SECURITIES AND EXCHANGE COMMISSION
                                    Washington, D.C. 20549
                                        FORM 10-K

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

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

                                For the fiscal year ended: March 31, 2001

                                   Commission File Number: 0-16734

                                     C.E.C. INDUSTRIES CORP.
                       (Exact name of registrant as specified in its charter)

           Nevada                                       87-0217252
      (State  or  other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                    Identification No.)

            3450 E Russell Road
            Las Vegas, Nevada                           89120
           (Address of principal executive offices)     (Zip Code)

          Registrant's telephone number including area code: (702) 214-4253

          Securities registered pursuant to Section 12(b) of the Act:
           Common Stock, $0.05 par value

          Securities registered pursuant to Section 12(g) of the Act:
             Common Stock, $0.05 par value

Indicate by check mark whether the registrant (a)has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to
this Form 10-K. [ ]

The aggregate market value (the average bid and asked prices) of the voting
stock held by non-affiliates of the registrant on March 31, 2001, was
approximately $188,318. The number of shares of Common Stock, $0.05 par value,
outstanding on March 31, 2001, was 40,831,805 shares, held by approximately
1762 shareholders.

<PAGE>

                                           PART I

ITEM 1. BUSINESS

(a) General

   C.E.C. Industries Corp. is a Nevada corporation with principal and executive
offices located at 3450 E Russell Road, Las Vegas, Nevada 89120, telephone
(702) 214-4253. C.E.C. Industries Corp. and it's consolidated subsidiaries are
referred to as either C.E.C. or the Company. C.E.C. is engaged in several
unrelated businesses through its primary subsidiaries, Custom Environmental
International, (hereinafter referred to as CEI), (carbon reactivation
technology), Mid-Nevada Art, Inc. (hereinafter referred to as Mid-Nevada Art),
(art collection), and Basia Holding, Inc. (hereinafterreferred to as Basia),
(holds quit claim title to 9,000 acres of land and mineral leases in
Tennessee). The Company also has methane gas interests in Alabama (hereinafter
referred to as Atlas Methane Leases) and a 24.5% interest in Victory Village
Associates Limited III (hereinafter referred to as Victory
Village), (320 unit multi-family project in Henderson, Nevada).  The Company's
current organization was accomplished through a merger and acquisition program
during the two fiscal years ended March 31, 1997, and continuing through the
present.

   C.E.C. was incorporated as Justheim Petroleum Company in Nevada in 1952.
C.E.C. Management Corp. was merged into Justheim Petroleum Company effective
December31, 1986, and was renamed C.E.C. Industries Corp. Prior to the merger,
Justheim had historically engaged in the business of acquiring, holding and
selling oil and gas leaseholds and retaining overriding royalty rights.  C.E.C.
Management Corp. primarily was in the business of engineering consulting and
designing and marketing customized minerals processing systems and equipment.

   C.E.C.'s primary business had been the manufacture and sale of minerals
processing equipment through its wholly-owned subsidiary, CEI formerly Custom
Equipment Corporation. Custom was a pioneer in the development of custom gold
processing equipment in the early to mid-1980's, thus, business was very
profitable. However, as gold prices declined after the early 1980's, fewer gold
plants were built, more competitors entered the market, and Custom's business
was negatively impacted. The Company attempted to use its expertise and
know-how to develop the carbon reactivation furnace technology in the water
treatment industry, but the continued losses in the metallurgical business
caused a capital drain necessitating other measures. Custom Environmental
International became the renamed subsidiary to carry on the efforts, building
a new prototype carbon furnace still in the development stage.  The
metallurgical equipment business was sold in fiscal year 1991.

   A spin-off of CEI was proposed in late 1995, however, on August 5, 1996 the
Board of Directors had a formal meeting regarding the proposed spin-off
(previously filed in the 8-K of October 4, 1995) of the Company's subsidiary
C.E.I. Due to the fact that the prior Board of Directors did not complete the
spin-off of C.E.I. and the documentation regarding this spin-off is not
included in the official books and records of the Company, the current Board of
Directors has decided that the spin-off of C.E.I. is not in the best
interests of the Company or it's shareholders and has terminated all spin-off
plans for C.E.I. at this time.

<PAGE>

   In September 1993, the Board of Directors of C.E.C considered expanding the
Company's business into opportunities outside of the carbon reactivation
furnace technology business, and thus caused several new directors with real
estate expertise to join the C.E.C. board. The intent being to develop land
owned by the Company in St. George, Utah as well as other properties to be
acquired.

   The Company formed Moonridge Development Corp. as a wholly-owned subsidiary
On February 24, 1994 (hereinafter referred to as "Moonridge"), to develop the
Company's property and subsequently other parcels of property. In 1995,
Moonridge acquired a General Contractor License and began development of a 320
unit multi-family complex in Henderson, Nevada. After much discussion regarding
the liability of such a project, the Board of Directors on June 10, 1996,
signed a Mutual Release and Hold Harmless Agreement with Moonridge Development
Corp., DSM Golf Enterprises, Inc. and Charles McHaffie.  This agreement
released the Company's interest in Moonridge Development Corp. However, the
Company regained title to all the lands owned by Moonridge and retained its
24.5% interest in the Victory Village Associates Limited III, a 320 unit multi-
family HUD project in Henderson, Nevada.

   In the fourth quarter of 1995, the Company acquired Sterling Travel, and the
revenues and expenses thereof from February 28, 1995 to March 31, 1995, were
included in the revenues and expenses for fiscal 1995. Pursuant to the terms
and conditions of the agreement with the 100% owner of Sterling Travel, the
Company was purchasing the travel Company for 400,000 shares of preferred stock
of the Company, at a valued price of $5 per share, convertible to common stock,
with a total value of $2 million.  In the event that in two years, the price of
the stock of the Company was not valued at $5 per share, then in that event the
Company was required to off set the difference with the issuance of additional
shares of common stock. According to the agreement, the preferred stock was to
be issued according to an earn out schedule based upon revenues earned by
Sterling Travel. However, Sterling Travel did not receive the revenue
projections as initially anticipated, and the preferred stock was not issued,
and the transaction was canceled.

   On March 28, 1996, the Company entered into an agreement whereby the Company
issued 8,660,000 shares of common restricted voting stock and 8,663,041 shares
of preferred voting stock of the company in exchange for 100% of the issued and
outstanding common shares of Basia Holding, Inc., a Tennessee Corporation
holding quit claim title to 9,000 acres of land and 100% of the issued and
outstanding shares of Mid-Nevada Art, Inc., and 100% of Atlas Methane fully paid
leasehold interests which leasehold interests include approximately 13,500 acres
located in the Black Warrior Basin area of Alabama. The March 28th
agreementfurther required the resignation of three of the Company's directors.

   On May 10, 1997, the Company entered into an agreement to sell approximately
8.5 acres of land on Russell Road in Las Vegas, Nevada. With the conveyance of
this land the Company reduced its indebtedness by $1,735, 185 on existing loans
and also received a six month extension with an option for an additional six
months and other considerations on the existing loans on the Company's 15 acres
of land in Las Vegas.

<PAGE>

   On June 15, 1996, the Company entered into a Stock Exchange Agreement to
Acquire 100% of the issued and outstanding stock of Auto Express, Inc., a
Colorado Corporation involved in the transportation of automobiles nationwide.
The Company subsequently became aware of material misrepresentations as well as
undisclosed liabilities made by Auto Express, Inc. In light of the material
nature of these issues, C.E.C. Industries Corp. has determined that it was in
the best interest of the Company and its shareholders to rescind the
transaction.

   On June 27, 1996 the Company entered into an Exchange Agreement with One
World Cards, Inc. & Bruce Perlowin its President for 278 - $10,000.00 pre-paid
Long distance calling cards at a rate of approximately $0.45 per minute or
better and an expiration date of five (5) years from the date of closing in
exchange for 18 original art works by Sky M. Jones. These paintings have an
appraisal value of $2,779,700.00 and are owned by the Company's wholly owned
subsidiary Mid-Nevada Art. The paintings book value was $0 at March 31, 1998.
Management elected to write the paintings down after evaluating them for risk
Impairment under FASB 121.

   Also on June 27, 1996 the Company entered into an Exchange Agreement with
One World Cards Inc. & Bruce Perlowin its President for 3 - $100,000.00 at a
Rate of approximately $0.45 per minute or better with no expiration date and
45- $10,000.00 pre-paid long distance calling cards at a rate of approximately
$0.45 per minute or better with an expiration date of five (5) years from the
date of closing in exchange for 12 original art works by Sky M. Jones with
appraisal books and appraisals totaling $750,000.00 owned by the Company's
wholly owned subsidiary Mid-Nevada Art. Mid-Nevada Art, Inc. exercised its
option wherein Mid-Nevada Art, Inc. returned the pre-paid calling cards to One
World Cards, Inc. and One World Cards, Inc. returned the 31 original artworks
to Mid-Nevada Art, Inc.  The decision for the return of the calling cards was
the result of the failure of One World Cards, Inc. to fully activate the
prepaid calling cards.

   On December 6, 1996, the Company signed an exchange agreement to sell it's
interest in 17.44 acres of vacant land in Las Vegas, Nevada for 165,876 free
trading shares of Synfuel Technologies, (OTC SNFL) trading at approximately
$20.00 per share. On March 31, 1997 Gold Coast Resources assumed the existing
mortgages of approximately $1,800,000.

(b) Information About Industry Segments.
   The Company is currently engaged in four main businesses; real estate
investment (Victory Village); carbon furnace development (CEI); mineral rights
development (Atlas Methane and Basia Holding) and investments in art (Mid-
Nevada Art).  Information regarding the Company's reportable business segments
is set forth in Item 1( c) and Note 9 to the Financial Statements. The Company
is not involved in mining operations, and, accordingly, no revenues are
generated therefrom.
<PAGE>

(c) Narrative Description of Business.

Victory Village Associates Limited III

   320 Unit Multi-Family Project to be built - Henderson, Nevada.  In June,
1995, the Company acquired a 24.5% interest in a 320 unit apartment project
generally known as Victory Village, in exchange for 1,200,000 shares of Rule
144 stock, with a simultaneous two-year restriction.  The project is located in
Henderson, Nevada near the intersection of Lake Mead Blvd. and Boulder Highway.
The City of Henderson issued bonds to facilitate the financing on the project,
with HUD,(Department of Housing and Urban Development) insuring the
construction and permanent loan in the sum of $16,442,400, at 6.38% interest,
and due in 40 years, which loan was recorded in June of 1995 against the
approximate 17.72 acres. The Majority of the construction on the project has
been completed and certificates of occupancy have been issued. The company's
investment in Victory Village was collateralized by a pledge of preferred stock
owned by the project manager.  In July of 1998, the company exchanged its
interest in Victory Village for the return of 1,805,000 shares of the company's
preferred stock.

Atlas Methane Gas Interests
   The Company owns 100% of 13,500 acres of leasehold interest located in the
Black Warrior Lagoon area of Alabama, containing methane reserves.

   Introduction. Coal deposits in the United States are widespread, underlying
360,000 square miles in 37 states. Methane is present in nearly all coal from
the shallow subsurface to depths over 10,000 feet.  Coalbed basins are
generally divided into eastern and western types.  This segregation is on the
basis of both geography and geology. The eastern coals are primarily
Pennsylvanian Age and western coals are Cretaceous Age. Much of the drilling
for coalbed gas has been concentrated in the Black Warrior Basin of North
Central Alabama.  This is due to several factors:

     The basin's proximity to gas pipelines that deliver to stable gas markets.
     The high BTU values of the gas, from 950-1050. Drilling depths are shallow
     from 1,000 to 5,000 feet. The coals are well understood in terms of
     their thickness, rank, and content.      Long term production has been
     established.

   Black Warrior Basin. Coal has been produced continuously for over 100 years
In the Black Warrior Basin. Although the presence of gas in coalbeds has been
recognized from the beginning, it had been considered only as a hazard to coal
mining. Gas from the field was originally vented, but as the natural gas prices
increased, the gas was collected and sold.

