<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K

[X]               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
                  For the year ended December 31, 2002
                                       OR
[ ]               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from__________to

                        Commission file number: 001-14171
                                    C2, Inc.
             (Exact name of registrant as specified in its charter)

            Wisconsin                             39-1915787
(State of other jurisdiction of      (I.R.S. Employer Identification No.)
 incorporation or organization)

700 N. Water Street, Suite 1200, Milwaukee, Wisconsin         53202
       (Address of principal executive office)              (Zip Code)

Registrant's telephone number, including area code (414) 291-9000

Securities registered pursuant to Section 12(b) of the Act:

    Title of Each Class           Name of Each Exchange on, which Registered
    -------------------           ------------------------------------------
Common Stock - $1 par value                  Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

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. [X]

The aggregate market value (based on $11.67 closing price) of voting stock held
by nonaffiliates of the registrant at March 13, 2003: $22,532,611

The aggregate market value (based on $7.30 closing price) of voting stock held
by nonaffiliates of the registrant at June 30, 2002: $13,140,110

Indicate by check market whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]

Number of Shares of Common Stock Outstanding at December 31, 2002: 5,271,864 The
Index to Exhibits is located on page 45.

                                       1

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2003 Annual Meeting of Shareholders (to
be filed with the Commission under Regulation 14A within 120 days after the end
of the registrant's year and, upon such filing, to be incorporated by reference
into Part III.)

                                     PART I

ITEM 1.   BUSINESS

C2, INC.

C2, Inc. ("C2" or the "Company") was formed in 1997 to acquire Total Logistic
Control, LLC ("TLC" or "Total Logistic Control") from Christiana Companies, Inc.
("Christiana") as part of the merger transaction between Christiana and
Weatherford International, Inc. ("Weatherford"), which was completed on February
8, 1999.

C2 completed its initial public offering on March 4, 1999, resulting in the sale
of 5,202,664 shares of common stock, par value $1 per share ("Common Stock"), at
$4.00 per share and raising $20,410,000 of initial equity capital, net of
offering costs for the Company. On September 30, 2000, the Company acquired the
remaining 33.3 percent of TLC from Weatherford in a cash purchase in the amount
of $8,284,000.

The Company's growth strategy anticipated that a part of its future growth would
come from acquiring, either directly or through TLC, other businesses, which may
or may not be related to TLC's current business. In line with that strategy, on
March 12, 1999, the Company announced the purchase of Zero Zone, Inc., a
Wisconsin-based manufacturer of refrigerated and freezer display cases. The
Company invested $4,500,000 in equity and capital notes for 70.6 percent of the
outstanding common stock of Zero Zone. On December 31, 2002, C2 acquired the
remaining 29.4 percent of Zero Zone. The consideration paid was 190,000 shares
of C2 stock at a value of approximately $2,561,000.

As of December 31, 2002, C2 owns 100 percent of its two operating subsidiaries,
Total Logistic Control and Zero Zone, Inc., which together operate C2's
principal business activity.

LOGISTIC SERVICES

The Company provides a full range of integrated third-party logistic services
through TLC. These services include full service public, contract and dedicated
warehousing; dedicated third-party facility and operations management;
transportation management and fleet operations; supply chain management;
logistics consulting; food distribution; bottling; packaging and repackaging;
and fulfillment services all provided in the full range of frozen, refrigerated
and ambient temperatures. Integrated logistic services generally combine
transportation, warehousing and information services to manage the distribution
channel for a customer's products from the point of manufacture to the point of
consumption. Transportation operations include full service truckload,
less-than-truckload and pooled consolidation in both temperature-controlled and
dry freight equipment, dedicated fleet services and specialized store-door
delivery formats. Transportation and logistic management services are provided
utilizing company-owned equipment as well as through carrier management and
logistic management services utilizing third party common and contract carriers.

TLC's transportation fleet consists of 404 tractors, 426 refrigerated trailers
and 282 dry trailers providing transportation services nationally.

TLC was formed in 1997 through a combination of the operations of two
wholly-owned subsidiaries of Christiana: Wiscold, Inc. ("Wiscold") and Total
Logistic Control, Inc. On September 1, 1992, Christiana acquired the assets of
Wiscold, a company formed in 1915, which engaged in providing public
refrigerated warehousing services, vegetable processing and individual quick
freeze ("IQF") services, automated poly

                                       2

<PAGE>

bag and bulk packaging services. On January 4, 1994, Christiana acquired Total
Logistic Control, Inc., a Zeeland, Michigan-based firm that is a successor
company to one founded in 1902.

On September 1, 2000, TLC acquired the ProSource Group, Inc. ("ProSource"),
located in Aurora, Illinois. ProSource provides dedicated third-party management
services to operate both manufacturing and distribution centers, primarily for
Fortune 500 consumer products companies.

Effective 2003, logistic services is organized into two primary service lines:
Supply Chain Services and Facility Management Services.

Supply Chain Services offers customers a full range of transportation services,
logistic management services, logistics consulting, and supply chain management
solutions utilizing optimization software to design and operate integrated
distribution programs. Logistic management services typically utilize
third-party warehouse and transportation companies to provide the most cost
effective service programs for its customers.

TLC provides dedicated facility management services through its newest service
line, Facility Management Services. These services include staffing and managing
the operations of manufacturing, distribution, or packaging facilities. In
addition to dedicated Facility Management Services, TLC provides public and
contract warehousing services through its network of owned and leased
refrigerated and dry distribution centers. To date, TLC has been awarded seven
dedicated facility management projects.

The first dedicated facility project was awarded in 2001 and entailed the
management of a 200,000 square foot ambient fulfillment center located in
Hurlock, Maryland on behalf of Cadmus Communications Corporation. TLC does not
own, lease, or have a capital exposure related to this facility. TLC provides
staffing and operations management on a cost plus fee basis under a multi-year
term service contract.

The second project was awarded during the fourth quarter of 2001 and entails TLC
staffing and managing the operations of a brewery located in Fogelsville,
Pennsylvania. Operation of the brewery commenced in January 2002 producing
carbonated malt-based beverages including Smirnoff Ice on behalf of Diageo PLC.
TLC provides these services under a cost plus fee basis under a multi-year term
service contract. TLC does not own, lease, or have any capital exposure related
to this facility.

The third dedicated facility management project commenced in May 2002 and
entails TLC staffing and managing the operations of a 400,000 square foot dry
distribution facility located in Knoxville, Tennessee. This facility is designed
to provide centralized distribution for ConAgra Foods' non-perishable products
in the Midwest region of the United States. TLC provides these services on a
cost plus fee basis under a multi-year term service contract. TLC does not own,
lease, or have any capital exposure related to this facility.

The fourth dedicated facility management project commenced in August 2002 and
entails TLC staffing and managing the operations of a 340,000 square foot dry
distribution facility for ConAgra Foods located in Jacksonville, Florida,
serving the Southeast region of the United States. TLC provides these services
on a cost plus fee basis under a multi-year term service contract. TLC does not
own, lease, or have any capital exposure related to this facility.

The fifth dedicated facility management project commenced in August 2002 and
entails TLC staffing and managing the operations of a 3.5 million cubic foot
refrigerated warehouse facility in Rochelle, Illinois for Sara Lee Corporation.
This facility provides centralized distribution for Sara Lee's refrigerated and
frozen food products for the Midwest region of the United States. This facility
was sold to Sara Lee Corporation by TLC in May 2002 for $9.8 million. TLC was
awarded a contract to operate this facility for Sara Lee on a cost plus fee
basis under a multi-year term services agreement. TLC does not own this
facility, nor does it have any capital exposure related to the facility. As a
part of its services agreement, TLC leases this facility from Sara Lee
Corporation under a reimbursement agreement, which obviates any financial
exposure.

The sixth dedicated facility management project commenced in January 2003 and
entails TLC staffing and managing the operations of a 4.8 million cubic foot
refrigerated distribution center for Sara Lee Corporation

                                       3

<PAGE>

located in Phoenix, Arizona. This facility commenced operations in February 2003
and serves as a centralized point of distribution for Sara Lee's refrigerated
and frozen food products for the Southwest region of the Unites States. TLC
provides these services on a cost plus fee basis under a multi-year term service
contract. TLC does not own, lease, or have any capital exposure related to this
facility.

The seventh dedicated facility management project commenced in February 2003 and
entails TLC staffing and managing the operations of a 400,000+ square foot dry
distribution center for ConAgra Foods located in Ontario, California. This
facility will provide centralized distribution for ConAgra Foods' non-perishable
products for the Southwest region of the United States. TLC will provide these
services to ConAgra Foods on a cost plus fee basis for a multi-year term service
contract. TLC does not own, lease, or have any capital exposure related to this
facility.

TLC believes it is the eleventh largest provider of public refrigerated
warehouse space in North America. All of TLC's refrigerated facilities are
modern and efficient single story buildings at dock height elevation and are
fully insulated. TLC's refrigerated logistic centers are as follows:

         -        Rochelle Logistic Center, located in Rochelle, Illinois, is
                  TLC's largest refrigerated warehouse operation, initially
                  constructed in 1986. Currently this location is comprised of
                  10,600,000 cubic feet of capacity having undergone four
                  capacity expansions in 1988, 1990 and 1993. All space is
                  capable of temperatures of -20(degree)F to ambient. Rochelle
                  Logistic Center is strategically located at the intersection
                  of two main line East-West railroads, the Burlington Northern
                  and the Union Pacific, and at the cross roads of two
                  interstate highways, I-39 and I-88. Rochelle Logistic Center
                  serves the Midwest distribution needs of national food
                  companies. It also operates a short line (Class III) railroad
                  under a long-term agreement with the City of Rochelle,
                  Illinois. In this capacity it provides railcar switching for
                  all industries served by the City of Rochelle lead rail track.
                  Total volume is approximately 5,000 railcars per year.

         -        Beaver Dam Logistic Center, located in Beaver Dam, Wisconsin,
                  was originally constructed in 1975. Since 1975, this facility
                  has undergone three freezer additions, the most recent in
                  1991, and today is comprised of 7,200,000 cubic feet of
                  freezer storage space. Beaver Dam Logistic Center serves
                  distribution related customers as well as vegetable and
                  cranberry processors. This facility's unique capabilities
                  involve value-added services for vegetable processors
                  including IQF.

         -        Milwaukee Logistic Center, located in Wauwatosa, Wisconsin,
                  was originally constructed in 1954. There have been six
                  expansions of this facility, and today the Milwaukee Logistic
                  Center facility comprises 4,300,000 cubic feet of which
                  3,754,000 cubic feet is freezer capacity and 546,000 cubic
                  feet is cooler space. This facility has multi-temperature
                  refrigerated storage ranging from -20(degree)F to +40(degree)F
                  and daily blast freezing capacity of 300,000 pounds. In 2002,
                  this facility underwent a significant upgrade, building a new
                  engine room, which provides the entire facility and a
                  third-party with refrigeration. An additional 3,000,000 cubic
                  feet of company-owned refrigerated and processing space
                  adjacent to the Milwaukee Logistic Center facility is leased
                  to a third-party retail grocery company on a long-term basis
                  expiring in January 2005 with five extensions to renew for
                  additional ten-year terms.

         -        Kalamazoo Logistic Center, located in Kalamazoo, Michigan, has
                  two distribution centers. Facility #1 is a 3,300,000 cubic
                  foot facility with 1,100,000 cubic feet of freezer capacity,
                  400,000 cubic feet of cooler capacity and 1,800,000 cubic feet
                  of dry storage capacity. This location services a number of
                  distribution customers in the Midwest and is strategically
                  located at the crossroads of I-94 and US 131 in Michigan,
                  equal distance between Chicago and

                                       4

<PAGE>

                  Detroit. Facility #2 is located adjacent to Facility #1 and is
                  comprised of 2,800,000 cubic feet of cooler capacity, all of
                  which is dedicated to one large distribution customer under a
                  five-year operating agreement. These facilities are held under
                  long-term leases, which expire in 2010 and 2008, respectively.

         -        The Company also operates three transportation equipment
                  maintenance facilities in Kalamazoo, Michigan (10,000 square
                  feet), Erie, Pennsylvania (18,500 square feet) and
                  Murfreesboro, Tennessee (5,000 square feet). Given these
                  strategic locations, substantially all maintenance on its
                  fleet of trucks is performed in-house.

         -        Holland Logistic Center, located in Holland, Michigan, has
                  undergone a number of expansions over the years, with a major
                  reconstruction in 1983. This refrigerated facility comprises
                  2,100,000 cubic feet of storage capacity of which 1,300,000
                  cubic feet is freezer capacity, 400,000 cubic feet is cooler
                  capacity and 400,000 cubic feet is convertible between freezer
                  and cooler capacity. Holland Logistic Center services both
                  distribution customers as well as fruit growers in Western
                  Michigan. This location is situated on a CSX rail spur with
                  two refrigerated rail docks. This facility is held under a
                  long-term lease, which expires April 2011.

         -        In 2000, TLC acquired the Paw Paw Logistics Center, a
                  2,500,000 cubic foot refrigerated facility located in Paw Paw,
                  Michigan. This multi-temperature facility is located 15 miles
                  west of the Kalamazoo facilities on Interstate 94. This site
                  has 16 acres of land and the warehouse can be expanded by an
                  additional 300,000 cubic feet. In addition as a part of the
                  acquisition, TLC received an option to purchase 90 additional
                  acres of land contiguous to the facility. The Paw Paw
                  Logistics Center was initially constructed in 1981 and under
                  went two expansions in 1984 and 1990. In early 2000, TLC
                  completed an extensive upgrading and re-racking of this
                  facility.

In addition to the refrigerated distribution centers described above, TLC
operates a network of owned and leased dry (non-refrigerated) distribution
centers comprising over 1,000,000 square feet of storage capacity. Dry
distribution centers are located in Zeeland (2) and Kalamazoo, Michigan;
Munster, Indiana and Dayton, New Jersey. Additionally, TLC contracts with
approximately 22 dry warehouse facilities to provide warehousing and order
fulfillment services on behalf of its clients under long-term logistic
management services contracts.

TLC's customers consist of international, national, regional and local firms
engaged in food and beverage manufacturing, consumer and industrial product
manufacturing, wholesale distribution and retailing. During 2002, TLC's top 10
customers accounted for approximately 54.1 percent of total consolidated
revenues. One of TLC's customers accounted for approximately 25.3 percent of
total consolidated revenues in 2002 and 19.4 percent of total consolidated
accounts receivable at December 31, 2002. TLC currently services approximately
1,900 customers.

