<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

                 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
                 THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM

                                       TO
         ------------------------------  ------------------------------

                        COMMISSION FILE NUMBER 000-30731

                             GRAND ENTERPRISES, INC.

        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

                  DELAWARE                                13-4118624
      ---------------------------------------     ---------------------------
     (STATE OR OTHER JURISDICTION OF EMPLOYER     (I.R.S. IDENTIFICATION NO.)
         INCORPORATION OR ORGANIZATION)


                 119 WEST 23RD STREET, SUITE 507,
                 NEW YORK, NY                            10004
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

         ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (646) 486-3900

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act during the past 12 months
(or 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 [ ]

         At September 30, 2001 there were issued and outstanding 22,500,000
shares of Common Stock.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
                                     PART I

Item 1. Financial Statements.

                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)




         INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                 <C>
CONDENSED CONSOLIDATED BALANCE SHEET
     SEPTEMBER 30, 2001 (UNAUDITED)                                                                                   F-2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND PERIOD
     FROM APRIL 6, 2000 (DATE OF INCEPTION) TO SEPTEMBER 30, 2001
     (UNAUDITED)                                                                                                      F-3

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
     PERIOD FROM APRIL 6, 2000 (DATE OF INCEPTION) TO SEPTEMBER 30, 2001
     (UNAUDITED)                                                                                                      F-4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     NINE MONTHS ENDED SEPTEMBER 30, 2001 AND PERIOD FROM APRIL 6, 2000
     (DATE OF INCEPTION) TO SEPTEMBER 30, 2001 (UNAUDITED)                                                            F-5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)                                                                                                         F-6/8
</TABLE>


                                      * * *

                                      F-1
<PAGE>
                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2001
                                   (Unaudited)

<TABLE>
<CAPTION>
                                     ASSETS
<S>                                                                                                     <C>
Current assets:
     Cash                                                                                               $   1,902
     Inventory                                                                                            958,795
                                                                                                        ---------

          Total                                                                                         $ 960,697
                                                                                                        =========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses                                                              $  58,721
     Advances from stockholders                                                                            77,380
     Due related party                                                                                    570,795
                                                                                                        ---------
          Total liabilities                                                                               706,896
                                                                                                        ---------

Stockholders' equity:
    Preferred stock, par value $.001 per share; 20,000,000 shares
       authorized; none issued                                                                                 --
    Common stock, par value $.001 per share; 80,000,000 shares
       authorized; 22,500,000 shares issued and outstanding                                                22,500
    Additional paid-in capital                                                                            880,500
    Note receivable - stockholder                                                                        (500,000)
    Deficit accumulated during the development stage                                                     (149,199)
                                                                                                        ---------
          Total stockholders' equity                                                                      253,801
                                                                                                        ---------

          Total                                                                                         $ 960,697
                                                                                                        =========
</TABLE>


See Notes to Unaudited Condensed Consolidated Financial Statements.


                                      F-2
<PAGE>
                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND PERIOD
          FROM APRIL 6, 2000 (DATE OF INCEPTION) TO SEPTEMBER 30, 2001
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                         Three              Nine
                                                         Months            Months
                                                          Ended            Ended
                                                        September          September
                                                        30, 2001           30, 2001          Cumulative
                                                      ------------       ------------       ------------
<S>                                                   <C>                <C>                <C>
General and administrative expenses                   $     42,787       $    115,876       $    181,863

Research and development expenses                               --                 --              6,000
                                                      ------------       ------------       ------------

Operating loss                                             (42,787)          (115,876)          (187,863)

Interest income                                              7,562             31,116             38,664
                                                      ------------       ------------       ------------

Net loss                                              $    (35,225)      $    (84,760)      $   (149,199)
                                                      ============       ============       ============

Basic net loss per share                              $         (-)      $         (-)
                                                      ============       ============

Basic weighted average common shares outstanding        22,500,000         20,941,176
                                                      ============       ============
</TABLE>


      See Notes to Unaudited Condensed Consolidated Financial Statements.


