U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-KSB
(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

     For the fiscal year ended December 31, 2001

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

     For the transition period from _______________ to ________________

Commission File No.:  333-46160


                            American Ammunition, Inc.
                  --------------------------------------------
               (Name of small business registrant in its charter)

         California                                      91-2021594
-------------------------------                        -------------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                               Identification No.)

3545 NW 71st Street
Miami, FL                                                      33147
----------------------------------------               -------------------------
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number: (305) 835-7400

Securities registered under Section 12(b) of the Exchange Act:

    Title of each class                                Name of each exchange
                                                       on which registered
         None
-----------------------------                     ------------------------------

Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 par value
                               -------------------
                                (Title of class)

Copies of Communications Sent to:

                                     Mintmire & Associates
                                     265 Sunrise Avenue, Suite 204
                                     Palm Beach, FL 33480
                                     Tel: (561) 832-5696 - Fax: (561) 659-5371


<PAGE>



     Check whether the registrant (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                  Yes  X                 No
                     -----                 -----

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     State registrant's revenues for its most recent fiscal year. $427,529

     The   aggregate   market  value  of  the  voting   common  equity  held  by
non-affiliates  as of March 27, 2002 was  $13,352,834.84  based upon  50,327,056
shares  outstanding of which 23,633,336 was held by  non-affiliates  and a share
price of $0.565. No non-voting common equity is outstanding.

                                     PART I

Item 1. Description of Business

         Business Development

     Certain  statements  contained in this annual  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

     Such factors include, among others, the following: international,  national
and local  general  economic and market  conditions:  demographic  changes;  the
ability of the Company to sustain, manage or forecast its growth; the ability of
the Company to successfully make and integrate acquisitions;  raw material costs
and availability; new product development and introduction;  existing government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

     Given these  uncertainties,  readers of this Form 10-KSB and  investors are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company disclaims any obligation

                                        2

<PAGE>



to update any such factors or to publicly  announce the result of any  revisions
to any of the forward-  looking  statements  contained  herein to reflect future
events or developments.

     American  Ammunition,  Inc. (the "Company") was incorporated on February 1,
2000 in the State of California as  FirsTelevision.com.  It subsequently changed
its corporate  name to FBI Fresh Burgers  International  with a business plan of
marketing the concept of a national "fast food" restaurant chain to children and
young adults, with a menu of fresh burgers, fries and sandwiches.

     On September 29, 2001,  the Company,  F&F  Equipment,  Inc.  d/b/a American
Ammunition  ("AA") and the  individual  shareholders  of AA entered into a share
exchange  agreement  whereby the shareholders of AA exchanged 100% of the issued
and  outstanding  stock of AA for  21,000,000  post-  forward  split  shares  of
restricted common stock of the Company. AA then became a wholly-owned subsidiary
of the Company.

     The  acquisition  of AA, on September 29, 2001,  by the Company  effected a
change in control and was accounted for as a "reverse acquisition" whereby AA is
the accounting acquiror for financial statement purposes.  Accordingly,  for all
periods subsequent to the September 29, 2001 change in control transaction,  the
financial  statements of the Company reflect the historical financial statements
of AA from its  inception on October 4, 1983 and the  operations  of the Company
subsequent to September 29, 2001.

     Concurrent with the September 29, 2001 reverse acquisition transaction, the
Company  amended its Articles of  Incorporation  to change the Company's name to
American Ammunition,  Inc. and modified the Company's capital structure to allow
for  the  issuance  of up to  320,000,000  total  equity  shares  consisting  of
20,000,000  shares of preferred  stock and  300,000,000  shares of common stock.
Both classes of stock have a par value of $0.001 per share.

     On October 9, 2001,  the  Company  effected a three (3) for one (1) forward
stock  split.  This  action  caused the then  issued and  outstanding  shares to
increase  from  2,990,400 to  8,971,200  on the action date.  The effect of this
action is reflected in the accompanying financial statements as of the first day
of the first period presented.

     AA was  incorporated  on  October  4,  1983  under the laws of the State of
Florida.  The Company was formed to engage  principally in the "import,  export,
retail & wholesale of firearms equipment, ammunition & other devices and for the
purpose of transacting any and/or all lawful business."

     The Company  relied upon Section  4(2) of the  Securities  Act of 1933,  as
amended (the "Act") and Rule 506 of Regulation D promulgated  thereunder  ("Rule
506") for recent  issuances of its  unregistered  securities.  In each instance,
such  reliance  was based upon the fact that (i) the  issuance of the shares did
not involve a public  offering,  (ii) there were no more than  thirty-five  (35)
investors (excluding "accredited investors"), (iii) each investor who was not an
accredited  investor  either alone or with his purchaser  representative(s)  has
such  knowledge  and  experience  in financial  and business  matters that he is
capable of evaluating the merits and risks of the prospective investment, or the
issuer  reasonably  believes  immediately  prior to  making  any sale  that such
purchaser comes within this description,  (iv) the offers and sales were made in
compliance with Rules 501 and 502, (v) the

                                        3

<PAGE>



securities  were subject to Rule 144  limitations on resale and (vi) each of the
parties was a sophisticated  purchaser and had full access to the information on
the Company necessary to make an informed  investment  decision by virtue of the
due diligence  conducted by the purchaser or available to the purchaser prior to
the transaction (the "506 Exemption").

     In March and May 2001, the Company issued an aggregate 496,200 post-reverse
split shares (165,400  pre-forward split shares) of common stock,  pursuant to a
Registration   Statement  on  Form  SB-2,  to  various   individuals   providing
investment,  financial and acquisition consulting services to the Company. These
transactions  were  cumulatively   valued  at  approximately   $165,400,   which
approximates  the "fair  value" of the  services  provided.  These  amounts  are
charged to operations in the accompanying pre-acquisition consolidated financial
statements.

     In September 2001, the Company issued 2,625,000  post-reverse  split shares
(875,000 pre- forward split shares) of common stock,  pursuant to a Registration
Statement on Form SB-2, to six  individuals  providing  investment and financial
consulting services to the Company.  These transactions were cumulatively valued
at approximately  $875,000,  which approximates the "fair value" of the services
provided.  These  amounts are charged to  operations  in the  accompanying  pre-
acquisition consolidated financial statements.

     In September 2001 the Company issued  21,000,000 shares of its common stock
to nineteen (19) shareholders of AA pursuant to a share exchange agreement.  The
shares  were valued at  $3,998,650.  The  transaction  resulted in AA becoming a
wholly owned  subsidiary of the Company in a  transaction  that was treated as a
reverse merger for accounting purposes. Of such shares, the current officers and
directors  of the Company  were issued a total of  15,750,000  shares.  For such
offering the Company relied upon the 506 Exemption.

     In September and October 2001,  the Company  issued 222,600 shares of $5.00
Series A Convertible  Preferred  Stock valued at  $1,113,000  through an ongoing
private  placement.  The  Series A  Convertible  Preferred  Stock  provides  for
cumulative  dividends at a rate of 8% per year,  payable  quarterly,  in cash or
shares of the Company's  common stock at the Company's  election.  Each share of
Series A  Convertible  Preferred  Stock is  convertible  into 11  shares  of the
Company's common stock at any time after 6 months after the date of issuance and
prior  to  notice  of  redemption  at the  option  of  the  holder,  subject  to
adjustments  for  customary  anti-dilution  events  (the  "Series A  Convertible
Preferred  Stock").  Of such shares, the Robert I. Escobio Family Trust acquired
2,000  shares.  Mr.  Escobio  is a  former  director  of the  Company.  For such
offering,  the  Company  relied  upon  the 506  Exemption.  All  investors  were
accredited.

     In September  2001, a creditor,  Key Packaging  Company,  agreed to convert
$10,000 of debt due from the Company into 2,000  shares of Series A  Convertible
Preferred stock. For such offering, the Company relied upon the 506 Exemption.

     In September 2001, a principal  shareholder,  Andres  Fernandez,  converted
$7,553,600 of unsecured debt due to him by the Company into 1,510,720  shares of
Series A Convertible  Preferred  Stock.  Mr.  Fernandez is a current officer and
director of the  Company.  For such  offering,  the Company  relied upon the 506
Exemption.


                                        4

<PAGE>



     In December  2001,  the Company  issued  222,222  shares of its  restricted
common stock to Forus  Investments,  Inc. ("Forus") in exchange for cancellation
of a debt by the Company in favor of Forus in the amount of  $100,000.  In March
2002, the Company issued an additional  277,777 shares of its restricted  common
stock to Forus in exchange for cancellation of the remaining  $100,000 principal
and $25,000 interest outstanding,  thereby satisfying the note in full. For such
offering, the Company relied upon the 506 Exemption.

     In December  2001,  the Company  issued  535,272  shares of its  restricted
common stock to Olin Corporation ("Olin") in exchange for cancellation of a debt
by the Company in favor of Olin in the amount of $242,872.40. For such offering,
the Company relied upon the 506 Exemption.

     See (b) "Business of Registrant" immediately below for a description of the
Company's business.

Business of Registrant

         General

     The Company changed its name to American Ammunition,  Inc. on September 26,
2001 and currently is quoted on the OTC-BB under the symbol "AAMI".

     On September 29, 2001, the Company entered into a Share Exchange  Agreement
with AA  whereby  100% of the  shares  of AA were  acquired  by the  Company  in
exchange  for shares of the  Company's  common  stock.  A new Board of Directors
consisting of AA directors took control of the Company. AA is the sole operating
subsidiary  of the  Company  after  the  effective  date of the  Share  Exchange
Agreement.

     The  Company's  principal  executive  offices  are  located at 3545 NW 71st
Street, Miami, Florida 33147; and its telephone number is (305) 835-7400.

     The Company had minimal operations until September 2001 when it acquired AA
and since such acquisition is engaged principally in the manufacture and sale of
ammunition for retail and wholesale sales. American Ammo is an established small
arms  munitions   manufacturer  with  an  existing   distribution  network.  The
ammunition  market is  dominated  by three  major  manufacturers;  however,  the
Company is poised to enter and impact the  growing  ammunition  market  with its
technologically advanced manufacturing equipment and techniques.  The Company is
an approved Department of Defense contractor.

     The Company  began as an assembler  and  re-loader of ammunition in several
calibers.  As the Company grew,  management  realized that the only way to break
into the  industry  was to  become a  vertically  integrated  manufacturer.  Its
founders  then  invested  heavily in research and  development,  equipment,  and
technology and focused on increasing its market share. As a result,  the Company
continued manufacturing its initial calibers along with special order ammunition
for the Department of Defense.  Further  streamlining of the operations resulted
in the  manufacture  of the  current  ammunition  product  line:  9mm,  .45auto,
..380auto, .32auto, .40S&W, 38Spl, and 30carbine. Management has identified these
products as having the largest share of the market for the next several years.

                                        5

<PAGE>



The Company's Equipment and Production Line Capabilities

     American  Ammo owns all the  equipment  necessary  to take the raw material
from cup, lead, primer and powder, to the finished product - a finished,  loaded
round. The process of manufacturing  diverse calibers of ammunition is extremely
complex and requires  tolerances of +/- .0005" to be maintained  throughout  the
process.

     The Company's  technology  and the  equipment  enable it to produce a large
variety of handgun and rifle  ammunition.  American  Ammo has a state of the art
machine shop and maintains its own testing and quality  assurance  equipment and
program.  Ammunition  is a  performance - based  product.  Therefore,  after the
manufacturing  process is complete,  the  ammunition  must comply with  specific
protocols such as velocity,  accuracy,  and pressure.  The Company purchases raw
materials  in bulk and strives to take  advantage  of  prepayment  discounts  to
produce  significant  savings in the manufacturing  process.  There are and have
been  instances  when  discounts  have been and may be  missed  due to cash flow
restrictions.

     The Company is evaluating the addition of several  products to its existing
production  lines,  including  the  addition  of high speed  projectile  forming
machines to  supplement  the existing  casting  machines.  This  addition  would
effectively  double or triple projectile  production  capacity,  while improving
projectile  quality and  performance.  The Company also is making  provisions to
increase other aspects of production  capacity which would  complement long term
goals of both production volume and product diversity.

     On October 26, 2000,  the  Company's  equipment and  production  lines were
appraised at $17,000,000.00 as the Fair Market Value,  In-Place,  In-Use for the
seven bullet  manufacturing  lines, machine shop and support equipment by Arnold
Stewart, ASA, 5761 NW 3th Avenue, Miami, Florida 33142. Such production includes
the metallurgical process of case making.

Business Strategy

     American  Ammo  is an  autonomous  manufacturer  of  ammunition,  with  the
technology  and  equipment  to take  advantage  of the  growing  market.  It has
developed what it believes is an excellent reputation within the industry.

     The barrier to entry into the ammunition market is extremely high; however,
American  Ammo is an  established  small arms  munitions  manufacturer,  with an
existing  distribution  network.  The Company  manufactures  its  ammunition  by
creating  most  of  the  components  itself.  Its  manufacturing  equipment  and
techniques are  technologically  advanced and the Company is poised to enter and
impact what it perceives as a growing market.

