTotalSource's technology and user interface are advanced in
their simplicity of use and ability to deliver multiple platforms and media
simultaneously. eTotalSource has no plans for any research and development in
the next 12 months.

      eTotalSource has no plans at this time for purchases or sales of fixed
assets which would occur in the next 12 months.


      Employees

      As of March 31, 2005, we had seven full-time employees, of which three
were executive. No employees are presently represented by any labor unions. We
believe our relations with our employees to be good, however additional
employees will need to be recruited to meet our growth projections. eTotalSource
has no expectation or anticipation of significant changes in number of employees
in the next 12 months. It may add full-or part-time employees of an unknown
number in the next 12 months if its business expands.

Going Concern

      There is substantial doubt about the ability of eTotalSource to continue
as a going concern as disclosed in the notes to the December 31, 2004 financial
statements filed by eTotalSource on Form 10-KSB. Those conditions continued
through the first quarter of 2005 resulting in operating losses and liquidity
shortages, including default conditions on certain notes payable and judgments
payable to creditors. As of March 31, 2005, current liabilities exceed current
assets by approximately $2.57 million.

      Management continues to meet operating deficits primarily through
short-term borrowings and is attempting to utilize other debt and non-dilutive
equity financing alternatives to sustain operations. Whether such financing will
be available as needed and the ultimate form of such financing is uncertain and
the effects f this uncertainty could ultimately lead to bankruptcy.

                                       13
<PAGE>

Risk Factors


eTotalSource Lost Money For The Years Ended December 31, 2004 and 2003, The
Three Months Ended march 31, 2005, And Losses May Continue In The Future

      For the 12 months ended December 31, 2004 and 2003, we incurred a net loss
of $2,372,675 and $1,966,575, respectively. For the three months ended March 31,
2005, we incurred a net loss of $283,957. We anticipate that we will in all
likelihood have to rely on external financing for all of our capital
requirements. Future losses are likely to continue unless we successfully
implement our business plan. Our ability to continue as a going concern will be
dependent upon our ability to draw down on the Standby Equity Distribution
Agreement ("SEDA") which we have entered into with Cornell as described in
detail below under the section of this report entitled "Liquidity & Capital
Resources." If we incur any problems in drawing down on the Standby Equity
Distribution Agreement, we may experience significant liquidity and cash flow
problems. If we are not successful in reaching and maintaining profitable
operations, we may not be able to attract sufficient capital to continue our
operations. Our inability to obtain adequate financing will result in the need
to curtail business operations and will likely result in a lower stock price.


We May Not Be Able To Access Sufficient Funds When Needed Under The SEDA And The
Price Of Our Common Stock Will Affect Our Ability To Draw Down On The SEDA

      Currently, we are dependent upon external financing to fund our
operations. Our financing needs are expected to be provided, in large part, by
the SEDA. The amount of each advance under the SEDA is subject to a maximum of
$200,000 every seven trading days. Because of the advance restriction, we may
not be able to access sufficient funds when needed. If the market price of our
shares of common stock declines, we would be required to issue more shares of
common stock in order to draw down the same dollar amount of an advance than if
our stock price was higher. Therefore, if we are unable to draw down on the
SEDA, we may be forced to curtail or cease our business operations.


We Have Negative Working Capital Which May Affect our Ability to Continue As A
Going Concern

      We had negative working capital of $2,497,528 and $2,385,502 at December
31, 2004 and December 31, 2003, respectively, negative working capital of
$2,575,765 for the three months ended March 31, 2005, and continue to need cash
for operations. We have relied on significant external financing to fund our
operations. As of March 31, 2005, we had $401 of cash on hand, total current
assets were $1,687, and our total current liabilities were $2,576,166. We will
need to raise additional capital to fund our anticipated operating expenses and
future expansion. Among other things, external financing may be required to
cover our operating costs. Unless we obtain profitable operations, it is
unlikely that we will be able to secure additional financing from external
sources. If we are unable to secure additional financing or we cannot draw down
on the SEDA, we believe that we have sufficient funds to continue operations for


                                       14
<PAGE>

approximately one month. We estimate that we will require $2,000,000 to fund our
anticipated operating expenses for the next 12 months. The sale of our common
stock to raise capital may cause dilution to our existing shareholders. Our
inability to obtain adequate financing will result in the need to curtail
business operations. Any of these events would be materially harmful to our
business and may result in a lower stock price. Our inability to obtain adequate
financing will result in the need to curtail business operations and you could
lose your entire investment. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


