FORM 10-Q/A
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2002
                                       OR
     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                       For the transition period from to .
                                                                              -

                        Commission file number: 0-28926

                                   ePlus inc.

             (Exact name of registrant as specified in its charter)

                      Delaware                          54-1817218

                (State or other jurisdiction of       (I.R.S. Employer
               incorporation or organization)         Identification No.)

                     400 Herndon Parkway, Herndon, VA 20170
               (Address, including zip code, of principal offices)

       Registrant's telephone number, including area code: (703) 834-5710


Indicate by check mark 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 [ ____ ]


         The number of shares of Common Stock  outstanding as of August 9, 2002,
was 10,397,030.






                                TABLE OF CONTENTS

                           ePlus inc. AND SUBSIDIARIES



Part I.  Financial Information:

     Item 1. Financial Statements - Unaudited:

       Condensed Consolidated Balance Sheets as of March 31, 2002 and
       June 30, 2002                                                         2
       Condensed Consolidated Statements of Earnings, Three Months
       Ended June 30, 2001 and 2002                                          3

       Condensed Consolidated Statements of Cash Flows, Three Months
       Ended June 30, 2001 and 2002                                          4

       Notes to Condensed Consolidated Financial Statements                  6

       Item 2.  Management's Discussion and Analysis of Results of
                Operations and Financial Condition                           10

       Item 3.  Quantitative and Qualitative Disclosures About Market Risk   21

Part II. Other Information:

       Item 1.  Legal Proceedings                                            22

       Item 2.  Changes in Securities and Use of Proceeds                    22

       Item 3.  Defaults Upon Senior Securities                              22

       Item 4.  Submission of Matters to a Vote of Security Holders          22

       Item 5.  Other Information                                            22

       Item 6.  Exhibits and Reports on Form 8-K                             22

Signatures                                                                   23




ePlus inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)



                                                                As of March 31, 2002    As of June 30, 2002
                                                                --------------------    -------------------
ASSETS

                                                                           
Cash and cash equivalents ...................................   $  28,223,503    $    32,260,183
Accounts  receivable,  net of allowance
   for doubtful  accounts of $3,719,207 and
   $3,478,403 as of March 31, 2002 and
   June 30, 2002, respectively .................................   41,397,320         55,492,421
Notes receivable                                                      227,914            197,432
Employee advances                                                      69,042             62,613
Inventories                                                           871,857          1,470,453
Investment in leases and leased equipment - net                   169,087,078        164,505,903
Property and equipment - net                                        6,144,061          5,853,262
Deferred tax asset                                                  5,471,658          5,076,158
Other assets                                                       27,503,121         28,161,902
                                                                -------------    ---------------
TOTAL ASSETS                                                    $ 278,995,554     $  293,080,327
                                                                =============    ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable - equipment                                    $   3,898,999     $    4,741,272
Accounts payable - trade                                           15,104,985         27,472,484
Salaries and commissions payable                                      491,716            510,834
Accrued expenses and other liabilities                             19,091,729         23,602,566
Income taxes payable                                                  364,183          1,287,046
Recourse notes payable                                              4,659,982          3,584,206
Nonrecourse notes payable                                         129,095,051        123,692,431
                                                                --------------------------------
Total Liabilities                                                 172,706,645        184,890,839


COMMITMENTS AND CONTINGENCIES                                         --                  --

STOCKHOLDERS' EQUITY

Preferred stock, $0.01 par value; 2,000,000 shares authorized;
   none issued or outstanding                                         --                  --
Common stock, $0.01 par value; 50,000,000 shares authorized;
   10,395,870 and 10,396,980 issued and outstanding at
   March 31, 2002 and June 30, 2002, respectively                $    104,619      $     105,030
Additional paid-in capital                                         62,414,067         62,686,869
Treasury Stock, at cost, 66,100 and 106,100 shares,respectively     (574,800)          (921,800)
Retained earnings                                                  44,345,023         46,319,070
Other comprehensive income                                            --                     319
                                                                  ------------------------------
Total Stockholders' Equity                                        106,288,909        108,189,488
                                                                  -----------        -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $ 278,995,554      $ 293,080,327
                                                                  ===========        ===========


See Notes to Condensed Consolidated Financial Statements


                                      -2-








ePlus inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
                                                                         Three Months Ended
                                                                              June 30,
                                                                        2001          2002
                                                                        ----          ----
REVENUES

                                                                               
Sales of equipment                                                   $36,453,739     $  50,631,880
Sales of leased equipment                                                452,108         4,611,303
                                                                         -------         ---------
                                                                      36,905,847        55,243,183

Lease revenues
                                                                      10,792,055        10,575,403
Fee and other income                                                   5,595,434         6,356,694
                                                                       ---------         ---------
                                                                      16,387,489        16,932,097
                                                                      ----------        ----------
TOTAL REVENUES                                                        53,293,336        72,175,280
                                                                      ----------        ----------
COSTS AND EXPENSES

Cost of sales, equipment                                              31,351,389        45,389,224
Cost of sales, leased equipment                                          427,370         4,535,001
                                                                         -------         ---------
                                                                      31,778,759        49,924,225

Direct lease costs                                                     3,288,399           910,776
Professional and other fees                                              720,524           773,073
Salaries and benefits                                                  6,966,460        11,178,983
General and administrative expenses                                    3,623,994         3,628,301
Interest and financing costs                                           3,350,257         2,410,584
                                                                       ---------         ---------
                                                                      17,949,634        18,901,717

                                                                      ----------        ----------
TOTAL COSTS AND EXPENSES                                              49,728,393        68,825,942
                                                                      ----------        ----------

EARNINGS BEFORE PROVISION FOR INCOME TAXES                             3,564,943         3,349,338
                                                                       ---------         ---------

PROVISION FOR INCOME TAXES                                             1,425,977         1,373,203
                                                                       ---------         ---------

NET EARNINGS                                                        $  2,138,966         1,976,135
                                                                    ============         =========

NET EARNINGS PER COMMON SHARE - BASIC                               $       0.22      $       0.19
                                                                    ============      ============
NET EARNINGS PER COMMON SHARE - DILUTED                             $       0.21      $       0.19
                                                                    ============      ============

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC                            9,946,355        10,404,895
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED                         10,138,328        10,506,489



See Notes to Condensed Consolidated Financial Statements.

