SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

     For the fiscal year ended February 28, 2003

                                       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 No. 33-98682

                        AMERICAN COMMERCE SOLUTIONS, INC.
             (Exact name of registrant as specified in its charter)


           Delaware                                              05-0460102
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                     1400 Chamber Dr, Bartow, Florida 33830
               (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code: (863) 533-0326

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

     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 { }

     Check if there is no disclosure of delinquent  filings pursuant to Item 405
of Regulation S-K contained herein, and no disclosure will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. {X}.

     State the issuer's revenues for its most recent fiscal year: $2,211,984

     The aggregate  market value of the voting and  non-voting  common equity of
the registrant held by non-affiliates of the registrant at February 28, 2003 was
approximately  $1,753,149  based  upon the  closing  sale  price of $.06 for the
Registrant's  Common  Stock,  $.002  par  value,  as  reported  by the  National
Association of Securities Dealers OTC Bulletin Board on February 28, 2003.

     As of February  28, 2003 the  registrant  had  29,219,158  shares of Common
Stock, $.002 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None

<PAGE>
                        American Commerce Solutions, Inc.
                          Annual Report on Form 10-KSB
                   For the Fiscal Year Ended February 28, 2003

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
                                     PART I

Item 1.  Description of Business                                               3
Item 2.  Description of Property                                               8
Item 3.  Legal Proceedings                                                     8
Item 4.  Submission of Matters to Vote of Securities Holders                   8

                                     PART II

Item 5.  Market for Common Equity and Related Security Stockholder Matters     9
Item 6.  Management's Discussion and Analysis or Plan of Operation            10
Item 7.  Financial Statements                                                 12
Item 8.  Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure                                           12

                                    PART III

Item 9.  Directors, Executive Officers, Promoters, and Control Persons;
           Compliance with Section 16(a) of the Exchange Act                  12
Item 10. Executive Compensation                                               13
Item 11. Security Ownership of Certain Beneficial Owners and Management       15
Item 12. Certain Relationships and Related Transactions                       17
Item 13. Exhibits and Reports on Form 8-K                                     18
Item 14. Controls and Procedures                                              18

                                        2
<PAGE>
     This  Annual  Report on Form  10-KSB  contains  forward-looking  statements
within the meaning of the Private  Securities  Litigation Reform Act of 1995 and
are subject to risks, uncertainties, and other factors, which could cause actual
results  to  differ   materially   from  those  expressed  or  implied  by  such
forward-looking  statements.  See "Item 1.  Description  of  Business  - Forward
Looking Statements."

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

     American Commerce Solutions,  Inc., was incorporated in Rhode Island in May
1991 under the name Jaque Dubois,  Inc. and was  re-incorporated  in Delaware in
1994. In July 1995, the Company's name was changed to JD American Workwear, Inc.
In  December  2000 the  shareholders  voted to change the name of the company to
American Commerce  Solutions,  Inc. to more accurately portray the activities of
the company.

     American Commerce Solutions, Inc. (the "Company" or "American Commerce") is
a multi-industry holding company for its operating subsidiaries. As of the close
of its most recently completed fiscal year end, the Company had one wholly owned
subsidiary  operating in the manufacturing  segment. The operating subsidiary is
International  Machine  and  Welding,  Inc.  located in Bartow,  FL.

     The  Company  intends  to  expand  its  holdings  by  acquiring  additional
subsidiaries to facilitate its business plan. The current business plan has been
in development since June 2000.

     International  Machine and Welding,  Inc.  provides  specialized  machining
services for heavy  industry.  Target  customers in the region  include  mining,
agriculture  processing,  maritime,  power  generation and industrial  machinery
companies.   Additional  operations  include  heavy  equipment  service  to  the
construction,  forestry,  waste and scrap  industries.  The  operation  provides
complete  service of the equipment,  which includes  rebuilding  undercarriages,
engines, transmissions,  final drives and hydraulics. The effective service area
for the operation  located in the Southeastern  region of the United States is a
prime and  lucrative  market  for such  services.  Growth in this  region of the
United States (population,  infrastructure,  and building) has created long term
needs  for  construction  equipment.  All of  these  machines  require  periodic
maintenance,  and at certain points major  overhauls.  In addition to its 38,000
square foot  facility,  the operation also provides fully equipped field service
vehicles so machines do not have to be removed from the work site. Normally, the
Company as an "independent" is more competitive than the "factory"  centers.  In
most  cases the  operation  can turn work in a quicker  and more cost  effective
manner.

     International  Machine and Welding,  Inc.  also sells OEM and  after-market
repair parts for heavy equipment. The operation has an extensive cross-reference
listing and network of sources.  One of the major competitive  advantages of the
operation  is its  ability to  determine  exactly  what the  customer  needs and
fulfill  the  requirement.  In many cases,  the  customer  may not have  service
manuals or to be able to identify part numbers.  If a customer has more than one
type of  machine,  which is quite  common,  they may have to contact a number of
different suppliers to get parts for multiple machines. Our operation identifies
the required parts and arranges the necessary repairs. As a result, the customer
only  has to make  one  phone  call  for all of their  needs.  This  also  makes
International Machine and Welding,  Inc. an attractive  alternative for sales to
customers  outside the United States.  Orders can be accumulated  throughout the
month and be sent on consolidated shipments. This has created a niche market for
the direct  parts sales  division.  The  operation  currently  has two  customer
relationships  in the  Caribbean.  Management  believes that this market has not
been fully  targeted  by its  competitors  and offers  potential  as a source of
increased business.

     The Board of Directors of American Commerce Solutions,  Inc. has determined
that  it  will  seek  to  acquire   additional   manufacturing   operations  and
construction operations that utilize heavy equipment.  Additional segments being
considered are manufacturing supply operations, consumer products and commercial
construction support services.

                                        3
<PAGE>
ACQUISITIONS AND DIVESTITURES

     The  Company  sold back to its  original  founder  the assets  and  certain
liabilities  of its JD American  Workwear,  Inc.  operation and all of the Rhode
Island  Truck and  Equipment,  Inc.  operations  on May 31, 2001 and October 31,
2001,  respectively.  The terms and conditions of these  transactions  have been
reported in their  respective  Form 10-QSB for the period ended May 31, 2001 and
November 30, 2001 and are incorporated by reference herein.

     On June 1, 2000,  the  Company  completed  the  purchase  of  International
Machine and Welding,  Inc. by acquiring all of the outstanding  capital stock of
its  holding  company,   Patina  Corporation  for  a  total  purchase  price  of
$4,446,159.  The  acquisition  was  accounted  for using the purchase  method of
accounting and, accordingly,  International Machine and Welding,  Inc.'s results
of operations have been included in the consolidated  financial statements since
the date of  acquisition.  The  acquisition  was funded by the issuance of 9,800
shares of Series C 6% Preferred Stock.

     On June 1, 2000,  the Company  completed the purchase of Rhode Island Truck
and  Equipment  Corp.  d/b/a  International  Paving,  Inc. by acquiring  all its
outstanding  capital  stock  for  a  total  purchase  price  of  $238,000.   The
acquisition was funded by the issuance of 200,000 shares of common stock.

     On June 1, 2001, the Company discontinued the operations of its JD American
Workwear,  Inc. subsidiary and exchanged certain assets and liabilities with the
President of the subsidiary for 725,000 shares of the Company's common stock and
notes payable of $43,115.  On October 31, 2001, the Company  returned all of the
stock of Rhode  Island  Truck and  Equipment  Corp.  to its  original  owners in
exchange for 155,000 shares of the Company's common stock.

BUSINESS STRATEGY

     The Company  has  adopted a business  strategy  that  focuses on  expansion
through   acquisitions  of  companies  that  are  synergistic  to  the  existing
subsidiary   operations.The   key  elements  must  include   solid   management,
profitability,  geographically compatible and can be enhanced by shared services
and opportunites.

Under the current  strategy,  the Company is developing  three  divisions of its
chosen segment: Manufacturing.

     Manufacturing Division. This division was formed to house the operations of
International  Machine and Welding,  Inc. Its operations include a 38,000 square
foot machine shop and sales of heavy equipment, parts and service.

PRODUCTS, SERVICES AND FEATURES

MANUFACTURING SEGMENT

     The Manufacturing  Division through International Machine and Welding, Inc.
offers a broad range of products  and  services  to heavy  industry  through its
three subdivisions.  The operations of Division 1 provide specialized  machining
of very large  components and machinery  repair to industries such as aerospace,
agricultural   processing,   chemical,   defense,  mining,  maritime  and  power
generation. Our 38,000 square foot facility located in Bartow, Florida is one of
the only  operations in the Southeast  capable of machining  components up to 55
feet in length and/or 20 feet in diameter.  Division 2 provides heavy  equipment
service (parts and labor), which includes repair and bonded rebuilds of engines,
tracks,  undercarriages,  transmissions,  final drives and hydraulic  systems on
heavy equipment. The equipment we repair is from the heavy construction industry
including bulldozers,  scrapers, loaders,  excavators,  large tractors, rollers,
etc. The division  provides field service via a fleet of fully equipped  service
trucks to provide repairs at the customer's site.  Division 3 sells  replacement
parts to the heavy equipment  market,  directly to the end user with most of the
parts exported outside the United States.

                                        4
<PAGE>
MANUFACTURING AND SOURCES OF SUPPLY

     Manufacturing Segment

     Supplies  and parts used by  International  Machine and  Welding,  Inc. are
purchased from several major suppliers including  Caterpillar,  John Deere, Case
and other major  manufacturers  and after market parts suppliers.  The machining
operations  purchase  from many  suppliers  based on the need of specific  jobs.
Although the  operations  do not have any  long-term  contracts  with any of its
suppliers, management believes that it has excellent business relationships with
its current suppliers and it is not exposed to any significant risk in the event
any one source of supply is discontinued, because there are many suppliers.

MARKETING AND SALES

     Manufacturing Segment

     International  Machine and Welding, Inc. operates three subdivisions at one
location.  Division 1 sales have  traditionally  come from  industries  within a
100-mile radius of its facilities requiring specialized machining  applications.
Direct salesmen have established  relationships  with specific customers and the
Company has expanded the business  relationship through quality,  rapid turn and
value.  While this  business is quite  lucrative,  visibility  is  limited.  The
operation  intends  to  expand  its  operations  in the OEM  market,  where  the
subsidiary provides  components to manufacturers of large machines.  These types
of  accounts  generally  involve  annual  contracts  with  three-month   rolling
schedules.  The  expansion  of the  market  also is  expected  to  increase  the
serviceable territory from the Southeast to include the entire United States.

     Direct sales personnel who primarily target mid-tier  accounts handle sales
for  Division  2 and 3. We  believe  that this  broad  niche  market is  largely
untapped by the larger factory-sponsored  operations which cater specifically to
very large  accounts.  Margins are typically  very slim in these  accounts and a
large  percentage of customer base is represented by very few accounts.  Because
we are an independent repair facility,  we can provide service to a much broader
base  of  customers  with  greater  margins  than  the  large  factory-sponsored
competitors.  Division 2 has  recently  expanded  its sales force to address the
total available market.  Anticipating growth of sales, the Company has installed
additional  specialized  equipment to service  undercarriages,  which represents
approximately 37% of the Company's repair revenue. The recent installation of an
additional track press will allow this division to double its capacity.

COMPETITION

     Manufacturing Segment

     The  principal  competitors  of  the  Manufacturing  Division  consists  of
regional  companies  such as Southern  Machinery,  Florida  Plating and Machine,
Arroyo  and  Florida  Metallizing  in  the  machining  operations  and  national
corporations  such  as  Ringhaver  Equipment,   Caterpillar,   and  Case  repair
facilities  in the  heavy  equipment  parts  and  service  category.  Management
believes  that the ability to rapidly turn goods or to provide parts on a timely
basis gives it a competitive  advantage.  We are able to ship parts  directly to
the consumer, usually on the same day as the order or to return all service work
within the time specified either by completing the work at the customers site or
because of immediate turnaround capabilities.

     Customer Dependence

     International  Machine and  Welding,  Inc.  has a broad and diverse base of
customers.  The division does not rely on any single customer, the loss of which
would have a material adverse effect on the segment. This division does generate
a  significant  amount of  revenues  from sales and  services  provided to three
different  industries.  The construction  industry  accounted for  approximately
31.7% of the  division's  revenues  in fiscal  2003  compared to 28.9% in fiscal
2002,  while the industrial and mining  industries  accounted for  approximately
26.6% and  29.3% in  fiscal  2003  compared  to 18.4% and 20.0% in fiscal  2002,
respectively, of the division's total revenues. Due to these concentrations, the
results  of  operations  of the  division  could be  affected  by changes in the
economic, regulatory, or other related conditions impacting on these industries.

                                        5
<PAGE>
CUSTOMER DEPENDENCE

     International  Machine and  Welding,  Inc.  has a broad and diverse base of
customers.  The division does not rely on any single customer, the loss of which
would have a material  adverse  effect on the segment.  During  fiscal 2003 five
customers  provided  more  than 5% of  sales  each.  These  customers  were  IMC
Phosphates Company 14.96%, Vehicare 13.68%, Wadsworth 6.87%, Southern Developers
6.74%, Kovacs 6.09% and Tuco Peat 5.23%.

EMPLOYEES

     At May 15, 2003, the Company and its subsidiaries had 23 employees devoting
full-time hours, no part time employees and 1 contractors. Of these workers, two
are performing executive, management and marketing functions, two are performing
accounting,  financial and office  functions,  three provide sales functions and
the  remainder   provide   support,   maintenance   or  fulfill  shop  operation
requirements.   The  parent  operation  has  three  full  time  employees.   The
Manufacturing Division employs 20 full time employees.