     In management's  opinion,  the ammunition market has grown each year and it
appears that supply is not keeping up with demand,  thus  allowing for companies
like American Ammo to make a significant impact in sales through distributors in
commercial  markets and in addition sales to government  agencies,  the military
and exports. American Ammo has been seeking additional capital

                                        6

<PAGE>



to allow it to enlarge its  operations  to take  advantage of its  technological
capacities, equipment and the existing marketplace.

Marketing and Sales Distribution

     American  Ammo  currently  has   agreements   with  sixteen  (16)  national
distributors  throughout  the United States to diversify its sales base.  Ellett
Brothers, Inc. accounts for thirty-two percent (32%) and fifty-one percent (51%)
of the Company's  total sales for fiscal year 2000 and 2001,  respectively.  The
Company  plans  to  continue  to  aggressively   pursue  new  customers  through
promotions,  advertising  and  trade  shows.  It  intends  to  solicit  original
equipment manufacturer  subcontract work from the three (3) major manufacturers;
seek additional  means of commercial  distribution;  seek further  Department of
Defense  and Law  Enforcement  contracts;  solicit  further  Export  sales;  and
increase its dealings with Mass Merchandisers/Chain stores.

     American  Ammo has been  certified  by the  United  States  Small  Business
Administration  as a "qualified  HUBZone  small  business  concern."  Under this
program , small businesses can qualify for special set-aside  contracts,  get up
to a 10% edge in competitive  contract bidding or even be the sole-source bidder
in some cases. The program's name signifies the effort to promote  businesses in
"historically  under-utilized  business zones," generally blighted areas and its
purpose is to create jobs for those who live in such areas as well.

     The  Company  also  is  aggressively  marketing  its  unique  manufacturing
flexibility  to  numerous  DOD  and  commercial   munitions   manufacturers   as
subcontractors  allowing prime  contractors to reap the benefits of its "HUBZone
certification",  thereby  allowing  such prime  contractors  to comply  with FAR
requirements  for the use of "small and  under-utilized  minority  business"  in
fulfilling government contracts.

     The  Small  Business  Reauthorization  Act of 1997  increased  the  overall
government  agencies'  procurement goals for small business to 23% and calls for
HUBZone contracts to increase from 1.5% of these procurements to 3% by 2003.

Pricing and Value

     The Company  strives to price its products  competitively  at a price lower
than any of the "big three" manufacturers (Remington,  Federal, and Winchester).
The  Company  capitalizes  on the fact  that the "big  three"  have  very  large
corporate  infrastructures and, in management's opinion, have to pay much higher
labor  costs to  their  plant  personnel.  This  pricing  strategy  permits  the
distributor to purchase the Company's product, add a significant profit and sell
such product at a retail price that is lower than that at which the  distributor
can purchase the competitors'  product.  The Company believes that this strategy
can have a significant  impact on the market and increase the  Company's  market
share.

Advertising & Promotion

     American Ammo intends to gear its  advertising  towards  magazine and print
media, focused on the gun and ammo, handgun and shooting markets. It is believed
that such advertising will result

                                        7

<PAGE>



in greater name recognition among individual consumers. Currently, the Company's
sales are generated  with very little  advertising  and it is believed that such
advertising  could  significantly  improve  retail/mass  merchandiser  sales and
increase market share.

Status of Publicly Announced Products and Services

Aircraft Bullet

     The Company was assigned a serial number  (60/325,046) from the U.S. Patent
and Trademark Office for its provisional  patent  application filed on September
26,  2001 for a bullet  that  will not  pierce  an  aircraft  fuselage  but will
penetrate human soft tissue. The product has been specifically  designed for use
inside  the  cabin  of  a  commercial  aircraft;   however,  it  has  additional
applications  for use in nuclear power plants,  at hazardous  materials  storage
facilities, and for home defense.

     The Company departed  completely from standard ballistics for the design of
this  projectile to meet what American Ammo  perceives as a growing and unfilled
need.  Two of the basic  design  criteria  in  ballistics  are  penetration  and
expansion  of the  projectile.  In this  design,  these  two  factors  have been
controlled to meet the specific  requirements  of weapons  discharged  inside an
aircraft cabin, while insuring fuselage integrity.  This design is a new concept
in close quarter  ammunition:  a bullet capable of  incapacitating  an assailant
without damaging surrounding structure.

     Design and material  selection  allows for the inverted  expansion  and aft
internal  collapse  of the  projectile  mass.  Upon  impact  with  the  aircraft
fuselage, the bullet (projectile)  internally collapses;  therefore not allowing
for the transfer of kinetic energy  forward or  penetration  above that required
for soft tissue penetration.  Testing has been successful using test sections of
various  commercial  airliner  fuselages as well as ballistic testing using both
ordinance gelatin and bovine tissue. This performance  criterion is accomplished
without  sacrificing  the standard  velocity  and accuracy of the caliber  being
used.  A video  of  those  tests  can be  viewed  on the  Company's  website  at
www.a-merc.com  in the New  Product  Section.  The Company  believes  that these
research and development efforts will provide a new product to the public safety
and security marketplace.

Competition

     The Company faces competition from large,  well-established  companies with
considerably  greater financial,  marketing,  sales and technical resources than
those available to the Company. Additionally,  many of the Company's present and
potential competitors have capabilities that may allow such competitors to offer
its  products  at prices  which may compete  with the  Company's  products.  The
Company's  products  could  be  made  uneconomical  by the  introduction  of new
products,  changes affecting the cost of packaging and shipping, or marketing or
pricing  actions  by one or more of the  Company's  competitors.  The  Company's
business,  financial  condition  or results of  operations  could be  materially
adversely  affected  by  one or  more  of  such  developments.  There  can be no
assurance that the Company will be able to compete  successfully against current
or future  competitors  or that  competition  will not have an material  adverse
effect on the Company's business, financial condition or results of operations.


                                                         8

<PAGE>



     The market for small arms ammunition is becoming increasingly  competitive.
Companies such as Remington,  Federal and  Winchester  are all better  equipped,
more experienced and better financed than the Company.

     For years the large  manufacturers have supplied the component parts of the
manufacturing process to smaller companies to assemble and distribute. A company
making its own components,  can produce and market a quality lower cost product.
This concept,  coupled with technology and progressive and environmentally sound
manufacturing practices (i.e. cans and recycled plastic packaging), has resulted
in a quality, affordable product reaching the marketplace.

     The U.S. Market for Firearms and Ammunition,  Economic Analysis of Markets,
Manufacturers  and  Importers  states  that,  "In 1999  sales for small arms and
handgun ammunition  exceeded $10 billion.  Only five (5) companies in the United
States  shared 90% of the market.  They  include Olin  Corporation's  Winchester
Ammunition  Division,  Remington Arms and Federal Cartridge Company,  Blount and
American Ammo."

     The Company believes it is feasible to increase its production  capacity by
50% to 100% over the next 3 years  utilizing  existing  equipment by  increasing
only  labor,  material  and  other  incidental  costs.   Management  bases  this
prediction  on the fact that the Company had reduced sales in fiscal 2001 due to
a lack of funding. The Company has already received significant bank and private
placement  funding  in fiscal  2002 (as of the date of this  report)  to ramp up
operations thereby significantly increasing its presence in the market.

     The U.S. Market for Firearms and Ammunition,  Economic Analysis of Markets,
Manufacturers  and Importers  states that,  "Domestic  consumption of commercial
ammunition exhibited strong growth rates between 1991 and 1996, much in the same
manner as the products in which they are used. In 1998 the United States Federal
Government purchased $1,687,658,000;  U.S. Exports of small arms ammunition were
$1,618,000,000 and U.S. commercial consumption totaled $758,000,000."

Sources and Availability of Raw Materials

     The Company  manufactures its ammunition by creating most of the components
itself.  The materials needed to produce the Company's  ammunition  products are
widely  available  from  numerous  third  parties.  No shortage of  materials is
expected in the foreseeable future.

Dependence on one or few customers

     The Company  currently has agreements  with sixteen  national  distributors
throughout  the United  States to diversify its sales base and plans to continue
to aggressively pursue new customers through  promotions,  advertising and trade
shows. It intends to solicit original  equipment  manufacturer  subcontract work
from  the  three  major  manufacturers;  seek  additional  means  of  commercial
distribution;  seek further Department of Defense and Law Enforcement contracts;
solicit   further   Export   sales;   and  increase   its  dealings   with  Mass
Merchandisers/Chain stores.


                                        9

<PAGE>



Research and Development

     The Company  believes that research and development is an important  factor
in its future growth.  The small arms  ammunition  industry is closely linked to
the latest  technological  advances.  Therefore,  the Company  must  continually
invest in the  technology to provide the best quality  product to the public and
to effectively compete with other companies in the industry. No assurance can be
made that the  Company  will have  sufficient  funds to  purchase  technological
advances as they become available.

Patents, Copyrights and Trademarks

     The Company  intends to protect its  original  intellectual  property  with
patents, copyrights and/or trademarks as appropriate.

     The  Company's  headstamp  "A-MERC " was  registered  as a trademark on May
10,1994.

     The Company was assigned a serial number  (60/325,046) from the U.S. Patent
and Trademark Office for its provisional  patent  application filed on September
26,  2001 for a bullet  that  will not  pierce  an  aircraft  fuselage  but will
penetrate human soft tissue.

Governmental Regulation

     In accordance  with the provisions of Title 1, Gun Control Act of 1968, and
the regulations  issued thereunder [27 CFR Part 178], the Company is required to
be  licensed  to engage in the  importing  of  firearms  other than  destructive
devices and as the  manufacturer  of ammunition for firearms.  Such licensing is
subject to  limitations  in Chapter  44,  Title 18,  United  States Code and the
regulations issued thereunder.

     In accordance  with these  requirements,  the Company  carries two licenses
issued by the Department of Treasury, Bureau of Alcohol, Tobacco and Firearms:

     License No.  1-59-025-06-3D  69152 for "06 - Manufacturer of Ammunition for
Firearms", which license expires on April 1, 2003; and

     License No.  1-59-025-08-3D-69454  for  "08-Importer  of Firearm other than
Destructive Devices", which license expires on April 1, 2003.

     In the event such  licenses  were not renewed  for any reason,  the Company
would be precluded from continuing its operations.

     The Company is not aware of any other  license  requirements  or government
regulation at a state or federal level  specific to their  business and believes
that it in full compliance with its existing licenses.



                                       10

<PAGE>



Effect of Probable Governmental Regulation on the Business

     The Company is not aware of any pending  legislation at either the state or
federal level that would change the requirements  under which it is licensed and
is not aware of any reason why the existing  licenses cannot be renewed at their
expiration  dates.  There  can be no  assurance  that  legislation  will  not be
proposed and enacted at some time in the future that would  preclude the Company
from continuing its operations.  Should such legislation be enacted,  and should
the  Company  be  precluded  from  continuing  its  operations,  it would have a
materially adverse effect upon the Company's business and future.

Cost and Effects of Compliance with Environmental Laws

     As a  manufacturer,  the  Company is subject  to general  local,  state and
federal regulations governing environmental  concerns.  Management believes that
the Company  has always been and  continues  to be in  compliance  with all such
laws.

     Special  precautions have been taken by the Company to ensure that adequate
ventilation exists for the portion of the Company's operations that utilize lead
and/or  brass.  Additionally,  the  Company's  gunpowder  supply is humidity and
temperature controlled in a secure facility.

Employees

     At December 31, 2001, the Company employed  thirty-seven (37) persons. None
of these  employees are  represented by a labor union for purposes of collective
bargaining.  The  Company  considers  its  relations  with its  employees  to be
excellent.  The  Company  may employ  additional  personnel,  as  necessary,  to
accommodate future sales and production requirements.

Item 2. Description of Property

     The Company maintains its executive offices at 3545 NW 71st Street,  Miami,
FL 33147.  Its telephone  number is (305)  835-7400 and its facsimile  number is
(305) 694-0037.

     The Company  leases  24,000  square feet of warehouse  space,  owned by the
family of one of its  officers and  directors,  Andres  Fernandez,  at a rate of
$3,931 per month plus applicable sales taxes.  This equates to a rate per square
for of $2.71  per  year.  Management  believes  comparable  rentals  in the area
average about $4.50 per square foot. The Company is operating  under a five-year
lease  agreement  expiring on October  31, 2003 that  contains a clause that the
lease may be  renewed  for an  additional  ten (10)  year  period  upon  written
notification  to the  lessor  no  later  than 120  days  prior to the  scheduled
expiration  date at a rental rate based upon the fair  market  value for similar
space in a similar location at the time of renewal. This facility is used as the
Company's production facility and headquarters.



                                       11

<PAGE>



Item 3. Legal Proceedings

     The  Company is not a party to any pending  litigation  at this time nor is
any of its property subject to any pending legal proceedings.

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

         None.

                                     Part II

Item 5. Market for Common Equity and Related Stockholder Matters.

a)   Market Information.