                                      -3-







ePlus inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                                                                      Three Months Ended
                                                                                           June 30,
                                                                                    2001            2002
                                                                                    ----            ----
Cash Flows From Operating Activities:
                                                                                           
 Net earnings                                                                    $  2,138,966    $  1,976,135
 Adjustments to reconcile net earnings to net cash (used) provided by
    operating activities:
       Depreciation and amortization                                                1,274,207       1,497,121
       (Recovery of) provision for credit losses                                      (28,155)        222,223
       Deferred taxes                                                                    --           395,500
       Loss on sale of operating lease equipment                                       (1,743)        (59,851)
       Adjustment of basis to fair market value of inventories and investments,     1,001,169            --
       Payments from lessees directly to lenders                                     (113,473)           --
       Loss on disposal of property and equipment                                      12,420            --
       Changes in:
          Accounts receivable                                                      16,224,951     (13,460,209)
          Other receivables                                                         1,355,953        (708,952)
          Employee advances                                                           (10,373)          3,114
          Inventories                                                                 800,153        (598,512)
          Other assets                                                                111,149         302,276
          Accounts payable - equipment                                             (2,529,381)        842,273
          Accounts payable - trade                                                   (356,279)     11,374,535
          Salaries and commissions payable, accrued
             expenses and other liabilities                                        (4,620,631)      5,369,313
                                                                                   ----------       ---------
                Net cash provided by operating activities                          15,258,933       7,157,966
                                                                                   ----------       ---------

Cash Flows From Investing Activities:
  Purchases of operating lease equipment                                             (887,976)       (254,575)
  Increase in investment in direct financing and sales-type leases                 (6,307,318)    (10,359,732)
  Purchases of property and equipment                                                (607,882)       (424,190)
  Cash used in acquisitions, net of cash acquired                                  (1,000,000)           --
 Increase in other assets                                                            (420,711)           --
                                                                                     --------      ----------
               Net cash used in investing activities                               (9,223,887)    (11,038,497)
                                                                                   ----------     -----------




                                      -4-







                                                                                               Three Months Ended
                                                                                                    June 30,
                                                                                            2001                 2002
                                                                                    ------------------------------------------
Cash Flows From Financing Activities:
 Borrowings:
                                                                                                         
    Nonrecourse                                                                            21,906,914          20,469,775
  Repayments:
    Nonrecourse                                                                           (12,832,837)        (11,400,914)
    Recourse                                                                                     (830)            (75,778)
 Purchase of treasury stock                                                                       -              (347,000)
 Proceeds from issuance of capital stock, net of expenses                                      62,445             271,128
 Net payments on lines of credit                                                           (5,027,284)         (1,000,000)
                                                                                           ----------          ----------
   Net cash provided by financing activities                                                4,108,408           7,917,211
                                                                                            ---------           ---------


Net Increase in Cash and Cash Equivalents                                                  10,143,454           4,036,680

Cash and Cash Equivalents, Beginning of Period                                             24,534,183          28,223,503
                                                                                           ----------          ----------

Cash and Cash Equivalents, End of Period                                             $     34,677,637     $    32,260,183
                                                                                     ================     ===============

Supplemental Disclosures of Cash Flow Information:
  Cash paid for interest                                                             $        125,084     $     1,797,374
                                                                                     ================     ===============
  Cash paid for income taxes                                                         $        982,344     $       261,142
                                                                                     ================     ===============

Schedule of Non-Cash Investing and Financing Activities:
  Common stock issued for assets in acquisition, 422,833 shares at $9.16/share       $        3,873,150   $            -
  Liabilities assumed in acquisition                                                 $        1,293,534   $            -



See Notes To Condensed Consolidated Financial Statements.





                                      -5-





                           ePlus inc. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.  BASIS OF PRESENTATION

The  condensed  consolidated  interim  financial  statements  of ePlus inc.  and
subsidiaries  (the "Company")  included herein have been prepared by the Company
without  audit,  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission  and  reflect all  adjustments  that are, in the opinion of
management,  necessary for a fair statement of results for the interim  periods.
All adjustments made were normal, recurring accruals. Certain prior year amounts
have been reclassified to conform to the current year's presentation.

These  interim  financial  statements  should  be read in  conjunction  with the
financial  statements and notes thereto contained in the Company's Annual Report
on Form 10-K (No.  0-28926)  for the year ended March 31,  2002 (the  "Company's
2002 Form 10-K").  Operating results for the interim periods are not necessarily
indicative of results for an entire year.

2.  INVESTMENTS IN LEASES AND LEASED EQUIPMENT - NET

Investments in leases and leased equipment - net consists of the following:

                                                            As of
                                                March 31, 2002  June 30, 2002
                                                       (In Thousands)
                                                ------------------------------
Investment in direct financing
  and sales-type leases - net                    $ 167,628      $ 163,516
Investment in operating lease
  equipment - net                                    1,459            990
                                                --------------- --------------
                                                 $ 169,087      $ 164,506
                                                =============== ==============

INVESTMENT IN DIRECT FINANCING AND SALES-TYPE LEASES

The Company's  investment in direct financing and sales-type  leases consists of
the following:

                                                            As of
                                                March 31, 2002    June 30, 2002
                                                          (In Thousands)
                                                ------------------------------
  Minimum lease payments                         $ 161,788     $  164,646
  Estimated unguaranteed residual value             25,880         24,128
  Initial direct costs, net of amortization (1)      3,424          3,320
  Less:  Unearned lease income                     (20,412)       (25,526)
            Reserve for credit losses               (3,052)        (3,052)
                                                --------------  --------------
  Investment in direct finance and sales
     type leases, net                            $ 167,628     $  163,516
                                                ============== ===============

           (1) Initial direct costs are shown net of  amortization of $5,486 and
           $5,893 at March 31, and June 30, 2002, respectively.

                                      -6-




The  Company's  net  investment in direct  financing  and  sales-type  leases is
collateral for non-recourse and recourse equipment notes.

INVESTMENT IN OPERATING LEASE EQUIPMENT

Investment in operating leases primarily  represents equipment leased for two to
three years and leases that are short-term  renewals on  month-to-month  status.
The  components  of the net  investment  in  operating  lease  equipment  are as
follows:

                                                             As of
                                                 March 31, 2002    June 30, 2002
                                                         (In Thousands)
                                                --------------------------------

  Cost of equipment under operating leases          $ 13,916         $ 13,100
  Initial direct costs                                    14               11
  Less:  Accumulated depreciation and
            Amortization                             (12,471)         (12,121)
                                                ----------------- --------------
                                                ----------------- --------------
  Investment in operating lease equipment, net      $  1,459           $  990
                                                ================= ==============


3.  BUSINESS COMBINATIONS

On October 4, 2001, the Company purchased all the outstanding stock of SourceOne
Computer  Corporation,  a  technology  and services  company  located in Silicon
Valley.  Total  consideration  paid of $2,807,500  included $800,006 in cash and
274,999  shares of  unregistered  common stock,  valued at $7.30 per share.  The
issuance  of  these  securities  was  made  in  reliance  on an  exemption  from
registration  provided by Section 4(2) or Regulation D of the Securities Act, as
amended,  as a transaction by an issuer not involving any public  offering.  The
shareholders of SourceOne  represented their intention to acquire the securities
for  investment  only and not with a view to or for  distribution  in connection
with such  transaction,  and an  appropriate  legend  was  affixed  to the share
certificates  issued in the  transaction.  The  shareholders  of  SourceOne  had
adequate access to information about ePlus through information made available to
the  shareholders  of  SourceOne.  The  shareholders  of SourceOne  were granted
certain registration rights in connection with the transaction.

On March 29, 2002, the Company purchased  certain fixed assets,  customer lists,
and contracts, and assumed certain liabilities, relating to Elcom International,
Inc.'s IT fulfillment and IT professional services business.  The Elcom purchase
added offices in Boston,  San Diego, New Jersey, and New York City. The purchase
price included $2.2 million in cash and the assumption of certain liabilities of
approximately $0.1 million.