FORWARD LOOKING STATEMENTS

     This  Annual  Report on Form 10-KSB  (including  the  Exhibits  hereto) may
contain  "forward-looking  statements"  within the  meaning  of the safe  harbor
provisions of the Private Securities  Litigation Reform Act of 1995,  including,
but not limited to,  statements  regarding,  among other  things,  the financial
condition  and  prospects  of the  Company  and  its  subsidiaries,  results  of
operations,  projections,  plans for future business development  activities and
the  opportunities  available  within its market areas,  capital spending plans,
financing  sources,  projections of financial  results or economic  performance,
capital   structure,   the  effects  of   competition,   statements   of  plans,
expectations,  or objectives of the Company, and the business of the Company and
its subsidiaries.  These forward-looking  statements are typically identified by
words or phrases such as "believe," "expect,"  "anticipate," "plan," "estimate,"
"intend,"  and other  similar words and  expressions,  or future or  conditional
verbs such as "will," "should," "would," and "could" and other characterizations
of future  events or  circumstances.  In addition,  the Company may from time to
time make such written or oral  "forward-looking  statements"  in future filings
with the Securities and Exchange Commission (including exhibits thereto), in its
reports  to  stockholders,  and in  other  communications  made by or  with  the
approval of the Company.

     These  forward-looking  statements reflect the current views of the Company
at the time they are made and are based on  information  currently  available to
the  management  of the Company and upon current  expectations,  estimates,  and
projections  regarding the Company and its industry,  management's  beliefs with
respect   thereto,   and  certain   assumptions   made  by   management.   These
forward-looking  statements  are not  guarantees of future  performance  and are
subject to risks,  uncertainties,  and other  factors (many of which are outside
the  control  of the  Company),  which  could  cause  actual  results  to differ
materially from those expressed or implied by such  forward-looking  statements.
Such forward-looking  statements speak only to the date that such statements are
made,  and the Company  undertakes no  obligation to update any  forward-looking
statements,  whether  as the  result  of new  information,  future  events,  the
occurrence of unanticipated events, or otherwise. The following sets forth some,
but not  necessarily  all, of the factors  that may cause the  Company's  actual
results  to  vary   materially   from  those   which  are  the  subject  of  any
forward-looking statements.

RISK FACTORS

     Accumulated   Deficit  and  Operating  Losses  and  Anticipated   Earnings;
Explanatory Language in Auditor's Report. The Company had an accumulated deficit
at  February  28, 2003 of  $11,918,918  and net loss to common  shareholders  of
$347,910 for the year ended  February 28,  2003.The  Company had an  accumulated
deficit of  $11,528,008,  and net loss to common  shareholders of $1,542,919 for
the year ended February 28, 2002. The Company had positive cash flow of $275 for
the fiscal year  February  28,2003 as opposed to negative cash flow for the year
ended  February 28, 2002 of $20,677.  The  Company's  financial  statements  are
presented on the basis that the Company is a going concern,  which  contemplates
the  realization of assets and the  satisfaction  of liabilities in the ordinary
course of business. While there can be no assurance of this outcome,  management
believes its plan of operation will allow the Company to achieve this goal.

                                        6
<PAGE>
     Growth Plans and Risk of Expansion.  The Company  adopted and implemented a
business  strategy,  which seeks growth and expansion through the acquisition of
synergistic companies.  Accordingly, the growth and financial performance of the
Company will depend,  in large part, upon the Company's  ability to identify and
locate suitable  acquisitions,  to manage such growth and the resultant  diverse
operations,  to manage the margins of the acquired  operations,  and to attract,
hire,  train, and retain qualified  supervisory  personnel and other operational
employees to meet the Company's needs as it expands, as well as the availability
of sufficient  working capital.  Difficulties  resulting from the failure of the
Company to manage and control its growth could  materially  adversely affect the
Company's operating results and financial condition.

     No  Assurance  of  Acquisitions.   The  Company  has  limited   acquisition
experience and,  although from time to time it has had  preliminary  discussions
with potential acquisition candidates, the Company has not entered into any such
transactions  since June 2000.  The Company  does have  current  understandings,
arrangements, or agreements (oral or written) relating to specific acquisitions,
but has not secured funding to close the potential acquisitions. There can be no
assurance  that  any  acquisition   candidate  will  be  interested  in  such  a
transaction,  that an acquisition transaction will be successfully negotiated or
consummated,  or that the Company will be able to finance any such  acquisition.
Furthermore, there can be no assurance that the Company will be able to identify
other suitable acquisition  candidates in the future that would be interested in
such a transaction. To the extent that acquisitions are consummated, the Company
may have difficulty in successfully  integrating the acquired  business into the
Company or may lack the  management  skills or systems  necessary to  adequately
implement the Company's strategy. Furthermore, once integrated, acquisitions may
not achieve  comparable  levels of revenues,  profitability,  or productivity as
existing Company  operations,  or otherwise  perform as expected  (including the
potential failure to achieve expected  synergies or other anticipated  financial
benefits).  The  Company  is unable to predict  whether or when any  prospective
acquisition   candidate  will  become   available  or  the  likelihood  that  an
acquisition will be completed should any negotiations commence. The Company will
face  competition for such  acquisitions  from entities that have  substantially
greater resources than the Company.

     Acquisition Risks.  Acquisitions involve a number of special risks, some or
all of which could have a material  adverse  effect on the Company's  results of
operations or financial  condition.  Such risks include, but are not limited to,
the diversion of management's  attention from core  operations,  difficulties in
the  integration of acquired  operations and retention of personnel,  customers,
and suppliers,  unanticipated problems or legal liabilities,  tax and accounting
issues,  and the  inability  to  obtain  all  necessary  governmental  and other
approvals and consents.

     Need for Additional  Financing.  Cash flow from  operations and the sale of
securities  provided  the  working  capital  needs  and  principal  payments  on
long-term  debt through most of fiscal 2003.  However,  the Company will need to
obtain  additional  financing  in order to finance  its  acquisition  and growth
strategy.  There  can be no  assurance  that debt or  equity  financing  will be
available  to the Company on  acceptable  terms,  if at all. If the Company does
require  additional  financing  and it cannot be  obtained  or the terms of such
financings  are  unfavorable,  it may  have a  material  adverse  impact  on our
operations and  profitability,  and the Company may need to curtail its business
plan and strategy

     Loss of Certain Members of Our Management  Team Could Adversely  Affect the
Company.  The Company is  dependent  to a  significant  extent on the  continued
efforts and abilities of our Chairman, Robert E. Maxwell and President and Chief
Executive Officer, Daniel L. Hefner. If the company were to lose the services of
either of these  individuals  or other key  employees  or  consultants  before a
qualified  replacement  could be  obtained,  the  business  could be  materially
affected.

     Expected  Volatility  in Share  Price.  The  market  price of our stock has
traded in a wide range. From March 1, 2001 through February 28,2003 the price of
our  common shares  has ranged  from $0.625 to $0.03 per share. The price of our

                                        7
<PAGE>
common stock may be subject to  fluctuations  in response to  quarter-to-quarter
variations   in  operating   results,   creation  or   elimination   of  funding
opportunities,   restriction  of  the  acquisition   plans,   and  favorable  or
unfavorable coverage of our officers and Company by the press.

     Control by Current  Stockholders,  Officers and  Directors.  Management and
affiliates of the Company currently beneficially own, including shares they have
the right to  acquire,  approximately  66% of the  voting  Common  Stock.  These
persons are, and will continue to be, able to exercise control over the election
of the Company's directors and the appointment of officers.

ITEM 2. PROPERTIES

     International  Machine and Welding,  Inc. owns in fee simple title a 38,000
square foot facility in Bartow, Florida, which currently serves as the principal
executive offices of American Commerce. A note with Valrico State Bank encumbers
this  building.  This note needs to be refinanced by November 2005. The note and
mortgage  in favor of Valrico  State Bank  allowed  the  Company to  negotiate a
settlement  with GE Capital Small  Business and other  creditors,  substantially
reducing debt service and generating a one time gain of $812,014.

ITEM 3. LEGAL PROCEEDINGS

     None.

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

     On  January  21,  2003 a  stockholders  meeting  was held at the  corporate
offices in Bartow, Florida. All notices and filings were properly made. A quorum
( 9,641,611) was present by proxy.

Three proposals came for action:

Proposal  No. 1 Election of  Directors.  Three  nominees,  Robert E.  Maxwell (2
years) Daniel L. Hefner (2 years) and Frank D. Puissegur (1 year) were elected

13,137,346 FOR      2,000 AGAINST

Proposal No. 2 Amendment to Company's 1995 Employee Stock Option Plan.
Proposed to increase the shares available by 1,500,000 shares to 3,500,000.

13,139,346 FOR      0 AGAINST

Proposal No. 3 Management  Proposal on Independent  Accountants.  Vote to ratify
the  selection of Pender  Newkirk & Company as  Independent  Auditors for Fiscal
2003.

13,139,346 FOR      0 AGAINST

                                        8
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

     Since the April 1996 closing of the Company's initial public offering,  the
Company's Common Stock has traded in the over-the-counter market on the National
Association of Securities  Dealers,  Inc. OTC Bulletin  Board System  ("OTCBB").
Until  January 31,  2001 the  company's  common  stock  traded  under the symbol
"JDAW." In connection with the name change,  since February 10, 2001, the common
stock has traded  under the symbol  "AACS." The  following  table sets forth the
range of high and low closing bid  quotations of the Common Stock as reported by
the OTCBB for each fiscal  quarter for the past two fiscal  years.  High and low
bid  quotations  reflect  inter-dealer  prices  without  adjustment  for  retail
mark-ups,  markdowns or commissions  and may not  necessarily  represent  actual
transactions.

                                                                  Bid Prices
                                                               ----------------
                                                               High        Low
                                                               ----        ---

FISCAL 2003

First Quarter  (March 1, 2002 through May 31, 2002)            $0.30      $0.20

Second Quarter  (June 1, 2002 through August 31, 2002)         $0.26      $0.03

Third Quarter  (September 1, 2002 through November 30, 2002)   $0.14      $0.03

Fourth Quarter  (December 1, 2002 through February 28, 2003)   $0.12      $0.04

FISCAL 2002

First Quarter (March 1, 2001 through May 31, 2001)             $0.625     $0.25

Second Quarter (June 1, 2001 through August 31, 2001)          $0.34      $0.17

Third Quarter (September 1, 2001 through November 30, 2001)    $0.30      $0.18

Fourth Quarter (December 1, 2001 through February 28, 2002)    $0.30      $0.18

On May 15, 2003 the closing bid price of the Company's  Common Stock as reported
by the OTCBB was $0.03 and there were approximately 538 shareholders of record.

DIVIDENDS

     The Company has never declared or paid a dividend on its Common Stock,  and
does  not  anticipate  paying  any cash  dividends  on its  Common  Stock in the
foreseeable  future.  The Company expects to retain, if any, its future earnings
for  expansion or  development  of the Company's  business.  The decision to pay
dividends,  if any,  in the  future is  within  the  discretion  of the Board of
Directors and will depend upon the  Company's  earnings,  capital  requirements,
financial condition and other relevant factors such as contractual  obligations.
There can be no assurance that dividends can or will ever be paid.

RECENT SALES OF UNREGISTERED SECURITIES

     None

                                        9
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     This Management's  Discussion and Analysis or Plan of Operation  presents a
review of the  consolidated  operating  results and  financial  condition of the
Company for the fiscal years ended February 28, 2003 and February 28, 2002. This
discussion  and analysis is intended to assist in  understanding  the  financial
condition  and results of  operation of the Company and its  subsidiaries.  This
section should be read in conjunction with the consolidated financial statements
and the related notes.

RESULTS OF OPERATIONS

     The Company owns one subsidiary that operated in the manufacturing  segment
during the fiscal  year ended  February  28,  2003 and  February  28,  2002.  To
facilitate the readers  understanding  of the Company's  financial  performance,
this discussion and analysis is presented on a segment basis.

MANUFACTURING SUBSIDIARY

     The manufacturing  subsidiary  generates its revenues from three divisions.
Division 1 provides specialized  machining and repair services to heavy industry
and original  equipment  manufacturers.  Division 2 provides  repair and rebuild
services on heavy equipment used in construction  and mining as well as sales of
used equipment.  Division 3 provides parts sales for heavy equipment directly to
the customer.  The primary market of this segment is the majority of central and
south Florida with parts sales expanding its market internationally. The current
operations can be significantly  expanded using the 38,000 square foot structure
owned by International Machine and Welding, Inc.

     The subsidiary's  sales  expectations  were not met in fiscal 2003 although
there was an increase in revenue. We have expectation of more significant growth
in  fiscal  2004.  This  will  be  facilitated  by  additional  working  capital
anticipated through improved operations, capital raises and bank loans.

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

     General

     The Company's consolidated net sales increased to $2,211,984 for the fiscal
year ended  February 28, 2003 an increase of $270,129  from  $1,941,855  for the
fiscal year ended February 28, 2002, an increase of 13.9%. This increase was due
to increased sales effort.

     Gross profit for the consolidated  operations decreased to $789,941 for the
fiscal  year ended  February  28, 2003 from  $837,147  for the fiscal year ended
February 28, 2002.  Gross  profit  decreased as a percentage  of sales to 35.71%
from 43.11%.  This change was due,in part, to the  management  decision to write
down inventory by $102,823.  Consolidated  interest expenses in fiscal 2003 were
$301,774  compared  to  $297,235  in fiscal  2002.  The  company  incurred a net
consolidated loss of $347,910 for the year ended February 28, 2003 compared to a
loss of  $1,542,919  for the year ended  February  28,  2002.  One time gains on
renegotiation and settlement of debt was a major factor in this improvement.