     The common stock of the Company currently is quoted on the Over the Counter
Bulletin  Board under the symbol  "AAMI" and has been since  October  23,  2001.
Prior to that time, it was approved for trading under symbol "FBIB," although it
never traded under that symbol.  The ask/high and bid/low  information  for each
quarter since October 23, 2001 are as follows:

Quarter                    Ask/High     Bid/Low
---------------------      --------     --------
09/01/2001-12/31/2001      1.75         0.53

     Please note that  over-the-counter  market  quotations  have been  provided
herein.  The  quotations  reflect  inter-dealer  prices,  without retail markup,
mark-down or commission and may not represent actual transactions.

(b)  Holders.

     As of December  31, 2001 the Company had  fifty-two  (52)  shareholders  of
record of its 26,850,000 outstanding shares of common stock, 23,728,800 of which
are restricted Rule 144 shares and 3,121,200 of which are  free-trading.  Of the
Rule 144 shares,  0 shares have been held by  affiliates of the Company for more
than one (1) year.

(c)  Dividends.

     The Company has never paid or declared  any  dividends  on its common stock
and does not anticipate paying cash dividends in the foreseeable future.



                                       12

<PAGE>


Item 6.    Management's Discussion and Analysis

(a)  Caution Regarding Forward-Looking Information

     Certain  statements  contained in this annual  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

     Such factors include, among others, the following: international,  national
and local  general  economic and market  conditions:  demographic  changes;  the
ability of the Company to sustain, manage or forecast its growth; the ability of
the Company to successfully make and integrate acquisitions;  raw material costs
and availability; new product development and introduction;  existing government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

     Given these  uncertainties,  readers of this Form 10-KSB and  investors are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(b)  Summary

     American Ammunition,  Inc. (AAI or Company) was incorporated on February 1,
2000 in the State of California as FirsTelevision.com.  AAI subsequently changed
its corporate  name to FBI Fresh Burgers  International  with a business plan of
marketing the concept of a national "fast food" restaurant chain to children and
young adults, with a menu of fresh burgers, fries and sandwiches. However, there
was no assurance that this business concept would be successful.

     On September  29, 2001,  the Company,  F&F  Equipment,  Inc.  (F&F) and the
individual  shareholders  of F&F entered into an "Agreement  For The Exchange Of
Common Stock"  (Exchange  Agreement)  whereby the  shareholders of F&F exchanged
100.0% of the issued and  outstanding  stock of F&F for 21,000,000  post-forward
split  shares of  restricted,  unregistered  common  stock of the  Company.  F&F
Equipment, Inc. then became a wholly-owned subsidiary of the Company.

     The  acquisition  of F&F  Equipment,  Inc.,  on September  29, 2001, by the
Company  effected  a change  in  control  and was  accounted  for as a  "reverse
acquisition"  whereby  F&F  Equipment,  Inc.  is  the  accounting  acquiror  for
financial  statement  purposes.  Accordingly,  for all periods subsequent to the
September 29, 2001 change in control  transaction,  the financial  statements of
the Company reflect the historical financial  statements of F&F Equipment,  Inc.
from its  inception  on  October  4,  1983  and the  operations  of the  Company
subsequent to September 29, 2001.

     Concurrent with the September 29, 2001 reverse acquisition transaction, the
Company  amended its Articles of  Incorporation  to change the Company's name to
American Ammunition,  Inc. and modified the Company's capital structure to allow
for  the  issuance  of up to  320,000,000  total  equity  shares  consisting  of
20,000,000  shares of preferred  stock and  300,000,000  shares of common stock.
Both classes of stock have a par value of $0.001 per share.

                                       13

<PAGE>



     On October 9, 2001,  the  Company  effected a three (3) for one (1) forward
stock  split.  This  action  caused the then  issued and  outstanding  shares to
increase  from  2,990,400 to  8,971,200  on the action date.  The effect of this
action is reflected in the accompanying financial statements as of the first day
of the first period presented.

     F&F Equipment,  Inc.(Company) was incorporated on October 4, 1983 under the
laws of the State of Florida.  The Company was formed to engage  principally  in
the  "import,  export,  retail & wholesale of firearms  equipment,  ammunition &
other  devices  and for  the  purpose  of  transacting  any  and/or  all  lawful
business." The Company  conducts its business  operations under the assumed name
of "American Ammunition".

     The Company and its subsidiary  have a year-end of December 31 and uses the
accrual method of accounting.

     All discussions in this section pertain to the historical operations of F&F
Equipment, Inc. as the accounting successor to the September

(c)  Results of Operations

     Year ended December 31, 2001 compared to Year ended December 31, 2000

     The Company's  operations were hampered during 2001 as a result of on-going
litigation  between the Company and it's financial lending  institution.  As the
Company was unable to access credit lines for working capital,  it was unable to
offer selling terms comparable to its competitors and, accordingly,  experienced
a significant  reduction in sales from prior years.  This litigation was settled
during June 2001 and the Company  negotiated  a new working  capital note with a
different  financial  institution which provided  liquidity for the remainder of
2001.

     During the year ended December 31, 2001, the Company  experienced  revenues
of approximately  $428,000 as compared to approximately  $1,716,000 for the year
ended December 31, 2000.

     The Company experienced costs of goods sold of approximately $1,629,000 and
$2,026,000  for the years ended  December 31, 2001 and 2000,  respectively.  The
Company  experiences  variable  costs in the area of  material  consumption  and
direct  labor.  The Company has  recognized  depreciation  expense on production
equipment of  approximately  $629,000 and $617,000,  respectively,  in the above
cost of goods expense  totals.  These  depreciation  levels are  anticipated  to
remain fairly  constant for future  periods  unless the Company is successful in
its plans to expand production.

     Due to the lack of  liquidity,  the  Company  has been  unable to reach its
break-even  point.  This  situation  has  generated a negative  gross  profit of
approximately  ($1,201,000),  or (280.97%) for the year ended  December 31, 2001
and approximately  ($310,000),  or (18.07%).  The Company  anticipates that with
adequate  liquidity,  it will be able to generate a positive gross profit during
Calendar 2002.

                                       14

<PAGE>



     The  Company  experiences  relatively  consistent  expenditure  levels  for
executive and  administrative  compensation,  interest  expense and depreciation
expense. The Company renegotiated its working capital note payable in June 2001.
This note bears  interest at the Wall Street Journal  published  prime rate plus
2.0%.  The new note has payment  terms as follows:  For the first year  (through
June 28, 2002), interest only, payable monthly. Thereafter, starting on July 28,
2002,  equal monthly  payments of principal and interest shall be due until June
28, 2007 which payments shall  represent the amount  necessary to fully amortize
the  remaining  principal  balance of the note.  The monthly  payments  shall be
recalculated at the time of any change in the applicable interest rate. The note
is secured by  virtually  all of the  Company's  real and personal  property.  A
portion  of the  proceeds  from  the  financing  were  used to pay the  $550,000
required in the Settlement and Compromise  Agreement.  Accordingly,  the Company
anticipates  relatively stable interest expense,  or declining levels, in future
periods depending on expansion and additional equipment financing  requirements.
The Company does not anticipate the addition of significant  additions to office
and administrative personnel.

     The Company  experienced  nominal research and development  expenses during
2001 related to the  development of a new  patent-pending  projectile for use in
ammunition   specifically  for  the  public  safety  and  security  marketplace,
especially in the rapidly expanding U. S. Air Marshall program.

     Due to the lack of liquidity  in 2001 and prior years,  the Company has not
developed an extensive marketing effort. Accordingly,  expenditures in this area
have been nominal. Due to improved liquidity during the last 1/2 of 2001 and for
future  periods,  the Company  anticipates,  as internally  generated  funds are
available, to increase its marketing efforts to boost sales.

     Other general and  administrative  expenses  increased  from  approximately
$87,000 during Calendar 2000 to approximately $535,000 during Calendar 2001. The
majority of this  increase  was a result of  professional  and  consulting  fees
related to the Company's reverse acquisition  transaction in September 2001, and
includes  approximately  $415,000  for  non-cash  charges  related  to fees  and
services charged to operations which were paid with common stock.

     The Company  also  experienced  non-cash  income  (charges)  to  operations
resulting from a one-time gain of  approximately  $755,000 for the settlement of
the litigation with its former lending institution and approximately  ($392,000)
in amortization of a beneficial  conversion  feature discount on preferred stock
with an equivalent post-conversion common stock price at an amount less than the
quoted closing market price of the Company's common stock as of the sale date of
the underlying convertible preferred stock.

     The  Company  recognized  a net  loss  of  approximately  $(2,212,000)  and
$(1,216,000)  for the years ended December 31, 2001 and 2000,  respectively,  or
$(0.08) and $(0.05) per share.



                                       15

<PAGE>


Year ended December 31, 2000 compared to Year ended December 31, 1999

     During  Calendar 2000, the Company began to incur  liquidity  problems as a
result of actions taken by its-then  lending  institution.  The actions taken by
the lending institution led to litigation being filed by the Company against the
lending  institution.  The  result of these  problems  was  responsible  for the
Company's revenues  declining from approximately  $2,914,000 in Calendar 1999 to
approximately $1,716,000 Calendar 2000.

     The Company experienced costs of goods sold of approximately $2,026,000 and
$2,780,000  for the years ended  December 31, 2000 and 1999,  respectively.  The
Company  experiences  variable  costs in the area of  material  consumption  and
direct  labor.  The Company has  recognized  depreciation  expense on production
equipment of  approximately  $617,000 and $591,000,  respectively,  in the above
cost of goods expense  totals.  These  depreciation  levels are  anticipated  to
remain fairly  constant for future  periods  unless the Company is successful in
its plans to expand production.

     Due to the lack of  liquidity,  the  Company  has been  unable to reach its
break-even  point.  This  situation  has  generated a negative  gross  profit of
approximately  $(310,000),  or (18.07%) for the year ended December 31, 2001 and
approximately $106,000, or 3.64%.

     The  Company  experiences  relatively  consistent  expenditure  levels  for
executive and  administrative  compensation,  interest  expense and depreciation
expense.  Interest  expense  during  Calendar 1999 and 2000,  respectively,  was
related to various  long-term  capital  leases for  equipment  and various  debt
instruments  which  were  cancelled  in June 2001 as a result of  aforementioned
litigation.  The  Company  does  not  anticipate  the  addition  of  significant
additions to office and administrative personnel.

     Due to the lack of liquidity  in 2001 and prior years,  the Company has not
developed an extensive marketing effort. Accordingly,  expenditures in this area
have been nominal.  Other general and  administrative  expenses  declined during
Calendar  2000 from  approximately  $237,000 in Calendar  1999 to  approximately
$87,000 during Calendar 2000.

     The  Company  recognized  a net  loss  of  approximately  $(1,216,000)  and
$(862,000)  for the years ended  December  31, 2001 and 2000,  respectively,  or
$(0.05) and $(0.03) per share.


(d)  Liquidity and Capital Resources

     As of  December  31,  2001,  2000 and 1999,  respectively,  the Company had
working capital of approximately  $341,000,  $(8,877,760) and $(7,956,000).  The
Company's working capital position improved  significantly in Calendar 2001 with
the  settlement  of  litigation  involving  its  outstanding  debt  to  its-then
financial  institution and the concurrent  restructuring of working capital debt
into a long-term instrument.

     The  Company  has  generated   (used)  cash  in  operating   activities  of
approximately $(1,100,000), $18,000 and $405,000 during the years ended December
31, 2001, 2000 and 1999. The cash used in operating  activities  during 2001 was
offset with cash received in the sale of Class A Convertible  Preferred Stock or
Common  Stock.  The Company  anticipates  that its improved  liquidity  position
during  the last half of  Calendar  2001  will  allow for  improved  sales  and,
accordingly, improved liquidity in future periods.

                                       16

<PAGE>





     The  Company  has  plans  to  increase  its  production  capability  in the
immediate  future  by 50% to 100%.  Accordingly,  this  expansion  will  require
additional capital which is anticipated to be raised in various  combinations of
capital leases, bank debt and/or equity offerings. At this time, the Company has
no definitive  budgets or timetables for such expansion and this  expansion,  if
any, will be dependent upon market demand for the Company's products. Management
is of the opinion that  sufficient  demand will be present,  as supported by new
product  development and increased  product marketing  efforts,  to justify this
expansion.  However,  there can be no assurance that the Company will be able to
obtain additional funding or, that such funding, if available,  will be obtained
on terms favorable to or affordable by the Company.

(e)  Product Research and Development

     The Company  believes that research and  development  activities will allow
for the  development  and  introduction  of new  products  into  the  ammunition
marketplace.   Over  the  next  12  calendar  months,  the  Company  anticipates
completing the design,  development and  introduction of its new  patent-pending
projectile for use in ammunition specifically for the public safety and security
marketplace,  especially  in the rapidly  expanding U. S. Air Marshall  program.
Management  also believes that this  projectile will have wide acceptance in the
home security and sport hunting markets.

     Further, additional ammunition calibers and/or projectiles may be developed
by the Company depending upon market research,  acceptance in the marketplace of
existing  products  and  production  capabilities.  At this  time,  there are no
definitive  plans for the further  introduction  of other new products  into the
marketplace.