The  impact  of  pro-forma  financial  information  as if the  acquisitions  had
occurred at the beginning of the periods presented is not material.

                                      -7-




4.  ISSUANCES OF COMMON STOCK, WARRANTS AND REPURCHASES OF COMMON STOCK

On  September  20,  2001,  the  Company's  Board  of  Directors  authorized  the
repurchase from time to time of up to 750,000 shares of its  outstanding  common
stock  to a  maximum  of  $5,000,000.  As of June  30,  2002,  the  Company  had
repurchased 106,100 shares of its outstanding common stock at an average cost of
$8.69 per share for a total of $921,800.

5.  SEGMENT REPORTING

The Company  manages its  business  segments  on the basis of the  products  and
services offered.  The Company's  reportable segments consist of its traditional
financing  business  unit and  technology  sales  business  unit.  The financing
business unit offers lease-financing  solutions to corporations and governmental
entities  nationwide.  The  technology  sales  business  unit sells  information
technology  equipment and software and related  services  primarily to corporate
customers  on a  nationwide  basis.  The  technology  sales  business  unit also
provides Internet-based  business-to-business  supply chain management solutions
for information technology and other operating resources.  The Company evaluates
segment performance on the basis of segment net earnings.

Both segments utilize the Company's proprietary software and services throughout
the organization. Sales, license, service, maintenance fees and related costs of
our  proprietary  software are included in the  technology  sales business unit.
Fees and other income relative to services generated by our proprietary software
and services are included in the financing business unit.

The accounting  policies of the financing and technology  business units are the
same as those  described  in Note 1,  "Organization  and Summary of  Significant
Accounting  Policies"  in the  Company's  2002  Form  10-K.  Corporate  overhead
expenses are allocated on the basis of revenue volume,  estimates of actual time
spent by  corporate  staff,  and  asset  utilization,  depending  on the type of
expense.

The Company changed reporting segments during the year ended March 31, 2002. All
prior period  balances  have been  reclassified  to conform to the new reporting
segments.

                                      -8-







                                                                       Technology
                                                         Financing        Sales
                                                          Business      Business
                                                            Unit           Unit             Total
                                                     -------------    -------------    -------------

Three months ended June 30, 2001
                                                                              
Sales                                                $     506,737    $  36,399,110    $  36,905,847
Lease revenues                                          10,792,055             --         10,792,055
Fee and other income                                     3,926,568        1,668,866        5,595,434
                                                     -------------    -------------    -------------
      Total revenues                                    15,225,360       38,067,976       53,293,336
Cost of sales                                              938,367       30,840,392       31,778,759
Direct lease costs                                       3,288,399             --          3,288,399
Selling, general and administrative
  expenses                                               5,370,857        5,940,121       11,310,978
                                                     -------------    -------------    -------------
Segment earnings                                         5,627,737        1,287,463        6,915,200
Interest expense                                         3,331,325           18,932        3,350,257
                                                     -------------    -------------    -------------
      Earnings before income taxes                       2,296,412        1,268,531        3,564,943
                                                     =============    =============    =============
Assets                                               $ 247,594,611    $  55,377,229    $ 302,971,840

Three months ended June 30, 2002
Sales                                                $   5,034,425    $  50,208,758    $  55,243,183
Lease revenues                                          10,575,403             --         10,575,403
Fee and other income                                     3,030,053        3,326,641        6,356,694
                                                     -------------    -------------    -------------
      Total revenues                                    18,639,881       53,535,399       72,175,280
Cost of sales                                            5,249,429       44,674,796       49,924,225
Direct lease costs                                         910,776             --            910,776
Selling, general and administrative                           --
  expenses                                               6,662,813        8,917,544       15,580,357
                                                     -------------    -------------    -------------
Segment earnings                                         5,816,863          (56,941)       5,759,922
Interest expense                                         2,256,498          154,086        2,410,584
                                                     -------------    -------------    -------------
      Earnings (Loss) before income taxes                3,560,365         (211,027)       3,349,338
                                                     =============    =============    =============
Assets                                               $ 229,781,841    $  63,298,486    $ 293,080,327




6.  NEW ACCOUNTING PRONOUNCEMENTS

Effective  April 1, 2001,  the Company  adopted  SFAS No. 140,  "Accounting  for
Transfer and Servicing of Financial Assets and  Extinguishments of Liabilities -
a  replacement  of FASB  Statement  No. 125," which  revises the  standards  for
accounting  for  securitizations  and other  transfers of  financial  assets and
collateral and requires  certain  disclosures,  but carries over the majority of
SFAS No. 125's provisions  without  reconsideration.  The Company's  adoption of
SFAS No. 140 did not have a material impact on its financial position or results
of operations.

In June 2001, the FASB issued SFAS No. 141,  "Business  Combinations."  SFAS No.
141  addresses  the  accounting  and  reporting  for business  combinations  and
broadens the criteria for recording intangible assets separate from goodwill. On
July 1, 2001,  the Company  adopted  SFAS No. 141 which  requires the use of the

                                      -9-




purchase method of accounting for all business combinations initiated after June
30, 2001. The Company's  adoption of SFAS No. 141 did not have a material impact
on its financial statements.

On July 20, 2001, the FASB issued SFAS No. 142,  "Goodwill and Other  Intangible
Assets." The Company has adopted SFAS No. 142  retroactive  to April 1, 2001, as
permitted.  SFAS No. 142 requires that goodwill and other intangible assets with
indefinite  useful  lives  no  longer  be  amortized,  but  instead  tested  for
impairment at least annually.

As of June 30, 2002, the Company had goodwill, net of accumulated  amortization,
of  $22,106,292,  an increase of $22,984 during the three months ending June 30,
2002. This increase relates to legal expenses incurred relating to the SourceOne
acquisition.  Goodwill, net of accumulated  amortization,  was $17,445,572 as of
June 30, 2001. No goodwill  amortization expense was recognized during the three
month periods ended June 30, 2002 and 2001.

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

The following  discussion  and analysis of results of  operations  and financial
condition  of the  Company  should  be read in  conjunction  with the  Condensed
Consolidated  Financial  Statements  and  the  related  Notes  thereto  included
elsewhere in this report, and the Company's 2002 Form 10-K.

Overview

Certain  statements  contained  herein are not based on historical fact, but are
forward-looking statements that are based upon numerous assumptions about future
conditions  that may not occur.  Actual  events,  transactions  and  results may
materially  differ  from  the  anticipated  events,  transactions,   or  results
described in such  statements.  Our ability to consummate such  transactions and
achieve  such events or results is subject to certain  risks and  uncertainties.
Such risks and  uncertainties  include,  but are not limited to, the  existence,
demand for, and acceptance of, the Company's services,  economic conditions, the
impact of  competition  and  pricing,  results of  financing  efforts  and other
factors  affecting  the  Company's  business  that are beyond our  control.  The
Company  undertakes  no  obligation  and does not  intend to  update,  revise or
otherwise publicly release the results of any revisions to these forward-looking
statements that may be made to reflect future events or circumstances.

