U.S. Securities and Exchange Commission
                             Washington, D.C. 20549


                                   Form 10-QSB


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

                For the quarterly period ended September 30, 1999
                         Commission file number: 0-20468


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


                Delaware                               68-0195770
     (State or other jurisdiction of        (IRS Employer Identification No.)
      incorporation or organization)



                       629 J Street, Sacramento, CA 95814
                    (Address of principal executive offices)

                                 (916) 231-0400
                           (Issuer's telephone number)

                  (Former address if changed since last report)


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

Number of shares of common stock outstanding as of October 31, 1999:  54,245,726



<PAGE>2



PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


                     ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                             Condensed Balance Sheet
                               September 30, 1999
                                   (Unaudited)


                                     Assets
<TABLE>
<S>                                                                           <C>
Current assets:
  Cash                                                                          $      854,277
  Accounts receivable, net                                                             241,091
  Other current assets, including notes receivable from employees and officers          89,156
                                                                                --------------

     Total current assets                                                            1,184,524


                                                                                $    1,184,524



                      Liabilities and Stockholders' Deficit

Current liabilities:
  Notes payable to stockholders                                                      3,258,090
  Notes payable to directors                                                            42,539
  Accounts payable to stockholders                                                     624,773
  Accounts payable                                                                     143,688
  Accrued payroll and related expenses                                                 193,042
  Accrued preferred stock dividends                                                    643,126
  Other current liabilities                                                            126,088
                                                                                --------------
     Total current liabilities                                                       5,031,346

Commitments and contingencies

Stockholders' deficit:
  Preferred stock, $6.00 par value - 1,200,000 shares authorized, 204,167
    Series D shares issued and outstanding; liquidation
    preference value of $1,868,128                                                   1,225,002
  Common stock, $0.01 par value - 100,000,000 shares
    authorized, 54,214,110 shares issued and outstanding                               542,141
  Additional paid-in capital                                                        32,897,244
  Accumulated deficit                                                              (38,511,209)
                                                                                --------------

    Total stockholders' deficit                                                     (3,846,822)


                                                                                $    1,184,524

</TABLE>


See accompanying notes to condensed financial statements.



<PAGE>3



PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


                     ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                       Condensed Statements of Operations
                                   (Unaudited)

<TABLE>
<S>                                                                           <C>               <C>

                                                                                         Three Months
                                                                                      Ended September 30,
                                                                                -------------------------------
                                                                                     1999              1998
                                                                                   --------          --------

Contract programming:
  Contract programming revenue                                                  $   944,651       $ 1,710,008
  Contract termination fees                                                           5,250                 -
  Programmer costs                                                                 (652,063)       (1,271,258)
  Start-up and other costs                                                         (203,124)         (158,523)
                                                                                ------------      ------------
    Contract programming gross profit                                                94,714           280,227

Selling, general and administrative                                                (276,944)         (340,194)
                                                                                ------------      ------------


Loss from operations                                                               (182,230)          (59,967)

Other income (expense):
   Interest income from officers and directors                                       11,109                 -
   Interest expense to stockholders and directors                                (2,523,511)         (111,828)
                                                                                ------------      ------------
                                                                                 (2,512,402)         (111,828)


Net loss                                                                        $(2,694,632)      $  (171,795)
                                                                                ============      ============


Preferred stock dividends in arrears                                                (30,625)          (30,625)
                                                                                ------------      ------------

Net loss applicable to common stockholders                                      $(2,725,257)      $  (202,420)
                                                                                ============      ============

Basic and diluted net loss per share                                            $     (0.07)      $     (0.01)
                                                                                ============      ============
Shares used in per share calculations                                             36,818,746        26,120,499
                                                                                ============      ============



See accompanying notes to condensed financial statements.

