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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-QSB

  Annual Report Pursuant to Section 13 or 15 (d) of The Securities Exchange Act
                                     of 1934

                For the Quarterly Period Ended December 31, 2002

                         Commission File Number 0-18515

                            SPECTRASOURCE CORPORATION

             (Exact Name of Registrant as specified in its charter)


                 NEVADA                                93-0960302
     ------------------------------        ----------------------------------
    (State or other jurisdiction of       (IRS Employer Identification Number)
     incorporation or organization)


                       14900 Westheimer Houston, TX 77082
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

         Company's telephone number, including area code: (713) 783-0443

Indicate by check mark whether the Company: (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 such shorter period that the Company was required to
file such reports); and (2) has been subject to such filing requirements for the
past ninety (90) days;   Yes [X] No [ ]

As of December 31, 2002, there were 7,184,872 shares of ($0.001) par value
Common Stock (the Company's only class of voting stock) outstanding.
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                         ==============================

                                   FORM 10-QSB

                            SPECTRASOURCE CORPORATION

                                TABLE OF CONTENTS

PART I      Financial Information

Item  1.    Financial Statements (Unaudited)

            a)    Consolidated Balance Sheets at December 31, 2002 and September
                  30, 2001

            b)    Consolidated Statements of Income for the three months ended
                  December 31, 2002 and December 31, 2001

            c)    Consolidated Statements of Cash Flows for the three months
                  ended December 31, 2002 and December 31, 2001

            d)    Notes to Consolidated Financial Statements

            e)    Accountant's Review Report


Item  2.    Management's Discussion and Analysis of Financial Condition
            and Results of Operation


SIGNATURES

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PART I      FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS (UNAUDITED)


                   SPECTRASOURCE CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEET


                                                     December 31,  September 30,
                                                         2002           2002
                                                     -----------    -----------
                                                     (UNAUDITED)

Assets
  Current Assets
     Cash                                            $   173,259    $   156,350
     Accounts Receivable, less reserve of
       $125,231 and $125,235, respectively             1,030,118      1,057,221
     Prepaid Expenses                                     15,771        115,954
     Inventory                                         1,167,422      1,134,242
                                                     -----------    -----------
  Total Current Assets                                 2,386,570      2,463,767
                                                     -----------    -----------

     Fixed Assets,net of Accumulated Depreciation
       of $392,036 and $399,878, respectively            427,581        451,068
     Goodwill, net of $0 impairment                      400,768        400,768
     Other Assets and Investments                         31,656         30,816
     Deferred Tax Asset                                  344,211        342,243
                                                     -----------    -----------

Total Assets                                         $ 3,590,786    $ 3,688,662
                                                     ===========    ===========


Liabilities and Stockholders' Equity
  Current Liabilities
     Accounts payable and accrued expenses           $   497,060    $   592,204
     Short Term Debt                                     824,600        806,600
     Current Maturities of Long Term Debt                118,834        141,017
     Other                                                28,728         36,429
                                                     -----------    -----------
  Total Current Liabilities                            1,469,222      1,576,250
                                                     -----------    -----------

  Long Term Debt
     Notes Payable, Banks                                 12,117         12,207
     Notes Payable, Shareholders                       1,457,964      1,522,548
     Due to Affiliates                                   120,000        120,000
                                                     -----------    -----------
  Total Long Term debt                                 1,590,081      1,654,755
                                                     -----------    -----------

  Stockholders' Equity (Deficit)

     Common stock, $.001 par value, 10,000,000
       shares authorized, with 7,184,872 and
       6,015,850 shares issued and outstanding
       at September 30, 2002 and September 30,
       2001, respectively                                 17,356         17,356
     Capital in excess of par value                    3,530,704      3,530,704
     Accumulated Deficit                              (3,016,577)    (3,090,403)
                                                     -----------    -----------
  Total Stockholders' Equity                             531,483        457,657
                                                     -----------    -----------

Total Liabilities and Stockholders' Equity           $ 3,590,786    $ 3,688,662
                                                     ===========    ===========

        See Notes to Financial Statements and Accountant's Review Report

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                   SPECTRASOURCE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF INCOME (LOSS)