Our  results of  operations  are  susceptible  to  fluctuations  for a number of
reasons,  including,  without  limitation,  customer demand for our products and
services,  supplier costs,  interest rate  fluctuations and differences  between
estimated  residual values and actual amounts  realized related to the equipment
we lease.  Operating  results  could also  fluctuate  as a result of the sale of
equipment in our lease  portfolio  prior to the  expiration of the lease term to
the  lessee or to a third  party.  Such sales of leased  equipment  prior to the
expiration of the lease term may have the effect of increasing  revenues and net
earnings during the period in which the sale occurs,  and reducing  revenues and
net earnings otherwise expected in subsequent periods.

We  currently  derive the  majority of our revenue  from sales and  financing of
information  technology  and other  assets.  We have  expanded  our  product and
service  offerings  under the Enterprise  Cost  Management,  or ECM, model which

                                      -10-




represents  the  continued  evolution  of our original  implementation  of ePlus
e-commerce  products  entitled  ePlusSuite.  Our ECM model is our  framework for
combining IT sales and professional  services,  leasing and financing  services,
asset management  software and services,  procurement  software,  and electronic
catalog content management software and services.

We have expanded our sales and marketing  personnel to approximately  186 people
from both hiring  personnel  and from the  acquisitions  of  SourceOne  Computer
Corporation and Elcom International,  Inc. Both are information technology sales
and  services  entities.  These two  acquisitions  and our hiring of other sales
persons  have  expanded  our  current  locations  to 36, all of which are in the
United States.

On May 15, 2001, we acquired from  ProcureNet,  Inc. the e-commerce  procurement
software  asset products and software  technology for cleaning and  categorizing
product descriptions for e-commerce catalogues.  These products and services and
associated expenses with this business acquisition have substantially  increased
our expenses, and the ability to sell these services and products is expected to
fluctuate  depending on the  customer  demand for these  products and  services,
which to date is still unproven. These products and services are included in our
Technology  Sales  Business  Unit  segment  combined  with our other sales of IT
products and services.  Our leasing and financing activities are included in our
financing sales business unit segment in our financial statements.

As a result of our acquisitions and expansion of sales locations,  the Company's
historical results of operations and financial position may not be indicative of
its future performance over time.

SELECTED ACCOUNTING POLICIES

The manner in which lease finance  transactions are  characterized  and reported
for  accounting  purposes  has a major  impact  upon  reported  revenue  and net
earnings.  Lease  accounting  methods  significant to our business are discussed
below.

We classify our lease  transactions,  as required by the  Statement of Financial
Accounting  Standards No. 13,  "Accounting for Leases",  or FASB No. 13, as: (1)
direct financing; (2) sales type; or (3) operating leases. Revenues and expenses
between  accounting  periods  for each lease term will vary  depending  upon the
lease classification.

For  financial   statement   purposes,   we  present   revenue  from  all  three
classifications  in lease revenues,  and costs related to these leases in direct
lease costs.

Direct Financing and Sales-Type  Leases.  Direct financing and sales-type leases
transfer  substantially  all benefits  and risks of  equipment  ownership to the
customer.   A  lease  is  a  direct   financing  or  sales-type   lease  if  the
creditworthiness  of the customer and the  collectibility  of lease payments are
reasonably  certain and it meets one of the  following  criteria:  (1) the lease
transfers  ownership  of the  equipment  to the customer by the end of the lease
term; (2) the lease contains a bargain  purchase  option;  (3) the lease term at
inception  is at  least  75% of  the  estimated  economic  life  of  the  leased
equipment;  or (4) the present value of the minimum  lease  payments is at least
90% of the fair market  value of the leased  equipment  at the  inception of the
lease.

Direct  financing  leases are recorded as investment in direct  financing leases
upon acceptance of the equipment by the customer. At the inception of the lease,
unearned lease income is recorded which represents the amount by which the gross
lease  payments  receivable  plus the estimated  residual value of the equipment

                                      -11-




exceeds the  equipment  cost.  Unearned  lease income is  recognized,  using the
interest method, as lease revenue over the lease term.

Sales-type leases include a dealer profit or loss that is recorded by the lessor
at the  inception  of the lease.  The  dealer's  profit or loss  represents  the
difference,  at the inception of the lease, between the fair value of the leased
property and its cost or carrying amount.  The equipment  subject to such leases
may be obtained in the secondary marketplace,  but most frequently is the result
of re-leasing our own portfolio. This profit or loss that is recognized at lease
inception is included in net margin on sales-type leases. For equipment supplied
from our  technology  sales  business  unit  subsidiaries,  the dealer margin is
presented  in equipment  sales  revenue and cost of  equipment  sales.  Interest
earned  on the  present  value  of the  lease  payments  and  residual  value is
recognized over the lease term using the interest method and is included as part
of our lease revenues.

Operating  Leases.  All leases that do not meet the criteria to be classified as
direct  financing or sales-type  leases are  accounted for as operating  leases.
Rental amounts are accrued on a straight-line  basis over the lease term and are
recognized as lease revenue. Our cost of the leased equipment is recorded on the
balance sheet as investment in leases and lease  equipment and is depreciated on
a  straight-line  basis over the lease term to our  estimate of residual  value.
Revenue,  depreciation expense and the resulting profit for operating leases are
recorded on a straight-line basis over the life of the lease.

As a result of these three  classifications  of leases for accounting  purposes,
the  revenues  resulting  from  the  "mix" of lease  classifications  during  an
accounting  period will affect the profit margin  percentage for such period and
such profit  margin  percentage  generally  increases  as  revenues  from direct
financing  and  sales-type  leases  increase.  Should a lease be  financed,  the
interest  expense  declines  over the term of the  financing as the principal is
reduced.

Residual Values.  Residual values represent our estimated value of the equipment
at the end of the initial lease term. The residual  values for direct  financing
and sales-type leases are reported as part of the investment in direct financing
and sales-type  leases,  on a net present value basis.  The residual  values for
operating  leases are included in the leased  equipment's net book value and are
reported in the investment in operating lease equipment.  The estimated residual
values will vary,  both in amount and as a percentage of the original  equipment
cost,  and  depend  upon  several   factors,   including  the  equipment   type,
manufacturer's discount, market conditions and the term of the lease.

We evaluate  residual values on an ongoing basis and record any required changes
in accordance with FASB No. 13. Residual values are affected by equipment supply
and demand and by new product announcements by manufacturers. In accordance with
generally accepted accounting principles,  residual value estimates are adjusted
downward when such assets are impaired.

We seek to realize the estimated  residual value at lease  termination  through:
(1) renewal or extension of the original lease; (2) sale of the equipment either
to the lessee or the  secondary  market;  or (3) lease of the equipment to a new
user. The difference between the proceeds of a sale and the remaining  estimated
residual  value is  recorded as a gain or loss in lease  revenues  when title is
transferred to the lessee, or, if the equipment is sold on the secondary market,
in  equipment  sales  revenues  and  cost  of  equipment  sales  when  title  is
transferred to the buyer.  The proceeds from any subsequent  lease are accounted
for as lease revenues at the time such transaction is entered into.

                                      -12-




Initial Direct Costs.  Initial direct costs related to the origination of direct
financing or operating  leases are  capitalized  and recorded as part of the net
investment in direct financing leases, or net operating lease equipment, and are
amortized over the lease term.