</TABLE>


<PAGE>4




PART I.  FINANCIAL INFORMATION
Item 1.           Financial Statements


                     ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                       Condensed Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<S>                                                                           <C>               <C>
                                                                                         Three Months
                                                                                      Ended September 30,
                                                                                -------------------------------
                                                                                     1999              1998
                                                                                   --------          --------



Net cash (used in) provided by operating activities                             $   (5,848)       $    1,669

Cash flows from financing activities:
  Proceeds from sale of common stock                                               826,553                 -
  Proceeds from notes payable to stockholders                                       33,500                 -
  Payments on notes payable to stockholders                                        (33,500)                -
  Proceeds from notes payable to directors                                             930               930
                                                                                -----------       ----------
Net cash provided by financing activities                                          827,483               930
                                                                                -----------       ----------

Net increase in cash                                                               821,635             2,599
Cash at beginning of period                                                         32,642            89,696
                                                                                -----------       ----------

Cash at end of period                                                           $  854,277        $   92,295
                                                                                ===========       ==========




</TABLE>


See accompanying notes to condensed financial statements.


<PAGE>5


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


                     ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                     Notes to Condensed Financial Statements
                               September 30, 1999

                                   (Unaudited)

Note 1 - Basis of Presentation

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and pursuant to the rules and  regulations  of the  Securities  and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSB for
the fiscal year ended June 30, 1999.

In the opinion of  management,  the  unaudited  condensed  financial  statements
contain all  adjustments  considered  necessary to present  fairly the Company's
financial  position at September 30, 1999,  results of operations  for the three
month  periods ended  September 30, 1999 and 1998,  and cash flows for the three
months  ended  September  30, 1999 and 1998.  The  results for the period  ended
September 30, 1999 are not necessarily  indicative of the results to be expected
for the entire fiscal year ending June 30, 2000.

The report of  independent  auditors on the Company's  June 30, 1999,  financial
statements  includes an explanatory  paragraph  indicating  there is substantial
doubt about the Company's ability to continue as a going concern.  The financial
statements do not include any adjustments to reflect the  uncertainties  related
to  the   recoverability  and  classification  of  assets  or  the  amounts  and
classification  of liabilities that may result from the inability of the Company
to  continue  as a going  concern.  Based on the steps the  Company has taken to
refocus its operations, the Company believes that it has developed a viable plan
to address the  Company's  ability to continue as a going  concern and that this
plan will enable the Company to continue as a going  concern  through the end of
fiscal year 2000.  However,  considering,  among  other  things,  the  Company's
historical  operating  losses,  the expected  substantial  cost to establish the
Company's   Internet  medical  provider  network  (IPN)  [see  Part  I,  Item  2
"Management's  Discussion  and Analysis and Results of Operations -- Overview"],
and its history in the contract computer programming  industry,  there can be no
assurance that this plan will be successfully implemented.  The Company does not
expect to generate  positive cash flow from operations  during fiscal 2000 or to
be able to pay off current  obligations,  fund the  establishment  of its IPN or
growth of its computer programmer business.  Therefore, the Company contemplates
needing to raise  additional  financing during fiscal 2000, the receipt of which
cannot be assured.



<PAGE>6


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements



Note 2 - Financing Arrangements

See  Part I,  Item 2  "Management's  Discussion  and  Analysis  and  Results  of
Operations -- Liquidity and Capital Resources."

Note 3 - Healtheon Agreement

In  September  1999  the  Company  entered  into  an  agreement  with  Healtheon
Corporation  to allow  under  insured  and  uninsured  healthcare  consumers  to
register to use ATR's IPN, when it is developed,  through the use of Healtheon's
Internet  consumer  portal.  The  agreement  provides  for  development  fees to
Healtheon  estimated to cost $160,000.  The agreement  also requires  payment to
Healtheon of $250,000  upon a promotional  announcement  of ATR's IPN program on
Healtheon's  Internet  portal,  and a  sharing  of  revenues  when  operational.
Operations  are to begin no later than six months  following  acceptance  of the
application software or the IPN has 100,000 primary care providers, whichever is
earlier.  The  agreement  term is three years,  but subject to  modification  or
withdrawal  of  services by  Healtheon  with  certain  financial  penalties.  In
addition,  revenue sharing is subject to  renegotiation on an annual basis based
on the date the program becomes operational.

