<PAGE> 1
                               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 March 31, 2002

          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 April 30, 2002:  60,941,353


<PAGE> 2


PART I.         FINANCIAL INFORMATION
Item 1.         Financial Statements


                                          ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                                                  Condensed Balance Sheets
                                                          (Unaudited)
<TABLE>
<S>                                   <C>                                               <C>                     <C>

                                                                                        Fiscal Quarter           Fiscal Year End
                                                                                            March 31,                 June 30,
                                       Assets                                                 2002                      2001
                                       ------
                                                                                      ----------------------    --------------------
Current assets:
  Cash and cash equivalents                                                           $     1,541,144           $     3,159,017
  Short-term investments                                                                            -                 1,354,137
  Trade accounts receivable                                                                       284                    24,252
  Interest receivable                                                                             288                    52,134
  Prepaid expenses and other current assets                                                   147,106                   267,635
                                                                                      ----------------------    --------------------
Total current assets                                                                        1,688,822                 4,857,175
                                                                                      ----------------------    --------------------

Property and equipment:
  Equipment and software                                                                      746,215                   501,626
  Accumulated depreciation and amortization                                                  (236,331)                 (107,848)
                                                                                      ----------------------    --------------------
  Property and equipment, net                                                                 509,884                   393,778
                                                                                      ----------------------    --------------------

Prepaid annual license and service fees                                                       236,476                   259,155
Other non-current assets                                                                       25,308                    67,550
                                                                                      ----------------------    --------------------

                                                                                      $     2,460,490           $     5,577,658
                                                                                      ======================    ====================

                   Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
  Payable to Healthcare Exchange participants                                         $       305,515           $        40,756
  Trade accounts payable                                                                      297,067                   151,371
  Accrued payroll and related expenses                                                        251,984                   181,028
  Accrued preferred stock dividends                                                           283,195                   283,195
  Accounts payable and accrued interest payable to stockholders                               706,564                   728,941
  Other current liabilities                                                                   362,510                   295,680
                                                                                      ----------------------    --------------------
Total current liabilities                                                                   2,206,835                 1,680,971
                                                                                      ----------------------    --------------------

  Notes payable to stockholder                                                              1,745,529                 1,511,635
  Convertible notes payable to stockholder                                                  2,423,823                 2,228,815
                                                                                      ----------------------    --------------------
Total notes payable to stockholders                                                         4,169,352                 3,740,450
                                                                                      ----------------------    --------------------

Commitments and contingencies

Stockholders' equity (deficit):
  Common stock, $0.01 par value - 100,000,000 shares authorized; 60,941,128
     shares issued and outstanding at March 31, 2002
     (59,394,844 at June 30, 2001)                                                           609,411                   593,949
  Additional paid-in capital                                                              52,211,468                49,109,283
  Accumulated other comprehensive loss                                                             -                       (22)
  Accumulated deficit                                                                    (56,736,576)              (49,546,973)
                                                                                      ----------------------    --------------------
Total stockholders' equity (deficit)                                                      (3,915,697)                  156,237
                                                                                      ----------------------    --------------------

                                                                                      $    2,460,490            $    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>

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

                                                                    Three Months Ended                      Nine Months Ended
                                                                         March 31,                              March 31,

                                                                2002               2001                2002                2001
Healthcare exchange
    Healthcare exchange revenue                          $     430,308       $          -       $     792,402       $         -
    Healthcare exchange costs                                 (401,529)                 -            (976,530)                -
                                                         ---------------     ---------------    ----------------    --------------
Healthcare exchange gross profit (loss)                         28,779                  -            (184,128)                -

Contract programming
    Contract programming revenue                                     -             46,385                   -           272,215
    Programmer costs                                                 -            (35,937)                  -          (210,108)
    Start-up and other costs                                         -               (982)                  -            (9,265)
                                                         ---------------     ---------------    ----------------    --------------
Contract programming gross profit                                    -              9,466                   -            52,842

Selling, marketing and product development costs            (1,852,186)        (1,227,696)         (4,903,843)       (3,523,618)

General and administrative expenses                           (673,076)          (640,279)         (1,778,955)       (3,271,838)
                                                         ----------------     ---------------    ----------------    --------------

Loss from operations                                        (2,496,483)        (1,858,509)         (6,866,926)       (6,742,614)