                                                     THREE MONTHS   THREE MONTHS
                                                        ENDED          ENDED
                                                     DECEMBER 31,   DECEMBER 31,
                                                         2002           2001
                                                     -----------    -----------

Sales                                                $ 1,838,257    $ 1,673,359
Cost of Sales                                            805,730        937,317
                                                     -----------    -----------
           Gross Profit                                1,032,527        736,042
                                                     -----------    -----------

Costs of Products Sold
           Selling and administrative expenses            17,356         15,055
           Depreciation and amortization                  29,056         23,776
           Other costs and operating expenses            880,331        593,013
                                                     -----------    -----------
Total Costs of Products Sold                             926,743        631,844
                                                     -----------    -----------

Income (Loss) from operations                            105,784        104,198

Other Income:
           Interest Income                                     0             45
           Miscellaneous Other Income (Expense)            6,069          1,332
                                                     -----------    -----------
Total Other Income                                         6,069          1,377
                                                     -----------    -----------

Income before taxes                                      111,853        105,575

Provision for income taxes                                38,030         31,672
                                                     -----------    -----------

Net Income or (Loss)                                 $    73,823    $    73,903
                                                     ===========    ===========

Basic and diluted EPS:                                      0.01           0.01

Weighted average number of common shares               7,184,872      6,015,850


        See Notes to Financial Statements and Accountant's Review Report

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                            SPECTRASOURCE CORPORATION
                         CONSOLIDATED STATEMENT OF CASH FLOW


                                                     THREE MONTHS   THREE MONTHS
                                                        ENDED          ENDED
                                                     DECEMBER 31,   DECEMBER 31,
                                                         2002           2001
                                                     -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income From Operations                           $    73,826    $    73,903
Adjustments to reconcile net income:
    Depreciation                                          29,056         23,776
    Allowance for bad debt                                 2,705          4,403
    Deferred Taxes                                        (1,968)        31,672
    (Increase) Decrease in Accounts Receivable            24,398         45,832
    Due from related parties
    (Increase) Decrease in Inventory                     (33,180)      (128,023)
    (Increase) Decrease in Prepaid                       100,183        (53,033)
    Increase (Decrease) in Accounts Payable              (95,144)       173,165
                                                     -----------    -----------

Net cash provided from (used in) operations               99,876        171,695
                                                     -----------    -----------

CASH FLOW FROM INVESTING ACTIVITIES
    LT Asset Purchases                                    (5,569)        (3,639)
    Decrease in LT Deposits
                                                     -----------    -----------

Net cash from investing activities                        (5,569)        (3,639)
                                                     -----------    -----------

CASH FLOW FROM FINANCING ACTIVITIES
    Issuance of Common Stock                                   0
    Increase (Decrease) in ST debt                        18,000        (97,967)
    Proceeds (Payment) of LT debt                        (86,857)       (46,728)
    (Increase) Decrease in LT Investments                   (840)
    Increase (Decrease) in due to related parties         (7,701)        16,098
                                                     -----------    -----------

Net cash provided by financing activities                (77,398)      (128,597)
                                                     -----------    -----------

Net Increase (Decrease) in cash and equivalents           16,909         39,459
Cash and equivalents, beginning of period                156,350        165,414
                                                     -----------    -----------
Cash and equivalents, end of period                  $   173,259    $   204,873
                                                     ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid for interest                           $    14,035    $    16,408


  See Notes to Consolidated Financial Statements and Accountant's Review Report

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                            SPECTRASOURCE CORPORATION
                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        BASIS OF PRESENTATION

The accompanying interim financial statements have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended September 30, 2002.

In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows as of December 31, 2002 and for the three
months ended December 31, 2002 and December 31, 2001, have been made. Certain
accounts have been reclassified for clearer reporting. The results of operations
for the period ended December 31, 2002 are not necessarily indicative of the
operating results for the full year.

        PRINCIPLES OF CONSOLIDATIONS

The consolidated financial statements include the accounts of the Company and
its subsidiaries after elimination of all significant inter-company
Transactions.

        USE OF ESTIMATES

The preparation of these financial statements requires the use of certain
estimates by management in determining the Company's' consolidated assets,
liabilities, revenues and expenses. Actual results could differ from those
estimates.

        CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of highly liquid investments that are readily
convertible into cash and have a maturity of three months or less.

        REVENUE RECOGNITION

Revenue from product sales is recognized as risk and title to the product
transfer to the customer, which usually occurs when shipment, delivery, or
installation, whichever is applicable, is made. The Company accrues for
allowances for doubtful accounts based on its experience.

        INVENTORIES

Inventories are carried at the lower of cost or market, using average cost.
Materials and supplies are valued using the average cost method.

        PROPERTY AND EQUIPMENT

Property and equipment is stated at cost less accumulated depreciation. Property
and equipment is depreciated on the straight-line method over their estimated
useful lives, which in the opinion of management is adequate to allocate the
cost of the property and equipment over their estimated useful lives.

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Expenditures for renewals, replacements, and betterments are capitalized.
Maintenance and repairs are charged to operating expenses as incurred. Upon sale
or other disposition, the applicable amounts of asset cost and accumulated
depreciation are removed from the accounts and the net amount, less proceeds
from disposal, is charged against or credited to income.

        GOODWILL

Goodwill represents the excess of purchase price paid over the value assigned to
the net tangible and identifiable intangible assets of a business acquired. As
described below under Recent Accounting Standards, no amortization of goodwill
has been recorded; instead, goodwill will be reviewed for impairment based on
fair values.

        DEFERRED SOFTWARE COSTS

Costs to purchase and to develop software for internal use are deferred and
amortized on a straight-line basis over 5 years.

        INCOME TAXES

The Company follows the asset and liability approach to account for deferred
income taxes. Under this method, deferred taxes are recognized for temporary
differences between the book and tax basis of assets and liabilities. These
temporary differences are measured using the applicable enacted tax rates and
provisions of the enacted tax laws. Valuation allowances are provided against
deferred tax assets when it is more likely than not that some portion or all of
the deferred tax asset will not be realized.

        COMPREHENSIVE INCOME

Financial Accounting Standards Board ("FASB") Statement No. 130, "Reporting
Comprehensive Income", became effective for fiscal years beginning after
December 15, 1997, and establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. This Statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. The Company
had no comprehensive income other than net income during the periods included in
the accompanying financial statements.

        EARNINGS PER COMMON SHARE

Earnings per common share is computed by dividing net income by the weighted
average number of common shares outstanding during the year.

        RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets, effective January 1, 2002. SFAS No. 141 is effective for business
combinations initiated after June 30, 2001 and has no effect on the Company.
SFAS No. 142 prescribes discontinuance of the amortization of goodwill as well
as annual review of goodwill for impairment. The implementation of SFAS No. 142
has not resulted in any impairment of goodwill to date, nor does the Company
expect any impairment in the foreseeable future.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. In October 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. Adoption of SFAS No. 143 and SFAS
No. 144 is not expected to have a material effect on the consolidated financial
statements of the Company.

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In April 2002, the FASB issued SFAS No. 145, RESCISSION OF FASB STATEMENTS NO.
4, 44, AND 64, AMENDMENT OF FASB STATEMENT NO. 13, AND TECHNICAL CORRECTIONS.
Application of the statement will be required in 2003. The Company does not
expect the implementation of SFAS No. 145 to have a material effect on the
financial statements of the Company.

In July 2002, the FASB issued SFAS No. 146, ACCOUNTING FOR EXIT OR DISPOSAL
ACTIVITIES. SFAS No. 146 addresses the recognition, measurement, and reporting
of costs associated with exit and disposal activities, including restructuring
activities and facility closings. SFAS No. 146 will be effective for activities
initiated after December 31, 2002. The Company does not expect adoption of SFAS
No. 146 to have a material impact on its consolidated financial statements.

NOTE 2. SIGNIFICANT EQUITY INVESTEE

Sales, gross profit, and net income (before application of a 34% income tax
rate) for the Gulf Coast Fan & Light subsidiary was $953,382, $614,089, and
$163,892, respectively, for the quarter ended December 31, 2002, compared to
$884,735, $399,596, and $146,869, respectively, for the quarter ended December
31, 2001.

















