United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549


                                    Form 10-Q



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

     For the quarterly period ended September 30, 2001

     Commission file number 0-20468


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


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



                     33 Jewel Court, Portsmouth, N.H. 03801
                    (Address of principal executive offices)

                                 (603) 501-3200
              (Registrant's telephone number, including area code)


                  (Former address if changed since last report)


Check whether the registrant  (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
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  September  30,  2001:
59,418,344

<PAGE>2

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

                     ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                            Condensed Balance Sheets
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                         September 30,          June 30,
                                                                             2001                 2001
                                                                        -------------        -------------
                               Assets
                               ------

<S>                                                                   <C>                   <C>
Current assets:
  Cash and cash equivalents                                             $   2,749,984        $   3,159,017
  Short-term investments                                                            -            1,354,137
  Trade accounts receivable                                                       225               24,252
  Interest receivable                                                           7,978               52,134
  Prepaid expenses and other current assets                                   241,984              267,635
                                                                        -------------        -------------
Total current assets                                                        3,000,171            4,857,175
                                                                        -------------        -------------
Property and equipment:
  Equipment and software                                                      592,659              501,626
  Accumulated depreciation and amortization                                  (142,395)            (107,848)
                                                                        -------------        -------------
  Property and equipment, net                                                 450,264              393,778
                                                                        -------------        -------------
Prepaid annual license and service fees                                       242,138              259,155
Other non-current assets                                                       40,996               67,550
                                                                        -------------        -------------
                                                                        $   3,733,569        $   5,577,658
                                                                        =============        =============
                 Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
  Payable to Healthcare Exchange participants                           $      86,348        $      40,756
  Trade accounts payable                                                      232,889              151,371
  Accrued payroll and related expenses                                        363,858              181,028
  Accrued preferred stock dividends                                           283,195              283,195
  Accounts payable and accrued interest payable
   to stockholders                                                            530,866              728,941
  Other current liabilities                                                   240,533              295,680
                                                                        -------------        -------------
Total current liabilities                                                   1,737,689            1,680,971
                                                                        -------------        -------------
  Notes payable to stockholder                                              1,630,529            1,511,635
  Convertible notes payable to stockholder                                  2,423,823            2,228,815
                                                                        -------------        -------------
Total notes payable to stockholders                                         4,054,352            3,740,450

Commitments and contingencies

Stockholders' equity (deficit):
  Common stock, $0.01 par value - 100,000,000 shares
    authorized; 59,418,344 shares issued and
    outstanding at September 30, 2001
    (59,394,844 at June 30, 2001)                                             594,184              593,949
  Additional paid-in capital                                               49,128,300           49,109,283
  Accumulated other comprehensive (loss)                                            -                  (22)
  Accumulated deficit                                                     (51,780,956)         (49,546,973)
                                                                        -------------        -------------
Total stockholders' equity (deficit)                                       (2,058,472)             156,237
                                                                        -------------        -------------
                                                                        $   3,733,569        $   5,577,658
                                                                        =============        =============

</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>
<CAPTION>

                                                                   Three Months Ended
                                                                      September 30
                                                                2001                2000
                                                           ------------         ------------
<S>                                                      <C>                    <C>
Healthcare Exchange
   Healthcare exchange revenue                             $    108,218         $          -
   Healthcare exchange costs                                   (224,788)                   -
                                                           ------------         ------------
Healthcare exchange gross profit (loss)                        (116,570)                   -

Contract Programming
   Contract programming revenue                                       -              178,019
   Programmer costs                                                   -             (129,602)
   Start-up and other costs                                           -               (6,200)
                                                           ------------         ------------
Contract programming gross profit                                     -               42,217

Selling, Marketing and Product development costs             (1,505,195)          (1,057,426)

General and administrative expenses                            (505,834)          (2,141,486)
                                                           ------------         ------------
Loss from operations                                         (2,127,599)          (3,156,695)

Other income (expense)
   Interest income                                               33,133               80,736
   Interest expense to stockholders and directors              (139,517)            (131,672)
                                                           ------------         ------------
Total other income (expense)                                   (106,384)             (50,936)
                                                           ------------         ------------
Net loss                                                     (2,233,983)          (3,207,631)

Preferred stock dividends in arrears                                  -             (886,142)
                                                           ------------         ------------
Net loss applicable to common stockholders                 $ (2,233,983)        $ (4,093,773)
                                                           ============         ============
Basic and diluted net loss per share                       $      (0.04)        $      (0.07)
                                                           ============         ============
Shares used in per share calculations                        59,401,860           56,695,586
                                                           ============         ============
</TABLE>

See accompanying notes to condensed financial statements.