     Selling,  general and  administrative  expenses decreased to $1,584,470 for
fiscal 2003 from  $2,043,752  for fiscal 2002, a decrease of $459,282 or 22.47%.
The  decrease was mainly  attributable  to  reduction  in  management  staff and
general tightening of controls.

     The Company's net loss to common  shareholders was $347,910 for fiscal 2003
compared to a net loss to common  shareholders  of  $1,542,919  for fiscal 2002.
This improvement was largely attributable to the one-time gain on forgiveness of
debt of $812,014 from the previous fiscal year.  Despite this  improvement  over
the  preceding  year and because of these  continuing  losses,  the  Independent
Auditors have questioned the Company's continuation as a going concern.

                                       10
<PAGE>
     Manufacturing Subsidiary

     The Manufacturing operation provided net sales of $2,211,984 for the fiscal
year ended  February 28, 2003 compared to  $1,941,855  for the fiscal year ended
February 28, 2002. The machining  operations  provided  $827,725 or 37.4% of net
sales with parts and service providing  $1,384,259 or 62.6% of net sales for the
fiscal  year  ended  February  28,  2003 as  compared  to  machining  operations
contributing  $849,723  or 43.8% of net sales with parts and  service  providing
$1,092,132  or 56.2% of net sales for the fiscal year ended  February  28, 2002.
This was  through the efforts of a three  person  sales staff and the  exemplary
work of the rank and file who  provided  product  turnaround  that  excited  the
customers and created more opportunities.

     Gross profit from the  Manufacturing  operation was $789,941 for the fiscal
year ended February 28, 2003 compared to $837,147 in fiscal 2002 providing gross
profit margins of 35.71% and 43.1%, respectively.

     Selling, general and administrative expenses were $1,584,470 for the fiscal
year ended  February 28, 2003 compared to  $2,043,752  for the fiscal year ended
February 28, 2002.  Interest  expenses  were  $301,774 for the fiscal year ended
February 28, 2003  compared to $297,235  for the fiscal year ended  February 28,
2002.

     The Company does not have discrete financial  information on each division,
nor does the Company make decisions on the divisions separately;  therefore they
are not reported as segments.

     Non-recurring Income

     On October 23, 2000 the terms of the original agreement between the Company
and  ULLICO  were  substantially  modified  to meet  the  changing  needs of the
Company.  The holder  relinquished all mandatory  conversion rights allowing the
Company to reclassify the proceeds of the preferred stock  transaction as equity
and a non-recurring  gain of $1,994,768 from the  extinguishment of debt and the
recapture of dividend and warrant costs.

On November 30, 2002 the company received a bank loan of $875,000 which was used
to pay off short and long term debt negotiated by management to allow a one time
gain on forgiveness of debt of  $812,014.This  debt was associated with the June
2000 acquisition of the assets of International Machine and Welding, Inc.

LIQUIDITY AND CAPITAL RESOURCES

     During the fiscal years ended  February 28, 2003 and February 28, 2002, the
Company  (used) net cash for  operating  activities  of $504,686 and  $(12,948),
respectively.  Accounts  receivable  decreased  to $169,040 at February 28, 2003
from $234,334 at February 28, 2002, a decrease of $65,294, or 27.86%.  Inventory
decreased to $103,630 at February 28, 2003 from $268,030 at February 28, 2002, a
decrease of $164,400,  or 61.3% as a result of a  substantial  write down during
fiscal 2003 and reclassification to property and equipment.

     During   fiscal  2003  and  2002,   the  Company  used  funds  for  capital
expenditures of $31,841 and $15,556, respectively.

     Cash flows from  operations  and loans or the sale of equity  provided  for
working  capital needs and principal  payments on long-term  debt through fiscal
2003.  To the extent that the cash flows from  operations  are  insufficient  to
finance the Company's  anticipated  growth,  or its other  liquidity and capital
requirements  during the next twelve  months,  the Company will seek  additional
financing from alternative  sources including bank loans or other bank financing
arrangements,  other debt financing,  the sale of equity  securities  (including
those issuable pursuant to the exercise of outstanding warrants and options), or
other financing  arrangements.  However, there can be no assurance that any such
financing  will be  available  and, if  available,  that it will be available on
terms favorable or acceptable to the Company.

SEASONALITY

     The diversity of operations in the  Manufacturing  Segment protects it from
seasonal  trends  except  in the  sales of  agricultural  processing  where  the
majority  of the  revenue  is  generated  while  the  processors  await the next
harvest.

                                       11
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

     The response to this item is included as a separate  section of this report
commencing on page F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS OF THE
        REGISTRANT

     The following table sets forth  information about each person who serves as
an executive officer or director of the Company:

     Name               Age      Positions with the Company
     ----               ---      --------------------------

Robert E. Maxwell       67       Chairman of the Board and Director

Frank D. Puissegur      43       Chief Financial Officer and Director

Daniel L. Hefner        52       Chief Executive Officer, President and Director

     Directors  of the Company  hold office until the earlier of the next annual
meeting of the  stockholders  and until their  successors have been duly elected
and qualified, or their death,  resignation,  or removal. Two board members were
elected to two-year  terms at the annual  stockholders  meeting held January 21,
2003. Robert Maxwell and Daniel Hefner were elected to a two-year term. On March
5, 2002 in consent action by  shareholders,  Norman  Birmingham was elected to a
two-year term, but subsequently  resigned the position.Our  officers are elected
annually by the board of directors to hold office until the next annual  meeting
of our board and their  successors  have been duly elected and qualified.  There
are no family relationships between any of our officers and directors. Set forth
below is a description of the business  experience during the past five years or
more and other  biographical  information  for directors and executive  officers
identified above:

     Mr.  Maxwell has been a director and the Chairman of the Board of Directors
of  the  Company  since  June  2000.  Mr.  Maxwell  serves  as a  consultant  to
International Machine and Welding, Inc., a subsidiary of the Company. He was the
owner/operator of Florida Machine and Welding, Inc., located in Bartow, Florida,
for the past 24 years until the sale of its assets in June 2000. Mr. Maxwell has
served on various bank and charitable boards of directors.


     Mr.  Puissegur  joined the Company in June 2001 as Chief Financial  Officer
and Director.  He became a Certified public Accountant with his certificate from
the State of Florida and the creation of a sole practitioner office in 1982. The
practice  grew and has  evolved  into its  current  form as the  partnership  of
Puissegur,  Finch, & Slivinski,  P.A., a full service  accounting  firm. He is a
member of the American and Florida  Institutes of Certified  Public  Accountants
and the  National  and  Polk  County  Estate  Planning  Councils.  The  American
Institute of Tax Studies has awarded Mr. Puissegur the designation of "Certified
Tax  Professional." He also holds the designation from the State of Florida as a
Certified Family Mediator.

                                       12
<PAGE>
     Mr. Hefner has been President of the Company since September,2002 and Chief
Executive  Officer  since March 2002.  He  previously  served as Executive  Vice
President  from June 2000 to June 2001 and as interim  President  from June 2001
through  February 2002. Mr. Hefner has been a director of the Company since June
2000.  Mr. Hefner  currently  serves as President of  International  Machine and
Welding, Inc. He also serves as President of International Commerce and Finance,
Inc.  an   investment/consulting   company  for   manufacturing  and  technology
companies,  and he has held this position since August 1999.  Mr.Hefner has been
active for the past twelve years as an independent  consultant to individuals or
business  seeking  to begin  operations  or to create  turnarounds  of  existing
business.  During the same period,  Mr. Hefner also operated his own independent
real estate brokerage operation where he served as President and Chief Executive
Officer.  From March to October 1999, Mr. Hefner was Chief Operating Officer for
Chronicle Communications,  Inc. (OTCBB: CRNC), a Tampa based printer. CRNC filed
bankruptcy protection under Chapter 11 of the Federal Bankruptcy Code two months
after Mr. Hefner's departure.

ITEM 10. EXECUTIVE COMPENSATION

     The  following  summary  compensation  table sets  forth cash and  non-cash
compensation  awarded,  paid or accrued,  for the past three fiscal years of the
Company's  Chief Executive  Officers,  and all other, if any, whose total annual
compensation  exceeded  $100,000  for the fiscal  year ended  February  28, 2003
(collectively, the " Named Executive Officers").

                           SUMMARY COMPENSATION TABLE

                                                      Compensation
                                                         Awards
                                        Annual        ------------
                                     Compensation      Securities
Name and                  Fiscal   ----------------    Underlying     All Other
Principal Position         Year    Salary     Bonus     Options     Compensation
------------------         ----    ------     -----     -------     ------------

Daniel L. Hefner           2003   $67,600               100,000       $25,000
 President

David N. DeBaene           2001   $87,500     $   0     100,000       $25,000
 Subsidiary President (1)

----------
(1)  The Company's  Board of Directors  accepted the  resignation of Mr. DeBaene
     from his position as President of J.D. American Workwear, Inc., on December
     15, 2000. Daniel L. Hefner was named President in September 2002.

     The Company does not have any  annuity,  retirement,  pension,  deferred or
incentive  compensation plan or arrangement  under which any executive  officers
are entitled to benefits, nor does the Company have any long-term incentive plan
pursuant to which  performance  units or other forms of  compensation  are paid.
Executive officers who qualify will be permitted to participate in the Company's
1995 Stock Option Plan,  which was adopted in February  1995.  See "Stock Option
Plan."   Executive   officers  may   participate  in  group  life,   health  and
hospitalization  plans if and when such  plans are  available  generally  to all
employees. All other compensation consisted solely of health care premiums.

EMPLOYMENT AGREEMENTS

     The Company signed an employment agreement with Daniel L. Hefner on June 1,
2000  containing  a base salary of $60,000;  a minimum cash bonus of $15,000 per
year and a 4% annual  increase of the base pay. Stock options are granted on the
signing and June 1 of each  contract  year at the rate of 100,000  common  share
equivalents.  The contract  also provides for a $750 per month car allowance and
the payment of all insurance,  fuel and  maintenance  costs and all  perquisites
related to health, dental, life or disability as may be offered to the executive
management  staff.  All other  provisions  of the previous  contract  related to
capital  raises or warrant  or  exercise  revenue  were  omitted  except for the
termination provisions stated above.

                                       13
<PAGE>
DIRECTOR COMPENSATION

     Directors  of the  Company  who are not  employees  or  consultants  do not
receive  any  compensation  for  their  services  as  members  of the  Board  of
Directors,  but are  reimbursed for expenses  incurred in connection  with their
attendance at meetings of the Board of Directors.

COMPENSATION COMMITTEE

     Robert E. Maxwell,  Daniel L. Hefner and Frank Puissegur are members of the
Compensation Committee,  which reviews and makes recommendations with respect to
compensation of officers,  employees and consultants,  including the granting of
options  under the Company's  1995 Stock Option Plan,  the  NonQualifying  Stock
Option Plan aproved effective July 10,2002 and the Employee Stock Incentive Plan
approved effective May 27,2003.

EMPLOYEE STOCK OPTION PLAN

     The 1995 Stock  Option  Plan.  The  Company's  1995 Stock  Option Plan (the
"Plan")  adopted by the Company's Board of Directors in February 1995 and by the
stockholders  in July 1995  provides for the  issuance of options to  employees,
officers and, under certain  circumstances,  directors of and consultants to the
Company ("Eligible Participants").  Options granted under the plan may be either
"incentive  stock  options"  ("ISOs") as defined in Section 422 of the  Internal
Revenue Code of 1986, as amended (the "Code") or  "nonqualified  stock  options"
("NQSOs").  The Plan does not  provide for the  issuance  of stock  appreciation
rights but does permit the granting of restricted and  non-restricted  stock and
deferred stock awards. A total of 250,000 shares of Common Stock were originally
reserved for issuance  under the Plan;  however,  in January 1998,  the Board of
Directors  voted to amend the Plan and  reserve for  issuance  under the Plan an
additional  500,000 shares,  which amendment was ratified by the stockholders of
the Company at the Annual Meeting of Stockholders  held April 15, 1998. The plan
was further amended at an Annual Shareholders meeting December 15, 2000 at which
time an increase of 1,250,000 shares were ratified. The Plan was also amended on
January 21,  2003 by the  stockholders  at which time an  increase of  1,500,000
shares were ratified for a total of 3,500,000 shares. The Compensation Committee
of the  Board  of  Directors  administers  the  Plan.  The  Committee  has  sole
discretion and authority,  consistent with the provisions of the Plan, to select
the Eligible  Participants  to whom Options will be granted under the Plan,  the
number of shares  which will be covered by each Option and the form and terms of
the agreement to be used.

All employees and officers of the Company  (including  members of the Committee)
are eligible to participate  in the Plan.  Directors are eligible to participate
only if they have been declared to be "eligible  directors" by resolution of the
Board of Directors.