Item 7. Financial Statements

     The required  consolidated  financial  statements begin on page F-1 of this
document.



                                       17

<PAGE>


                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

                        Consolidated Financial Statements
                                       and
                          Independent Auditor's Report
                           December 31, 2001 and 2000










\




                               S. W. HATFIELD, CPA
                          certified public accountants

                      Use our past to assist your future sm




<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

                                    CONTENTS

<TABLE>
<S>                                                                                       <C>
                                                                                          Page

Report of Independent Certified Public Accountants                                         F-2

Consolidated Financial Statements

   Consolidated Balance Sheets
     as of December 31, 2001 and 2000 (post-acquisition)
     and December 31, 2000 (pre-acquisition)                                               F-3

   Consolidated Statement of Operations and Comprehensive Loss
     for the years ended December 31 2001 and 2000 (post-acquisition) and
     the period from February 1, 2000 (date of incorporation) through
     December 31, 2000 (pre-acquisition)                                                   F-5

   Consolidated Statement of Changes in Stockholders' Equity
     for the years ended December 31, 2001 and 2000 (post-acquisition) and
     the period from February 1, 2000 (date of incorporation) through
     December 31, 2000 (pre-acquisition)                                                   F-6

   Consolidated Statement of Cash Flows
     for the years ended December 31, 2001 and 2000 (post-acquisition) and
     the period from February 1, 2000 (date of incorporation) through
     December 31, 2000 (pre-acquisition)                                                   F-8

   Notes to Consolidated Financial Statements                                             F-10
</TABLE>








<PAGE>


S. W. HATFIELD, CPA
certified public accountants

Member:    Texas Society of Certified Public Accountants
           Press Club of Dallas


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
American Ammunition, Inc.
   (formerly FBI Fresh Burgers International)

We have  audited  the  accompanying  consolidated  balance  sheets  of  American
Ammunition,  Inc.  (formerly  FBI Fresh  Burgers  International)  (a  California
corporation)  as of December 31, 2001 and 2000  (post-acquisition)  and December
31, 2000 (pre-acquisition) and the related consolidated statements of operations
and comprehensive loss, changes in stockholders'  equity and cash flows for each
of the two years ended  December 31, 2001 and 2000 (post-  acquisition)  and the
period from February 1, 2000 (date of  incorporation)  through December 31, 2000
(pre-   acquisition).   These   consolidated   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall consolidated financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of American Ammunition,
Inc. (formerly FBI Fresh Burgers International, Inc) as of December 31, 2001 and
2000  (post-acquisition) and December 31, 2000 (pre-acquisition) and the related
consolidated statements of operations,  changes in stockholders' equity and cash
flows  for  each  of  the  two  years   ended   December   31,   2001  and  2000
(post-acquisition)   and  for  the  period  from   February  1,  2000  (date  of
incorporation) through December 31, 2000  (pre-acquisition),  in conformity with
generally accepted accounting principles generally accepted in the United States
of America.



                                                       S. W. HATFIELD, CPA
Dallas, Texas
March 12, 2002

                      Use our past to assist your future sm
(secure mailing address)                   (overnight delivery/shipping address)
P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      SWHCPA@aol.com

                                       F-2

<PAGE>


<TABLE>
<CAPTION>
                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2001 and 2000

                                                            (post-acquisition)(post-acquisition)(pre-acquisition)
                                                               December 31,     December 31,     December 31,
                                                                 2001              2000              2000
                                                            -----------------------------------------------------
<S>                                                               <C>           <C>              <C>
         ASSETS
Current Assets
   Cash on hand and in bank                                       $   596,419   $          858   $          -
   Accounts receivable - trade, net of
     factored accounts of approximately
     $-0- and $10,070 and allowance for
     doubtful accounts of $-0- and $-0-, respectively                       -           60,415              -
   Inventory                                                          314,741          333,410              -
   Prepaid expenses                                                     9,458                -              -
                                                                  ------------  --------------   ------------

     Total Current Assets                                             920,618          394,683              -
                                                                  ------------  --------------   ------------


Property and Equipment - at cost or contributed value
   Manufacturing equipment                                         6,470,064         6,365,802              -
   Office furniture and fixtures                                     50,856             49,699              -
   Leasehold improvements                                            182,052           181,814              -
                                                                  ------------  --------------   ------------
                                                                   6,702,972         6,597,315              -
   Accumulated depreciation                                       (2,737,717)       (2,097,881)             -
                                                                  ------------  --------------   ------------

     Net Property and Equipment                                    3,965,255         4,499,434              -
                                                                  ------------  --------------   ------------


Other Assets
   Loan costs, net of accumulated amortization of
     approximately $69,334, $23,778 and $-0-, respectively                 -            45,556              -
   Investment in acquisition candidate                                     -                 -         21,000
   Deposits and other                                                 74,310            59,712              -
                                                                  ------------  --------------   ------------

     Total Other Assets                                               74,310           105,268         21,000
                                                                  ------------  --------------   ------------

TOTAL ASSETS                                                      $ 4,960,183   $    4,999,385   $     21,000
                                                                  ============  ==============   ============
</TABLE>




                                  - Continued -





                                                                             F-3

<PAGE>


<TABLE>
<CAPTION>
                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)
                     CONSOLIDATED BALANCE SHEETS - CONTINUED
                           December 31, 2001 and 2000

                                                            (post-acquisition)(post-acquisition)(pre-acquisition)
                                                               December 31,     December 31,     December 31,
                                                                 2001              2000              2000
                                                            -----------------------------------------------------
<S>                                                               <C>           <C>              <C>
      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Cash overdraft                                                 $          -  $       73,234   $          -
   Notes payable to a bank                                                   -       1,143,381              -
   Current maturities of leases payable                                  8,365          28,409              -
   Accounts payable - trade                                            461,902         684,674              -
   Accrued excise taxes payable                                          8,641          27,380              -
   Accrued interest payable                                              1,000       3,308,038              -
   Note payable to stockholder                                         100,000       4,007,327              -
                                                                  ------------  --------------   ------------
     Total Current Liabilities                                         579,908       9,272,443              -

Long-Term Liabilities
   Note payable to a bank                                              950,000               -              -
   Capital leases payable                                               17,348          79,875              -
                                                                  ------------  --------------   ------------

     Total Liabilities                                               1,547,256       9,352,318              -
                                                                  ------------  --------------   ------------


Commitments and Contingencies


Mandatory Convertible Preferred Stock
   45,600 shares issued and outstanding                                228,000               -              -
                                                                  ------------  --------------   ------------


Stockholders' Equity
   Preferred stock - $0.001 par value
     20,000,000 shares authorized.
     1,795,320 shares allocated to Series A                                  -               -              -
   Common stock - $0.001 par value.
     300,000,000 shares authorized.
     49,975,614, 26,850,000 and 26,850,000
     shares issued and outstanding                                      49,976          26,850         26,850
   Additional paid-in capital                                       14,700,771       4,974,150         (3,900)
   Accumulated deficit                                             (11,565,820)     (9,353,933)        (1,950)
                                                                  ------------  --------------   ------------

   Total Stockholders' Equity                                        3,184,927      (4,352,933)        21,000
                                                                  ------------  --------------   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $  4,960,183  $    4,999,385   $     21,000
                                                                  ============  ==============   ============
</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                                                             F-4

<PAGE>


<TABLE>
<CAPTION>
                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
            Years ended December 31, 2001 and 2000 (post-acquisition)
            and Period from February 1, 2000 (date of incorporation)
                  through December 31, 2000 (pre-acquisition)

                                                           (post-acquisition)  (post-acquisition) (pre-acquisition)
                                                                                                      Period from
                                                                                                   February 1, 2000
                                                               Year ended          Year ended         through
                                                               December 31,        December 31,      December 31,
                                                                2001               2000              2000
                                                             -------------------------------------------------------
<S>                                                          <C>                <C>                 <C>
Revenues                                                     $        427,529   $      1,715,885    $              -
                                                             ----------------   ----------------    ----------------

Cost of Sales
   Materials                                                          357,399          1,158,662                   -
   Direct Labor                                                       260,012            210,707                   -
   Other direct costs and expenses                                    382,407             39,633                   -
   Depreciation                                                       628,925            616,982                   -
                                                             ----------------   ----------------    ----------------
     Total Cost of Sales                                            1,628,743          2,025,984                   -
                                                             ----------------   ----------------    ----------------

Gross Profit                                                       (1,201,214)          (310,099)                  -
                                                             ----------------   ----------------    ----------------

Operating Expenses
   Research and development expenses                                    3,963                  -                   -
   Marketing and promotion expenses                                     4,043              4,609                   -
   Salaries, wages and related expenses                               365,079            363,265                   -
   Other operating expenses                                           535,450             86,901               1,950
   Interest expense                                                   453,943            438,226
   Depreciation expense                                                10,911             12,769                   -
                                                             ----------------   ----------------    ----------------
     Total Operating Expenses                                       1,373,389            905,770               1,950
                                                             ----------------   ----------------    ----------------

Loss from Operations                                               (2,574,603)        (1,215,869)            (1,950)

Other Income (Expense)
   Settlement of litigation                                           754,830                  -                   -
   Amortization of Beneficial Conversion
     Feature Discount on Preferred Stock                             (392,114)                 -                   -
                                                             ----------------   ----------------    ----------------

Loss before Income Taxes                                           (2,211,887)        (1,215,869)             (1,950)

Provision for Income Taxes                                                  -                  -                   -
                                                             ----------------   ----------------    ----------------

Net Loss                                                           (2,211,887)        (1,215,869)             (1,950)

Other Comprehensive Income                                                  -                  -                   -
                                                             ----------------   ----------------    ----------------

Comprehensive Loss                                           $     (2,211,887)  $     (1,215,869)   $         (1,950)
                                                             ================   ================    ================

Loss per weighted-average share of common
   stock outstanding, computed on net loss -
   basic and fully diluted                                   $          (0.08)  $          (0.05)                nil
                                                             ================   ================    ================
Weighted-average number of
   common shares outstanding                                       28,019,722         26,850,000           5,850,000
                                                             ================   ================    ================
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                                                             F-5

<PAGE>


<TABLE>
<CAPTION>
                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
            Years ended December 31, 2001 and 2000 (post-acquisition)
            and Period from February 1, 2000 (date of incorporation)
                  through December 31, 2000 (pre-acquisition)

                                                Mandatory Convertible
                                                    Preferred Stock       Common Stock       Additional
                                                ---------------------  -------------------    paid-in    Accumulated
                                                  Shares     Amount      Shares      Amount   capital      deficit         Total
                                               -------------------------------------------------------------------------------------
<S>                                            <C>           <C>      <C>         <C>        <C>          <C>          <C>
Stock issued to founders
   at formation                                        -     $     -   1,810,000  $  1,810   $        -   $        -   $      1,810
   Effect of 3 for 1 forward split                     -           -   3,620,000     3,620       (3,620)           -              -

Stock issued for services                              -           -     140,000       140            -            -            140
   Effect of 3 for 1 forward split                     -           -     280,000       280         (280)           -              -

Issuance of common stock for acquisition
   of subsidiary                                       -           -  21,000,000    21,000            -            -         21,000

Net loss for the year (pre-acquisition)                -           -           -         -            -       (1,950)        (1,950)
                                               ----------   -------- ----------- ---------  -----------  ------------ --------------

Balances at December 31, 2000
   (pre-acquisition)                                   -           -  26,850,000    26,850       (3,900)      (1,950)        21,000

Recapitalization due
   to reverse merger with
   F&F Equipment, Inc.                                 -           -           -         -    4,978,050   (8,136,114)    (3,158,064)

Net loss for the year (post-acquisition)               -           -           -         -            -   (1,215,869)    (1,215,869)
                                               ----------   -------- ----------- ---------  -----------  ------------ --------------

Balances at December 31, 2000
   (post-acquisition)                                  -    $      -  26,850,000 $  26,850  $ 4,974,150  $(9,353,933) $  (4,352,933)
                                               ==========   ======== =========== =========  ===========  ============ ==============
</TABLE>




                                  - Continued -



                                                                             F-6

<PAGE>


<TABLE>
<CAPTION>
                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
            Years ended December 31, 2001 and 2000 (post-acquisition)
            and Period from February 1, 2000 (date of incorporation)
                  through December 31, 2000 (pre-acquisition)

                                                Mandatory Convertible
                                                    Preferred Stock       Common Stock       Additional
                                                ---------------------  -------------------    paid-in    Accumulated
                                                  Shares     Amount      Shares      Amount   capital      deficit         Total
                                               -------------------------------------------------------------------------------------
<S>                                            <C>          <C>      <C>         <C>        <C>          <C>          <C>
Balances at December 31, 2000
   (post-acquisition)                                  -    $      -  26,850,000 $  26,850  $ 4,974,150  $ (9,353,933) $ (4,352,933)