                                      F-3
<PAGE>
                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)

       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
       PERIOD FROM APRIL 6, 2000 (DATE OF INCEPTION) TO SEPTEMBER 30, 2001
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                    Preferred Stock                         Common Stock                 Additional
                                           -------------------------------       -------------------------------          Paid-in
                                               Shares              Amount            Shares            Amount             Capital
                                               ------              ------        -------------      ------------       -------------
<S>                                        <C>                <C>                <C>                <C>                <C>
Proceeds from the issuance of shares
     to founders                                     --       $         --          3,000,000       $      3,000

Note receivable from stockholder

Issuance of shares to founders
     for patent rights                                                              9,250,000              9,250       $     (9,250)

Shares sold through private placement                                               6,250,000              6,250          1,043,750

Net loss
                                           ------------       ------------       ------------       ------------       ------------

Balance, December 31, 2000                           --                 --         18,500,000             18,500          1,034,500

Net loss

Effects of reverse acquisition                                                      4,000,000              4,000           (154,000)
                                           ------------       ------------       ------------       ------------       ------------

Balance, September 30, 2001                          --       $         --         22,500,000       $     22,500       $    880,500
                                           ============       ============       ============       ============       ============
</TABLE>
<TABLE>
<CAPTION>
                                                           Deficit
                                               Note       Accumulated
                                            Receivable     During the
                                              from        Development
                                           Stockholder       Stage           Total
                                           ------------    ---------       ---------
<S>                                        <C>            <C>              <C>
Proceeds from the issuance of shares
     to founders                                                           $   3,000

Note receivable from stockholder           $   (500,000)                    (500,000)

Issuance of shares to founders
     for patent rights

Shares sold through private placement                                      1,050,000

Net loss                                                   $ (64,439)        (64,439)
                                           ------------    ---------       ---------

Balance, December 31, 2000                     (500,000)     (64,439)        488,561

Net loss                                                     (84,760)        (84,760)

Effects of reverse acquisition                                              (150,000)
                                           ------------    ---------       ---------

Balance, September 30, 2001                $(500,000)      $(149,199)      $ 253,801
                                           ============    =========       =========
</TABLE>


See Notes to Unaudited Condensed Consolidated Financial Statements.


                                      F-4
<PAGE>
                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
       NINE MONTHS ENDED SEPTEMBER 30, 2001 AND PERIOD FROM APRIL 6, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                Nine
                                                                               Months
                                                                               Ended
                                                                             September
                                                                              30, 2001        Cumulative
                                                                            -----------       -----------
<S>                                                                         <C>               <C>
Operating activities:
     Net loss                                                               $   (84,670)      $  (149,199)
     Adjustments to reconcile net loss to net cash provided by
        (used in) operating activities - changes in operating
        assets and liabilities:
          Prepaid expenses and other current assets                              66,245
          Accounts payable and accrued expenses                                  40,501            58,721
                                                                            -----------       -----------
              Net cash provided by (used in) operating activities                22,076           (90,478)
                                                                            -----------       -----------

Investing activities:
     Issuance of note receivable - stockholder                                                   (500,000)
     Repayments from stockholders                                               282,838            77,380
                                                                            -----------       -----------
              Net cash provided by (used in) investing activities               282,838          (422,620)
                                                                            -----------       -----------

Financing activities:
     Proceeds from issuance of common stock to founders                                             3,000
     Proceeds from issuances of common stock                                                    1,050,000
     Repayment of due related party                                            (388,000)         (388,000)
     Payment in connection with reverse acquisition                                              (150,000)
                                                                            -----------       -----------
              Net cash provided by (used in) financing activities              (388,000)          515,000
                                                                            -----------       -----------

Net increase (decrease) in cash                                                 (83,086)            1,902

Cash, beginning of period                                                        84,988                --
                                                                            -----------       -----------

Cash, end of period                                                         $     1,902       $     1,902
                                                                            ===========       ===========


Supplemental disclosure of noncash investing and financing activities:

     Purchase of inventory through amounts due related party                $   958,795       $     1,902
                                                                            ===========       ===========
</TABLE>

See Notes to Unaudited Condensed Consolidated Financial Statements.

                                      F-5
<PAGE>
                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 1 - Business and basis of presentation:

         On April 16, 2001, pursuant to an agreement and plan of reorganization
         and merger, Grand Enterprises, Inc. ("Grand"), an inactive
         publicly-held company, acquired EC 2000, Inc. ("EC 2000") by issuing
         18,500,000 shares of its common stock to stockholders of EC 2000 in
         exchange for all of the outstanding shares of EC 2000. The stockholders
         of EC 2000, after the acquisition, owned the majority of the combined
         company. Accordingly, the combination has been accounted for as a
         reverse acquisition whereby, for accounting purposes, EC 2000 is the
         accounting acquirer and Grand is the accounting acquiree. Grand and EC
         2000 are collectively referred to as (the "Company").