Competition in integrated logistic services is on a international, national,
regional and local basis with a predominant emphasis on transportation services.
At present, there are no known direct competitors providing the full scope of
warehousing, transportation, logistic management and facility management
services across the full range of temperatures as provided by TLC. However, each
of TLC's individual business lines is highly fragmented with many local,
regional, national and international competitors, especially in the
transportation, dry and refrigerated warehousing industries. TLC believes it has
a competitive edge in its ability to provide fully integrated logistic services
designed to its customers' distribution needs, which may, but would not
necessarily, include utilizing TLC's network of strategically located
refrigerated and dry distribution centers, transportation equipment, and
logistic management

                                       5

<PAGE>

services. TLC's revenues and earnings can be affected by changes in competitive
pricing in both transportation and warehousing operations, particularly at the
local level; poor achievement of performance standards established under
contractual service agreements; harvest yields of certain vegetable and fruit
crops grown in the Upper Midwest; changes in customers distribution patterns or
channels; industry consolidation of its customers and/or competitors; changes in
short-term interest rates; general economic conditions; and energy costs,
particularly diesel fuel and electric power.

TLC holds a trademark on its name and logo. No other trademarks, patents,
licenses, franchises or concessions are considered material to its business.

Expenditures for research and development and compliance with environmental
regulations have not been, and are not anticipated to be, significant.

PRODUCT SALES

Product Sales include the manufacturing of frozen and refrigerated glass door
and reach-in display cases used by grocery, convenience and drug store chains
for merchandising of food, beverage and floral products through Zero Zone and
operations in food distribution related to supplying municipal school districts
with commodity and non-commodity food products. The Company also designs and
manufactures refrigeration and power distribution control systems for use by
retail grocery chains, convenience and drugstore chains, industrial facilities
and ice rinks.

Zero Zone, headquartered in North Prairie, Wisconsin currently owns and operates
three manufacturing facilities and leases one warehouse for offsite storage of
finished products.

Zero Zone's headquarters and manufacturing facility was built in 1995. With a
1999 addition plus a small, adjacent building purchased in 2000, this facility
has a total of 119,000 square feet under roof. Zero Zone's operations at this
plant consist of light manufacturing, primarily heat exchange equipment
assembly, panel molding and case assembly operations. A full line of reach-in
cases produced at this facility is marketed under the Company's Maximizer(R)
label. The different configurations include 1, 2, 3, 4, and 5 glass-door
line-ups, back-to-back, and wrap-around refrigerated display cases.

Zero Zone's second manufacturing facility is located four miles east of North
Prairie in Genesee, Wisconsin. This 34,000 square foot facility is primarily
utilized for production of display casements with self-contained refrigeration
equipment including the Open Merchandiser Cooler (OMC) Line. Zero Zone renovated
the Genesee location in 2000 to accommodate the OMC product line. This product
line maintains safe product temperatures of 41(degree)F or lower, as required
by food regulatory authorities.

The Company's third facility houses Zero Zone Refrigeration in Ramsey,
Minnesota, which was acquired in February 2002. This Company manufactures
mechanical houses and refrigeration racks used to power and control the
refrigeration systems, electrical panels, air conditioning and stand-by power
for supermarkets, convenience and drug stores, industrial applications and ice
rinks. The addition of refrigeration systems to Zero Zone's product offering
allows the Company to provide an integrated package of display cases and
refrigeration systems to its customers.

Zero Zone also currently leases a warehouse in Waukesha, Wisconsin used for
storage of finished refrigerated display case products. The current lease of
79,000 square feet of space expires August 31, 2005.

Competition in commercial refrigeration equipment manufacturing varies depending
on the market segment being served. Zero Zone is primarily a supplier to
retailers engaged in grocery, drug and convenience stores. Zero Zone also sells
to refrigeration contractors, dealers, and food wholesalers in 2002. Zero Zone's
top 10 customers accounted for approximately 14.6 percent of total consolidated
revenues. One Zero Zone customer represented approximately 11.8 percent of total
consolidated revenues in 2002. Zero Zone's

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<PAGE>

active customer list includes approximately 500 customers. At December 31, 2002
Zero Zone's backlog totaled $8,309,000.

Zero Zone's competition consists of larger companies that supply a complete line
of refrigerated equipment while Zero Zone's specialty is glass door and
open-faced, reach-in display cases and refrigeration systems, two significant,
high dollar volume niches. Zero Zone's direct competitors include divisions of
large Fortune 500 companies such as Hussmann International, division of
Ingersoll Rand Company Limited; Tyler, division of United Technologies
Corporation; Hill-Phoenix, division of Dover Corp. and Kysor, division of Enodis
plc. Zero Zone believes it has a competitive advantage in its product quality,
performance and service, along with a flexible manufacturing process that allows
for shorter lead times and quicker response to its customers' construction and
refurbishment schedules.

Zero Zone revenues and earnings can be affected by the loss of a significant
customer, industry consolidation among customers and/or competitors, loss of
material vendors, changes in competitive pricing, raw material cost changes,
changes in distribution channels, the activity level of new construction and
refurbishment of grocery and chain store retailers, availability of skilled
labor, interest rates, and general economic conditions.

EMPLOYEES

The following table shows the number of full-time C2, TLC and Zero Zone
employees at the dates indicated.

<TABLE>
<CAPTION>
                    FULL-TIME EMPLOYEES AT FEBRUARY 28,
                    -----------------------------------
                     2003           2002          2001
                    ------         ------        ------
<S>                 <C>            <C>           <C>
C2                      9             10            11
TLC                 1,603          1,050         1,005
Zero Zone             251            184           185
                    -----          -----         -----
   TOTAL            1,863          1,244         1,201
</TABLE>

EXECUTIVE OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
                                          POSITION AND PRINCIPAL OCCUPATION
       NAME              AGE                 DURING THE LAST FIVE YEARS
------------------      ------       ----------------------------------------------
<S>                     <C>          <C>
William T. Donovan        51         President and Chief Executive Officer of C2 (1)

David J. Lubar            48         Chairman of C2 (2)

0yvind Solvang            44         Vice President of C2 (3)
</TABLE>

         (1)  Mr. Donovan served as Chairman and Chief Financial Officer of the
              Company from December 1997 to July 24, 2000, when he was named the
              Company's President and Chief Executive Officer. He served in the
              capacity of President, Chief Financial Officer and Executive Vice
              President as an executive officer of Christiana for more than the
              last five years. He was a principal of Lubar & Co. (private equity
              investment) for more than five years. Mr. Donovan is a director of
              Grey Wolf, Inc.

         (2)  David J. Lubar served as President of the Company from December
              1997 to July 24, 2000, when he was named the Company's Chairman.
              Mr. Lubar has been a principal of Lubar & Co. located in
              Milwaukee, Wisconsin since 1983.

         (3)  Oyvind Solvang has been Vice President of C2, Inc. since December
              1997. Mr. Solvang has served as President of Cleary Gull Reiland &
              McDevitt, Inc., an investment banking firm, located in Milwaukee,
              Wisconsin from January 1996 to October 1996 and Chief Operating
              Officer from October 1995 to January 1996.

                                       7

<PAGE>

Sheldon B. Lubar, a director of the Company, is the father of David J. Lubar and
father-in-law of 0yvind Solvang. None of the other directors or executive
officers are related to each other. The term of office of each of the executive
officers expires at the annual meeting of directors.

INDUSTRY SEGMENTS

Financial information concerning the Company's industry segments is included in
Note H to the Consolidated Financial Statements contained in Item 8 of this Form
10K.

ITEM 2.   PROPERTIES
          WAREHOUSING FACILITIES

At December 31, 2002, TLC directly owned or leased twelve warehouse facilities
in five states. Of this total, seven are public refrigerated with the balance
being non-refrigerated facilities. Refrigerated warehousing operations are
conducted through seven public logistic centers located in Wisconsin (2),
Michigan (4), and Illinois (1). TLC's refrigerated facilities are large
single-story buildings constructed at dock height with full insulation and vapor
barrier protection. Refrigeration is provided by screw-type compressors all of
which employ ammonia-based cooling systems. The facilities are strategically
located and well served by rail and truck.

TLC's refrigerated warehouse facilities are described in the following table:

<TABLE>
<CAPTION>
                                                                             TOTAL STORAGE SPACE
            FACILITY                                LOCATION               (CUBIC FEET IN MILLIONS)    TYPE OF FACILITY
----------------------------------           -----------------------       ------------------------   -------------------
<S>                                          <C>                           <C>                        <C>
Rochelle Logistic Center I                   Rochelle, IL                           10.6              Distribution
Beaver Dam Logistic Center                   Beaver Dam, WI                          7.2              Distribution/Production
Milwaukee Logistic Center                    Milwaukee, WI                           4.3              Distributione, WI
Paw Paw Logistic Center                      Paw Paw, MI                             2.5              Distribution
Kalamazoo Logistic Center I (1)(2)           Kalamazoo, MI                           3.3              Distribution
Kalamazoo Logistic Center II (1)             Kalamazoo, MI                           2.8              Distribution
Holland Logistic Center (1)                  Holland, MI                             2.1              Distribution/Production
                                                                                    ----
    TOTAL                                                                           32.8
                                                                                    ====
</TABLE>

(1) Leased facility

(2) Includes 1,800,000 cubic feet of non-refrigerated storage capacity.

At both the Rochelle and Beaver Dam Logistic Centers, the Company owns
substantial additional acreage available for expansion. In addition, the Company
has an option to purchase 90 additional acres of contiguous land for future
expansion and development at the Paw Paw Logistic Center. This option expires
January 5, 2004.

At December 31, 2002, TLC directly operated five public non-refrigerated or dry
warehouse distribution facilities located in Michigan (3), Indiana and New
Jersey. Zeeland Distribution Center II, located in Zeeland, Michigan is a
Company-owned facility. All other dry facilities are held under leases and
generally serve the distribution requirements of customers on a month-to-month
basis. These facilities are single story block or metal construction buildings.
All dry facilities are constructed at dock height and are approved as food grade
storage facilities.

                                       8

<PAGE>

         TLC's dry warehouse facilities are described on the following table:

<TABLE>
<CAPTION>
                                                                    TOTAL STORAGE
                                                                        SPACE
                                                                     (SQ. FT. IN            TYPE OF
          FACILITY                            LOCATION                THOUSANDS)            FACILITY
-----------------------------               -------------           -------------           --------
<S>                                         <C>                     <C>                     <C>
Zeeland Logistic Center I (1)               Zeeland, MI                 202                   Public
Zeeland Logistic Center II                  Zeeland, MI                 220                   Public
Michigan Distr. Center I (1)                Kalamazoo, MI               125                   Public
Munster Logistic Center (1)                 Munster, IN                 446                   Public
Dayton Logistic Center (1)                  Dayton, NJ                   90                   Public
                                                                      -----
    TOTAL                                                             1,083
                                                                      -----
</TABLE>

(1) Leased facility.

TLC owns one maintenance and operations facility and leases two additional
facilities. These facilities provide maintenance services and bases for
operations for TLC's fleet of tractors and trailers, and are located in
Kalamazoo, Michigan (owned), Erie, Pennsylvania (leased) and Murfreesboro,
Tennessee (leased).

Zero Zone currently owns and operates three manufacturing facilities and leases
one warehouse for offsite storage of finished products. Zero Zone's headquarters
and main manufacturing facility was built in 1995. The original plant consisted
of 61,000 square feet and was expanded in 1999 by an additional 52,000 square
feet. This facility is used for the manufacture of reach-in merchandising cases.
Zero Zone's second manufacturing facility is located four miles east of North
Prairie in Genesee, Wisconsin. This 34,000 square foot facility is primarily
utilized for production of display casements with self-contained refrigeration
equipment including the Open Merchandiser Cooler (OMC) line.

In 2000, Zero Zone purchased a 6,300 square foot building and 2.47 acres of land
directly adjacent to its North Prairie facility to house a display center to
exhibit product for customer visits.

Zero Zone also currently leases a warehouse in Waukesha, Wisconsin used for
storage of finished refrigerated display case products. The current lease of
79,000 square feet of space expires August 31, 2005.

The Company's third manufacturing facility is located in Ramsay, Minnesota.
Acquired in February 2002, Zero Zone Refrigeration manufactures mechanical
houses and refrigeration racks used to power and control the refrigeration
systems, electrical panels and stand-by power for supermarkets, convenience and
drug stores, industrial applications and ice rinks. This 80,000 square foot
building houses engineering, sales and manufacturing.

ITEM 3.   LEGAL PROCEEDINGS.

From time to time, TLC and Zero Zone, in the normal course of business, are
involved in litigation incidental to the conduct of their businesses. The
Company does not believe that the ultimate disposition of any currently pending
claims, individually or in the aggregate, would have a material adverse effect
on the Company's consolidated financial condition, results of operations or cash
flows.

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

No matters were submitted to a vote of shareholders during the quarter ended
December 31, 2002.

                                       9

<PAGE>

PART II

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

The common stock of the Company was originally listed on the Nasdaq Small Cap
Market effective March 5, 1999. On June 4, 1999 the Company's common stock was
listed on the Nasdaq National Market. The table below sets forth the reported
high and low sales prices as reported by Nasdaq for the quarters ended March 31,
2001 through March 13, 2003.

<TABLE>
<CAPTION>
                                              2003                       2002                      2001
                                      ----------------------     --------------------      --------------------
QUARTER ENDED                           HIGH          LOW          HIGH         LOW         HIGH         LOW
-------------                         --------      --------     --------     -------      -------     --------
<S>                                   <C>           <C>          <C>          <C>          <C>         <C>
March 31*                             $ 16.580      $ 11.100     $  8.590     $ 6.000      $ 7.750     $  5.625
June 30                                                             9.750       7.130        7.750        6.000
September 30                                                        8.600       6.680        7.000        6.000
December 31                                                        13.939       5.900        8.750        4.750
</TABLE>

* Ten weeks ended March 13, 2003

At March 13, 2003, there were approximately 117 shareholders of record and over
400 round lot holders. There have been no dividends paid, and based on the
Company's strategic business plan of reinvesting cash flow, none are anticipated
in the near future.