Other income (expense)
    Interest income                                                744            114,057              41,523           379,693
    Interest expense to stockholders and directors            (111,673)          (102,789)           (364,200)         (339,380)
                                                          ---------------     ---------------    ----------------    --------------
Total other income (expense)                                  (110,929)            11,268            (322,677)           40,313
                                                          ---------------     ---------------    ----------------    --------------

Net loss                                                    (2,607,412)        (1,847,241)         (7,189,603)       (6,702,301)

Preferred stock dividends in arrears                                 -                  -                   -          (886,142)
                                                          ---------------     ---------------    ----------------    --------------

Net loss applicable to common stockholders               $  (2,607,412)      $ (1,847,241)      $  (7,189,603)      $(7,588,443)
                                                          ===============     ===============    ================    ==============

Basic and diluted net loss applicable to common
stockholders per share                                   $      (0.04)       $       (.03)      $       (0.12)      $      (0.13)
                                                          ===============     ===============    ================    ==============

Shares used in per share calculations                      61,261,644          59,358,090          60,019,455         58,454,427
                                                          ===============     ===============    ================    ==============
</TABLE>

See accompanying notes to condensed financial statements.



<PAGE> 4

PART I.         FINANCIAL INFORMATION
Item 1.         Financial Statements


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

<TABLE>
<S>                                                                   <C>             <C>           <C>
                                                                                       Nine Months Ended
                                                                                           March 31,
                                                                                2002                        2001
                                                                       ------------------------     ----------------------

Net cash used in operating activities                                  $    (6,138,409)             $    (5,100,044)
                                                                       ------------------------     ----------------------

Cash flows used in investing activities:
    Purchases of property and equipment                                       (244,589)                    (134,709)
    Purchase of short-term investments                                               -                   (3,358,676)
    Maturities of short-term investments                                     1,354,159                         -
                                                                       ------------------------     ----------------------
Net cash provided (used) by investing activities                             1,109,570                   (3,493,385)
                                                                       ------------------------     ----------------------

Cash flows from financing activities:
    Proceeds from sale of common stock                                       2,743,787                    9,560,345
    Proceeds from exercise of options and warrants                             238,277                       42,233
    Proceeds from notes payable to stockholders                                428,902                      233,026
    Payments on notes payable to stockholders                                        -                      (60,000)
    Payments on notes payable to directors                                           -                      (23,324)
                                                                       ------------------------     ----------------------
Net cash provided by financing activities                                    3,410,966                    9,752,280
                                                                       ------------------------     ----------------------


Net increase (decrease) in cash and cash equivalents                        (1,617,873)                   1,158,851
Cash and cash equivalents at beginning of period                             3,159,017                    1,909,421
                                                                       ------------------------     ----------------------

Cash and cash equivalents at end of period                             $     1,541,144              $     3,068,272
                                                                       ========================     ======================
</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
                               March 31, 2002
                                 (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 March 31, 2002
and June 30,  2001,  results of  operations  for the three and nine months ended
March 31, 2002 and 2001, and cash flows for the nine months ended March 31, 2002
and 2001.  The results for the period  ended March 31, 2002 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 $56,736,576 at March 31, 2002.  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.  The  company is  currently  seeking  to raise up to  $12,000,000  by
selling up to 5,333,333  shares of its common stock at $2.25 per share.  Through
March 31, 2002 the Company has received $2,773,315 through the sale of 1,232,585
shares pursuant to this offering. Proceeds net of offering costs were $2,743,786
[see Part I Item 2 "Management's  Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources"].

There can be no assurance that this plan will be  successfully  implemented.  If
the offering is not fully subscribed,  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.

<PAGE> 6

PART I.         FINANCIAL INFORMATION
Item 1.         Financial Statements

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 March 31, 2002 and 2001 was
$2,607,412,  and  $1,849,730,  and $7,189,581 and $6,700,691 for the nine months
ended  March  2002 and 2001  respectively.  Other  comprehensive  income  (loss)
represents  the net change in unrealized  gains  (losses) on  available-for-sale
securities.

Note 4 - Net Loss Per Share

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 and nine
months ended March 31, 2002 and 2001 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.

Note 5 - 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.

<PAGE> 7

PART I.         FINANCIAL INFORMATION
Item 1.         Financial Statements

In  October  2001,  the FASB  issued  Statement  No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets"  (SFAS 144).  SFAS 144  supersedes
SFAS 121,  however it  retains  the  fundamental  provisions  of that  statement
related to the  recognition  and  measurement  of the  impairment  of long-lived
assets to be "held  and  used."  Among  other  things,  SFAS 144  provides  more
guidance on estimating  cash flows when  performing a  recoverability  test. The
Company will adopt SFAS 144 effective July 1, 2002.  Management  does not expect
that the  adoption of SFAS 144 will have an effect on the  Company's  results of
operations, financial condition or cash flows.