Sales. Sales revenue includes the following types of transactions:  (1) sales of
new or used  equipment  which is not subject to any type of lease;  (2) sales of
equipment subject to an existing lease, under which we are lessor, including any
underlying  financing related to the lease; (3) sales of off-lease  equipment to
the secondary  market;  and (4) sales of procurement  software.  Sales of new or
used equipment are recognized  upon shipment.  Sales of equipment  subject to an
existing lease and off-lease  equipment are recognized when  constructive  title
passes  to  the  purchaser.  Revenue  from  sales  of  procurement  software  is
recognized in accordance  with the  Statement of Position  (SOP) 97-2,  Software
Revenue  Recognition,  as amended by SOP 98-4 and SOP 98-9. We recognize revenue
when all the following criteria exist: when there is persuasive evidence that an
arrangement  exists,  delivery has occurred,  no significant  obligations by the
Company with regard to implementation  remain,  the sales price is determinable,
and it is probable that  collection will occur.  Our accounting  policy requires
that revenue  earned on software  arrangements  involving  multiple  elements be
allocated  to each  element on the  relative  fair  values of the  elements  and
recognized  when  earned.   Revenue  relative  to  maintenance  and  support  is
recognized  ratably  over the  maintenance  term  (usually one year) and revenue
allocated to training,  implementation  or other  services is  recognized as the
services are performed.

Other  Sources of Revenue.  Amounts  charged for  Procure(+)  are  recognized as
services are rendered.  Amounts charged for the Manage(+) service are recognized
on a  straight-line  basis over the period the  services are  provided.  Fee and
other income  results from:  (1) income from events that occur after the initial
sale of a financial asset; (2) re-marketing  fees; (3) brokerage fees earned for
the   placement   of  financing   transactions;   and  (4)  interest  and  other
miscellaneous income. These revenues are included in fee and other income in our
consolidated statements of earnings.

Reserve for Credit  Losses.  The reserve for credit  losses is  maintained  at a
level believed by management to be adequate to absorb  potential losses inherent
in the Company's lease and accounts  receivable  portfolio.  As of June 30, 2001
and 2002, the Company's reserve for credit losses was $4,167,315 and $6,530,585,
respectively. Management's determination of the adequacy of the reserve is based
on  an  evaluation  of  historical  credit  loss  experience,  current  economic
conditions,  volume,  growth, the composition of the lease portfolio,  and other
relevant  factors.  The reserve is increased by provisions for potential  credit
losses charged against  income.  Accounts are either written off or written down
when the loss is both probable and determinable,  after giving  consideration to
the customer's financial condition,  the value of the underlying  collateral and
funding status (i.e., discounted on a non-recourse or recourse basis).

The  company's  reserves for credit losses are  segregated  between our accounts
receivable  and our  investment  in  direct  financing  leases  as  follows  (in
thousands):

                                      -13-






                                                                 Investment
                                        Accounts                 in Direct
                                       Receivable             Financing Leases                Total
                                  -------------------------------------------------------------------------


                                                                               
Balance April 1, 2001              $         1,392         $         2,887              $         4,279

Bad Debts Expense                            1,324                     165                        1,489
Recoveries                                    (184)                      -                         (184)
Assumed in Acquisitions                         73                       -                           73
Other                                        1,114                       -                        1,114

                                  -------------------------------------------------------------------------
Balance March 31, 2002             $         3,719         $         3,052              $         6,771
                                  =========================================================================

Bad Debts Expense                             (222)                      -                         (222)
Recoveries                                       -                       -                            -
Assumed in Acquisitions                          -                       -                            -
Other                                          (19)                      -                          (19)
                                  -------------------------------------------------------------------------
Balance June 30, 2002              $         3,478         $         3,052              $         6,530
                                  =========================================================================



Balances in "Other"  include  reclasses  from prior years.  The Company  assumed
$72,631 in reserve for credit losses in the  acquisition  of SourceOne  Computer
Corporation.

Investments.  The Company had a 5%  membership  interest in MLC/CLC LLC, a joint
venture  to which  the  Company  sold  leased  equipment.  MLC/CLC  LLC  stopped
purchasing  leased  equipment  prior to the year ending  March 31,  2002.  Other
assets  reflects the Company's  investment in MLC/CLC LLC of $628,218 as of June
30,  2001,  accounted  for  using  the cost  method.  The  company  recorded  an
impairment  of  $628,218  during  the  quarter  ended  June  30,  2001  on  this
investment.  Also  included in other assets was an  investment of $420,711 as of
June 30, 2001,  which the Company  wrote off during the quarter  ending June 30,
2001 as the  underlying  equity in the  start-up  venture  did not  support  the
carrying amount of the Company's investment.

Capitalization  of Software Costs for Internal Use. The Company has  capitalized
certain costs for the development of internal-use  software under the guidelines
of  Statement  of  Position  (SOP)  98-1,  Accounting  for the Costs of Computer
Software  Developed or Obtained for Internal Use.  Approximately,  $0.0 and $0.2
million of internal use software was  capitalized  during the three months ended
June 30, 2002 and 2001,  respectively,  which is  included  in the  accompanying
consolidated balance sheet as a component of property and equipment.

Capitalization of Software Costs Available to Customers. In accordance with SFAS
No. 86,  "Accounting  for Costs of  Computer  Software  to be Sold,  Leased,  or
Otherwise  Marketed",  software development costs are expensed as incurred until
technological  feasibility  has been  established,  at such time such  costs are
capitalized  until the product is made  available for release to  customers.  No
development costs have been capitalized for the three months ended June 30, 2002
or 2001 relative to software costs available to customers.


                                      -14-



RESULTS OF  OPERATIONS  - Three  Months  Ended June 30,  2002  Compared to Three
Months Ended June 30, 2001

Total revenues generated by the Company during the three-month period ended June
30,  2002 were  $72,175,280  compared  to  revenues  of  $53,293,336  during the
comparable  period in the prior fiscal year, an increase of 35.4%.  The increase
is primarily the result of increased  sales of equipment  and leased  equipment.
The  Company's  revenues are composed of sales and other  revenue,  and may vary
considerably  from period to period.  See "POTENTIAL  FLUCTUATIONS  IN QUARTERLY
OPERATING RESULTS".

Sales revenue,  which includes sales of equipment and sales of leased equipment,
increased  49.7% to  $55,243,183  during the  three-month  period ended June 30,
2002, as compared to $36,905,847  generated during the  corresponding  period in
the prior fiscal year.

Sales of equipment are  generated  primarily  through the  Company's  technology
sales business unit  subsidiaries and represented 91.7% and 98.8% of total sales
revenue for the three months ended June 30, 2002 and 2001,  respectively.  Sales
of equipment  increased 38.9% to $50,631,880  during the current period compared
to $36,453,739  generated during the comparable period in the prior fiscal year.
The increase was a result of higher sales within our  technology  sales business
unit  subsidiaries as well as additional sales resulting from the acquisition of
SourceOne in October 2001 and Elcom in March 2002. The Company  realized a gross
margin on sales of  equipment  of 10.4% and  14.0% for the  three-month  periods
ended June 30, 2002 and 2001, respectively.  The Company's gross margin on sales
of equipment is affected by the mix and volume of products sold.