<PAGE>4

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

<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                       September 30
                                                                2001                2000
                                                           ------------         ------------
<S>                                                      <C>                    <C>

Net cash used in operating activities                      $ (2,005,312)        $ (1,575,969)
                                                           ------------         ------------
Cash flows used in investing activities:
   Purchases of property and equipment                          (91,033)             (51,972)
   Maturities of short-term investments                       1,354,159                    -
                                                           ------------         ------------
Net cash provided (used) by investing activities              1,263,126              (51,972)
                                                           ------------         ------------

Cash flows from financing activities:
   Proceeds from sale of common stock                                 -            9,564,644
   Proceeds from exercise of options and warrants                19,251               26,666
   Proceeds from notes payable to stockholders                  313,902              233,027
   Payments on notes payable to directors                             -              (23,324)
                                                           ------------         ------------
Net cash provided by financing activities                       333,153            9,801,013
                                                           ------------         ------------

Net increase (decrease) in cash and cash equivalents           (409,033)           8,173,072
Cash and cash equivalents at beginning of period              3,159,017            1,909,421
                                                           ------------         ------------
Cash and cash equivalents at end of period                 $  2,749,984         $ 10,082,493
                                                           ============         ============

</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, 2001
                                   (Unaudited)


Note 1 - Basis of Presentation

The accompanying  unaudited condensed financial statements have been prepared in
accordance with accounting  principles  generally  accepted in the United States
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  accounting  principles  generally
accepted in the United  States 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-K for the  fiscal  year ended June 30,
2001.

In the opinion of  management,  the  unaudited  condensed  financial  statements
contain all adjustments,  consisting of normal recurring adjustments, considered
necessary to present  fairly the Company's  financial  position at September 30,
2001 and June 30,  2001,  results  of  operations  for the  three  months  ended
September 30, 2001 and 2000, and cash flows for the three months ended September
30, 2001 and 2000.  The results for the period ended  September 30, 2001 are not
necessarily  indicative of the results to be expected for the entire fiscal year
ending June 30, 2002.

The Company has incurred  operating losses since inception,  which have resulted
in an accumulated  deficit of  $51,780,956  at September 30, 2001.  Based on the
steps the  Company  has taken to refocus its  operations  and obtain  additional
financing,  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,  at least through the end of
fiscal year 2002. However, the Company believes it will need to raise additional
funds  during  fiscal  2002.  There can be no  assurance  that this plan will be
successfully implemented. If unsuccessful, the Company may be required to reduce
the  development  efforts of its  Healthcare  Exchange or be forced into seeking
protection under federal bankruptcy laws. As a result, the report of independent
auditors  on the  Company's  June 30,  2001  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 possible future effects on the recoverability and
classification  of assets or the amounts and  classification of liabilities that
may result from the outcome of this uncertainty.

Note 2 - Financing Arrangements

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

Note 3 - Comprehensive Loss

Total comprehensive loss for the three months ended September 30, 2001 and 2000,
was $2,233,961, and $3,207,631,  respectively. Other comprehensive income (loss)
represents  the net change in unrealized  gains  (losses) on  available-for-sale
securities.