Issuance of common stock for
   Consulting fees - pre-acquisition                   -           -     124,400       125      124,275             -       124,400
     Recapitalization due to reverse
     merger with F&F Equipment, Inc.                   -           -           -         -     (124,400)            -      (124,400)
   Consulting fees - post-acquisition                  -           -     916,000       916      413,160             -       414,076
     Effect of 3 for 1 forward split
     on cumulative consulting fees                     -           -   2,080,800     2,081       (2,081)            -             -
   Cash                                                -           -     222,222       222       99,778             -       100,000
   Settlement of accounts payable                      -           -     535,272       535      240,337             -       240,872

Private placement of Preferred Stock             284,600   1,423,000           -         -            -             -             -
   Less costs of raising capital                       -           -           -         -     (144,915)            -      (144,915)
   Beneficial Conversion Feature
     Discount on Preferred Stock                       -           -           -         -    1,207,993             -     1,207,993

Conversion of shareholder debt and
   accrued interest into Preferred Stock       1,510,720   7,553,600           -         -            -             -             -

Conversion of Preferred Stock to
   Common Stock                               (1,749,720) (8,748,600) 19,246,920    19,247    8,729,353             -     8,748,600
   Adjustment of the unamortized
     balance of Beneficial Conversion
     Feature Discount as a result
     of the exercise of conversion                     -           -           -         -     (816,879)            -      (816,879)

Net loss for the year (post-acquisition)               -           -           -         -            -    (2,211,887)   (2,211,887)
                                               ----------   --------- ---------- ---------  -----------  ------------ --------------

Balances at December 31, 2001
   (post-acquisition)                              45,600   $ 228,000 49,975,614 $  49,976  $14,700,771  $(11,565,820)$   3,184,927
                                               ==========   ========= ========== =========  ===========  ============ ==============
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                                                             F-7

<PAGE>


<TABLE>
<CAPTION>
                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          Years ended December 31, 2001 and 2000 (post-acquisition) and
              Period from February 1, 2000 (date of incorporation)
                  through December 31, 2000 (pre-acquisition)

                                                           (post-acquisition)  (post-acquisition) (pre-acquisition)
                                                                                                      Period from
                                                                                                   February 1, 2000
                                                               Year ended          Year ended         through
                                                               December 31,        December 31,      December 31,
                                                                2001               2000              2000
                                                             -------------------------------------------------------
<S>                                                          <C>                <C>                 <C>
Cash flows from operating activities
   Net loss for the year                                     $  (2,211,887)     $  (1,215,869)      $    (1,950)
   Adjustments to reconcile net loss to net
     cash provided by operating activities
       Depreciation and amortization                               639,836            638,398                 -
       Gain on litigation settlement                              (754,830)                -                  -
       Common stock issued for fees and services                   540,534                 -              1,950
       Accrued interest converted to preferred stock               240,440                 -                  -
       Amortization of conversion discount
         on preferred stock                                        392,114                 -                  -
       (Increase) Decrease in
         Accounts receivable                                        60,415            86,488                  -
         Inventory                                                  18,669           (49,725)                 -
         Prepaid expenses, deposits and other                      (24,056)          (50,457)                 -
       Increase (Decrease) in
         Accounts payable - trade                                   18,100           335,427                  -
         Interest payable                                           (1,000)          320,586                  -
         Excise taxes payable                                      (18,739)          (47,240)                 -
                                                             --------------     --------------      -------------
Net cash provided by (used in) operating activities             (1,100,404)           17,608                  -
                                                             --------------     --------------      -------------

Cash flows from investing activities
   Purchase of property and equipment                             (105,657)         (265,268)                 -
                                                             --------------     --------------      -------------
Net cash used in investing activities                             (105,657)         (265,268)                 -
                                                             --------------     --------------      -------------

Cash flows from financing activities
   Increase in cash overdraft                                        7,760            73,234                  -
   Cash received (paid) on short term loans - net                 (451,652)          (14,583)                 -
   Cash received on long-term loans                                950,000                 -                  -
   Principal paid on long-term loans                                     -           (42,841)                 -
   Principal paid on long-term capital leases                      (82,571)          (24,749)                 -
   Cash received on sale of Mandatory
     Convertible Preferred Stock                                 1,423,000                 -                  -
   Cash received on sale of common stock                           100,000                 -                  -
   Cash paid to acquire capital                                   (144,915)                -                  -
                                                             --------------     --------------      --------------
Net cash provided by financing activities                        1,801,622            (8,939)                 -
                                                             --------------     --------------      --------------

INCREASE (DECREASE) IN CASH                                        595,561          (256,599)                 -

Cash at beginning of year                                              858           256,457                  -
                                                             --------------     --------------      --------------

Cash at end of year                                          $     596,419      $        858        $         -
                                                             ==============     ==============      ==============
</TABLE>

                                  - Continued -



                                                                             F-8

<PAGE>



<TABLE>
<CAPTION>
                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          Years ended December 31, 2001 and 2000 (post-acquisition) and
              Period from February 1, 2000 (date of incorporation)
                  through December 31, 2000 (pre-acquisition)


                                                           (post-acquisition)  (post-acquisition) (pre-acquisition)
                                                                                                      Period from
                                                                                                   February 1, 2000
                                                               Year ended          Year ended         through
                                                               December 31,        December 31,      December 31,
                                                                2001               2000              2000
                                                             -------------------------------------------------------
<S>                                                          <C>                <C>                 <C>
Supplemental disclosure of interest
   and income taxes paid
     Interest paid for the period                            $        214,503   $        108,993    $              -
                                                             ================   ================    ================
     Income taxes paid for the period                        $              -   $            -      $              -
                                                             ================   ================    ================

Supplemental disclosure of non-cash
   investing and financing activities
     Conversion of debt and accrued interest
       payable to a shareholder into preferred stock         $      7,553,600   $              -    $              -
                                                             ================   ================    ================
     Payment of accounts payable with
       issuance of common stock                              $        240,872   $              -    $              -
                                                             ================   ================    ================
</TABLE>




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                                                             F-9

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note A - Organization and Description of Business

American Ammunition,  Inc. (AAI or Company) was incorporated on February 1, 2000
in the State of California as  FirsTelevision.com.  AAI subsequently changed its
corporate  name to FBI  Fresh  Burgers  International  with a  business  plan of
marketing the concept of a national "fast food" restaurant chain to children and
young adults, with a menu of fresh burgers, fries and sandwiches. However, there
was no assurance that this business concept would be successful.

On September 29, 2001, the Company, F&F Equipment, Inc. (F&F) and the individual
shareholders of F&F entered into an "Agreement For The Exchange Of Common Stock"
(Exchange  Agreement)  whereby the  shareholders of F&F exchanged  100.0% of the
issued and outstanding stock of F&F for 21,000,000  post-forward split shares of
restricted,  unregistered common stock of the Company. F&F Equipment,  Inc. then
became a wholly-owned subsidiary of the Company.

The  acquisition of F&F  Equipment,  Inc., on September 29, 2001, by the Company
effected a change in control and was  accounted  for as a "reverse  acquisition"
whereby F&F Equipment,  Inc. is the accounting  acquiror for financial statement
purposes.  Accordingly,  for all periods  subsequent  to the  September 29, 2001
change in control  transaction,  the financial statements of the Company reflect
the historical financial statements of F&F Equipment, Inc. from its inception on
October 4, 1983 and the  operations  of the Company  subsequent to September 29,
2001.

Concurrent  with the September  29, 2001 reverse  acquisition  transaction,  the
Company  amended its Articles of  Incorporation  to change the Company's name to
American Ammunition,  Inc. and modified the Company's capital structure to allow
for  the  issuance  of up to  320,000,000  total  equity  shares  consisting  of
20,000,000  shares of preferred  stock and  300,000,000  shares of common stock.
Both classes of stock have a par value of $0.001 per share.

On October 9, 2001,  the Company  effected a three (3) for one (1) forward stock
split.  This action  caused the then issued and  outstanding  shares to increase
from  2,990,400 to  8,971,200  on the action date.  The effect of this action is
reflected in the  accompanying  financial  statements as of the first day of the
first period presented.

F&F Equipment,  Inc.(Company) was incorporated on October 4, 1983 under the laws
of the State of Florida.  The Company  was formed to engage  principally  in the
"import,  export,  retail & wholesale of firearms equipment,  ammunition & other
devices and for the purpose of transacting any and/or all lawful  business." The
Company  conducts  its business  operations  under the assumed name of "American
Ammunition".

The  Company  and its  subsidiary  have a year-end  of  December  31 and use the
accrual method of accounting.

The  accompanying  consolidated  financial  statements  contain the  accounts of
American  Ammunition,  Inc.  (formerly FBI Fresh Burgers  International) and its
wholly-owned  subsidiary,  F&F  Equipment,  Inc.  All  significant  intercompany
transactions  have been eliminated.  The consolidated  entities are collectively
referred to as "Company".

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.



                                                                            F-10

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note B - Summary of Significant Accounting Policies

1.   Cash and cash equivalents

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  including  accounts  in  book  overdraft  positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.

     Cash  overdraft  positions may occur from time to time due to the timing of
     making bank deposits and releasing checks, in accordance with the Company's
     cash management policies.

2.   Accounts receivable

     In the normal course of business,  the Company extends  unsecured credit to
     virtually  all of its  customers  which are located  throughout  the United
     States.  Because of the credit risk  involved,  management  has provided an
     allowance for doubtful accounts which reflects its opinion of amounts which
     will   eventually   become   uncollectible.   In  the  event  of   complete
     non-performance, the maximum exposure to the Company is the recorded amount
     of trade  accounts  receivable  shown on the  balance  sheet at the date of
     non-performance.

3.   Inventory

     Inventory  consists of raw  materials,  work-in-process  and finished goods
     related to the production and sale of small arms  ammunition.  Inventory is
     valued at the lower of cost or market using the first-in, first-out method.

4.   Property, plant and equipment

     Property and  equipment are recorded at  historical  cost.  These costs are
     depreciated over the estimated useful lives of the individual  assets using
     the straight-line method, generally three to ten years.

     Gains and losses from  disposition of property and equipment are recognized
     as incurred and are included in operations.

5    Loan costs

     Amounts paid for  origination  fees related to loans  payable are amortized
     over the scheduled maturity of the corresponding debt.

6.   Income Taxes

     The Company uses the asset and liability  method of  accounting  for income
     taxes.  At December 31, 2001 and 2000,  the deferred tax asset and deferred
     tax  liability  accounts,  as  recorded  when  material  to  the  financial
     statements,  are entirely the result of  temporary  differences.  Temporary
     differences   represent  differences  in  the  recognition  of  assets  and
     liabilities for tax and financial reporting purposes, primarily accumulated
     depreciation and amortization, allowance for doubtful accounts and vacation
     accruals.

     As of December 31, 2001 and 2000,  the  deferred  tax asset  related to the
     Company's net  operating  loss  carryforward  is fully  reserved.  If these
     carryforwards are not utilized, they will begin to expire in 2005.

                                                                            F-11

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note B - Summary of Significant Accounting Policies - Continued

7.   Earnings (loss) per share

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance, whichever is later. As of December 31, 2001 and 2000, the Company
     had no warrants and/or options outstanding.

8.   Advertising

     The Company does not conduct any direct  response  advertising  activities.
     For non-direct response advertising, the Company charges the costs of these
     efforts  to  operations  at the  first  time  the  related  advertising  is
     published.

Note C - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Note D - Inventory

As of  December  31,  2001  and  2000,  inventory  consisted  of  the  following
components:

<TABLE>
<CAPTION>
                        (post-acquisition) (post-acquisition) (pre-acquisition)
                           December 31,       December 31,       December 31,
                               2001               2000              2000
                        -------------------------------------------------------
<S>                       <C>                <C>                   <C>
Raw materials             $  82,454          $  109,467            $     -
Work in process             197,704             196,935                  -
Finished goods               34,583              27,008                  -
                          ---------          ----------            --------

Totals                    $ 314,741          $  333,410            $     -
                          =========          ==========            ========
</TABLE>



                (Remainder of this page left blank intentionally)



                                                                            F-12

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note E - Property and Equipment

Property and equipment consist of the following components:

<TABLE>
<CAPTION>
                                         (post-acquisition)(post-acquisition)
                                            December 31,     December 31,       Estimated
                                                2001              2000          useful life
                                          --------------------------------------------------
<S>                                         <C>                 <C>             <C>
   Manufacturing equipment                  $6,470,064          $6,365,802      10 years
   Office furniture and fixtures                50,856              49,699       7 years
   Leasehold improvements                      182,052             181,814      20 years
                                             ---------           ---------
                                             6,702,972           6,597,315
   Accumulated depreciation                 (2,737,717)         (2,097,881)
                                             ---------           ---------

   Net property and equipment               $3,965,255          $4,499,434
                                             =========           =========
</TABLE>

Total  depreciation  expense  charged to operations for the years ended December
31, 2001 and 2000 was approximately $639,836 and $629,751, respectively.