On October  12,  1999,  the  Company  and  Healtheon  received a letter from the
California  Department  of  Corporations  ("DOC")  inquiring  whether or not the
Company's  proposed  services,  when offered to California  consumers  under the
agreement  with  Healtheon,  may constitute a health care service plan requiring
the  Company to be licensed  with the DOC in  California.  The Company  does not
believe that its  proposed  business  services  constitute a health care service
plan.  The  Company  intends  to meet with the DOC and will  provide  additional
documentation in support of its position. No assurance can be given that the DOC
will agree with the Company's position. If the DOC determines that the Company's
proposed  business  services  constitute a health care service plan, the Company
will consider its options including  licensing with the DOC or restructuring its
agreement with Healtheon.




<PAGE>7


PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations




Management's Discussion and Analysis

The following  discussion  provides  information to facilitate the understanding
and  assessment  of  significant  changes  in trends  related  to the  financial
condition  of the Company and its  results of  operations.  It should be read in
conjunction  with the Company's  financial  statements and the notes thereto and
other financial information included elsewhere in the 10-KSB for the fiscal year
ended June 30, 1999.

Overview

Alternative  Technology  Resources,  Inc. ("ATR" or the  "Company"),  a Delaware
corporation, was founded in 1989 to develop and sell computer integrated medical
laboratory information systems ("LIS"). The Company operated under the name 3Net
Systems, Inc. and was never successful in the LIS market.  Therefore,  in fiscal
1996, the Company  stopped new system  development and later decided to exit LIS
entirely.

During  fiscal  1997,  the Company  changed its name to  Alternative  Technology
Resources,  Inc.  and focused its efforts on its computer  programmer  placement
business.  ATR recruits  experienced,  qualified computer programmers  primarily
from the former  Soviet  Union,  obtains  necessary  visas,  and places them for
assignment in the United States.  ATR is also recruiting  programmers from South
Korea for future placement. ATR's computer programmer placement business has not
generated sufficient cash flow to support operations.  Further, there has been a
decline in contract programming revenues caused by the non-renewal of programmer
contracts from a high of 96 programmers at customer locations during fiscal year
1999 to 41 programmers as of September 30, 1999.

In August 1999, ATR decided to pursue the  establishment  of an Internet medical
provider  network  (IPN).  The Company plans to use its experience in healthcare
and information  technology to offer the nation's 600,000 plus medical providers
the ability to more  directly  link their  practice  via the Internet to parties
that pay for medical services.  ATR is initially focusing on those who are under
insured and the 44 million  Americans who are uninsured.  In September 1999, the
Company  entered into an agreement  with  Healtheon  Corporation  to allow under
insured  and  uninsured  consumers  to  register  to use ATR's  IPN,  when it is
developed,  through the use of Healtheon's  Internet consumer portal. In October
1999, the Company began its IPN development  efforts.  No assurance can be given
that the Company will be able to develop an IPN, or if  developed,  that it will
be profitable.

Year 2000 Issues

Management  has made an assessment of its computer  programs and has  determined
that it has no Year 2000 impairment in its computer systems  developed  in-house
and is relying on vendor  declarations  that their  systems and programs have no
impairment related to the Year 2000 issue. Therefore, management


<PAGE>8


PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations




does not currently anticipate that the Company will incur significant  operating
expenses or be required to invest heavily in computer systems improvements to be
Year 2000 compliant.

Results of Operation

Contract programming

Contract  Programming  Revenue.  Contract  programming revenue results primarily
from sales of programmer  services.  Revenues  decreased  $765,000 or 45% in the
quarter ended  September 30, 1999,  compared to the quarter ended  September 30,
1998.  This  decrease  is due to a reduction  in the average  number of contract
programmers  working at customer sites in the quarter ended  September 30, 1999,
compared to the quarter  ended  September  30, 1998.  There was an average of 46
programmers at customer sites in the first quarter of fiscal 2000 compared to 95
in the first quarter of fiscal 1999.  Two events in the last half of fiscal 1999
began to impact ATR's results of operations:  customers  moving toward utilizing
individual  programmers or small (2 to 4 people)  programming  teams rather than
large programming  teams, and several customers  choosing to exercise a contract
termination  provision which allowed them to convert ATR's  programmers to their
employees.  As a result, when contracts with several customers  approached their
termination  date,  they were either not renewed,  renewed for a fewer number of
programmers, or programmers converted to customer employees.