<PAGE>6

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements


Note 4 - Recent Accounting Pronouncements

In July 2001, the Financial  Accounting  Standards  Boards issued  Statements of
Financial Accounting Standards No. 141, "Business Combinations," or SFAS 141 and
No. 142, "Goodwill and Other Intangible  Assets," or SFAS 142. SFAS 141 requires
that the purchase  method of  accounting  be used for all business  combinations
initiated  after June 30,  2001.  Use of the  pooling-of-interests  method is no
longer permitted. SFAS 141 also includes guidance on the initial recognition and
measurement  of  goodwill  and other  intangible  assets  acquired in a business
combination  that is completed  after June 30, 2001.  SFAS 142 no longer permits
the amortization of goodwill and  indefinite-lived  intangible assets.  Instead,
these  assets  must be  reviewed  annually  (or more  frequently  under  certain
conditions) for impairment in accordance with this statement.  Intangible assets
that do not have  indefinite  lives will  continue  to be  amortized  over their
useful lives and reviewed for impairment in accordance  with existing  guidance.
We are required to adopt SFAS 142  effective  July 1, 2002.  Because the Company
has historically  not been party to any business  combinations and therefore has
not recorded  related goodwill and intangible  assets,  the adoption of SFAS 141
and 142 did not and will not,  respectively,  have an  effect  on the  Company's
results of operations, financial position or cash flows.

Note 5 - Net Loss Per Share

All loss per share  amounts for all periods have been  presented  in  accordance
with Statement of Financial  Accounting  Standards Board No. 128,  "Earnings per
Share". As the Company has reported net losses in all periods  presented,  basic
and  diluted  loss per  share  have  been  calculated  on the  basis of net loss
applicable  to common  stockholders  divided by the weighted  average  number of
common stock shares  outstanding  without giving effect to outstanding  options,
warrants,  and convertible  securities whose effects are anti-dilutive.  For the
three-months ending September 30, 2001 and 2000, there were stock options, stock
warrants,  and a convertible note payable  outstanding,  which could potentially
dilute earnings per share in the future but were not included in the computation
of diluted  loss per share as their  effect  was  anti-dilutive  in the  periods
presented.

<PAGE>7

PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition 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 Form 10-K for the fiscal
year ended June 30, 2001.

Overview

General

Alternative  Technology  Resources,  Inc.  has  developed  and is  operating  an
exchange for healthcare  services  ("Healthcare  Exchange").  The purpose of the
Healthcare  Exchange  is to  utilize  the  Internet  and other  technologies  to
facilitate  Provider  initiated   discounts  and  administrative,   billing  and
remittance  services  for all  commercial  lines  of  business.  The  Healthcare
Exchange offers a direct and efficient  conduit between Providers and Purchasers
of  healthcare   services  and/or  their  agents,  such  as  Preferred  Provider
Organizations.

ATR's  Healthcare  Exchange began  operations with a limited number of Providers
and  Purchasers in the quarter  ending June 30, 2001.  The Company  continues to
receive,  process and analyze  operating  data, and the results of the Company's
analysis will determine the amount and timing of remaining  development  related
efforts.

The Company is currently  recruiting in twenty states medical  doctors,  medical
groups,   hospitals   and  other   health  care   practitioners   (collectively,
"Providers") to offer their services,  through the Healthcare  Exchange to those
who purchase or facilitate the purchase of healthcare services ("Purchasers").

The Company has outsourced to multiple  vendors  portions of the development and
operations of the information systems for its Healthcare  Exchange.  The Company
signed  agreements  effective  in January  2001,  with an  application  services
provider to license, support and run software to process medical bills submitted
to the Company's Healthcare Exchange.  ATR has also signed agreements to receive
claims from Providers  through  electronic  clearinghouses  and to convert paper
claims into electronic  formats.  ATR is evaluating  other potential  technology
vendors as well.

ATR will not provide healthcare services, but rather expects to act as a neutral
conduit for efficiency  between Providers,  Purchasers and their  intermediaries
including  Preferred  Provider  Organizations,  that  should  benefit  all.  ATR
believes that  eliminating  the costs  associated with  traditional  "bricks and
mortar"  operations,   creating  economies  of  scale,  facilitating  access  to
Providers and Purchasers,  streamlining overhead costs, exploiting possibilities
for functional  integration,  reducing errors and speeding the payment of claims
should allow  Purchasers  to pay less and Providers to recover more of what they
bill.