   Market Analysis.  The pipeline systems situated in the Black Warrior Basin,
Are Alabama Gas Company (ALAGASCO), Basin Pipeline Corporation, and Southern
Natural Pipeline Company (SONAT), and Associated natural Gas Inc. (ANGI).  The
Company does not contemplate any marketing problems related to coalbed methane
production in the Warrior Basin.

<PAGE>

   Competition.  There are a large number of companies and individuals engaged
In exploration and development of oil and gas properties. Accordingly, the
Company will encounter strong competition from independent operators and major
Oil companies in acquiring any additional leases suitable for development.
Many of the companies so engaged have financial resources and staffs
Considerably larger than those available to the Company.  There are likewise
Numerous companies and individuals engaged in the organization and conduct of
royalty, production, and marketing of gas, thus providing a high degree of
competition among companies and individuals in the development and marketing of
gas leasehold interests.

   The ability of the Company to market oil and gas will depend on numerous
factors beyond the control of the Company, the effect of which factors cannot
be accurately predicted or anticipated.  Some of these factors include the
availability of other domestic and foreign production, the marketing of
competitive fuels, the proximity and capacity of pipelines, fluctuations in
supply and demand, the availability of a ready market, the effect of the
federal and state regulation of production, refining, transportation and sales,
and general national and worldwide economic conditions.

Basia Holding, Inc.
   Basia Holdings holds quit claim title to 9,000 acres of land Grundy County,
Tennessee, pursuant to a conveyance from Alpine Development Co., a Florida
corporation, known as O & F Tennessee Land; and is in part of what is locally
referred to as the Southern Field of the Tennessee coalfield.

   The Company currently does not have the means, nor the intention in the near
future to attempt to develop and or mine the coal property or perfect the
title. The Company is seeking a buyer or a joint venture partner for the coal
reserves. The ability of the Company to market the coal will depend on numerous
factors beyond the control of the Company, the effect of which factors cannot
be accurately predicted or anticipated. Some of these factors include the
accessibility of the material, the availability of other domestic and foreign
production, environmental issues in both the region where the materials are
located and other regions where competitive materials are located, fluctuations
in supply and demand, the availability of a ready market, the effect of the
federal and state regulation of production, transportation and sales, and
general national and worldwide economic conditions.  Basia Holding, Inc. was
inactive during 2000 and 2001.
Mid-Nevada Art, Inc.

   Mid Nevada Art, Inc. is a wholly owned subsidiary of CEC with assets of $0.
Management elected to write the paintings down to zero based on the inability
of the Company to rent or sell and of these paintings. These artworks were
appraised at a value in excess of $1.7 million, however the appraisals were not
considered arms length and management reevaluated the book value based on
cashflow and projected cash flow for the rental or sell of the paintings.  Sky
M.Jones is a noted American artist, Sky Jones is a painter from the American
West, born October 3, 1947 in Salt Lake City, Utah. He graduated with a
bachelor degree in Art from the University of Utah in 1971. He has written
books on Art and Life. Jones deals in Multiple Imagery, that is, layers upon
layers of 3D forms overlaid and interwoven. Sky Jones originals have been in
the private collections of Queen Elizabeth, Governor Michael Dukakis, the late
Lucille Ball, and Mohammed Ali to name a few.  He has created various movie
posters including Star Trek, the Never Ending Story, Final Countdown, etc.
Limited edition prints and paintings by Sky Jones have been collected by or
displayed in museums, corporations and galleries world wide. Prior to 1985 he
used the name of Michael Whipple.  Mid-Nevada Art, Inc. was inactive during
2000 and 2001.

<PAGE>

Custom Environmental International

   Custom Environmental International, (CEI) is engaged in the business of
development and implementation of a patented carbon reactivation furnace.  CEI
developed a cost effective vertical kiln used for the recovery of gold.
Production models were sold throughout the world. CEI has gained valuable field
experience which has lead to improved models.

   Federal and State Regulation. General.  The activities of the Company with
respect to methane gas and coal, are subject to federal and state environmental
laws and regulations which impose limitations on the discharge of pollutants
into the air and water and which also establish standards for the treatment,
storage and disposal of solid and hazardous waste.  Management believes that
the Company is substantially in compliance with such laws and regulations, and
there are no pending proceedings which question compliance with all applicable
environmental, health and safety.

   Although the Company does not consider current laws and regulations relating
To such matters to be materially burdensome, especially in light of the reserve
status of the Company's involvement as opposed to operations, there can be no
assurance that future legislative or governmental actions or judicial decisions
will not adversely affect the Company or its ability to retain the mineral
rights set forth herein. The Company is not aware of any proposed or pending
legislative, governmental or judicial action that would materially adversely
affect the Company's properties.

   Methane Extraction.  The chief potential for environmental harm in the
extraction of coalbed methane, the gas trapped in underground coal streams, is
the discharge of salt water into streams. Weekly and monthly water-quality
samples are required to monitor the water quality during extraction.  Currently
the Company is not involved in the extraction of its methane reserves, and
thus faces no immediate environmental challenges.
Custom Environmental International, (CEI) was inactive during 2000 and 2001.

Executive Offices
C.E.C.'s executive offices are located at 3450 E Russell Road, Las Vegas,
Nevada 89120.

PATENTS
   C.E.C. had obtained certain patents for its low temperature furnaces
developed by CEI and used in regenerating carbon.

EMPLOYEES
   On April 1, 1996 the Company signed an agreement with WWW Consulting,
wherein, WWW Consulting would provide the Company with management and personnel
and other qualified technical and office personnel as required.  The Company
agreed on the following monthly compensation to be paid in cash or stock in the
Company for services rendered: Gerald Levine $8,500 per month; Marie Levine
$8,500 per month; misc. office personnel at varying rates depending on services
needed. This agreement was terminated in 1997.

<PAGE>

ITEM 2. PROPERTIES

   Principal and Executive Offices. C.E.C. does not currently lease or rent
Office space.
   320 Unit - Victory Village Apartments.  A general discussion of the 320 unit
Victory Village project is included under Item 1(c),Narrative Description of
Business, "Operations". During June 1995, the Company acquired a 24.5% interest
in the Victory Village III, Ltd. partnership utilizing Rule 144 restricted
common stock of the Company valued at $700,000. A $16,442,400 loan was recorded
against the approximate 17.72 acres providing the construction
financing for the project.  The project was completed in early 1997 and
certificates of occupancy have been obtained.

   Basia Holding, Inc.  A general discussion of the Basia Holding are included
under Item 1(c),Narrative Description of Business, "Operations". Basia Holding
Holds title to 9,000 acres of land in Grundy County, Tennessee known as O & F
Tennessee land; and is in part of what is locally referred to as the Southern
Field of the Tennessee coalfield.

   Atlas Methane Gas Interests.  A general discussion of the Atlas Methane
Holdings are included under Item 1(c), "Narrative  Description of Business",
"Operations". The Company owns 100% of 13,500 acres of leasehold interest
located in the Black Warrior Lagoon area of Alabama, containing methane gas
reserves.
   The Black Warrior basin encompasses an area of about 35,000 square miles in
northeastern Mississippi and Northwestern Alabama.  The basin is named for the
Black Warrior River, a prominent navigable river over most of its length through
the area.  The Black Warrior basin straddles the Cumberland Plateau, Appalachian
Valley and Ridge province, and East Gulf Coastal Plain. Although the basin's
exact limits are not firmly established in the literature, it is structurally
bounded on the north by the Nashville-Cincinnati arch and on the southeast by
the Appalachian fold and thrust belt. The basin is largely covered by Cretaceous
and younger sediments of the Gulf Coastal Plain and Mississippi Embayment.

ITEM 3. LEGAL PROCEEDINGS

   Fernando Aldecoa, et. al. v. Softpoint, Inc., United States District Court,
Southern District of California, Case Number 951654H(LSP) was instituted in
October, 1995. The Principal parties included Softpoint, Inc., Robert Cosby,
C.E.C. Industries, Inc., George Matthews, Ron Robinson, Ron Stoecklein, and Don
Stocklein. The action pertains the allegations made by certain Softpoint
shareholders that the defendants materially misrepresented, or allowed certain
misrepresentations to occur, which were relied upon by the plaintiffs in
purchasing their stock in Softpoint. The only relationship between the
plaintiffs and the Company is that the Company was attempting a merger with
Softpoint, which merger was not completed. Further, one of the past directors of
the Company was a past president of Softpoint, Inc.; however the dual
relationship existed after the merger termination. The plaintiffs are seeking
an unknown damage, which must be established upon determining liability, if any
Because the Company and its outside counsel, are of the opinion that the
Company has no exposure in the litigation, the Company is not aware of any
governmental authority which has interest in the matter from the standpoint of
the Company. The Company, through its independent counsel has filed a motion to
have the case dismissed against the Company, which motion will be heard by the
Federal Court on September 22, 1997.

<PAGE>

   Medera Component Systems, Inc. v. Prime Construction, Inc. et. al., Nevada
Federal District Court Case Number 596-01105 was instituted on November 27,
1996. The principal parties include Moonridge Development Corp., as well as
C.E.C. Industries Corp. The action alleges that the Company entered into an
indemnity agreement with Medera Component Systems, in relation to the use of
Medera's roof trusses on the Victory Village project. The Company has filed a
cross complaint alleging that no contract was entered into nor did the Company
ever elicit any indemnity agreement. The Company is strongly responding to the
litigation and believes that a judgment will be rendered in their favor.  The
case is in the discovery stage. A provision in the agreement wherein the Company
invested in the Victory Village project, contained an indemnification in favor
f the Company collateralized by preferred stock. In the event of a loss, the
Company is in a position of offset against the value of the preferred stock.

   On September 2, 1998, a judgement was entered in United States District
Court, District of Utah, Central Division, against C.E.C. Industries, Inc. In
favor of George A. Matthews, Jr. A former President and Director of C.E.C.
Industries.  The judgement entered was in the amount of $207,306.93.  The
judgment award was to compensate Mr. Matthews for monies allegedly owed to him
on his Employment Agreement, from an alleged wrongful stop transfer, interest,
and attorney'sfees.

   The company has been unable to post a bond.  The judgment has been record in
several states under the Sister State Judgment Act.

   On February 11, 1999, C.E.C. Industries, Inc. filed a complaint in the Third
Judicial District court in Salt Lake County, State of Utah against Richard G.
Matthews (son of George Matthews, Jr.) And Raymond A. Ebert.  In that action,
C.E.C. Industries claims that both Richard G. Matthews and Raymond A. Ebert
breached their fiduciary duties while Officers and/or Directors of C.E.C.
Industries.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   No matter was submitted to a vote of security holders, through the
Solicitation of proxies or otherwise, during the fourth quarter of the Company's
fiscal year ended March 31, 2001.

                                   PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is traded in the over-the-counter securities market
through the National Association of Securities Dealers Automated Quotation
Bulletin Board System, under the NASDAQ symbol CECN. The following table sets
forth the quarterly high and low bid prices for the Company's Common Stock
during the last two fiscal years of the Company, as reported by the National
Quotations Bureau. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not necessarily represent actual
transactions.
                                2000                1999
                           High      Low       High      Low

    1st Quarter           .065     .035       $.085     $.04
    2nd Quarter           .04      .03         .06       .03
    3rd Quarter           .06      .01         .105      .005
    4th Quarter           .03      .01         .095      .005

<PAGE>

No dividend was declared or paid by the Company during fiscal year 2001 or 2000.
A decision to pay dividends in the future will depend upon the Company's
profitability, need for liquidity and other financial considerations. There are
approximately 1762 shareholders of the 40,831,805 outstanding shares, as of
March 31, 2001.