We Need Additional Capital To Be Successful, Which Will Potentially Dilute The
Value Of Our Shareholders' Shares

      We need substantial capital to execute our business plan. To finance our
operations to date, we have relied on private offerings, exercises of warrants,
and loans. As of March 31, 2005, we have issued an aggregate of 11,731,908
shares of common stock to finance our operations. We will issue up to an
additional 33,534,700 shares if all of the outstanding debentures are converted
and all options and warrants exercised. The terms on which we obtain additional
financing, including the exercise of outstanding warrants, may dilute the
existing shareholders' investment, or otherwise adversely affect their position.
It is also possible that we will be unable to obtain the additional funding we
need as and when we need it. If we are unable to obtain additional funding as
and when needed, we could be forced to curtail or cease our operations.


All Of Our Assets Are Securing Our Obligations To Cornell

      Pursuant to the terms contained in that certain Security Agreement dated
October 6, 2004, by and between eTotalSource and Cornell, all of our obligations
under the Securities Purchase Agreement, the Secured Convertible Debenture, the
Investor Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions, and the Escrow Agreement are secured by all of our non-cash assets
as of such date or thereafter acquired by us. Accordingly, if we are unable to
satisfy any of our obligations under the foregoing agreements, our assets may be
foreclosed upon and our business may be shut down.


Our Success Is Based On Increasing Demand For Our Products

      We depend on the continued demand for our products and on favorable
general economic conditions. We cannot assure you that our business strategy
will be successful or that we will successfully address these risks or
difficulties. If we should fail to adequately address any of these risks or
difficulties, we could be forced to curtail or cease our business operations.


We Rely On Our Senior Management And Will Be Harmed If Any Or All Of Them Leave

      Our success is dependent on the efforts, experience and relationships of
Terry Eilers, our Chief Executive Officer and Chairman, Virgil Baker, our Chief
Financial Officer and a director, and Michael Sullinger, our Chief Operating
Officer and a director, and other essential staff. If any of these individuals
become unable to continue in their role, our business or prospects could be
adversely affected. Although we have entered into employment agreements with
each of our executive officers, we cannot assure you that such individuals will
continue in their present capacity for any particular period of time.


                                       15
<PAGE>

Fluctuations In Our Operating Results May Adversely Affect Our Stock Price And
Purchasers Of Our Shares Of Common Stock May Lose All Or A Portion Of Their
Investment

      Historically, there has been volatility in the market price for our common
stock. Our quarterly operating results, the number of shareholders desiring to
sell their share, changes in general conditions in the economy, the financial
markets or the healthcare industry, or other developments affecting us or our
competitors, could cause the market price of our common stock to fluctuate
substantially. We expect to experience significant fluctuations in our future
quarterly operating results due to a variety of factors.

      Accordingly, in one or more future quarters, our operating results may
fall below the expectations of securities analysts and investors. In this event,
the market price of our common stock would likely be materially adversely
affected. If the selling shareholders all elect to sell their shares of our
common stock at the same time, the market price of our shares may decrease. It
is possible that the selling shareholders will offer all of the shares for sale.
Further, because it is possible that a significant number of shares could be
sold at the same time, the sales, or the possibility thereof, may have a
depressive effect on the market price of our common stock.


Our Common Stock May Be Affected By Limited Trading Volume And May Fluctuate
Significantly

      Our common stock is currently traded on the Over-the-Counter Bulletin
Board and Pink Sheets. Prior to this offering, there has been a limited public
market for our common stock and there can be no assurance that an active trading
market for our common stock will develop. This could adversely affect our
shareholders' ability to sell our common stock in short time periods, or
possibly at all. Our common stock is thinly traded compared to larger, more
widely known companies in our industry. Thinly traded common stock can be more
volatile than common stock traded in an active public market. The average daily
trading volume of our common stock from approximately January 1, 2004 through
December 31, 2004 was 104,392 shares. The high and low trading price of our
common stock during 2004 has been $0.24 and $0.04, respectively. Our common
stock has experienced, and is likely to experience in the future, significant
price and volume fluctuations, which could adversely affect the market price of
our common stock without regard to our operating performance. In addition, we
believe that factors such as quarterly fluctuations in our financial results and
changes in the overall economy or the condition of the financial markets, could
cause the price of our common stock to fluctuate substantially.