         EC 2000 was incorporated in the State of Delaware on April 6, 2000. The
         Company plans to market a fuel treatment system (the "Property") that
         will increase fuel efficiency and reduce harmful exhaust emissions. The
         Company has adopted a December 31 year end.

         The unaudited condensed consolidated financial statements of the
         Company are the historical condensed financial statements of EC 2000
         and include the accounts of Grand since the acquisition date.

         In the opinion of management, the accompanying unaudited condensed
         consolidated financial statements reflect all adjustments, consisting
         of normal recurring accruals, necessary to present fairly the financial
         position of the Company as of September 30, 2001, its results of
         operations for the three and nine months ended September 30, 2001, the
         changes in stockholders' equity for the period from April 6, 2000 (date
         of inception) to September 30, 2001 and cash flows for the six months
         ended June 30, 2001 and the related cumulative amounts for the period
         from April 6, 2000 (date of inception) to June 30, 2001. Pursuant to
         the rules and regulations of the United States Securities and Exchange
         Commission (the "SEC"), certain information and disclosures normally
         included in financial statements prepared in accordance with accounting
         principles generally accepted in the United States of America have been
         condensed in or omitted from these financial statements unless
         significant changes have taken place since the end of the most recent
         fiscal year. Accordingly, these unaudited condensed consolidated
         financial statements should be read in conjunction with the audited
         financial statements as of December 31, 2000 and for the period April
         6, 2000 (date of inception) to December 31, 2000 and the notes thereto
         included in the Company's Form 8-K/A filed with the SEC on October 10,
         2001.

         The results of operations for the three and nine months ended September
         30, 2001 are not necessarily indicative of the results to be expected
         for the full year. For the three months ended September 30, 2000 and
         period from April 6, 2000 (date of inception) to September 30, 2001,
         the Company had no operations.


                                      F-6
<PAGE>
                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 1 - Business and basis of presentation (concluded):

         On August 29, 2000, the Company signed an exclusive license agreement
         (the "License Agreement") with Mr. Mario Pandolfo (the "Owner"). The
         license agreement gave the Company the right to file for a patent for
         the Property, in certain countries, as defined. As an inducement for
         Mr. Pandolfo to enter into the License Agreement, the Company issued
         him 9,250,000 shares of common stock. The patent was valued at its
         historical cost basis of nil.

         As of September 30, 2001, the Company's operations were limited to
         organizational activities. It has not generated any revenue from
         operations through that date. Accordingly, it is considered a
         "development stage company" for accounting purposes.

         The accompanying unaudited condensed consolidated financial statements
         have been prepared assuming the Company will continue as a going
         concern. However, as of September 30, 2001, the Company has not
         generated any revenue from its operations. Management believes that the
         Company will not generate any revenue until it obtains the license and
         U.S. patents for the Property. Management believes that the Company
         will need total additional financing of $250,000 to continue to operate
         as planned during the twelve-month period subsequent to September 30,
         2001. These conditions raise substantial doubt about the Company's
         ability to continue as a going concern.

         Management plans to obtain such financing through private offerings of
         debt and equity securities. However, management cannot assure that the
         Company will be able to obtain any or all of the additional financing
         it will need in order to continue to operate through at least September
         30, 2002 or that, ultimately, it will be able to generate any profits
         from the sale of the Property. If the Company is unable to obtain the
         required financing, it may have to curtail its operations or terminate
         its operations and liquidate its remaining assets and liabilities.

         The accompanying unaudited condensed consolidated financial statements
         do not include any adjustments related to the recoverability and
         classifications of assets or the amounts and classification of
         liabilities that might be necessary should the Company be unable to
         continue its operations as a going concern.

Note 2 - Summary of significant accounting policies:
      Principles of consolidation:
         The unaudited condensed consolidated financial statements include the
         accounts of EC 2000 and Grand. All significant intercompany balances
         and transactions have been eliminated in consolidation.


                                      F-7
<PAGE>
                     GRAND ENTERPRISES, INC. AND SUBSIDIARY
                          (A Development Stage Company)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2 - Summary of significant accounting policies (concluded):
      Use of estimates:
         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect certain
         reported amounts and disclosures. Accordingly, actual results could
         differ from those estimates.

      Inventory:
         Inventory, consisting principally of finished goods, is stated at the
         lower of cost (first-in, first-out) or market.