Contract  Termination Fees. Contract  termination fees are amounts received from
customers when they exercise the contract provision which allows them to convert
ATR's programmer to their employee. In addition, these fees can also be received
from programmers when they exercise their contract  provision to terminate their
relationship  with the Company prior to the termination  date of their contract.
These fee amounts are stipulated in customer and programmer contracts, are based
on the  length of time  remaining  under the  contract,  and are  recognized  as
revenue when such contract provisions are invoked. Although contract termination
fees are common in the  industry,  the number and  frequency of exercises of the
"buy-out" provisions is unpredictable.

Programmer  Costs.  Programmer  costs are the salary and other wage and  benefit
costs of ATR's programmer  employees.  These costs decreased $619,000 or 49% for
the three months  ended  September  30,  1999,  compared to the same period last
year.  This decrease is primarily due to the reduction in the number of contract
programmers at customers discussed above in "Contract Programming Revenue."

Start-up and Other Costs.  Start-up and other costs are the costs of recruiting,
training,  and travel for programmer  employees coming to the United States from
the Former Soviet Union for the first time,  relocation  costs within the United
States,  and  legal  and  other  costs  related  to  obtaining  and  maintaining
compliance with required visas, postings and notifications.



<PAGE>9


PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations




Included in this category of costs is employee compensation paid by ATR whenever
programmer employees are hired and enter the United States or are relocated once
in the United States but before these  programmers begin working at a customer's
work site. There are times when under  immigration  law, ATR, as employer,  must
pay a  programmer  employee  at least  95% of  prevailing  wages  for his or her
specialty even when the programmer is not placed.

ATR  expenses  start-up  and other costs as  incurred,  which  results in timing
differences  between the  incurring  of expense  and  recognition  of  resulting
revenue.  Such differences may be particularly  evident in ATR's case because of
its  relatively  small revenue base. The affect may be  particularly  noticeable
whenever the timing of  placement  of employees is such that the major  start-up
costs occur late in one reporting  period and the revenues  appear in subsequent
periods.

Start-up and other costs increased $45,000 or 28% in the quarter ended September
30,  1999,  as compared  to the same  quarter for the prior  fiscal  year.  This
increase is primarily due to an increase in the number of  programmers  who were
not  working at  customer  sites,  an  average of 5 during the first  quarter of
fiscal 2000 compared to an average of 1 in the first quarter of fiscal 1999.

Contract  Programming Gross Profit.  The gross profit percentage was 10% for the
three months ended  September 30, 1999,  compared to 16% in the same quarter for
the prior fiscal year.  This  decrease is primarily  due to the higher number of
programmers who were not working at customer sites.

Selling, General and Administrative Expenses

Selling,  General and Administrative  Expenses ("SG&A"). SG&A expenses decreased
$63,000 or 19% for the three months  ended  September  30, 1999  compared to the
same quarter for the prior fiscal year  primarily  due to a decrease in non-cash
employee  compensation  related to stock  grants to the  Company's  former Chief
Executive Officer.

Other Income (Expense)

Interest Income.  Interest income of $11,000 is related to notes receivable from
employees and officers of the Company.

Interest  Expense.  Interest  expense  increased  $2,412,000 in the three months
ended September 30, 1999, compared to the same quarter for the prior fiscal year
due to the benefit accruing to the note holders of amending the conversion terms
of a $1,000,000 convertible note (see "Liquidity and Capital Resources").



<PAGE>10


PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations




Income Taxes

As of June 30,  1999,  the Company had a net  operating  loss  carryforward  for
federal  and  state   income  tax  purposes  of  $25  million  and  $5  million,
respectively.  The federal net operating loss carryforward  expires in the years
2006 through 2018 and the state net operating loss carryforward  expires in 1999
through 2004.  The Company  expects that annual  limitations  on the use of loss
carryforwards generated before September 13, 1993 will result in $4.1 million of
net operating loss carryovers  which may not be utilized prior to the expiration
of the carryover period.