Our Common Stock Is Deemed To Be "Penny Stock," Which May Make It More Difficult
For Investors To Sell Their Shares Due To Suitability Requirements

      Our common stock is deemed to be "penny stock" as that term is defined in
Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Penny stocks are stock:

                                       16
<PAGE>

      o  with a price of less than $5.00 per share;

      o  that are not traded on a "recognized" national exchange;

      o  whose prices are not quoted on the NASDAQ automated quotation system
         (NASDAQ-listed stock must still have a price of not less than $5.00 per
         share); or

      o  stock in issuers with net tangible assets less than $2,000,000 (if the
         issuer has been in continuous operation for at least three years) or
         $5,000,000 (if in continuous operation for less than three years), or
         with average revenues of less than $6,000,000 for the last three years.

      Broker-dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks. Moreover,
broker-dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor. These requirements may
reduce the potential market for our common stock by reducing the number of
potential investors. This may make it more difficult for investors in our common
stock to sell shares to third parties or to otherwise dispose of them. This
could cause our stock price to decline.

      Shareholders should be aware that, according to SEC, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (i) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (ii)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (iii) "boiler room" practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (iv) excessive and undisclosed bid-ask differentials and markups
by selling broker-dealers; and (v) the wholesale dumping of the same securities
by promoters and broker-dealers after prices have been manipulated to a desired
consequent investor losses. eTotalSource' management is aware of the abuses that
have occurred historically in the penny stock market. Although eTotalSource does
not expect to be in a position to dictate the behavior of the market or of
broker-dealers who participate in the market, management will strive within the
confines of practical limitations to prevent the described patterns from being
established with respect to eTotalSource' securities.

Existing Shareholders Will Experience Significant Dilution From Our Sale Of
Shares Under The SEDA

      The sale of shares pursuant to the SEDA that we entered into with Cornell
on October 6, 2004 will have a dilutive impact on our stockholders. At our
current stock price of $0.03, we would have to issue 333,333,333 shares of
common stock to draw down the entire $10 million available to us under the SEDA.
These shares would represent approximately 88% of our outstanding common stock
upon issuance. Please refer to the section of this report entitled "Liquidity &
Capital Resources" for a detailed explanation of the SEDA.


Sale Of Shares Eligible For Future Sale Could Adversely Affect The Market Price

      All of the approximate 8,117,946 shares of common stock which are
currently held, directly or indirectly, by management have been issued in
reliance on private placement exemptions under the Securities Act of 1933, as
amended (the "Securities Act"). Such shares will not be available for sale in


                                       17
<PAGE>

the open market without separate registration except in reliance upon Rule 144
under the Securities Act. In general, under Rule 144 a person (or persons whose
shares are aggregated), who has beneficially owned shares acquired in a
non-public transaction, for at least one year, including persons who may be
deemed affiliates of eTotalSource, as defined, would be entitled to sell within
any 3-month period a number of shares that does not exceed the greater of 1% of
the then outstanding shares of common stock, or the average weekly reported
trading volume during the four calendar weeks preceding such sale, provided that
current public information is then available. If a substantial number of the
shares owned by these stockholders were sold under Rule 144 or a registered
offering, the market price of the common stock could be adversely affected.

eTotalSource' Competition is Better Capitalized and Has Greater Marketing
Capabilities Which Could Adversely Affect eTotalSource' Ability to Compete in
the Marketplace

      eTotalSource is in competition with other services and products developed
and marketed by much larger corporations, which are better capitalized and have
far greater marketing capabilities than eTotalSource. eTotalSource expects to be
at a disadvantage when competing with many firms that have substantially greater
financial and management resources and capabilities than eTotalSource. As a
result of these disadvantages, eTotalSource may not be able to effectively
complete in the markets in which its products and services are sold, which
would, in turn, affect its ability to continue to operate.

Critical Accounting Policies

      Revenue Recognition

      eTotalSource recognizes revenue in accordance with Statement of Position
No. 97-2 "Software Revenue Recognition" issued by the Accounting Standards
Executive Committee of the American Institute of Certified Public Accountants
("AICPA"). Revenues are recorded net of an allowance for estimated returns and
collectibility at the time of billing.

      Product revenue is derived primarily from the sale of self-produced
training multimedia and related off-the-shelf software products. eTotalSource
recognizes revenue from sales of these products at the time of shipment to
customers. Service revenue is primarily derived from production of videos for
others and is recognized upon customer acceptance.