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. (hereinafter referred to as "ATR," the
"Company,"  "we" or  "us")  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 in the healthcare industry.  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.

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 within the
healthcare  industry.  Our  Healthcare  Exchange  offers a direct and  efficient
conduit  between  Providers and Purchasers of health care services,  their PPOs'
and/or their  agents.  Providers  submit bills to the Company,  who reprices the
bills   to   the   rate   set   by   the   Providers,    including    adding   a
transaction-processing  fee,  and  then  routes  them  to  Purchasers  or  their
intermediaries.  The Company  receives  payments  from  Purchasers  on behalf of
Providers, and then remits payments to Providers.

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 medical doctors,  medical groups,  hospitals
and other health care  practitioners  (collectively,  "Providers") in thirty-two
markets in  twenty-two  states to offer their  services  through the  Healthcare
Exchange to those who purchase or facilitate the purchase of healthcare services
("Purchasers").

<PAGE> 8

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

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 does 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 reducing 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
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
customers.  This  conversion  process was complete as of June 30, 2001,  and the
Company is no longer in that line of business.

<PAGE> 9

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

Critical Accounting Policies

Revenue  Recognition.  The  Company  has  developed  a proof of  concept  of its
Healthcare    Exchange.    The    Company    recognizes    revenue    for    the
transaction-processing  fee  when  it is  earned  and  if no  other  contractual
obligations or contingencies exist.

Product Development Costs. In October 1999, the Company began incurring costs to
develop its Healthcare Exchange.  In accordance with SOP 98-5,  "Reporting Costs
on Start-Up  Activities," start-up costs associated with the Healthcare Exchange
have been expensed as incurred.

Stock-Based  Compensation.  The Company  has elected to account for  stock-based
compensation   using  the  intrinsic  value  method   prescribed  by  Accounting
Principles  Board Opinion No. 25,  "Accounting  for Stock Issued to  Employees."
Under the intrinsic value method,  compensation  cost is the excess,  if any, of
the  quoted  market  price or fair value of the stock at the grant date or other
measurement date over the amount an employee must pay to acquire the stock.

Prepaid License and Service Fees. Prepaid license and services fees are recorded
at cost and  amortized on a  straight-line  basis over the service  period of 66
months.  Management  considers whether  indicators of impairment of these assets
are present at each balance  sheet date and an impairment  loss is recorded,  if
necessary.

Financial Condition

Cash and cash  equivalents  decreased  approximately  $1,617,873  and short-term
investments  decreased  $1,354,137  since  June  30,  2001.  At March  31,  2002
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 nine  months  ended March 31, 2002 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

<PAGE> 10

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

contingencies  exist.  During the three and nine month periods  ending March 31,
2002  $430,308  and  $792,402  of  revenue  was  recognized,   respectively.  No
Healthcare  Exchange  revenue  was  generated  during  the three and nine  month
periods ending March 31, 2001.

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 and nine month periods
ending March 31, 2002 were  $401,529 and $976,530,  respectively.  No Healthcare
Exchange  costs were incurred for the three and nine month periods  ending March
31, 2001.

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 and nine month periods ending March
31, 2001, $46,385 and $272,215 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
and nine month periods ending March 31, 2002. There were $35,937 and $210,108 in
programmer costs for the three and nine month periods ending March 31, 2001.

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 and nine month periods  ending March 31, 2002 as compared to
$982 and $9,265 for the three and nine month periods ending March 31, 2001.

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

<PAGE> 11

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

network of healthcare  Providers.  The cost increase of $624,490 and  $1,380,225
for the three and nine month periods  ending March 31, 2002 compared to the same
period in the prior fiscal year is primarily the result of the increase of sales
and  marketing  staff to 71 at quarter end March 31, 2002 from 32 at quarter end
March 31, 2001.