History

Alternative  Technology  Resources,  Inc. was founded as 3Net  Systems,  Inc. in
1989. In August 1999, James W. Cameron,  Jr., the Company's largest stockholder,
was named Chairman and Chief Executive Officer.  Under his direction the Company
identified what it believes to be a significant  business  opportunity and began

<PAGE>

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


developing a business model involving the establishment of a Healthcare Exchange
under the name "DoctorandPatient."

In February  2000,  Jeffrey S.  McCormick  assumed the position of the Company's
Chief Executive Officer. Mr. McCormick has significant  experience in financing,
managing and growing early stage development companies as a managing director of
Boston-based  Saturn  Asset  Management,  Inc.  Mr.  McCormick  has served as an
advisor or director of several Internet and electronic  commerce  companies over
the last six years.  As the Company's CEO, Mr.  McCormick is responsible for all
phases of development,  implementation and operation of the Company's Healthcare
Exchange.  Mr.  Cameron still acts as Chairman and Chief  Financial  Officer and
continues to play an active and  substantial  role in formulating  the Company's
business strategy and policy.

The Company is using its management's  experience in health care and information
technology to establish the Healthcare Exchange,  which has become the Company's
sole focus.  At present,  the  Healthcare  Exchange is operating  with a limited
number of Providers so the Company can refine its model and determine the amount
and  timing of  remaining  development  efforts.  ATR's  previous  business  was
recruiting,  hiring, and training foreign computer  programmers and placing them
with  U.S.  companies.  In line  with  the  Company's  strategy  to focus on the
establishment of a Healthcare  Exchange for health care services,  ATR suspended
recruitment of foreign computer  programmers in December 1999 and began pursuing
the  conversion of foreign  computer  programmers  to become  employees of ATR's
former customers. This conversion process was complete as of June 30, 2001.

Financial Condition

Cash  and cash  equivalents  decreased  approximately  $409,033  and  short-term
investments  decreased  $1,354,137  since June 30, 2001.  At September  30, 2001
substantially all of ATR's cash was invested in money market accounts.

Because the Company is emphasizing the  development of the Healthcare  Exchange,
the results of operation for the three months ended  September 30, 2001, may not
be indicative of results of operations for the year ended June 30, 2002.

Results of Operation

Healthcare Exchange

Healthcare  Exchange  Revenue.  The Company  developed a proof of concept of its
Healthcare  Exchange,  which began operations with a limited number of Providers
in the three-month  period ending June 30, 2001.  Providers submit bills to ATR,
who reprices the bills to the Provider's  Healthcare  Exchange  rate,  including
adding a transaction-processing fee, and then routes them to Purchasers or their
intermediaries.  ATR receives  payments from  Purchasers on behalf of Providers,
and then remits payments to Providers.  The Company  recognizes  revenue for the
transaction-processing  fee when earned and no other contractual  obligations or
contingencies  exist.  During the three-month  period ending September 30, 2001,
the second quarter of operations of the Healthcare Exchange, $108,218 of revenue
was recognized.  No revenue was generated  during the three-month  period ending
September 30, 2000.

<PAGE>9

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


Healthcare  Exchange  Costs.  Healthcare  Exchange  costs are the  direct  costs
related to the  processing  of the bills  submitted  by  Providers  and payments
received  from  Purchasers.  These  costs  include the salary and other wage and
benefit costs of the Healthcare Exchange operations staff and the operating cost
of the application  services  provider.  The costs for three-month period ending
September  30, 2001,  were  $224,788.  No operating  costs were incurred for the
three-month period ending September 30, 2000.

Contract Programming

Contract  Programming Revenue.  ATR's previous business was recruiting,  hiring,
training and placing foreign computer  programmers with U.S. companies.  In line
with the  Company's  strategy to focus on the  establishment  of the  Healthcare
Exchange for health care services, ATR suspended recruitment of foreign computer
programmers  in December  1999 and began  pursuing  the  conversion  of computer
programmers to employees of ATR's former customers.  This conversion process was
complete as of June 30, 2001. For the  three-month  period ending  September 30,
2000,  $178,019  in revenue was  generated  primarily  from sales of  programmer
services.