      Earnings (loss) per share:
         The Company presents "basic" earnings (loss) per share and, if
         applicable, "diluted" earnings per share pursuant to the provisions of
         Statement of Financial Accounting Standards No. 128, "Earnings per
         Share" ("SFAS 128"). Basic earnings (loss) per share is calculated by
         dividing net income or loss by the weighted average number of common
         shares outstanding during each period. The calculation of diluted
         earnings per share is similar to that of basic earnings per share,
         except that the denominator is increased to include the number of
         additional common shares that would have been outstanding if all
         potentially dilutive common shares, such as those issuable upon the
         exercise of stock options, were issued during the period. The Company
         did not have any potentially dilutive common shares outstanding during
         the period from April 6, 2000 (date of inception) to September 30,
         2001.

Note 3 - Note receivable:
         As of September 30, 2001, the Company had a note receivable of $500,000
         from Mr. Pandolfo that is due on November 2, 2002 and bears interest at
         the prime rate. Upon the due date, the Company has the option to
         convert the outstanding balance into shares of treasury stock at $1 per
         share. However, if at any time during the term of the note, the bid
         price equals or exceeds $4 per share for a period of twenty consecutive
         trading days, the outstanding balance is automatically converted into
         treasury stock at $1 per share.

Note 4 - Advances to and from stockholders and related party matters:
         As of September 30, 2001, the Company had received a net advance of
         $77,380 from its stockholders. These advances were noninterest bearing
         and due on demand.

         As of September 30, 2001, the Company had an amount due a related party
         of $570,795 ($958,795 before repayment of $388,000) as a result of the
         purchase of inventory. The amounts are noninterest bearing and due on
         demand.

         The founders provided services to the Company for the three and nine
         months ended September 30, 2001 and for the period from April 6, 2000
         (date of inception) to September 30, 2001 for which they were not
         compensated.


                                      F-8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

OPERATING EXPENSES

         For the three and nine months ended September 30, 2001 and the period
from April 6, 2000 (date of inception) to September 30, 2001, the Company
incurred operating expenses of approximately $43,000, $116,000 and $182,000,
respectively, consisting primarily of professional fees relating to general
corporate matters.

INTEREST INCOME

         Interest for the three and nine months ended September 30, 2001 and the
period from April 6, 2000 (date of inception) to September 30, 2001 was
approximately $8,000, $31,000 and $39,000, respectively, which consists of
interest on the note receivable owing from stockholder.

NET LOSS

          Net loss for the three and nine months ended September 30, 2001 and
the period from April 6, 2000 (date of inception) to September 30, 2001 was
approximately $35,000, $85,000 and $149,000, respectively. The reason for the
net losses is explained above.

LIQUIDITY AND CAPITAL RESOURCES

         On October 26, 2000, the Company sold 6,250,000 shares of common stock
through a private placement and received proceeds of $1,050,000.

         To date, the Company has utilized approximately $90,000 in its
operating activities primarily to fund its net loss. The Company had made
advances to its principal stockholder of approximately $500,000, paid and repaid
approximately $388,000 to a stockholder for inventory acquired and $150,000 in
connection with the reverse acquisition. As a result of the aforementioned, the
Company, on September 30, 2001 only has approximately $2,000 of cash.

         As of September 30, 2001 the Company had not generated any revenues
from operations and, accordingly are in the development stage. The Company does
not expect to generate any revenues from planned operations prior to the third
quarter of 2002. Management believes that the Company will need a total
additional financing of approximately $250,000 to continue to operate as planned
during the twelve-month period subsequent to September 30, 2001. Management
plans to obtain such financing through private offerings of debt and equity
securities. However, management cannot assure that the Company will be able to
obtain such funds. These conditions raise substantial doubt about the Company's
ability to continue to operate as a going concern absent such financing.

                                        1
<PAGE>
PART II
OTHER INFORMATION

ITEM 1 -  LEGAL PROCEEDINGS

None.

ITEM 2 - CHANGES IN SECURITIES

None.

ITEM 3 - DEFAULT IN SENIOR SECURITIES

None.

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

None.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(A) Not Applicable

(B) None

                                        2
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                      GRAND ENTERPRISES, INC.


                                      By:    /s/ Teodosio V. Pangia
                                          --------------------------------------
                                                 Teodosio V. Pangia
                                                 President and CEO

                                      Date:      November 14, 2001





                                        3