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                               ACCOUNTANT'S REPORT

To The Board of Directors and Stockholders of
SpectraSource Corporation

We have reviewed the accompanying balance sheet of SpectraSource Corporation, a
Nevada corporation, as of December 31, 2002, and the related statements of
income, retained earnings, and cash flows for the quarter then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountant's. All
information included in these financial statements is the representation of the
management of SpectraSource Corporation.

A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.



/s/ Yartz & Rabalais, P.C.

Houston, Texas
February 10, 2003


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

Certain statements contained in this Quarterly Report on Form 10-QSB, including,
without limitation, statements containing the words "believes", "anticipates",
"estimates", "expects", "projections", and words of similar import, constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned not to put undue reliance
on forward-looking statements. All forward-looking statements are made as of the
date hereof and are based on information available to the parties as of such
date. The Company does not undertake any obligation to update any
forward-looking statements to reflect events or circumstances after the date of
this Form 10-QSB. It is important to note that actual outcome and the actual
results could differ materially from those in such forward-looking statements.
Factors that could cause actual results to differ materially include risks and
uncertainties such as future economic conditions, corporate and marketplace
changes, all as more fully described in the Company's Report on Form 10-KSB for
the period ended September 30, 2002 under Management's Discussion and Analysis
of Financial Conditions and Results of Operations "Assumptions Underlying
Certain Forward-Looking Statements and Factors that May Affect Future Results"
and elsewhere from time to time in the Company's other SEC reports.

PLAN OF OPERATIONS
------------------

The Company is a leading provider of ceiling fans, electrical components,
advanced wiring, home networks and hardware to the residential and commercial
markets. The Company continues to focus on its nationwide expansion program by
leveraging the customer base of its long established Texas divisions. These
divisions currently sell to most of the major builders in its market, many of
whom have national operations.

The Company does not anticipate the need to raise additional funds in the next
twelve months. As reported in previous Registrant's filings, the Company met its
target schedule to complete the start-up phase of its Connect Source division
and the consolidation of warehousing, administrative and overhead functions.

The Company plans to increase its focus on implementing a state of the art
warehousing and inventory tracking system.

The Company anticipates no substantial performance of product research and
development, purchases of significant equipment, or significant changes in the
number of employees over the next twelve months.

FINANCIAL RESULTS
-----------------

For the quarter ended December 31, 2002, the Company reported net income of
$73,823 compared to net income of 73,903 for the quarter ended December 31,
2001. Gross revenues for the quarter ended December 31, 2002 were $1,838,257
compared to $1,673,359 for the quarter ended December 31, 2001. The increase in

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revenue was offset by a corresponding increase in labor charges on product
installation. Net cash flow for the quarter ended December 31, 2002 was $16,909
compared to 39,459 for the quarter ended December 31, 2001.

The Company's strategic investment in its Connect Source structured wiring
division was enhanced with the purchase of the operating assets of Home
Structure Sound shortly prior to fiscal year ended September 30, 2002. Revenues
for Connect Source for the quarter ended December 31, 2002 was $264,390,
compared to $6,935 for the quarter ended December 31, 2001. EBITDA for Connect
Source for the quarter ended December 31, 2002 was $1825, compared to ($52,363)
for the quarter ended December 31, 2001, reflecting the division's emergence
from a start-up operation.

The Company's Gulf Coast Fan & Light subsidiary continues to increase market
share with its trademarked Old Jacksonville brand ceiling fan. Net income for
the quarter ended December 31, 2002 grew 11% to $163,892, compared to $146,869
for the quarter ended December 31, 2001.

The Company's Builder's Lighting and Hardware division experienced a decrease in
revenue and net income for the quarter just ended due to industry-wide
recessionary pressures on the residential home building market. Revenue and
after-tax net income for the quarter ended December 31, 2002 was $616,353 and
($39,756), respectively, compared to $756,133 and $25,614, respectively, for the
quarter ended December 31, 2001. Management has addressed organizational issues
and the cost structure of the division and expects it to return to profitability
in subsequent quarters.


SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report on Form 10-QSB to be signed on its behalf by the undersigned,
thereunto duly authorized.


SPECTRASOURCE CORPORATION

By:  /s/ CHARLES SHEFFIELD
    -------------------------------------------
    Charles Sheffield, Chief Executive Officer,
    President and Director



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