ITEM 6.   SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                             2001           2000           1999          1998
<S>                          <C>            <C>            <C>           <C>
Revenue from continuing
   operations              $10,305          $5,253       $23,895        $1,892
Revenue from discontinued
    operations                   0               0             0             0

Net income (loss) from
   continuing operations $(167,953)   $(147,178.00)  $(1,135,970)    $(331,110)

Net gain/ loss from
  Discontinued operations        0              0             0             0

Gain/loss per common share:
   Continuing operations      (.01)           (.01)         (.06)         (.02)
   Discontinued operations    0.00           0.00           0.00          0.00

Total Assets              $117,727        $121,953      $940,267    $7,662,230

Long term obligations            0               0             0             0

Cash dividends per
   common share                  0               0             0             0
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial
statements and the notes thereto.

Overview
   The company has continued to go through major transitions pertaining to
direction and continued operations.  During fiscal 1998, the Company earned
revenues primarily through the sales of its royalty interest.

   Moonridge Development Corp. The Company divested itself of all interest to
Moonridge Development Corp. in June of 1996 regaining all interest in
properties located in Las Vegas, Nevada, (approximately 25 acres of commercial
real estate which was sold in the second and third quarters of 1996) and 24.5%
interest in Victory Village Associates Limited III (320 unit apartment project
in Henderson, Nevada, which is completed and has received certificates of
occupancy.

   On May 10, 1996, the Company entered into an agreement to sell approximately
8.5 acres of land on Russell Road in Las Vegas, Nevada. With the conveyance of
this land the company reduced its indebtedness by $1,735,185 on existing loans
and also received a six month extension with an option for an additional six
months and other consideration on the existing loans on the Company's 15 acres
of land in Las Vegas, which was subsequently sold.

<PAGE>

   On December 6, 1996, the company signed an exchange agreement to sell it's
interest in 15 and 2.2 acres of vacant land in Las Vegas, Nevada for 165,876
free trading shares of Synfuel Technologies, (OTC SNFL) trading at
approximately $20.00 per share on March 31, 1997 The existing mortgage on the
property of approximately $1,800,000 was assumed by the buyer.

   CEI. The Company, through its subsidiary, CEI, continued to incur expenses
related to the carbon reactivation furnace. The spin off that was announced in
October of 1995 was never completed and the Board of Directors decided that the
spinoff of CEI was not in the best interest of the Company or it's shareholders
and the Company terminated all spin off plans at this time.

   Basia Holdings, Inc. The Company holds quit claim title to approximately
9,000 of land in Tennessee through its wholly owned subsidiary, Basia Holdings,
and 13,500 acres of methane gas leases in Alabama. The Company has not
developed these assets at this time.

   Mid-Nevada Art, Inc. is no longer generating revenues from its broadcasting
services. The company also entered into an Exchange Agreement with One World
Cards, Inc. for the purchase of 31 art works by Sky M. Jones for approximately
$3.5 Million in pre-paid calling cards at a rate of $.45 per minute.. Mid-
Nevada Art exercised its option wherein Mid-Nevada Art returned the pre-paid
calling cards to One Wold Cards, Inc. and One World Cards, Inc. returned the art
works to Mid-Nevada Art, Inc. The decision for the return of the calling cards
was the result of the failure of One World Cards, Inc. to fully activate all of
the prepaid calling cards.

   Auto Express, Inc. On June 15, 1996, the company entered into a Stock
Exchange Agreement to acquire 100% of the issued and outstanding stock of Auto
Express, Inc., a Colorado Corporation involved in the transportation of
automobiles nationwide. The Company subsequently became aware of material
misrepresentations as well as undisclosed liabilities made by Auto Express,
Inc.  In light of the material nature of these issues, the Company has
determined that it is in the best interest of the Company and its shareholders
to rescind the transaction.

Liquidity and Capital Resources

   Cash requirements of C.E.C. have been met by funds provided from
royalty income and borrowing.  The ratio of current assets to current
liabilities at March 31, 2001 was .15 to 1 compared to .17 to 1 at March 31
2000.

   The working capital of the Company as of March 31, 2001, was ($648,531).
The working capital at March 31, 2000 was ($623,754).

   Cash was $1312 at Fiscal 2001 year end versus $476 at fiscal 2000 year end.

   During 2000, the Company increased its accounts payable By $145,521 mainly
as a result of a management agreement with a related party, Wire to Wire, Inc.
Accounts Receivable increase to $1,050.  Inventory remained at $0.  Payroll
Taxes, and Other Accrued Liabilities were $0 due to decreased operations and
the management agreement with Wire to Wire, Inc.

  During 2000, the Company recorded no new long term debt.  The long term debt
included the $207, 306 judgment awarded George Matthews Jr.  It had no other
long term debt.

<PAGE>

   During 1999, the Company accounts receivable-related parties, accrued
interest receivable and notes receivable-related parties  by $395,408 were
assigned to an attorney for legal services in connection with the Matthews
judgment.  The receivables were due from Mr. D. Stoeklein and Mr. R. Stoecklein
from members of the company.  Accounts receivable at March 31, 2000 were for
royalty interests.  Accounts receivable at March 31, 2001 were $-0-.

Significant Customers

   The Company had no principal customer.

Borrowing Activities

   During the past three years, the Company's operations and investing
activities have been financed extensively from borrowings.  Borrowings have
Been approximately $23,727, $145,521 and $323,609  in fiscal years 2001, 2000
And 1999, respectively.

   Fiscal 1996.  During fiscal 1996, the Company repaid 50% of the $1,000,000
line of credit from Pioneer Citizens Bank, and as of the date of this report,
approximately $10,000 in accrued interest is owed on the loan as of March 31,
1997.  Also during fiscal 1996, the Company borrowed private money in the
approximate amount of $199,900 for the purpose of funding the Company's
construction activities through Moonridge Development Corporation.  Subsequent
to year end, the Company eliminated approximately $3,935,000 of debt in the
sale of its 7.28 acre mini-warehouse project. Of the $3 million dollar loan
with Bank of America, included in the $3,935,000 amount, only approximately
$600,000 had been drawn down by the Company's construction division for
purposes of constructing the mini-warehouse project.

   Fiscal 1995.  During fiscal 1995, the Company drew down on a $1,000,000 line
of credit from Pioneer Citizens Bank.  Also during 1995, the Company entered
into a construction loan agreement in the sum of $3,000,000 with Bank of
America, for the construction of its mini-storage facility in Las Vegas,
Nevada.  The collateral for the Bank of America loan was a 7.28 acre parcel of
property upon which the Company is building its mini-storage facility.  These
loans were both retired in Fiscal 1996-1997. (See Above.)

Results of Operations

   Fiscal Year 2001 Compared to Fiscal Year 2000

   Revenues.  The Company's revenues increased from  $5,253 in 2000 to $10,305
in 2001.

   Selling, General and Administrative Expenses.  The Company's selling,
general and administrative expenses increased from $8,584 in 2000 to $10,758 in
2001, an increase of $2,174.  Selling, General and Administrative Expenses
S,G&A) net increases were primarily attributable to inactivity of the company,
directors fees and expenses were $0 in 2000 and $0 in 2001, research and
development was $0 in 2000 and $0 in 2001, consulting expenses were $0 in 2000
and $140,000 in 2001, legal from $43,847 in 2000 to 27,500 in 2001 a decrease
of $16,347, and other selling, general and administrative expenses from $0 in
2000 to $0 in 2001.  The increase in consulting expenses resulted from
management's attempts to obtain financing and the continuing search for
acquisition candidate.

<PAGE>

   Interest Expense. Interest expense for the Company was from $0 in 2000 to $0
in 2001.Other Income and Expense. Other income and expense for the Company was
from $0 in 2000 and $0 in 2001.
   Gain or Loss on Sale of Assets. There was no gain or loss on sale of assets
for the Company in 2000 or 2001.

   Gain or Loss from Discontinued Operations.  There was no gain or loss from
discontinued operations during 2000 or 2001.

   Gain or Loss on Disposal of Discontinued Operations.  There was no Gain or
loss from disposal of discontinued operations during 2000 or 2001.

   The Company reported a loss on impairment of assets in the amount of $86,772
in 1999 and $0 in 2000 and 2001.  The Company reported a loss on investments in
the amount of $721,345 in 1999 and $0 in 2000 and 2001.

Fiscal Year 2000 Compared to Fiscal Year 1999

   Revenues.  The Company's revenues decrease from  $23,895 in 199 to $5,253
in 2000.

   Selling, General and Administrative Expenses. The Company's selling, general
and administrative expenses decrease from 15,684 in 1999 to $8,584 in 2000, a
decrease of $7,100. Selling, General and Administrative Expenses (S,G&A) net
decreases were  primarily attributable to inactivity of the company, directors
fees and expenses were $0 1999 and $0 in 2000, research and development was
$0 in 1999 and $0 in 2000, consulting expenses were $0 in 1998 to $0, legal,
accounting and auditing from $128,758 in 1999 to $143,847 in 2000 an increase
of $15,089, and other selling, general and administrative expenses from $0 in
1999 to $0 in 2000.

   Interest Expense. Interest expense for the Company increased 100% from $0
in 1999 to $0 in 2000.

   Other Income and Expense. Other income and expense for the Company was
from $0 in 1999 and $0 in 2000.

   Gain or Loss on Sale of Assets. There was no gain or loss on sale of assets
for the Company in 1999 or 2000.

   Gain or Loss from Discontinued Operations.  There was no gain or loss from
discontinued operations during 1999 or 2000.

   Gain or Loss on Disposal of Discontinued Operations.  There was no gain
or loss from disposal of discontinued operations during 1999 or 2000.

   The Company reported a loss on impairment of assets in the amount of $86,772
in 1999 and $0 in 2000.  The Company report a loss on investments in the amount
of $721,345 in 1999 and $0 in 2000.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   See Financial Statements and Financial Statement Schedules appearing on
F-1 to F-23 of this Form 10-K Annual Report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

NONE.

<PAGE>

                                        PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Directors and Officers of the Company as of March 31, 2000 are as follows:
Name and Address              Age            Position Held

Brian Dvorak                  45             Chairman of the Board, Director,
P O Box 230656                               Chief Executive Officer,
Las Vegas, Nevada 89123                      President, Principal Financial
                                             Officer, Principal Accounting
                                             Officer, Secretary/Treasurer

ITEM 11. EXECUTIVE COMPENSATION

   The Compensation which the Company paid to the President for services in
All capacities and for the fiscal years indicated, was as follows:

Name and Principal Position                 Year         Salary          Other
Brian Dvorak                                2001          $0

Brian Dvorak                                2000          $0

Marie Levine, President                     1999          $0

Gerald H.  Levine, President                1998          $0

Gerald H.  Levine, President                1997    $102,000(1)

Gerald H.  Levine, President                1996          $0

George Matthews, President                  1996    $156,500

Richard Cope, President                     1996          $0

Ronald J.  Robinson, President              1995    $100,000

Donald J.  Stoecklein, Secretary            1995    $100,000

Ronald G.  Stoecklein, Treasurer            1995    $100,000

Company's contribution to the Savings and Protection Plan.

On April 1, 1996 the Company signed an agreement with WWW Consulting,
wherein, WWW Consulting would provide the Company with management personnel
and other qualified technical and office personnel as required.

Insider Participation in Compensation Decisions

   The Company has no separate Compensation Committee; the entire Board of
Directors makes decisions regarding executive compensation.  Brian Dvorak,
serves as the officers and directors of the Company.  He participated in
deliberations of the Company's Board of Directors concerning executive officer
compensation.

Board of Directors Report on Executive Compensation

   The Board of Directors has no existing policy with respect to the specific
relationship of corporate performance to executive compensation.  Since the
Company's sale, effective December 31, 1990, of all of the Company's assets
relating to its then primary active business of engineering consulting and
customized minerals processing, the Board has set executive compensation at
what the Board considered to be the minimal levels necessary to retain and
compensate the officers of the company for their activities on the Company's
behalf.