The Company also recognizes  revenue from the sale of leased  equipment.  During
the three  months  ended  June 30,  2002,  sales of leased  equipment  increased
920.0%.  During the three  months  ended  June 30,  2002 and 2001,  the  Company
recognized  a gross  margin  of 1.7%  and  5.5% on  leased  equipment  sales  of
$4,611,303  and  $452,108,  respectively.  The  significant  increase  in leased
equipment sales reflects the higher volume of lease equity that the Company sold
to outside investors. Leases that are not equity-sold to investors remain on the
Company's books and lease earnings are recognized accordingly.  In addition, the
revenue  and  gross  margin  recognized  on sales of leased  equipment  can vary
significantly  depending  on the nature  and timing of the sale,  as well as the
timing of any debt funding recognized in accordance with SFAS No. 140.

The Company's lease revenues  decreased 2.0% to $10,575,403 for the three months
ended June 30, 2002 compared with the  corresponding  period in the prior fiscal
year.  The  decrease  is  primarily  the result of small  decrease  in our lease
portfolio.


For the three months ended June 30, 2002, fee and other income  increased  13.6%
over the  comparable  period  in the prior  fiscal  year.  Fee and other  income
includes revenues from adjunct services and fees, including broker fees, support
fees,  warranty  reimbursements,  and learning center revenues  generated by the
Company's  technology  sales  business  unit  subsidiaries.  The current  period
increase  in fee  and  other  income  is  attributable  to  additional  revenues
resulting  from the  purchase of  SourceOne  in October  2001 and Elcom in March
2002.  We also  received  settlement  money of $2.0 million from Toshiba for the
three months  ending June 30, 2002 compared to $2.5 million for the three months
ending June 30, 2001. The Company's fee and other income contains  earnings from
certain  transactions  which are in the Company's  normal course of business but
there is no  guarantee  that future  transactions  of the same  nature,  size or
profitability will occur. The Company's ability to consummate such transactions,

                                      -15-




and the timing  thereof,  may depend  largely  upon  factors  outside the direct
control of  management.  The  earnings  from these  types of  transactions  in a
particular  period may not be indicative of the earnings that can be expected in
future periods.

The Company's  direct lease costs decreased 72.3% during the three-month  period
ended June 30, 2002 as compared to the same period in the prior fiscal year. The
decrease is primarily the result a lease impairment charge of approximately $1.0
million  taken in the June 2001  quarter and a decrease  in lease  depreciation,
specifically depreciation on the Company's matured lease portfolio.

The increase in professional and other fees of 7.3%, or $52,549, for the current
period over the  comparable  period in the prior fiscal year,  was primarily the
result of expenses related to the Company's outside technical services.

Salaries and benefits  expenses  increased 60.5% during the  three-month  period
ended June 30, 2002 over the same period in the prior year.  The increase is the
result of  additional  expense  related to the  Company's  recent  acquisitions,
SourceOne Computer Corporation and Elcom International, Inc., which is offset by
reduced  commission  expenses in the Company's  lease  financing and  technology
sales units.

The Company's general and  administrative  expenses increased 0.1% to $3,628,301
during the three months  ended June 30, 2002,  as compared to the same period in
the prior fiscal year.

Interest and financing  costs incurred by the Company for the three months ended
June 30, 2002  decreased  28.0% and relates to interest  costs on the  Company's
indebtedness,  both  lease-specific  and general working  capital.  Payments for
interest  costs  on the  majority  of the  Company's  non-recourse  and  certain
recourse notes are typically remitted directly to the lender by the lessee.

The Company's  provision for income taxes  decreased to $1,373,203 for the three
months ended June 30, 2002 from  $1,425,977  for the three months ended June 30,
2001,  reflecting  effective income tax rates of 41% for the three months ending
June 30, 2002 and 40% for the three months ending June 30, 2001.

The foregoing  resulted in a 7.6%  decrease in net earnings for the  three-month
period  ended June 30, 2002 as  compared to the same period in the prior  fiscal
year. Basic and fully diluted earnings per common share were $0.19 and $0.19 for
the three months  ended June 30, 2002,  as compared to $0.22 for basic and $0.21
for fully diluted  earnings for the three months ended June 30, 2001.  Basic and
diluted  weighted  average common shares  outstanding for the three months ended
June 30, 2002 were 10,404,895 and 10,506,489 respectively.  For the three months
ended June 30, 2001, the basic and diluted weighted  average shares  outstanding
were 9,946,355 and 10,138,328, respectively.

LIQUIDITY AND CAPITAL RESOURCES

During the  three-month  period ended June 30, 2002, the Company  generated cash
flows  from  operations  of  $7,157,965  and  used  cash  flows  from  investing
activities of $11,038,497. Cash flows generated by financing activities amounted
to $7,917,211  during the same period.  The net effect of these cash flows was a
net increase in cash and cash  equivalents of $4,036,680  during the three-month
period.   During  the  same  period,   the  Company's  total  assets   increased
$14,084,773,  or 5.0%.  The cash  balance at June 30,  2002 was  $32,260,183  as
compared to $28,223,503 at March 31, 2002.

                                      -16-




The Company's debt financing activities  typically provide  approximately 80% to
100% of the purchase  price of the equipment  purchased by the Company for lease
to its  customers.  Any  balance of the  purchase  price (the  Company's  equity
investment in the  equipment)  must  generally be financed by cash flow from its
operations, the sale of the equipment leased to third parties, or other internal
means.  Although the Company  expects that the credit  quality of its leases and
its residual  return history will continue to allow it to obtain such financing,
no assurances  can be given that such  financing will be available on acceptable
terms,  or at all.  The  financing  necessary to support the  Company's  leasing
activities  has  principally   been  provided  by   non-recourse   and  recourse
borrowings.  Historically,  the Company has obtained  recourse and  non-recourse
borrowings from banks and finance companies.  Non-recourse  financings are loans
whose repayment is the  responsibility of a specific  customer,  although we may
make  representations  and  warranties  to the  lender  regarding  the  specific
contract or have ongoing loan servicing obligations.  Under a non-recourse loan,
we  borrow  from  a  lender  an  amount  based  on  the  present  value  of  the
contractually  committed  lease  payments  under  the  lease at a fixed  rate of
interest,  and the lender secures a lien on the financed assets. When the lender
is fully  repaid from the lease  payment,  the lien is released  and all further
rental or sale  proceeds  are  ours.  We are not  liable  for the  repayment  of
non-recourse  loans unless we breach our  representations  and warranties in the
loan  agreements.  The lender  assumes the credit risk of each lease,  and their
only  recourse,  upon  default  by the  lessee,  is  against  the lessee and the
specific  equipment  under  lease.  The  Company  has formal  programs  with Key
Corporate Capital,  Inc. and Fleet Business Credit  Corporation.  In addition to
these programs, recently the Company has regularly funded its leasing activities
with  Citizens  Leasing  Corporation,  GE Capital  Corporation,  De Lage  Landen
Financial Services,  Inc., Hitachi Leasing America,  and Fifth Third Bank, among
others.  These programs require that each  transaction is specifically  approved
and done solely at the lender's discretion. During the three-month period ending
June 30, 2002, the Company's lease related non-recourse debt portfolio decreased
4.2% to $123,692,431.