RECENT SALE OF UNREGISTERED SECURITIES:

On December 31, 2002, the Company acquired the remaining 29.4 percent equity
interest in Zero Zone that the Company did not own. In consideration for the
remaining equity interest of Zero Zone, the Company issued to the six
shareholders of Zero Zone other than the Company, a total of 190,000 shares of
the Company's common stock valued for purposes of the transaction at an
aggregate value of $2,561,000. The shares issued in connection with this
transaction were not registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon the exemption from registration
thereunder available under Section 4(2) of the Securities Act.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about the Company's equity compensation
plans as of December 31, 2002:

<TABLE>
<CAPTION>
                                                                                               Number of securities
                                                                                             remaining available for
                                                                                              future issuance under
                                    Number of securities                                       equity compensation
                                   to be issued upon the           Weighted-average              plans (excluding
                                    upon the exercise of          exercise price of          securities reflected in
    Plan category                 outstanding options (1)        outstanding options            the first column)
    -------------                 -----------------------        -------------------         -----------------------
<S>                               <C>                            <C>                         <C>
Equity compensation
plans approved by
security holders                          405,000                       $4.47                        115,000

Equity compensation                         None                         n/a                           None
plans not approved by                       ----                         ---                           ----
security holders
Total                                     405,000                       $4.47                        115,000
                                          =======                                                    =======
</TABLE>

    (1)  Represents options to purchase the Company's Common Stock granted under
         the 1998 Equity Incentive Plan, which was approved by the Company's
         shareholders.

                                       10

<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA.

Selected Financial Data is provided under the caption "Five Year Financial
Information", which is included on page 43.

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

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

The Company's consolidated revenues increased 25.8 percent to $267,238,000 in
2002 compared to 2001. The Company's consolidated revenues in 2002 included
$195,774,000 of logistic services, reflecting year-to-year growth of 32.6
percent and product sales of $71,464,000, which increased 10.3 percent due
primarily to the acquisition of Zero Zone Refrigeration in January 2002.

The increase in revenues from logistic services in 2002 was attributable to
strong growth in dedicated facility projects, transportation operations and
Logistic management services. Revenues attributable to warehousing operations in
2002 increased slightly from those recorded in 2001 due to increased utilization
and price increases offset by the sale of one of the Company's refrigerated
warehouses in May 2002.

Increased product sales in 2002 were primarily attributable to the acquisition
of Zero Zone Refrigeration, partially offset by lower sales of food products due
to the loss of certain Michigan school districts during the year. The Company
continues to market its services in non commodity food products to school
systems in regions of Michigan, Indiana, and Illinois and has been awarded a
five-year contract to provide certain food products to regions in the state of
Michigan for additional volume commencing August 2003, which is expected to
improve capacity utilization in one of its warehouse facilities in Michigan as
well as it transportation fleet. Sales of refrigerated casements in 2002 were up
slightly over those recorded in 2001, reflecting the generally depressed level
of capital spending in retail grocery, convenience and drug store chains, which
continued throughout 2002. Lower levels of volume throughout the retail chain
industry resulted in aggressive price discounting for new sales programs, which
required the Company to respond accordingly.

The direct margin attributable to logistic services in 2002 was 11.3 percent,
down from 12.1 percent in 2001, reflecting higher growth of lower margin
services in dedicated facility projects, logistic management services and
transportation operations as compared to warehousing operations. However, growth
in these areas is consistent with the Company's strategy of emphasizing growth
in non-asset based services, which leverage the Company's existing
infrastructure, technology and personnel without requiring additional capital
investment. Included in the Company's facility management services activities
are long-term contractual management services to staff and operate facilities,
which are cost plus fee arrangements. During 2002, the company started up four
large new facility management projects under multi-year term service contracts.
Two additional projects have been contracted and will start up in the first
quarter of 2003.

The direct margin attributable to product sales in 2002 was 19.0 percent, which
is a slight decrease compared to last year's level of 20.3 percent. The decrease
in margin is due in part to the acquisition of Zero Zone Refrigeration, which
generated lower margin as volume was lower than anticipated, lower volume of
food product sales to school districts and competitive price pressure for sales
of refrigerated casements to new account relationships.

Depreciation and amortization expense in 2002 was $7,508,000 compared to
$8,153,000 reported for 2001. In May 2002, TLC sold a refrigerated warehouse
facility, which reduced depreciation expense in 2002. Additionally, the Company
incurred depreciation expense on new capital expenditures. In 2002, the Company
became subject to the adoption of the new accounting standard that eliminated
amortization

                                       11

<PAGE>

of goodwill and indefinite-lived intangible assets, the result of which reduced
amortization in 2002 by $537,000.

Selling, general and administrative expenses in 2002 totaled $18,389,000, or 6.9
percent of total revenues, compared to $15,425,000, or 7.3 percent for the same
period in 2001. Absolute growth in selling, general and administrative expenses
is attributable to increased volume and the addition of Zero Zone Refrigeration.
However, aggressive cost management initiatives enabled these expenses to be a
lower percentage of total revenues in 2002 than in the prior year. Strong growth
in volume in logistics services was also a contributing factor in the
improvement of this expense ratio.

Consolidated earnings from operations in 2002 total $9,889,000, representing a
31.9 percent increase compared to $7,495,000 reported in 2001. Higher operating
income in 2002 was due to growth in logistic services with the addition of
incremental fee income attributable to new facility management projects
commenced during 2002, partially offset by margin pressure in display case
product sales and lower volume of food product sales.

Consolidated net interest expense in 2002 was $3,976,000 compared to $5,051,000
reported for 2001, reflecting a 21.3 percent decline in this expense. The
decrease in interest expense in 2002 was primarily attributable to the decline
in short-term interest rates, the sale of a refrigerated warehouse for
$9,800,000, which reduced TLC's revolving credit outstandings by a like amount
and an additional $6,067,000 of debt reduction at TLC from internally generated
cash flow, offset by an increase in debt of $3,400,000 associated with the
acquisition and working capital requirements of Zero Zone Refrigeration. In
order to reduce the Company's exposure to higher interest rates in the future,
both TLC and Zero Zone entered into a series of interest rate swap transactions
beginning on September 28, 2001 and continuing through January 8, 2002. These
swap transactions effectively converted $28,420,000 of floating rate debt to
fixed rate debt while enabling the Company to benefit from earned incentive
based reductions in the spread paid over LIBOR.

The effective tax rate in 2002 was 43 percent, compared to 42 percent in 2001.
The increase was the result of higher state taxes, particularly the State of
Michigan, partially offset by the reduction in nondeductible goodwill.

In 2002, consolidated net earnings totaled $3,061,000, or $0.58 per diluted
share, representing an increase of 277.0 percent compared to net earnings in
2001 of $812,000, or $0.16 per diluted share. The increase in net earnings is
attributable to the significant growth in revenues and operating profitability
in logistic services in 2002, which was a meaningful improvement over the prior
year's results. Lower interest expense and the elimination of goodwill
amortization were also contributing factors to the improvement in net earnings.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

The Company's consolidated revenues for 2001 totaled $212,445,000, compared to
$183,450,000 reported for 2000, an increase of $28,995,000, or 15.8 percent. The
Company's consolidated revenues in 2001 included $147,663,000 of logistics
services, reflecting year-to-year growth of 30.2 percent, and product sales of
$64,782,000, which declined 7.6 percent in 2001.

The increase in logistic services in 2001 was attributable to strong growth in
logistic management services, transportation operations, and dedicated facility
solutions. Revenues attributable to warehousing operations were lower by
approximately 10 percent, due largely to the expiration of two contracts, one in
refrigerated operations and one in dry warehousing.

The decline in product sales was attributable to lower volume of display cases,
reflecting the generally low level of capital spending in the retail grocery,
convenience and drug store chains, all of which were depressed throughout 2001.

                                       12

<PAGE>

The direct margin attributable to logistics services was 12.1 percent in 2001,
down from 16.3 percent in 2000, reflecting continued higher growth in lower
margin logistic management and facility management activities than in
warehousing operations. However, such non-asset based logistics and facility
management services have substantially lower capital requirements to fund growth
than asset intensive warehousing operations.

The direct margin attributable to product sales in 2001 was 20.3 percent
reflecting a decrease over the prior year's level of 23.1 percent. The decrease
in margin is largely attributable to lower volume and price pressure.

Depreciation and amortization expense in 2001 was $8,153,000 compared to
$7,895,000 reported for 2000. The 3.3 percent increase resulted from a full year
of depreciation on capital expenditures of $9,845,000 made in 2000.

Selling general and administrative expenses in 2001 totaled $15,425,000, or 7.3
percent of total revenues, compared to $15,623,000, or 8.5 percent in 2000.
Aggressive cost containment strategies were employed at both TLC and Zero Zone.
Lower commission expense resulting from the decline in product sales volume was
also a contributing factor to the reduction in expenses in 2001.

Consolidated earnings from operations for 2001 totaled $7,495,000, compared to
$11,153,000 reported for 2000, reflecting a 32.8 percent decline. Lower volume
in product sales was the principal factor impacting operating profit in 2001.
Margin pressure resulting from increased competitive pricing experienced in
logistic services and product sales was also a contributing factor in the
decline in operating earnings in 2001.

Consolidated net interest expense in 2001 was $5,051,000, compared to $5,899,000
reported for 2000. The decrease in interest expense was primarily attributable
to the decline in short-term interest rates. In addition, consolidated funded
debt was reduced during 2001 by $6,441,000, which contributed to the decline in
interest expense.

The effective tax rate in 2001 was 42 percent compared to 43 percent in 2000.

In 2001, consolidated net earnings totaled $812,000, or $0.16 per share fully
diluted, down 59.3 percent from the prior year's net earnings of $1,995,000, or
$0.38 per share fully diluted. The decline in 2001 net earnings was due to lower
earnings from operations primarily attributable to reduced volume of product
sales at Zero Zone and to a lesser extent, lower operating margins at both Zero
Zone and TLC as previously noted.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents at December 31, 2002 totaled $4,483,000 compared to
$2,539,000 at December 31, 2001. The Company's working capital at December 31,
2002 was $4,003,000 compared to $7,924,000 at December 31, 2001. Working capital
declined in 2002 due to an increase in accrued liabilities attributable
primarily to the Company's growth during the year and an increase in short-term
debt associated with funding the working capital needs of Zero Zone
Refrigeration, which was acquired in February 2002.

Operating activities in 2002 provided cash of $12,291,000 compared to
$10,666,000 provided in 2001. In 2002, cash provided by operating activities was
derived primarily from net earnings of $3,061,000, depreciation and amortization
expense of $7,508,000 and a net decrease in working capital accounts of
$498,000.

Net cash used by investing activities in 2002 totaled $4,986,000, which compares
to a use of cash in 2001 in investing activities of $3,980,000. The major
component in the use of cash was capital expenditures made in 2002 of
$5,070,000. Capital expenditures in 2002 were comprised of $1,922,000 related to

                                       13

<PAGE>

buildings and improvements, $1,001,000 associated with information system
investments, $218,000 of transportation equipment, $798,000 for machinery and
equipment, $821,000 for capital additions at Zero Zone and $310,000 for other
miscellaneous capital expenditures.

Cash flows used in financing activities totaled $5,361,000 in 2002 compared to
$6,441,000 used in 2001. The major components of cash flows used in financing
activities in 2002 were the repayments of long-term debt. During 2002, TLC
reduced long-term debt by $15,867,000 funded by the sale of a refrigerated
warehouse in Rochelle, Illinois for $9,800,000 and the balance of $6,067,000 by
internally generated cash flows. At Zero Zone, debt increased by $706,000, net
related to the acquisition of Zero Zone Refrigeration.

On June 8, 2001, TLC entered into an amended and restated credit agreement with
its bank group. The new credit facilities include a $40,000,000, 5-year reducing
revolving credit agreement and a $25,000,00, 5-year term loan. The revolving
credit facility steps down $2,000,000 per year beginning July 1, 2002, with a
final maturity of $32,000,000 on June 30, 2006. The term loan amortizes $416,666
per quarter commencing September 30, 2001, with a final payment due on June 30,
2006. At December 31, 2002, outstanding indebtedness under these facilities
totaled $41,217,000. Unused borrowings under the revolving credit agreement
totaled $19,200,000 at December 31, 2002. During 2002, TLC's performance related
to increased earnings before interest, taxes, depreciation and amortization
("EBITDA") and reduced debt enabled a reduction in the interest rate spread
charged under its revolving credit and term loan agreements. The spread over
LIBOR was reduced in total by 125 basis points, the full impact of which will be
realized in 2003. As of December 31, 2002, TLC was in full compliance with all
required covenants related to earnings, net worth and cash flows.

On September 28, 2001, TLC entered into two Interest Rate Swap agreements
("Swaps"), which effectively fixed the interest rate payable by TLC on (a)
$5,000,000 of outstanding debt for the period to October 2, 2004, and (b)
$5,000,000 of outstanding debt for the period to June 30, 2006. The effective
interest rate for each Swap was fixed at 3.92 percent and 4.47 percent,
respectively, plus the LIBOR spread, which is subject to reduction based on
TLC's leverage ratio, as defined. At December 31, 2002, the fixed interest rates
for the underlying principal under the Swap transactions were 5.92 percent and
6.47 percent, respectively.

On October 31, 2001, TLC entered into two more Swaps, which effectively fixed
the interest rate payable by TLC on (a) $5,000,000 of outstanding debt for the
period to November 2, 2004 , and (b) $5,000,000 of outstanding debt through June
30, 2006. The effective interest rate for each Swap was fixed at 3.6725 percent
and 4.3175 percent, respectively, plus the LIBOR spread, which is subject to
reduction based on TLC's leverage ratio, as defined. At December 31, 2002, the
fixed interest rates for the underlying principal under the Swap transactions
were 5.6725 percent and 6.3175 percent, respectively.

At TLC, the unrealized depreciation on these Swap transactions at December 31,
2002 was $583,000, net of tax, which was recorded as a separate component of
equity in other comprehensive income. The Company does not anticipate realizing
any gain or loss on these swap transactions, as it is the present intention to
hold them to maturity, thereby providing a level of protection against higher
interest rates.

Zero Zone completed a financing package on August 31, 1999 with a major
commercial bank. The package contains two bond issues and a demand line of
credit. The first facility is a tax-free Industrial Revenue Bond issue in the
amount of $3,420,000 that was issued through the State of Wisconsin. This bond
has a 20-year life with no annual amortization and carries a seven-day variable
interest rate, which was 1.7 percent at December 31, 2002. The second issue is a
taxable Industrial Revenue Bond in the original amount of $6,000,000 issued
through a bank. This bond has a 12-year maturity schedule with annual principal
repayments of $500,000. The interest rate on the second bond is also a seven-day
variable interest rate, 1.6 percent at December 31, 2002. The amount outstanding
at December 31, 2002 was $4,500,000. Both bonds are secured by letters of credit
issued by a major commercial bank.