Brian Dvorak receives no compensation for his services.

<PAGE>

EMPLOYEE BENEFIT PLAN
   Effective February, 1996, the Savings and Protection Plan (the Savings Plan
was terminated by C.E.C. Management Corp.

1987 NONQUALIFIED STOCK OPTION PLAN

The Company's 1987 Nonqualified Stock Option Plan (the NSOP) was terminated in
1996

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

BENEFICIAL STOCK OWNERSHIP

   The following table sets forth, as of March 31, 2001, Common Stock ownership
of (1) the directors of the Company, (2) the only persons known to management
to be the beneficial owners of more than five percent of the Common Stock of
the Company, and (3) the Company's directors and officers as a group:

                                      Amount and               Options
                                      Nature of                or Other
Title of  Name and Address            Beneficial     Percent   Beneficial
Class     of Beneficial Owner(1)      Ownership of   Class     Owners(2)(3)
Common    Brian Dvorak                9,298,173        22%

Common    Ester Chan                 20,000,000        49%

(1) Addresses are furnished only for those beneficial owners of 5% or more of
the Company's Common Stock.
(2) All beneficial owners have sole voting and investment power over all of the
shares they own, except as indicated in column five and these footnotes.
(3) The amounts in column three include the amounts in column five.

Agreements Changing Control of the Company

On or about January 27, 2001, Mr. Brian Dvorak, acting on behalf of himself
and as agent for a group of other investors, entered into an agreement with
Gerald and Marie Levine to purchase a control block of CEC stock for personal
funds of the group.  The agreement included the current officers and directors
to resign and the appointment of Mr. Dvorak as President and Director.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a) Transactions with Management and Others.

Management Transactions as of March 31, 2001

Gerald Levine, President and Director of the Company is also the President and
Director of O.T.S. Holdings, Inc. and President and a Director of Wire to Wire,
Inc. dba WWW Consulting.

Marie A. Levine, Secretary and Director of the Company is also the Secretary and
a Director of Wire to Wire, Inc. dba WWW Consulting.

Loans Made to the Company by, or Guaranteed by Affiliates

The Company has borrowed $741,219 from WWW Consulting,.

Stock Options Exercised by Board Members

In February of 1996, two directors executed options to acquire 300,000 shares
of common stock, each, in the Company in exchange for consideration paid
pursuant to the terms and conditions of promissory notes executed concurrent
with the exercise.

<PAGE>

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

In April, 2000, a Form 8K was filed regarding change in management and control
In June, 2000, a Form 8K was filed reporting a letter of intent to acquire
Denner Power.

(a) Documents filed as part of this Report

     1. Financial Statements:

     Independent Auditors' Report                               F-1
     Consolidated Balance Sheets at March 31, 2001 & 2000       F-2 & F-3
     Consolidated Statements of Operations for the years ended
          March 31, 2001, 2000                                  F-4

     Consolidated Statements of Stockholders' Equity for the
          years ended March 31, 2001, 2000                      F-5 & F-6

     Consolidated Statements of Cash Flows for the years ended
          March 31, 2001, 2000                                  F-7

     Notes to Consolidated Financial Statements                 F-8 to F-252
     2. Exhibits required to be filed are listed below.

     Exhibit Number           Description

     (b)  During the fiscal year 2001, the Company filed
          the following 8-K's.


Subsequent to the end of the fiscal year, the Company  filed
the following reports on Form 8-K

None


                                   SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934,the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

C.E.C. INDUSTRIES CORP.

By:  /s/ Brian Dvorak                 Dated: June 4, 2002
     ---------------------
     Brian Dvorak, President

<PAGE>
                      C.E.C. Industries, Corp. and Subsidiaries
                             (A DEVELOPMENT STAGE COMPANY)

                                  FINANCIAL STATEMENTS
                                      March 31, 2001
                                           and
                                       March 31, 2000
<PAGE>

INDEPENDANT AUDITOR'S REPORT-----------------------------------------------  1

BALANCE SHEET-ASSETS-------------------------------------------------------  2

BALANCE SHEET - LIABILITIES AND SHAREHOLDER'S EQUITY-----------------------  3

STATEMENT OF OPERATIONS----------------------------------------------------  4

STATEMENT OF STOCKHOLDERS' EQUITY----------------------------------------  5-6

STATEMENT OF CASH FLOWS----------------------------------------------------  7

NOTES TO FINANCIAL STATEMENTS-------------------------------------------  8-22
<PAGE>

                                INDEPENDENT AUDITORS' REPORT

Board of Directors                                             March 29,  2002
C.E.C. Industries Corporation (the Company)
Las Vegas, Nevada 89120

     I have audited the Balance Sheet of C.E.C. Industries Corporation, as of
March 31, 2001 and  March 31, 2000, and the related Statements of Operations,
Stockholders' Equity and Cash Flows for the years ending March 31, 2001 and
March 31, 2000.  These financial statements are the responsibility of the
Company's management.  My responsibility is to express an opinion on these
financial statements based on my audit.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of C.E.C. Industries
Corporation, as of March 31, 2001, and  March 31, 2000, and the results of its
operations and cash flows for the period in conformity with generally accepted
accounting principles.

     The accompanying financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has had limited operations and have not
commenced planned principal operations.  This raises substantial doubt about
its ability to continue as a going concern.  Management's plan in regard to
these matters are also described in Note 3.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.


James E. Slayton, CPA

<PAGE>

                     C.E.C. Industries, Corp and Subsidiaries
                          (A Development Stage Company)
                                    BALANCE SHEET
                                        AS AT

                                       ASSETS
<TABLE>
<CAPTION>
     ASSETS                                   March 31, 2001    March 31, 2000
<S>                                           <C>               <C>
CURRENT ASSETS
Cash                                              1,312.00            476.00
Accounts Receivable                                   0.00          1,050.00
                                               -----------       -----------
Total Current Assets                              1,312.00          1,526.00

OTHER ASSETS

Security Deposits                                     0.00          4,012.00
Oil & Gas Interests                             116,415.00        116,415.00
                                               -----------       -----------
Total Other Assets                              116,415.00        120,427.00
                                               -----------       -----------
TOTAL ASSETS                                    117,727.00        121,953.00
                                               -----------       -----------
                                               -----------       -----------
</TABLE>

               See accompanying notes to financial statements
                                   F-2
<PAGE>
                     C.E.C. Industries, Corp and Subsidiaries
                          (A Development Stage Company)
                                    BALANCE SHEET
                                        AS AT

LIABILITIES & EQUITY
<TABLE>
<CAPTION>
                                              March 31, 2001    March 31, 2000
<S>                                           <C>               <C>
CURRENT LIABILITIES
Accounts Payable                               764,946.00         741,219.00
Bank Overdraft                                       0.00               0.00
Payroll Taxes Payable                                0.00               0.00
                                               -----------       -----------
Total Current Liabilities                      764,946.00         741,219.00

OTHER LIABILITIES
Judgement                                      207,306.00         207,306.00
                                               -----------       -----------
Total Other Liabilities                        207,306.00         207,306.00
                                               -----------       -----------
Total Liabilities                              972,252.00         948,525.00


EQUITY
Common Stock, $0.05 par value, shares;
authorized,                                  2,039,090.00         939,090.00
50,000,000 shares, issued and outstanding at
March 31, 2001, 40,831,805 shares and
18.831,805 shares in at March 31, 2000

Additional Paid in Capital                   6,162,830.00       7,122,830.00

Convertible Preferred stock, $0.001 par
value, shares authorized, 100,000,000 shares,
issued and outstanding 0 shares in 1999 and
10,663,041 shares in 1998                             .00               0.00

Retained Earnings (Deficit accumulated
during development stage)                   (9,056,445.00)     (8,888,492.00)
                                               -----------       -----------

Total Stockholders' Equity                    (854,525.00)       (826,572.00)
                                               -----------       -----------

     TOTAL LIABILITIES & OWNER'S EQUITY        117,727.00         121,953.00
                                               -----------       -----------
                                               -----------       -----------
</TABLE>
                 See accompanying notes to financial statements
                                        F-3
<PAGE>

                     C.E.C. Industries, Corp and Subsidiaries
                          (A Development Stage Company)
                            STATEMENT OF OPERATIONS
                               FOR PERIODS ENDING
                      March 31, 2001 and March 31 , 2000
<TABLE>
<CAPTION>
                                              March 31, 2001    March 31, 2000
<S>                                           <C>               <C>
     REVENUE
Royalty Income                                  10,305.00           5,253.00

    COSTS AND EXPENSES

Selling, General and Administrative             10,758.00           8,584.00
Legal Expense                                   27,500.00         143,847.00
Consulting Expense                             140,000.00               0.00
Loss on Impairment of Assets                         0.00               0.00
Loss on Investments                                  0.00               0.00
Judgement for compensation                           0.00               0.00
                                               -----------       -----------
          Total Costs and Expenses             178,258.00         152,431.00
                                               -----------       -----------
               Net Ordinary Income or (Loss) (167,953.00)       (147,178.00)
                                               -----------       -----------
                                               -----------       -----------
Weighted average number of common shares
Outstanding                                    28,831,805         18,831,805

Net Loss Per Share                                  (0.01)             (0.01)
</TABLE>
               See accompanying notes to financial statements
                                      F-4


<PAGE>
          C.E.C. Industries, Corp and Subsidiaries (Development Stage Company)
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR YEARS ENDED March 31, 2001 and March 31, 2000
<TABLE>
<CAPTION>
                                                                                   Deficit
                                                                                   accumulated
                               Preferred           Common               Additional during        Treasury             Total
                               Stock               Stock                paid-in    development   Stock                Stockholder's
                               Shares    Amount    Shares      Amount   capital    stage         shares     Amount    Equity
                                --------- --------- ----------- -------- ---------- ------------  ---------- --------- ----------
<S>                            <C>       <C>       <C>         <C>      <C>        <C>           <C>        <C>       <C>
Balance at March 31, 1995         725,000      $725   1,867,459  $93,373 $3,799,919  ($3,419,976) (5,986.00) ($23,527)   450,514

Bio-Sphere Shares Canceled
in Connection with Asset
Purchase Cancellation            (125,000)     (125)                                                                        (125)

Canceled Sterling Travel
Purchase                                                                    (30,788)      (4,819)                        (35,607)
24.5% Interest Victory
Village Limited Partnership                           1,200,000   60,000    240,000                                      300,000

Exchanged Preferred $.001
Shares For Preferred $.50
Redeemable Shares                (600,000)     (600)                                                                        (600)

Issued Preferred $.50
Redeemable Shares               4,200,000     4,200                         (3,476)                                          724

S-8 Shares Issued                 200,000       200   3,372,830  168,642    933,920                                    1,102,762
Rosenbaum Shares
Canceled                                                (30,000)  (1,500)   (21,000)                                     (22,500)

Issued to 401-K                                           1,506       75    (19,856)                  5,986    23,527      3,746

Stock Options Exercised                                 600,000   30,000    150,000                                      180,000

Exchanged  for 100%
Interest in Mid-Nevada Art,
Inc.                            4,016,734      4017   2,886,667  144,333  1,213,124                                 0  1,361,474

Exchanged  for 100%
Interest in Basia Holding,
Inc.                            1,797,385      1797   2,309,333  115,467    682,736                                      800,000

Exchanged  for 100%
Interest in Oil and Gas
Interest                        2,848,922      2849   3,464,000  173,200  1,055,201                                    1,231,250

Expenses of Exchange
Agreement                                                                  (171,750)                                    (171,750)

Net Loss                                                                              (1,512,091)                     (1,512,091)
                                --------- --------- ----------- -------- ---------- ------------ ---------- --------- ----------
Balance at March 31,1996       13,063,041   $13,063  15,671,795 $783,590 $7,828,030  ($4,936,886)         0        $0 $3,687,797

S-8 Shares issued for
Services                                              2,065,000  103,250    454,150                                      557,400