      Deferred revenue includes payments received for product licenses covering
future periods and advances on service contracts that have not yet been
fulfilled.

      Significant estimates include evaluation of eTotalSource's income tax net
operating loss carry-forwards and valuation of non-monetary transactions in
connection with issuances of common stock and common stock warrants and options.


                                       18
<PAGE>

Results of Operations

      Results of Operations For The Three Month Period Ended March 31, 2005
      Compared To The Same Period Ended March 31, 2004

      Revenues.

      Revenues for the three months ended March 31, 2005 were $14,987 versus
$18,093 for the corresponding 2004 period, a decrease of $3,106 or 17%. The
decrease was attributable to fewer sales of eTotalSource's CD training products.

      Expenses.

      Operating expenses for the three month period ended March 31, 2005 were
$252,525 as compared to $397,262 for the comparable 2004 period, a decrease of
$144,737 or 36%. The decrease was primarily due to a decrease in stock
compensation and payroll expenses. Payroll expenses for the three month period
ended March 31, 2005 were $107,177 as compared to $114,256 for the comparable
period in 2004, a decrease of $7,079 or 6%.

      Interest expense for the three month period ended March 31, 2005 was
$47,761 as compared to $27,368 for the corresponding 2004 period, an increase of
$20,393 or 75%. The increase in interest expense is the result of the
amortization expense in 2005 of the fair value of warrants issued as incentives
to lenders and the amortization of secured convertible debenture in 2005.

      Gain (Loss) From Operations.

      eTotalSource recognized a loss for the three month period ended March 31,
2005 in the amount of $283,957 or $0.006 per share, as compared with a loss of
$406,556 or $0.01 per share for the corresponding period ended March 31, 2004.
The decrease of $122,599 or $0.004 per share was attributable to the decrease in
stock compensation and payroll expenses.

Contractual Obligations and Commercial Commitments

      As of March 31, 2005, the following obligations were outstanding:

                                   Payments Due Period


<TABLE>
<CAPTION>
                                                                                         After
Contractual Obligations         Less than 1 year       2-3 years          4-5 years     5 years               Total
-----------------------         ----------------       ---------          ---------  -------------          ---------
<S>                                <C>                 <C>                  <C>           <C>           <C>
Judgments payable                  $  204,788          $    .00             $.00          $.00          $  204,788
Short Term note payables              882,000               .00              .00           .00             882,000
Convertible debentures                    .00           294,219              .00           .00             294,219
Other current liabilities           1,489,378               .00              .00           .00           1,489,378
Total contractual cash
obligations                        $2,576,166          $294,219             $.00          $.00          $2,870,385
</TABLE>


                                       19
<PAGE>

Facilities and Leases

      eTotalSource leases its corporate offices in Yuba City, California on a
month-to-month basis with no expiration date. Monthly rentals under the lease
are approximately $2,500. Such premises are adequate to serve eTotalSource's
current staffing level. The offices consist of approximately 1,700 square feet.

Dividends

      eTotalSource does not intend to pay dividends in the foreseeable future.

Liquidity and Capital Resources

      At March 31, 2005, eTotalSource had $401 in cash with which to conduct
operations, a decline of $37,448 during the quarter. There can be no assurance
that eTotalSource will be able to complete its business plan or fully exploit
business opportunities that management may identify. Accordingly, eTotalSource
will need to seek additional financing through loans, the sale and issuance of
additional debt and/or equity securities, or other financing arrangements,
including loans from our shareholders to cover expenses. eTotalSource presently
has no capital availability except through the Standby Equity Distribution
Agreements described below.

      eTotalSource is unable to carry out any plan of business without funding.
We cannot predict to what extent our current lack of liquidity and capital
resources will impair the continuation of business or whether it will incur
further operating losses. There is no assurance that we can continue as a going
concern without substantial funding, for which there is no source.

      eTotalSource does not have capital sufficient to meet its current cash
needs. We will have to seek loans or equity placements to cover such cash needs.
Lack of its existing capital may be a sufficient impediment to prevent it from
accomplishing the goal of successfully executing its business plan. eTotalSource
will need to raise additional funds to conduct its business activities over the
next 12 months. At the present, our current cash will last less than a month.