                                       14

<PAGE>

The interest rate on Zero Zone's $7,500,000 line of credit, which is secured by
Zero Zone's assets, is based on LIBOR plus an amount that varies according to a
pricing grid determined by the ratio of funded debt to EBITDA. At December 31,
2002, Zero Zone had $4,470,000 in outstanding borrowings under this facility
bearing an interest rate at December 31, 2002 of 2.88%.

As part of the acquisition of Zero Zone Refrigeration on February 5, 2002, two
debt issues were assumed. The first is a tax-free bond in the amount of
$3,100,000, issued by the State of Minnesota. The bond issue date was April 1,
2000 and has a 20-year life with annual principal payments of $85,000 in 2002,
increasing to $285,000 in 2020. The beginning interest rate on the bond was
5.25% increasing to 7.25%. The bond's outstanding balance at December 31, 2002
was $3,015,000. The second debt issue is an equipment note from the City of
Ramsey in the amount $300,000. At December 31, 2002 $242,000 was outstanding.
This note has a 10-year life with annual amortization of $34,766 of principal
and interest. The interest rate on this note is 3.00%.

At December 31, 2002 Zero Zone had unsecured senior subordinated indebtedness in
the amount of $1,350,000 to former shareholders. The interest rate on this debt
is 8.00%. Payment of $1,000,000 is due March 12, 2003 and the final payment of
$350,000 is due March 12, 2004. Zero Zone has $1,500,000 of unsecured junior
subordinated indebtedness to former and existing shareholders. The interest rate
is 8.5% of which 3.4% is paid in cash and 5.1% is payment-in-kind. Payment of
$500,000 per year is due beginning December 31, 2005. Included in subordinated
indebtedness is $319,000 owing to an officer of Zero Zone.

On November 2, 2001, Zero Zone entered into an Interest Rate Swap agreement with
a major commercial bank. This agreement effectively fixes the interest rate
payable on the taxable Industrial Revenue Bond in the original amount of
$5,000,000 at 4.53% until August 1, 2011. On January 8, 2002, Zero Zone entered
into a second Interest Rate Swap agreement. This agreement effectively fixes the
interest rate payable on the $3,420,000 tax-free Industrial Revenue Bond at
4.135% until January 3, 2012. At December 31, 2002, these Swaps had unrealized
depreciation of $360,000, net of tax, which was recorded as a separate component
of equity in other comprehensive income. The Company does not anticipate
realizing any gain or loss on these swap transactions, as it is the present
intention to hold them to maturity, thereby providing a level of protection
against higher interest rates. The ineffectiveness of the swaps is
insignificant.

As of December 31, 2002, Zero Zone was in compliance with, or has secured
waivers and amendments relating to all required covenants associated with
required cash flow, earnings and net worth covenants under its debt agreements.

On December 31, 2002, C2 acquired the remaining 29.4 percent of Zero Zone. The
consideration paid was 190,000 shares of C2 stock at a value of $2,561,000.

At year-end, the Company had in place a $15,000,000 unsecured line of credit
facility, renewable annually, for general corporate purposes. There were no
borrowings under this facility in 2002.

The Company's current sources of capital include: cash generated from
operations, existing cash resources, which at year-end totaled $4,483,000 and
unused availability under existing credit facilities totaling approximately
$37,230,000. The Company believes these resources are sufficient to fund
projected cash requirements related to current operations. Anticipated capital
expenditures for 2003 are not expected to exceed those incurred in 2002.

The Company continues to evaluate new acquisitions in areas of strategic
importance to existing operations, as well as, in new lines of business. Future
acquisitions may be funded through cash balances; cash flows from operations;
existing credit facilities; potential new credit facilities; and/or the issuance
of equity securities through an underwritten offering, a rights offering to
shareholders or otherwise.

As of December 31, 2002, the Company had no material capital commitments.

                                       15

<PAGE>

CRITICAL ACCOUNTING POLICIES: The Company prepares its consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America ("U.S. GAAP"). This requires management to make
estimates and judgments that affect reported amounts and related disclosures.
Actual results could differ from those estimates. The Company considers the
following policies to be the most critical in understanding the judgments that
are involved in the preparation of the Company's consolidated financial
statements and the uncertainties that could impact the Company's financial
condition, results of operations and cash flows.

REVENUE RECOGNITION: The Company recognizes and earns revenue when all of the
following circumstances are satisfied: persuasive evidence of an arrangement
exists, the price is fixed or determinable, collectibility is reasonably assumed
and delivery has occurred or services have been rendered.

GOODWILL AND OTHER INTANGIBLE ASSETS: The Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets"
effective January 1, 2002. Under SFAS No. 142, goodwill and indefinite-lived
intangible assets are no longer amortized; however, they must be tested for
impairment periodically, or more frequently under certain circumstances, and
written down when impaired. The impairment assessment and purchase price
allocation process requires management estimates and judgment as to expectations
for future cash flows of the business and application of those cash flows to
identifiable intangible assets in determining the estimated fair value for
allocation purposes. If the actual results differ from the estimates and
judgments used in the purchase price allocation, the amounts recorded in the
financial statements could result in a possible impairment of the intangible
assets and goodwill or require acceleration in amortization expense. The Company
is subject to financial statement risk to the extent that goodwill becomes
impaired. Any impairment review is, by its nature, highly judgmental as
estimates of future sales, earnings and cash flows are utilized to determine
impairment. There was no impairment of goodwill upon adoption of SFAS No. 142,
nor upon the Company's subsequent testing.

NEW ACCOUNTING STANDARDS

In November 2002, the Financial Accounting Standards Board ("FASB") issued
Financial Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." FIN 45 requires certain guarantees to be recorded at
fair value and requires a guarantor to make significant new disclosures, even
when the likelihood of making any payments under the guarantee is remote.
Generally, FIN 45 applies to certain types of financial guarantees that
contingently require the guarantor to make payments to the guaranteed party
based on changes in an underlying that is related to an asset, liability, or an
equity security of the guaranteed party; performance guarantees involving
contracts, which require the guarantor to make payments to the guaranteed party
based on another entity's failure to perform under an obligating agreement;
indemnification agreements that contingently require the guarantor to make
payments to an indemnified party based on changes in an underlying that is
related to an asset, liability, or an equity security of the indemnified party;
or indirect guarantees of the indebtedness of others. The initial recognition
and initial measurement provisions of FIN 45 are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002. Disclosure
requirements under FIN 45 are effective for financial statements ending after
December 15, 2002 and are applicable to all guarantees issued by the guarantor
subject to FIN 45's scope, including guarantees issued prior to FIN 45. The
Company does not expect that FIN 45 will have a material effect on its financial
condition, results of operations or cash flows.

FINANCIAL MARKET RISK

The Company's interest expense is sensitive to changes in the interest rates in
the U.S. and foreign markets. In this regard, changes in U.S. and foreign
interest rates affect interest payable on the Company's borrowing under the
Company's revolving credit agreement with TLC and multiple debt issues of both
TLC and Zero Zone. The Company has utilized interest rate swaps in order to
establish a fixed interest rate, subject to a spread reduction on $27,920,000 of
its $56,662,000 variable rate

                                       16

<PAGE>

obligations. If market interest rates had averaged 10 percent higher than actual
levels in either 2002 or 2001, the effect on the Company's results of operations
would not have been material.

The Company also has approximately $3,411,000 of long-term obligations, which
are recorded at fixed interest rates. The potential loss in fair value of this
debt on such fixed rate obligations from a hypothetical 10 percent increase in
market interest rates would not be material to the overall fair value of the
debt. The Company currently does not have any plans to repurchase its
outstanding fixed-rate instruments and, therefore, fluctuations in the market
interest rates would not have an effect on the Company's results of operations
or shareholders' equity.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Following is a summary of the Company's contractual obligations and payments due
by period following December 31, 2002 (in thousands):

<TABLE>
<CAPTION>
                                                                                FOR YEARS ENDED DECEMBER 31,
                                                           ----------------------------------------------------------------------
                                            TOTAL AT
                                          DECEMBER 31,
                                              2002            2003        2004        2005        2006        2007     THEREAFTER
CONTRACTUAL OBLIGATIONS                 --------------     ----------  ----------  ----------  ----------  ----------  ----------
<S>                                     <C>                <C>         <C>         <C>         <C>         <C>         <C>
Debt:
    Line of credit                          $  4,470        $ 4,470     $    --      $    --     $    --      $   --     $    --
    Revolving credit agreement                18,800             --          --           --      18,800          --          --
    Term loan                                 22,417          1,667       1,667        1,667      17,416          --          --
    Bonds payable                             10,935            590         595          600         610         615       7,925
    Subordinated Notes                         3,169          1,000         350          500         500         819
    Other                                        242             28          29           30          30          31          94
                                            --------        -------     ---------    -------     -------      ------     -------
       Total Debt                             60,033          7,755       2,641        2,797      37,356       1,465       8,019
Operating leases                              51,033         13,187      10,854        9,951       6,607       4,802       5,632
                                            --------        -------     ---------    -------     -------      ------     -------
Total contractual cash obligations          $111,066        $20,942     $13,495      $12,748     $43,963      $6,267     $13,651
                                            ========        =======     =========    =======     =======      ======     =======
</TABLE>

FORWARD LOOKING STATEMENTS

Certain matters discussed in this Report are "forward-looking statements"
intended to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement includes phrases such as the Company "believes," "expects" or other
words of similar import. Similarly, statements that describe the Company's
future plans, objectives or goals are also forward-looking statements,
including, among other, discussions of growth in the market and demand for
services in third-party logistics, the outlook for growth in the market for new
construction or refurbishment of grocery, drug and convenience stores, and thus
demand for Zero Zone's products. Such forward-looking statements are subject to
certain risks and uncertainties, which could cause actual results or outcomes to
differ materially from those currently anticipated. Although the Company
believes its expectations are based on reasonable assumptions, it can give no
assurance that its goals will be achieved. Important factors that could affect
actual results or outcomes include, without limitation:

         -        Demand for warehousing, transportation, logistic services,
                  refrigerated display and refrigeration control systems cases
                  may be adversely affected by increases in interest rates,
                  adverse economic conditions, increased energy costs, loss of a
                  material customer or vendor, weather or other factors.

         -        Growth in volume of services or products may be adversely
                  affected by reduced ability to identify and hire qualified
                  employees.

         -        The Company's profitability may be adversely affected by
                  increases in interest rates because a significant portion of
                  the Company's capital structure is debt, a portion, which
                  bears interest at variable interest rates.

                                       17

<PAGE>

         -        The Company's profitability may be adversely affected by
                  performance, which does not meet standards established in
                  contractual agreements relating to transportation operations,
                  logistics management, dedicated facility operations and
                  product warranty.

         -        Consolidation within the food industry or grocery, drug or
                  convenience retailers could negatively impact the Company's
                  customers.

         -        The Company's market share may be adversely affected as a
                  result of new or increased competitive conditions in
                  warehousing, transportation or display case and refrigeration
                  control systems manufacturing.

Shareholders, potential investors and other readers are urged to consider these
factors in evaluating the forward-looking statements and are cautioned not to
place undue reliance on such forward-looking statements. The forward-looking
statements included are made only as of the date of this report. The Company is
not obligated to publicly update such forward-looking statements to reflect
subsequent events or circumstances.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information under the caption "Management's Discussion and Analysis -
Financial Market Risk" contained in Item 7 of the Form 10-K, is hereby
incorporated by reference in answer to this item.

ITEM 8.   FINANCIAL STATEMENT AND SUPPLEMENTARY DATA.

See Index to Financial Information on page 24.

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

A report on Form 8-K was filed June 17, 2002, and incorporated by reference, to
report the appointment of Deloitte & Touche LLP as the Company's independent
auditors as the successor to Arthur Andersen LLP.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

The information required by this Item with respect to directors and Section 16
compliance is included under the captions "Election of Directors" and "Section
16(a) Beneficial Ownership Reporting Compliance", respectively, in the Company's
definitive Proxy Statement for its 2003 Annual Meeting of Shareholders ("Proxy
Statement") and is hereby incorporated herein by reference. Information with
respect to the executive officers of the Company appears in Part I, page 7 of
this Annual Report on Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION.

The information required by this Item is included under the captions "Board of
Directors - Directors Compensation" and "Executive Compensation" in the Proxy
Statement and is hereby incorporated herein by reference; provided, however,
that the subsection entitled "Executive Compensation - Report on Executive
Compensation" shall not be deemed to be incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

The information required by this Item is included under the captions "Principal
Shareholders" and "Approval of Amendments to the 1998 Equity Incentive Plan -
Equity Compensation Plan Information" in the Proxy Statement and is hereby
incorporated herein by reference.

                                       18

<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by this Item is included under the caption "Certain
Transactions" in the Proxy Statement and is hereby incorporated herein by
reference.

                                     PART IV

ITEM 14.  CONTROLS AND PROCEDURES.

         (a)  Evaluation of disclosure controls and procedures. In accordance
              with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the
              "Exchange Act"), within 90 days prior to the filing date of this
              annual report on Form 10-K, an evaluation was carried out under
              the supervision and with the participation of the Company's
              management, including the Company's President and Chief Executive
              Officer and Chief Financial Officer, of the effectiveness of the
              design and operation of the Company's disclosure controls and
              procedures (as defined in Rule 13a-14(c) under the Exchange Act).
              Based upon their evaluation of these disclosure controls and
              procedures, the President and Chief Executive Officer and the
              Chief Financial Officer concluded that the disclosure controls and
              procedures were effective as of the date of such evaluation to
              ensure that material information relating to the Company,
              including its consolidated subsidiaries, was made known to them by
              others within those entities, particularly during the period in
              which this Annual Report on Form 10-K was prepared.

         (b)  Changes in internal controls. There were not any significant
              changes in the Company's internal controls or other factors that
              could significantly affect these controls subsequent to the date
              of their evaluation, including any corrective actions with regard
              to significant deficiencies and material weaknesses.

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

         (a)  (1) Financial Statement and Schedules - The financial statements
                  and financial statement schedules listed in the accompanying
                  index to financial statement and financial statement schedules
                  are filed as part of this Annual Report on Form 10-K and are
                  incorporated herein by reference. See Index on page 24.

              (2) Exhibits - The exhibits listed in the accompanying index to
                  exhibits are filed as part of this Annual Report on Form 10-K.
                  See Index on page 45.

         (b)  Reports on Form 8-K:
              No reports on Form 8-K were filed by the Company during the
              quarter ended December 31, 2002.

                                       19

<PAGE>

                                   SIGNATURES

Pursuant to the requirement of Section 13 of 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.

                                           C2, Inc.