Exchanges for 100% Interest
in Auto Express, Inc. on
June 15, 1996                                           495,000   24,750    148,500                                      173,250

Issued for Telephone Calling
Cards                                                   200,000   10,000     60,000                                       70,000
Auto Express Exchange
Canceled on January 31,
1997                                                   (495,000) (24,750)  (148,500)                                    (173,250)

Shares Issued for Telephone
Calling Cards Canceled                                 (200,000) (10,000)   (60,000)                                     (70,000)

Shares Redeemed in
Connection with pay-off of
Note Receivable                (2,400,000)   (2,400)                     (1,197,600)                                  (1,200,000)

Net Loss                                                                              (3,571,909)                     (3,571,909)

Dividends Paid on Preferred
Stock                                                                                   (165,372)                       (165,372)
                                --------- --------- ----------- -------- ---------- ------------ ---------- --------- ----------
</TABLE>

                                                               F-5

<PAGE>

          C.E.C. Industries, Corp and Subsidiaries (Development Stage Company)
             CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
          FOR YEARS ENDED March 31, 2001 and March 31, 2000 (CONTINUED)
<TABLE>
<CAPTION>
                                                                                   Deficit
                                                                                   accumulated
                              Preferred           Common                Additional during        Treasury             Total
                              Stock               Stock                 paid-in    development   Stock                Stockholder's
                              Shares    Amount    Shares       Amount   capital    stage         shares     Amount    Equity
                              --------- --------- -----------  -------- ---------- ------------  ---------- --------- ----------
<S>                           <C>       <C>       <C>          <C>      <C>        <C>           <C>        <C>       <C>
Balance at March 31,1997     10,663,041   $10,663  17,736,795  $886,840 $7,084,580  ($8,674,167)         0        $0  ($692,084)


Prior Period Adjustment                                                               $1,399,933                      $1,399,933

Net (Loss) for year ended
ended 03/31/1998                                                                        ($331,110)                      (331,110)
                              --------- --------- -----------  -------- ---------- ------------  ---------- --------- ----------
Balance at March 31, 1998    10,663,041   $10,663  17,786,795  $886,840 $7,084,580   (7,605,344)          0        $0    376,739

Preferred Stock canceled    (10,663,041)  (10,663)                                                                       (10,663)

Issued for cancellation of
$10,000 in debt                                        50,000     2,500      7,500                                        10,000

Issued for cancellation of
$60,000 in debt                                       550,000    27,500     22,500                                        50,000

Issued for legal services                             250,000    12,500      7,500                                        20,000

Issued for  cancellation of
$7500 in debt                                          95,010     4,750      2,750                                         7,500

Net (loss) for year ended
03/31/1999                                                                           (1,135,970)                      (1,135,970)
                              --------- --------- -----------  -------- ---------- ------------  ---------- --------- ----------
Balance at March 31, 1999             0         0  18,731,805   934,090  7,124,830   (8,741,314)          0         0   (682,394)

Issued for $3,000 in
legal services                                        100,000     5,000     (2,000)                                        3,000

Net (loss) for year ended for
year ended 03/31/2000                                                                  (147,178)                        (147,178)

Balance at March 31, 2000             0         0  18,831,805   939,090  7,122,830   (8,888,492)          0         0   (826,572)
                              --------- --------- -----------  -------- ---------- ------------  ---------- --------- ----------
Issued for consulting services in
September 2000                                      2,000,000   100,000    (60,000)                                       40,000

Issued for consulting services in
October 2000                                       20,000,000 1,000,000   (900,000)                                      100,000

Net (loss) for year ended for
03/31/2001                                                                             (167,953)                        (167,953)

Balance at March 31, 2001             0         0  40,831,805 2,039,090  6,162,830  (9,056,445)           0         0   (854,525)

                              --------- --------- -----------  -------- ---------- ------------  ---------- --------- ----------
                              --------- --------- -----------  -------- ---------- ------------  ---------- --------- ----------
</TABLE>
                  See accompanying notes to financial statements
                                    -6-

<PAGE>
                         C.E.C. Industries, Corp. and Subsidiaries
                                (A DEVELOPMENT STAGE COMPANY)

                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    FOR THE YEARS ENDED
<TABLE>
<CAPTION>
                                               March 31, 2001   March 31, 2000
<S>                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) from operations                       (167,953)         (147,178)
Adjustments to reconcile net income or loss
to net cash used in operation activities
Services rendered for Stock                       140,000             3,000
Increase (Decrease) in Current Assets               1,050            (1,050)
Increase (Decrease) in Other Assets                 4,012                 0
Increase (Decrease) in Accounts Payable            23,727           145,521
Increase (Decrease) in Other Liabilities                0                 0
Increase (Decrease) in Payroll Taxes                    0                 0
Increase (Decrease) in Accrued Liabilities              0                 0
                                               -----------       -----------
Total Adjustments                                 168,789           147,471
                                               -----------       -----------
     Net Cash provided by Operating Activities        836               293
                                               -----------       -----------
     Net cash used by investing activities              0                 0

CASH FLOWS FROM FINANCING ACTIVITIES
Cancellation of Preferred Equity
Preferred Dividends Paid                                0                 0
                                               -----------       -----------
Net cash provided by financing activities               0                 0
                                               -----------       -----------

     Net increase (decrease)  in cash and
     cash Equivalents                                 836               293

     Cash and cash equivalents at beginning
     Of Year                                          476               183
                                               -----------       -----------

     Cash and Cash Equivalents at End of Year       1,312               476
                                               -----------       -----------
                                               -----------       -----------
Income Taxes                                         $  0              $  0
                                               -----------       -----------
                                               -----------       -----------
</TABLE>

                      See accompanying notes to financial statements
                                         -7-
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

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

Supplemental Schedule of Non-Cash Investing and Financing Activities

During 1996 and 1995, the Company issued 5,986 and 45,189 and shares of
treasury stock valued at $23,527 and $11,298, respectively, as a contribution
to the retirement plan.

During 1994, the Company issued 600,000 shares of preferred stock at $4.00 per
share ($2,400,000) as additional value for the unimproved land purchased in
Las Vegas, Nevada.

During 1996, the Company converted the 600,000 shares of $4.00 preferred stock
into 4,200,000 shares of new series "B" non-converting preferred stock with
a par value of $0.001 per share,  with a redemption value of $.50 per share,
that has attached to the issue one vote per share, equal in value to one vote
of common stock and each share pays a cumulative preferred dividend of 10% per
year. The Company may redeem the 4,200,000 shares of new Series "B" non-
converting preferred stock through October 12, 1999.  On December 20, 1995,
the Company issued an additional 100,000 nonvoting preferred shares with a par
value of $.001 per share, redeemable at $.50 per share and 100,000 voting
preferred shares with a par value of $.001 per share, redeemable at $.50 per
share in consideration of raising DMS Golf Enterprises, Inc. note receivable
from $1,000,000 to $1,200,000.

In fiscal 1996, the remaining investment Logos International, Inc. was sold for
$34,996. In fiscal 1994, the investment in Logos International, Inc. was
written down to its market value resulting in a loss of $625,960. (See Note 3)

During 1995, the Company purchased 100% of Sterling Travel with net assets
valued at $30,788 through incurring accrued expenses of $30,788.  During 1996,
the Company rescinded the purchase agreement with Sterling Travel for
nonperformance on the agreement. (See Note 13)

During 1995, the Company issued 125,000 shares of preferred stock to Bio-Sphere
Technology valued at $62,500for medical technology. (See Notes 8 and 13)
During 1996, the Company agreed to cancel the agreement with Biosphere
Technology, and accordingly, canceled the preferred shares issued.

In fiscal 1997, the Company issued 2,065,000 shares of common stock on Form
S-8 for professional services.  In fiscal 1996, the Company issued 3,972,830
shares of common stock on Form S-8 for directors' fees and professional
services. In fiscal 1995, the Company issued 449,974 shares of common stock
on Form S-8 for directors' fees and professional services. The shares were
valued at $557,400, $1,102,762, and $489,447 respectively, for an average of
$0.20 per share.

On March 28, 1996, the Company issued 8,660,000 shares of common stock and
8,663,041 shares of preferred stock in exchange for 100% of the common stock
of Mid-Nevada Art, Inc., 100% of the common stock of Basia Holding, Inc. and
100% interest in oil and gas leases. The shares were valued at $1,361,474,
$800,000 and $1,231,250, respectively, less expenses of the exchanges of
$171,500.

On June 15, 1996, the Company issued 495,000 shares of common stock in exchange
for 100% of the common stock of Auto Express, Inc. The shares were valued  at
$.035 at per share or $173,250.  On January 31, 1997, the exchange was canceled
 for nonperformance under the exchange contract.
                                                F-8
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS


During June, 1996, the Company issued 200,000 shares of common stock in
exchange for Telephone Calling
Cards. The shares were valued at $0.35 per share or $70,000. On January 31,
1997, the exchange was canceled because of the inability of the Telephone
Calling Card Company to activate the Calling Cards.

During June, 1996, the Company issued 945,010 shares of common stock in
exchange for cancellation of $67,500 in debt.

On March 31, 1997, a note receivable in the amount of $1,200,000 plus accrued
interest of $165,372 was paid off by cancellation of 2,400,000 shares of
preferred stock with a cost of $1,200,000 plus preferred stock dividends of
$165,372  that paid the principal and interest in full.

On July 29, 1998, the Company, reached an agreement Fort Worth Credit
Partners, Ltd, to return 1, 805,000 shares of Preferred Stock for the
Company's interest in Victory Village.  In addition, the Company also cancelled
8,868,041 shares of preferred stock which had been issued for related party
receivables.

During March, 1999, the Company issued 250,000 shares of common stock for
legal services valued at $20,000.

During April, 1999, the Company issued 100,000 shares of common stock for
legal services valued at $3,000.00

During September 2000, the Company issued 2,000,000 shares of common stock for
consulting services valued at $40,000.

During October 2000, the Company issued 20,000,000 shares of common stock for
consulting services valued at $100,000.

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Business and Principles of Consolidation

The consolidated financial statements include the accounts of C.E.C.
Industries Corp. (the  Parent) and its subsidiaries, Custom Environmental
International, Inc. ("CEI") (80% owned the reduction in ownership of CEI from
90% was due to the issuance of additional shares of common stock to employees
in lieu of salaries), Plata Oro (57% owned), Moonridge Development Corp.
(100% owned), Sterling Travel (100% owned), Microsphere Technology
(100% owned), Islet Transplant Technology (100% owned), Mid-Nevada Art, Inc.
(100% owned) and Basia Holding, Inc. (100% owned.). During the fiscal year
1996, the Sterling Travel (100%) purchase was canceled do to nonperformance by
Sterling Travel. During the fiscal year 1996, Microshpere Technology (100%) and
Islet Transplant Technology (100%) operations were discontinued. During the
fiscal year 1997, the Company sold Moonridge Development Corp. All material
intercompany transactions have been eliminated.  Custom Environmental
International, Inc. is developing and marketing a carbon regeneration furnace.
Plata Oro is involved in minerals exploration but has been inactive for several
years.  Moonridge Development Corp. develops unimproved land in Las Vegas,
Nevada.  Sterling Travel is a travel agency in Boca Raton, Florida. Microsphere
Technology and Islet Transplant Technology are engaged in research and
development of medical technology.  Mid-Nevada Art, Inc. purchases artworks
for lease and rental.  Basia Holding, Inc. holds title by quitclaim deed to
approximately 9,000 unencumbered acres of land and coal  reserves.
(See Note 12)
                                      F-9
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS
Revenue Recognition

Royalty revenues are recorded as received from oil and gas leasehold interests
and retained overriding royalty rights. During the fiscal year 1996 all oil and
gas rights were sold.  The Company is not involved in mining or extraction of
coal, oil or gas, and accordingly, no revenues are generated therefrom.
Revenues from travel consultants are recognized as commissions earned from
bookings of travel reservations net of ticketing costs and from affiliation
fees. Revenue from travel consultants occurred only during the year 1995.