Options.  The Committee is empowered to determine the exercise  price of Options
granted  under  the  Plan,  but the  exercise  price of ISOs must be equal to or
greater  than the fair market  value of a share of Common  Stock on the date the
Option is granted  (110% with respect to option  holders who own at least 10% of
the  outstanding  Common  Stock).  The exercise price of NQSOs granted under the
Plan must not be less than 85% of the fair market  value of the Common  Stock on
the date the Option is granted. The Committee has the authority to determine the
time or times at which Options  granted under the Plan become  exercisable,  but
the  Options  expire no later than ten years from the date of grant  (five years
with respect to Option  holders who own at least 10% of the  outstanding  Common
Stock of the Company).  The Options are nontransferable,  other than by will and
the laws of descent,  and generally may be exercised  only by an employee  while
employed by the Company or within 90 days after  termination of employment  (one
year from  termination  resulting from death or  disability).  The  compensation
committee  has the  authority to waive  payment of the  exercise  price of stock
options issued under the plan.

NONQUALIFYING STOCK OPTION PLAN

On July 10,  2002 the  Company  adopted a  Non-qualifying  Stock  Option/  Stock
Appreciation  Rights  Plan and  reserved  7,000,000  common  shares of stock for
employees  officers and  consultants.  These options are granted by the Board at
their discretion. 50,000 options were granted during fiscal 2003.

EMPLOYEE STOCK INCENTIVE PLAN (SUBSEQUENT EVENT)

Effective May 27, 2003,  the Company  adopted an employee  stock  incentive plan
(the "Plan") for the year 2003 that authorizes up to 15,000,000 shares of common
stock for grants of both incentive stock options and non-qualified stock options
to designated officers,  employees,  and certain non-employees.  Options granted
under the Plan  must be  exercised  within  10 years of the date of  grant.  The
exercise  price of options  granted  may not be less than 85 percent of the fair
market  value of the stock.  As of May 29, 2003,  there were no options  granted
under this Plan.

Effective May 27, 2003,  the Company also adopted a  non-employee  directors and
consultants  retainer stock plan for the year 2003.  This plan  authorizes up to
5,000,000  shares of common stock to be issued in the amount of compensation for
services to directors and  consultants at the deemed  issuance price of $.04 per
share. As of May 29, 2003, there were no options issued under this plan.

     At February  28,  2003,  the Company did not have any  long-term  incentive
plans nor had it awarded any restricted  shares to any Named Executive  Officer.
The table set forth  below  contains  information  with  respect to the award of
stock  options  during the  fiscal  year ended  February  28,  2003 to the Named
Executive Officers covered by the Salary Compensation Table.

                                       14
<PAGE>
                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (individual grants)

                        Number of        % of Total
                         Securities     Options/SAR's   Exercise
                         underlying      Granted to     or Base
                        Options/SAR's   Employees in     Price     Expiration
Name                      Granted        Fiscal Year     ($/Sh)       Date
----                      -------        -----------     ------       ----
Daniel L. Hefner          100,000           11.76        $0.286    June 1, 2007
Daniel L. Hefner          200,000           23.53        $0.242     Exercised
Barbara Maxwell           200,000           23.53        $0.242     Exercised
R. Beimel                 200,000           23.53        $0.242     Exercised
N. Birmingham             150,000           17.65        $0.242     Exercised

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTION/SAR VALUES

     The following  table sets forth,  for each Named  Executive  Officer in the
Summary  Compensation  Table  who  holds  stock  options,  the  number of shares
acquired  pursuant to the exercise of stock  options  during  fiscal  2003,  the
number of stock  options  held on February 28, 2003 and the  realizable  gain of
stock options that are "in-the-money."

<TABLE>
<CAPTION>
                                                             Number of
                                                       Securities Underlying            Value of Unexercised
                                                        Unexercised Options             In-the-Money Options
                                                         at Fiscal Year End            At Fiscal Year End (1)
                         Shares                      ---------------------------     ---------------------------
                       Acquired or        Value      Exercisable   Unexercisable     Exercisable   Unexercisable
Name                  Exercised (#)     Realized         (#)            (#)               $              $
----                  -------------     --------     -----------   -------------     -----------   -------------
<S>                    <C>                  <C>         <C>               <C>              <C>            <C>
Daniel L. Hefner       100,000              0           100,000           0                0              0
</TABLE>

----------
(1)  Based upon the closing  price of the Common Stock as quoted on the Over The
     Counter Bulletin Board on February 28, 2003 of $0.06 per share.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding the beneficial
ownership of the Company's  outstanding Common Stock as of May 15, 2003, by: (i)
each director and nominee for director of the Company, (ii) each Named Executive
Officer,  (iii) all directors and executive  officers of the Company as a group,
and (iv) each person  known to the Company  beneficially  owning more than 5% of
the outstanding Common Stock. Except as otherwise  indicated,  the persons named
in the table have sole voting and  investment  power with  respect to all of the
Common Stock owned by them.

                                       15
<PAGE>
Name and Address or                    Amount and Nature of          Percentage
  Number in Group                    Beneficial Ownership (1)       of Class (2)
  ---------------                    ------------------------       ------------

Directors and Executive Officers

Robert E. Maxwell (3)                        11,147,342                38.15%

Frank D. Puissegur                                    0                   **

Daniel L. Hefner (5)
1400 Chamber Dr.
Bartow, FL                                    9,511,110                32.55%

All Directors and Executive
Officers as a Group (3 persons)              20,658,452(6)             70.70%

International Commerce and
Finance, Inc.
Tampa, FL                                     7,970,000                27.28%

FMW (4)                                      10,423,982                35.68%
Bartow, Florida

----------
(**) less than 1%

(1)  In  accordance  with Rule  13d-3  promulgated  pursuant  to the  Securities
     Exchange  Act of 1934, a person is deemed to be the  beneficial  owner of a
     security for  purposes of the rule if he or she has or shares  voting power
     or  dispositive  power with  respect to such  security  or has the right to
     acquire such ownership within sixty days. As used herein, "voting power" is
     the  power to vote or to direct  the  voting of  shares,  and  "dispositive
     power" is the  power to  dispose  or  direct  the  disposition  of  shares,
     irrespective of any economic interest therein.

(2)  In calculating  the percentage  ownership for a given  individual or group,
     the number of shares of Common Stock  outstanding  includes unissued shares
     subject to options,  warrants,  rights or conversion privileges exercisable
     within  sixty  days held by such  individual  or group,  but are not deemed
     outstanding by any other person or group.

(3)  Includes 723,360 shares of Common Stock held by his spouse Barbara Maxwell.
     Includes  10,423,982  shares held in FMW of which Mr. Maxwell is beneficial
     owner.

(4)  Stock issued for extinguishing $531,000 of long-term debt.

(5)  Includes (a) 300,000 shares of Common Stock, which may be acquired pursuant
     to currently  exercisable options (b) 1,241,110 shares of Common Stock held
     personally and, (c) 7,970,000 shares of Common Stock  beneficially owned as
     the President of International Commerce and Finance, Inc.

(6)  Includes 400,000 shares of Common Stock subject to options.

     The Company has two classes of preferred stock outstanding comprised of 102
shares of Series A Preferred Stock and 3,718 shares of Series B Preferred Stock.
Each  outstanding  class of preferred stock has voting rights and is convertible
into  Common  Stock.  Each share of Series A Preferred  Stock  converts to 1,289
shares of  Common  Stock and votes on an as  converted  basis.  3,207  shares of
Series B Preferred Stock is convertible  into 641,400 shares of Common Stock and
511 Series B Preferred  Shares  convert into 511,000  shares of Common Stock and
votes on an as converted basis.

     Gerald Hoak,  owner of 20 shares or 19.61% of Series A Preferred Stock, and
Merit  Capital  Associates,  owner of 40 shares or 39.22% of Series A  Preferred
Stock are the only  owners of more than 5% of the class.  No director or officer
is the beneficial owner of any of the Series A or Series B Preferred Stock.

     Beneficial Voting Power Held

     The  following  table sets forth the voting power in the  Company's  equity
securities,  as of  February  28,  2003  held  by:  (i)  each  director  of  the
Company,(ii)  each Named  Executive  Officer,  (iii) all directors and executive
officers as a group,  and (iv) each person known by the Company to own more than
5% of any class of outstanding equity security of the Company.  The voting power
set forth in this  table is the  beneficial  voting  power  held,  directly  and
indirectly, by

                                       16
<PAGE>
such person as of the date  indicated  assuming no  conversion  of the preferred
stock (i.e.,  includes  shares that may be acquired  within 60 days by reason of
option or warrant  exercise but not those that could be obtained upon conversion
of preferred stock).

                                                          Percent of Outstanding
Name                                                       Voting Power Held(1)
----                                                      ----------------------

Directors and Executive Officers

Robert E. Maxwell........................................         38.15%
Frank Puissegur .........................................           *
Daniel L. Hefner (3).....................................         32.55%
All directors and executive officers
as a group (3 persons)...................................         70.70%

FMW (2)..................................................         35.68%

International Commerce and Finance (4)...................         27.28%

----------
*    Less than 1%

(1)  Based upon 29,219,158  outstanding  shares of common stock, 102 outstanding
     shares of Series A Preferred Stock and 3718 outstanding  shares of Series B
     Preferred  Stock.  Each share of Common  Stock is  entitled to one vote per
     share.  Each  outstanding  share of Series A Preferred Stock is entitled to
     1,289 votes.  3,207 shares of Series B Preferred  Stock are entitled to 200
     votes per share and 511 shares of Series B  Preferred  are  entitled  1,000
     votes each.  Accordingly,  as of Feb 28, 2003, the Series A Preferred Stock
     and Series B Preferred  Stock are entitled to an aggregate of 131,478 votes
     and 1,152,400 votes, respectively. Voting rights are calculated in the same
     manner  described  in footnote 2 to table  above  disclosing  the  Security
     Ownership  of  Management  and  Certain   Beneficial  Owners   ("Beneficial
     Ownership  Table").  Totals  exceed  100%  due  to  such  calculations  and
     overlapping  beneficial  voting  rights held  between  holders as set forth
     herein.
(2)  FMW was awarded  10,423,982  shares for acceptance of $531,000 of debt.
(3)  Consisting of 300,000 votes upon exercise of currently  exercisable options
     to  purchase  Common  Stock,  1,241,110  shares  of Common  Stock  held and
     7,970,000  shares  of  Common  Stock  beneficially  owned as  President  of
     International Commerce and Finance, Inc.
(4)  Consisting of 7,970,000 shares of Common Stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

STOCKHOLDERS AGREEMENT

A Stockholders  Agreement dated April 9, 1998 was entered into among ULLICO, the
Company,  David N. DeBaene,  Annette DeBaene,  Norman DeBaene,  Thomas Lisi, and
Steve Panneton (each, a "Holder").  The Stockholders Agreement provides that the
Company shall have a right of first  refusal  before any Holder may transfer any
shares of Common Stock. ULLICO has a right of second refusal and co-sale rights,
if the Company  does not elect to buy all of the  securities  it is offered.  If
ULLICO enters into an agreement to transfer, sell or otherwise dispose of all of
its  Preferred  Stock,  Warrants and any Common Stock issued upon  conversion or
exercise of the former (such agreement referred to as a "Tag-Along Sale"),  each
Holder has the right to participate in the Tag-Along  Sale. If ULLICO,  alone or
with another person, accepts an offer from any party who is unaffiliated with it
to  purchase  any of  ULLICO's  shares  which  results in such party  having the
ability to elect a majority of the Company's  Board of  Directors,  then, at the
request of ULLICO,  each  Holder  shall sell all shares of Common  Stock held by
such Holder (referred to as a "Drag-Along Sale").

During the year ended February 28, 2003, two executives who are  stockholders of
the Company deferred  approximately  $130,000 of compensation  earned during the
year. The balance due to stockholders at February 28, 2003 totaled $178,394. The
note is unsecured, non-interest bearing, and has no specific repayment terms.

During the year ended  February 28, 2003,  the Company  issued 462,500 shares of
common stock to an employee valued at $74,650 for services rendered. The Company
also issued  200,000 shares of common stock to a related party valued at $48,400
for services rendered.

The Company  also issued  566,666  shares of common  stock to a related  company
valued at $55,000 for a pledge of assets and  guarantee of a loan.  This related
company is 100 percent owned by the president and chief executive officer of the
Company.

During the year ended February 28, 2003, the Company wrote off a loan receivable
balance of $31,234, which was due from a stockholder as additional compensation.

The above amounts are not necessarily  indicative of the amounts that would have
been incurred had  comparable  transactions  been entered into with  independent
parties.

                                       17
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

List of Exhibits

(a)  The  exhibits  that are  filed  with this  report or that are  incorporated
     herein by reference  are set forth in the Exhibit  Index  appearing on page
     E-1.

(b)  Reports on Form 8-K

ITEM 14. CONTROLS AND PROCEDURES

The company had controls and procedures in place during the reporting  period to
ensure  that  material  information  is known to us in a timely  fashion.  Those
controls and  procedures  have been reviewed from time to time to evaluate their
effectiveness.  The company is satisfied  that these controls and procedures are
adequate to give fair representation of material information about the financial
condition of the company.

There have been no significant factors or changes to the controls and procedures
of the company that could  significantly  affect internal controls subsequent to
the reporting period.

Certification by each Director and executive officer has been executed.

                                       18
<PAGE>
                                   SIGNATURES

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

                                        AMERICAN COMMERCE SOLUTIONS, INC.


Date: June 6, 2003                      By: /s/ Daniel L. Hefner
                                            ------------------------------------
                                            Daniel L. Hefner, President
<PAGE>
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
                     906 OF THE SARBAENES-OXLEY ACT OF 2002

     In connection with the Annual Report of American Commerce  Solutions,  Inc.
(the  'Company')  on Form 10-KSB for the year ended  February 28, 2003, as filed
with the Securities and Exchange  Commission on the date hereof (the  'Report'),
each of the  undersigned  officers  of the  Company  certifies,  pursuant  to 18
U.S.C.Sction 1350, as adopted pusuant to Section 906 of the  Sarbaenes-Oxley Act
of 2002, that to such officer's knowledge: Section 13(a)

     (1)  The Report fully complies with the  requirements  of Section 13 (a) or
          Section 15 (d) of the Securities and Exchange Act of 1934: and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the  Company as of the dates and for the periods  expressed  in the
          Report.