Included in the amounts  reflected  in the  accompanying  balance  sheet are the
following fixed assets on long-term capital leases:

<TABLE>
<CAPTION>
                                                 (post-acquisition)  (post-acquisition)
                                                    December 31,       December 31,
                                                        2001               2000
                                                  --------------------------------
<S>                                                  <C>                   <C>
     Manufacturing and processing equipment          $153,400              $153,400
     Less accumulated depreciation                    (39,179)              (23,839)
                                                      --------              --------

                                                     $114,221              $129,561
                                                      =======               =======
</TABLE>


Note F - Notes payable to a Bank

Notes  payable to a Bank consist of the following at December 31, 2001 and 2000,
respectively:

<TABLE>
<CAPTION>
                                                                         (post-acquisition)  (post-acquisition)
                                                                            December 31,         December 31,
                                                                                2001                 2000
                                                                          -------------------------------------
<S>                                                                        <C>                 <C>
$200,000 line of credit  payable to a bank.  Interest at the
Bank's prime rate plus 1.50% or 2.00%, respectively.  (11.00
% at December 31, 2000). Interest payable monthly.  Advances
and  accrued,  but unpaid,  interest  mature on the 60th day
following funding. Agreement is renegotiable annually on the
anniversary   date  in  November  of  each  calendar   year.
Collateralized  by all accounts  receivable,  inventory  and
fixed assets of the Company and the personal guaranty of the
Company's President.                                                       $            -      $     200,000
</TABLE>


                                                                            F-13

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note F - Notes payable to a Bank - Continued

Notes payable to a Bank consist of the following at December 31, 2001 and 2000,
respectively:

<TABLE>
<CAPTION>
                                                                         (post-acquisition)  (post-acquisition)
                                                                            December 31,         December 31,
                                                                                2001                 2000
                                                                          -------------------------------------
<S>                                                                        <C>                 <C>

$250,000 installment note payable to a bank. Interest at the
Wall Street Journal  published  prime rate plus 2.0% (11.00%
at December 31, 2000).  Payable in monthly  installments  of
approximately  $2,083, plus accrued interest.  Final payment
due  in  December  2009.   Collateralized  by  all  accounts
receivable,  inventory and fixed assets of the Company,  the
personal guaranty of the Company's  President and a mortgage
on  the  Company's   corporate   offices  and  manufacturing
facility owned by the Company's stockholder.                                            -            235,417

$738,090 (originally $1,000,000) installment note payable to
a bank.  Interest at the Wall Street Journal published prime
rate plus 2.50%  (11.0% at December  31,  2000).  Payable in
monthly  installments of approximately  $7,530, plus accrued
interest. Final payment due in March 2008. Collateralized by
all accounts  receivable,  inventory and fixed assets of the
Company  and  the   personal   guaranty  of  the   Company's
President.                                                                              -            707,964
                                                                             -------------     --------------

   Total notes payable to a bank                                            $           -      $   1,200,805
                                                                             =============     ===============
</TABLE>


As of  December  31,  2000,  the  Company was  operating  under a bank  approved
moratorium  on the payment of principal  and interest on all of the above listed
notes payable.  During 2001, the Company and its President commenced  litigation
against the lending institution and , on June 29, 2001, the Company and the Bank
executed a Settlement  and Compromise  Agreement  whereby all loans and debts of
the Company to the Bank were settled and  cancelled  for a one-time cash payment
of  $550,000.  Accordingly,  due  to the  circumstances  surrounding  the  final
settlement and retirement of these loans,  they were  classified as "current" on
December 31, 2000 in the accompanying consolidated balance sheets. The source of
funds for the  $550,000  settlement  came from a new  $950,000  note  payable to
another financial institution.

As a result of this  settlement,  the Company  recognized a one-time gain on the
settlement of approximately $754,830.




                                                                            F-14

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note G - Capital Leases Payable

Capital  leases  payable  consist of the  following  as of December 31, 2001 and
2000, respectively:

<TABLE>
<CAPTION>
                                                                         (post-acquisition)  (post-acquisition)
                                                                            December 31,         December 31,
                                                                                2001                 2000
                                                                          -------------------------------------
<S>                                                                        <C>                 <C>

Three  and six  capital  leases,  respectively,  payable  to
various equipment financing companies. Interest, at December
31,  2001,  ranging  between  11.37% and 14.05%.  Payable in
aggregate  monthly   installments  of  approximately   $935,
including accrued  interest,  as of December 31, 2001. Final
maturities  occur between  September 2004 and December 2004.
Collateralized    the   underlying   leased    manufacturing
equipment.                                                                 $       25,713      $     108,284

     Less current maturities                                                       (8,365)           (28,409)
                                                                             -------------     --------------

     Long-term portion                                                     $       17,348      $      79,875
                                                                             =============     ==============
</TABLE>

Future maturities of capital leases payable are as follows:

                              Year ending
                              December 31      Amount
                              ------------------------

                              2002           $ 8,365
                              2003             9,507
                              2004             7,841
                                              ------

                              Totals         $25,713
                                              ======


Note H - Loan payable to Stockholder

<TABLE>
<CAPTION>
                                                                         (post-acquisition)  (post-acquisition)
                                                                            December 31,         December 31,
                                                                                2001                 2000
                                                                          -------------------------------------
<S>                                                                        <C>                 <C>

$4,007,327  note  payable  to  the  Company's   stockholder.
Interest at 8.0%.  Principal and accrued interest payable at
maturity. Maturity at December 31 annually and automatically
renews for an equivalent  annual period unless called by the
Stockholder  at least 90 days prior to maturity.  Unsecured.
Converted to preferred stock during 2001.

                                                                            $           -      $  4,007,327
                                                                             =============     ==============
</TABLE>



                                                                            F-15

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note I - Long-Term Debt Payable to a Bank

On June 28,  2001,  in  anticipation  of the  settlement  of  litigation  with a
financial  institution,  the Company  executed a new  $950,000  note  payable to
another financial  institution.  This new note bears interest at the Wall Street
Journal  published  prime  rate plus  2.0%.  The new note has  payment  terms as
follows:  For the first year  (through June 28, 2002),  interest  only,  payable
monthly.  Thereafter,  starting  on July 28,  2002,  equal  monthly  payments of
principal  and interest  shall be due until June 28, 2007 which  payments  shall
represent the amount necessary to fully amortize the remaining principal balance
of the note.  The  monthly  payments  shall be  recalculated  at the time of any
change in the applicable  interest rate. The note is secured by virtually all of
the  Company's  real and personal  property.  A portion of the proceeds from the
financing  were  used  to  pay  the  $550,000  required  in the  Settlement  and
Compromise Agreement.


Note J - Preferred Stock Transactions

In September and October 2001, the Company issued 222,600 shares of $5.00 Series
A Convertible  Preferred Stock (Series A Preferred  Stock) for total proceeds of
approximately  $1,113,000  through an ongoing  private  placement.  The Series A
Convertible  Preferred Stock provides for cumulative dividends at a rate of 8.0%
per year, payable quarterly,  in cash or shares of the Company's common stock at
the Company's  election.  Each share of Series A Preferred  Stock is convertible
into 11 shares of the  Company's  common stock at any time after 6 months of the
date of issue and prior to the notice of redemption at the option of the holder,
subject to adjustments for customary anti- dilution events.

In September 2001, the Company's principal shareholder  converted  approximately
$4,007,327 of unsecured  debt and  approximately  $3,546,273  of cumulative  and
unpaid accrued interest into 1,510,710 shares of Series A Preferred Stock.

In  September  2001, a creditor of the Company  agreed to convert  approximately
$10,000 of trade accounts payable into 2,000 shares of Series A Preferred Stock.

In February 2002,  certain  holders of the Series A Preferred Stock notified the
Company of their intent to exercise the conversion  features on 1,749,720 issued
and outstanding  shares of Series A Preferred  Stock into  19,246,920  shares of
common stock.  Due to the timing of the  conversion in relation to the Company's
year-end and the first  available  date for such  conversion,  the effect of the
conversion exercise is reflected in the accompanying  financial statements as if
the conversion had occurred on December 31, 2001.

In  conjunction  with the  issuance of certain  shares of the Series A Preferred
Stock,  certain  shares were issued with an equivalent per share value of common
stock below the ending quoted market price of the Company's  common stock on the
issue date. This difference created a Beneficial  Conversion Feature Discount of
approximately  $1,207,993.  This discount was then  amortized over the unexpired
time  period  between the date of issue of the  eligible  shares and the initial
eligible conversion date. Approximately $392,114 was amortized to operations and
the  unamortized  balance was  reclassified  to  additional  paid-in  capital on
December 31, 2001 as a result of the February 2002 conversion exercise.



                                                                            F-16

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note K - Common Stock Transactions

Concurrent  with the September  29, 2001 reverse  acquisition  transaction,  the
Company  amended its Articles of  Incorporation  to change the Company's name to
American Ammunition,  Inc. and modified the Company's capital structure to allow
for  the  issuance  of up to  320,000,000  total  equity  shares  consisting  of
20,000,000  shares of preferred  stock and  300,000,000  shares of common stock.
Both classes of stock have a par value of $0.001 per share.

On October 9, 2001,  the Company  effected a three (3) for one (1) forward stock
split.  This action  caused the then issued and  outstanding  shares to increase
from  2,990,400 to  8,971,200  on the action date.  The effect of this action is
reflected in the  accompanying  financial  statements as of the first day of the
first period presented.

In February  2000,  the  Company  issued  5,430,000  post-forward  split  shares
(1,810,000 pre-forward split shares) of restricted, unregistered common stock to
its founders for administrative services and services related to the development
and  implementation of the Company's business plan, in effect at the time. These
transactions   were   cumulatively   valued  at  approximately   $1,810,   which
approximates  the "fair  value" of the  services  provided.  These  amounts  are
charged to operations in the accompanying pre-acquisition consolidated financial
statements.

In June 2000,  the Company  issued 420,000  post-forward  split shares  (140,000
pre-forward  split  shares)  of  restricted,  unregistered  common  stock to two
unrelated  individuals  for  services  related  to  the  implementation  of  the
Company's  business  plan,  in  effect  at the  time.  These  transactions  were
cumulatively  valued at approximately  $140, which approximates the "fair value"
of the  services  provided.  These  amounts  are  charged to  operations  in the
accompanying pre-acquisition consolidated financial statements.

In March and May 2001,  the Company  issued an  aggregate  496,200  post-reverse
split shares (165,400  pre-forward split shares) of common stock,  pursuant to a
Registration   Statement  on  Form  SB-2,  to  various   individuals   providing
investment,  financial and acquisition consulting services to the Company. These
transactions  were  cumulatively   valued  at  approximately   $165,400,   which
approximates  the "fair  value" of the  services  provided.  These  amounts  are
charged to operations in the accompanying pre-acquisition consolidated financial
statements.

In  September  2001,  the Company  issued  2,625,000  post-reverse  split shares
(875,000  pre-forward split shares) of common stock,  pursuant to a Registration
Statement on Form SB-2, to six  individuals  providing  investment and financial
consulting services to the Company.  These transactions were cumulatively valued
at approximately  $875,000,  which approximates the "fair value" of the services
provided.   These  amounts  are  charged  to  operations  in  the   accompanying
pre-acquisition consolidated financial statements.

In September 2001, the Company issued an aggregate 21,000,000 post-forward split
shares of  restricted,  unregistered  common  stock to the  shareholders  of F&F
Equipment,  Inc. in exchange for 100.0% of the issued and  outstanding  stock of
F&F Equipment,  Inc. F&F Equipment, Inc. became a wholly-owned subsidiary of the
Company as a result of this transaction.

In December 2001, the Company issued 222,222 shares of post-forward split shares
of restricted,  unregistered common stock to an unrelated entity in exchange for
the  cancellation  of $100,000 of short-term  debt.  In March 2002,  the Company
issued an additional 277,777 shares of restricted,  unregistered common stock in
payment  for  $100,000 in  short-term  debt  payable and $25,000 in  agreed-upon
interest payable to a shareholder, thereby satisfying all outstanding short-term
debt in full.

                                                                            F-17

<PAGE>



                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note K - Common Stock Transactions - Continued

In December 2001, the Company issued 535,272 shares of restricted,  unregistered
common stock to a creditor in settlement of approximately $242,872 in open trade
accounts payable.


Note L - Related Party Transactions

The Company  leases its  corporate  office and  manufacturing  facility from its
controlling stockholder under a long- term operating lease agreement.  The lease
requires a monthly payment of approximately $3,931, plus applicable sales taxes.
Further, the Company is responsible for all utilities and maintenance  expenses.
The lease  expires on October 31, 2003 and  contains a clause that the lease may
be renewed for an additional  ten year period upon written  notification  to the
lessor no later than 120 days prior to the scheduled expiration date at a rental
rate based upon the fair value for similar space in a similar location.

On January 1, 1998, the Company's  controlling  stockholder  contributed various
manufacturing  equipment  to the  Company.  This  transaction  was  valued at an
agreed-upon value of approximately $5,000,000, which was substantially less than
original  founders cost. As of October 25, 2000, in conjunction  with a proposed
sale-leaseback transaction, the Company received an independent appraisal on its
manufacturing equipment with an appraised value of approximately  $17,000,000 at
a utilization rate of 90,000,000  rounds of small-arms  ammunition  produced per
annual period.