      No commitments to provide additional funds have been made by management or
other stockholders. Accordingly, there can be no assurance that any additional
funds will be available to eTotalSource to allow it to cover its expenses as
they may be incurred.

      Irrespective of whether eTotalSource's cash assets prove to be inadequate
to meet our operational needs, we might seek to compensate providers of services
by issuances of stock in lieu of cash.


                                       20
<PAGE>

      The SEDAs

      The 2004 SEDA

      On October 6, 2004, we entered into a SEDA (the "2004 "SEDA") with
Cornell. Pursuant to the 2004 SEDA, we could, at our discretion, periodically
sell to Cornell shares of our common stock for a total purchase price of up to
$10 million. For each share of common stock purchased under the 2004 SEDA,
Cornell was obligated to pay us 98% of the lowest volume weighted average price
of our common stock on the Over-the-Counter Bulletin Board or other principal
market on which our common stock is traded for the five consecutive trading days
immediately following the advance notice date. Cornell is a private limited
partnership whose business operations are conducted through its general partner,
Yorkville Advisors, LLC. Further, Cornell was entitled to retain a fee of 5% of
each advance under the 2004 SEDA. We also paid Cornell a one-time commitment fee
pursuant to the 2004 SEDA on October 6, 2004, which was paid by the issuance of
3,833,334 shares of our common stock.

      In addition, we engaged Newbridge Securities Corporation ("Newbridge"), a
registered broker-dealer, to advise us in connection with the 2004 SEDA. For its
services, Newbridge received a fee of $10,000 paid in 166,666 shares of our
common stock on October 6, 2004. eTotalSource registered 15,000,000 shares of
common stock underlying the 2004 SEDA pursuant to a Registration Statement on
Form SB-2 that eTotalSource filed with the SEC on November 24, 2004 (the "2004
Registration Statement").

      Pursuant to the 2004 SEDA, we could periodically sell shares of common
stock to Cornell to raise capital to fund our working capital needs. The
periodic sale of shares is known as an advance. We could request an advance
every seven trading days with a maximum of $200,000 per advance. A closing will
be held five trading days after such written notice at which time we were
obligated to deliver shares of common stock and Cornell will pay the advance
amount.

      We could request advances under the 2004 SEDA once the underlying shares
of stock became registered with the SEC pursuant to the 2004 Registration
Statement. Thereafter, we could continue to request advances until Cornell
advanced $10 million or 24 months after the effective date of the Registration
Statement, whichever occurred first.

      We withdrew the 2004 Registration Statement on April 19, 2005, pursuant to
a Form RW that we filed with the SEC on such date. We filed the Form RW because
we intended to enter into a new financing arrangement with Cornell that we were
negotiating in late-March 2005, and therefore, we did not have to register the
shares of stock underlying the 2004 SEDA.

      The 2005 SEDA

      On April 20, 2005, we entered into a new SEDA with Cornell (the "2005
SEDA"). Pursuant to the 2005 SEDA, we may, at our discretion, periodically sell
to Cornell shares of our common stock for a total purchase price of up to $10
million. For each share of common stock purchased under the 2005 SEDA, Cornell
will pay eTotalSource 98% of the lowest volume weighted average price of our
common stock on the Over-the-Counter Bulletin Board or other principal market on
which our common stock is traded for the five trading days immediately following
the notice date. Cornell is entitled to retain a fee of 5% of each advance under
the 2005 SEDA.

                                       21
<PAGE>

      Pursuant to the 2005 SEDA, we may periodically sell shares of common stock
to Cornell to raise capital to fund our working capital needs. We may request an
advance every seven trading days with a maximum of $200,000 per advance. A
closing will be held five trading days after such written notice at which time
we will deliver shares of common stock and Cornell will pay the advance amount.

      We may request advances under the 2005 SEDA once the underlying shares are
registered with the SEC pursuant to the 2005 Registration Statement described
below. Thereafter, we may continue to request advances until Cornell has
advanced $10 million or 24 months after the effective date of the accompanying
registration statement, whichever occurs first.

      The amount of each advance is limited to a maximum draw down of $200,000
every seven trading days. At a recent stock price of $0.03, we would have to
issue 6,802,721 shares of common stock to Cornell to draw down the maximum
advance amount of $200,000. The amount available under the 2005 SEDA is not
dependent on the price or volume of our common stock. Our ability to request
advances are conditioned upon our registering the shares of common stock with
the SEC pursuant to the 2005 Registration Statement. In addition, we may not
request advances if the shares to be issued in connection with such advances
would result in Cornell owning more than 9.9% of our outstanding common stock.
We do not have any agreements with Cornell regarding the distribution of such
stock, although Cornell has indicated that it intends to promptly sell any stock
received under the 2005 SEDA.