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.

     Signatures                             Title                       Date
     ----------                             -----                       ----

/s/ Robert E. Maxwell        Chairman of the Board and Director     June 11,2003
--------------------------
Robert E. Maxwell

/s/ Daniel L. Hefner         Chief Executive Officer, President
                             and Director                           June 11,2003
--------------------------
Daniel L. Hefner

/s/ Frank D. Puissegur       Chief Financial Officer (Principal
--------------------------   Financial Officer) and Director        June 11,2003
Frank D. Puissegur
<PAGE>
                                 Certifications
                                   SECTION 302

I, Frank D. Puissegur, certify that:

     1.   I have reviewed this annual report on Form 10-KSB of American Commerce
          Solutions, 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  officers 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 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 functions):

          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.


Date June 11, 2003                      /s/ Frank D. Puissegur
                                        ----------------------------------------
                                        Frank D. Puissegur

                                        Chief Financial Officer
                                        ----------------------------------------
                                        Title
<PAGE>
I, Daniel L. Hefner, certify that:

     1.   I have reviewed this annual report on Form 10-KSB of American Commerce
          Solutions, 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  officers 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 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 functions):

          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.


Date June 11, 2003                      /s/ Daniel L. Hefner
                                        ----------------------------------------
                                        Daniel L. Hefner

                                        Chief Executive Officer
                                        ----------------------------------------
                                        Title
<PAGE>
     SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
           SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

(1)  An annual report covering the registrant's  last fiscal year ended February
     28,2002 was sent to security holders of the registrant in January 2003.

(2)  A proxy statement, proxies, and other proxy soliciting material was sent to
     the registrant's shareholders during the past fiscal year. The Company held
     its annual shareholders meeting on January 21, 2003.
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                        Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

                                    Contents

Independent Auditors' Report on Consolidated Financial Statements,
    February 28, 2003........................................................F-1

Independent Auditors' Report on Consolidated Financial Statements,
    February 28, 2002........................................................F-2

Consolidated Financial Statements:

    Consolidated Balance Sheet...............................................F-3
    Consolidated Statements of Operations....................................F-4
    Consolidated Statements of Changes in Stockholders' Equity...............F-5
    Consolidated Statements of Cash Flows..............................F-7 - F-8
    Notes to Consolidated Financial Statements........................F-9 - F-24
<PAGE>
                          Independent Auditors' Report

Stockholders and Board of Directors
American Commerce Solutions, Inc. and Subsidiary
Bartow, Florida

We have audited the accompanying consolidated balance sheet of American Commerce
Solutions,  Inc.  and  Subsidiary  as of  February  28,  2003  and  the  related
statements of operations,  changes in stockholders'  equity,  and cash flows for
the  year  then  ended.   These  consolidated   financial   statements  are  the
responsibility  of the  management  of American  Commerce  Solutions,  Inc.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

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

In our opinion,  the 2003 consolidated  financial  statements  referred to above
present fairly,  in all material  respects,  the financial  position of American
Commerce Solutions,  Inc. and Subsidiary as of February 28, 2003 and the results
of its operations and its cash flows for the year then ended in conformity  with
accounting principles generally accepted in the United States of America.

The  accompanying   consolidated   financial  statements  of  American  Commerce
Solutions, Inc. and Subsidiary have been prepared assuming that the Company will
continue as a going concern.  As more fully described in Note 2, the Company has
had recurring operating losses since inception,  has negative working capital as
of February 28, 2003, has used approximately  $504,700 of cash in operations for
the year ended  February 28,  2003,  and is in default on several  loans.  These
conditions raise  substantial doubt about the Company's ability to continue as a
going concern.  Management's plans regarding these matters are also disclosed in
Note 2. The  consolidated  financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.

Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida

April 11, 2003,  except for the last two  paragraphs of Note 14, as to which the
date is May 29, 2003

                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
   of American Commerce Solutions, Inc. and Subsidiary

We have audited the accompanying consolidated statements of operations,  changes
in stockholders' equity, and cash flows of American Commerce Solutions,  Inc. (a
Delaware Corporation) and Subsidiary for the year ended February 28, 2002. 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 audit.

We conducted our audit in accordance with generally  accepted auditing standards
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  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
audit provides a reasonable basis for our opinion.

In  our  opinion,  the  consolidated   statements  of  operations,   changes  in
stockholders'  equity,  and cash flows referred to above present fairly,  in all
material respects, the results of operations and cash flows of American Commerce
Solutions,  Inc.  and  Subsidiary  for the year  ended  February  28,  2002,  in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  2002  consolidated  statements  of  operations,   changes  in
stockholders'  equity,  and cash flows have been  prepared  assuming the Company
will continue as a going  concern.  As discussed in Note 2 to the 2002 financial
statements (which is not presented herein), the Company's  significant operating
losses and negative working capital raise substantial doubt about its ability to
continue as a going concern.  Management's  plans  regarding  these matters were
also  discussed  in Note 2 to the 2002  financial  statements.  These  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

Respectfully submitted,

/s/ BELLA, HERMIDA, GILLMAN, HANCOCK & MUELLER

Certified Public Accountants
Plant City, Florida
May 23, 2002

                                      F-2
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                           Consolidated Balance Sheet

                                February 28, 2003


<TABLE>
<S>                                                                        <C>
Assets
Current assets:
    Cash                                                                   $     14,483
    Accounts receivable, net of allowance of $5,190                             169,040
    Inventory                                                                   103,630
    Other receivables                                                            77,814
    Other current assets                                                         41,908
                                                                           ------------
Total current assets                                                            406,875
                                                                           ------------

Property and equipment, net of accumulated depreciation of $823,999           5,245,655
                                                                           ------------

Other assets:
    Prepaid loan costs                                                           32,430
    Long-term receivable                                                        142,675
    Real property held for resale                                               243,150
                                                                           ------------
Total other assets                                                              418,255
                                                                           ------------

                                                                           $  6,070,785
                                                                           ============

Liabilities and Stockholders' Equity
Current liabilities:
    Current portion of notes payable and capital leases                    $    828,030
    Bank overdraft                                                               14,187
    Accounts payable                                                            503,459
    Accrued expenses                                                             46,854
    Accrued interest                                                            157,442
    Due to stockholders                                                         178,394
    Deferred revenue                                                             36,425
                                                                           ------------
Total current liabilities                                                     1,764,791
                                                                           ------------

Notes payable and capital leases, net of current portion                      1,269,691
                                                                           ------------

Stockholders' equity:
    Preferred stock, total authorized 1,000,000 shares:
      Series A, cumulative and convertible; $.001 par value;
        600 shares authorized; 102 shares issued and
        outstanding; liquidating preference of $376,125
      Series B, cumulative and convertible; $.001 par value;
        3,950 shares authorized; 3,718 shares issued and
        outstanding; liquidating preference of $3,718,180                             3
      Series C, cumulative and convertible; $.001 par value;
        20,000 shares authorized; 0 shares issued and outstanding
    Common stock; $.002 par value; 75,000,000 shares
      authorized; 29,741,158 shares issued; 29,219,158 shares
      outstanding                                                                59,482
    Additional paid-in capital                                               15,233,137
    Stock subscription receivable                                               (10,000)
    Treasury stock, at cost                                                    (265,526)
    Accumulated deficit                                                     (11,918,918)
    Loan costs                                                                  (61,875)
                                                                           ------------
Total stockholders' equity                                                    3,036,303
                                                                           ------------

                                                                           $  6,070,785
                                                                           ============
</TABLE>

THE  ACCOMPANYING  NOTES  ARE AN  INTEGRAL  PART OF THE  CONSOLIDATED  FINANCIAL
STATEMENTS.

                                      F-3
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                 Year Ended February 28,
                                                              ----------------------------
                                                                  2003            2002
                                                              ------------    ------------
<S>                                                           <C>             <C>
Net sales                                                     $  2,211,984    $  1,941,855

Cost of goods sold                                               1,422,043       1,104,708
                                                              ------------    ------------

Gross profit                                                       789,941         837,147
                                                              ------------    ------------

Selling, general and administrative expenses                     1,584,470       2,043,752
Impairment of property and equipment                                80,000
Gain on forgiveness of debt                                       (812,014)
                                                              ------------    ------------
                                                                   852,456       2,043,752
                                                              ------------    ------------

Loss from operations                                               (62,515)     (1,206,605)
                                                              ------------    ------------

Other income (expense):
    Other income                                                    24,153          22,564
    (Loss) gain on sale of assets                                   (7,774)         14,547
    Interest expense                                              (301,774)       (297,235)
                                                              ------------    ------------
Total other income (expense)                                      (285,395)       (260,124)
                                                              ------------    ------------


Net loss from operations                                          (347,910)     (1,466,729)
                                                              ------------    ------------
Discontinued operations:
    Loss from discontinued operations                                              (59,350)
    Loss on disposal of subsidiary                                                 (16,840)
                                                              ------------    ------------
Net loss from discontinued operations                                              (76,190)
                                                              ------------    ------------

Net loss                                                      $   (347,910)   $ (1,542,919)
                                                              ============    ============

Net loss from continuing operations per common share          $       (.02)   $       (.14)
                                                              ============    ============

Net loss from discontinued operations per common share        $       (.00)   $       (.01)
                                                              ============    ============

Net loss per common share                                     $       (.02)   $       (.15)
                                                              ============    ============

Weighted average number of common shares outstanding            17,991,670      10,300,282
                                                              ============    ============
</TABLE>

THE  ACCOMPANYING  NOTES  ARE AN  INTEGRAL  PART OF THE  CONSOLIDATED  FINANCIAL
STATEMENTS.

                                      F-4
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

           Consolidated Statements of Changes in Stockholders' Equity

                     Years Ended February 28, 2003 and 2002

<TABLE>
<CAPTION>
                                                               Common Stock                Preferred Stock
                                                        --------------------------    --------------------------
                                                          Shares          Amount          Shares          Amount
                                                       ------------    ------------    ------------    ------------
<S>                                                    <C>           <C>               <C>             <C>
Balance, February 28, 2001                               10,717,589    $     21,435           8,117    $          8
Common shares issued for services                            25,000              50
Common shares issued for debt repayment                      96,690             194
Common shares surrendered for stock
    receivable                                              (10,000)            (20)
Preferred shares converted                                4,850,065           9,700          (4,808)             (5)
Common shares issued for accrued compensation             2,030,000           4,060
Common stock acquired in sale of subsidiary
Stock receivable paid in services
Stock receivable paid in cash
Common shares retired                                      (358,000)           (716)
Preferred shares issued for Series B dividends                                                  264
Net loss
                                                       ------------    ------------    ------------    ------------
Balance, February 28, 2002                               17,351,344          34,703           3,573               3
Common shares issued for services                         1,415,832           2,831
Common shares issued for debt repayment                  10,423,982          20,848
Common shares issued for compensation                       550,000           1,100
Cash received for stock subscription receivable
Preferred shares issued for Series B dividends                                                  247
Loan cost from issuance of common stock
Amortization of loan cost
Net loss
                                                       ------------    ------------    ------------    ------------
Balance, February 28, 2003                               29,741,158    $     59,482           3,820    $          3
                                                       ============    ============    ============    ============
</TABLE>

THE  ACCOMPANYING  NOTES  ARE AN  INTEGRAL  PART OF THE  CONSOLIDATED  FINANCIAL
STATEMENTS.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
Additional         Stock
  Paid-In       Subscription    Accumulated      Treasury           Loan
  Capital        Receivable       Deficit          Stock            Cost          Total
------------    ------------    ------------    ------------    ------------   ------------
<S>             <C>             <C>             <C>             <C>            <C>
$ 14,229,367    $   (477,000)   $(10,028,089)                                  $  3,745,721
       4,450                                                                          4,500
      82,007                                                                         82,201

      (2,980)         10,000                                                          7,000
      (9,695)
     361,340                                                                        365,400
                                                $   (525,588)                      (525,588)
                     442,000                                                        442,000
                       5,000                                                          5,000
    (259,346)                                        260,062

                                  (1,542,919)                                    (1,542,919)
------------    ------------    ------------    ------------    ------------   ------------
  14,405,143         (20,000)    (11,571,008)       (265,526)                     2,583,315
     185,219                                                                        188,050
     510,775                                                                        531,623
     132,000                                                                        133,100
                      10,000                                                         10,000

                                                                $    89,259
                                                                    (27,384)
                                    (347,910)                                      (347,910)
------------    ------------    ------------    ------------    ------------   ------------
$ 15,233,137    $    (10,000)   $(11,918,918)   $   (265,526)   $     61,875   $  3,098,178
============    ============    ============    ============    ============   ============
</TABLE>