Note M - Income Taxes

The components of income tax (benefit)  expense for the years ended December 31,
2001 and 2000, respectively, are as follows:

<TABLE>
<CAPTION>
                                 (post-acquisition)  (post-acquisition)
                                     Year ended          Year ended
                                    December 31,         December 31,
                                        2001                 2000
                                  -------------------------------------
<S>                                <C>                 <C>
Federal:
  Current                          $     -               $    -
  Deferred                               -                    -
                                   -------               ------
                                         -                    -
                                   -------               ------
State:
  Current                                -                    -
  Deferred                               -                    -
                                   -------               ------
                                         -                    -
                                   -------               ------
  Total                            $     -               $    -
                                   =======               ======
</TABLE>

As of December 31, 2001,  the Company has a net operating loss  carryforward  of
approximately  $5,800,000 to offset future  taxable  income.  Subject to current
regulations,  components of this  carryforward will begin to expire in 2003. The
amount and availability of the net operating loss  carryforwards  may be subject
to  limitations  set forth by the  Internal  Revenue  Code.  Factors such as the
number of shares ultimately issued within a three year look-back period; whether
there is a deemed  more  than 50  percent  change  in  control;  the  applicable
long-term  tax  exempt  bond  rate;  continuity  of  historical  business;   and
subsequent  income of the  Company  all enter  into the  annual  computation  of
allowable annual utilization of the carryforwards.


                                                                            F-18

<PAGE>


                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note M - Income Taxes - Continued

The Company's income tax expense (benefit) for the years ended December 31, 2001
and 2000,  respectively,  differed from the statutory federal rate of 34 percent
as follows:

<TABLE>
<CAPTION>
                                                          (post-acquisition)    (post-acquisition)
                                                              Year ended           Year ended
                                                             December 31,         December 31,
                                                                 2001                2000
                                                           --------------------------------------
<S>                                                        <C>                  <C>
Statutory rate applied to loss before income taxes         $     (752,000)      $    (413,000)
Increase (decrease) in income taxes resulting from:
     State income taxes                                                 -                   -
     Other, including reserve for deferred tax asset              752,000             413,000
                                                           --------------       -------------

       Income tax expense                                  $            -       $           -
                                                           ==============       =============
</TABLE>

Temporary  differences,  consisting  primarily of statutory  differences  in the
depreciable  lives for property and equipment,  between the financial  statement
carrying  amounts and tax bases of assets and liabilities  give rise to deferred
tax assets and liabilities as of December 31, 2001 and 2000, respectively:

<TABLE>
<CAPTION>
                                                          (post-acquisition)    (post-acquisition)
                                                              Year ended           Year ended
                                                             December 31,         December 31,
                                                                 2001                2000
                                                           --------------------------------------
<S>                                                        <C>                  <C>
Deferred tax assets - long-term
  Net operating loss carryforwards                         $   1,980,000        $   1,230,000
Deferred tax liabilities - long-term
  Statutory depreciation differences                            (250,000)            (280,000)
                                                           -------------        -------------
                                                               1,730,000              950,000
Less valuation allowance                                      (1,730,000)            (950,000)
                                                           -------------        -------------

  Net Deferred Tax Asset                                   $           -        $           -
                                                           =============        ==============
</TABLE>

During the years ended December 31, 2001 and 2000,  respectively,  the valuation
allowance increased (decreased) by approximately $780,000 and $(70,000).




                                                                            F-19


<PAGE>


                            AMERICAN AMMUNITION, INC.
                   (formerly FBI Fresh Burgers International)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


Note N - Contingencies

In May 1998, the Company entered into a $500,000 accounts  receivable  factoring
facility  with its then  financial  institution.  The facility  provided for the
purchase of various  trade  accounts  receivable by the bank from the Company at
80.0% of the face value of the underlying  invoice.  The Company paid a discount
fee of 1.5% for invoices settled between 1 and 30 days of invoice date, 3.0% for
invoices  settled  between 31 and 60 days of invoice date and an additional 1.5%
for each additional 30 days thereafter.  All accounts  receivable  invoices were
factored with full recourse to the Company and the Company bears all credit risk
associated with the factored  invoices.  At December 31, 2000 the Company was at
risk for approximately $10,070 of factored invoices.  The Company experienced no
losses  related to the factoring  agreement.  This  Agreement was  terminated in
conjunction  with the execution of the Settlement  and  Compromise  Agreement on
June 29, 2001.

Note O - Significant Customers

During the years ended December 31, 2001 and 2000, respectively, the Company had
a single  customer  responsible  for  approximately  51% and 32% of total sales.
There were no other customers responsible for more than 10.0% of total net sales
during 2001 and 2000, respectively.





                                                                            F-20


<PAGE>



Item 8.  Changes  In  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

     On January 29, 2002 the Company notified its accountants,  Roger G. Castro,
CPA that they were being dismissed as the Company's  independent  auditors.  The
stated  reasons  were that the  Registrant  wanted to retain the  auditor of its
wholly-owned  subsidiary,  needed to  consolidate  the  audits of the parent and
subsidiary  to  comply  with SEC  requirements  and did not want to  engage  the
services of more than one (1) auditor. The Company's Board of Directors made the
decision to change accountants.

     During the Registrant's past two (2) fiscal years and during any subsequent
interim  period  preceding  the  date  of  dismissal,  the  Company  has  had no
disagreements with Roger G. Castro,  CPA on any matter of accounting  principles
or practices, financial statement disclosure or auditing scope or procedure.

     The report of Roger G. Castro, CPA on the financial statements for the past
two (2) fiscal  years did not  contain an adverse  opinion nor a  disclaimer  of
opinion nor was the report qualified or modified as to uncertainty,  audit scope
or accounting principles.

     On January 29, 2002 the Company  provided Roger G. Castro,  CPA with a copy
of this  disclosure  and  requested  that it  furnish a letter  to the  Company,
addressed to the SEC,  stating that it agreed with the statements made herein or
the reasons why it disagreed. On January 29, 2002, the Company received a letter
from Roger G. Castro, CPA that it agreed with the statements contained herein.

     On January 29, 2002, the Company  engaged the firm of S.W.  Hatfield,  CPA,
P.O. Box 820392,  Dallas, TX 75382 as the Company's independent  auditors.  Such
appointment was accepted by S.W. Hatfield,  President of the firm. Prior to such
engagement,  the Registrant had not consulted  S.W.  Hatfield,  CPA on any prior
matters,  including  any  matters  relative  to the  application  of  accounting
principles or any subject of disagreement with Roger G. Castro, CPA.


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
     with Section 16(a) of the Exchange Act

     (a) Set forth below are the names,  ages,  positions,  with the Company and
business experiences of the executive officers and directors of the Company.



                                       36

<PAGE>


<TABLE>
<S>                       <C>      <C>
Name                      Age      Position(s) with Company
---------------           -----    -----------------------------------------
J.A. Fernandez, Sr.       65       Chairman of the Board and Director of Sales

Andres F. Fernandez       36       President and Chief Executive Officer

Emilio D. Jara            37       Vice-President of Operations, Secretary and Director

Amelia Fernandez          65       Vice President and Director

Maria A. Fernandez        42       Director

Len Hale                  57       Director
</TABLE>

     All  directors  hold office until the next annual  meeting of the Company's
shareholders and until their successors have been elected and qualify.  Officers
serve at the pleasure of the Board of Directors. The officers and directors will
devote such time and effort to the business and affairs of the Company as may be
necessary  to  perform  their  responsibilities  as  executive  officers  and/or
directors of the Company.

Family Relationships

     J.A.  Fernandez,  Sr.  and  Amelia  Fernandez  are the father and mother of
Andres and Maria Fernandez.  There are no other family relationships  between or
among the executive officers and directors of the Company.

Business Experience

     J. A. Fernandez, Sr., age 65, currently serves as the Chairman of the Board
and Director or Sales.  He has been  employed by the Company since its inception
in 1983. Mr.  Fernandez is the patriarch of what began as a family  business and
is responsible for the sales  activities of the Company.  Mr. Fernandez has over
40 years experience in diverse industries including aerospace,  advanced polymer
manufacturing,  munitions, mining and processing of gemstones and metal ores and
has utilized such experience for the growth and  development of the Company.  He
is fluent in Spanish.

     Andres Fernandez, age 36, currently serves as President and Chief Executive
Officer.  Mr.  Fernandez has served in each of these  capacities since September
2001.  He has been employed by the company for over a decade.  Mr.  Fernandez is
responsible  for day to day  operations  and has been a driving force behind the
Company and its success in becoming a  vertically  integrated  manufacturer.  He
studied physics and calculus at St. Thomas University,  FL and at the University
of  Miami,  FL. He is a  licensed  pilot,  having  graduated  from the  American
Institute of  Aeronautics,  FL, and received his  certificate as a private pilot
(fixed  wing) as well as  private  helicopter  (rotary)in  1989.  In  1989,  Mr.
Fernandez  graduated  from the  Institute  of Public  Service  (Pan Am), GA as a
tactical rappel instructor.  In 1990, he graduated from Omni Explosives, TN with
a specialty in

                                       37

<PAGE>



tactical  explosives.  Mr. Fernandez was certified by the Florida  Department of
Law Enforcement Academy in special  operations/entry  techniques in 1990. He has
served as a tactical  advisor to U.S.  Treasury  Department,  Bureau of Alcohol,
Tobacco,  and Firearms,  U.S. Customs Service, and the Florida Department of Law
Enforcement. He has received numerous commendations and letters of appreciation.
He also  served on the Board of  Veterans  Affairs  (Hialeah  , FL) from 1990 to
1991. He is fluent in Spanish.

     Emilio Jara,  age 37,  currently  serves as Vice  President of  Operations,
Secretary and a Director.  Mr. Jara has served in each of these capacities since
September 2001. He has been employed with the Company since 1988. He has been an
integral  part  of  the  Company's  technological  growth.  His  abilities  have
contributed to the Company's research and development and subsequent increase in
the  number  of  production   lines.  Mr.  Jara  is  extremely  well  versed  in
metallurgical  and  ballistic  issues.  He studied  business  administration  at
Miami-Dade  Community  College  (1984/1985).  In  1989,  he  graduated  from the
Institute of Public  Service (Pan Am), GA as a Tactical  Rappel  Instructor.  In
1990, Mr. Jara graduated from Omni  Explosives,  TN with a specialty in Tactical
Explosives. He is fluent in Spanish.

     Amelia Fernandez,  age 65, currently serves as Vice President and Director.
Mrs.  Fernandez has served in each of these  capacities since September 2001. he
graduated from  Conservatorio  Falcon (1950),  and the National  Conservatory of
Music in Havana,  Cuba in 1952. Mrs. Fernandez holds the degrees of Professor of
Piano and Professor of  Solmization  Theory.  She is an  accomplished  classical
pianist,  opera singer and artist.  As a diamond  importer and  wholesaler,  she
completed and graduated from numerous Gemological  Institute of America courses,
including  the diamond and colored  stone  courses.  She  achieved  success as a
jewelry  designer for a select group of buyers,  both corporate and  individual.
She  has  managed,  owned  and  operated  several  business  enterprises  in the
competitive world of wholesale and retail diamonds and precious stones.  She has
been  employed  by the  Company  since  1986 as its  Office  Manager  and  Human
Resources  Coordinator,  including  the  research  and  development  of training
manuals and procedures for the selection of personnel. She is fluent in Spanish.

     Maria A. Fernandez,  age 42, currently serves as Director.  Mrs.  Fernandez
has served as a Director since  September  2001. She is the managing  partner at
Fernandez Friedman Grossman & Kohn PLLC. since May 1998. Prior to that date, she
was a partner at Taustine Post Sotsky Berman  Fineman & Kohn.  She  concentrates
her legal practice in the areas of estate planning,  probate and administration.
She also practices in the areas of Medicaid and disability  planning,  corporate
and  individual  taxation and  Corporate  law,  with an emphasis in closely held
corporations.  She is a graduate of the  University  of Miami,  FL  (Bachelor of
Business Administration and Master of Professional  Accounting) and the Brandeis
School of Law at the University of Louisville,  KY. Ms. Fernandez is licensed to
practice  in  Kentucky  and  Florida.  She has  lectured  in the areas of estate
planning  and probate,  Medicaid  planning and elder law. She is a member of the
Louisville,  Florida,  Kentucky and American Bar  Associations  and is fluent in
Spanish. Ms. Fernandez is the past President of the Women Lawyers Association of
Jefferson  County,  Kentucky  and current  Board  Member of the  Louisville  Bar
Association.  A Graduate of the  Kentucky  Women's  Leadership  Network,  she is
active in various civic  organizations and is on the board of several non-profit
corporations.