Net Loss

Net loss  increased  $2,523,000  for the three months ended  September 30, 1999,
compared to the same  quarter for the prior  fiscal  year due  primarily  to the
increase in interest expense.

Basic and Diluted Net Loss Per Share

The  Company's  net loss per share has been  computed by dividing net loss after
deducting  Preferred Stock dividends  ($30,625 in each of the three months ended
September 30, 1999 and 1998) by the weighted  average number of shares of common
stock  outstanding  during the quarters  presented.  Common stock  issuable upon
conversion of Preferred  Stock,  common stock options and common stock  warrants
have been excluded from the net loss per share  calculations  as their inclusion
would be anti-dilutive.

Liquidity and Capital Resources

The Company has used a  combination  of equity and debt  financing  and internal
cash flow to fund  operations and finance  accounts  receivable but has incurred
operating losses since its inception.

As a result, the report of independent  auditors on the Company's June 30, 1999,
financial  statements  includes an  explanatory  paragraph  indicating  there is
substantial  doubt about the Company's  ability to continue as a going  concern.
The  financial  statements  do  not  include  any  adjustments  to  reflect  the
uncertainties  related to the recoverability and classification of assets or the
amounts and  classification of liabilities that may result from the inability of
the Company to continue as a going  concern.  Based on the steps the Company has
taken to refocus its  operations,  the Company  believes that it has developed a
viable plan to address the Company's  ability to continue as a going concern and
that this plan will enable the Company to  continue as a going  concern  through
the end of fiscal  year 2000.  However,  considering,  among other  things,  the
Company's   historical  operating  losses,  the  expected  substantial  cost  to
establish  the  Company's  IPN,  and  its  history  in  the  contract   computer
programming  industry,  there  can  be no  assurance  that  this  plan  will  be
successfully implemented.  The Company does not expect to generate positive cash
flow  from  operations  during  fiscal  2000 or to be  able  to pay off  current
obligations, fund


<PAGE>11


PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations




the  establishment  of its IPN or growth of its computer  programming  business.
Therefore, the Company contemplates needing to raise additional financing during
fiscal 2000, the receipt of which cannot be assured.

The Company has received  short-term,  unsecured  financing in the form of notes
payable  of  $3,258,090  from  two  stockholders,  Mr.  James  W.  Cameron,  Jr.
("Cameron") and Dr. Max Negri ("Negri"). These notes bear interest at 10.25%. In
December 1998, Messrs. Cameron and Negri extended the maturity date on all notes
payable  originally  maturing  December 31, 1998, to the earlier of December 31,
1999, or such time as the Company  obtains  equity  financing,  in return for an
extension fee of 2% of the amounts  extended.  In addition,  interest accrued on
these notes as of December  31, 1998,  was  included in the  extended  principal
amounts.

Although  the Company has not entered into any written  agreements  with Messrs.
Cameron  or Negri,  management  believes,  based on  discussions  with these two
individuals,  that they will continue to fund operations and extend the maturity
dates of the various  notes  payable until at least June 30, 2000, or until such
time as the Company can repay the notes. However, there can be no assurance that
events may arise  which may affect  these  stockholders'  ability to finance the
Company or that the Company may experience  significant and  unanticipated  cash
flow  problems  which  may cause  these two  stockholders  to  reconsider  their
investment.

In September and October 1998,  ATR submitted  over 100 petitions for H1-B visas
to the U. S.  Immigration and  Naturalization  Service (the "INS").  In December
1998,  the  Company  received  a  request  from  the  INS for  more  information
including:  the  size of  ATR's  offices,  payroll  information,  corporate  tax
information,  and information about the Company's  officers and directors.  This
information  was  provided  to the INS in late  December  1998.  In April  1999,
approximately  50 of the 100 visa  petitions  previously  submitted  were denied
based  on what  ATR  believes  is a  misunderstanding  by the  INS of the  facts
submitted  in  December  1998.  Subsequently,  additional  information  has been
provided to the INS by the Company; however, no further decisions have been made
by the INS.