Lease and rental income from artworks are recorded as received. During the
years ending March 31, 1996, 1997 and 1998 there was no lease and rental income
received. Sales of artworks are recorded net of its original cost as gain or
loss on the sale of investments.  During the years ending March 31, 1999, 2000
and 2001 there were no revenues from sale or rental of the artworks.

Revenue from fixed-price contracts are recognized on the percentage of
completion method, measured by the percentage of cost incurred to date to
estimated costs for each contract, by management monthly and approved by the
engineer, architect and owner. An asset, "Costs and estimated earnings in
excess of billings on uncompleted contracts" represents revenues recognized in
excess of amounts billed and are recognized on the balance sheet.  Since the
construction company was sold on May 16, 1997, no revenues are included in the
results of operations for 1997 and prior year Statements of Consolidated
Operations have been restated. (See Note 14)

Property and Equipment

Expenditures that increase asset lives are capitalized at cost. Normal
maintenance and repairs are expensed as incurred.  The cost and accumulated
depreciation of assets retired or disposed are removed from the accounts and
any resulting gain or loss is included in the consolidated statements of
operations. Depreciation is reported on a straight-line basis over the
estimated useful lives on the assets which range from 3 to 7 years.
Office Equipment                  5 to 7 Years
   Automobiles                    3 Years

There was no depreciation in 2000 or 2001.

Inventories

The Company does not have any inventories.

Patents

Costs incurred in connection with obtaining patents are capitalized and
amortized on a straight-line basis over 17 years from the date of issuance
of such patent.

There was no amortization in 2000 or 2001.

Long-Lived Assets

The company's long-lived assets consist of patents, that are being amortized
on a straight-line basis over 17 years from the date of issuance of such
patents, net of amortization, is equal to its current book value.  The artworks
are recorded at cost.  The artworks were reviewed by management for impairment
of value in 1998.  Management wrote the artworks down to zero based on cash
flow and projected cash flow.  The artworks had not generated any cash revenues
nor were they projected to for the next five years.  The company reviewed the
patents for impairment of value in 1999.  Management wrote the patents down to
$0 based on cash flow and projected cash flow.
                                                    F-10
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

Earnings (Loss) Per Common Share

Earnings (Loss) per common share is computed based on the weighted average
number of common shares and common share equivalents outstanding.  Stock
options are included as common share equivalents using the treasury stock
method except for 1995 when they were anti dilutive.

The number of shares used in computing earnings (loss) per common share was
18,831,805  in 2000 and 28,831,805 in 2001.

Cash Equivalents

For purposes of the consolidated statement of cash flows, the Company considers
all highly liquid debt instrument purchased with an original maturity of three
months or less to be cash equivalents.

Use of Estimates

Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities,  and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing the financial statements.

Presentation

Certain accounts from prior years have been reclassified to conform with the
current year's presentation.

Pending Accounting Pronouncements

It is anticipated that current pending accounting pronouncements will not have
an adverse  impact on the financial statements of the Company.


NOTE 2 - INVENTORIES
The company no longer has any interests in undeveloped or developed land or
any inventory.

NOTE 3 - INVESTMENTS - MARKETABLE SECURITIES

Investment in Trading Securities

On December 6, 1996, the Company exchanged 17.44 acres of undeveloped and
developed land for 139,824 common shares of Synfuel Technologies, Inc.  This
stock was originally valued at $2,656,656.  Based on subsequent events, the
transaction is being revalued at $36,900, the value at December 31, 1997.
During 1998, the stock became valueless and was written down to $0.
                                                F-11
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

NOTE 3 - INVESTMENTS - MARKETABLE SECURITIES (CONTINUED)

Investment in Equity Securities - Logos International, Inc.

In fiscal year 1992 the Company acquired 776,857 shares of common stock of
Associated Trades, Inc. (ATI) valued at $.875 per share (the market value of
the Company's stock), or $679,750.  The shares were acquired in exchange for
a building, Company stock, and majority interest in GLI Industries, Inc.
Effective April 1, 1992, ATI was merged into Logos International, Inc. (Logos),
and after two reverse stock splits and additional shares being issued, the
Company's shares were reduced to 430,320 shares.

On October 28, 1991, C.E.C. entered into an Agreement to Purchase with Oxford
House, Inc., a Utah corporation and a wholly-owned subsidiary of Associated
Trades, Inc., by which  C.E.C. sold all of its right, title, and interest in
the real property and building in which  C.E.C.'s offices were located, for a
total purchase price of $786,478.  The purchase price by Oxford House, Inc.
included its assumption of the outstanding mortgage of the property in the
amount of $719,229 and 76,857 shares of the common stock of ATI, valued by
C.E.C. at $67,250.  The ATI stock was subsequently exchanged for Logos stock.

In connection with the Agreement, C.E.C. and ATI entered into an Exchange
Agreement by which the companies exchanged 500,000 shares of one another's
common stock.  C.E.C. has valued the shares of common stock received in the
transaction at $.875 per share (the bid price of C.E.C.'s common stock on the
date of the exchange), for a total value of  $437,500. The ATI stock was
subsequently exchanged for Logos stock.

Pursuant to a Reorganization Agreement dated as of December 1, 1991, C.E.C.
sold 18,000,000 shares of its subsidiary's common stock, GLI Industries, Inc.,
to ATI.  This represented 90% of the total outstanding common stock of GLI.  In
return C.E.C. received 200,000 shares of the common stock of ATI, and was
entitled to a  royalty on gross sales of GLI products of two and one-half
percent (2 1/2%).  The ATI stock was subsequently exchanged for Logos stock.
Logos was incorporated November 6, 1981, under the laws of the State of Nevada
and  acquired several companies in printing and publishing, arts and framing,
automotive and    towing services, aerospace, and real estate.  The market
price of Logos stock dropped from a bid of $10.00 per share at September 18,
1992 and $5.00 bid per share at June 1, 1993, to   $.125 per share at March 31,
1994 and $.25 at March 31, 1995.

Management believes the  drop in value is permanent and is due to the inability
of Logos'  management to supply adequate funding or provide management of its
newly acquired companies.  Management has thereby elected to write off its
investment in Logos to its current market value. The transaction resulted in
a loss of $625,960 in 1994, and a further loss of $46,305 in 1995.  The
remainder of 10,420 shares is $2,605. During the fiscal year 1996 all the
remaining shares were sold for $34,996.
                                             F-12
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

 NOTE 4 - REVERSE STOCK SPLIT

On September 30, 1992, the Company consummated a 1:10 reverse stock split.
The reverse stock split also reduced the outstanding stock options on the
same basis of 1:10.


NOTE 5 - INCOME TAXES

The provision or benefit for income taxes is based on pretax loss reported
In the consolidated financial statements.  The tax effect of temporary
Differences generating Federal income tax is summarized as follows:

                                             2001        2000         1999
      Tax Benefit at Statutory Rate            $0      $40,649     $386,230
      Surtax Amount    	                   (2,129)      (2,129)     (20,070)
      Valuation Allowance for Benefit
        of Net Operating Loss
        Carryforward Not Recognized
                And Other Items.         (147,178)    (147,178)  (1,135,970)
                                         ---------    ---------  -----------
      Total                                    $0           $0           $0
                                         ---------    ---------  -----------
                                         ---------    ---------  -----------

A reconciliation of the Federal statutory income tax rate to the effective
income tax rate based on income before income tax follows:

                                             2001        2000         1999

      Statutory Rate                          35%         35%           35%
      Surtax Amount                           (1)         (1)           (1)
      Decrease in Tax Rate Resulting
      From:
        Net Operating Loss Limitation
        and Other  Items                     (34)        (34)          (34)
                                         ---------    ---------  -----------
                                               0%          0%            0%
                                         ---------    ---------  -----------
                                         ---------    ---------  -----------

The tax net operating loss carryforward at March 31, 1999, 2000 and 2001 was
approximately, 8,741,314, $8,888,492 and $9,056,445 respectively, expiring
through 2015. The valuation allowance has increased to $621,027 from March 31,
1994 to March 31, 1995, and has increased to $1,214,777 from March 31, 1995
to March 31, 1996.  For the March 31,1996 to March 31, 1997, the valuation
allowance has increased to $2,286,349.  For the March 31, 1997 to March 31,
1998, the valuation allowance has increased $2,336,015.  From March 31, 1998
to March 31, 1999, the valuation allowance has increased to $2,722,245.  For
the March 31, 1999 to March 31, 2000, the valuation allowance has increased to
$3,022,087.   For the March 31, 2000 to March 31, 2001, the valuation allowance
has increased to $3,079,191.
                                          F-13
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS


The temporary differences and tax carry forwards which created deferred tax
assets and liabilities at March 31,2001 are detailed below:

           Deferred Tax Assets:
           Net Operating Loss            $9,056,445
                                         ----------
           Total Deferred Tax Assets      3,079,191
           Valuation Allowance           (3,079,191)
                                          ---------
           Net Deferred Tax Asset                $0
                                          ---------
                                          ---------

NOTE 6 - RELATED PARTIES

During the year 1996, George Matthews, the former President of the Company
received 131,000 shares of common stock, pursuant to an employment contract,
in lieu of paid salary in the amount of $65,500. During fiscal 1995, George
Matthews, the former President of the Company borrowed $50,000 from the
Company, whose loan was paid off during the same fiscal year. George Matthews
Received in fiscal 1996, pursuant to an employment contract, a stock bonus of
262,000shares of Rule 144 stock valued at $91,000 and accrued at March 31,
1995.  In fiscal 1995, Mr. Matthews also received a $50,000 cash bonus. George
Matthews, the former President of the Company borrowed $10,000 from the Company
During fiscal 1996.  The loan is still outstanding at end of fiscal 1997.

Directors of the Company received S-8 stock issued as director compensation,
2,500 shares per quarter, per director.

The President, Secretary, and Treasurer of the Company received a monthly
salary of $8,333  per month, through fiscal 1996, which, in the event of a
lack of cash available for the payment of such sums, accrues, and or is paid
pursuant to the issuance of S-8 stock.  As of March 31, 1997, and 1998,  $0 and
$0 is accrued for such salaries.

Prior to the company's acquisition of Sterling Travel, Laurie Doll, the
President, and at the time, sole shareholder of Sterling Travel, borrowed at
different times, money from Sterling  Travel, which sums totaled $14,547 as of
March 31, 1995. During the fiscal year 1996, the purchase agreement with
Sterling Travel was canceled due to nonperformance by Sterling Travel.  On
November 14, 1995, the Company sold 80.5 acres of land in St. George, Utah
to DMS Golf Enterprises, Inc. and its agent Charles McHaffie in exchange for
a note in the amount of $1,200,000 that is due November 14, 1999, with interest
payable at 10% per annum. The note is collateralized by 2,100,000 preferred
shares of the Company's preferred $.001 par value stock, redeemable at $.50
per share.  On March 31, 1997, the note in the amount of   $1,200,000 plus
accrued interest of $165,372 was paid off by cancellation of 2,400,000 shares
of preferred stock with a cost of $1,200,000 plus preferred stock dividends of
$165,372.  This transaction was not reported as a sale of real estate due to
the related party transaction.  The transaction was reported at the Company's
historical cost with no gain being reported due to the transaction
being a non monetary transaction without any monetary consideration being
involved.

During the fourth quarter of fiscal 1995, the Company, through its wholly owned
subsidiary, borrowed $35,000 from IGLLC, an affiliate party, which loan was
utilized for the financing of the acquisition of a new GMC Suburban vehicle
utilized by the President of Moonridge.  This note is evidenced by a demand
note bearing interest at the rate of 10%.  During the fiscal year 1996, the
note was assumed by DSM Golf Enterprises, Inc. under the same terms and
conditions.  Additionally during fiscal 1996, DSM Golf Enterprises, Inc. had
advanced other funds in the amount of 164,900 that is due on demand, carries
no interest rate,for a total of  $199,900.
                                                F-14
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

As part of the acquisition on March 28, 1996, of Mid-Nevada Art, Inc., Basia
Holding, Inc.  and 100% interest in oil and gas leases, the Company assumed a
note payable to O.T.S. Holdings, Inc. in the amount of $382,310.  During fiscal
1997, principal payments of $3,530 were applied to the note, leaving a balance
at March 31, 1997 of $378,781. The note is payable on demand and includes
interest payable at the rate of 8% per annum.