Date: March 20, 2003                       By: /s/ William T. Donovan
                                          ------------------------------------
                                           William T. Donovan, President & CEO

Pursuant to the requirements of the Securities Exchange Act of 1934 this 10-K
report has been signed below on March 20, 2003 the following persons on behalf
of the Registrant and in the capacity indicated.

                                  Signature

/s/ William T. Donovan             President & Chief Executive Officer
-----------------------------      and a Director
 William T. Donovan

/s/David J. Lubar                  Chairman and a Director
-----------------------------
 David J. Lubar

/s/ Nicholas F. Brady              Director
-----------------------------
 Nicholas F. Brady

/s/ Sheldon B. Lubar               Director
-----------------------------
 Sheldon B. Lubar

/s/ William H. Lacy                Director
-----------------------------
 William H. Lacy

/s/ John A. Becker                 Director
-----------------------------
 John A. Becker

/s/ Betty J. Whit e                Treasurer, Controller and Assistant Secretary
-----------------------------
 Betty J. White

                                       20

<PAGE>

                       PURSUANT TO 18 U.S.C. Section 1350
                  WRITTEN STATEMENT OF CHIEF EXECUTIVE OFFICER

I, William T. Donovan, certify that:

1.       I have reviewed this annual report on Form 10-K of C2, Inc.

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              annual report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this annual report (the "Evaluation Date"); and

         c)   presented in this annual report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)   all significant deficiencies in the design or operation of
              internal controls, which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

March 20, 2003

----------------------------
William T. Donovan
President & Chief Executive Officer

                                       21

<PAGE>

                  WRITTEN STATEMENT OF CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. Section 1350

I, William T. Donovan, certify that:

1.       I have reviewed this annual report on Form 10K of C2, Inc.

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              annual report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this annual report (the "Evaluation Date"); and

         c)   presented in this annual report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)   all significant deficiencies in the design or operation of
              internal controls, which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

6.       The registrant's other certifying officer and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

March 20, 2003

----------------------------
William T. Donovan
President & Chief Financial Officer

                                       22

<PAGE>

                                    C2, INC.

                              FINANCIAL INFORMATION

                   FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K

                          YEAR ENDED DECEMBER 31, 2002

                                       23

<PAGE>

                                    C2, INC.
                         INDEX TO FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                      Page No.
<S>                                                                                   <C>
Independent Auditors' Report........................................................     25

Report of Independent Public Accountants............................................     26

C2, Inc. Consolidated Balance Sheets as of December 31, 2002 and 2001...............     27

C2, Inc. Consolidated Statements of Income for the years ended
  December 31, 2002, 2001 and 2000..................................................     28

C2, Inc. Consolidated Statements of Shareholders' Equity
  For the years ended December 31, 2002, 2001 and 2000..............................     29

C2, Inc. Consolidated Statements of Cash Flows for the years
  ended December 31, 2002, 2001 and 2000............................................     30

Notes to Consolidated Financial Statements..........................................     31

Five Year Financial Information.....................................................     43
</TABLE>

                                       24

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Shareholders of C2, Inc.
Milwaukee, Wisconsin

We have audited the accompanying consolidated balance sheet of C2, Inc. and
subsidiaries as of December 31, 2002, and the related consolidated statements of
income, shareholders' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The Company's financial statements as of December 31, 2001 and for
each of the two years in the period ended December 31, 2001 were audited by
other auditors who have ceased operations. Those auditors expressed an
unqualified opinion on those financial statements, in their report dated
February 8, 2002.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the 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
statements. An audit also includes the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such 2002 financial statements present fairly, in all material
respects, the financial position of C2, Inc. and subsidiaries as of December 31,
2002, and the results of their operations and their cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.

As described in Note A to the consolidated financial statements, on January 1,
2002, the Company adopted Statement of Financial Accounting Standards No. 142
"Goodwill and Other Intangible Assets."

Deloitte & Touche LLP

Milwaukee, Wisconsin
February 7, 2003

                                       25

<PAGE>

The following report is a copy of a report previously issued by Arthur Andersen
LLP in connection with the Company's financial statements for the year ended
December 31, 2001. The opinion has not been reissued by Arthur Andersen LLP.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of C2, Inc.:

We have audited the accompanying consolidated balance sheets of C2, Inc. and
subsidiaries (a Wisconsin Corporation) as of December 31, 2001 and 2000, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 2001. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we 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 statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of C2, Inc. and subsidiaries as of
December 31, 2001 and 2000, and the results of its operations and its cash flows
for each of the years in the three year period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin
February 8, 2002

                                       26

<PAGE>

                            C2, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                         2002                 2001
                                                                    --------------       --------------
<S>                                                                 <C>                  <C>
ASSETS:
Current Assets:
     Cash and cash equivalents                                      $    4,483,000       $    2,539,000
     Accounts receivable, net                                           24,224,000           22,525,000
     Inventories                                                        10,518,000            9,640,000
     Prepaids and other assets                                           2,699,000            4,709,000
                                                                    --------------       --------------
        Total current assets                                            41,924,000           39,413,000
                                                                    --------------       --------------

Long-Term Assets:
     Property, plant and equipment, net                                 65,971,000           73,079,000
     Goodwill                                                           16,191,000           14,482,000
     Other assets                                                        2,300,000            1,777,000
                                                                    --------------       --------------
        Total long-term assets                                          84,462,000           89,338,000
                                                                    --------------       --------------

        Total assets                                                $  126,386,000         $128,751,000
                                                                    ==============       ==============

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
     Current maturities of long-term debt                           $    3,285,000       $    3,167,000
     Line of credit                                                      4,470,000            1,163,000
     Accounts payable                                                   13,571,000           14,181,000
     Accrued liabilities                                                16,595,000           12,978,000
                                                                    --------------       --------------
        Total current liabilities                                       37,921,000           31,489,000
                                                                    --------------       --------------

Long-Term Liabilities:
     Long-term debt, less current maturities                            52,278,000           66,272,000
     Other liabilities                                                   3,196,000            2,334,000
                                                                    --------------       --------------
        Total long-term liabilities                                     55,474,000           68,606,000
                                                                    --------------       --------------
        Total liabilities                                               93,395,000          100,095,000
                                                                    --------------       --------------

SHAREHOLDERS' EQUITY:
     Preferred stock, par value $.01 per share
         10,000,000 shares authorized, none issued or outstanding               --                   --
     Common stock, par value $.01 per share; 50,000,000 shares
        authorized, 5,271,864 shares and 5,206,064 shares issued
        in 2002 and 2001, respectively                                      53,000               52,000
     Additional paid-in capital                                         22,353,000           20,371,000
     Treasury stock at cost, 124,200 shares in 2001                             --             (578,000)
     Accumulated other comprehensive (loss) or income                     (943,000)             344,000
     Retained earnings                                                  11,528,000            8,467,000
                                                                    --------------       --------------
        Total shareholders' equity                                      32,991,000           28,656,000
                                                                    --------------       --------------
        Total liabilities and shareholders' equity                  $  126,386,000       $  128,751,000
                                                                    ==============       ==============
</TABLE>

                 See notes to consolidated financial statements.

                                       27

<PAGE>

                            C2, INC. AND SUBSIDIARIES
                         CONSOLIDATED INCOME STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<TABLE>
<CAPTION>
                                                           2002              2001                 2000
                                                      -------------     --------------       ---------------
<S>                                                   <C>               <C>                  <C>
Revenues:
     Logistic Services                                $ 195,774,000     $  147,663,000       $   113,376,000
     Product Sales                                       71,464,000         64,782,000            70,074,000
                                                      -------------     --------------       ---------------
                                                        267,238,000        212,445,000           183,450,000
                                                      -------------     --------------       ---------------
Costs and Expenses:
     Logistic Expense                                   173,569,000        129,749,000            94,870,000
     Cost of Product Sales                               57,883,000         51,623,000            53,909,000
     Depreciation and Amortization                        7,508,000          8,153,000             7,895,000
     Selling, General and Administrative                 18,389,000         15,425,000            15,623,000
                                                      -------------     --------------       ---------------
                                                        257,349,000        204,950,000           172,297,000
                                                      -------------     --------------       ---------------
         Earnings from Operations                         9,889,000          7,495,000            11,153,000

Other Income (Expense):
     Interest Expense                                    (3,976,000)        (5,051,000)           (5,899,000)
     Other (Expense) Income, net                            (43,000)           (45,000)               58,000
                                                      -------------     --------------       ---------------
                                                         (4,019,000)        (5,096,000)           (5,841,000)

Earnings before Income Taxes and Minority Interest        5,870,000          2,399,000             5,312,000

Provision for Income Taxes                                2,505,000          1,027,000             2,270,000
                                                      -------------     --------------       ---------------

Earnings before Minority Interest                         3,365,000          1,372,000             3,042,000

Minority Interest                                           304,000            560,000             1,047,000
                                                      -------------     --------------       ---------------
Net Earnings                                          $   3,061,000     $      812,000       $     1,995,000
                                                      =============     ==============       ===============
Basic Earnings per share                              $        0.60     $         0.16       $          0.39
                                                      =============     ==============       ===============
Diluted Earnings per Share                            $        0.58     $         0.16       $          0.38
                                                      =============     ==============       ===============
</TABLE>

                 See notes to consolidated financial statements.

                                       28

<PAGE>

                            C2, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                                     (000's)

<TABLE>
<CAPTION>
                                                                                          Accumulated        Current
                                                              Additional                     Other             Year
                                       Common      Treasury     Paid-In      Retained     Comprehensive   Comprehensive
                                        Stock       Stock       Capital      Earnings     Income (Loss)       Income
                                     --------     ---------   ----------   -----------    -------------   -------------
<S>                                  <C>          <C>         <C>          <C>            <C>             <C>
Balance, December 31, 1999           $     52          --     $   20,358   $     5,660             --              --

Purchase of Treasury Stock                 --     $  (578)            --            --             --              --
Exercise Stock Options                     --          --             13            --             --              --

Net Earnings                               --          --             --         1,995             --        $  1,995
                                                                                                             --------
Total Comprehensive Income                 --          --             --            --             --        $  1,995
                                                                                                             ========
                                     --------     -------     ----------   -----------     ----------
Balance, December 31, 2000                 52        (578)        20,371         7,655             --

Change in Fair Values of
   Interest Rate Swaps                     --          --             --            --     $      344        $    344

Net Earnings                               --          --             --           812             --             812
                                                                                                             --------
Total Comprehensive Income                 --          --             --            --             --
                                                                                                             $  1,156
                                                                                                             ========
                                     --------     -------     ----------   -----------     ----------
Balance, December 31, 2001                 52        (578)        20,371         8,467            344

Change in Fair Value of
   Interest Rate Swaps, Net
   of Tax of $722 and
   Reclassification to Net
   Income of $88                           --          --             --            --         (1,287)       $ (1,287)

Acquisition of Minority Interest
   in Zero Zone                             1         578          1,982            --             --              --

Net Earnings                               --          --             --         3,061             --           3,061
                                                                                                             --------
Total Comprehensive Income                 --          --             --            --             --
                                                                                                             $  1,774
                                                                                                             ========
                                     --------     -------     ----------   -----------     ----------
Balance, December 31, 2002           $     53     $    --     $   22,353   $    11,528     $     (943)
                                     ========     =======     ==========   ===========     ==========
</TABLE>

                 See notes to consolidated financial statements.

                                       29

<PAGE>

                            C2, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000

<TABLE>
<CAPTION>
                                                                  2002               2001           2000
                                                              ------------        -----------    ------------
<S>                                                           <C>                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income                                                    $  3,061,000        $   812,000    $  1,995,000
Adjustments to Reconcile Net Income to
    Net Cash Provided by Operating Activities:
    Depreciation and amortization                                7,508,000          8,153,000       7,895,000
    Gain on disposal of assets                                          --            (90,000)       (139,000)
    Minority interest in income of subsidiaries                    304,000            560,000       1,047,000
    Deferred income tax provision                                  855,000           (122,000)        915,000
    Other                                                           65,000                 --              --
Changes in Assets and Liabilities:
    (Increase) in accounts receivable                           (1,246,000)          (824,000)     (3,685,000)
    Decrease (increase) decrease in inventories                    460,000         (1,065,000)     (2,147,000)
    (Increase) in prepaids and other assets                        (10,000)          (535,000)     (1,703,000)
    Increase in accounts payable and accrued liabilities         1,294,000          3,777,000       4,391,000
                                                              ------------        -----------    ------------
        Net cash provided by operating activities               12,291,000         10,666,000       8,569,000

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of fixed assets                                    (5,070,000)        (4,377,000)     (9,845,000)
    Businesses acquired, net of cash received                        6,000                 --      (8,284,000)
    Proceeds from sale of fixed assets                              78,000            397,000         562,000
                                                              ------------        -----------    ------------
        Net cash used in investing activities                   (4,986,000)        (3,980,000)    (17,567,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from sale of stock                                         --                 --          13,000
    Borrowings on line of credit, net                            2,632,000         (9,667,000)      8,060,000
    Proceeds from issuance of long-term debt                     2,800,000          7,128,000              --
    Payment of long-term debt                                  (20,593,000)        (3,902,000)       (775,000)
    Proceeds from sale leaseback transaction                     9,800,000                 --              --
    Purchase of treasury stock                                          --                 --        (578,000)
    Distribution for income taxes                                       --                 --        (381,000)
                                                              ------------        -----------    ------------
        Net cash (used in) provided by financing activities     (5,361,000)        (6,441,000)      6,339,000
                                                              ------------        -----------    ------------

NET INCREASE (DECREASE) IN CASH AND
        CASH EQUIVALENTS                                         1,944,000            245,000      (2,659,000)

BEGINNING CASH AND CASH EQUIVALENTS                              2,539,000          2,294,000       4,953,000
                                                              ------------        -----------    ------------
ENDING CASH AND CASH EQUIVALENTS                              $  4,483,000        $ 2,539,000    $  2,294,000
                                                              ============        ===========    ============

Supplemental Disclosures of Cash Flow Information
      Interest paid                                           $  4,095,000        $ 4,962,000    $  5,977,000
      Amounts paid for income taxes                           $  1,636,000        $ 1,506,000    $  3,924,000
</TABLE>

On December 31, 2002 the Company acquired the remaining 29.4% of Zero Zone, Inc.
The consideration paid was 190,000 shares of C2 common stock valued at
$2,561,000.

                 See notes to consolidated financial statements.