      We cannot predict the actual number of shares of common stock that will be
issued pursuant to the 2005 SEDA, in part, because the purchase price of the
shares will fluctuate based on prevailing market conditions and we have not
determined the total amount of advances we intend to draw. Nonetheless, we can
estimate the number of shares of our common stock that will be issued using
certain assumptions. Based on our recent stock price of $0.03 and that we
registered 200 million shares of our common stock under the 2005 SEDA pursuant
to a Registration Statement on Form SB-2 that we filed with the SEC on April 21,
2005 (the "2005 Registration Statement"), we could draw down a maximum gross
amount of $5,880,000 under the 2005 SEDA. These 200 million shares would
represent approximately 81% of our outstanding common stock upon issuance.

      There is an inverse relationship between our stock price and the number of
shares to be issued under the 2005 SEDA. That is, as our stock price declines,
we will be required to issue a greater number of shares under the 2005 SEDA for
a given advance. The issuance of a larger number of shares under the 2005 SEDA
may result in a change of control. That is, if all or a significant block of
such shares are held by one or more shareholders working together, then such
shareholder or shareholders would have enough shares to assume control of
eTotalSource by electing its or their own directors.

                                       22
<PAGE>

      In order for us to utilize the full $10 million available under the 2005
SEDA, it may be necessary for our shareholders to approve an increase in our
authorized common stock and for us to register additional shares of common
stock. This is currently the case based on our stock price of $0.03 as of April
1, 2005. eTotalSource is authorized in its Articles of Incorporation to issue up
to 300 million shares of common stock. As of April 1, 2005, eTotalSource had
46,710,821 shares of common stock outstanding. eTotalSource registered 200
million shares of common stock to be issued under the 2005 SEDA by filing the
2005 Registration Statement, which as of the date of this report is being
reviewed by the SEC.

      In the event we desire to draw down any available amounts remaining under
the 2005 SEDA after we have issued the 200 million shares being registered in
the 2005 Registration Statement (and assuming we have obtained shareholder
approval to increase our authorized common stock), we will have to file a new
registration statement to cover such additional shares which we will issue for
additional draw downs under the 2005 SEDA.

      We are not paying any commitment fees to Cornell, nor any placement agent
fees to Newbridge, in connection with the 2005 SEDA.

      The costs associated with the 2005 Registration Statement are estimated to
be approximately $85,000 (consisting primarily of professional fees), all of
which will be borne by us. There are no other significant closing conditions to
draws under the 2005 SEDA.


                                       23
<PAGE>

Item 3.     Controls and Procedures

      a.    Evaluation Of Disclosure Controls And Procedures

      eTotalSource's Principal Executive Officer and Principal Accounting and
Financial Officer, after evaluating the effectiveness of eTotalSource's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of the end of the period covered by this report, have
concluded that as of such date, eTotalSource's disclosure controls and
procedures were adequate and effective to ensure that material information
relating to eTotalSource that is required to be disclosed by eTotalSource in
reports that it files or submits under the Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
accumulated and communicated to eTotalSource's management, including its
Principal Executive Officer and Principal Accounting and Financial Officer, to
allow timely decisions regarding required disclosure.

      b.    Changes In Internal Controls Over Financial Reporting

      In connection with the evaluation of eTotalSource's internal controls
during eTotalSource's last fiscal quarter, eTotalSource's Principal Executive
Officer and Principal Accounting and Financial Officer have determined that
there are no changes to eTotalSource's internal controls over financial
reporting that have materially affected, or are reasonably likely to materially
effect, eTotalSource's internal controls over financial reporting.


                                       24
<PAGE>

                                     PART II


                                OTHER INFORMATION



Item 1.     Legal Proceedings

            None.



Item 2.     Changes in Securities

            None.



Item 3.     Defaults Upon Senior Securities

            None.



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



      On February 4, 2005, at a Special Meeting of eTotalSource's shareholders,
the shareholders approved an amendment to eTotalSource's Articles of
Incorporation to increase the number of authorized shares of common of stock, no
par value, from 100,000,000 to 300,000,000. The amendment was passed with
30,898,791 shares voting in favor and 296,896 shares voting against, which was
sufficient to approve the amendment.