ATR is  aggressively  working  with  its  immigration  attorney  to bring to the
attention of the INS what it believes to be errors in the INS's  analysis of the
Company and an inadequate  understanding of the Company's business practices. As
this situation  continues,  the Company is not precluded from filing  additional
H1-B  visa  petitions.  It is ATR's  intention  to  continue  to file  H1-B visa
petitions as it identifies programmer placement  opportunities;  however, in the
event the  Company is unable to obtain  additional  H1-B  visas,  the  Company's
operations  and financial  position  could be adversely  affected in fiscal year
2000.

On April 21, 1997,  the Company  issued an unsecured note payable (the "Straight
Note") to Cameron for $1,000,000 in accordance with the Reimbursement  Agreement
the Company  signed on February  28,  1994.  Terms of the note  provided  for an
interest rate of 9.5% and monthly interest payments. No maturity date was stated
in the note; however, under the terms of the Reimbursement Agreement, upon


<PAGE>12


PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations




written  demand by Mr.  Cameron,  the Straight Note was to be replaced by a note
convertible  into ATR's  common  stock (the  "Convertible  Note") in a principal
amount equal to the  Straight  Note and bearing  interest at the same rate.  The
conversion price of the Convertible Note was equal to 20% of the average trading
price of the  Company's  common stock over the period of ten trading days ending
on the trading day next preceding the date of issuance of such Convertible Note.

Subsequent to June 30, 1999, Mr.  Cameron  disposed of a portion of his interest
in the Straight  Note,  reducing  the balance due him to $711,885,  plus accrued
interest.  On August 19, 1999, the Company's Board of Directors  agreed with the
Straight Note holders to fix the  conversion  price of the  Convertible  Note to
$0.044 in exchange for the Straight and/or  Convertible  Notes ceasing to accrue
interest  as of that date.  Because of the  decline  in  revenues  caused by the
non-renewal  of programmer  contracts and the steady decline in the quoted value
of the Company's common stock at that time (trading price was at $0.25 on August
19,  1999),  the Board  agreed it was in the best  interest  of the  Company  to
eliminate the future market risk that the  conversion  price become lower than a
fixed  conversion  price of $0.044.  The benefit  accruing  to the note  holders
resulting from the amendment to the conversion  terms, as measured on August 19,
1999,  was  approximately  $2.4  million  and has been  recorded  as  additional
interest expense in the quarter ended September 30, 1999.

Subsequent  to August 19, 1999,  Mr.  Cameron  elected to replace his  remaining
interest in the Straight Note, including accrued interest,  with the Convertible
Note and then  simultaneously  converted the  Convertible  Note into  19,762,786
shares of ATR's  common  stock.  All other  Straight  Note  holders  have  since
replaced their Straight Notes,  including  accrued  interest,  with  Convertible
Notes and converted such Convertible Notes into an aggregate of 7,998,411 shares
of the Company's common stock.

On August 26, 1999, Mr. Cameron, the Company's majority stockholder,  joined the
Board of Directors and assumed the position of Chief  Executive  Officer.  Under
Mr. Cameron's direction,  ATR decided to pursue the establishment of an IPN (see
Part I, Item 1, "Note 3 - Healtheon Agreement" and Part I, Item 2, "Management's
Discussion and Analysis -- Overview").

In September 1999, the Company received $826,553 in a private sale of its common
stock at an average price of $2.84 per share,  and in October 1999,  the Company
received  $121,174  in another  private  sale of its common  stock at an average
price of $4.04 per share.