                                       38

<PAGE>




     Len Hale, age 57, currently serves as a Director.  Mr. Hale has served as a
Director since  September 2001. He is the President of Hale  Consulting,  LLC in
Montgomery,  AL, a management  consulting firm focusing on sales,  marketing and
management  systems.  Mr.  Hale has more  than 20 years  experience  as a proven
leader in the firearms industry. From 1995-1998, he served as group president of
Blount  International,  Inc.  (AL).  As president  of this public  manufacturing
company  consisting of 10 sporting goods brands,  he oversaw a $300 million plus
operation with three (3) division Presidents and increased sales from $84M to in
excess of $300M through  internal growth and  acquisitions,  improved  operating
income  and return on capital  employed.  From  1990-1995,  Mr.  Hale  served as
Executive  Vice-President  and  Chief  Operating  Officer  of  Ellett  Brothers,
Inc.(SC)  Under his  leadership,  sales improved from $69M to $160 M and profits
grew from a  negative  profit to in excess of $6M.  He also  installed  a marine
division,  archery  division  and  manufacturing  divisions.  He has  served  on
numerous boards and industry organizations,  including the Board of Governors of
SAAMI (Sporting Arms and Ammunition Manufacturers  Association) and the Board of
Governors of the National Shooting Sports Foundation.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     No Director,  Officer,  Beneficial  Owner of more than ten percent (10%) of
any class of equity securities of the Company failed to file reports required by
Section  16(a) of the Exchange  Act during the most recent  fiscal year or prior
fiscal years.

Item 10. Executive Compensation

     The following  summary  compensation  table sets forth the  aggregate  cash
compensation  paid or accrued by the Company to each of the Company's  executive
officers  and key  employees  for  services  rendered to the Company  during the
Company's fiscal year ended 2001 and 2000 and all plan and non-plan compensation
awarded to, earned by or paid to certain designated executive officers.



                                       39

<PAGE>


<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

                                                            Long Term Compensation

                         Annual Compensation                       Awards            Payouts
(a)               (b)     (c)       (d)      (e)          (f)         (g)          (h)      (i)
                                             Other        Restricte   Securities   LTIP     All
Name and                                     Annual       d Stock     Underlying   Pay-     Other
Principal         Year    Salary    Bonus    Compen-      Award(s)    Options/     outs     Compen-
Position                  ($)       ($)      sation ($)   ($)         SARs  (f)             sation ($)
(1)
----------------- ------  --------  -------- ------------ ----------  ------------ -------- ----------
<S>               <C>     <C>       <C>      <C>          <C>         <C>          <C>      <C>
Artem             2000    $ -0-     $-0-     $-0-         $805        $-0-         $-0-     $-0-
Gotov,            2001    $ -0-     $-0-     $-0-         $-0-        $-0-         $-0-     $-0-
former
President

Stephen H.        2000    $ -0-     $-0-     $-0-         0           $-0-         $-0-     $-0-
Durland,          2001    $ 21,000  $-0-     $-0-         47,502      $-0-         $-0-     $-0-
former
Chief
Financial
Officer and
former
Director

Emilio D.         2000    $36,400   $-0-     $-0-         $-0-        $-0-         $-0-     $-0-
Jara, Vice-       2001    $42,500   $-0-     $-0-         $-0-        $-0-         $-0-     $-0-
President
of
Operations,
Secretary
and
Director

Amelia            2000    $59,202   $-0-     $-0-         $-0-        $-0-         $-0-     $-0-
Fernandez,        2001    $59,923   $-0-     $-0-         $-0-        $-0-         $-0-     $-0-
Vice
President
and
Director
</TABLE>

(1)  Mr.  Gotov  resigned as an  executive  officer in  September  2001 and Mrs.
     Fernandez and Mr. Jara were appointed  executive officers at that time. Mr.
     Durland resigned recently.

                                       40

<PAGE>



Compensation of Directors

     The Company has no standard  arrangements for compensating the directors of
the Company for their attendance at meetings of the Board of Directors.

Item 11. Security Ownership of Certain Beneficial Owners and Management

     The  following  table sets  forth  information  as of  December  31,  2001,
regarding the ownership of the Company's common stock by each shareholder  known
by the Company to be the beneficial  owner of more than five percent (5%) of its
outstanding shares of common stock, each director and all executive officers and
directors as a group.  Except as otherwise  indicated,  each of the shareholders
has sole voting and  investment  power with respect to the share of common stock
beneficially owned.

<TABLE>
<CAPTION>
Name and Address of              Title of              Amount and Nature of    Percent of
Beneficial Owner                  Class                  Beneficial Owner        Class
------------------------------------------------------------------------------------------------
<S>                                 <C>                <C>                      <C>
J.A. Fernandez, Sr.                 Common              5,569,200               18.58%
3545 NW 71st Street
Miami, Florida 33147

Andres F. Fernandez        (2)      Common             20,889,820               41.53%
3545 NW 71st Street
Miami, Florida 33147

Amelia C. Fernandez                 Common              4,281,900               14.29%
3545 NW 71st Street
Miami, Florida 33147

Maria A. Fernandez (4)              Common                840,000                2.80%
Fernandez Friedman Grossman
& Kohn PLLC
101 S.  5th Street
Suite 2400
Louisville, KY 40202-3115

Emilio D. Jara                      Common                504,000                1.68%
3545 NW 71st Street
Miami, Florida 33147

Len C. Hale                         Common                168,000                0.56%
Hale Consulting, LLC
3700 Jesse Court
Montgomery, AL 36106

All officers and directors
as a group (7 persons) (5)          Common             26,693,720               53.04%
--------------------
</TABLE>


                                       41

<PAGE>



(1)  J.A.  Fernandez,  Sr. and Amelia C.  Fernandez are husband and wife and the
     parents of Andres F. Fernandez and Maria A.  Fernandez.  Some or all of the
     securities  owned  by  the  individual  Fernandez  family  members  may  be
     aggregated together and/or ownership imputed to one another.

(2)  In  addition to his common  stock,  in  September  2001,  Andres  Fernandez
     converted  unsecured  indebtedness  of the  Company to him in the amount of
     $7,553,600  for 1,510,720  shares of $5.00 Series A  Convertible  Preferred
     Stock.  The Series A Convertible  Preferred  Stock  provides for cumulative
     dividends at the rate of 8% per year, payable quarterly,  in cash or shares
     of the  Company's  common stock at the  Company's  election.  Each share of
     Series A Convertible  Preferred Stock is convertible,  at the option of the
     holder,  into eleven (11) shares of the Company's  common stock at any time
     after  six (6)  months  from the date of  issuance  and  prior to notice of
     redemption,  subject to adjustments for customary  anti-dilution events. In
     February 2002,  certain holders of the Series A Preferred Stock,  including
     Andres F.  Fernandez,  notified the Company of their intent to exercise the
     conversion  features on 1,749,720 issued and outstanding shares of Series A
     Preferred Stock into 19,246,920 shares of common stock. Andres F. Fernandez
     converted  1,510,720 shares of such Preferred Stock into 16,617,920  shares
     of  restricted  common  stock  of the  Company.  Due to the  timing  of the
     conversion  in relation to the Company's  year-end and the first  available
     date  for  such  conversion,  the  effect  of the  conversion  exercise  is
     reflected in this report as well as the accompanying  financial  statements
     as if the conversion had occurred on December 31, 2001.

(3)  Mr. Durland, the Company's former CFO and Director, acquired 100,000 shares
     of the Company's  common stock under the  Registration  Statement  filed on
     Form SB2 effective February 28, 2001.

(4)  These do not include the 945,000 shares Maria  Fernandez holds as a Trustee
     for an entity in which neither she nor any of the other Officer or Director
     is the beneficial owner.

(5)  Except as noted above,  each of the Officers and Directors  received all of
     their  other  shares  as part of the Share  Exchange  whereby  the  Company
     acquired AA in September 2001.

Item 12. Certain Relationships and Related Transactions

         Mr. Durland acquired 100,000 shares of the Company's common stock under
the Registration Statement filed on Form SB2 effective February 28, 2001.

     In September 2001 the Company issued  21,000,000 shares of its common stock
to nineteen (19) shareholders of AA pursuant to a share exchange agreement.  The
shares  were valued at  $3,998,650.  The  transaction  resulted in AA becoming a
wholly owned  subsidiary of the Company in a  transaction  that was treated as a
reverse merger for accounting purposes. Of such shares, the current officers and
directors  of the Company  were issued a total of  15,750,000  shares.  For such
offering the Company relied upon the 506 Exemption.

     In September and October 2001,  the Company  issued 222,600 shares of $5.00
Series A Convertible  Preferred  Stock valued at  $1,113,000  through an ongoing
private  placement.  The  Series A  Convertible  Preferred  Stock  provides  for
cumulative  dividends at a rate of 8% per year,  payable  quarterly,  in cash or
shares of the Company's  common stock at the Company's  election.  Each share of
Series A  Convertible  Preferred  Stock is  convertible  into 11  shares  of the
Company's common stock at any time after 6 months after the date of issuance and
prior to notice of redemption at the

                                       42

<PAGE>



option of the holder, subject to adjustments for customary  anti-dilution events
(the "Series A  Convertible  Preferred  Stock").  Of such shares,  the Robert I.
Escobio Family Trust acquired 2,000 shares.  Mr. Escobio is a former director of
the Company. For such offering, the Company relied upon the 506 Exemption.

     In September 2001, a principal  shareholder,  Andres  Fernandez,  converted
$7,553,600 of unsecured debt due to him by the Company into 1,510,720  shares of
Series A Convertible  Preferred  Stock.  Mr.  Fernandez is a current officer and
director of the  Company.  For such  offering,  the Company  relied upon the 506
Exemption.

Item 13. Exhibits and Reports on Form 8-K.

     (a) The exhibits  required to be filed  herewith by Item 601 of  Regulation
S-B, as described in the following index of exhibits, are incorporated herein by
reference, as follows:

<TABLE>
<CAPTION>
Exhibit No.       Exhibit Name
-----------       ---------------------
<S>      <C>      <C>
2.1      [2]      Share Exchange Agreement between FBI Fresh Burgers International and F&F
                  Equipment, Inc. dated September 29, 2001.

3(i).1   [1]      Articles of Incorporation (formerly Exhibit 3.1).

3(i).2   [1]      Amendment to Articles of Incorporation (formerly Exhibit 3.2).

3(i).3   [2]      Amendment to Articles of Incorporation.

3(ii).1  [1]      Bylaws (formerly Exhibit 3.4).

3(ii).2  [3]      Amended Bylaws

4.1      [1]      Form of Common Stock Certificate.

5.1      [1]      Opinion of Kenneth G. Eade (including consent).

6.1      [1]      Specimen of Stock Certificate.

16.1     [4]      Letter on change of certifying  accountant pursuant to Regulation
                  SK Section 304(a)(3).

23.1     [1]      Consent of Roger G.  Castro, Independent Certified Public Accountant

23.2     [1]      Consent of Kenneth G. Eade (filed as part of Exhibit 5.1).
----------------
</TABLE>

[1]  Previously filed with the Company's  Registration Statement on Form SB-2 on
     September 20, 2000 (Registration Number 333-46160).


                                       43

<PAGE>



[2]  Previously  filed with the Company's  Current Report on Form 8-K on October
     4, 2001.

[3]  Previously  filed with the  Company's  Form  10-QSB for the  Quarter  ended
     September 30, 2001.

[4]  Previously  filed with the Company's  Current Report on Form 8-K on January
     29, 2002.

*    Filed herein.

     (b) A report on Form 8-K was filed on October 4, 2001  reporting  the Share
Exchange conducted between the Company, F&F Equipment, Inc. and the shareholders
of F&F Equipment, Inc. on September 29, 2001.

     A report on Form 8-K was filed on January  29,  2002  reporting a change in
the Registrant's Certifying Accountant.















                                       44

<PAGE>


                                   SIGNATURES

     In accordance with Section 13 and 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                            American Ammunition, Inc.
                                  (Registrant)


Date: March 29, 2002    By: /s/J.A. Fernandez, Sr.
                        --------------------------------------------------------
                          J.A. Fernandez, Sr., Chairman and Director of Sales

                        By: /s/Andres F. Fernandez
                        --------------------------------------------------------
                           Andres F. Fernandez, President and CEO

                        By: /s/Emilio D. Jara
                        --------------------------------------------------------
                           Emilio D. Jara, V.P. of Operations,
                              Secretary and Director

                        By: /s/Amelia Fernandez
                        --------------------------------------------------------
                           Amelia Fernandez, V.P. and Director

                        By: /s/Maria A. Fernandez
                        --------------------------------------------------------
                           Maria A. Fernandez, Director



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

<TABLE>
<CAPTION>
Signature                   Title                             Date

<S>                         <C>                               <C>
/s/J.A. Fernandez, Sr.
----------------------      Chairman of the Board             March 29, 2002
J.A. Fernandez, Sr.         and Director of Sales

/s/Andres F. Fernandez
----------------------      President and Chief               March 29, 2002
Andres F. Fernandez         Executive Officer

/s/Emilio D. Jara
----------------------      Vice-President of Operations,     March 29, 2002
Emilio D. Jara              Secretary and Director

/s/Amelia Fernandez
----------------------      Vice President and Director       March 29, 2002
Amelia Fernandez

/s/Maria A. Fernandez
----------------------      Director                          March 29, 2002
Maria A. Fernandez
</TABLE>


                                       45