On April 1, 1996, the Company entered into a management agreement with WWW
Consulting that will supply the management services of Gerald and Marie Levine,
as President and Secretary of Company.  The agreement provides that a monthly
fee of $8,500 each will be paid for such services and will also lease two
vehicles at a monthly rate not to exceed $600. Additionally, WWW Consulting
will advance short term loans as needed at an interest rate of 10% per annum.

On May 16, 1996, the Company, as part of the sale of the subsidiary, Moonridge
Development Corp. agreed to carry an accounts receivable in the amount of
$210,635.

There has been no activity on the note through March 31, 1997 and the note
was cancelled in 1999.

NOTE 7 - STOCK OPTIONS

The Company has issued stock options to various directors, officers and
employees.  The option prices are based on the fair market value of the stock
at the date of grant.  The Company makes no charge to operations in relation
to option grants.  The Company's stock option transactions for the years ended
March 31, 1997, 1996, and 1995 are summarized as follows:
                                                Number of     Option
                                                 Shares        Price
      Options Outstanding and Exercisable
             at March 31, 1993                   35,000    $1.25-12.50
       Options Canceled in 1994                  (5,000)          5.00
       Options Granted in 1994                1,200,000          1.375
                                              ---------
       Options Outstanding and Exercisable
            at March 31, 1994                 1,230,000     1.25-12.50
       Options Canceled in 1995                  (5,000)         12.50
                                              ---------
       Options Outstanding and Exercisable
            at March 31, 1995                 1,225,000     1.25-12.50
       Options granted in 1996                4,900,000        .20-.50
       Options exercised in 1996               (600,000)          5.00
                                              ---------
       Options Outstanding and Exercisable
            at March 31, 1996                 5,525,000       .50-5.00

      Options exercised in 1997                       0
                                              ---------
       Options Outstanding and Exercisable
            at March 31, 1997                 5,525,000       .50-5.00
                                              ---------
                                              ---------
        Options Outstanding and Exercisable
          at March 31, 1998, 1999, 2000 and 2001      0
                                              F-15
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS


NOTE 8- RETIREMENT PLAN

The Company has established a qualified plan under Section 401(k) of the
Internal Revenue Code as a retirement plan for all employees who elect to
participate.  The Plan allows the Company to contribute up to 100% of the
employees' contributions (limited to 10% of the  employees' annual salary)
to the retirement plan. The Plan's fiscal year is July 1 to June 30.  During
1995 and 1994, the Company issued 22,595 and 3,392 shares of treasury stock
valued $5,649 and $5,300, respectively, as a matching contribution to the
retirement plan.  No contributions were made in 1993.  The Company's expense
relating to this plan for the years ended March 31, 1995 and 1994 was $5,649
and $5,300, respectively.  All contributions and expenses relating to the plan
were paid in treasury stock.  Also in 1995 the Company issued 22,595 shares of
treasury stock valued at $5,649 as employee compensation. During the year
1996, the 401(k) plan was canceled and 100% distribution was made to all
employees.

NOTE 9 - COMMITMENTS & CONTINGENCIES

The Company's subsidiary, Custom Environmental International ("CEI"), filed
suit in the United States District Court for the Central Division of Utah,
Custom Environmental International, a Utah corporation, Plaintiff vs.
Lockhead-Haggerty Engineering & Manufacturing Co., Ltd., a Canadian
corporation, Defendant, Case No. 2:95CV0153B, in which CEI is claiming an
infringement of CEI's patent.  The Defendant has responded to the complaint
by (i) requesting an extension of time to file a responsive pleading and (ii)
making an offer of settlement which has been rejected.

Fernando Aldecoa, et. al. v. Softpoint, Inc., United States District Court,
Southern District of California, Case Number (951654H(LSP).  An action brought
by shareholders of another public company wherein C.E.C. Industries Corp. is
alleged to be an alter ego of the other public company.  Independent counsel
for the Company, selected by the Company's  insurance company, is handling the
litigation, which is not anticipated to result in a
judgment against the Company.

Madera Component Systems, Inc. Nevada Federal District Court, Case No.
(596-01105PMP). An action against the Company alleging that the Company entered
into a contract with Prime Construction, et al and executed an indemnity
agreement. The Company filed a cross-complaint alleging no contract was ever
entered into nor did the Company ever execute any indemnity agreement. Counsel
strongly responded to this litigation and believes that a judgment will be
rendered in their favor. This case is in the discovery stage.

In a lawsuit subsequent to the date of the financial statements, a judgment
was entered in United States District Court, District of Utah, Central
Division, against C.E.C. Industries, Inc. in favor of George A. Matthews, Jr.
A form President and Director of C.E.C Industries.  The judgment was for the
amount of $207,306.93.  The company has filed an appeal with the United States
Court of Appeals for the Tenth Circuit.  The company has been unable to post
a bond.

As of the date hereof, the Company is not aware of any other material legal
proceedings, pending or contemplated, to which the Company is, or would be, a
party of which any of its property is, or would be the subject.

The Company leased 2,622 sq. ft. of office space for its executive offices at
23 Cactus Garden Drive, F-60, Green Valley, Nevada.  This lease was canceled in
July 1997.  The company currently does not have any lease or rental agreements.
Lease expense for the years ended March 31, 2001, March 31, 2000 and March 31,
1998, was $0 $16,654 and $55,090, respectively.
                                                        F-16
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

NOTE 10 - SEGMENT INFORMATION AND MAJOR CUSTOMERS

Segment Information for Fiscal 2001

                    CEC               CEI                   Other      Total
                    Real Estate       Oil
                    Development    Royalties

Revenue                 $0           $10,305                   $0           $0

Income/Loss             (0)           10,305              178,258     (167,953)

Identifiable
  Assets                 0           116,415                1,312      121,954

Amortization             0                 0                    0            0

NOTE 11 - PRIOR PERIOD ADJUSTMENT

There was a prior period adjustment of $1,399,933 to retained earnings at the
beginning of the fiscal year ending March 31, 1998.  This was comprised
primarily of Notes Payable to Related Parties and Inventory.  Management felt
that these items were not valid and did not affect operations of the company
for the audited periods.

NOTE 12 - NOTES PAYABLE & LINES OF CREDIT

On February 4, 1994, the Company purchased approximately 23.91 acres of
undeveloped land in Las Vegas, Nevada, for $3,327,158 which included three
separate parcels; 15.24 acres, 1.39 acres and 7.28 acres.  At the same time,
the Company borrowed $1,800,000 utilizing the approximate 23.91 acres as
collateral for the loan from National Investors Corp. et al (Lender), to meet
the down payment, closing costs of $904,692, and providing a balance for
development proceeds. The annual interest rate is 12.5% payable monthly.  As
additional consideration, the Company issued 600,000 shares of preferred stock
(Note 13). The note for $1,800,000 was initially due on February 4, 1995,
however, it was subsequently  extended to February 4, 1996 after payment of
extension fees and late fees of $50,000 in fiscal 1995, with an additional
$150,000 being added to principal in fiscal 1996 as part of the agreement to
renew to the note, adjusting the principal to $2,000,000. Further, pursuant to
the terms of the note, the Company is obligated to pay  principal payments of
$150,000 per month until a total of $800,000 is paid as principal reduction on
the total loan amount. The note further provides that in the event that
payments are not paid when due, the Company  incurs a late charge of 10%.
On May 10, 1996, the Lender agreed to add to the note all accrued interest and
extension fees through May 10, 1996, in the amount of $236,905, bringing the
total note balance to $2,365,051. Additionally, the Company, as part of this
agreement, conveyed the 7.28 acre and the 1.39 acre tracts to the Lender in
satisfaction of  $935,185 principal, reducing the outstanding balance to
$1,433,866, plus an additional extension fee of $71,693 or $1,505,559.  The
Lender further agreed to a six month extension to October 20, 1996.  On October
20,1996,  the Lender agreed to an additional extension to April 20, 1996,
adding an extension fee to the note in the amount of $71,693 bringing the
balance to $1,577,252.  On December 6, 1996, the Company exchanged the 15.24
acre tract  in full satisfaction of the note in the amount of $1,577,252, plus
interest of $96,098 or $1,673,350 for 139,824 shares of common stock of
Synfuels Technologies, Inc. The Company was released from any further
liability on the note. (See Note 3)
                                                    F-17
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

On March 31, 1995, the Company executed a construction loan agreement for
$3,000,000  with Bank of America, which loan is collateralized by 7.28 acres
of property owned by the Company. The proceeds of the loan are being utilized
for the construction of a mini-storage project. At year end 1995 there was a
balance due of $573,318.  The principal balance of the  mini-storage loan bears
interest at the per annum rate of interest publicly announced from  time to
time by Bank of America National Trust and Savings Association in San
Francisco, California, plus one and one-half percentage (1.5%) points.  The
mini-storage loan converts from a construction loan to a permanent loan upon
completion of construction and upon     reaching certain debt coverage ratio
requirements.  In the event the company does not meet  the debt coverage ratio,
the Bank of America may elect, in its sole discretion, to either refuse to
convert the loan indebtedness to permanent loan indebtedness, or to permit the
conversion of such lesser amount of the loan as will cause the debt coverage
ratio to comply. with the minimum debt coverage ratio. As of March 31, 1996,
the loan was in default. On  May 10, 1996, the Company conveyed this note to
National Investor Corp., et al as part of the consideration in the transfer of
the 7.28 acre tract. The Company was released from any further liability on the
note.  On April 20, 1994, the Company purchased approximately 2.20 acres of
undeveloped land in Las Vegas, Nevada for $200,000.  The Company paid $100,00
 cash and the seller carried a note for $100,000 with interest in the amount of
8%, collateralized by the 2.20 acres, principal and interest all being due by
April 20, 1995. On June 28, 1995, the Company paid the $100,000 note in full
and borrowed $150,000, the balance at March 31, 1996, with interest in the
amount of 14%, collateralized by the 2.20 acres, principal and interest all
being due June 28, 1996.  During fiscal 1997 the real estate was exchanged as
part of the December 6, 1996 transaction and the note was paid in full.  The
Company, during fiscal year 1995, executed an agreement with Pioneer Citizens
Bank  for an initial line of credit for $500,000 with a compensating balance in
the form of a certificate of deposit.  As of March 31, 1995, the Pioneer
Citizens Bank line of credit was increased to $1,000,000 with a compensating
balance in the form of certificates of deposit in the sum of $1,000,000.
Interest on the line of credit is 4.5% per annum.  The Company has drawn
$825,000 down on the line of credit as of March 31, 1995. During the fiscal
year 1996 the Company drew down the balance of the $1,000,000 line of credit.
During February, 1996, the Company paid down the line of credit to $500,000,
leaving a balance as of March 31, 1996 of $500,000. The balance of the line
of credit was paid off in May, 1996.

NOTE 13 - NOTES PAYABLE - RELATED PARTIES

During the fourth quarter of fiscal 1995, the Company, through its wholly owned
subsidiary, borrowed $35,000 from IGLLC, an affiliate party, which loan was
utilized for the financing of the acquisition of a new GMC Suburban vehicle
utilized by the President of Moonridge.  This note is evidenced by a demand
note bearing interest at the rate of 10%. During the fiscal year 1996, the note
was assumed by DSM Golf Enterprises, Inc. under the same terms and conditions.
Additionally during fiscal 1996, DSM Golf Enterprises, Inc. had advanced other
funds in the amount of 164,900 that is due on demand, carries no interest rate,
for a total of  $199,900.  As part of the acquisition on March 28, 1996, of
Mid-Nevada Art, Inc., Basia Holding, Inc  and 100% interest in oil and gas
leases, the Company assumed a note payable to O.T.S. Holdings, Inc. in the
amount of $382,310.  During fiscal 1997, principal payments of $3,530 were
applied to the note, leaving a balance at March 31, 1997 of $378,781.  The note
is payable on demand  and includes interest payable at the rate of 8% per
annum.