Programmer Costs. Programmer costs were salary, and other wage and benefit costs
of  ATR's  programmer  employees.  Due  to  the  final  phase  out  of  contract
programming business through conversion of the computer programmers to employees
of ATR's  customers  as of June  30,  2001,  as  discussed  above  in  "Contract
Programming  Revenue,"  no  contract  programming  costs were  incurred  for the
three-month  period ending September 30, 2001. There were $129,602 in programmer
costs for the three-month period ending September 30, 2000.

Start-up  and Other  Costs.  Start-up  and other  costs  represent  the costs of
recruiting  fees,  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. Start-up
and other costs were  expensed  as  incurred.  There were no start-up  and other
costs for the three-month period ending September 30, 2001 as compared to $6,200
the three-month period ending September 30, 2000.

Selling, Marketing and Product Development Costs

In October  1999 the Company  began  incurring  costs to develop its  Healthcare
Exchange.  Costs incurred are primarily salary,  other wage and benefit costs of
ATR's  employees and other  operational  costs  associated  with  recruiting the
network  of  healthcare  Providers.  The  cost  increase  of  $447,769  for  the
three-month period ending September 30, 2001, compared to the same period in the
prior fiscal year is primarily the result of the increase of sales and marketing
staff to 53 at quarter end September 30, 2001,  from 23 at quarter end September
30, 2000.

General and Administrative Expenses

General and Administrative  Expenses ("G&A").  G&A expenses decreased $1,635,652
for the three-month  period ended September 30, 2001 compared to the same period
of the prior fiscal year.  This decrease is due  primarily to non-cash  employee
compensation  related to the  purchase of common stock in the  Company's  August
2000 private  placement by the  Company's  Chief  Executive  Officer and related

<PAGE>10

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


entities,  and non-cash  compensation  due to  conversion  of Series D Preferred
Stock into common stock by the Company's  Chairman of the Board recorded  during
the  three-month  period ended  September  30, 2000.  No  comparable  costs were
recorded in the three-month  period ending September 30, 2001. The period ending
September  30,  2001  reflects an increase  of  employees  and related  costs to
support development efforts of the Healthcare Exchange.

Other Income (Expense)

Interest Income. Interest income is related to the short-term investment of cash
balances. The decrease is the result of reduced cash balances in the three-month
period  ending  September  30, 2001,  in comparison to the same period in fiscal
2001.

Interest  Expense.  Interest expense  increased $7,845 in the three months ended
September 30, 2001 primarily due to the increase in Notes Payable to Stockholder
and Convertible Notes Payable to Stockholder.

Income Taxes

As of June 30,  2001,  the  Company had net  operating  loss  carryforwards  for
federal  and state  income tax  purposes  of  approximately  $37 million and $21
million,  respectively.  The federal net operating loss carryforwards  expire in
2004 through 2020 and the state net operating loss carryforwards  expire in 2001
through 2010. The Company also has approximately $98,000 and $25,000 of research
and  development  tax credit  carryforwards  for  federal  and state  income tax
purposes,   respectively.  The  federal  research  and  development  tax  credit
carryforwards expire in 2005.

Under  certain  provisions  of the Internal  Revenue  Code of 1986,  as amended,
portions of the net operating loss carryforward and research and development tax
credit  carryforward are subject to annual limitations as a result of changes in
the ownership of the company.

Liquidity and Capital Resources

Traditionally,  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,  which has resulted in an
accumulated deficit of $51,780,956 at September 30, 2001.

The Company's  Healthcare Exchange  development efforts will require substantial
funds prior to generating sufficient revenues to fund operations and repay debt.
Therefore, the Company engaged a New York based financial and investment banking
firm to assist the Company in raising  capital.  On August 28, 2000, the Company
sold 3,333,334 shares of its common stock at $3.00 per share.  Proceeds,  net of
offering  costs,  were  approximately  $9,560,345.  Proceeds  are being  used to
develop the Company's Healthcare Exchange. The Company's Chief Executive Officer
and related entities purchased 2,333,335 shares of the Company's common stock in
the private  placement.  Because the purchase  price of such stock was less than
the  public  trading  price  on the  date  of  purchase,  the  Company  recorded
compensation  expense of $1,458,334 in the first fiscal quarter ended  September
30, 2000.