                                      F-6
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                    Year Ended February 28,
                                                                  --------------------------
                                                                      2003           2002
                                                                  -----------    -----------
<S>                                                               <C>            <C>
Operating activities
    Net loss                                                      $  (347,910)   $(1,542,919)
                                                                  -----------    -----------
    Adjustments to reconcile net loss to net cash used by
        operating activities:
           Depreciation and amortization                              312,494        294,314
           Impairment of property and equipment                        80,000
           (Recovery) provision for doubtful accounts                 (18,125)           731
           Provision for losses on inventory                          102,823
           Stock issued for services and compensation                 321,150        475,162
           Loss on disposal of subsidiary                                             16,840
           Loss (gain) on disposal of assets                            7,774        (14,457)
           Gain on forgiveness of debt                               (812,014)
           Decrease (increase) in:
               Accounts receivable                                     83,416        (73,134)
               Inventory                                              (28,544)        15,889
               Other receivables and other assets                    (211,373)       (11,354)
           (Decrease) increase in:
               Accounts payable and accrued expenses                  (30,802)       825,980
               Deferred income                                         36,425
                                                                  -----------    -----------
    Total adjustments                                                (156,776)     1,529,971
                                                                  -----------    -----------
    Net cash used by operating activities                            (504,686)       (12,948)
                                                                  -----------    -----------

Investing activities
    Decrease in long-term receivables                                                (28,440)
    Increase in long-term receivables                                  37,189         22,787
    Cash sold in disposals                                                           (61,260)
    Proceeds from sale of assets                                       14,000          9,089
    Acquisition of property and equipment                             (31,841)       (15,556)
                                                                  -----------    -----------
    Net cash provided (used) by investing activities                   19,348        (73,380)
                                                                  -----------    -----------

Financing activities
    Increase (decrease) in bank overdrafts                             13,909         (8,371)
    Increase in due to stockholder                                    132,599
    Proceeds from notes payable                                     1,135,811        152,651
    Principal payments on notes payable and capital leases           (806,706)       (83,629)
    Proceeds received on common stock receivable                       10,000          5,000
                                                                  -----------    -----------
    Net cash provided by financing activities                         485,613         65,651
                                                                  -----------    -----------

Net increase (decrease) in cash                                           275        (20,677)

Cash, beginning of year                                                14,208         34,885
                                                                  -----------    -----------

Cash, end of year                                                 $    14,483    $    14,208
                                                                  ===========    ===========
</TABLE>

THE  ACCOMPANYING  NOTES  ARE AN  INTEGRAL  PART OF THE  CONSOLIDATED  FINANCIAL
STATEMENTS.

                                      F-7
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                  Year Ended February 28,
                                                                                  ----------------------
                                                                                     2003         2002
                                                                                  ---------    ---------
<S>                                                                               <C>          <C>
Supplemental disclosure of cash flow information:
    Cash paid for interest                                                        $ 239,430    $ 168,798
                                                                                  =========    =========
</TABLE>

Supplemental schedule of noncash investing and financing activities:

    During the year ended  February 28, 2003, the Company  transferred  $499,700
    from equipment held for resale to property and equipment.  Also, the Company
    transferred $75,121 from inventory to property and equipment.

    During the year ended February 28, 2003, the Company  transferred $15,000 of
    merchandise from inventory to equipment held for resale.

    During the year ended February 28, 2003, the Company  exchanged  $381,437 of
accrued expenses for a note payable.

    During the year ended February 28, 2003, the Company exchanged  $437,830 and
    $93,793  of debt and  related  accrued  interest,  respectively,  for common
    stock.

    The following are noncash investing and financing  activities as of February
28, 2002:

<TABLE>
<S>                                                                                            <C>
        Securities issued for debt repayment                                                   $  44,500
                                                                                               =========
        Securities issued for payables                                                         $ 381,438
                                                                                               =========
        Securities surrendered                                                                 $   3,000
                                                                                               =========
        Common stock acquired in sale of subsidiary                                            $ 156,532
                                                                                               =========
</TABLE>

    In  connection  with the disposal of all of the common stock of Rhode Island
    Truck and Equipment  Corp.,  the Company  reacquired  155,000  shares of its
    common stock in exchange for net assets  valued at $156,532  during the year
    ended February 28, 2002.

<TABLE>
<S>                                                                                            <C>
        Common stock acquired in sale of operations                                            $ 369,056
                                                                                               =========
        Notes payable issued in sale of operations                                             $  43,115
                                                                                               =========
</TABLE>

    In connection with the disposal of the assets of JD American Workwear, Inc.,
    the Company  reacquired  725,000 shares of its common stock and issued notes
    payable of $43,115 in exchange for net assets valued at $325,941  during the
    year ended February 28, 2002.

<TABLE>
<S>                                                                                            <C>
        Mortgage paid with proceeds from sale of building                                      $ 106,323
                                                                                               =========
        Notes payable issued for equipment                                                     $ 106,212
                                                                                               =========
        Notes receivable issued to President of JD American Workwear, Inc.                     $  40,000
                                                                                               =========
        Notes receivable assigned for accounts payable                                         $  42,291
                                                                                               =========
        Notes payable and accrued interest refinanced                                          $ 185,229
                                                                                               =========
</TABLE>

THE  ACCOMPANYING  NOTES  ARE AN  INTEGRAL  PART OF THE  CONSOLIDATED  FINANCIAL
STATEMENTS.

                                      F-8
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

1.   BACKGROUND INFORMATION

American Commerce Solutions, Inc. was incorporated in Rhode Island in 1991 under
the name Jaque Dubois,  Inc.,  and was  re-incorporated  in Delaware in 1994. In
July 1995, Jaque Dubois, Inc. changed its name to JD American Workwear,  Inc. In
December  2000, the  stockholders  voted at the annual  stockholders  meeting to
change the name of JD American  Workwear,  Inc. to American Commerce  Solutions,
Inc. (the "Company").

The Company is primarily a holding  company  whose wholly  owned  subsidiary  is
engaged in the machining and  fabrication  of parts used in industry,  and parts
sales and service for heavy construction equipment.

2.   GOING CONCERN

The Company has incurred  substantial  operating  losses since inception and has
used  approximately  $504,700 of cash in operations  for the year ended February
28, 2003. The Company recorded losses from continuing operations of $347,910 and
$1,466,729 for the years ended February 28, 2003 and 2002, respectively. Current
liabilities   exceed   current  assets  by  $1,357,916  at  February  28,  2003.
Additionally,  the Company has been unable to meet  obligations to its creditors
as they have become due and is in default on several notes payable.  The ability
of the Company to continue as a going  concern is dependent  upon its ability to
reverse negative  operating trends,  raise additional  capital,  and obtain debt
financing.

Management  has revised its business  strategy to include  expansion  into other
lines of business through the acquisition of other companies in exchange for the
Company's  stock.  Management is currently  negotiating new debt financing,  the
proceeds from which would be used to settle  outstanding debts at more favorable
terms, to finance operations,  and to complete additional business acquisitions.
However,  there  can be no  assurance  that  the  Company  will be able to raise
capital,  obtain debt financing,  or improve operating  results  sufficiently to
continue as a going concern.

The  accompanying   consolidated   financial   statements  do  not  include  any
adjustments  relating  to the  recoverability  and  classification  of  recorded
assets, or the amounts and classification of liabilities that might be necessary
if the Company is unable to continue as a going concern.

                                      F-9
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

3.   SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed are:

     The  accompanying   consolidated   financial  statements  include  the
     activity  of  the  Company  and  its  wholly  owned  subsidiary.   All
     intercompany transactions have been eliminated in consolidation.

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

     Financial   instruments  that  potentially   subject  the  Company  to
     concentrations   of  credit  risk   consist   primarily   of  accounts
     receivable.   Accounts   receivable  consist  of  billed  services  or
     products.  The Company  records an allowance for doubtful  accounts to
     allow for any amounts that may not be  recoverable,  which is based on
     an analysis of the Company's  prior  collection  experience,  customer
     credit worthiness,  and current economic trends. Based on management's
     review of accounts  receivable,  an allowance for doubtful accounts of
     $5,190 is considered  adequate at February 28, 2003.  Receivables  are
     determined to be past due based on payment terms of original invoices.
     The Company  does not charge  significant  amounts of interest on past
     due receivables.  There were no receivables on non-accrual of interest
     status at February 28, 2003.

     Inventories  are  stated  at the  lower  of  cost or  market.  Cost is
     determined  on a standard cost basis that  approximates  the first-in,
     first-out method;  market is determined based on net realizable value.
     Appropriate consideration is given to obsolescence,  excessive levels,
     deterioration, and other factors in evaluating net realizable value.

                                      F-10
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

3.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Property  and   equipment  are  stated  at  cost.   Depreciation   and
     amortization  expense  are  calculated  using  the  straight-line  and
     accelerated  methods of accounting over the following estimated useful
     lives of the assets:

          Building and improvements                           15 - 39 years
          Machine and equipment                                5 - 30 years
          Office furniture and equipment                       5 - 10 years
          Trucks and vehicles                                  5 - 7 years

     Maintenance  and  repairs  are charged to  operations  when  incurred.
     Betterments and renewals are capitalized.  When property and equipment
     are sold or  otherwise  disposed  of, the asset  account  and  related
     accumulated depreciation account are relieved, and any gain or loss is
     included in operations.

     Direct costs  incurred with the issuance of notes payable are deferred
     and amortized over the life of the guaranty.  As of February 28, 2003,
     the Company incurred amortization expense of $30,336.

     The Company  records  amounts  billed to  customers  for  shipping and
     handling  costs as sales  revenue.  Costs  incurred by the Company for
     shipping and handling are included in cost of sales.

     Sales are recorded when products,  repairs,  or parts are delivered to
     the  customer.  Provisions  for  discounts  and rebates to  customers,
     estimated returns,  allowances, and other adjustments are provided for
     in the same  period the  related  sales are  recorded.  No products or
     parts are delivered with any contingencies except for defects.

     The Company has adopted SFAS No. 144,  "Accounting  for the Impairment
     or  Disposal  of  Long-Lived  Assets."  SFAS  No.  144  addresses  the
     financial  accounting  and reporting for the  impairment of long-lived
     assets,  excluding goodwill and intangible assets, to be held and used
     or disposed of. The adoption of SFAS No. 144 did not have an impact on
     the  Company's  financial  position  or  results  of  operations.   In
     accordance with SFAS No. 144, the carrying values of long-lived assets
     are  periodically  reviewed by the Company  and  impairments  would be
     recognized if the expected future operating  non-discounted cash flows
     derived  from an asset  were less than its  carrying  value and if the
     carrying  value is more than the fair value of the  asset.  During the
     year ended  February 28, 2003, the Company  recorded  $80,000 in asset
     impairment.  At February  28 2003,  the Company did not have any asset
     that it considered impaired.

                                      F-11
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

3.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     The Financial  Accounting  Standards Board (FASB) issued  Statement of
     Financial  Accounting  Standards No. 123,  "Accounting for Stock-Based
     Compensation"  (SFAS No. 123),  effective  for fiscal years  beginning
     after  December 15, 1995.  SFAS No. 123 provides that expense equal to
     the  fair  value  of all  stock-based  awards  on the date of grant be
     recognized  over the vesting  period.  Alternatively,  this  statement
     allows  entities  to continue to apply the  provisions  of  Accounting
     Principles  Board  Opinion  No. 25,  "Accounting  for Stock  Issued to
     Employees"  (APB  Opinion No.  25),  whereby  compensation  expense is
     recorded on the date the options are granted to employees equal to the
     excess of the market price of the  underlying  stock over the exercise
     price.  The Company has elected to continue to apply the provisions of
     APB Opinion No. 25 and provide pro forma  disclosure of the provisions
     of SFAS No. 123.

     Net loss per common  share is computed by dividing  net loss to common
     stockholders by the weighted  average number of shares of common stock
     outstanding  for each fiscal year.  Common stock  equivalents  are not
     considered in loss years because they are anti-dilutive.

     Fair value  estimates  discussed  herein are based upon certain market
     assumptions  and pertinent  information  available to management.  The
     respective  carrying  value  of  certain  on-balance-sheet   financial
     instruments   approximated   their  fair   values.   These   financial
     instruments include cash, accounts  receivable,  accounts payable, and
     accrued  expenses.  Fair values were assumed to  approximate  carrying
     values for these  financial  instruments  since they are short-term in
     nature and their carrying amounts  approximate fair values or they are
     receivable or payable on demand. The fair value of the Company's notes
     payable is estimated  based upon the quoted market prices for the same
     or similar  issues or on the current  rates offered to the Company for
     debt of the same remaining maturities.

     Deferred tax assets and  liabilities  are recognized for the estimated
     future  tax  consequences  attributable  to  differences  between  the
     consolidated  financial statements carrying amounts of existing assets
     and liabilities and their  respective  income tax bases.  Deferred tax
     assets and  liabilities  are measured using enacted tax rates expected
     to apply to  taxable  income  in the  years in which  those  temporary
     differences  are expected to be  recovered  or settled.  The effect on
     deferred  tax  assets  and  liabilities  of a change  in tax  rates is
     recognized as income in the period that included the enactment date.

                                      F-12
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

3.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     The  Company  records  stock as  issued at the time  consideration  is
     received or the obligation is incurred.

     On April 1, 2002,  the Company  adopted SFAS No. 145,  "Rescission  of
     FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13,
     and  Technical  Corrections."  SFAS No. 145  rescinded  the  following
     pronouncements:   SFAS  No.  4,  "Reporting   Gains  and  Losses  from
     Extinguishment of Debt"; SFAS No. 64, "Extinguishments of Debt Made to
     Satisfy Sinking-Fund  Requirements";  and SFAS No. 44, "Accounting for
     Intangible Assets of Motor Carriers." In addition, SFAS No. 145 amends
     SFAS No. 13, "Accounting for Leases," and makes technical  corrections
     and  amendments to various  existing  pronouncements.  The adoption of
     SFAS  No.  145  resulted  in  the  Company  classifying  the  gain  on
     forgiveness of debt as part of income from operations on the Company's
     consolidated statements of operations.