                                       30

<PAGE>

C2, INC AND SUBSIDIAIRIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

DESCRIPTION OF BUSINESS: C2 is a Milwaukee-based public company principally
engaged in third-party integrated logistic and facility management services and
equipment manufacturing for customers throughout the United States. C2, Inc.'s
operating segments include logistic services, consisting of refrigerated and
non-refrigerated third-party integrated logistic and facility management
services, and product sales, consisting of 1) distribution of food products and
2) the manufacture and sale of refrigerated and freezer display cases and
refrigeration control systems used in grocery, convenience and drug store chains
for retail merchandising of food, beverage and floral products.

On March 4, 1999, C2, Inc. common shares were issued to subscribers
contemporaneous with the distribution of the cash merger consideration
attributable to the Christiana Companies, Inc. (formerly NYSE:CST) and
Weatherford International, Inc. (NYSE:WFT). In connection with the merger, on
February 8, 1999, C2, Inc. acquired a two-thirds interest in Total Logistic
Control, LLC ("TLC"). TLC provides integrated third-party logistic services,
which include refrigerated and non-refrigerated warehousing, transportation,
logistic management services, facilities and operations management, food
distribution, product fulfillment, international customs house brokerage and
freight forwarding and packaging.

In 1999, C2, Inc. purchased 70.6% percent of the common stock of Zero Zone, Inc
("Zero Zone") in connection with a recapitalization plan for Zero Zone. On
December 31, 2002, the Company acquired the remaining 29.4% of Zero Zone.

CONCENTRATION OF CREDIT RISK: In 2002, 2001 and 2000, two customers represented
approximately 37 percent, 31.7 percent and 27.5 percent, respectively of total
consolidated revenues. In 2002, two of the Company's customers, Diageo PLC and
Wal-Mart, accounted for 25.3 percent and 11.8 percent, respectively, of total
consolidated revenue. At December 31, 2002, one customer, Diageo PLC,
represented approximately 19.4 percent of total consolidated accounts
receivable.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of C2, Inc. and its subsidiaries, TLC Holdings, Inc., Total Logistic
Control, LLC ("TLC") and Zero Zone, Inc ("Zero Zone", including its subsidiary,
Zero Zone Refrigeration, Inc.). All material intercompany transactions have been
eliminated in consolidation.

ACQUISITIONS: On September 1, 2000, TLC acquired substantially all the assets of
the ProSource Group, Inc. located in Aurora, Il. ProSource provides dedicated
third-party management to operate both manufacturing and distribution centers
primarily for Fortune 500 consumer products companies.

On September 30, 2000, C2, Inc. purchased the remaining 33.3 percent of TLC for
$8,284,000. As of September 30, 2000, TLC was a wholly-owned subsidiary of C2,
Inc. The premium over the carrying value of minority interest was $992,000 all
of which was allocated to TLC's fixed assets.

On February 5, 2002, Zero Zone acquired the assets and assumed certain
liabilities of Systematic Refrigeration, Inc ("Systematic"). Additional
consideration is contingent upon Systematic achieving certain future performance
targets through 2006. Any additional consideration will be allocated to
goodwill. Systematic, located in Ramsey, Minnesota, is a supplier of
refrigeration control systems to the retail grocery industry and various
industrial markets. Systematic is an independent producer of refrigeration
systems and will be operated under the trade name Zero Zone Refrigeration.

                                       31

<PAGE>

The purchase price included acquisition expenses of $130,000 and the assumption
of liabilities of $6,214,000 and was allocated as follows:

<TABLE>
<S>                              <C>
Cash                             $    6,000
Receivables                         530,000
Inventory                         1,338,000
Other Assets                        432,000
Goodwill                             31,000
PP&E                              4,007,000
                                 ----------
                                 $6,344,000
                                 ==========
</TABLE>

On February 13, 2002, C2, Inc. acquired TSI, a regional truckload carrier based
in Erie, Pennsylvania through its wholly-owned subsidiary, Total Logistic
Control, for the assumption of certain leases. TSI's operations serve primarily
the food industry with refrigerated and dry transportation. The acquisition
included 39 tractors and 118 trailers, plus a maintenance and operations
terminal.

On December 31, 2002, C2, Inc. acquired the remaining 29.4% of Zero Zone, Inc.
that it did not previously own. The consideration paid to the minority interest
holders, all of whom are current members of Zero Zone's management team, was
190,000 shares of C2, Inc. common stock valued at approximately $2,561,000 based
on the average closing price of C2 for the prior five business days to the
transaction date of December 31, 2002. The Company has allocated $579,000 to
fixed assets and the remainder of the purchase price over minority interest is
recorded to goodwill on a preliminary basis until it is able to complete the
final allocation in 2003.

On January 9, 2003, subsequent to year end, C2, Inc. announced the acquisition
of Birkmire Trucking Company, a regional freight service provider based in Erie,
Pennsylvania, by its wholly-owned subsidiary, TLC, for the assumption of certain
leases. Birkmire's operations serve primarily the food industry with
refrigerated and dry transportation. Birkmire's fleet consisted of 44 tractors
and 101 trailers.

All of the above acquisitions have been accounted for as purchase transactions.
Accordingly, results of operations have been included in the Company's financial
statements since the dates of acquisition and are not material to the Company on
a pro forma basis.

ESTIMATES: The Company prepares its consolidated financial statements in
conformity with generally accepted accounting principles in the United States of
America ("U.S. GAAP"). This requires management to make estimates and judgments
that affect reported amounts and related disclosures. Actual results could
differ from those estimates.

CASH AND CASH EQUIVALENTS: Cash and cash equivalents consist of cash and U.S.
Treasury securities having a maturity within three months of date of purchase.
Cash is primarily held at one financial institution. The Company performs
periodic evaluations of the relative credit standing of this financial
institution to limit the credit exposure.

                                       32

<PAGE>

ACCOUNTS RECEIVABLE: Accounts receivable is presented net of an allowance for
uncollectible accounts.

Following is a summary of the change in the allowance for uncollectible accounts
for the years ended December 31, 2002, 2001 and 2000:

<TABLE>
<CAPTION>
                                                  FOR THE YEAR ENDED
                                                     DECEMBER 31,
                                 ---------------------------------------------------
                                      2002               2001              2000
                                 ------------      -------------       -------------
<S>                              <C>               <C>                 <C>
Beginning balance                $  468,000        $    415,000        $   330,000
Provision for bad debts             249,000              90,000            110,000
Write offs                          (40,000)            (37,000)           (25,000)
                                 ----------        ------------        -----------
Ending balance                   $  677,000        $    468,000        $   415,000
                                 ==========        ============        ===========
</TABLE>

INVENTORIES: Inventories at TLC consist of repair parts and commodities and
other food products held for distribution under exclusive logistic contracts.
These items are carried at the lower of FIFO (first-in, first-out) cost or
market value. At Zero Zone, inventories are stated at the lower of FIFO cost or
market value and include materials, labor and manufacturing overhead. As of
December 31, 2002 and 2001, inventories are comprised of the following:

<TABLE>
<CAPTION>
                                                     AT DECEMBER 31,
                                           -------------------------------------
                                                2002                 2001
                                           -------------        ---------------
<S>                                        <C>                  <C>
Repair parts                               $    173,000         $      108,000
Commodities and other                         1,651,000              3,207,000
Raw materials and work in process             5,682,000              3,780,000
Finished goods                                3,012,000              2,545,000
                                           ------------         --------------
                                           $ 10,518,000         $    9,640,000
                                           ============         ==============
</TABLE>

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are carried at
cost, less accumulated depreciation,, which is computed using both straight-line
and accelerated methods for financial reporting purposes. The cost of major
renewals and improvements are capitalized; repair and maintenance costs are
expensed as incurred. Tires related to new equipment are included in the
capitalized equipment cost and depreciated using the same methods as equipment.
Replacement tires are expensed when placed in service. A summary of the cost of
property, plant and equipment, accumulated depreciation and the estimated useful
lives for financial reporting purposes is as follows:

<TABLE>
<CAPTION>
                                            AT DECEMBER 31,
                                  ------------------------------    ESTIMATED
                                      2002             2001        USEFUL LIVES
                                  ------------     -------------   -------------
<S>                               <C>              <C>             <C>
Land                              $  6,157,000     $   4,665,000             --
Machinery and equipment             37,580,000        37,483,000      3-7 years
Buildings and improvements          74,377,000        80,152,000    30-40 years
Construction in progress               216,000           610,000
                                                                             --
                                  ------------     -------------
                                   118,330,000       122,910,000
Less:  Accumulated depreciation    (52,359,000)      (49,831,000)
                                  ------------     -------------
                                  $ 65,971,000     $  73,079,000
                                  ============     =============
</TABLE>

LONG-LIVED ASSETS: The Company continually evaluates whether events and
circumstances have occurred that may indicate the remaining useful life of
long-lived assets may warrant revision or that the remaining balance may not be
recoverable. When factors indicate that long-lived assets should be evaluated
for possible impairment, the Company uses an estimate of undiscounted future
cash flows over the remaining life of the long-lived assets to measure whether
the long-lived assets are impaired. If impaired, a loss is recognized for the
amount by which the carrying value exceeds the fair value.

                                       33

<PAGE>

GOODWILL: Prior to 2002, goodwill was amortized on a straight-line basis over 40
years. Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill
and Other Intangible Assets." SFAS No. 142 requires goodwill to be tested for
impairment annually, or more frequently under certain circumstances, and written
down when impaired, rather than being amortized as previous standards required.

Changes in the carrying amount of goodwill by reportable segment for the year
ended December 31, 2002 are as follows:

<TABLE>
<CAPTION>
                                        LOGISTIC        PRODUCT
                                        SERVICES         SALES          TOTAL
                                     -------------    -----------    ------------
<S>                                  <C>              <C>            <C>
Balance as of December 31, 2001      $  4,882,000     $ 9,600,000    $ 14,482,000
Goodwill acquired during the year              --       1,709,000       1,709,000
                                     ------------     -----------    ------------
Balance as of December 31, 2002      $  4,882,000     $11,309,000    $ 16,191,000
                                     ============     ===========    ============
</TABLE>

The Company adopted the provisions of SFAS No. 142 effective January 1, 2002 and
according to the provisions of SFAS No. 142, ceased amortizing goodwill as of
that date. The following table presents the impact of SFAS No. 142 on net income
and net income per share had the new standard been in effect for the years ended
December 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                    YEAR ENDED DECEMBER 31,
                                         ----------------------------------------
                                             2002          2001           2000
                                         -----------    ----------    -----------
<S>                                      <C>            <C>           <C>
Reported net income                      $ 3,061,000    $  812,000    $ 1,995,000
Amortization of goodwill, net of tax              --       537,000        537,000
                                         -----------    ----------    -----------

Adjusted net income                      $ 3,061,000    $1,349,000    $ 2,532,000
                                         ===========    ==========    ===========
Basic net income per share:
    As reported                          $      0.60    $     0.16    $      0.39
    As adjusted                          $      0.60    $     0.27    $      0.50
Diluted net income per share:
    As reported                          $      0.58    $     0.16    $      0.38
    As adjusted                          $      0.58    $     0.26    $      0.48
                                         ===========    ==========    ===========
</TABLE>

There was no impairment of goodwill upon adoption of SFAS No. 142, nor upon the
Company's subsequent testing as of September 30, 2002. The Company is required
to perform goodwill impairment tests on an annual basis and between annual tests
in certain circumstances. There can be no assurance that future goodwill
impairment tests will not result in a charge to earnings.

OTHER ASSETS: Other assets represent primarily deferred charges and cash
surrender value of officer's life insurance.

ACCRUED LIABILITIES:  The major components of accrued liabilities are:

<TABLE>
<CAPTION>
                                            AT DECEMBER 31,
                                    ----------------------------
                                         2002            2001
                                    ------------     -----------
<S>                                 <C>              <C>
Deferred revenue                    $  2,150,000     $ 2,088,000
Accrued accounts payable               2,609,000       1,916,000
Other                                 11,836,000       8,974,000
                                    ------------     -----------
                                    $ 16,595,000     $12,978,000
                                    ============     ===========
</TABLE>

                                       34

<PAGE>

Deferred revenue arises as handling revenue is billed when product is received
at a warehouse. Revenue is fully earned when the product is delivered out of the
warehouse. The portion related to handling when the product leaves the warehouse
is treated as deferred revenue and recognized when the product is shipped.

REVENUE RECOGNITION: The Company recognizes and earns revenue when all of the
following circumstances are satisfied: persuasive evidence of an arrangement
exists, the price is fixed or determinable, collectibility is reasonably assumed
and delivery has occurred or services have been rendered.

SHIPPING AND HANDLING FEES AND COSTS: The Company accounts for Shipping and
Handling Fees and Costs in accordance with Emerging Issues Task Force ("EITF")
Issue No. 00-10 "Accounting for Shipping and Handling Fees and Costs." The
Company records amounts billed to a customer in a product sale transaction
related to shipping costs as net sales and the related costs incurred for
shipping are reported as selling and administrative expenses. Freight costs of
$80,000 are included in selling and administrative expenses for the year ended
December 31, 2002.

ADVERTISING COSTS: The Company expenses advertising costs as incurred. Total
advertising expense was $508,000, $222,000 and $505,000 for 2002, 2001 and 2000,
respectively. Advertising costs are charged to selling, general and
administrative expenses.

INTEREST EXPENSE: Included in interest expense in 2002 is $33,000 of interest
income.

STOCK OPTIONS: As permitted by SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company has elected to follow APB No. 25, "Accounting for
Stock Issued to Employees" and related interpretations in accounting for stock
options issued to employees.

EARNINGS PER SHARE: Following is a reconciliation of basic and diluted earnings
per share for the years ended December 31, 2002, 2001, and 2000:

<TABLE>
<CAPTION>
                                                    YEAR ENDED DECEMBER 31,
                                       ------------------------------------------
                                           2002            2001          2000
                                       -----------      ----------    -----------
<S>                                    <C>              <C>           <C>
Basic Earnings per Share:
Net earnings available to common
    shareholders                       $ 3,061,000      $  812,000    $ 1,995,000
Average shares of common stock
    outstanding                          5,082,385       5,081,864      5,106,043
Basic earnings per share               $      0.60      $     0.16    $      0.39
Diluted Earnings per Share:
Average shares of common stock
    outstanding                          5,082,385       5,081,864      5,106,043
Incremental common shares applicable
    to common stock options                177,267         137,569        160,746
                                       -----------      ----------    -----------
Average common shares assuming full
    dilution                             5,259,652       5,219,433      5,266,789
Diluted earnings per share             $      0.58      $     0.16    $      0.38
</TABLE>

In 2001, options to purchase 50,000 shares were not included in the above
calculations because the exercise price exceeded the average market price for
the applicable period.