Whenever  possible and  desirable,  the Company  arranges for equity  investment
financing which includes  selling assets,  including the residual  portions,  to
third parties and financing the equity  investment on a non-recourse  basis. The
Company  generally  retains customer control and operational  services,  and has
minimal  residual  risk.  The Company  usually  preserves  the right to share in
remarketing proceeds of the equipment on a subordinated basis after the investor
has received an agreed to return on its investment.  We actively sell or finance
our equity  investment with Bank of America,  Fleet Business Credit  Corporation
and GE Capital Corporation, among others.

The Company's  "Accounts  payable - equipment"  represents  equipment costs that
have been  placed on a lease  schedule,  but for which the  Company  has not yet
paid.  The balance of unpaid  equipment  cost can vary depending on vendor terms
and the timing of lease  originations.  As of June 30,  2002,  the  Company  had
$4,741,272  of unpaid  equipment  cost,  as compared to  $3,898,999 at March 31,
2002.

The Company's "Accrued expenses and other liabilities" includes deferred income,
reserves for credit  losses,  and amounts  collected and payable,  such as sales
taxes and lease rental  payments due to third parties.  As of June 30, 2002, the
Company had $23,602,566 of accrued expenses and other liabilities.

Working capital for our leasing  business is provided  through a credit facility
which  is a  revolving  $35  million  limit  and  expires  on  April  17,  2004.
Participating  in this facility  are,  among  others,  Branch  Banking and Trust

                                      -17-




Company ($10  million),  PNC Bank N.A. ($5 million) and National City the agent.
The ability to borrow  under this  facility is limited to the amount of eligible
collateral  at any given  time.  The credit  facility  has full  recourse to the
Company and is secured by a blanket  lien  against all of the  Company's  assets
including the common stock of all wholly-owned subsidiaries. The credit facility
contains certain  financial  covenants and certain  restrictions on, among other
things,  the Company's ability to make certain  investments,  and sell assets or
merge with another  company.  The interest  rates charged on borrowings  are the
LIBOR  interest rate plus 1.75% to 2.5%. As of June 30, 2002, the Company had no
outstanding balance on the facility.  The loss of this relationship could have a
material  adverse  effect  on our  future  results  as we may  have to use  this
facility for daily working capital and liquidity for our leasing business.

In general, we use the National City facility to pay the cost of equipment to be
put on lease,  and we repay  borrowings  from the  proceeds  of: (1)  long-term,
non-recourse,  fixed  rate  financing  which we obtain  from  lenders  after the
underlying  lease  transaction  is  finalized  or (2)  sales of  leases to third
parties. The Company has a $3.1 million  subordinated  recourse note payable due
to Centura Bank resulting from the  acquisition of CLG, Inc. This note comes due
in October, 2006 and has an 11% interest rate payable monthly.

ePlus Technology of NC, inc., ePlus Technology of PA, inc. and ePlus Technology,
inc.  have  separate   credit   facilities  to  finance  their  working  capital
requirements for inventories and accounts receivable. Their traditional business
as sellers of computer  technology  and related  network  equipment and software
products is financed through  agreements known as "floor planning"  financing in
which  interest  expense for the first thirty to forty-five  days is not charged
but is paid by the  supplier/distributor.  The floor  planning  liabilities  are
recorded as  accounts  payable-trade,  as they are  normally  repaid  within the
thirty to forty-five day time-frame and represent an assigned  accounts  payable
originally generated with the supplier/distributor.  If the thirty to forty-five
day  obligation  is not  paid  timely,  interest  is  then  assessed  at  stated
contractual rates.

In addition to the floor planning  financing,  ePlus Technology,  inc. and ePlus
Technology of NC, inc.  have accounts  receivable  facilities  through  Deutsche
Financial  Services  Corporation.  Of the  total  $33  million  dollar  facility
provided  by  Deutsche  Financial  Services  Corporation,  $26  million  is  for
traditional  inventory  floor  planning and $7 million is available for accounts
receivable  financing.  The  maximum  available  under the  accounts  receivable
facilities for ePlus  Technology,  inc. and ePlus  Technology of PA, inc. are $5
million  and $2  million  respectively  and as of June  30,  2002  there  was no
outstanding balance on these account receivable  facilities.  Availability under
the lines of credit may be limited by the asset value of equipment  purchased by
the  Company  and may be  further  limited by  certain  covenants  and terms and
conditions of the facilities.

                                      -18-



As of June 30, 2002, the respective floor planning  inventory  agreement maximum
credit limits and actual outstanding balances are as follows:



                                                                                               Balance at
                     Entity                    Floor Plan Supplier         Credit Limit      June 30, 2002
         ------------------------------- -------------------------------- ---------------- -------------------
                                                                                        
         ePlus Technology of NC, inc.    Deutsche Financial Services,     $3,500,000          $ 2,426,820
                                         Inc.
                                         IBM Credit Corporation           $  250,000          $   276,406

         ePlus Technology of PA, inc.    Deutsche Financial Services,     $9,000,000          $ 6,753,189
                                         Inc.
                                         IBM Credit Corporation           $1,250,000          $ 1,132,116

         ePlus Technology, inc.          Deutsche Financial Services,    $13,500,000          $ 3,836,411
                                         Inc.




The facilities  provided by Deutsche  Financial  Services  Corporation for ePlus
Technology of PA, inc. and ePlus Technology, inc. require a separate guaranty of
up to $4,900,000 and $2,000,000,  respectively, by ePlus inc. The floor planning
facility provided by IBM Credit Corporation to ePlus Technology of PA, inc. also
requires a guaranty by ePlus inc. for the total balance outstanding. The loss of
the  Deutsche  Financial  Services  Corporation  or the IBM  Credit  Corporation
relationship  could have a material  adverse  effect on our future results as we
rely on these  facilities  for  daily  working  capital  and  liquidity  for our
technology sales business

The continued implementation of the Company's ECM business model could require a
significant  investment  in both cash and  managerial  focus.  In addition,  the
Company may selectively  acquire other  companies that have attractive  customer
relationships and skilled sales forces.  The Company may also acquire technology
companies  to  expand  and  enhance  the  ECM  platform  to  provide  additional
functionality  and value added  services.  As a result,  the Company may require
additional  financing to fund its strategy  implementation  and potential future
acquisitions, which may include additional debt and equity financing.


POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Company's  future  quarterly  operating  results and the market price of its
stock may  fluctuate.  In the event the  Company's  revenues or earnings for any
quarter are less than the level expected by securities analysts or the market in
general,  such shortfall could have an immediate and significant  adverse impact
on the market price of the  Company's  stock.  Any such adverse  impact could be
greater if any such shortfall  occurs near the time of any material  decrease in
any widely  followed  stock index or in the market  price of the stock of one or
more public  equipment  leasing and  financing  companies or major  customers or
vendors of the Company.