Item 5.     Other Information

            None.


                                       25
<PAGE>

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      a.    Exhibits pursuant to Regulation S-K:

 DESIGNATION OF
 EXHIBIT AS SET
  FORTH IN ITEM
     601 OF
 REGULATION S-B             DESCRIPTION                     LOCATION
---------------   -------------------------------   ----------------------------
2.1               Agreement and Plan of Merger,     Incorporated  by reference
                  dated August 7, 2000 between      to  Exhibit  2(1)  to Form
                  Calipso and Knowledge             8-K  filed  on   September
                  Foundations, Inc.                 27, 2000 to

2.2               Merger Agreement, dated April     Incorporated  by reference
                  23, 2002, between ETotalSource,   to  Exhibit  99.2  to Form
                  Inc., Knowledge Foundations,      8-K filed on May 9, 2002
                  Inc. and KFI, Inc.

2.3               First Amendment to Merger         Incorporated  by reference
                  Agreement dated August 8, 2002,   to  Form   S-4   filed  on
                  between ETotalSource, Inc., KFI,  August 13, 2002
                  Inc. and Knowledge Foundations,
                  Inc.

2.4               Separation and Distribution       Incorporated  by reference
                  Agreement by and among Knowledge  to  Form   S-4   filed  on
                  Foundations, Inc., Cyber          August 13, 2002
                  Knowledge, Inc. and CKI Group

3.1
                  Articles                         of Incorporation Incorporated
                                                   by Reference to the
                                                   Registration Statement of
                                                   Form SB-2 filed on April ___,
                                                   2005.

3.2
                  Bylaws                           Incorporated by Reference to
                                                   the Registration Statement of
                                                   Form SB-2 filed on April ___,
                                                   2005.

3.3
                  Certificate of Amendment of the   Incorporated by reference
                  Articles of Incorporation         to the current report on
                                                    Form 8-K dated July 14,
                                                    2003. (File no. 000-49797)

3.4
                  Articles of Amendment to the      Incorporated by reference
                  Articles of Incorporation         to the current report on
                                                    Form 8-K dated December 1,
                                                    2003 (File no. 000-49797)


                                       26
<PAGE>

 DESIGNATION OF
 EXHIBIT AS SET
  FORTH IN ITEM
     601 OF
 REGULATION S-B             DESCRIPTION                     LOCATION
---------------   -------------------------------   ----------------------------
3.5
                  Articles of Amendment to the      Provided herewith
                  Articles of Incorporation

4.1
                  2003 Stock Plan                   Incorporated by reference
                                                    to the current report on
                                                    Form S-8 dated May 23,
                                                    2003. (File no.
                                                    333-105518)

4.11
                  2004 Stock Plan                   Incorporated by reference
                                                    to the current report on
                                                    Form S-8 dated July 15,
                                                    2004. (File no.
                                                    333-111732)

10.1              Plan & Agreement of              Incorporated by reference to
                  Reorganization dated December    the Annual Report on Form
                  18, 2002 by and between          8-K dated December 30, 2002.
                  Premium Enterprises, Inc and     (File no. 000-49797)
                  eTotalSource, Inc.

10.2              Employment Agreement of Terry     Incorporated by reference to
                  Eilers dated February 7, 2000     the pending Registration
                                                    Statement on Form SB-2 dated
                                                    November 24, 2004 (File no.
                                                    333-120786)

10.3
                  Employment Agreement of Virgil    Incorporated by reference
                  Baker dated February 7, 2000      to the pending
                                                    Registration Statement on
                                                    Form SB-2 dated November 24,
                                                    2004 (File no. 333-120786)

10.4
                  Employment Agreement of Michael   Incorporated by reference
                  Sullinger dated August 1, 2002    to the pending
                                                    Registration Statement on
                                                    Form SB-2 dated November 24,
                                                    2004 (File no. 333-120786)

10.5              Securities Purchase Agreement,    Incorporated by reference
                  dated October 6, 2004 by and      to the pending
                  between eTotalSource, Inc. and    Registration Statement on
                  Cornell Capital Partners, L.P.    Form SB-2 dated November
                                                    24, 2004 (File no.
                                                    333-120786)