The Company has incurred operating losses since inception which have resulted in
an  accumulated  deficit of $38,511,209 at September 30, 1999. The Company had a
working  capital  deficit  and a  stockholders'  deficit of  $3,846,822  each at
September 30, 1999.  Going forward,  ATR's IPN development  efforts will require
substantial  funds  prior to  generating  revenues.  Therefore,  ATR is pursuing
additional  funds through private equity financing or additional debt financing.
Although there can be no assurance that additional  financing can be obtained or
that if obtained such  financing  will be sufficient to prevent the Company from
having  to  materially  reduce  its  level of  operations  or be  forced to seek
protection  under  federal  bankruptcy  laws,  management  of ATR believes  that
sufficient financing


<PAGE>13


PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations




will be available until  operations can be internally  funded.  Ultimately,  ATR
will need to achieve a profitable level of operations to fund growth to meet its
obligations when they become due.

Effects of Inflation

The Company's most significant cost is programmer employees. To the extent these
personnel  costs  increase,  management  of the Company  believes  that customer
billing rates can be increased to cover such personnel increases.


<PAGE>14


PART II. OTHER INFORMATION




Items 1, 2, 3 and 4

None

Item 5.

As  previously  disclosed,  in  September  1999,  the  Company  entered  into an
agreement  with  Healtheon  Corporation  to allow under  insured  and  uninsured
healthcare consumers to register to use ATR's IPN, when it is developed, through
the use of Healtheon's  Internet  consumer  portal.  The agreement  provides for
development  fees to Healtheon  estimated to cost  $160,000.  The agreement also
requires  payment to Healtheon of $250,000  upon a promotional  announcement  of
ATR's IPN program on Healtheon's Internet portal, and a sharing of revenues when
operational.  Operations  are to  begin  no  later  than  six  months  following
acceptance of the application  software or when the IPN has 100,000 primary care
providers,  whichever is earlier. The agreement term is three years, but subject
to  modification  or withdrawal of services by Healtheon with certain  financial
penalties. In addition, revenue sharing is subject to renegotiation on an annual
basis based on the date the program becomes operational.

On October  12,  1999,  the  Company  and  Healtheon  received a letter from the
California  Department  of  Corporations  ("DOC")  inquiring  whether or not the
Company's  proposed  services,  when offered to California  consumers  under the
agreement  with  Healtheon,  may constitute a health care service plan requiring
the  Company to be licensed  with the DOC in  California.  The Company  does not
believe that its  proposed  business  services  constitute a health care service
plan.  The  Company  intends  to meet with the DOC and will  provide  additional
documentation in support of its position. No assurance can be given that the DOC
will agree with the Company's position. If the DOC determines that the Company's
proposed  business  services  constitute a health care service plan, the Company
will consider its options including  licensing with the DOC or restructuring its
agreement with Healtheon.

Item 6.  Exhibits and Reports on Form 8-K

(a)     None

(b)     Reports on 8-K

The  Company  filed a Form 8-K on August  27,  1999,  announcing  that  James W.
Cameron, Jr., the Company's majority  shareholder,  had disposed of a portion of
his interest in a $1,000,000  straight note,  that he and the other note holders
had elected to replace  their  interest in the straight  notes with  convertible
notes and  simultaneously  converted  the  convertible  notes into the Company's
common stock. It was further  announced that Mr. Cameron had joined the Board of
Directors,  assumed the position of Chief Executive Officer and intended for the
Company to pursue the establishment of an Internet medical provider network.



<PAGE>15


PART II. OTHER INFORMATION




The Company  filed a Form 8-K on  September  28,  1999,  filing a press  release
announcing  that the Company had signed an agreement with Healtheon  Corporation
to allow  uninsured  and under  insured  consumers to register for the Company's
Internet  medical  provider  network,  when it is developed,  through the use of
Healtheon's consumer portal.



<PAGE>16



                                          SIGNATURES


In accordance with the requirements 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.

                                    ALTERNATIVE TECHNOLOGY
                                    RESOURCES, INC.
                                    (Registrant)



Dated:  November 9, 1999            /s/   JAMES W. CAMERON, JR.
                                    --------------------------------------------
                                    James W. Cameron, Jr.
                                    Chief Executive Officer
                                    (Principal Executive Officer)



Dated:  November 9, 1999            /s/   EDWARD L. LAMMERDING
                                    --------------------------------------------
                                    Edward L. Lammerding
                                    Chief Financial Officer
                                    (Principal Financial Officer)