General and Administrative Expenses

General and administrative expenses increased $32,797 for the three-month period
ended  March 31,  2002 over the same  period  of the  prior  fiscal  year due to
additional  support staff and related  administrative  expenses.  The nine month
period ending March 31, 2002 decreased $1,492,883 compared to the same period of
the prior fiscal year 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  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 nine-month period ended
March 31, 2001.  During the  nine-month  period  ending March 31, 2002  non-cash
compensation expense of $135,583, related to the purchase of common stock in the
Company's  January  2002  private  placement  by  the  Company's  Chairman,  was
recorded. The period ending March 31, 2002 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 and
nine month period ending March 31, 2002 as compared to the same period in fiscal
2001.

Interest Expense. Interest expense increased $8,884 and $24,820 in the three and
nine months ended March 31, 2002 primarily due to the increase in Notes Payable
to Stockholder and Convertible Notes Payable to Stockholder balances.

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.

<PAGE> 12

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

Liquidity and Capital Resources

Beginning  in the  three-month  period ended June 30,  2001,  ATR began  limited
operations of its Healthcare Exchange. For the nine-months ended March 31, 2002,
the Company earned  $792,402 in revenues but incurred a $7,189,603  loss.  Until
the Company can  generate  sufficient  revenue to finance  its  operations,  the
Company will have to seek other financing. 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 $56,736,576
at March 31, 2002.

The Company's  Healthcare Exchange  development efforts will require substantial
funds prior to generating sufficient revenues to fund operations and repay debt.
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.  The  Company is  currently  seeking  to raise up to  $12,000,000  by
selling  up to  5,333,333  shares  of its  common  stock at $2.25 per share in a
private  placement.  The common stock to be issued in the private placement will
be  restricted  securities.  In the event  that  within  one year from the final
closing the Company sells shares of common stock,  or securities  exercisable to
convertible into common stock, at a price less than $2.25 per share, the Company
will issue  additional  shares to  Investors  in an amount such that the overall
purchase price will be equal to the lower,  subsequent sales price. The forgoing
shall exclude common stock that may be issued in connection with a merger,  as a
dividend,  pursuant to the exercise of outstanding  options,  warrants and other
convertible securities and pursuant to options subsequently issued to employees.
Through March 31, 2002 the Company has received  $2,773,315  through the sale of
1,232,585 shares pursuant to this offering.  Proceeds net of offering costs were
$2,743,786.  The  proceeds  from  the  private  placement  will be used to funds
operations and repay debt. The Company's  Chairman and Chief  Financial  Officer
purchased 222,222 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
approximately $135,583 during the quarter ending March 31, 2002.

During the quarter  ending March 31, 2002,  the Company issued 284,200 shares of
common stock through the exercise of warrants for the amount of $213,150.

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.

<PAGE> 13

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

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
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  $316,702 in compensation  expense and $862,000 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  $2,423,823,  including  accrued interest at 10.25% per annum.  During the
quarter ending March 31, 2002 Mr.  Cameron  extended to the Company a short-term
note of $115,000  bearing  interest at 10.25% per annum with a due date of April
10,  2002.  Subsequent  to March 31,  2002,  this note and  accrued  interest of
$1,259.31 was paid prior to the due date.

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 needs 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

<PAGE> 14

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

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.

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

The Company has long-term debt in the aggregate amount of $4,169,352 as of March
31, 2002 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

Item 1          None

Item 2          Changes in Securities and Use of Proceeds.

(c) On January 9, 2002 the Board of Directors  unanimously approved to issue and
sell up to  5,333,333  shares of  Common  Stock at $2.25  pursuant  to a Private
Placement.  Assuming  that the  offering is fully  subscribed,  the Company will
receive  approximately  $12,000,000  in gross  proceeds.  This  amount is before
expenses of the offering of approximately  $100,000 and potential  finders fees,
which will not exceed 10% of the gross proceeds in the  aggregate.  We intend to
use the net proceeds of the offering (after  expenses) to develop our Healthcare
Exchange and for other general working capital purposes.  Subscription  proceeds
received as of quarter ending March 31, 2002 are $2,773,315  through the sale of
1,232,585 shares of common stock. The Company's Chief Financial  Officer,  James
W. Cameron,  Jr.,  purchased 222,222 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 dates of purchase, the Company recorded compensation
expense of $135,583 in the quarter ending March 31, 2002. The Company is relying
on Regulation D, Rule 506, as an exemption from registration.

Item 3, 4, 5, 6         None

<PAGE> 15

                                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:  May 13, 2002

                               /S/ JAMES W. CAMERON, JR.
                               -------------------------------------------------
                               James W. Cameron, Jr.
                               Chairman of the Board and Chief Financial Officer
                               (Principal Executive and Financial Officer)