10.6              Investor Registration Rights      Incorporated by reference
                  Agreement, dated October 6,       to the pending
                  2004, by and between              Registration Statement on
                  eTotalSource, Inc. and Cornell    Form SB-2 dated November
                  Capital Partners, L.P.            24, 2004 (File no.
                                                    333-120786)

                                       27
<PAGE>

 DESIGNATION OF
 EXHIBIT AS SET
  FORTH IN ITEM
     601 OF
 REGULATION S-B             DESCRIPTION                     LOCATION
---------------   -------------------------------   ----------------------------
10.7              Security Agreement, dated         Incorporated by reference
                  October 6, 2004, by and between   to the pending
                  eTotalSource, Inc. and Cornell    Registration Statement on
                  Capital Partners, L.P.            Form SB-2 dated November
                                                    24, 2004 (File no.
                                                    333-120786)

10.8              Irrevocable Transfer Agent        Incorporated by reference
                  Instructions, dated October 6,    to the pending
                  2004, by and among eTotalSource,  Registration Statement on
                  Inc., Cornell Capital Partners,   Form SB-2 dated November
                  L.P., and Executive Registrar &   24, 2004 (File no.
                  Transfer, Inc.                    333-120786)

10.9              Escrow Agreement (SEDA), dated    Incorporated by reference
                  October 6, 2004, by and among     to the pending
                  eTotalSource, Inc., Cornell       Registration Statement on
                  Capital Partners, L.P., and       Form SB-2 dated November
                  David Gonzalez, Esq.              24, 2004 (File no.
                                                    333-120786)

10.10             Escrow Agreement (CD), dated      Incorporated by reference
                  October 6, 2004, by and among     to the pending
                  eTotalSource, Inc., Cornell       Registration Statement on
                  Capital Partners, L.P., and       Form SB-2 dated November
                  David Gonzalez, Esq.              24, 2004 (File no.
                                                    333-120786)

10.11             Secured Convertible Debenture     Incorporated by reference
                                                    to the pending
                                                    Registration Statement on
                                                    Form SB-2 dated November
                                                    24, 2004 (File no.
                                                    333-120786)

10.12             Standby Equity Distribution       Incorporated by reference
                  Agreement, dated October 6,       to the pending
                  2004, by and between              Registration Statement on
                  eTotalSource, Inc. and Cornell    Form SB-2 dated November
                  Capital Partners, L.P.            24, 2004 (File no.
                                                    333-120786)

10.13             Registration Rights Agreement,    Incorporated by reference
                  dated October 6, 2004, by and     to the pending
                  between eTotalSource, Inc. and    Registration Statement on
                  Cornell Capital Partners, L.P.    Form SB-2 dated November
                                                    24, 2004 (File no.
                                                    333-120786)

                                       28
<PAGE>

 DESIGNATION OF
 EXHIBIT AS SET
  FORTH IN ITEM
     601 OF
 REGULATION S-B             DESCRIPTION                     LOCATION
---------------   -------------------------------   ----------------------------
10.14             Placement Agent Agreement, dated  Incorporated by reference to
                  October 6, 2004, by and among     the pending Registration
                  eTotalSource, Inc., Cornell       Statement on Form SB-2 dated
                  Capital Partners, L.P., and       November 24, 2004 (File no.
                  Newbridge Securities Corporation  333-120786)


14.1              Code of Ethics                    Incorporated by reference
                                                    to the pending
                                                    Registration Statement on
                                                    Form SB-2 dated November
                                                    24, 2004 (File no.
                                                    333-120786)

31.1              Section 302 Certification of      Provided Herewith
                  Terry L. Eilers

31.2              Section 302 Certification of      Provided Herewith
                  Virgil D. Baker

32.1              Section 906 Certification of      Provided Herewith
                  Terry L. Eilers

32.2              Section 906 Certification of      Provided Herewith
                  Virgil D. Baker



      b.    Reports on Form 8-K:

            None.


                                       29
<PAGE>



                                   SIGNATURES

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

                                        eTOTALSOURCE, INC.



May 12, 2005                            By:   /s/ Terry L. Eilers
                                           ----------------------
                                              Terry L. Eilers, President,
                                              Principal Executive Officer, and
                                              Director



May 12, 2005                            By:   /s/ Virgil D. Baker
                                           ----------------------
                                              Virgil D. Baker, CFO, Principal
                                              Accounting and Financial Officer,
                                              and Director