                                       35

<PAGE>

NEW ACCOUNTING STANDARDS: In November 2002, the Financial Accounting Standards
Board ("FASB") issued Financial Interpretation No. 45 ("FIN 45"), "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." FIN 45 requires certain guarantees to be
recorded at fair value and requires a guarantor to make significant new
disclosures, even when the likelihood of making any payments under the guarantee
is remote. Generally, FIN 45 applies to certain types of financial guarantees
that contingently require the guarantor to make payments to the guaranteed party
based on changes in an underlying that is related to an asset, liability, or an
equity security of the guaranteed party; performance guarantees involving
contracts, which require the guarantor to make payments to the guaranteed party
based on another entity's failure to perform under an obligating agreement;
indemnification agreements that contingently require the guarantor to make
payments to an indemnified party based on changes in an underlying that is
related to an asset, liability, or an equity security of the indemnified party;
or indirect guarantees of the indebtedness of others. The initial recognition
and initial measurement provisions of FIN 45 are applicable on a prospective
basis to guarantees issued or modified after December 31, 2002. Disclosure
requirements under FIN 45 are effective for financial statements ending after
December 15, 2002 and are applicable to all guarantees issued by the guarantor
subject to FIN 45's scope, including guarantees issued prior to FIN 45. The
Company does not expect that FIN 45 will have a material effect on its financial
condition, results of operations or cash flows.

B. RELATED PARTY TRANSACTIONS:

The Company rents its headquarters offices from an entity owned in part by
certain officers and directors of the Company. The Company pays its pro rata
share of the rent, utilities and other expenses of these premises. A total of
$77,000, $78,000 and $71,000 was paid in 2002, 2001 and 2000, respectively.
Certain employees of C2, Inc. also provide services to Lubar & Co. Incorporated.
An allocation of compensation for services is based on time spent on the
respective entity and is periodically reviewed. In 2002, Lubar & Co.
Incorporated paid C2 $192,000 for services rendered.

C. INDEBTEDNESS:

The following is a summary of the Company's indebtedness:

<TABLE>
<CAPTION>
                                                    AT DECEMBER 31
                                            ----------------------------
                                                2002             2001
                                            -----------      -----------
<S>                                         <C>              <C>
Line of credit                              $ 4,470,000      $ 1,163,000
Revolving credit agreement                   18,800,000       33,000,000
Term loan                                    22,417,000       24,083,000
Bonds payable                                10,935,000        8,420,000
Subordinated notes                            3,169,000        3,936,000
Other                                           242,000               --
                                            -----------      -----------
Total debt                                   60,033,000       70,602,000
Less:  Current portion of long-term debt     (3,285,000)      (3,167,000)
       Line of credit                        (4,470,000)      (1,163,000)
                                            -----------      -----------
Total long-term debt                        $52,278,000      $66,272,000
                                            ===========      ===========
</TABLE>

On June 8, 2001, TLC entered into an amended and restated credit agreement with
its bank group. The credit facility includes a $40 million, 5-year reducing
revolving credit agreement and a $25 million, 5-year term loan. Both facilities
are secured by liens or security interests on substantially all of the assets of
TLC and mortgages on its real estate. The revolving credit facility steps down
$2 million per year beginning July 1, 2002, with a final maturity of $32 million
on June 30, 2006. The term loan amortizes $416,666 per quarter, with a final
payment of $17,000,342 due on June 30, 2006. At December 31, 2002, outstandings
under these facilities totaled $41,217,000. The interest rate on these
facilities are LIBOR or prime rate based, at TLC's option, and vary pursuant to
a pricing grid based on the ratio of TLC's funded debt to EBITDA, as defined in
the credit agreement. At December 31, 2002, borrowings under these

                                       36

<PAGE>

facilities carried an average interest rate of LIBOR plus 2 percent, or 3.70
percent. As of December 31, 2002, TLC was in full compliance with all required
cash flow, earnings and net worth covenants.

On September 28, 2001, TLC entered into two Interest Rate Swap agreements
("Swaps"), which effectively fixed the interest rate payable by TLC on (a)
$5,000,000 of outstanding debt for the period to October 2, 2004, and (b)
$5,000,000 of outstanding debt for the period to June 30, 2006. The effective
interest rate for each Swap was fixed at 3.92 percent and 4.47 percent,
respectively, plus the LIBOR spread, which is subject to reduction based on
TLC's leverage ratio, as defined. At December 31, 2002, the fixed interest rates
for the underlying principal under the Swap transactions were 5.92 percent and
6.47 percent, respectively.

On October 31, 2001, TLC entered into two more Swaps, which effectively fixed
the interest rate payable by TLC on (a) $5,000,000 of outstanding debt for the
period to November 2, 2004 and (b) $5,000,000 of outstanding debt through June
30, 2006. The effective interest rate for each Swap was fixed at 3.6725 percent
and 4.3175 percent, respectively, plus the LIBOR spread, which is subject to
reduction based on TLC's leverage ratio, as defined. At December 31, 2002, the
fixed interest rates for the underlying principal under the Swap transactions
were 5.6725 percent and 6.3175 percent, respectively.

Zero Zone completed a financing package on August 31, 1999 with a major
commercial bank. The package contains two bond issues and a demand line of
credit. The first is a tax-free Industrial Revenue Bond issue in the amount of
$3,420,000 that was issued through the State of Wisconsin. This bond has a
20-year life with no annual amortization and carries a seven-day variable
interest rate, which was 1.7 percent at December 31, 2002. The second issue is a
taxable Industrial Revenue Bond in the original amount of $6,000,000 issued
through a bank. This bond has a 12-year maturity schedule with annual principal
repayments of $500,000. The interest rate on the second bond is also a seven-day
variable interest rate, 1.6 percent at December 31, 2002. The amount outstanding
on the second issue at December 31, 2002 was $4,500,000. Both bonds are secured
by letters of credit issued by a major commercial bank. The interest rate on the
line of credit, which is secured by Zero Zone's assets, is based on LIBOR plus
an amount that varies according to a pricing grid determined by the ratio of
funded debt to EBITDA. At December 31, 2002, Zero Zone had $4,470,000 in
outstanding borrowings under its $7,500,000 demand line of credit. The interest
rate at December 31, 2002 was 2.88%.

As part of the acquisition of Zero Zone Refrigeration on February 5, 2002, two
notes were assumed. The first is a tax-free bond for $3,100,000, issued by the
State of Minnesota. The bond issue date was April 1, 2000 and has a 20-year life
with annual principal payments of $85,000 in 2002, increasing to $285,000 in
2020. The interest rate on the bond began at 5.25% and increases to 7.25%. The
balance outstanding at December 31, 2002 was $3,015,000. The second is an
Equipment Note from the City of Ramsey for $300,000. At December 31, 2002, the
outstanding balance on this note was $242,000. This note has a 10-year life with
annual amortization of $34,766 of principal and interest. The interest rate on
this note is 3% and is secured by equipment used in the production of its
products.

Zero Zone has unsecured senior subordinated indebtedness in the amount of
$1,350,000 to former shareholders. The interest rate on this debt is 8%. Payment
of $1,000,000 is due March 12, 2003 and the final payment of $350,000 is due
March 12, 2004. Zero Zone also has $1,500,000 of unsecured junior subordinated
indebtedness to existing shareholders. The interest rate is 8.5% of which 3.4%
is paid in cash and 5.1% amounting to $319,000, is payment-in-kind. Payment of
$500,000 per year is due beginning December 31, 2005,.

On November 2, 2001, Zero Zone entered into an Interest Rate Swap agreement with
a major commercial bank. This agreement effectively fixes the interest rate
payable on the taxable Industrial Revenue Bond in the original amount of
$5,000,000 at 4.53% until August 1, 2011. On January 8, 2002, Zero Zone entered
into a second Interest Rate Swap agreement. This agreement effectively fixes the
interest rate payable on the $3,420,000 tax-free Industrial Revenue Bond at
4.135% until January 3, 2012.

As of December 31, 2002, Zero Zone was in compliance with, or has secured
waivers and amendments relating to all required covenants related to earnings,
cash flow, and net worth under its debt agreements.

                                       37

<PAGE>

Substantially all of the Company's assets and operations are held and conducted
by the company's subsidiaries. The various debt agreements discussed above
restrict the transferability of substantially all of the subsidiaries' net
assets to C2, other than for tax liabilities and management fees.

C2, Inc. has a $15,000,000 unsecured line of credit, renewable annually.
Borrowings under this line bear interest at either LIBOR plus 150 basis points,
or prime at the Company's option. No compensating balances are required under
the terms of this credit facility. There were no outstanding borrowings under
this line at December 31, 2002 and 2001.

As of December 31, 2002, the future maturities of consolidated indebtedness are
as follows:

<TABLE>
<C>              <C>
2003             $  7,755,000
2004                2,641,000
2005                2,797,000
2006               37,356,000
2007                1,465,000
Thereafter          8,019,000
                 ------------
Total            $ 60,033,000
                 ============
</TABLE>

At December 31, 2002 and 2001, the fair value of the long-term debt was not
materially different from the carrying value based on borrowings that are
currently available to the Company with similar terms and maturities. The fair
value of interest rate swaps was a loss of $943,000 (net of tax of $722,000) and
a gain of $344,000 at December 31, 2002 and 2001, respectively, based on dealer
quotes.

D.  INCOME TAXES:

The summary of the provision for income taxes is as follows:

<TABLE>
<CAPTION>
                   YEAR ENDED DECEMBER 31,
              ---------------------------------------
                   2002        2001           2000
              ----------   -----------    -----------
<S>           <C>          <C>            <C>
Current:
 Federal      $  216,000   $  (511,000)   $   846,000
 State           712,000       (90,000)       124,000
 Deferred      1,577,000     1,628,000      1,300,000
              ----------   -----------    -----------
              $2,505,000   $ 1,027,000    $ 2,270,000
              ==========   ===========    ===========
</TABLE>

The components of deferred income taxes are:

<TABLE>
<CAPTION>
                                                      AT DECEMBER 31,
                                                ---------------------------
                                                   2002            2001
                                                ----------      -----------
<S>                                             <C>             <C>
Current Deferred Income Taxes:
   NOL carry forward                            $    5,000      $  850,000
   AMT credit carry forward                        319,000         323,000
   Compensation related accruals                   690,000         929,000
   Bad debt reserve                                217,000         159,000
   Other                                          (224,000)        434,000
                                                ----------      ----------
   Total Current Deferred Income Taxes          $1,007,000      $2,695,000
                                                ----------      ----------
   (Included in Prepaids and other assets)
Long-Term Deferred Income Taxes:
   Tax over book depreciation                   $1,799,000      $1,910,000
   Interest rate swaps                            (722,000)             --
                                                ----------      ----------
Total Long-Term Deferred Income Taxes            1,077,000      $1,910,000
                                                ----------      ----------
   (Included in Other liabilities)
Net Deferred Tax (Liability) Asset              $  (70,000)     $  785,000
                                                ==========      ==========
</TABLE>

The net operating loss carry forward will expire in 19 years. The alternative
minimum tax credit carry forward has an indefinite term. No valuation allowance
was deemed necessary for these carry forwards.

                                       38

<PAGE>

A reconciliation of the statutory Federal income tax rate for years ended
December 31, 2002, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                                   AT DECEMBER 31,
                                                              ----------------------
                                                               2002      2001    2000
                                                              ------    ------  ------
<S>                                                           <C>       <C>     <C>
Statutory federal income tax rate                               34%       34%     34%
Increase in taxes resulting from state income tax, net          10%        6%      6%
Non-deductible goodwill amortization                            --         4%      4%
Other, net                                                      (1)%      (2)%    (1)%
                                                               ---       ---     ---
                                                                43%       42%     43%
                                                               ===       ===     ===
</TABLE>

E. STOCK OPTIONS AND EMPLOYEE BENEFIT PLANS:

In 1999, the Company adopted a stock option and stock appreciation plan and has
520,000 shares of its common stock reserved for issuance under a stock option
plan, which permits the granting of options as well as appreciation rights and
awards. Options are granted at market value with varying vesting periods from
immediate to ratably over five years. At December 31, 2002, options for 258,200
shares were exercisable. No appreciation rights have been granted. The following
table summarizes information concerning outstanding and exercisable options at
December 31, 2002.

<TABLE>
<CAPTION>
 Year of     No. of      Exercise       Vesting          Weighted Average      Exercisable
  Grant      Options      Price        Period (yrs)      Contractual Life      at 12/31/02
--------   ---------     --------      ------------      -----------------     -----------
<S>        <C>           <C>           <C>               <C>                   <C>
  1999      331,000      $ 4.00             5                  6.2               198,600
  2000       12,000        5.00             5                  7.1                 4,800
  2000       12,000        5.25             5                  7.4                 4,800
  2001       50,000        7.25         Immediate              8.1                50,000
           --------                                            ---               -------
            405,000                                            6.5               258,200
           ========                                            ===               =======
</TABLE>

The weighted-average exercise price of total stock options outstanding at
December 31, 2002 and 2001 was $4.47 per share. Additionally, the weighted
average remaining contractual life in years of stock options outstanding at
December 31, 2002 was 6.5 years.

Changes in stock options outstanding are summarized as follows:

<TABLE>
<CAPTION>
                                                                 WEIGHTED
                                                                 AVERAGE
                                                                 EXERCISE
                                                 NUMBER OF       PRICE PER
                                                  OPTIONS         OPTION
                                                 ---------       ---------
<S>                                              <C>             <C>
Balance December 31, 1999                         348,000         $ 4.00
  Options granted                                  12,000           5.00
  Options granted                                  12,000           5.25
  Options cancelled                               (13,600)         (4.00)
  Options exercised                                (3,400)         (4.00)
                                                 --------         ------
Balance December 31, 2000                         355,000           4.08
  Options granted - 2001                           50,000           7.25
                                                 --------         ------
Balance December 31, 2002 and 2001                405,000         $ 4.47
                                                 ========         ======
</TABLE>

Pro forma information regarding net income and earnings per share is required by
Statement of Financial Accounting Standards No. 123, as amended by SFAS No 148,
and has been determined as if the Company had accounted for its stock options
under the fair value method as provided therein. The fair value of each option
is estimated on the date of the grant using an option pricing model.