The Company's  quarterly  operating results are also susceptible to fluctuations
for a number of other reasons, including, without limitation, its entry into the
e-commerce  market,  any reduction of expected  residual  values  related to the
equipment under the Company's  leases,  and timing of specific  factors that may

                                      -19-




affect  future  operating  results.   Quarterly  operating  results  could  also
fluctuate  as a result  of the sale by the  Company  of  equipment  in its lease
portfolio,  at the expiration of a lease term or prior to such expiration,  to a
lessee or to a third  party.  Such  sales of  equipment  may have the  effect of
increasing  revenues and net income during the quarter in which the sale occurs,
and reducing revenues and net income otherwise expected in subsequent quarters.

The Company believes that comparisons of quarterly results of its operations are
not necessarily meaningful and that results for one quarter should not be relied
upon as an indication of future performance.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

Certain  statements  contained  herein are not based on historical fact, but are
forward-looking statements that are based upon numerous assumptions about future
conditions  that may not occur.  Actual  events,  transactions  and  results may
materially  differ  from  the  anticipated  events,  transactions,   or  results
described  in  such  statements.   The  Company's  ability  to  consummate  such
transactions  and achieve such events or results is subject to certain risks and
uncertainties.  Such risks and uncertainties include, but are not limited to the
matters set forth below.

Our  traditional  businesses of equipment  leasing and financing and  technology
sales have the following risks:

o    we may not be able to realize our entire  investment  in the  equipment  we
     lease;

o    we depend on  creditworthy  customers and may not have reserved  adequately
     for credit losses;

o    capital spending may decrease;

o    direct  marketing by  manufacturers  rather than through  distributors  may
     affect future sales; and

o    inventory and accounts receivable financing may not be available.

Our eECM solution  introduced in May 2002 has had a limited  operating  history.
Although we have been in the  business  of  financing  and  selling  information
technology  equipment  since 1990,  we will  encounter  some of the  challenges,
risks,  difficulties  and  uncertainties  frequently  encountered by early-stage
companies  using new  business  models in  evolving  markets.  As a result,  the
Company  will  encounter  some  of  the  challenges,   risks,  difficulties  and
uncertainties  frequently  encountered  by early stage  companies  using new and
unproven  business  models in new and rapidly  evolving  markets.  Some of these
challenges relate to the Company's ability to:

o    increase the total number of users of ECM services;

o    adapt to meet changes in its markets and competitive developments; and

o    continue to update its technology to enhance the features and functionality
     of its suite of products.

We cannot be certain that our business  strategy  will be  successful or that it
will successfully address these and other challenges, risks and uncertainties.

                                      -20-




Over the longer term, the Company expects to derive a significant portion of its
revenues from its ECM business model, which is unproven.  The Company expects to
incur  expenses  that may  negatively  impact  profitability.  The Company  also
expects to incur significant sales and marketing,  research and development, and
general and  administrative  expenses in connection with the development of this
business.  As a result,  the Company may incur significant  expenses,  which may
have a material adverse effect on the future operating results of the Company as
a whole.

Broad and  timely  acceptance  of the ECM  services,  which is  critical  to the
Company's  future success,  is subject to a number of significant  risks.  These
risks include:

o    the electronic  commerce  business-to-business  solutions  market is highly
     competitive;  o the system's ability to support large numbers of buyers and
     suppliers  is  unproven;  o  significant  enhancement  of the  features and
     services  of our  Enterprise  Cost  Management  solution  may be  needed to
     achieve  widespread  commercial  initial and  continued  acceptance  of the
     system;

o    the pricing model may not be acceptable to customers;

o    if the Company is unable to develop and increase volume from our Enterprise
     Cost  Management  Services,  it is  unlikely  that it will ever  achieve or
     maintain profitability in this business;

o    businesses  that  have  already  made  substantial  up-front  payments  for
     e-commerce solutions may be reluctant to replace their current solution and
     adopt the Company's solution;

o    the  Company's  ability to adapt to a new market that is  characterized  by
     rapidly changing  technology,  evolving  industry  standards,  frequent new
     product announcements and established competition;

o    we may be unable to protect our intellectual property rights or face claims
     from third parties for infringement of their products.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Although a substantial  portion of the Company's  liabilities are  non-recourse,
fixed interest rate instruments, the Company is reliant upon lines of credit and
other financing  facilities which are subject to fluctuations in interest rates.
These  instruments  were  entered  into for other  than  trading  purposes,  are
denominated in U.S. Dollars,  and, with the exception of amounts drawn under the
National  City Bank and  Deutsche  facilities,  bear  interest  at a fixed rate.
Because the interest  rate on these  instruments  is fixed,  changes in interest
rates will not  directly  impact our cash flows.  Borrowings  under the National
City and Deutsche facilities bear interest at a market-based  variable rate. Due
to the  relatively  short nature of the interest rate periods,  we do not expect
our  operating  results  or cash flow to be  materially  affected  by changes in
market  interest  rates.  As of June 30, 2002,  the aggregate  fair value of our
recourse borrowings approximated their carrying value.

                                      -21-




PART II.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS
         Not Applicable


Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS
         Not Applicable


Item 3.  DEFAULTS UPON SENIOR SECURITIES
         Not Applicable


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         Not Applicable


Item 5.  OTHER INFORMATION
         Not Applicable


Item 6(a) EXHIBITS

          Exhibit No.  Exhibit Description
          -----------  -------------------

          3.1(1)       Certificate of Incorporation of the Company, as amended
          3.2          Certificate of Amendment to Certificate of Incorporation
          3.3(2)       Bylaws of the Company
          4.1(2)       Speciman certificate of Common Stock of the Company
          10.1         Lease Agreement, dated as of November 1, 2001, by and
                       between the Company, as Tenant, and Phillip G. Norton,
                       Trustee, as Landlord
          99.1         Certification of Chief Executive Officer and Chief
                       Financial Officer
          -----------

          (1) Incorporated herein by reference to the indicated exhibit filed as
          part of the Registrant's Form 10-Q filed on November 14, 1997.

          (2) Incorporated herein by reference to the indicated exhibit filed as
          part of the  Registrant's  Registration  Statement  on Form  S-1  (No.
          333-11737).


Item 6(b) REPORTS ON FORM 8-K

Form 8-K dated  March 29, 2002 and filed with the SEC on April 5, 2002 to report
that the Company had purchased fixed assets,  customer lists,  and contracts and
assumed  certain  limited  liabilities  relating  to the IT  fulfillment  and IT
professional   services   business   from  Elcom   International,   Inc.   Total
consideration  was approximately  $2.3 million  consisting of cash of $2,150,000
and the assumption of certain liabilities of approximately $113,000.

                                      -22-





                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following  persons on behalf of the registrant and in the
capacities and on the dates indicated.

                                  ePlus inc.


                                  /s/ PHILLIP G. NORTON
                                  --------------------------------------------
                                  By: Phillip G. Norton, Chairman of the Board,
                                  President and Chief Executive Officer
                                  Date: August 14, 2002


                                  /s/ STEVEN J. MENCARINI
                                  --------------------------------------------
                                  By: Steven J. Mencarini, Senior Vice President
                                  and Chief Financial Officer
                                  Date: August 14, 2002





                                      -23-