On  September,  11,  2000,  the  Company  agreed  with the  Series  D  Preferred
stockholders to exchange all their  outstanding  Series D shares and $475,915 in
accrued preferred stock dividends into 566,972 shares of common stock based on a

<PAGE>11

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


purchase price of $3.00 per common share.  The benefit  accruing to the Series D
Preferred  stockholders  was recorded in the quarter  ended  September 30, 2000,
approximately  $317,702 in compensation  expense and $862,033 in preferred stock
dividends.

The Company has received short-term,  unsecured financing to fund its operations
in the form of notes payable of $3,740,450 as of June 30, 2001, from Mr. Cameron
and another  stockholder.  These notes bear interest at 10.25%. On September 11,
2000,  the  Company  agreed  with Mr.  Cameron  to extend  the due date on notes
payable to him until December 31,  2001,in  exchange for an extension fee of 2%.
These extended notes total $1,511,635,  including accrued interest and extension
fees,  and bear interest at 10.25% per annum.  Also on September  11, 2000,  the
Company  agreed  with the other note  holder to extend the due date of his notes
until December 31, 2001, in  consideration  of such notes  becoming  convertible
promissory notes. The convertible  promissory notes total $2,288,815,  including
accrued  interest,  bear interest at 10.25% per annum and are  convertible  into
common stock at $3.00 per share (approximate  public trading price on that date)
at the note holder's option.  On September 1, 2001, the due dates of these notes
were  extended  from  December  31, 2001 to December  31,  2002.  Mr.  Cameron's
extended notes total  $1,630,529,  including accrued interest and extension fees
of 2%, and bear interest at 10.25% per annum.  The convertible  promissory notes
total $2,423,826, including accrued interest at 10.25% per annum.

The Company  signed  agreements  effective in January  2001 with an  application
services provider to license,  support and run software to process medical bills
submitted  to the  Company's  Healthcare  Exchange.  The  agreements  are for 66
months. They required payment of an initial base license fee of $250,000,  which
is being amortized over 66 months, and start-up costs, including data center set
up,  training and  implementation  fees of  approximately  $145,000,  which were
expensed.  The agreements  require monthly minimum  payments  currently of about
$35,000 and additional fees that are transaction  based if volumes exceed levels
included in the monthly minimums.

Based on the steps the Company has taken to refocus  its  operations  and obtain
additional  financing,  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 at least the
end of  fiscal  2002.  However,  the  Company  believes  it will  need to  raise
additional  funds during fiscal 2002.  There can be no assurance  that this plan
will be successfully implemented. If unsuccessful the Company may be required to
reduce the  development  efforts or its  Healthcare  Exchange  or be forced into
seeking  protection under federal  bankruptcy  laws. As a result,  the report of
independent  auditors  on the  Company's  June 30,  2001,  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 possible  future  effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainty.

Effects of Inflation

Management does not expect  inflation to have a material effect on the Company's
operating expense.

<PAGE>12

PART I  FINANCIAL INFORMATION
Item 3  Quantitative and Qualitative Disclosures About Market Risk

The Company has  long-term  debt in the  aggregate  amount of  $4,054,352  as of
September 30, 2001,  payable to two stockholders of the Company.  The debt bears
interest at 10.25% per annum and is due December 31, 2002.  The Company does not
believe  that any change in  interest  rates will have a material  impact on the
Company during fiscal 2002.  Further,  the Company has no foreign operations and
therefore is not subject to foreign currency fluctuations.


PART II OTHER INFORMATION

Items 1, 2, 3, 4, 5, 6
None

<PAGE>13

                                   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)


Date:   November 13, 2001           /s/   James W. Cameron, Jr.
                                    ------------------------------------------
                                    James W. Cameron, Jr.
                                    Chairman of the Board and Chief Financial
                                    Officer
                                    (Principal Executive and Financial Officer)