                                       39

<PAGE>

For purposes of these disclosures, the fair value of each option granted was
estimated on the date of grant using the Black-Scholes option pricing model with
the following weighted

<TABLE>
<CAPTION>
                            2001        2000
                           ------     -------
<S>                        <C>        <C>
Expected volatility        84.81%     108.23%
Risk-free interest rate     4.3%         5.0%
Dividend rate               0.0%         0.0%
Expected life in years      8.1          7.3
</TABLE>

Based on these assumptions, the weighted average fair value of options granted
in 2001 and 2000 were $5.87 and $4.51, respectively.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period of 1 to 5 years. Set
forth below is a summary of the Company's net earnings and earnings per share as
reported and pro forma, as if the fair value based method of accounting defined
in SFAS No. 123 had been applied.

<TABLE>
<CAPTION>
                                                                Year Ended December 31
                                                        -------------------------------------
                                                            2002         2001         2000
                                                        ----------    ---------    ----------
<S>                                                     <C>           <C>          <C>
Net income - as reported                                $3,061,000    $ 812,000    $1,995,000
Total stock-based employee compensation expense           (126,000)    (280,000)     (110,000)
    determined under the fair value method, net of
    related tax effects
                                                        ----------    ---------    ----------
Net income - pro forma                                  $2,935,000    $ 532,000    $1,885,000
                                                        ==========    =========    ==========
Basic earnings as reported                              $     0.60    $    0.16    $     0.39
                                                        ==========    =========    ==========
Basic earnings pro forma                                $     0.58    $    0.10    $     0.37
                                                        ==========    =========    ==========
Diluted as reported                                     $     0.58    $    0.16    $     0.38
                                                        ==========    =========    ==========
Diluted pro forma                                       $     0.56    $    0.10    $     0.32
                                                        ==========    =========    ==========
</TABLE>

The Company has 401(k) plans covering substantially all of its employees. The
costs under these plans have not been material. The Company does not provide
post-employment medical, life insurance or other retirement benefits.

F. COMMITMENTS:

TLC and Zero Zone have operating leases for warehouse and office facilities and
transportation equipment. Rental expense under these leases was $13,765,000,
$10,775,000 and $9,098,000 in 2002, 2001 and 2000, respectively. At December 31,
2002, future minimum lease payments under noncancellable operating leases are as
follows:

<TABLE>
<S>                      <C>
 2003                    $13,187,000
 2004                     10,854,000
 2005                      9,951,000
 2006                      6,607,000
 2007                      4,802,000
Thereafter                 5,632,000
                         -----------
Total                    $51,033,000
                         ===========
</TABLE>

                                       40

<PAGE>

G. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES:

The Company has limited involvement with derivative financial instruments and
does not use them for trading purposes. Prior to 2001, there were no derivative
financial instruments outstanding. As of December 31, 2002 and 2001, interest
rate swaps are the only derivative financial instruments held by the Company.
These interest rate swaps were put into place during 2001 and 2002 in an effort
to manage certain interest rate risks. The interest rate swaps, designated as
cash flow hedging relationships, were entered into in an effort to mitigate the
risk of rising interest rates in future periods by converting certain floating
rate debt instruments into fixed rate debt. The effective portion of the gains
and losses on these instruments are deferred in other comprehensive income and
recognized in interest expense over the period in which the Company accrues
interest expense on the related debt instruments. The ineffective portion of
hedging derivatives is insignificant.

H.  SEGMENT INFORMATION:

C2, Inc. is divided into two discrete segments - Logistic Services and Product
Sales. Logistic Services include providing warehousing, transportation
operations and management services, supply chain management, dedicated
third-party facility and operations management, fulfillment services, packaging
and food processing. Product Sales operating segment includes the purchase for
resale of certain food products and the manufacture and sale of glass-door
refrigerated and frozen display cases and refrigeration control systems.
Products within this segment are sold primarily to grocery, municipal school
districts, convenience and drug store chains and industrial applications
throughout the United States. These operating segments are determined based upon
the primary services and product lines provided to customers.

The accounting policies used by the Company's business segments are the same
accounting policies used in the preparation of the consolidated financial
statements. Segment profit is revenues less direct and allocable operating
expenses and selling, general and administrative expenses. Corporate items
include interest income, amortization expense, selling, general and
administrative expenses, other income/expense and income taxes at the corporate
level only. Corporate assets are principally cash and cash equivalents, prepaid
items and certain non-operating fixed assets.

                                       41

<PAGE>

Corporate capital expenditures consist primarily of computer equipment and
software. Financial information by business segment is as follows:

<TABLE>
<CAPTION>
                              Logistic Services   Product Sales      Corporate         Total
                              -----------------   -------------    ------------     ------------
<S>                           <C>                 <C>              <C>              <C>
2002
----
Revenues                         $195,774,000      $ 71,464,000    $         --     $267,238,000
Interest expense                    3,048,000           961,000              --        4,009,000
Segment net earnings                2,651,000           765,000        (355,000)       3,061,000
Total assets                       85,869,000        36,629,000       3,888,000      126,386,000
Capital expenditures                4,228,000           822,000          20,000        5,070,000
Depreciation and amortization       6,541,000           949,000          18,000        7,508,000

2001
----
Revenues                         $147,663,000      $ 64,782,000    $         --     $212,445,000
Interest expense                    4,138,000           935,000         203,000        5,276,000
Segment net earnings                  326,000           805,000        (319,000)         812,000
Total assets                      101,406,000        22,167,000       5,178,000      128,751,000
Capital expenditures                3,600,000           763,000          14,000        4,377,000
Depreciation and amortization       6,933,000         1,206,000          14,000        8,153,000

2000
----
Revenues                         $113,376,000      $ 70,074,000    $         --     $183,450,000
Interest expense                    4,814,000         1,128,000         148,000        6,090,000
Segment net earnings                  264,000         1,997,000        (266,000)       1,995,000
Total assets                      100,228,000        25,094,000       4,578,000      129,900,000
Capital expenditures                8,200,000         1,632,000          13,000        9,845,000
Depreciation and amortization       7,142,000           741,000          12,000        7,895,000
</TABLE>

I.       QUARTERLY FINANCIAL INFORMATION
         (unaudited)

<TABLE>
<CAPTION>
                                                    QUARTER ENDED
                              --------------------------------------------------------
                                MARCH 31       JUNE 30     SEPTEMBER 30    DECEMBER 31
                              -----------    -----------   ------------    -----------
<S>                           <C>            <C>            <C>            <C>
2002 (1)
----
Revenues                      $64,640,000    $73,324,000    $66,471,000    $62,803,000
Earnings from operations        2,632,000      2,961,000      2,609,000      1,687,000
Earnings before taxes
   and minority interest        1,455,000      1,693,000      1,890,000        832,000
Net earnings                      753,000        861,000      1,043,000        404,000
Basic earnings per share             0.15           0.17           0.21           0.08
Diluted earnings per share           0.14           0.16           0.20           0.08

2001
----
Revenues                      $48,930,000    $54,928,000    $52,862,000    $55,725,000
Earnings from operations        2,174,000      2,310,000      1,376,000      1,635,000
Earnings before taxes             727,000      1,002,000        172,000        498,000
   and minority interest
Net earnings                      282,000        307,000          3,000        220,000
Basic earnings per share             0.06           0.06           0.00           0.04
Diluted earnings per share           0.05           0.06           0.00           0.04
</TABLE>

(1) The Company changed its accounting method for goodwill amortization as of
    January 1, 2002.

                                       42

<PAGE>

FIVE YEAR FINANCIAL INFORMATION (1)

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31
                              ---------------------------------------------------------------------------------
                                   2002 (2) (3)       2001            2000            1999           1998 (1)
                              -----------------  -------------   -------------   -------------   --------------
<S>                           <C>                <C>             <C>             <C>             <C>
Revenues                      $267,238,000       $212,445,000    $183,450,000    $145,676,000    $ 90,610,000
Net Earnings                     3,061,000            812,000       1,995,000       1,255,000       4,375,000
Basic Earnings Per Share              0.60               0.16            0.39            0.24            0.84
Diluted Earnings Per Share            0.58               0.16            0.38            0.24            0.84
Total Assets                   126,386,000        128,751,000     129,900,000     123,627,000      87,061,000
Long-Term Liabilities           55,474,000         68,606,000      67,566,000      67,432,000      38,607,000
Shareholders' Equity            32,991,000         28,656,000      27,500,000      26,070,000      35,457,000
</TABLE>

(1) The year ended December 31, 1998 reflects the historical financial
    information of Christiana Companies, Inc. of which TLC was a part.

(2) The results for year ended December 31, 2002 include the operations of Zero
    Zone, Inc. acquired on February 5, 2002. Through September 30, 2000, C2
    owned two-thirds of Total Logistic Control LLC. On September 30, 2000, C2
    acquired the remaining one third interest and from that date forward 100
    percent of TLC is included.

(3) The Company changed its accounting method for goodwill amortization as of
    January 1, 2002.

                                       43

<PAGE>

CORPORATE INFORMATION

DIRECTORS

John A. Becker                                 William H. Lacy
     Retired Vice Chairman & COO                    Retired Chairman & CEO
     Firstar Corporation                            MGIC Investment Corporation

Nicholas F. Brady                              David J. Lubar
     Chairman                                       Chairman
     Darby Overseas Investments, LTD.                C2, Inc.

William T. Donovan                             Sheldon B. Lubar
     President & CEO                                Chairman
     C2, Inc.                                        Lubar & Co.

OFFICERS

William T. Donovan                             Betty J. White
     President and Chief Executive                Treasurer, Controller and
     Officer                                      Assistant Secretary

David J. Lubar                                 Gary R. Sarner
     Chairman                                       Chief Executive Officer
                                                    Total Logistic Control, LLC

0yvind Solvang                                 Robert J. Koerner
     Vice President                                 President & Chief Operating
     Business Development                           Officer
                                                    Total Logistic Control, LLC

David E. Beckwith                              Jack Van der Ploeg
     Secretary                                      Chief Executive Officer
                                                    Zero Zone, Inc.

TRANSFER AGENT AND REGISTRAR                   CORPORATE HEADQUARTERS
American Stock Transfer                        700 N. Water, Suite 1200
16800 West Greenfield Avenue                   Milwaukee, WI 53202
Brookfield, WI 53005                           Telephone: (414) 291-9000
                                               Facsimile: (414) 291-9061
WEB SITE (WWW.C2-INC.COM)
The C2, Inc. web site contains detailed company information, news releases, and,
free of charge, print-formatted SEC-filings. To receive e-mails with C2 news
releases, sign up via the Inquiry Section of the website.

EXCHANGE LISTING
C2, Inc. common stock trades on the Nasdaq Stock Market(R)under the symbol: CTOO

ANNUAL MEETING
C2, Inc. Annual Meeting of Shareholders will be held at 9:00 a.m. on April 22,
2003 at the Galleria Conference Room, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin.

                                       44

<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.                      BRIEF DESCRIPTION OF EXHIBIT
<S>             <C>
   2.1          Amended and Restated Agreement and Plan of Merger, dated as of
                October 14, 1998, by and among Christiana Acquisition Co.,
                Weatherford International, Inc., Christiana Companies, Inc.
                and C2, Inc. [Incorporated by referenced to Exhibit 2.1 to C2,
                Inc.'s Form S-1 Registration Statement (Reg. No. 333-460270)].

   2.2          Purchase Agreement, dated as of December 12, 1997, as amended
                by amendment No. 1 dated May 26, 1998 and Amendment No. 2
                dated October 13, 1998, by and among Weatherford
                International, Inc., Total Logistic Control, LLC, Christiana
                Companies, Inc. and C2, Inc. [Incorporated by referenced to
                Exhibit 2.2 C2, Inc.'s Form S-1 Registration Statement (Reg.
                No. 333-46027)].

   2.3          Recapitalization Agreement by and among C2, Inc., Zero Zone,
                Inc. and the shareholders of Zero Zone, Inc. [Incorporated by
                referenced to Exhibit 2.1 to C2, Inc.'s Current Report on Form
                8-K dated March 12, 1999 and filed on March 29,1999].

   3.1          C2, Inc.'s Amended and Restated Articles of Incorporation.
                [Incorporated by reference to Exhibit 3.1 to C2, Inc.'s Form
                S-1 Registration Statement (Reg. No. 333-46027)].

   3.2          C2, Inc.'s Amended and Restated Bylaws. [Incorporated by
                reference to Exhibit 3.2 to C2, Inc.'s Form S-1 Registration
                Statement (Reg. No. 333-46027)].

  10.1          Form of Credit Agreement, by and among Total Logistic Control,
                LLC, Firstar Bank, N.A., individually and as agent, and the
                lenders that are a party thereto. [Incorporated by reference
                to Exhibit 10.1 to C2, Inc.'s Form S-1 Registration Statement
                (Reg. No. 333-46027)].

  10.2          Form of First Amended and Restated Operating Agreement, by and
                between C2, Inc. and Christiana Companies, Inc. [Incorporated
                by reference to Exhibit 10.2 to C2, Inc.'s Form S-1
                Registration Statement (Reg. No. 333-46027)]

  10.3          C2, Inc. 1998 Equity Incentive Plan [Incorporated by reference
                to Exhibit 10.2 to C2, Inc.'s Form S-1 Registration Statement
                (Reg. No. 333-46027)].

  10.4          Asset Purchase Agreement dated September 5, 2000 between Total
                Logistic Control, LLC and the ProSource Group, Inc.
                (Incorporated by reference to C2, Inc.'s Annual Report on Form
                10-K for the year ended December 31, 2000.)

  10.5          Amendment of Asset Purchase Agreement dated September 5, 2000
                between Total Logistic Control, LLC and the ProSource Group,
                Inc. (Incorporated by reference to C2, Inc.'s Annual Report on
                Form 10-K for the year ended December 31, 2000.)


  10.6          Asset Purchase Agreement, dated February 5, 2002, between Zero
                Zone, Inc. and Systematic Refrigeration, Inc.

  10.7          Exchange Agreement between Zero Zone, Inc. and certain
                shareholders of Zero Zone, Inc. dated December 31, 2002

    21          Company's Subsidiaries.
</TABLE>

                                       45

<PAGE>

<TABLE>
<S>             <C>
    99          The Proxy Statement for the 2003 Annual Meeting of
                Shareholders will be filed with the Securities and Exchange
                Commission under Regulation 14A within 120 days after the end
                of the company's year. [Except to the extent specifically
                incorporated by reference, the Proxy Statement for the 2003
                Annual Meeting of Shareholders shall not be deemed to be filed
                with the Securities and Exchange Commission as part of this
                Annual Report on Form 10-K].

  99.1          Written Statement of Chief Executive Officer

  99.2          Written Statement of Chief Financial Officer
</TABLE>

                                       46