     In June  2002,  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
     Associated with Exit or Disposal  Activities,"  which is effective for
     the Company for exit or disposal  activities  that are initiated after
     December 31, 2002. This statement addresses  financial  accounting and
     reporting for costs  associated  with exit or disposal  activities and
     nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability
     Recognition for Certain Employee  Termination Benefits and Other Costs
     to  Exit  an  Activity   (including   Certain  Costs   Incurred  in  a
     Restructuring)."  This statement  requires that a liability for a cost
     associated  with an exit or disposal  activity be recognized  when the
     liability is incurred.  Under EITF Issue No. 94-3, a liability  for an
     exit cost,  as  defined,  was  recognized  at the date of an  entity's
     commitment  to an exit plan.  The Company  will adopt SFAS No. 146 for
     all exit or disposal  activities that are initiated after December 31,
     2002, and does not expect this statement to have a material  effect on
     the consolidated financial statements.

     In November  2002,  FASB issued  Interpretation  No. 45,  "Guarantor's
     Accounting  and  Disclosure  Requirements  for  Guarantees,  Including
     Indirect   Guarantees  of   Indebtedness  of  Others"  (FIN  45).  The
     interpretation  elaborates on the existing disclosure requirements for
     most guarantees,  including loan guarantees such as standby letters of
     credit.  It also  clarifies  that,  at the  time a  company  issues  a
     guarantee,  the company must  recognize an initial  liability  for the
     fair value,  or market value,  of the obligations it assumes under the
     guarantee and must disclose

                                      F-13
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

3.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     that information in its interim and annual financial  statements.  The
     provisions  related to  recognizing  a liability  at  inception of the
     guarantee for the fair value of the guarantor's  obligations  does not
     apply  to  product  warranties  or  to  guarantees  accounted  for  as
     derivatives.   The  initial   recognition   and  initial   measurement
     provisions  apply on a  prospective  basis  to  guarantees  issued  or
     modified  after December 31, 2002.  The  disclosure  requirements  are
     effective for financial  statements of periods  ending after  December
     15, 2002.  The Company  believes the adoption of the  recognition  and
     measurement  provisions  of FIN 45 will not have a material  impact on
     its financial position, results of operations, or cash flows.

     FASB issued SFAS No. 148,  "Accounting for Stock-Based  Compensation -
     Transition and  Disclosure,"  which is effective for the Company as of
     January 1, 2003. This statement  amends SFAS No. 123,  "Accounting for
     Stock-Based   Compensation,"   to  provide   alternative   methods  of
     transition  for a voluntary  change to the fair value based  method of
     accounting for stock-based employee  compensation.  In addition,  this
     statement  amends  the  disclosure  requirements  of SFAS  No.  123 to
     require  prominent  disclosures  in both annual and interim  financial
     statements  about the method of accounting  for  stock-based  employee
     compensation and the effect of the method used on reported results.

     In April 2003,  FASB issued SFAS No. 149,  "Accounting  for Derivative
     Instruments and Hedging  Activities," which is effective for contracts
     entered  into  or  modified  after  June  30,  2003  and  for  hedging
     relationships  designated  after June 30, 2003. This statement  amends
     and  clarifies  financial  accounting  and  reporting  for  derivative
     instruments  including certain instruments embedded in other contracts
     and for  hedging  activities  under  SFAS  No.  133,  "Accounting  for
     Derivative Instruments and Hedging Activities." The Company will adopt
     this statement and does not expect it to have a material effect on its
     consolidated financial statements.

     In May  2003,  FASB  issued  SFAS No.  150,  "Accounting  for  Certain
     Financial  Instruments  with  Characteristics  of Both Liabilities and
     Equity," which is effective for financial  instruments entered into or
     modified  after  May 31,  2003,  and  otherwise  is  effective  at the
     beginning of the first interim period  beginning  after June 15, 2003.
     SFAS No. 150  establishes  standards for how an issuer  classifies and
     measures certain financial  instruments with  characteristics  of both
     liabilities  and equity.  The Company will adopt SFAS No. 150 and does
     not expect it to have a material impact on its consolidated  financial
     statements.

                                      F-14
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

4.   INVENTORIES

Inventories consist of the following at February 28, 2003:

     Work-in-process                                   $    23,661
     Finished goods                                         79,969
                                                       -----------
     Total inventory                                   $   103,630
                                                       ===========

During the year ended  February 28, 2003,  management  evaluated its estimate of
the net realizable  value of inventories  based on actual sales. As a result,  a
provision  for loss on  inventories  of  $102,823  was  charged to cost of sales
during the fourth quarter of the year ended February 28, 2003.

During the year ended  February 28,  2003,  management  determined  that $75,121
should be  reclassified  to property and  equipment as there is no resale market
for these items and the Company could better use these items within operations.

5.   PROPERTY, EQUIPMENT, AND INTANGIBLE ASSETS

Property, equipment, and intangible assets at February 28, 2003 consist of:

     Land                                              $   186,045
     Building and improvements                           2,851,837
     Machinery and equipment                             2,382,579
     Office furniture and equipment                        194,768
     Trucks and automobiles                                320,117
     Equipment held under capital lease                    134,308
                                                       -----------
                                                         6,069,654
     Less accumulated depreciation                         823,999
                                                       -----------
                                                       $ 5,245,655
                                                       ===========

Depreciation expense for the years ended February 28, 2003 and 2002 was $312,494
and  $292,314,  respectively.  Depreciation  expense  includes  amortization  of
equipment held under a capital lease in the amount of $8,954 for the each of the
years ended February 28, 2003 and 2002.

                                      F-15
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

6.   NOTES RECEIVABLE

Notes receivable,  included in other receivables and long-term  receivables,  at
February 28, 2003 consist of the following:

     Note receivable; 10.0% interest; due on demand; unsecured      $  35,473

     Notes receivable; interest ranging between 7.25% and 9.0%;
       unsecured; guaranteed by a stockholder                         170,122
                                                                    ---------
                                                                      205,595
     Less current portion                                              65,473
                                                                    ---------
                                                                    $ 140,122


7.   NOTES PAYABLE AND CAPITAL LEASES

Notes payable and capital leases at February 28, 2003 consist of:

<TABLE>
<S>                                                                             <C>
     Notes payable to the parents of the former president of the Company;
        stockholders; 10.0% interest; matures May 2003; payable in
        monthly installments of $5,494; unsecured                               $ 185,291
     Notes payable to the parents and sister of the former president of the
        Company; stockholders; 10.0% interest; matures May 2003;
        monthly interest payments beginning January 15, 2003; unsecured            31,697
     Notes payable; 5.0% to 18.0% interest; due on demand, including
        $242,798 to stockholders; $145,000 past maturity; $10,000
        collateralized by accounts receivable                                     362,239
     Notes payable, individuals; matured April and May 2001; interest
        payable in the amount of $10,000 each, in addition to principal;
        unsecured                                                                  20,000
     Note payable to a corporation related through common stockholders;
        0.0% to 7.0% interest; $30,000 past maturity; $2,882 due on
        demand; unsecured                                                          32,882
     Note payable; 9.0% interest; monthly principal and interest payment of
        $670; matures April 1, 2006; collateralized by a vehicle                   22,094
     Capitalized lease on equipment; 8.0% interest; monthly payments of
        $2,728; matures October 1, 2004                                            47,285
</TABLE>

                                      F-16
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

7.   NOTES PAYABLE AND CAPITAL LEASES (CONTINUED)

<TABLE>
<S>                                                                             <C>
     Convertible subordinated notes due to investors; 11.0% interest; the
        notes are subordinate in rights of payment to all indebtedness of the
        Company outstanding as of August 15, 1995 or to be incurred in
        the future; matured September 30, 1998; unsecured                            37,500
     Convertible note payable to investor; 15.0% interest; the note is
        convertible at $.70 per share; in conjunction with the note, the
        Company issued 3,500 warrants for the purchase of common stock at
        $2.00 per share; the warrants expired on March 1, 2002; matured
        June 1, 2002; unsecured                                                       4,050
     Note payable to investor; interest payable in 2,000 shares of stock until
        the maturity date, and at 20 percent thereafter; matured September 7,
        2000; unsecured                                                               2,000
     Note payable to Internal Revenue Service pursuant to a Chapter 11
        reorganization plan; 8.0% interest; secured by tax lien; monthly
        payments of $1,500 of principal and interest; matures on May 25,
        2006                                                                        378,437
     Note payable to Florida Department of Revenue pursuant to a
        Chapter 11 reorganization plan; 5.0% interest; monthly payments of
        $2,500 of principal and interest; matures by July 15, 2003 or
        renewal of agreement                                                         54,657
     Note payable to stockholder; 15.25% interest; due January 3, 2004;
        interest payments of $650; unsecured                                         50,000
     Note payable to a financial institution; 7.5% interest; monthly principal
        and interest payments of $8,166;  collateralized by fixed assets, key
        man life insurance policy, and 1,000,000 shares of common stock owned
        by a stockholder; guaranteed by a stockholder; due
        December 29, 2005 with a three-year balloon                                 869,589
                                                                                -----------
                                                                                  2,097,721
        Less current portion                                                        828,030
                                                                                -----------
                                                                                $ 1,269,691
</TABLE>

As of February 28, 2003, the notes payable listed above include $238,550 and are
currently in default.

                                      F-17
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

7.   NOTES PAYABLE AND CAPITAL LEASES (CONTINUED)

The aggregate principal maturing in subsequent years are:

     Year Ending
     February 28,
     ------------
         2004                                                   $   828,030
         2005                                                        98,238
         2006                                                       826,633
         2007                                                       344,820
                                                                -----------
                                                                $ 2,097,721

Long-term  debt includes a capital lease for equipment with a lease term through
October 2004. The obligation has been recorded in the accompanying  consolidated
financial  statements  at the present value of future  minimum  lease  payments,
discounted at eight percent.  The total  capitalized  costs at February 28, 2003
and 2002 was $134,308. Related amortization included in accumulated depreciation
was $26,862 and $17,908 at February 28, 2003 and 2002, respectively.

The  future  minimum  lease  payments  and the net  present  value of the future
minimum lease payments under the capital lease are as follows:

     Year Ending
     February 28,
     ------------
        2004                                                    $    30,713
        2005                                                         16,572
                                                                -----------
     Present value of future minimum lease payments                  47,285
     Less current portion                                            30,713
                                                                -----------
     Long-term portion                                          $    16,572
                                                                ===========

8.   COMMITMENTS AND CONTINGENCIES

The Company has an employment agreement with a key employee,  the terms of which
expire in fiscal year 2004. Such  agreements,  which have been revised from time
to time, provide for minimum salary levels, adjusted annually for cost of living
increases, normal employment benefits,  automobile allowances, stock options, as
well as bonuses, which may contain minimum and incentive components.  The annual
commitment for future salaries at February 28, 2003,  including minimum bonuses,
is approximately $125,000.

                                      F-18
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

9.   CONVERTIBLE PREFERRED STOCK

Holders of Series A convertible  preferred  stock vote on a converted basis with
the  common  stockholders  on  all  matters  to be  brought  to a  vote  of  the
stockholders.  Each  share  of  Series  A  convertible  preferred  stock  can be
converted  into 1,289 shares of common  stock.  Dividends are payable in kind at
the  Company's  option at a rate of ten  percent  annually.  Payments  of annual
dividends  have  been  deferred  by the  Company's  Board  of  Directors  on the
outstanding  Series A shares because of losses  sustained by the Company.  As of
February  28, 2003,  preferred  dividends  in arrears  amounted to $118,377,  or
$1,161 per share.

The Series B convertible  preferred  stock has rights to receive  cumulative six
percent cash  dividends in  preference  to the payment of dividends on all other
shares of capital stock of the Company.  No dividends may be declared or paid on
any other shares of stock until the full amount of the  cumulative  dividends on
the Series B preferred  stock has been paid.  Each share of Series B convertible
preferred  stock can be converted into 1,000 shares of common stock.  Cumulative
dividends  amounted to  $193,635  and  $117,926  at February  28, 2003 and 2002,
respectively.  Dividends  may be  paid  in  stock  through  May  31,  2004  at a
conversion  rate of $1.00 per share.  For the years ended  February 28, 2003 and
2002,  247 and 264 shares of  preferred  stock were paid in  additional  shares,
respectively.

Holders of Series B preferred  stock vote on a  converted  basis with the common
stockholders  on all  matters to be brought to a vote of the  stockholders.  The
Series B preferred  stockholders  are  entitled to elect one director out of the
seven authorized directors of the Company's board. If certain events occur or do
not occur,  such as the  failure  to pay  dividends  to the  Series B  preferred
stockholders,  the holders of the Series B preferred stock are entitled to elect
the  smallest  number  of  directors  that will  constitute  a  majority  of the
authorized number of directors, immediately upon giving written notice.

10.  CAPITALIZATION AND SUBSEQUENT EVENTS

Subsequent  to  year-end,  the Company  amended its  articles of  incorporation,
increasing  the number of authorized  shares of common stock from  30,000,000 to
75,000,000.

The Company's 1995 Stock Option Plan authorizes up to 3,500,000 shares of common
stock for grants of both incentive stock options and non-qualified stock options
to key employees,  officers,  directors, and consultants.  Options granted under
the Plan must be exercised  within ten years of the date of grant.  The exercise
price of options  granted  may not be less than 85  percent  of the fair  market
value of the stock. Additionally, the Company issues stock options to executives
under their employment agreements.