All notes payable have been assigned or settled.
                                           F-18
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

NOTE 14 - PREFERRED STOCK
During 1994, the Company amended its Articles of Incorporation authorizing
100,000,000 shares of preferred stock at a par value of $.001 per share.  On
February 4, 1994, the Company issued 600,000 shares at $4.00 per share, or
$2,400,000 as additional consideration to purchase the unimproved land in Las
Vegas, Nevada  (Note 11).  The issued  shares are designated as series "A"
preferred stock convertible, after two years (24 months), to common stock at a
guaranteed "bid" price of not less than $4.00 per share.  In the event said
"bid" price is less than the stated $4.00 at the time in which the shares are
offered for conversion, additional common stock shares will be issued to
satisfy any shortfall.  The preferred shares are non-voting.  In addition,
C.E.C. Industries Corp. will have an option to  purchase 50% of said shares at
a price of $8.00 per share.  The option exercising period will be for 30 days
following the two year (24 month) period, but closing of the option will occur
within 60 days from the end of the two year period (24 months). On October 12,
1995, the Company entered into a conversion agreement that canceled the 600,000
shares of  preferred stock series "A" at a par value of $.001 and issued
4,200,000 of new series "B" preferred stock at a par value of $.001, with a
redemption value of $.50 per share, which has attached to the issue one vote
per share, equal in value to one vote of common stock and pays a cumulative
dividend of 10%  per year. Preferred cumulative stock dividends payable at
March 31, 1997 is $105,878. Each preferred share of Series "B" preferred stock
shall have attached a warrant for 1/6 of a share of common stock which shall be
exercisable prior to the four (4) year redemption period for a redemption
price of $0.20 per share of common stock.  If exercised by Holder these
warrants will result in the issuance of 700,000 shares of common stock for a
price of $.020 per share or a total price of $140,000. On March 31, 1997, the
Company redeemed 2,400,000 preferred shares in payment of a note receivable of
$1,200,000 using the redemption value of $.50.  This reduces the attached
warrants for 1/6 of a share of common stock to 300,000 at $.20 or a total
price of  $60,000.

On April 22, 1994, the Company entered into an agreement with Bio-Sphere
Technology wherein the Company issued 125,000 shares of preferred stock
for certain medical   technology.  The agreement  called for the Company
to form two wholly owned subsidiaries, Microsphere Technology and Islet
Transplant Technology, for purposes of pursuing the development of the
technology. Subsequent to the issuance of the preferred shares to Bio-Sphere,
the Company was notified of an attempted unilateral rescission by Bio-Sphere of
the agreement with C.E.C. (See Note 8).  As a result, the Company wrote down
its investment in the medical technology which amounted to $62,500.  During
1996, the Company agreed to cancel the agreement with Bio-Sphere Technology,
and accordingly, cancel the preferred shares issued.

On January 18, 1995, the Company entered into an agreement with Lauri Doll
Gladstone wherein the company, in exchange for 100% of the outstanding common
stock of Sterling Travel, agreed to issue 400,000 shares of preferred non-
voting stock, convertible to  common stock at a price of $5 per share.

The shares are issued pursuant to an earn-out provision. At this time the
preferred shares have not been issued to Lauri Doll Gladstone.  Results of
operations from Sterling Travel have been accounted for the period starting
with  March 1, 1995 and ending with fiscal year end 1995.  The acquisition was
accounted for utilizing the purchase method of accounting. During 1996, the
Company rescinded the purchase agreement with Sterling Travel for non-
performance on the agreement. (See Note 13)

On June 7, 1995, the Company acquired a 24.5% limited partnership interest in
Victory Villages Ltd. III that is constructing a 320 unit apartment project
generally known as Victory  Village, in exchange for 1,200,000 shares of Rule
144 stock in the Company valued at  $300,000.  The shares are restricted from
resale for a period of two years, and 720,000 of the shares are subject to a
voting agreement wherein the Company directors vote the shares.  On June 10,
1995, an Amended and Restated Limited Partnership Agreement of Victory Village
Ltd. III Limited Partnership was executed with Moonridge Development Corp., a
wholly owned subsidiary of the Company, in which Moonridge Development Corp.
became the 24.5% Limited Partner. On May 31, 1996, an assignment was made to
the Company for the 24.5% Limit Partner interest in Victory Village Associates,
LTD III as part  of the sale of Moonridge Development Corp.
                                              F-19
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

NOTE 14 - PREFERRED STOCK (CONTINUED)

During 1995, the Company issued 1,216,844 shares of S-8 stock for director,
employee, and consulting fees, issued as follows: 264,830 shares were issued as
consulting fees; 500,000  S-8 shares were options received by certain
consultants; 300,000 shares of S-8 stock were  R.V. Jones' options and were
exercised by the Company and given to him as his construction  fee for the
Mission Valley Mini Storage project; and the remainder of the S-8 stock was
issued to directors, consultants, and employees pursuant to the C.E.C.
Industries Corp. 1995 Stock Award Plan.  George Matthews received 262,000
shares (See Note 5).  Value of the shares issued per the S-8 Registration was
the bid price at the time of the issue, ranging from  $.56 to $.94 per share.
During 1996, the Company issued 3,372,830 shares of S-8 stock to directors,
consultants, and employees pursuant to the C.E.C. Industries Corp. 1996 Stock
Award Plan.  Value of the shares was the bid price at the time of the issue,
averaging $.32 per share.

On March 28, 1996, the Company issued 8,660,000 shares of common stock and
8,663,041 shares of preferred stock in exchange for 100% of the common stock
of Mid-Nevada Art, Inc., 100% of the common stock of Basia Holding, Inc. and
100% interest in oil and gas leases. The assets were valued at .22 cents per
common share, the market price of the preferred stock is considered zero as it
had no convertible feature.   The 8,663,041 shares of preferred stock were
canceled in July of 1998.

The Company has adopted FASB 121.  Management has accordingly reviewed the
values of the Company's artwork and coal reserves.  Based on what management
beliefs is significant impairment of the assets, the assets have been written
down to zero.  Factors which influenced management's decision include cash flow
from these assets are projected to be zero for the next five years.  The
Company is in the process of determining a current fair market value of these
assets.  These valuations if any will be disclosed in footnotes to future
financial statements.

NOTE 15 - DISCONTINUED OPERATIONS

Management has accordingly reviewed the values of oil and gas reserves.  Based
on what management beliefs is significant impairment of the assets, the assets
have been written down to $116,415.  Factors which influenced managements
decisions include cash flow from these assets are projected to be $116,415.00
for the next five years.

On May 16, 1996, the Company sold Moonridge Development Corp. at book value.
No Revenues or expenses were included in the consolidated financial statements
for the year ended March 31, 1998, March 31, 2000 and March 31, 2001.  The
statements of operations for the years ended March 31, 1996 and 1995 have been
restated to reflect the net losses of $312,510 and $17,170, respectively.  Gross
revenues for the years ended March 31, 1996 and 1995, were $1,187,207 and $0.
The Company reflected a gain on the transaction of $390,796.  The following is
a condensed balance sheet of Moonridge Development Corp. as of March 31, 1996:

    Condensed Balance Sheet

    Current Assets                                   $533,869
    Equipment, Net                                     23,819
    Other Assets                                      557,015
                                                    ---------
    Total Assets                                    1,114,703
                                                    ---------
                                                    ---------

    Current Liabilities                             1,424,498
    Common Stock                                       20,000
    Deficit                                         (329,795)
                                                   ----------
    Total Liabilities and Capital                  $1,114,703
                                                    ---------
                                                    ---------

                                              F-20
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

NOTE 15 - DISCONTINUED OPERATIONS (CONTINUED)

On June 15, 1996, the Company entered into a purchase agreement with Auto
Express, Inc.  wherein the Company purchased 100% of the issued and outstanding
shares of Auto Express, Inc. The agreement called for the issuance of 495,000
common shares at $.35 per share or  $173,250. The agreement was completed on
June 28, 1996.  Auto Express, Inc. is involved in the business of transporting
vehicles across the United States for major businesses as well as consumers.
The transaction was accounted for using the Purchase Method. Loss from
discontinued operations was reported during the period of ownership in the
amount of $49,935. On January 31, 1997 the purchase agreement was canceled
because of non performance on the part of Auto Express, Inc.

The following are condensed balance sheets and statements of operations as of
June 30, 1996, the date of purchase and December 31, 1996, the date the
agreement was canceled.

    Condensed Balance Sheet            June 30, 1996        December 31, 1996

    Current Assets           	          $  201,459             $210,161
       Equipment, Net                      253,455              200,428
                                        ----------            ---------
    Total Assets                           454,914              410,589
                                        ----------            ---------
                                        ----------            ---------

    Liabilities                            509,051              490,559
    Common Stock                            14,350               14,350
    Deficit                                (68,487)             (94,320)
                                        ----------            ---------
    Total Liabilities and Capital         $454,914             $410,589
                                        ----------            ---------
                                        ----------            ---------

    Condensed Statement of Operations

    Gross Revenues                        $834,208            $1,166,573
    Expenses                               858,310             1,216,508
                                        ----------            ---------
    Net Operating Loss             $(24,102)           $(49,935)
                                        ----------            ---------
                                        ----------            ---------

On June 27, 1996, the Company entered into an Exchange Agreement with One World
Cards, Inc. & Bruce Perlowin, its President for 278 - $10,000 prepaid long
distance calling cards at a rate of approximately $0.45 per minute or better
and an expiration date of five (5) years from the date of closing in exchange
for 18 original art works by Sky M. Jones  with appraisal books and appraisals
totaling $2,779,700 owned by the Company's wholly owned subsidiary Mid-Nevada
Art, Inc. Because of the inability of One World Cards, Inc. to activate the
prepaid calling cards, the exchange agreement was canceled.

NOTE 16-OTHER ITEMS

In July of 1998, the company reached an agreement to exchange its interest in
Victory Village, Ltd. III Limited Partnership, as part of this transaction the
company wrote off Notes Receivable from Related Parties in the amount of
$163,000and Accounts Receivable-Related Parties in the amount of $220,635.00.



                                                  F-21
<PAGE>

                        C.E.C. Industries, Corp. and Subsidiaries
                             (A Development Stage Company)
                              NOTES TO FINANCIAL STATEMENTS

NOTE 16-OTHER ITEMS (CONTINUED)

On June 27, 1996, the Company entered into an Exchange Agreement with One
World Cards, Inc. and Bruce Perlowin, its President for 3 - $100,000 prepaid
long distance calling cards at a rate of $0.45 per minute or better with no
expiration date and 45 -$10,000 prepaid long distance calling cards at a rate
of approximately $0.45 per minute or better and an expiration date of five (5)
years from the date of closing in exchange for 12 original arts works by Sky
M. Jones with appraisal books and appraisals totaling $750,000 owned by the
Company's wholly owned subsidiary Mid-Nevada Art, Inc. On June 27, 1996 the
Company issued 200,000 shares of common stock at $.35 per share or $70,000.
On September 24, 1996, the Company canceled the shares as a result of One World
Cards, Inc. inability to activate the prepaid calling cards.

In July of 1998, the company reached an agreement to exchange its interest
in Victory Village, Ltd. III Limited Partnership, as part of this transaction
the company wrote off Notes Receivable from Related Parties in the amount of
$163,000 and Accounts Receivable-Related Parties in the amount of $220,635.00.

                                                 F-22