                                      F-19
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

10.  CAPITALIZATION AND SUBSEQUENT EVENTS (CONTINUED)

On July 10, 2002, the Company adopted a Non-Qualified  Option/Stock Appreciation
Rights Plan that  authorizes  7,000,000  shares of common stock for grant to key
management  employees or  consultants.  Options  granted  under the plan must be
exercised  within ten years of the date of grant.  The exercise price of options
shall not be less than par value  and shall be  determined  by the Stock  Option
Plan Committee and the Board of Directors.

A summary of the Company's stock option activity is as follows:

                                                                Weighted-Average
                                                    Number       Exercise Price
                                                   of Shares        Per Share
                                                   ---------        ---------
     Options outstanding, February 28, 2001          62,500           $1.57
     Granted                                        200,000            0.51
     Exercised                                            0            0.00
     Expired, forfeited                            (150,000)           0.83

     Options outstanding, February 28, 2002         112,500            0.57
     Granted                                        900,000            0.23
     Exercised                                     (750,000)           0.24
     Expired, forfeited                                   0            0.00

     Options outstanding, February 28, 2003         262,500            0.36

At February 28, 2003, 262,500 options with a  weighted-average  contractual life
of 6.49 years were outstanding at exercise prices ranging from $.05 to $.57. All
outstanding options were fully vested and exercisable.

During the year ended February 28, 2003, the Company  granted 900,000 options to
key executives  and  consultants,  750,000 of which were exercised  immediately.
Total  compensation  expense  recognized  in  conjunction  with the exercise was
$181,500 in consulting expense.

During the year ended February 28, 2002, the Company  granted 200,000 options to
two key  executives  in  connection  with  their  employment  agreements.  Total
compensation costs recognized for stock-based  employee  compensation  awards in
conjunction with the exercise was $100,000 for the year ended February 28, 2002.

                                      F-20
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

10.  CAPITALIZATION AND SUBSEQUENT EVENTS (CONTINUED)

The following  summarizes  information  about options  granted  during the years
ended February 28, 2003 and 2002:

                                                                Weighted-Average
                                                    Number       Exercise Price
                                                   of Shares        Per Share
                                                   ---------        ---------
     Options granted in 2002 with exercise
        price below market price                    200,000           $0.42
     Options granted in 2003 with exercise
        price below market price                    150,000           $0.21

Stock-based  compensation  to  non-employees  is valued using the  Black-Scholes
option  pricing  model.  The Company uses the  intrinsic  value method under APB
Opinion No. 25 to account for stock option  compensation  granted to  employees.
Had compensation costs been recognized under SFAS No. 123, the amount would have
been  $195,482  and  $90,320  for the years  ended  February  28, 2003 and 2002,
respectively.

The pro forma disclosures required under SFAS No. 123 are as follows:

                                            2003           2002
                                       ------------    ------------
     Net loss:
        As reported                    $   (347,910)   $ (1,542,919)
        Pro forma                      $   (543,392)   $ (1,633,239)

     Loss per common share:
        As reported                    $       (.02)   $       (.15)
        Pro forma                      $       (.03)   $       (.16)

The following  assumptions were used to estimate the fair value of stock options
using the Black-Scholes method:

                                           2003            2002
                                       ------------    ------------
     Dividend yield                      0.00%           0.00%
     Expected volatility               124.00%         399.00%
     Average expected option life        8.34 years      5.00 years
     Risk-free interest rate             1.75%           4.25%

                                      F-21
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

10.  CAPITALIZATION AND SUBSEQUENT EVENTS (CONTINUED)

In  December  2002,  FASB  issued  SFAS No.  148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure - an Amendment of FASB Statement No.
123," which provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
In addition,  this statement amends the disclosure  requirements of SFAS No. 123
to require prominent disclosures in both annual and interim financial statements
about the method of accounting for  stock-based  compensation  and the effect of
the method used on reported results.  SFAS No. 148 is effective for fiscal years
ending after December 15, 2002 and for financial  reports  containing  financial
statements for interim  periods  beginning  after December 15, 2002. The Company
has decided to continue  applying  APB Opinion No. 25 (as  permitted by SFAS No.
123 and SFAS No. 148).  The required  disclosures of the effects of SFAS No. 123
and SFAS No. 148 are included in the consolidated  financial  statements.  Under
APB Opinion No. 25, the  Company did not have any  compensation  expense for the
years ended February 28, 2003 and 2002, respectively.

11.  INCOME TAXES

The Company has incurred  significant  operating losses since its inception and,
therefore, no tax liabilities have been incurred for the periods presented.  The
amount of unused tax losses  available to carryforward and apply against taxable
income in future years totaled approximately $13,500,000. The loss carryforwards
expire beginning in 2007. Due to the Company's continued losses,  management has
established  a valuation  allowance  equal to the amount of  deferred  tax asset
because  it is more  likely  than not that the  Company  will not  realize  this
benefit.

Temporary differences giving rise to the deferred tax asset are as follows:

     Unused operating loss carryforward                      $  5,000,000
     Excess depreciation for tax purposes over the amount
        for financial reporting purposes                         (441,000)
                                                             ------------
                                                                4,559,000
     Valuation allowance                                       (4,559,000)
                                                             ------------
                                                             $          0
                                                             ============

                                      F-22
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

11.  INCOME TAXES (CONTINUED)

Differences  between the federal  benefit  computed at a statutory  rate and the
Company's effective tax rate and provision are as follows:

     Statutory benefit                                          $ (118,300)
     State tax benefit, net of federal effect                      (12,600)
     Non-deductible expenses                                         2,500
     Increase in deferred income tax valuation allowance           128,400
                                                                ----------
                                                                $        0
                                                                ==========

The Internal  Revenue Code contains  provisions that may limit the net operating
loss carryforwards available for use in any given year if significant changes in
ownership interest of the Company occur.

12.  FORGIVENESS OF DEBT

During the year ended  February 28, 2003,  management of the Company  negotiated
new debt  financing,  of which  the  proceeds  of  $875,000  were used to settle
outstanding  debts and  finance  operations.  The  Company  settled  debt in the
amounts of $1,374,775 for $562,761,  which resulted in a gain of $812,014.  This
gain has been  reflected  as  forgiveness  of debt  income  in the  accompanying
consolidated financial statements.

13.  RELATED PARTY TRANSACTIONS

During the year ended February 28, 2003, two executives who are  stockholders of
the Company deferred  approximately  $130,000 of compensation  earned during the
year. The balance due to stockholders at February 28, 2003 totaled $178,394. The
note is unsecured, non-interest bearing, and has no specific repayment terms.

During the year ended  February 28, 2003,  the Company  issued 462,500 shares of
common stock to an employee valued at $74,650 for services rendered. The Company
also issued  200,000 shares of common stock to a related party valued at $48,400
for services rendered.

The Company  also issued  566,666  shares of common  stock to a related  company
valued at $55,000 for a pledge of assets and  guarantee of a loan.  This related
company is 100 percent owned by the president and chief executive officer of the
Company.

                                      F-23
<PAGE>
                American Commerce Solutions, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements

                       As of February 28, 2003 and for the
                     Years Ended February 28, 2003 and 2002

13.  RELATED PARTY TRANSACTIONS (CONTINUED)

During the year ended February 28, 2003, the Company wrote off a loan receivable
balance of $31,234, which was due from a stockholder as additional compensation.

The above amounts are not necessarily  indicative of the amounts that would have
been incurred had  comparable  transactions  been entered into with  independent
parties.

14.  SUBSEQUENT EVENTS

On March 28, 2003, the Company  entered into an agreement to sell and assign all
rights,  title,  and interest to certain of the  Company's  accounts  receivable
existing  at that  date,  and  certain  receivables  arising in the  future.  In
exchange,  the Company will immediately receive a discounted percent of approved
accounts receivable. These terms are based on guarantees of two stockholders and
collateralized  by  inventory  and fixed  assets.  Management  of the Company is
currently studying and determining the accounting  treatment of this arrangement
in accordance with SFAS No. 140.

Effective May 27, 2003,  the Company  adopted an employee  stock  incentive plan
(the "Plan") for the year 2003 that authorizes up to 15,000,000 shares of common
stock for grants of both incentive stock options and non-qualified stock options
to designated officers,  employees,  and certain non-employees.  Options granted
under the Plan  must be  exercised  within  10 years of the date of  grant.  The
exercise  price of options  granted  may not be less than 85 percent of the fair
market  value of the stock.  As of May 29, 2003,  there were no options  granted
under this Plan.

Effective May 27, 2003,  the Company also adopted a  non-employee  directors and
consultants  retainer stock plan for the year 2003.  This plan  authorizes up to
5,000,000  shares of common stock to be issued in the amount of compensation for
services to directors and  consultants at the deemed  issuance price of $.04 per
share. As of May 29, 2003, there were no options issued under this plan.

                                      F-24
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                                             Sequentially
Incorporated Documents                                 SEC Exhibit Reference                   Numbered
----------------------                                 ---------------------                   --------
<S>        <C>                                         <C>                                  <C>
 3.1       Certificate of Incorporation of the         As filed with the Registrant's             N/A
           Registrant, as amended                      Form SB-2, on October 27, 1995,
                                                       File No. 33-98486

 3.2       By-Laws of the Registrant, as amended       As filed with the Registrant's             N/A
                                                       Form SB-2 on October  27,
                                                       1995, File No. 33-98486

 4.1       Form of Warrant Agreement                   As filed with the Registrant's             N/A
                                                       Form SB-2, on October 27, 1995,
                                                       File No. 33-98486

 4.2       Form of Warrant of the Registrant           As filed with the Registrant's Form        N/A
           issued in the Registrant's January          SB-2 on October 27, 1995, File No.
           1995 Private Placement                      33-98486

 4.3       Form of Unit Purchase Option issued         As filed with the Registrant's Form        N/A
           to Merit Capital Associates, Inc.           SB-2 on October 27, 1995, File No.
                                                       33-98486

 4.4       Form of 11% Convertible Subordinated        As filed with the Registrant's Form        N/A
           Note of the Registrant issued in the        SB-2 on October 27, 1995, File No.
           Registrant's August, 1995 Private           33-98486
           Placement

 4.5       Form of Warrant of the Registrant           As filed with the Registrant's Form        N/A
           issued in the Registrant's August,          SB-2 on October 27, 1995, File No.
           1995 Private Placement                      33-98486

 4.6       Securities Purchase Agreement dated         As filed with the Registrant's Form        N/A
           April 9, 1998                               10KSB on June 13, 1999

 4.7       Certificate of Designation of Series        As filed with the Registrant's Form        N/A
           B Preferred Stock.                          10 KSB on June 13, 1999

 4.8       Stockholders' Agreement dated April         As filed with the Registrant's Form        N/A
           9, 1998.                                    10 KSB on June 13, 1999

 4.9       Registration Rights Agreement dated         As filed with the Registrant's Form        N/A
           April 9, 1998                               10 KSB on June 13, 1999

 4.10      Warrant Certificate issued to ULLICO        As filed with the Registrant's Form        N/A
                                                       10 KSB on June 13, 1999

 4.11      Escrow Agreement                            As filed with the Registrant's Form        N/A
                                                       10 KSB on June 13, 1999

 4.12      Certificate of Designations of Series       As filed with the Registrant's             N/A
           A Preferred Stock                           Form 10-KSB on June 11, 1998

 4.13      Certificate of Designation of Series        As filed with the Registrant's Form        N/A
           C Preferred Stock                           10-KSB on June 12, 2000
</TABLE>
<PAGE>
<TABLE>
<S>        <C>                                         <C>                                  <C>
 4.14      Amendment to the Articles of                As filed with the Registrant's             N/A
           Incorporation of JD American                Form10-KSB on June 14, 2001
           Workwear, Inc. for name change to
           American Commerce Solutions, Inc. and
           the increase in authorized shares

 10.2      Employment Agreement with Steven D.         As filed with Registrant's Form            N/A
           Smith                                       10-KSB on July 19, 2001

 10.3      Registrant's 1995 Stock Option Plan         As filed with the Registrant's             N/A
                                                       Form SB-2 on October 27, 1995,
                                                       File No. 33-98486

 10.4      Form of Option Agreement under the          As filed with the Registrant's Form        N/A
           Registrant's 1995 Stock Option Plan         SB-2 on October  27, 1995, File No.
                                                       33-98486

 10.5      Employment Agreement with Norman            As filed with Registrant's Form            N/A
           Birmingham                                  10-KSB on June 12, 2000

 10.6      Consulting Agreement with Richard           As filed with Registrant's Form            N/A
           Sullivan                                    10-KSB on June 12, 2000

 10.7      Option to Purchase Businesses between       As filed with Registrant's Form            N/A
           Registrant and International Commerce       10-KSB on June 12, 2000
           and Finance, Inc.

 10.8      Stock Purchase Agreement between            As filed with Registrant's Form            N/A
           Registrant and Patina Corporation           10-KSB on June 12, 2000

 10.9      Employment Agreement with David             As filed with Registrant's Form            N/A
           DeBaene January 1, 2001                     10-KSB on June 12, 2000

10.10      Asset Sale Agreement Between                As filed with Registrant's Form            N/A
           Registrant and David N. DeBaene June        10-QSB on July 26, 2001
           1, 2001

10.11      Stock Purchase Agreement between            As filed with Registrant's Form            N/A
           Registrant and Rhode Island truck and       10-QSB on December 14, 2001
           Equipment, Corp. October 31, 2001

10.12      Employment Agreement with Daniel L.
           Hefner dated June 1, 2000
</TABLE>